Decided on November 26, 2021

SUPREME COURT, APPELLATE TERM, SECOND DEPARTMENT, 2d, 11th and 13th JUDICIAL DISTRICTS

Nightingale Law, P.C. (Michael S. Nightingale of counsel), for appellant. The Law Offices of Florence D. Zabokritsky, PLLC, for respondent (no brief filed).

Appeal from an order of the Civil Court of the City of New York, Kings County (Robin Kelly Sheares, J.), entered August 5, 2019. The order denied defendant’s motion to sever the claim of each assignor into separate actions.

ORDERED that the order is reversed, with $30 costs, and defendant’s motion to sever the claim of each assignor into separate actions is granted.

In this action by a provider to recover first-party no-fault benefits assigned to it by two assignors, defendant appeals from an order of the Civil Court which denied defendant’s motion pursuant to CPLR 603 to sever the cause of action seeking to recover upon a claim for supplies furnished to Joe Chaluisant from the remaining cause of action seeking to recover upon a claim for supplies furnished to Robert Murray. Defendant’s counsel asserted that the claims had arisen out of two different accidents and that defenses relating to each claim differed. The Civil Court denied defendant’s motion.

While the decision to grant severance (see CPLR 603) is an exercise of judicial discretion which, in the absence of a party’s showing of prejudice to a substantial right, should not be disturbed on appeal (see Majestic Acupuncture, P.C. v Interboro Mut. Ins. Co., 61 Misc 3d [*2]152[A], 2018 NY Slip Op 51785[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2018]; City Chiropractic, P.C. v Auto One Ins. Co., 59 Misc 3d 144[A], 2018 NY Slip Op 50730[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2018]; King’s Med. Supply Inc. v GEICO Cas. Ins. Co., 14 Misc 3d 136[A], 2007 NY Slip Op 50232[U] [App Term, 2d Dept, 2d & 11th Jud Dists 2007]), in this instance, severance is warranted.

The complaint alleges that the claims arose out of separate accidents which occurred on different dates. The record further reveals that while one claim was denied on the ground of lack of medical necessity, the other claim was denied due to a failure to cooperate with defendant’s attempt to investigate the alleged accident. As such, different questions of fact and law are involved, and defendant’s motion to sever the causes of action should have been granted (see Premier Surgical Servs., P.C. v GEICO Gen. Ins. Co., 65 Misc 3d 140[A], 2019 NY Slip Op 51704[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2019]; King’s Med. Supply Inc. v GEICO Cas. Ins. Co., 14 Misc 3d 136[A], 2007 NY Slip Op 50232[U]; cf. Unique Physical Therapy, PT, P.C. v Global Liberty Ins. Co. of NY, 71 Misc 3d 132[A], 2021 NY Slip Op 50323[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2021]).

Accordingly, the order is reversed and defendant’s motion to sever the claim of each assignor into separate actions is granted.

ELLIOT, J.P., WESTON and GOLIA, JJ., concur.

Index No: CV-714348/19

Attorney for plaintiff: Gabriel & Moroff, PC

Attorney for defendant: The Law Offices of Rubin & Nazarian

In this action for the payment of no-fault benefits, defendant moves seeking an order granting it summary judgment and dismissal of this action. Defendant avers that inasmuch as it timely and properly denied plaintiff’s claims for medical services under the no-fault portion of its policy, on grounds that it did not insure any of the vehicles involved in the assignor’s accident, the instant action must be dismissed. Plaintiff opposes the instant motion, asserting that insofar as defendant’s submissions fail to establish that it did not insure the vehicles involved in the assignor’s accident with admissible evidence, defendant fails to establish prima facie entitlement to summary judgment. Plaintiff also cross-moves seeking summary judgment, averring that defendant’s very own denial forms establish that it timely submitted the instant claim and is now overdue.

For the reasons that follow hereinafter, defendant’s motion is denied and plaintiff’s cross-motion is granted.

The instant action is for payment of no-fault insurance benefits for medical treatment. The complaint alleges, in relevant part, the following: STEAVEN MERCEDES (Mercedes) was involved in a motor vehicle accident and thereafter, sought medical treatment from plaintiff for injuries sustained. Mercedes was covered by an insurance policy issued by defendant, which pursuant to Article 51 of the Insurance Law, required payment of health related expenses and whose benefits Mercedes [*2]assigned to plaintiff. The treatments provided by plaintiff to Mercedes totaled $1,789.19, were covered by defendant’s policy, were billed to defendant, but were nevertheless not paid. Based on the foregoing, plaintiff seeks payment of the aforementioned sums pursuant to the Comprehensive Motor Vehicle Insurance Reparations Act ^[FN1] (11 NYCRR 65-3.1 et seq.).

Standard of Review

The proponent of a motion for summary judgment carries the initial burden of tendering sufficient admissible evidence to demonstrate the absence of a material issue of fact as a matter of law (Alvarez v Prospect Hospital, 68 NY2d 320, 324 [1986]; Zuckerman v City of New York, 49 NY2d 557, 562 [1980]). Thus, a defendant seeking summary judgment must establish prima facie entitlement to such relief by affirmatively demonstrating, with evidence, the merits of the claim or defense, and not merely by pointing to gaps in plaintiff’s proof (Mondello v DiStefano, 16 AD3d 637, 638 [2d Dept 2005]; Peskin v New York City Transit Authority, 304 AD2d 634, 634 [2d Dept 2003]). There is no requirement that the proof be submitted by affidavit, but rather that all evidence proffered be in admissible form (Muniz v Bacchus, 282 AD2d 387, 388 [1st Dept 2001], revd on other grounds Ortiz v City of New York, 67 AD3d 21, 25 [1st Dept 2009]). Notably, the court can consider otherwise inadmissible evidence when the opponent fails to object to its admissibility and instead relies on the same (Niagara Frontier Tr. Metro Sys. v County of Erie, 212 AD2d 1027, 1028 [4th Dept 1995]).

Once movant meets his initial burden on summary judgment, the burden shifts to the opponent who must then produce sufficient evidence, generally also in admissible form, to establish the existence of a triable issue of fact (Zuckerman at 562). It is worth noting, however, that while the movant’s burden to proffer evidence in admissible form is absolute, the opponent’s burden is not. As noted by the Court of Appeals,

[t]o obtain summary judgment it is necessary that the movant establish his cause of action or defense ‘sufficiently to warrant the court as a matter of law in directing summary judgment’ in his favor, and he must do so by the tender of evidentiary proof in admissible form. On the other hand, to defeat a motion for summary judgment the opposing party must ‘show facts sufficient to require a trial of any issue of fact.’ Normally if the opponent is to succeed in defeating a summary judgment motion, he too, must make his showing by producing evidentiary proof in admissible form. The rule with respect to defeating a motion for summary judgment, however, is more flexible, for the opposing party, as contrasted with the movant, may be permitted to demonstrate acceptable excuse for his failure to meet strict requirement of tender in admissible form. Whether the excuse offered will be acceptable must depend on the circumstances in the particular case

(Friends of Animals v Associated Fur Manufacturers, Inc., 46 NY2d 1065, 1067-1068 [1979] [internal citations omitted]). Accordingly, generally, if the opponent of a motion for summary judgment seeks to have the court consider inadmissible evidence, he must proffer an excuse for failing to submit evidence in admissible form (Johnson v Phillips, 261 AD2d 269, 270 [1st Dept 1999]).

When deciding a summary judgment motion the role of the Court is to make determinations as to the existence of bonafide issues of fact and not to delve into or resolve issues of credibility. As the Court stated in Knepka v Talman (278 AD2d 811, 811 [4th Dept 2000]), [s]upreme Court erred in resolving issues of credibility in granting defendants’ motion for summary judgment dismissing the complaint. Any inconsistencies between the deposition testimony of plaintiffs and their affidavits submitted in opposition to the motion present issues for trial (see also Yaziciyan v Blancato, 267 AD2d 152, 152 [1st Dept 1999]; Perez v Bronx Park Associates, 285 AD2d 402, 404 [1st Dept 2001]). Accordingly, the Court’s function when determining a motion for summary judgment is issue finding, not issue determination (Sillman v Twentieth Century Fox Film Corp., 3 NY2d 395, 404 [1957]). Lastly, because summary judgment is such a drastic remedy, it should never be granted when there is any doubt as to the existence of a triable issue of fact (Rotuba Extruders v Ceppos, 46 NY2d 223, 231 [1978]). When the existence of an issue of fact is even debatable, summary judgment should be denied (Stone v Goodson, 8 NY2d 8, 12 [1960]).

No-Fault Law

Pursuant to 11 NYCRR 65-2.4(a), entitlement to no-fault benefits requires compliance with all conditions precedent, one of which is that the eligible injured person or that person’s assignee or legal representative shall submit written proof of claim to the self-insurer, including full particulars of the nature and extent of the injuries and treatment received and contemplated, as soon as reasonably practicable but, in no event later than 45 days after the date services are rendered. The eligible injured person or that person’s legal representative shall submit written proof of claim for work loss benefits and for other necessary expenses to the self-insurer as soon as reasonably practicable but, in no event, later than 90 days after [*3]the work loss is incurred or the other necessary services are rendered. The foregoing time limitations for the submission of proof of claim shall apply unless the eligible injured person submits written proof providing clear and reasonable justification for the failure to comply with such time limitation.

(11 NYCRR 65-2.4[c]^[FN2] ). Because the No-Fault Law is a derogation of common law, it must be strictly construed (Presbyt. Hosp. in City of New York v Atlanta Cas. Co., 210 AD2d 210, 211 [2d Dept 1994]; Maxwell v State Farm Mut. Auto. Ins. Co., 92 AD2d 1049, 1050 [3d Dept 1983]), and thus, when an insurer fails to timely deny or pay a claim, as required by the statutory schedule, it is precluded from interposing a statutory exclusion defense (Presbyt. Hosp. in City of New York, 210 AD2d at 211; Presbyt. Hosp. in the City of New York v Maryland Cas. Co., 90 NY2d 274, 282 [1997]; New York Hosp. Med. Ctr. of Queens v Country-Wide Ins. Co., 295 AD2d 583, 584 [2d Dept 2002]; Mount Sinai Hosp. v Triboro Coach Inc., 263 AD2d 11, 16 [2d Dept 1999]; Presbyt. Hosp. in City of New York v Atlanta Cas. Co., 210 AD2d 210, 211 [2d Dept 1994]).

Similarly, and for the same reasons, compliance with the technical requirements of the no-fault law are preconditions for payment to a medical provider thereunder. Accordingly, a medical provider’s failure to tender a claim and requisite proof to an insurer within 45 days generally warrants denial of said claims [*4](Kane v Fiduciary Ins. Co. of Am., 114 AD3d 405, 405 [1st Dept 2014] [“The arbitrators were therefore correct that petitioner was required, but failed, to comply with the conditions precedent to coverage found in the no-fault regulations. He did not submit timely written proof of claim to the insurer, including the particulars regarding the nature and extent of the injuries and treatment received and contemplated.”]; St. Barnabas Hosp. v Penrac, Inc., 79 AD3d 733, 734 [2d Dept 2010]; Sunrise Acupuncture PC v ELRAC, Inc., 52 Misc 3d 126[A], *1 [App Term 2016]; Nir v MVAIC, 17 Misc 3d 134[A], *1-2 [App Term 2007]). However, 11 NYCRR 65-2.4[c] and 11 NYCRR 65-1.1 state that the time limitations for the submission of proof of claim shall apply unless the eligible injured person or that person’s representative submits written proof providing clear and reasonable justification for the failure to comply with such time limitation.

Accordingly, when the proponent of a belated claim establishes that the delay is reasonably justifiable, the insurer may not deny the same (Matter of Med. Socy. of State v Serio, 100 NY2d 854, 862-863 [2003] [“At the same time, the new regulations relax the standard for accepting late filings, replacing the previous rule that late filings were permitted only when written proof showed that compliance with a deadline was ‘impossible’ (11 NYCRR 65.11 [m] [2], [3]; 65.12), with a standard excusing a missed deadline when there is a “clear and reasonable justification” for the delay (11 NYCRR 65-2.4 [b], [c]; 65-1.1).”]). In such cases, plaintiff must assert its reasonable justification with its belated submission (Nir at *2 [“The record further reveals that, in opposition to MVAIC’s cross motion seeking summary judgment, plaintiff failed to proffer admissible evidence demonstrating that there was a ‘reasonable justification’ for the submission of the claim more than 130 days after the services were rendered.”]; NY Arthroscopy & Sports Medicine PLLC v Motor Veh. Acc. Indem. Corp., 15 Misc 3d 89, 90 [App Term 2007] [“Even assuming, arguendo, that plaintiff’s inadvertent submission of the claim to State Farm initially justified its delay in submitting the claim to MVAIC (see 11 NYCRR 65-3.5 [1]), plaintiff failed to address, much less provide a ‘reasonable justification’ for the 3½-month delay between December 18, 2003, when plaintiff’s counsel advised plaintiff that there was no coverage, and plaintiff’s submission of the claim to MVAIC on March 26, 2004.”]; see Bronx Expert Radiology, P.C. v Motor Veh. Acc. Indem. Corp., 20 Misc 3d 140[A], *1 [App Term 2008]; Elm Med., P.C. v MVAIC, 20 Misc 3d 145[A], *1 [App Term 2008]).

Generally, once an insured receives a claim from a medical provider, it must pay or deny the same within 30 days thereof (11 [*5]NYCRR 65-3.8[c]; Westchester Med. Ctr. v Nationwide Mut. Ins. Co., 78 AD3d 1168, 1168 [2d Dept 2010]; Nyack Hosp. v Gen. Motors Acceptance Corp., 27 AD3d 96, 100 [2d Dept 2005], affd as mod and remanded, 8 NY3d 294 [2007]; Westchester County Med. Ctr. v New York Cent. Mut. Fire Ins. Co., 262 AD2d 553, 554 [2d Dept 1999]).

However, the foregoing period – within which to deny or pay a claim – can be extended by a proper request for verification (11 NYCRR 65-3.5[b] [“Subsequent to the receipt of one or more of the completed verification forms, any additional verification required by the insurer to establish proof of claim shall be requested within 15 business days of receipt of the prescribed verification forms.”]), and when such a request is made, “an insurer is not obligated to pay or deny a claim until all demanded verification is provided” (New York and Presbyt. Hosp. v Allstate Ins. Co., 31 AD3d 512, 513 [2d Dept 2006]; see Hosp. for Joint Diseases v Elrac, Inc., 11 AD3d 432, 434 [2d Dept 2004]; Nyack Hosp. at 101; New York Hosp. Med. Ctr. of Queens at 584; New York & Presbyt. Hosp. v Am. Tr. Ins. Co., 287 AD2d 699, 700 [2d Dept 2001]). A request for verification submitted more than 15 days after a claim is received does not render the same invalid and merely serves to diminish the 30 day period within which to pay or deny a claim once verification is received; such time diminished by the number of days beyond the 15 days within which to request verification prescribed by the No-Fault Law (11 NYCRR 65-3.8[j]; Nyack Hosp. at 100-101 [“Therefore, inasmuch as the defendants mailed the request for additional verification two days beyond the 15-day period, the time within which the defendants had to either pay or deny the claim was reduced from 30 to 28 days.”]). A request for verification, thus, tolls the time within which to pay or deny a claim and such time does not begin to run until the documents are provided (New York & Presbyt. Hosp. at 700 [“Since the respondent did not supply the additional verification of the claim, the 30-day period in which the defendant had to either pay or deny the claim did not begin to run.”]; Westchester County Med. Ctr. at 555).

A medical provider seeking payments under the relevant no-fault policy establishes prima facie entitlement to summary judgment with proof of that it submitted a timely claim form to the defendant, proof of the fact and the amount of the loss sustained, and “proof either that the defendant [] failed to pay or deny the claim within the requisite 30-day period, or that the defendant [] issued a timely denial of claim that was conclusory, vague or without merit as a matter of law” (Ave T MPC Corp. v Auto One Ins. Co., 32 Misc 3d 128[A] [App Term 2011]; see, New York and Presbyt. Hosp. at 513; Westchester Med. Ctr. at 1168; Nyack Hosp. at 100; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742, 742 [2d Dept 2004]; E. Coast Psychological, P.C. v [*6]Allstate Ins. Co., 13 Misc 3d 133(A), *1 [App Term 2006]; Mollins v Motor Veh. Acc. Indem. Corp., 14 Misc 3d 133(A), *1 [App Term 2007]). A provider can establish the foregoing with “evidentiary proof that the prescribed statutory billing forms were mailed and received [and] that payment of no-fault benefits [is] overdue” (St. Vincent’s Hosp. of Richmond v Govt. Employees Ins. Co., 50 AD3d 1123, 1124 [2d Dept 2008]). However, an insurer raises an issue of fact sufficient to preclude summary judgment when it tenders evidence evincing a timely denial (id. at 124 [“However, in opposition, the defendant submitted admissible evidence in the form of an affidavit of an employee with knowledge of the defendant’s standard office practices or procedures designed to ensure that items were properly addressed and mailed.”]; New York and Presbyt. Hosp. at 513 [“However, in opposition to the motion, the defendant established that it had made a timely request for additional information and that it timely denied the claim within 30 days of receipt of the hospital records it had requested to verify the claim. Accordingly, the Supreme Court properly denied that branch of the plaintiffs’ motion which was for summary judgment on the first cause of action.”]), or that denial within the 30 day prescribed by law wasn’t given because such period was extended by a request for verification (Nyack Hosp. at 100 [“Here, the defendants presented evidence in opposition to the motion and in support of their cross motion demonstrating that the request for the complete inpatient hospital records mailed to the plaintiff on September 12, 2003, resulted in an extension of the 30-day statutory period.”]; New York Hosp. Med. Ctr. of Queens at 585; New York & Presbyt. Hosp. at 700).

Conversely, once an insurer establishes a timely denial on grounds that a plaintiff failed to tender a claim within 45 days, the insurer establishes prima facie entitlement to summary judgment (St. Barnabas Hosp. v Penrac, Inc. at 734; Sunrise Acupuncture PC at *1). In addition, an insurer who demonstrates that despite proper requests for verification, verification was never received resulting in a denial of the claim also establishes prima facie entitlement to summary judgment (New York Hosp. Med. Ctr. of Queens v QBE Ins. Corp., 114 AD3d 648, 649 [2d Dept 2014]; New York & Presbyt. Hosp. v Allstate Ins. Co., 30 AD3d 492, 493 [2d Dept 2006]; Nyack Hosp. at 99; Cent. Suffolk Hosp. v New York Cent. Mut. Fire Ins. Co., 24 AD3d 492, 493 [2d Dept 2005]; Hosp. for Joint Diseases v State Farm Mut. Auto. Ins. Co., 8 AD3d 533, 534 [2d Dept 2004]; Westchester County Med. Ctr. at 555). This is particularly true when a demand for verification remains unanswered for more than 120 days. To be sure, 11 NYCRR 65-3.5(o) states that [a]n applicant from whom verification is requested shall, within 120 calendar days from the date of the initial request for verification, submit all such [*7]verification under the applicant’s control or possession or written proof providing reasonable justification for the failure to comply. The insurer shall advise the applicant in the verification request that the insurer may deny the claim if the applicant does not provide within 120 calendar days from the date of the initial request either all such verification under the applicant’s control or possession or written proof providing reasonable justification for the failure to comply.

Additionally, 11 NYCRR 65-3.8(b)(3) states that

an insurer may issue a denial if, more than 120 calendar days after the initial request for verification, the applicant has not submitted all such verification under the applicant’s control or possession or written proof providing reasonable justification for the failure to comply, provided that the verification request so advised the applicant as required in section 65-3.5(o) of this Subpart.

Thus, when the insurer establishes denial of a claim because a demand for verification went unanswered for 120 days or more, prima facie entitlement to summary judgment is established (Hosp. for Joint Diseases v Elrac, Inc., 11 AD3d 432, 434 [2d Dept 2004] [relying on 11 NYCRR 65.11[m][3] which is now 11 NYCRR 65-3.8[b][3], the court held that “[t]he defendant denied the claim on October 9, 2002, more than 180 days after NY & P Hospital first notified it of the claim. Under these circumstances, the claim was properly denied.”]; Hempstead Gen. Hosp. v New York Cent. Mut. Fire Ins. Co., 232 AD2d 454, 454 [2d Dept 1996] [same]; TAM Med. Supply Corp. v Tri State Consumers Ins. Co., 57 Misc 3d 133(A), *1 [App Term 2017]). Significantly, in Hosp. for Joint Diseases, the court held that defendant – the insurer – established prima facie entitlement to summary judgment with an affidavit from a claims representative, who, based on his review of defendant’s business records, established defendant’s defense – timely denial (id. at 433-434)^[FN3] .

It is well settled that a party’s burden to establish that forms were mailed and therefore, presumed to have been received by another is established upon the tender of proof in admissible form “of actual mailing or proof of a standard office practice or procedure designed to ensure that items are properly addressed and mailed” (New York and Presbyt. Hosp. v Allstate Ins. Co., 29 AD3d 547, 547 [2d Dept 2006]; Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679, 680 [2d Dept 2001] [“Here, the deposition testimony of AIC’s president, a certificate of mailing, and a mailing ledger signed and date-stamped by a U.S. Postal Service employee established the actual mailing of the notice of cancellation to the plaintiff, giving rise to a rebuttable presumption of delivery.”]; Delta Diagnostic Radiology, P.C. v Chubb Group of Ins., 17 Misc 3d 16, 18 [App Term 2007] [the law does not “requir[e] that an affidavit of mailing must state either that it was the affiant’s duty to ensure compliance with the insurer’s standard office practice or procedure with regard to mailing or that the affiant possessed personal knowledge of such compliance. Rather, as the Appellate Division has repeatedly noted, it is sufficient for the affiant to set forth that he or she possessed personal knowledge that the mailing occurred or describe the standard office practice or procedure used to ensure that items were properly addressed and mailed.”]). Notably, an affidavit of mailing, which attests to the practice of mailing documents must contain information with respect to how the items mailed were accurately addressed and the absence of such information renders the affidavit inadequate (Orthotech Express Corp. v MVAIC, 37 Misc 3d 128(A), *1 [App Term 2012] [“In the absence of any recitation of such matters as how the names and addresses on the IME notices were checked for accuracy and how the notices were picked up for mailing, we cannot say, on this record, that the office practice and procedure followed by defendant’s contractor was designed to ensure that the IME notices were addressed to the proper parties and properly mailed.” (internal quotation marks omitted)]; Westchester Med. Ctr. v Countrywide Ins. Co., 45 AD3d 676, 676-677 [2d Dept 2007] [“The supervisor, however, had no personal knowledge that the verification requests were actually mailed on the dates they were issued, and her conclusory allegations regarding the defendant’s office practice and procedure failed to establish that the practice and procedure was designed to ensure that the verification requests were addressed to the proper party and properly mailed.”]).

In New York, no-fault benefits, also known as first party benefits are both promulgated and governed by the Insurance Law and the Comprehensive Motor Vehicle Insurance Reparations Act (CMVIRA) (11 NYCRR 65-1.1, et seq).

Insurance Law § 5103 (a) and (a)(1) state, in relevant part that [e]very owner’s policy of liability insurance issued on a motor vehicle . . . shall be liable for; the payment of first party benefits to . . . Persons, other than occupants of another motor vehicle or a motorcycle, for loss arising out of the use or operation in this state of such motor vehicle.

First party benefits “means payments to reimburse a person for basic economic loss on account of personal injury arising out of the use or operation of a motor vehicle” (Insurance Law § 5102[b]). Basic economic loss “means, up to fifty thousand dollars per person of” medical expenses and lost earnings (Insurance Law § 5102[a]].

11 NYCRR 65-1.1 states that [e]very owner’s policy of liability insurance issued in satisfaction of the minimum requirements of article 6 or 8 of the Vehicle and Traffic Law and article 51 of the Insurance Law and every policy issued in satisfaction of the minimum requirements of article 44-B of the Vehicle and Traffic Law shall contain provisions providing minimum first-party benefits equal to those set out below in the mandatory personal injury protection endorsement (New York).

The foregoing insurance is required in all policies issued in New York after January 26, 2011 (11 NYCRR 65-1.1[b][1] [“An insurer shall provide . . . The Mandatory Personal Injury Protection Endorsement (New York) to every insured with respect to a policy issued, renewed, modified, altered or amended on or after January 26, 2011.”]). Per the relevant endorsement, an insurer “will pay first-party benefits to reimburse for basic economic loss sustained by an eligible injured person on account of personal injuries caused by an accident arising out of the use or operation of a motor vehicle” (11 NYCRR 65-1.1[d]). Per the endorsement, “[b]asic economic loss shall consist of medical expense, work loss, other expense[s.] (id.). An eligible person is defined as the named insured . . . any relative who sustains personal injury arising out of the use or operation of any motor vehicle . . . [and] any other person who sustains personal injury arising out of the use or operation of the insured motor vehicle in the State of New York while not occupying another motor vehicle (11 NYCRR 65-1.1[d]).

Based on the foregoing, it is clear, that first party or no-fault benefits are only available when the injuries claimed arise from an accident involving an insured vehicle by the defendant from whom first party benefits are sought. Indeed, a review of [*8]the plain language of the Insurance Law and the CMVIRA, evinces that first party benefits are only available from an insurer if, inter alia, the insurer insures one of the vehicles involved in an accident from which injuries arise. Specifically, Insurance Law § 5103 (a) and (1) require an owner to provide a policy that pays “first party benefits to . . . Persons, other than occupants of another motor vehicle or a motorcycle, for loss arising out of the use or operation in this state of such motor vehicle.” The word “such” is a direct reference to the insured vehicle on which there is a policy to pay said benefits. It is the relevant insurer, of course, which would necessarily have to provide the relevant policy under which claims need to be made.

The forgoing is bolstered by the CMVIRA, which per 11 NYCRR 65-1.1, requires that all policies of insurance in New York “contain provisions providing minimum first-party benefits equal to those set out below in the mandatory personal injury protection endorsement.” Per that endorsement, first party benefits are limited to an eligible person, meaning one “the named insured . . . any relative who sustains personal injury arising out of the use or operation of any motor vehicle . . . [and] any other person who sustains personal injury arising out of the use or operation of the insured motor vehicle in the State of New York while not occupying another motor vehicle.” Clearly, the “insured motor vehicle” is a reference to the relevant policy in place and of course to the relevant insurer, such that claims can only be made to an insurer if the same’s vehicle was involved in the accident giving rise to the injuries for which first party benefits are made.

Besides the clear language of the forgoing statutes, case law supports the proposition that no first party benefit claims can be made to an insurer who did not insure a vehicle at the time of an accident. For example, it is well settled that when an insurer cancels a policy on a vehicle, which is subsequently involved in an accident, the prior insurer is not required to pay first party benefits (SK Prime Med. Supply v Permanent Gen. Assur. Corp., 66 Misc 3d 129[A]], *1 [App Term 2019] [Court granted defendant’s motion for summary judgment on grounds that defendant insurer did not insure the assignor’s vehicle at the time of the accident.]; KJC Chiropractic, P.C. v Hartford Ins. Co., 65 Misc 3d 145[A], *1 [App Term 2019] [same]). The same is true when first party benefits are sought from an insurer who never provided insurance coverage to a vehicle involved in an accident. To be sure, in Compas Med., P.C. v Hereford Ins. Co., (49 Misc 3d 146[A] [App Term 2015]), defendant moved for summary judgment asserting that “plaintiff’s assignor was not entitled to receive no-fault benefits from defendant since plaintiff’s assignor had been injured while driving a vehicle insured by a different insurer” (id. at *1). The trial court granted [*9]defendant’s cross-motion on the grounds asserted, but the Appellate Term then reversed (id. at *1). Implicit in the Court’s holding however, is that but for the absence of proof that defendant did not insure the assignor’s vehicle, it would have affirmed the grant of summary judgment on the grounds asserted by defendant (id. at *1 [“In support of its cross motion for summary judgment dismissing the complaint, defendant relied upon a conclusory affidavit from its no-fault claims supervisor and a partially illegible copy of a police report which, according to defendant’s counsel, purported to establish that, when the accident occurred, plaintiff’s assignor was in a car insured by another insurer and not an occupant in the vehicle insured by defendant. However, as the foregoing was insufficient to establish, as a matter of law, that defendant did not insure the vehicle in which plaintiff’s assignor was riding when the accident occurred, defendant’s cross motion should have been denied.”]). The court in Matter of Tri State Consumer Ins. Co. v High Point Prop. & Cas. Co. (127 AD3d 980 [2d Dept 2015]), is in accord with the holding in Compas Med., P.C. In Matter of Tri State Consumer Ins. Co., the court vacated an arbitration award requiring the insurer to pay first party benefits for an accident involving a vehicle it did not insure (id. at 981). The court, noting that there can be no payment of first party benefits unless the insurer insured the assignor’s vehicle, held that “there was no rational basis in the record for the arbitrators’ rejection of the appellant’s defense of lack of coverage, since the record demonstrated that the subject insurance policy issued by the appellant pertained to a vehicle and an insured different from those involved in the accident.” (id. at 981).

Notably, in cases where there is an allegation that the assignor’s injuries are unrelated to an insured accident, “an insurer, despite its failure to reject a claim within the 30—day period prescribed by [the] Insurance Law . . . may assert a lack of coverage defense premised on the fact or founded belief that the alleged injury does not arise out of an insured incident” (Cent. Gen. Hosp. v Chubb Group of Ins. Companies, 90 NY2d 195, 199 [1997] [internal citations omitted]; see Mount Sinai Hosp. v Triboro Coach Inc., 263 AD2d 11, 19 [2d Dept 1999]; Amaze Med. Supply, Inc. v Utica Mut. Ins. Co., 26 Misc 3d 129[A], *1 [App Term 2009] [“In opposition to plaintiff’s motion, defendant asserted that the alleged injuries did not arise out of an insured incident. We find that defendant’s submissions were sufficient to demonstrate that defendant possessed a founded belief that the alleged injuries do not arise out of an insured incident”] [internal citations and quotations marks omitted]; Ema Acupuncture, P.C. v State Farm Ins. Co., 16 Misc 3d 135[A], *1 [App Term 2007]; Ocean Diagnostic Imaging, P.C. v Lancer Ins. [*10]Co., 6 Misc 3d 62, 63 [App Term 2004]). This is because, it is well settled that the failure to timely deny coverage cannot create coverage where none existed in the first place (Zappone v Home Ins. Co., 55 NY2d 131, 135-136 [1982] [“We conclude, however, that the Legislature did not intend by its use of the words ‘deny coverage’ to bring within the policy a liability incurred neither by the person insured nor in the vehicle insured, for to do so would be to impose liability upon the carrier for which no premium had ever been received by it and to give no significance whatsoever to the fact that automobile insurance is a contract with a named person as to a specified vehicle.”]; see Matter of Worcester Ins. Co. v Bettenhauser, 95 NY2d 185, 188 [2000] [“Disclaimer pursuant to section 3420 (d) is unnecessary when a claim falls outside the scope of the policy’s coverage portion. Under those circumstances, 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.”]).

Defendant’s Motion

Defendant’s motion for summary judgment is denied. Significantly, defendant fails to establish that it did not insure the vehicle in which Mercedes, the assignor, was a passenger at the time of the instant accident. As such, defendant fails to establish its defense and therefore, fails to establish prima facie entitlement to summary judgment.

In support of its motion, defendant submits an affidavit by Tony Singh (Singh), a No-Fault Supervisor, employed by defendant, who states the following: Singh is responsible for the oversight and management of all no-fault claims made to defendant. Moreover, Singh is familiar with plaintiff’s claim with regard to Mercedes because he was the supervisor responsible for the handling of said claim and because Singh reviewed defendant’s file with regard to said claim. Singh states that defendant’s office procedure with regard to mail is that all mail is processed on the same day it is received. All mail, including bills, are date and time stamped upon receipt and then imported into a claim system used to track each bill. Each bill is then assigned an adjuster to process the bill and claim. When an adjuster creates a denial for a claim or requests additional verification, those documents are given to a mailing officer, which is either Singh or Carl Periana. The mailing officers then address the envelopes, the forgoing documents are placed therein, postage is applied and then they are mailed that same day. Specifically, the envelopes are given to an agent of the United States Postal Service, who picks up the mail on a daily basis. The foregoing documents are created and maintained in the ordinary course of defendant’s business. With regard to Mercedes and plaintiff’s claim, a bill for services rendered to Mercedes on November 7, 2018 was received by defendant on December 14, [*11]2018. A denial was subsequently issued on January 10, 2019. The basis of the denial was that Mercedes was not an eligible injured person insofar as his injuries did not arise out of the use and operation of the motor vehicle and/or the vehicle was not the proximate cause of Mercedes’ injuries. On November 28, 2018, defendant issued a global denial asserting that Mercedes was not an occupant in defendant’s vehicle.

Singh also states that the proximate cause of Mercedes’ accident was a collision between a vehicle owned by Mohammad Badrudoza and insured by American Transit Insurance Company and a vehicle owned by Alassane Yoda and insured by Park Insurance Company.

Defendant submits the documents described by Singh in his affidavit. Said documents, which deny the claim made by plaintiff, contain the information described by Singh. Specifically, the denial on January 10, 2019, states that Mercedes “is not an Eligible Injured Person as the applicant’s injuries did not arise out of the use or operation of the motor vehicle and/or the motor vehicle was not the proximate cause of the applicant’s injuries.” The denial dated November 28, 2018 states that Mercedes “was not an occupant in our vehicle.”

Defendant also submits a Police Accident Report, for which no foundation is laid.

Based on the foregoing, defendant fails to establish prima facie entitlement to summary judgment. Significantly, here, defendant denied the instant claim on grounds that it did not insure any of the vehicles involved in Mercedes’ accident such that it has no obligation to provide first party no-fault benefits to him. However, while, defendant’s submission establish some of the foregoing contentions with regard to the timely mailing of the denials, the record is bereft of competent and admissible evidence establishing the substance of said defense.

Preliminarily, here, defendant does establish that it timely ^[FN4] denied the instant claim on the grounds, that defendant urges warrants dismissal. First, defendant provides the denials it sent to plaintiff and laid the foundation for their admission [*12]into evidence ^[FN5] . These denials do evince that they were made within 30 days of receipt of plaintiff’s claim. One denial was actually made before the instant claim was submitted, presumably when plaintiff applied for first party benefits. Second, defendant established that it timely denied the claims. To be sure, it is well settled that a party’s burden to establish that forms were mailed and therefore, presumed to have been received by another is established upon the tender of proof in admissible form “of actual mailing or proof of a standard office practice or procedure designed to ensure that items are properly addressed and mailed” (New York and Presbyt. Hosp. at 547; Residential Holding Corp. at 680; Delta Diagnostic Radiology, P.C. at 18). Here, Singh’s affidavit, which describes defendant’s procedure for the receipt, processing and mailing of no-fault claim related documents, establishes that the claims herein were timely denied insofar as the denials were mailed within 30 days of receiving plaintiff’s claim.

However, defendant’s evidence is wholly inadequate for purposes of establishing, as urged, that the claim herein warranted denial because defendant did not insure any of the vehicles involved in Mercedes’ accident, let alone the one in which he was a passenger. Again, an insurer who establishes that it never insured an assignor’s vehicle at the time of the accident giving rise to the claim for first party benefits is not liable to pay the same (Compas Med., P.C. v at *1; Matter of Tri State Consumer Ins. Co. at 981). Here, it is clear that Singh’s assertion – that defendant did not insure any of the vehicles involved in the instant accident – is entirely based on the Police Accident Report appended to defendant’s motion. The record, however, is bereft of any foundation for the same’s admission and as such it cannot be considered. As such, defendant fails to establish prima facie entitlement to summary [*13]judgment. Inasmuch as defendant fails to meet its burden, the Court need not consider the sufficiency of any of the opposition papers submitted (Winegrad v New York University Medical Center, 64 NY2d 851, 853 [1985]). Accordingly, defendant’s motion is denied.

Plaintiff’s Cross-Motion

Plaintiff’s cross-motion seeking summary is granted. Significantly, plaintiff establishes that it timely submitted the instant claim, that although timely denied, the defense undergirding the denial has no legal merit, and that the claim is overdue.

A medical provider seeking payments under the relevant no-fault policy establishes prima facie entitlement to summary judgment with proof of that it submitted a timely claim form to the defendant, proof of the fact and the amount of the loss sustained, and “proof either that the defendant [] failed to pay or deny the claim within the requisite 30-day period, or that the defendant [] issued a timely denial of claim that was conclusory, vague or without merit as a matter of law” (Ave T MPC Corp. at *1; New York and Presbyt. Hosp. at 513; see Westchester Med. Ctr. at 1168; Nyack Hosp. at 100; Mary Immaculate Hosp. at 742; E. Coast Psychological, P.C. at *1; Mollins at *1).

Here although, plaintiff submits no evidence in support of its motion, it nevertheless establishes prima facie entitlement to summary judgment by relying on the denial forms submitted by defendant in support of its motion for summary judgment. To be sure, in no fault cases, the proponent of summary judgment may establish prima facie entitlement to summary judgment using the evidentiary submissions of the opposing party (Oleg Barshay, DC, P.C. v State Farm Ins. Co., 14 Misc 3d 74, 75 [App Term 2006]; see E. Acupuncture, P.C. v Electric Ins. Co., 16 Misc 3d 128(A) [App Term 2007]; Fair Price Med. Supply Corp. v Elrac Inc., 12 Misc 3d 119, 120 [App Term 2006]. In Oleg Barshay, DC, P.C., the court granted plaintiff’s motion for summary judgment even though plaintiff had not submitted sufficient evidence to establish prima facie entitlement thereto (id. at *1-2). That court searched the record, noted that the missing elements of plaintiff’s prima facie case were annexed to defendant’s opposition papers, and granted plaintiff’s motion (id. at *1-2). Specifically, that court stated [w]hile in its motion papers, plaintiff proved that it prepared a claim setting forth the fact and amount of the loss, plaintiff’s proof that it submitted the claim to defendant was inadequate. We have held that a no-fault benefits applicant may cure deficiencies in its proof of mailing by annexing to its motion papers an insurer’s denial of claim form wherein the insurer acknowledges the claim’s receipt. Where, as here, plaintiff failed to annex the defendant’s denial of claim form to its motion papers, and the defendant annexes the denial of claim form to its opposing papers, the deficiency is similarly cured. We are aware of the well-established principle that the failure of a proponent of a motion for summary judgment to make a prima facie showing of entitlement to judgment as a matter of law requires denial of the motion regardless of the sufficiency of the [*14]opposing papers. Moreover, it has been said that where a movant fails to demonstrate its entitlement to judgment as a matter of law, it is unnecessary for the court to even consider the sufficiency of the opposition papers. While opposition papers should not be reviewed for the sufficiency of the opposition, i.e., in order to determine whether a triable issue of fact has been raised, since in such cases the burden of proof will not have shifted to the party opposing the motion, this is not to say that where a movant fails to establish a prima facie case, the court may never review the opposition papers. Where the missing elements of a movant’s prima facie showing of entitlement to judgment as a matter of law (such as here, plaintiff’s submission of the claim forms) are supplied in the opposition papers, it is our opinion that the court may, in its discretion and pursuant to its power to search the record, find that a prima facie case exists, thereby shifting the burden of proof, notwithstanding the evidentiary deficiencies in the moving papers. Indeed, CPLR 3212 (b) authorizes the court to grant a motion for summary judgment, if upon ‘all the papers and proof submitted, the cause of action or defense shall be established sufficiently to warrant the court as a matter of law in directing judgment in favor of any party.’ The discretion of the court to review the opposition papers may be viewed as akin to the court’s discretionary power to grant reverse summary judgment in an appropriate case. This discretion exists both in the motion court and, in the first instance, in an intermediate appellate court. Thus, the opposition papers may, in the court’s discretion, be perused to determine whether the record as a whole establishes the movant’s prima facie entitlement to judgment. Were we to interpret the law otherwise, a court could not, for example, grant summary judgment to a plaintiff whose moving papers are insufficient, even where there has been a concession of liability in defendant’s opposition papers (internal citations omitted) (id. at *1-2).

Here, as previously noted, defendant’s denial form establishes that the claim herein was timely, that it was timely denied, but insofar as defendant denied the existence of coverage, never paid. Now that this Court, by denying defendant’s motion, has, by operation of law, determined that defendant’s defense lacks merit, payment on the claim is over due. Accordingly, plaintiff establishes prima facie entitlement to summary judgment and nothing submitted by defendant raises an issue of fact sufficient to preclude summary judgment in plaintiff’s favor. It is hereby

ORDERED that the Clerk enter judgment in plaintiff’s favor in the amount of 1,789.19, plus interest. It is further

ORDERED that plaintiff serve a copy of this Decision and Order with Notice of Entry upon defendant within thirty (30) days hereof.

This constitutes this Court’s decision and Order.

Dated: November 19, 2021
FIDEL E. GOMEZ, JCC

Footnotes

Footnote 1: 11 NYCRR 65-3.1 states that “[t]he following are rules for the settlement of claims for first-party and additional first-party benefits on account of injuries arising out of the use or operation of a motor vehicle, a motorcycle or an all-terrain vehicle. These rules shall apply to insurers and self-insurers, and the term insurer, as used in this section, shall include both insurers and self-insurers as those terms are defined in this Part and article 51 of the Insurance Law, the Motor Vehicle Accident Indemnification Corporation (MVAIC), pursuant to section 5221(b) of the Insurance Law and any company or corporation providing insurance pursuant to section 5103(g) of the Insurance Law, for the items of basic economic loss specified in section 5102(a) of the Insurance Law.”

Footnote 2: See also 11 NYCRR 65-1.1 [“No action shall lie against the Company unless, as a condition precedent thereto, there shall have been full compliance with the terms of this coverage. . . . Medical, Work Loss, and Other Necessary Expenses. In the case of a claim for health service expenses, the eligible injured person or that person’s assignee or representative shall submit written proof of claim to the Company, including full particulars of the nature and extent of the injuries and treatment received and contemplated, as soon as reasonably practicable but, in no event later than 45 days after the date services are rendered. The eligible injured person or that person’s representative shall submit written proof of claim for work loss benefits and for other necessary expenses to the Company as soon as reasonably practicable but, in no event, later than 90 days after the work loss is incurred or the other necessary services are rendered. The foregoing time limitations for the submission of proof of claim shall apply unless the eligible injured person or that person’s representative submits written proof providing clear and reasonable justification for the failure to comply with such time limitation.”]

Footnote 3: It bears mentioning that the court’s reasoning in Hosp. for Joint Diseases – that “[p]ersonal knowledge of [defendant’s] documents, their history, or specific content are not necessarily required of a document custodian” (id. at 433), for purposes of laying a business record foundation sufficient to admit the documents in evidence, or in that case, for consideration on summary judgment – is merely a recognition of well settled law. Indeed, the business record foundation only requires proof that (1) the record at issue be made in the regular course of business; (2) it is the regular course of business to make said record and; (3) the records were made contemporaneous with the events contained therein (CPLR § 4518; People v Kennedy, 68 NY2d 569, 579 [1986]). Accordingly, “[i]t is well settled that a business entity may admit a business record through a person without personal knowledge of the document, its history or its specific contents where that person is sufficiently familiar with the corporate records to aver that the record is what it purports to be and that it came out of the entity’s files” (DeLeon v Port Auth. of New York and New Jersey, 306 AD2d 146 [1st Dept 2003]).

Footnote 4: This is, of course, is irrelevant here since the defense is a lack of coverage defense which can be asserted even in the absence of a timely denial (Gen. Hosp. v Chubb Group of Ins. at 199; see Mount Sinai Hosp. at 19; Amaze Med. Supply, Inc. at *1; Ema Acupuncture, P.C. at *1; Ocean Diagnostic Imaging, P.C. at 63 [App Term 2004]). This is because, it is well settled that the failure to timely deny coverage cannot create coverage where none existed in the first place (Zappone at 135-136; see Matter of Worcester Ins. Co. at 188).

Footnote 5: Defendant’s denial forms are admissible insofar as Singh laid the requisite business records foundation. To be sure, the business record foundation only requires proof that (1) the record at issue be made in the regular course of business; (2) it is the regular course of business to make said record and; (3) the records were made contemporaneous with the events contained therein (CPLR § 4518; People v Kennedy, 68 NY2d 569, 579 [1986]). Accordingly, “[i]t is well settled that a business entity may admit a business record through a person without personal knowledge of the document, its history or its specific contents where that person is sufficiently familiar with the corporate records to aver that the record is what it purports to be and that it came out of the entity’s files” (DeLeon v Port Auth. of New York and New Jersey, 306 AD2d 146 [1st Dept 2003]).

Decided on November 12, 2021

SUPREME COURT, APPELLATE TERM, SECOND DEPARTMENT, 2d, 11th and 13th JUDICIAL DISTRICTS

Defendant appeals from an order of the Civil Court of the City of New York, New York County (Jose A. Padilla, Jr., J.), entered March 29, 2021, which denied his motions (1) to strike the complaint or conditionally preclude plaintiff from offering evidence at trial for failure to comply with discovery orders, and (2) for leave to amend his answer to include a counterclaim in the sum of $24,938.59 plus interest and statutory attorneys’ fees.

Per Curiam.

Order (Jose A. Padilla, Jr., J.), entered March 29, 2021, affirmed, with $10 costs.

In this action seeking a de novo adjudication of a no-fault insurance claim following a master arbitrator’s award in excess of $5,000 (see Insurance Law § 5106[c]), Civil Court providently exercised its discretion in denying defendant’s motion to strike the complaint or to conditionally preclude plaintiff from offering evidence for failure to comply with discovery orders. A motion court “is afforded broad discretion in supervising disclosure and its determinations will not be disturbed unless that discretion has been clearly abused” (Those Certain Underwriters at Lloyds, London v Occidental Gems, Inc., 11 NY3d 843, 845 [2008] [internal quotation marks omitted]). Here, the motion court’s finding that plaintiff’s responses were sufficient is supported by the record and was a proper exercise of discretion (see Youwanes v Steinbrech, 193 AD3d 492 [2021]; Lyoussi v Etufugh, 188 AD3d 604, 605 [2020]). Nor was the court constrained by the doctrine of law of the case, which is inapplicable to prior discretionary conditional discovery orders (see Allstate Ins. Co. v Buziashvili, 71 AD3d 571, 572 [2010]; Brothers v Bunkoff Gen. Contrs., 296 AD2d 764, 765 [2002]).

Civil Court also providently exercised its discretion in denying defendant’s eve of trial motion to amend his answer to assert a counterclaim for $24,938.59 in no-fault benefits, where he failed to establish a reasonable excuse for his years-long delay in moving for leave to amend (see Barry v Clermont York Assoc., LLC, 144 AD3d 607, 608 [2016]). Moreover, the proposed amendment would prejudice plaintiff at this stage of the proceedings, where discovery had been [*2]completed, a notice of trial had been filed and defendant previously limited his recovery to $15,251.76 based upon the fee schedule.

We have reviewed defendant’s remaining contentions and find them to be without merit.

THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT.

[*1] (October 26, 2021)

Scahill Law Group P.C., Bethpage (Albert J. Galatan of counsel), for appellants.

The Stuttman Law Group, P.C., Purchase (Dennis D. Murphy of counsel), for respondent.

Order, Supreme Court, Bronx County (Mary Ann Brigantti, J.), entered on or about May 21, 2020, which, to the extent appealed from as limited by the briefs, denied defendants’ motion to dismiss this action, based on the execution of a release by the nonparty injured person covered by plaintiff’s no-fault additional personal injury protection (PIP) benefits, unanimously affirmed, with costs.

The notice dated September 7, 2017, advising defendants’ insurer of the payment of PIP benefits covering the medical bills of nonparty Damaris Ortiz and demanding reimbursement, establishes that plaintiff insurer’s “right to subrogation ‘accrue[d] upon payment of the loss’ ” on September 5, 2017 (Fasso v Doerr, 12 NY3d 80, 88 [2009], quoting Federal Ins. Co. v Arthur Andersen & Co., 75 NY2d 366, 372 [1990]). Plaintiff’s subrogation examiner, who averred having personal knowledge of the facts, including the date of mailing of the PIP notices identifying her as plaintiff’s contact person, properly authenticated this and other notices as business records (see CPLR 4518 [a]). Before Supreme Court, defendants did not contest the affiant’s assertion that the September 7, 2017 notice was mailed the same day, three days before Ortiz signed the general release in question (see CPLR 2103 [b] [2] [service completed when mailed]). We disregard defendants’ references to purported evidence to the contrary, which was not submitted to Supreme Court on this motion and is not included in the record on appeal (see Bregman v 111 Tenants Corp., 97 AD3d 75, 85 [1st Dept 2012]).

Contrary to defendants’ contention, the notices were not required to be sent directly to them, instead of their insurer, which was their “agent acting within the scope of [its] agency” (Center v Hampton Affiliates, 66 NY2d 782, 784 [1985]), and from which plaintiff had already recovered payments it made for another injured individual’s medical bills due to defendants’ liability arising from the same automobile accident (see Insurance Law § 5105 [a]). The insurer’s “knowledge” of plaintiff’s subrogation right “is imputed to [its] principal[s],” who are “bound by such knowledge although the information is never actually communicated to [them]” (Center, 66 NY2d at 784 [citations omitted]). Notably, prior to plaintiff’s first payment of benefits covering Ortiz, the bill of particulars served by Ortiz upon defendants in her personal injury action advised of the expected PIP coverage by plaintiff. As such, defendants “kn[e]w[ ] or should have known that a right to subrogation exist[ed]” at the time Ortiz signed the general release (Fasso, 12 NY3d at 88; see Ocean Acc. & Guar. Corp. v Hooker Electrochemical Co., 240 NY 37, 46 [1925] [tortfeasor “knew or possessed information which reasonably pursued would have given it knowledge of (the) plaintiff’s status as an insurer of (the injured party) against claims springing from (the) defendant’s fault and that it had become subrogated to various claims of such a character against [*2]the (defendant)]”).

We reject defendants’ contention that five days must be added to the date of service, since, here, there is no “period of time prescribed by law [that] is measured from the service of a paper” (CPLR 2103 [b] [2]; see also Allied Wholesale v Asia N. Am. Eastbound Rate Agreement, 212 AD2d 472, 473 [1st Dept 1995], citing Matter of Knickerbocker Ins. Co. [Gilbert], 28 NY2d 57, 65-66 [1971] [service of demand for arbitration is complete upon mailing and timeliness is measured by date of mailing]). Defendants’ reliance on similar provisions measuring periods of time to request hearings after receiving mailed unemployment decisions, under the Labor Law, and to cure lease violations after receiving a landlord’s mailed notice to cure, under the Loft Law, is likewise unavailing (see 12 NYCRR 461.2; Matter of Tartaglia [Aegis Capital Corp.—Commissioner of Labor], 128 AD3d 1304, 1305 [3d Dept 2015], citing Labor Law § 620 [2]; see also D&R Realty Corp. v Blakely, 9 Misc 3d 203, 205-209 [Civil Ct, NY County 2005]). Concur—Gische, J.P., Webber, Mazzarelli, Shulman, Pitt, JJ.

The Rybak Firm, PLLC (Damin J. Toell of counsel), for appellant. McCormack, Mattei & Holler (Jamila Shukry of counsel), for respondent.

Appeal from a judgment of the Civil Court of the City of New York, Kings County (Michael Gerstein, J.), entered March 14, 2019. The judgment, after a nonjury trial, dismissed the complaint.

ORDERED that the judgment is reversed, with $30 costs, and the matter is remitted to the Civil Court for the entry of a judgment in favor of plaintiff in the principal sum of $1,176.95.

In this action by a provider to recover the principal sum of $1,176.95 in assigned first-party no-fault benefits for durable medical products it sold to its assignor in June 2015, a nonjury trial was held. At the trial, a “Trial Stipulation” was admitted into evidence which stated that both sides had “established their respective prima facie burdens” and “[t]he only remaining issues to be resolved at trial are those defenses which are preserved in defendant’s timely denials and any non-waivable defenses.” Plaintiff rested its case after the stipulation was admitted into evidence.

In support of defendant’s affirmative defense that plaintiff was not properly licensed at the time it sold the durable medical equipment to its assignor, defendant’s witness, its senior litigation representative, testified that she had made a Freedom of Information Law (FOIL) request in order to find out whether plaintiff had a Department of Consumer Affairs license during the time period of January 2010 to June 2016. The representative testified that she had received a response that “No records were found for Quality Health Supply Corp. Inc.” Certified copies of the FOIL request and response were admitted into evidence at trial.

Following the trial, the Civil Court found that plaintiff was not entitled to recover no-fault benefits because it was not licensed at the time the products were sold to the assignor, and dismissed the complaint. A judgment was subsequently entered on March 14, 2019.

Upon a review of the record, we find that the testimony of defendant’s senior litigation representative, as well as the certified FOIL documents entered into evidence at trial, were insufficient to establish that plaintiff did not have a Department of Consumer Affairs license for the time period of January 2010 to June 2016 (cf. Bath Med. Supply, Inc. v Allstate Indem. Co., 27 Misc 3d 92 [App Term, 2d Dept, 9th & 10th Jud Dists 2010]). The FOIL evidence solely established that a company named “Quality Heath Supply Corp. Inc.” was not licensed during this time period and no evidence was provided that plaintiff “Quality Health Supply Corp.” is the same entity as “Quality Health Supply Corp. Inc.” As there was no other evidence to establish that plaintiff was not properly licensed at the time it sold the durable medical products to its assignor, plaintiff should have been awarded a judgment in its favor.

Accordingly, the judgment is reversed and the matter is remitted to the Civil Court for the entry of a judgment in favor of plaintiff in the principal sum of $1,176.95.

ALIOTTA, P.J., WESTON and TOUSSAINT, JJ., concur.

Index No. CV 13288/21

GOLDBERG, MILLER & RUBIN P.C.
Attorneys for Petitioner
By: Harlan R. Schreiber, Esq.
1501 Broadway, Suite 715
New York, New York 10036
646.863.1531

ISRAEL, ISRAEL & PURDY, LLP
Attorneys for Respondent Corona Medical P.C.
By: Michael Hoenig, Esq.
11 Grace Avenue – Suite 11021
Great Neck, New York 11001
516.829.0363

MARSHALL & MARSHALL, PLLC
Attorneys for Respondent MVAIC
By: Jeffrey Kadsushin, Esq.
30 Jericho Executive Plaza, Suite 100 West
Jericho, New York 11753
516.997.6000

BACKGROUND

Mostafa Hekal (Assignor), a 29 year old male, was injured in a motor vehicle accident on March 8, 2019. Assignor was driving a 2018 Ford, with New Jersey plate L62KUG, when it was involved in a collision on the Southern State Parkway in Hempstead, New York. The 2018 Ford was a rental car owned by AutoTeam, Inc. and insured under New Jersey code 989, by Unitrin Preferred Insurance Company.

Assignor maintained a business policy in New York through Hereford, which is a New York State livery insurer. Assignor submitted the claim to Hereford and Hereford denied the claim, because the rental car was not an insured vehicle under the Hereford policy.

Assignor then submitted the claim to MVAIC who denied the claim because AutoTeam has a policy which covered the vehicle.

The amount in dispute was $550.00.

The parties submitted to arbitration to resolve the underlying dispute regarding no fault benefits. Corinne Pascariu (CP), the Arbitrator, held a hearing on June 29, 2020 and October 22, 2020 and issued a decision finding that MVAIC was not liable for the claim as a policy existed. CP further found:

… where, as here, there may be more than one insurer — the insurer providing coverage to the vehicle Assignor had been renting and the insurer providing for hire coverage to the vehicle Assignor had been driving — liable for providing first-party No-Fault benefits, and “a dispute regarding priority of payment arises among insurers who otherwise are liable for the payment of first party benefits then the first insurer to whom notice of claim is given…shall be responsible for payment….

CP went on to find that as Hereford was the first to receive the notice of claim, it was responsible for processing the claim and its assertion that AutoTeam Inc is the insurer responsible must be resolved through intercompany arbitration.^[FN1]

The award was confirmed by Victor J. D’Ammora (VD), a Master Arbitrator pursuant to decision dated March 1, 2021. VD agreed with CP’s analysis and conclusions and found that CP’s decision was neither arbitrary and capricious nor incorrect as a matter of law.

THE PETITION

Hereford filed the petition commencing this proceeding on May 14, 2021. MVAIC and Corona Medical both appeared by counsel and filed opposition and cross-petitions. On October 14, 2021, the papers were fully submitted, and on October 15, 2021, the case was assigned to this court for determination.

The petition and cross-petitions are consolidated herein for determination.

For the reasons stated below, the petition to vacate the award is granted and the cross-petitions are denied.

There Was No Basis in the Record to Find Coverage by Hereford Existed

CPLR § 7511(b)(1)(iii) provides for an application for a party to vacate an arbitration [*2]award, where the arbitrator exceeded her power. While judicial review of arbitration awards is limited to the grounds set forth in CPLR 7511, an award that is the product of compulsory arbitration, such as the case at bar, has an additional layer of review to insure that the award is supported by evidence in the record and that the award is not arbitrary and capricious (Liberty Mutual Fire Insurance Co v Global Liberty Insurance Co. of NY 144 AD3d 1160, 1161).

In this case, the insurance policy issued by Hereford clearly on its face indicates it covers only the automobile owned by Assignor, and therefore provides no coverage for the vehicle Assignor rented and was driving when he got into the accident. The vehicle covered by Hereford is a 2015 Chevrolet, specifically identified by a PIN number on the declaration page of the policy issued by Hereford. The issue below was not one of priority of payment, as ruled on by the Arbitrator, but a lack of coverage defense, which the Arbitrator did not rule on, noting only that there “may” be coverage under the policy issued by Hereford without citing any evidence for this conjecture.

It is well settled that where an insurance company made no contract of insurance with the person and for the vehicle involved in the accident, liability is properly denied (Zappone v Homes Ins. Co. 55 NY2d 131, 136). In such a situation “… although the carrier may have some other relationship with the owner or driver of the vehicle, it has no contract with that person with respect to the vehicle involved and, there being no contractual relationship with respect to the vehicle, is not required to deny coverage or otherwise respond to a claim arising from an accident involving that vehicle except as statute mandates or courtesy suggests (Id at 136-137).” The court in Zapone further noted that the purpose of requiring company’s disputing priority of payment to go to intercompany arbitration was “.. to avoid prejudice to the injured claimant … not, however to provide an added source of indemnification which had never been contracted for and for which no premium had ever been paid (Id at 137).” Additionally, a lack of coverage defense may be raised regardless of whether the insurer’s denial was timely or in proper form [Gentlecare Ambulatory Anesthesia Services v Hereford 69 Misc 3d 144(A)].

Under these circumstances, and given the lack of evidence in the record for any finding that coverage by Herford exists, the award is arbitrary and capricious and must be vacated (Global Liberty Insurance Co. v Medco Tech, Inc. 170 AD3d 558; Progressive Cas. Ins.. Co. v New York State Ins. Fund 850 NYS2d 478; Allstate Insurance Co v Countrywide Insurance Co. 2002 NY Slip Op 40177(U)).

The cross-petition of Corona Medical PC is denied for the reasons stated above.

The cross-petition of MVAIC is also denied. Although, the court agrees with that portion of the arbitrator’s decision which found that there was no liability as pertains to MVAIC, because AutoTeam, Inc. had a policy, the court can not both vacate the award as against Hereford and confirm the award as to MVAIC. To do so would constitute a modification of the award, and there is no applicable basis under CPLR 7511( c) for this court to issue a modification.^[FN2]

CONCLUSION

Based on the foregoing, it is hereby

ORDERED that the petition is granted to the extent of vacating and setting aside the award of Victor J’ D’Ammora, The Mater Arbitrator, dated March 1, 2021 with AAA [*3]Assessment Number 17-20-1157-8170, and the award of Corinne Pascariu, the Lower Arbitrator, dated October 28, 2020, upon the grounds that the award was arbitrary and capricious and exceeded the Master Arbitrator’s authority; and it is further

ORDERED that the cross-petitions of MVAIC and Corona Medical PC are denied in their entirety; and it is further

ORDERED that the Clerk of the Court shall enter judgment accordingly.

This constitutes the decision and order of this court.

New York, New York
October 20, 2021
Hon. Sabrina B. Kraus,
JCC

Footnotes

Footnote 1:CP also made a finding that Allstate’s denial was timely issued although Allstate does not appear to have been a party to the arbitration.

Footnote 2:Neither AutoTeam Inc, nor its insurer, Unitrin were party to the underlying arbitration. There is no discussion of why this party was not joined in the arbitrator’s decision.

Index No.: CV-031515-03/QU

Plaintiff’s counsel:

Law Offices of David O’Connor PC

807 Kings Highway

Brooklyn, NY 11223

Defendant’s counsel:

Bruno, Gerbino & Soriano, LLP

445 Broad Hollow Road, Suite 220

Melville, NY 11747

The following papers were read on Defendant’s motion to dismiss Plaintiff’s complaint:

Papers Numbered

Defendant’s Notice of Motion and Affirmation dated November 9, 2017 (“Motion“) and file stamped by the court on November 14, 2017. 1

Plaintiff’s Affirmation in Opposition dated March 26, 2018 (“Opposition“). 2

Defendant’s Reply Affirmation dated April 6, 2018 (“Reply“). 3

Appellate Term for the 2nd, 11th and 13th Judicial Districts’ Decision and Order entered March 13, 2020. 4

Background

In a summons and complaint filed January 6, 2003, Plaintiff sued Defendant insurance company to recover $5,249.06 in unpaid first party No-Fault benefits for medical services provided to Plaintiff’s assignor Rodriquez on September 5, 2002, plus attorneys’ fees and statutory interest. Court’s case summary indicates that this action became “inactive” as of on [*2]June 1, 2007. However, in a notice of motion filed January 7, 2008 (“2008 Motion“), Defendant moved to dismiss Plaintiff’s complaint as a penalty for noncompliance with discovery (CPLR 3126). According to court’s case summary and court’s marking on the original 2008 Motion, the 2008 Motion was marked withdrawn on February 5, 2008.

Defendant further moved to dismiss Plaintiff’s complaint on November 14, 2017 through the Motion as abandoned (CPLR 3404) or as barred by laches, which Plaintiff opposed. In an order entered June 4, 2018 (“Prior Order“), the court (H., J.) granted Defendant’s Motion on the ground it was barred by laches and dismissed Plaintiff’s complaint with prejudice, but did not rule on the other branches of Defendant’s Motion. By notice of appeal dated July 13, 2018, Plaintiff appealed the Prior Order. In a decision and order dated March 13, 2020, the Appellate Term for the 2nd, 11th and 13th Judicial Districts reversed the Prior Order and remitted the matter to Civil Court to determine the remaining branches of Defendant’s Motion. Defendant’s Motion was assigned to this Court on May 20, 2021. Several attempts to schedule an oral argument by both parties before this Court were not successful.

Discussion and Decision

Defendant moved to dismiss Plaintiff’s complaint as abandoned (CPLR 3404) or as barred by laches, and alternatively sought to stay interest from the time the action was marked “disposed” on June 1, 2007. The Appellate Term reversed the Prior Order which dismissed the action as barred by laches. The remaining branches of Defendant’s Motion sought dismissal on the ground that the Plaintiff abandoned the action by failing to restore the action since it was marked disposed on June 1, 2007, and alternatively, sought to stay interest from June 1, 2007, the date the matter was marked off, until the date the matter was restored.

CPLR 3404 provides:

A case in the supreme court or a county court marked “off” or struck from the calendar or unanswered on a clerk’s calendar call, and not restored within one year thereafter, shall be deemed abandoned and shall be dismissed without costs for neglect to prosecute. The clerk shall make an appropriate entry without the necessity of an order.

CPLR 3404 does not apply to actions in New York City Civil Court (Chavez v 407 Seventh Ave. Corp., 39 AD3d 454, 456 [2d Dept 2007]; Gaetane Physical Therapy, P.C. v Kemper Auto & Home Ins. Co., 50 Misc 3d 144[A], 2016 NY Slip Op 50255[U] *1 [App Term 2d Dept 2016]; Halpern v Tunne, 38 Misc 3d 126[A], 2012 NY Slip Op 52321[U] * 2 [App Term 2d Dept 2012]; Small v Metropolitan Prop. & Cas. Ins. Co., 35 Misc 3d 134[A], 2012 NY Slip Op 50760[U] * 1 [App Term 2d Dept 2012]). Even if CPLR 3404 were to apply in New York City Civil Court, CPLR 3404 would not have applied to pre-note of issue actions (Guillebeaux v Parrott, 188 AD3d 1017, 1017 [2d Dept 2020; Onewest Bank, FSB v Kaur, 172 AD3d 1392, 1393 [2d Dept 2019]; Kapnisakis v Woo, 114 AD3d 729, 730 [2d Dept 2014]; Arroyo v Board of Educ. Of City of NY, 110 AD3d 17, 19 [2d Dept 2013]), because CPLR 3404 would not have furnished grounds for dismissal since no party filed a notice of trial, which is the Civil Court equivalent of the note of issue (Exceptional Med. Care, P.C. v Fiduciary Ins. Co., 43 Misc 3d 75, 76 [App Term 2d Dept 2014]; Tong Li v Citiwide Auto Leasing, Inc., 43 Misc 3d 128[A], 2014 NY Slip Op 50481[U] *1 [App Term 2d Dept 2014]; Richman v Obiakor Obstetrics & Gynecology, P.C., 32 Misc 3d 135[A], 2011 NY Slip Op 51461[U] *1 [App Term 2d Dept 2011]). Therefore, this Court denies Defendant’s motion to dismiss pursuant to CPLR 3404.

In its Reply, Defendant also contended that Plaintiff’s complaint must be dismissed [*3]pursuant to 22 N.Y.C.R.R. § 208.14[c], which provides that “[a]ctions stricken from the calendar may be restored to the calendar only upon stipulation of all parties so ordered by the court or by motion on notice to all other parties, made within one year after the action is stricken.” Defendant’s arguments regarding 22 N.Y.C.R.R. § 208.14[c] were improperly raised for the first time in its Reply (Grocery Leasing Corp. v P & C Merrick Realty Co., LLC, NY Slip Op 04701*2 [2d Dept Aug. 18, 2021]; Deutsche Bank Natl. Trust Co. v March, 191 AD3d 762, 763 [2d Dept 2021]). In any event, 22 N.Y.C.R.R.§ 208.14[c] “makes no provision for dismissing an action for neglect to prosecute” (Chavez v 407 Seventh Ave. Corp., 39 AD3d at 456; Hillside Place, LLC v Shahid, 55 Misc 3d 101, 103 [App Term 2d Dept 2017]; Marone v Bevelaqua, 36 Misc 3d 140[A], 2012 NY Slip Op 51484[U] *2 [App Term 2d Dept 2012]), which was what Defendant argued here. Despite the inapplicability of CPLR 3404 and 22 N.Y.C.R.R. § 201.14[c], Defendant is not without remedy (see Guillebeaux v Parrott, 188 AD3d at 1018; Onewest Bank, FSB v Kaur, 172 AD3d at 1393; General Assur. Co v Lachmenar, 45 Misc 3d 134[A], 2014 NY Slip Op 51722[U] *2 [App Term 2d Dept 2014].)

Defendant alternatively argued that interest accrual should be stayed from the time the case was marked off until the time it is restored. “If an applicant has submitted a dispute to arbitration or the courts, interest shall accumulate, unless the applicant unreasonably delays the arbitration or court proceeding” (11 NYCRR § 65-3.9[d]; East Acupuncture, P.C. v Allstate Ins. Co., 61 AD3d 202, 204 n. 2 [2d Dept 2009]; Kew Gardens Med & Rehab, P.C. v Country-Wide Ins. Co., 52 Misc 3d 143[A], 2016 NY Slip Op 51240[U] *1 [App Term 2d Dept 2016]; Aminov v Country Wide Ins. Co., 43 Misc 3d 87, 89 [App Term 2d Dept 2014]). Here, although Plaintiff commenced the action on January 6, 2003, court’s case summary reveals that the only activity occurred was Defendant’s motion to dismiss filed on January 7, 2008, which was withdrawn, Defendant’s instant Motion to dismiss, which was filed on November 14, 2017 and the subsequent appellate practice culminating in the order of the Appellate Term dated March 13, 2020.

As noted above, Plaintiff has not filed a notice of trial. Although the case was “inactive” as of June 1, 2007, a disposed marking of a pre-note of issue case is not permitted (Bilkho v Roosevelt Sq., LLC, 157 AD3d 849, 850 [2d Dept 2018]; Khaolaead v Leisure Video, 18 AD3d 820, 821 [2d Dept 2005], see Arroyo v Board of Educ. Of City of NY, 110 AD3d at 21). Here, the disposed marking does not prevent Plaintiff from prosecuting the case because undoing such marking does not require a motion to restore (Arroyo v Board of Educ. of City of NY, 110 AD3d at 20; General Assur. Co. v Lachmenar, 2014 NY Slip Op 51722[U] *2 [App Term 2d Dept 2014]). Plaintiff should not be rewarded for the years of inactivity in the court proceeding “by receiving a windfall of interest” (Kew Gardens Med & Rehab, P.C. v Country-Wide Ins. Co., 2016 NY Slip Op 51240[U] *1; V.S. Medical Services, P.C. v Travelers Ins. Co., 49 Misc 3d 152[A], 2015 NY Slip Op 51760[U] *2 [App Term 2d Dept 2015]; Aminov v Country Wide Ins. Co., 43 Misc 3d at 89). Therefore, this Court grants this branch of Defendant’s motion and in the event Plaintiff prevails on its claims, fixes the date interest accrues to such date as a notice of trial is filed (see V.S. Medical Services, P.C. v Travelers Ins. Co., 2015 NY Slip Op 51760[U] * 2; Aminov v Country Wide Ins. Co., 43 Misc 3d at 89).

IV. Order

Accordingly, it is

ORDERED that Defendant’s motion to dismiss on the ground that Plaintiff abandoned the action is denied; and it is further

ORDERED that Defendant’s motion to fix accrual of interest is granted; and it is further

ORDERED that in the event Plaintiff prevails on its claims, interest shall accrue from the filing date of the notice of trial.

This constitutes the Decision and Order of this Court.

Dated: October 8, 2021

Queens County Civil Court

Hon Wendy Changyong Li, J.C.C.

Decided on October 8, 2021

SUPREME COURT, APPELLATE TERM, SECOND DEPARTMENT, 2d, 11th and 13th JUDICIAL DISTRICTS