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

Law Office of Jason Tenenbaum, P.C. (Shaaker Bhuiyan of counsel), for appellant. Law Office of Melissa Betancourt, P.C. (Melissa Betancourt and Jamin Koo of counsel), for respondent.

Appeal from an order of the Civil Court of the City of New York, Kings County (Rosemarie Montalbano, J.), entered September 19, 2019. The order, insofar as appealed from and as limited by the brief, denied defendant’s motion for summary judgment dismissing the complaint.

ORDERED that the order, insofar as appealed from, is reversed, with $30 costs, and defendant’s motion for summary judgment dismissing the complaint is granted.

In this action by a provider to recover assigned first-party no-fault benefits, defendant moved for summary judgment dismissing the complaint, and plaintiff cross-moved for summary judgment. By order entered September 19, 2019, the Civil Court denied defendant’s motion and plaintiff’s cross motion, and limited the issues for trial, in effect pursuant to CPLR 3212 (g), to whether plaintiff’s assignor failed to appear for duly scheduled independent medical examinations (IMEs), and whether the amounts sought by plaintiff exceeded the amounts permitted by the workers’ compensation fee schedule. As limited by the brief, defendant appeals from so much of the order as denied defendant’s motion.

An assignor’s appearance at an IME “is a condition precedent to the insurer’s liability on the policy” (Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 35 AD3d 720, 722 [2006]). Contrary to the determination of the Civil Court, defendant demonstrated that, before it [*2]received the claims at issue, it had properly scheduled IMEs of plaintiff’s assignor, and that the assignor failed to appear for those duly scheduled IMEs (see id.; ARCO Med. NY, P.C. v Lancer Ins. Co., 34 Misc 3d 134[A], 2011 NY Slip Op 52382[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2011]). As plaintiff failed to raise a triable issue of fact in opposition to defendant’s motion or challenge the implicit CPLR 3212 (g) findings in defendant’s favor, defendant is entitled to summary judgment dismissing the complaint. In view of the foregoing, we reach no other issue.

Accordingly, the order, insofar as appealed from, is reversed and defendant’s motion for summary judgment dismissing the complaint is granted.

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

Law Offices of Tina Newsome-Lee (Michael L. Rappaport of counsel), for appellant. Zara Javakov, P.C. (Victoria Tarasova of counsel), for respondent.

Appeal from a decision and order (one paper) of the Civil Court of the City of New York, Kings County (Carolyn Walker-Diallo, J.), entered March 12, 2020. The decision and order awarded plaintiff the sum of $164.01.

ORDERED that the appeal is dismissed.

In this action to recover assigned first-party no-fault benefits, the Civil Court (Odessa Kennedy, J.), by order dated November 16, 2017, directed, “The sole issue for trial is for [defendant] to establish its fee schedule defense.” In lieu of a trial, the parties submitted memoranda, and no testimony was taken. Defendant appeals from a “decision and order” of the Civil Court (Carolyn Walker-Diallo, J.), which was entered on March 12, 2020 and awarded plaintiff the sum of $164.01. No judgment has been entered.

To the extent that the March 12, 2020 “decision and order” constitutes an “order,” in that it appears that the parties requested a “Decision ordering” relief, the paper is not appealable as of right because it did not decide a motion made upon notice (see CCA 1702 [a] [2]; CPLR 2211; Mautner-Glick Corp. v Tunne, 38 Misc 3d 126[A], 2012 NY Slip Op 52320[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012]; New Century Osteopathic v State Farm Fire & Cas. Ins. Co., 22 Misc 3d 126[A], 2008 NY Slip Op 52584[U] [App Term, 2d Dept, 2d & 11th Jud Dists 2008]), and we decline to grant leave to appeal. To the extent that the March 12, 2020 “decision and order” constitutes a decision, no appeal lies from a decision (see Schicchi v J.A. [*2]Green Constr. Corp., 100 AD2d 509 [1984]; AR Med. Rehabilitation, P.C. v MVAIC, 65 Misc 3d 138[A], 2019 NY Slip Op 51683[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2019]).

Accordingly, the appeal is dismissed.

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

Index No. CV-3161-20/SM
James F. Matthews, J.

Upon the following papers numbered 1 to 16 read on this motion by defendant for summary judgment of dismissal by Notice of Motion/ Order to Show Cause and supporting papers 1,2,9 ; Notice of Cross Motion and supporting papers 10,11 ; Answering Affidavits and supporting papers 10,11 ; Replying Affidavits and supporting papers 15,16 ; Filed papers; Other exhibits: 3-8,12-14 ;(and after hearing counsel in support of and opposed to the motion), it is

ORDERED that the motion by defendant for summary judgment dismissing plaintiff’s complaint, is denied, and plaintiff’s cross-motion for summary judgment in the total sum of $6,947.81, is denied.

In this action by a medical provider to recover assigned first-party no-fault benefits for medical services rendered, consisting of ten (10) bills totaling $6,947.81, defendant insurer moves for summary judgment dismissing the complaint based upon assignor’s failure to appear for orthopedic independent medical examinations (“IME’s”) on 08/14/2019, and then on 09/14/2019, not satisfying a condition precedent of its insurance policy (see 11 NYCRR 65-1.1), which defendant raised as a ninth affirmative defense in its amended verified Answer, thereby vitiating insurer’s liability (see Stephan Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 35 AD3d 720 [2nd Dept 2006]). Defendant asserts it denied each of the 10 claims premised on a breach of condition to coverage, which voided the policy ab-initio, resulting in no coverage to the no-fault claims retroactively dated to the date of the automobile accident of 04/25/2019 (see Unitron Advantage Ins. Co. v Bay Shore Physical Therapy, PLLC., 82 AD3d 559 [1st Dept 2011], lv denied 17 NY3d 705 [2011]).

In opposition to the motion, plaintiff argues defendant failed to properly and timely schedule the orthopedic IME’s pursuant to 11 NYCRR 65-3.5(d), which requires that a scheduled IME as additional verification of a claim, be scheduled to be held within 30 calendar days from the date of receipt of prescribed verification forms or claims (see W.H.O. Acupuncture , P.C. v Travelers Home & Marine Ins. Co., 36 Misc 3d 152[A][2nd Dept, 2d, 11th & 13th Jud Dists 2012]).

Plaintiff contends that defendant concedes (and admits) it received the first claim on 05/31/2019 as noted on defendant’s NF-10 Denial of Claim form, and should have scheduled its orthopedic IME within the next 30 days from 05/31/2019, or within 06/30/2019. However, defendant’s scheduling letter for its orthopedic IME was dated 07/30/2019, with its first IME date set for 08/14/2019, which was untimely and improper.

Plaintiff also contends that defendant concedes (and admits) it received the second claim on 06/17/2019 as noted on defendant’s NF-10 Denial of Claim form, and should have scheduled its orthopedic IME within the next 30 days from 06/17/2019, or within 07/17/2019. However, defendant’s scheduling letter for its orthopedic IME was dated 07/30/2019, with its first IME date set for 08/14/2019, which was untimely and improper.

Plaintiff further contends that defendant concedes (and admits) it received the third claim on 07/03/2019 as noted on defendant’s NF-10 Denial of Claim form, and should have scheduled its orthopedic IME within the next 30 days from 07/03/2019, or within 08/02/2019. However, defendant’s scheduling letter for its orthopedic IME was dated 07/30/2019, with its first IME date set for 08/14/2019, which was untimely and improper.

Plaintiff also cross-moves for summary judgment in the sum of $6,947.81, asserting it timely submitted the 10 NF-3 Notice of Claim forms to defendant for this total, and payment is overdue. Plaintiff contends that defendant’s NF-10 Denial of Claim forms for each of the 10 submitted claims, is prima facie proof of plaintiff’s timely submission and defendant’s receipt of each claim and that payment is overdue.

In opposition to plaintiff’s cross-motion, defendant denies plaintiff’s arguments in support, and raises the doctrine of res judicata as a defense to plaintiff’s contentions, citing 2 civil decisions from the City of New York, a copy of each of which was provided by defendant to the Court:

1) LONGEVITY MEDICAL SUPPLY, INC., a/a/o MARISOL TORRES v NY CENTRAL MUT. FIRE INS., Index No. 713404/20 (Civ Court, City of New York, Queens Cty, dated 6/9/2021 (Greenburg, J.), and

2) NORTH QUEENS SURGICAL CENTER, a/a/o MARISOL TORRES v NY CENTRAL MUT. FIRE INS., Index No. 715694/20 (Civ Court, City of New York, Queens Cty, dated 6/6/2021 (Lanzetta, J.).

Defendant argues that both decisions demonstrate that assignor Marisol Torres’ failure to appear at duly scheduled IME’s were the grounds for dismissal, with prejudice, and since plaintiff’s assignor herein is the same Marisol Torres as in the two cited cases, the instant cross-motion by plaintiff should be denied under the doctrine of res judicata, accordingly.

In addition, defendant replies in further support of its motion for summary judgment, that it is entitled to dismissal on the grounds it timely denied reimbursements for plaintiff’s bills, based upon the failure of plaintiff’s assignor to appear at duly scheduled IME’s, thereby failing to satisfy a condition precedent to the insurer’s liability under the no-fault policy, which voided the policy ab-initio, resulting in no coverage for the no-fault claims, retroactively dated to the automobile accident date of 04/25/2019.

Here, the Court finds that although defendant established that the notices of the scheduled orthopedic IME’s were properly mailed in accordance with defendant’s standard office practice and procedures (see St. Vincent’s Hosp. of Richmond v GEICO, 50 AD3d 1123 [2nd Dept 2008]; Delta Diagnostic Radiology, P.C. v Chubb Group of Ins., 17 Misc 3d 16 [App Term, 2d,11th & 13th Jud Dists 2007), and that plaintiff’s assignor failed to appear at each of the IME’s (see [*2]Stephen Fogel Psychological , P.C. v Progressive Cas. Ins. Co., 35 AD3d 720,721 [2nd Dept 2006]; Utopia Equipment, Inc. v ELRAC, Inc.,56 Misc 3d 134[A][App Term, 2nd Dept, 2d, 11th & 13th Jud Dists 2017]), defendant failed to demonstrate that the scheduling of the orthopedic IME’s complied with Regulation 11 NYCRR §65-3.5[d], which prescribes a statutory 30-calendar-day time frame for the timely holding of IME’s, from the date of receipt of the verification forms or claims (see American Tr. Ins. Co. v Longevity Med. Supply, Inc., 131 AD3d 841, 841 [1st Dept 2015]), or that the 30-day period was tolled by a proper verification request (see Nyack Hosp. v Encompass Ins. Co., 23 AD3d 535 [2nd Dept 2005]; 11 NYCRR 65-3.5).

Therefore, the Court finds that defendant has failed to demonstrate a prima facie entitlement for summary judgment (see Alvarez v Prospect Hospital, 68 NY2d 320, 324 [1986]; Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]; Zuckerman v City of New York, 49 NY2d 557,562 [1980]), in that defendant failed to timely schedule its first orthopedic IME for each of the first submitted three claims, pursuant to 11 NYCRR 65-3.5(d), which requires that a scheduled IME as additional verification of a claim, be scheduled to be held within 30 calendar days from the date of receipt of the claims ^[FN1] (see Irina Acupuncture, P.C. v Nationwide Affinity Ins. Co., 57 Misc 3d 146[A][App Term, 2nd Dept, 2d, 11th & 13th Jud Dists 2017]; W.H.O. Acupuncture, P.C. v Travelers Home & Marine Ins. Co., supra at *2; see also O & M Medical, P.C. v Travelers Indem. Co., 47 Misc 3d 134[A][App Term, 2nd Dept, 2d, 11th & 13th Jud Dists 2015]).

Defendant’s own NF-10 Denial of Claim form dated 10/21/2019, admits the first claim was received from plaintiff on 05/31/2019, requiring a scheduled IME by 06/30/2019. However, defendant’s scheduling letter for its first orthopedic IME for this claim was dated 07/30/2019, with its first orthopedic IME date set for 08/14/2019, which was untimely and improper (see 11 NYCRR 65-3.5[d]; American Tr. Ins. Co. v Longevity Med. Supply, Inc., supra; W.H.O. Acupuncture, P.C. v Travelers Home & Marine Ins. Co., supra).

In addition, Defendant’s own NF-10 Denial of Claim form dated 10/22/2019, admits the second claim was received from plaintiff on 06/17/2019, requiring a scheduled IME by 07/17/2019. However, defendant’s scheduling letter for its orthopedic IME for this claim was dated 07/30/2019, with its orthopedic IME date set for 08/14/2019, which was also untimely and improper (see 11 NYCRR 65-3.5[d]; American Tr. Ins. Co. v Longevity Med. Supply, Inc. supra; W.H.O. Acupuncture, P.C. v Travelers Home & Marine Ins. Co., supra).

Furthermore, Defendant’s own NF-10 Denial of Claim form dated 10/21/2019, admits the third claim was received from plaintiff on 07/03/2019, requiring a scheduled IME by 08/02/2019. [*3]However, defendant’s scheduling letter for its orthopedic IME was dated 07/30/2019, with its orthopedic IME date set for 08/14/2019, which was also untimely and improper (see 11 NYCRR 65-3.5[d]; American Tr. Ins. Co. v Longevity Med. Supply, Inc., supra; W.H.O. Acupuncture, P.C. v Travelers Home & Marine Ins. Co., supra).

The remaining 7 NF-3 Notices of Claim were denied by defendant on the same basis of plaintiff assignor’s failure to appear at the scheduled orthopedic IME of 08/14/2019, and the rescheduled IME of 9/04/2019.^[FN2] However, these NF-10 Denials of Claim relied upon the same untimely and improperly scheduled IME date of 08/14/2019. Since the first IME date of 08/14/2019 was untimely and improper, the rescheduled IME date of 09/04/2019 was also untimely and improper, and it did not toll defendant’s time to pay or deny those bills (see St. Vincent’s Hosp. of Richmond v GEICO, 50 AD3d 1123 [2nd Dept 2008]); see also Concourse Chiropractic, PLLC. v Fiduciary Ins. Co. Of America, 35 Misc 3d 146[A][App Term, 2nd Dept, 2d, 11th & 13th Jud Dists 2012).

In effect, there was no duly scheduled IME at which plaintiff failed to appear, as the scheduling letters for the IME’s were each scheduled to be held beyond the 30 days of defendant’s receipt of the claims, as required by 11 NYCRR 65-3.5(d), rendering each scheduling letter a nullity (see American Tr. Ins. Co. v Longevity Med. Supply, Inc., supra; O & M Medical, P.C. v Travelers Indem. Co., supra).

Therefore, defendant failed to demonstrate that it had properly denied the claim, based upon plaintiff’s breach of a condition precedent to coverage, which voided the policy ab-initio, resulting in no coverage for the 10 no-fault claims, retroactively dated to the automobile accident date of 04/25/2019 (see Unitron Advantage Ins. Co. v Bay Shore Physical Therapy, PLLC., 82 AD3d 559 [1st Dept 2011]; Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., supra at 721]; 11 NYCRR 65-1.1).

Accordingly, the motion by defendant for summary judgment dismissing plaintiff’s complaint on this basis, is denied.

The Court now turns to plaintiff’s cross-motion for summary judgment for the amount in the complaint. Here, the Court determines that plaintiff has failed to demonstrate a prima facie entitlement for summary judgment, by proof in admissible form sufficient to establish the lack of any material issues of fact (see Alvarez v Prospect Hospital, supra; Winegrad v New York Univ. Med. Ctr., supra; Zuckerman v City of New York, supra).

Plaintiff attempts to use defendant’s NF-10 Denial of Claim forms as proof that it submitted its 10 claims totaling the sum of $6,947.81, which have not been timely paid or denied. “The Second Department has repeatedly held that a plaintiff no-fault provider establishes its prima facie entitlement to judgment by submitting proper evidentiary proof that it generated and mailed the prescribed statutory billing forms to the defendant insurer, that the defendant received [*4]it, and that the no-fault benefits were overdue” (see AR Medical Rehabilitation v State-Wide Ins. Co., 49 Misc 3d 918 [Civil Ct, New York City 2015], citing Westchester Med. Ctr. v Progressive Cas. Ins. Co., 89 AD3d 1081-82 [2nd Dept 2011]).

This was later affirmed by the Court of Appeals wherein it held that a medical provider is required to submit proof of mailing through evidence in admissible form, which may include “the verification of treatment form and/or an affidavit from a person or entity (1) with knowledge of the claim and how it was sent to the insurer or (2) who has relied upon the forms in the performance of their business” (see Viviane Etienne Med. Care, P.C. v Country-Wide Ins. Co., 25 NY3d 498 [2015]). “The burden of proving submission is generally met by an affidavit of a billing agent or an employee averring that he or she personally mailed the claim forms to the insurer or averring that a standard office practice or procedure designed to ensure that items were properly addressed and mailed was followed” (see AR Medical Rehabilitation v State-Wide Ins. Co., supra at 919, citing Viviane Etienne Med. Care, P.C. v Country-Wide Ins. Co., supra at 506-07).

Neither Court addressed the issue of whether a medical provider could forgo evidentiary proof of its mailing procedure by relying upon its receipt of a denial form from the insurer (see AR Medical Rehabilitation v State-Wide Ins. Co., supra at 920). However, the Appellate Term had previously ruled that a medical provider’s receipt of an NF-10 denial form from the insurer was sufficient to demonstrate that the claim form was sent by the medical provider and received by the insurer (see Eagle Surgical Supply, Inc. v Allstate Ins. Co., 42 Misc 3d 145[A][App Term, 2nd Dept, 2d, 11th & 13th Jud Dists 2014). In this instance, “plaintiff is not trying to use the denial as the plaintiff’s own business record pursuant to CPLR 4518[a]; instead, in this context, the denial is being used as an admission by the defendant that the claim form had been received” (Id.).^[FN3] “Defendant’s denials admitted the receipt of the bills at issue…and plaintiff was not required to establish a CPLR 4518 foundation for the bills” (see EMC Health Prods., Inc. v Geico Ins. Co., 43 Misc 3d 139[A][App Term 2nd Dept, 2d, 11th & 13th Jud Dists 2014]). Therefore, a “plaintiff may establish its prima facie case by submitting a copy of its proof of claim form accompanied by an affidavit or testimony of its billing manager as to his personal knowledge of the issuance of the claim and a copy of defendant’s denial form indicating when defendant received the claim and when it denied it” (see AR Medical Rehabilitation v State-Wide Ins. Co., supra at 921, citing Oleg Barshay, D.C., P.C. v State Farm Ins. Co., 14 Misc 3d 74 [App Term 2nd Dept 2006]).

In the instant matter, plaintiff has failed to demonstrate it prima facie entitlement to summary judgment, by submission of a copy of its NF-3 proof of claim forms accompanied by an affidavit of its billing manager as to his personal knowledge of the issuance of the claim, in addition to defendant’s NF-10 denial of claim form. Accordingly, plaintiff’s cross-motion for summary judgment in the sum of $6,947.81 on this basis is denied.

Nevertheless, defendant has opposed plaintiff’s cross-motion for summary judgment, by raising the doctrine of res judicata (claim preclusion), as a defense to plaintiff’s contentions, citing two civil decisions from the City of New York, wherein plaintiff’s assignor, Marisol Torres, was also named as a plaintiff’s assignor, with the named defendant, NY Central Mut. Fire Ins. Company. Both decisions noted the failure of plaintiff’s assignor to appear at duly scheduled [*5]IME’s, and resulted in the Court’s dismissal of each case.

The Court finds that defendant has failed in its burden to produce evidentiary proof in admissible form sufficient to establish material issues of fact which would require a trial of the action (see CPLR 3212[b]; Alvarez v Prospect Hospital, supra at 324). Though defendant has interposed the doctrine of res judicata as a defense, under res judicata, “a disposition on the merits bars litigation between the same parties, or those in privity with them, of a cause of action arising out of the same transaction” (see Cortazar v Tomasino, 150 AD3d668 [2nd Dept 2017]). Or more simply, “a valid final judgment bars future actions between the same parties on the same cause of action” (see Parker v Blauvelt Volunteer Fire Co., 93 NY2d 343, 347 [1999]). “One linchpin of res judicata is an identity of parties actually litigating successive actions against each other: the doctrine applies only when a claim between the parties has been previously ‘brought to a final conclusion'” (see Blue Sky, LLC. v Jerry’s Self Storage, LLC., 145 AD3d 945 [2nd Dept 2016]).

The Court further finds that the cited cases by defendant fail to demonstrate they are a disposition on the merits for the same litigation between the same parties, or those in privity with them, for a cause of action arising from the same transaction (see Cortazar v Tomasino, supra). Indeed, the cited cases refer to litigants, Longevity Medical Supply, Inc. and North Queens Surgical Center, as assignees of Marisol Torres, but there is no link to Jiang Acupuncture, P.C., other than there being the same assignor in the instant matter. Also, there is no factual showing that the cited matters refer to the same transaction.

Accordingly, the Court finds that defendant has failed in its burden to produce evidentiary proof in admissible form sufficient to establish material issues of fact which would require a trial of the action.

Any remaining contentions of the parties are either unavailing or have been rendered academic.

The foregoing constitutes the decision and order of this Court.

Dated: September 23, 2021

HON. JAMES F. MATTHEWS

J.D.C.

Footnotes

Footnote 1:The Court notes that “the record does not reflect when [defendant] received the ‘prescribed verification forms'” (see American Tr. Ins. Co. v Longevity Med. Supply, Inc., 131 AD3d 841 [1st Dept 2015][citing to dissent of Friedman, J.P. at 844]), though “the 30 day period within which the IME was supposed to be scheduled, is measured from the date on which [defendant insurer] received the prescribed verification form from [plaintiff] itself (citing to Ops Gen Counsel NY Ins Dept No. 03-02-12, Feb 2003, remaining cite omitted ), noting that the prescribed verification form to which §65-3.5[d] refers is, in the case of a non-hospital healthcare provider, as in the instant matter, ‘NYS Form NF-3, Verification of Treatment by Attending Physician or Other Provider of Health Service [emphasis added]'” (see American Tr. Ins. Co. v Longevity Med. Supply, Inc., supra at dissent of Friedman, J.P. at page 845).

Footnote 2:The remaining NF-10 Denial of Claim forms also refer to the Reason For Denial (#33) as being based upon the failure of plaintiff assignor to appear at a scheduled Chiropractor and Acupuncture IME held on 08/21/2019. However, no factual evidence, such as a dated scheduling letter, or failure to appear affidavit, to support this statement was submitted, and the Court makes no ruling in this regard. Additional reasons for denial (#33) were for plaintiff’s submission of excessive workers’ compensation fee schedule rates, and submission of inaccurate insurance information based upon the insurer’s investigation, but no supporting evidence was submitted and the Court also makes no ruling in this regard.

Footnote 3:The Court notes that the Eagle case ultimately turned on the fact that defendant insurer consented to the admission into evidence of plaintiff’s claim form.

[*1]

Supreme Court, New York County, September 23, 2021

APPEARANCES OF COUNSEL

Goldberg, Miller & Rubin, P.C., New York City (Harlan R. Schreiber and Benjamin Bagenski of counsel), for plaintiff.

Gary Tsirelman, P.C., Brooklyn (Stefan Belinfanti of counsel), for Alpha Chiropractic P.C., defendant.

This motion concerns plaintiff Kemper Independence Insurance Company’s potential obligation to pay no-fault insurance benefits. Defendants Lateef Fowler and Cynthia Brown were passengers in a vehicle that was involved in a collision in February 2018. The vehicle was covered by a no-fault insurance policy issued by Kemper. Fowler and Brown assigned their rights to collect no-fault benefits under that policy to various treating medical providers, including defendant Alpha Chiropractic P.C.

In May 2018, Kemper sent Alpha a letter requesting among other things that Alpha produce a witness for an examination under oath (EUO) on May 31, 2018. (See NY St Cts Elec Filing [NYSCEF] Doc No. 78 at 4.) Alpha did not appear on the scheduled EUO date. On June 5, 2018, Kemper sent a second letter, requesting that Alpha produce a witness on June 22, and warning that a second failure to appear would constitute a breach of the policy leading to a denial of Alpha’s claims. (See NYSCEF Doc No. 78 at 1-2.) On June 14, Alpha wrote back to Kemper, seeking a “reasonable justification for the instant EUO request.” (NYSCEF Doc No. 78 at 7.) Kemper declined. In a July 24, 2018 letter to Alpha, Kemper stated that “while the request for EUO is made in good faith and does seek to verify necessity and causality of treatment,” the “Department of Insurance has specifically found that disclosing of the basis for EUO is not required by an insurer.” (NYSCEF Doc No. 78 at 10.) Kemper adjourned the EUO to August 7, 2018, and requested that Alpha’s witness appear on that date whether or not Kemper had provided a “reasonable justification” for that request. (See id. at 11.) Alpha did not appear on August 7.

Kemper later brought this action, seeking a declaration that it is not required to pay no-fault benefits to Fowler and Brown,{**73 Misc 3d at 587} Alpha or the other medical-provider defendants. Kemper moves here for summary judgment under CPLR 3212 against Alpha. The motion is denied.

Discussion

A no-fault-benefits claimant must appear for an examination under oath (EUO) on the reasonable request of the insurer. (See 11 NYCRR 65-1.1.) A claimant’s failure without reasonable cause to appear for a timely and properly scheduled EUO is grounds to deny coverage. An EUO request “must be based upon the application of objective standards so that there is specific objective justification supporting” the choice to seek an EUO. (Id. § 65-3.5 [e].)

Here, Kemper argues that Alpha failed to appear for scheduled examinations under oath (EUOs), which breached Alpha’s obligations under the no-fault policy. Alpha, on the other hand, contends that because Kemper declined Alpha’s request to provide a specific justification for the EUO, Alpha’s refusal to appear for the rescheduled EUO did not breach the terms of the underlying no-fault insurance policy. This court agrees with Alpha.^[FN1]

Kemper relies in part on a 2006 interpretive opinion letter issued by the State Insurance Department (now the State Department of Financial Services [DFS]). This letter concluded that although section 65-3.5 (e) provides that an EUO notice will be effective only if it includes “language advising” the witness of the “right to reimbursement for lost earnings and transportation costs incurred in attending the EUO,” the regulation does not require that “an insurer must include language stating the reason(s) for requiring the EUO” in each {**73 Misc 3d at 588}scheduling notice. (Ops Gen Counsel NY Ins Dept No. 06-12-16 [Dec. 2006].)^[FN2]

The 2006 opinion letter does not, however, indicate whether it is intended also to address the extent of an insurer’s discretion to refuse to provide an EUO-justification should the benefits claimant request it after receiving an initial EUO scheduling notice—the issue presented here. Nor is this court aware of any Appellate Division authority (or, in the First Department, any appellate precedent at all) on the question.

The First Department has held that if a denial of a no-fault claim leads to coverage litigation, the insurer must on request disclose to the benefits claimant the insurer’s “specific objective justification” for having sought an EUO. (Kemper Independence Ins. Co. v AB Med. Supply, Inc., 187 AD3d 671, 671 [1st Dept 2020], quoting 11 NYCRR 65-3.5 [e]; see also American Tr. Ins. Co. v Jaga Med. Servs., P.C., 128 AD3d 441, 441 [1st Dept 2015] [same].) Given that holding, it is difficult to see why an insurer should be excused during the claims-verification process itself from providing on request the insurer’s EUO-justification.

The Department of Financial Services has explained that the EUO-request provisions of DFS’s no-fault regulations are intended to balance two interests: “the importance of EUOs in identifying fraud and violations of New York law in the submission of claims for reimbursement,” on the one hand; and the need “to ensure that insurers would not request EUOs on either a routine or arbitrary basis, but would only do so when reasonably warranted” based on the particular facts underlying a given no-fault claim, on the other. (Ops Gen Counsel NY Ins Dept No. 02-10-14 [Oct. 2002].)^[FN3] If an insurer need not provide specific reasons justifying a given EUO, should a claimant request that justification during the claims-verification process, the justification-requirement language in section 65-3.5 (e) has little teeth. At most, a claimant might, years after the fact, request and obtain a justification should coverage litigation result and proceed to discovery. That contingent possibility alone seems insufficient to fulfill the{**73 Misc 3d at 589} regulatory aim of ensuring that insurers issue EUO requests only when warranted by the facts of particular cases.

This is not to say that an insurer’s justification provided during the claims-verification process must necessarily be lengthy or detailed. Requiring extensive justification would [*2]undermine the regulatory goal of resolving the high volume of no-fault claims quickly, efficiently, and fairly. For that matter, the ultimate purpose of EUO requests is to prevent or limit the granting of fraudulent claims. The insurer thus has an important interest in avoiding overly detailed EUO-request explanations: such explanations would risk tipping the insurer’s hand about when it would—and would not—find a claim suspicious so as to warrant further investigation through EUOs.

To say, though, that an insurer’s “specific objective justification” during the claims-verification process for its EUO request may be satisfactory even if it does not go into granular detail is quite different from saying that an insurer need not offer any justification at all. (See American Chiropractic Care, P.C. v GEICO Ins., 57 Misc 3d 529, 535 [Civ Ct, Kings County 2017] [drawing this distinction].) Here, Kemper expressly refused Alpha’s request to explain Kemper’s reasons for asking Alpha to produce an EUO witness.^[FN4] Given that categorical refusal, Kemper’s second EUO request to Alpha was not reasonable; and Alpha’s failure or refusal to appear for the rescheduled EUO does not form a basis to deny Alpha’s benefits claim.

Kemper’s contrary argument on this point relies in part on a decision of the Appellate Term, Second Department. (See NYSCEF Doc No. 93 ¶ 9, citing Bronx Chiropractic Care, P.C. v State Farm Ins., 63 Misc 3d 132[A], 2019 NY Slip Op 50423[U], *1-2 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists, Mar. 22, 2019].) This court is not persuaded by the holding of Bronx Chiropractic. That decision relies on the two DFS/Insurance Department opinion letters quoted above. But as this court has already discussed, the 2006 opinion letter does not definitively resolve the key question here: whether an EUO scheduling notice{**73 Misc 3d at 590} must disclose the insurer’s justification for the EUO after that justification has been requested by the claimant.^[FN5]

The 2002 opinion letter is also consistent with this court’s conclusions here. That letter states that DFS deliberately decided in enacting its regulations to refrain from requiring insurers to disclose to claimants the insurers’ internal standards for making EUO requests. But requiring production of the “objective standards established by the insurer” regarding when to request EUOs is different from requiring a more limited disclosure of the “specific facts” that, applied to those internal standards in a given case, prompted the insurer to request an EUO. (Ops Gen Counsel NY Ins Dept No. 02-10-14.) The former is materially more intrusive, and more likely to provide a guide to no-fault fraudsters on how to evade insurer scrutiny and detection. Indeed, in Jaga Med. [*3]Servs. and AB Med. Supply, the First Department drew this same distinction: The Court held in those decisions that insurers must turn over in discovery their justifications for requesting EUO-based-verification of particular claims, notwithstanding DFS’s conclusion that section 65-3.5 (e) does not require insurers to produce their underlying internal standards. (See AB Med. Supply, 187 AD3d at 671; Jaga Med. Servs., 128 AD3d at 441; see also American Chiropractic, 57 Misc 3d at 534 [holding that the insurer’s obligation to maintain its internal standards for “Insurance Department( ) oversight” of those standards should be treated as distinct from an insurer’s obligation to provide an explanation for a given EUO request to determine “whether those standards were properly applied with regard to a particular provider”].)

Kemper thus was not entitled to deny Alpha’s no-fault benefits claims based on Alpha’s nonappearance at requested EUOs. Kemper’s motion for summary judgment is denied. Although the facts relating to Alpha’s EUO-nonappearances are undisputed, this court concludes that it would be premature to grant Alpha summary judgment as the nonmoving party under CPLR 3212 (b).{**73 Misc 3d at 591}

Kemper appears to be relying on this motion only on Alpha’s EUO nonappearances. (See NYSCEF Doc No. 75 at 6-7 ¶¶ 21-29 [counsel’s affirmation]; NYSCEF Doc No. 93 ¶ 2 [counsel’s reply affirmation].) But some of Kemper’s motion papers also suggest that even had Alpha appeared for EUOs, Kemper still would have denied its no-fault claims because Kemper had concluded the treatment for which benefits were being sought was not causally related to the underlying vehicle collision. (See NYSCEF Doc No. 75 at 5 ¶¶ 14-15 [counsel’s affirmation]; NYSCEF Doc No. 80 [medical reports].) There is, however, no claim-denial form in the record that might clarify this ambiguity.^[FN6] In these circumstances, this court concludes that a reasonable possibility exists that Kemper could yet establish a valid basis for a declaration of no coverage, making it premature to grant summary judgment to Alpha dismissing Kemper’s claim.

Accordingly, for the foregoing reasons, it is hereby ordered that Kemper’s motion for summary judgment under CPLR 3212 is denied.

Footnotes

Footnote 1:There is also significant reason to doubt that Kemper has established that its EUO letters were timely under the governing regulations, as required to obtain a declaration of no coverage. (See American Tr. Ins. Co. v Longevity Med. Supply, Inc., 131 AD3d 841, 841 [1st Dept 2015].) When the insurer makes an EUO request after receiving claim forms from the injured person or a medical-provider assignee, the request must be made within 15 business days of the insurer’s receipt of a claim form. (See 11 NYCRR 65-3.5 [a]-[b].) Here, Kemper’s first EUO letter states that Alpha “ha[s] made certain No-Fault claims for medical treatment to claimant.” (NYSCEF Doc No. 78 at 4.) But Kemper has not provided proof that this letter was sent within 15 days of receipt of any of those claims. Kemper also contends that its last EUO letter was sent within 15 days of receipt of a claim form. (See NYSCEF Doc No. 75 ¶ 28.) But that form, though dated prior to the last EUO letter, does not on its face reflect when Kemper received it. (See NYSCEF Doc No. 79.) Nor would a single EUO nonappearance support a claim denial in any event.

Footnote 2:This opinion letter appears on the DFS website at http://www.dfs.ny.gov/insurance/ogco2006/rg061216.htm (last visited Sept. 22, 2021).

Footnote 3:This opinion letter appears on the DFS website at https://www.dfs.ny.gov/insurance/ogco2002/rg021014.htm (last visited Sept. 22, 2021).

Footnote 4:Kemper contends that it did provide its reasons, by stating in its EUO letters that Kemper sought “to assess the necessity and causality of treatment and the business relationship of the treating provider to the company.” (NYSCEF Doc No. 93 ¶ 11; see also NYSCEF Doc No. 78 at 4, 10 [EUO letters].) Those statements, though, merely explained the information that Kemper was seeking to verify, not the specific objective justification for why Kemper believed it needed verification.

Footnote 5:An earlier Appellate Term decision cited by Bronx Chiropractic, Flow Chiropractic, P.C. v Travelers Home & Mar. Ins. Co. (44 Misc 3d 132[A], 2014 NY Slip Op 51142[U], *1 [App Term, 2d Dept, 9th & 10th Jud Dists 2014]) carries little weight here for similar reasons: The claimant in that case apparently did not respond to the insurer’s EUO notices at all, let alone request a justification for the EUO. And to the extent that Flow Chiropractic also concluded that an insurer need not provide an EUO-justification when sought in later coverage litigation (see id.), the First Department has since held otherwise in Jaga Med. Servs. and AB Med. Supply.

Footnote 6:The record is, in fact, unclear about whether Kemper ever formally denied Alpha’s claim. (Compare NYSCEF Doc No. 75 at 5 ¶ 15 [counsel’s opening affirmation, indicating that Kemper denied Alpha’s claims], and id. at 19 ¶ 25 [affidavit of no-fault claim representative, indicating that Kemper denied Alpha’s claims], with NYSCEF Doc No. 93 ¶¶ 36-38 [counsel’s reply affirmation, contending that Kemper was not required to have issued a denial-of-claim form to be entitled to a declaration of no coverage in later litigation].)