—[*1]

Motion by the appellant for leave to reargue an appeal from an order and judgment (one paper) of the Supreme Court, Nassau County (Bucaria, J.), dated February 17, 2004, which was determined by decision and order of this Court dated May 23, 2005 [18 AD3d 756], or, in the alternative, for leave to appeal to the Court of Appeals from the decision and order of this Court.

Upon the papers filed in support of the motion and the papers filed in opposition thereto, it is

Ordered that the branch of the motion which is for leave to reargue is granted; and it is further,

Ordered that the motion is otherwise denied; and it is further,

Ordered that upon reargument, the decision and order of this Court dated May 23, 2005 is recalled and vacated and the following decision and order is substituted therefor:

In a proceeding pursuant to CPLR article 75 to permanently stay arbitration, the [*2]appeal is from an order and judgment (one paper) of the Supreme Court, Nassau County (Bucaria, J.), dated February 17, 2004, which granted the petition.

Ordered that the order and judgment is reversed, on the law, without costs or disbursements, and the matter is remitted to the Supreme Court, Nassau County, for further proceedings in accordance herewith.

On May 13, 1999 the appellant was involved in an automobile accident with nonparty Rajinder Dharamshot. She filed a no-fault claim dated May 14, 1999 with her insurer, the petitioner Nationwide Mutual Insurance Company (hereinafter Nationwide), and initially received no-fault benefits from Nationwide. Those benefits were cancelled in October 1999 after Nationwide conducted an independent medical examination of the appellant.

According to the appellant, while her injuries did not appear to be serious at first, they eventually proved to be serious. As a result, in June 2000 she commenced an action against Dharamshot. The appellant’s counsel subsequently learned, on or about April 25, 2001, that Dharamshot’s policy was limited and less than the appellant’s. Accordingly, by letter of April 26, 2001, he notified Nationwide that the appellant would be making a claim for underinsured coverage under the SUM provisions of her policy (hereinafter the SUM coverage).

By letter dated May 14, 2001, Nationwide asked the appellant to fill out a 25-page questionnaire. Before she could comply, by letter dated May 25, 2001, Nationwide disclaimed coverage based on the appellant’s failure to timely notify it of her SUM (underinsured motorist) claim, and failure to forward the summons and complaint in her personal injury action to it.

In April 2002 after Dharamshot’s carrier tendered its policy, Nationwide indicated that it had no objection to the appellant accepting the full policy and settling with Dharamshot. After Nationwide received the appellant’s demand for arbitration, it commenced this proceeding to stay the arbitration. The Supreme Court agreed and granted the petition without a hearing, finding that the appellant failed to timely comply with the notification provisions of her policy with Nationwide. We reverse.

Under Rekemeyer v State Farm Mut. Auto. Ins. Co. (4 NY3d 468, 475-476 [2005]) where, as here, there was timely notice of the accident and a claim for no-fault benefits, the insurer must show that it was prejudiced before it can rely on the policy provisions requiring timely notice of the SUM claim and/or a claimant’s failure to promptly forward the claimant’s summons and complaint to it, to disclaim a demand for SUM coverage solely based on late notice by the claimant. Therefore, the Supreme Court should have held a hearing on the issue of prejudice to Nationwide prior to making a determination on its petition, and we remit the matter to the Supreme Court, Nassau County, for a hearing on the issue of prejudice to Nationwide and a new determination of the petition thereafter.

In light of this determination, we need not reach the appellant’s remaining contentions. Florio, J.P., Schmidt, Rivera and Lifson, JJ., concur.

—[*1]

In an action for a declaratory judgment, (a) the plaintiff appeals from so much of (1) an order of the Supreme Court, Nassau County (Parga, J.), entered March 23, 2005, as denied that branch of his motion which was for summary judgment declaring that he is not obligated to reimburse the defendant Incorporated Village of Lake Success for the money paid to him pursuant to General Municipal Law § 207-c, and granted the cross motion of the defendant Incorporated Village of Lake Success for summary judgment, in effect, declaring that the plaintiff is obligated to reimburse it for the money paid to him pursuant to General Municipal Law § 207-c, and (2) an order of the same court dated July 22, 2005, as denied his motion, in effect, for leave to reargue that branch of his prior motion which was for summary judgment declaring that the plaintiff is not obligated to reimburse it for the money paid to the plaintiff pursuant to General Municipal Law § 207-c and the prior cross motion, and (b) the defendant American Protection Insurance Company separately appeals from so much of (1) the order entered March 23, 2005, as denied that branch of its motion which was for summary judgment declaring that the defendant Incorporated Village of Lake Success is not entitled to a lien in the amount it paid the plaintiff pursuant to General Municipal Law § 207-c against any underinsured motorist arbitration award that is made to the plaintiff, and granted the cross motion of the Incorporated Village of Lake Success for summary judgment declaring that the [*2]defendant Incorporated Village of Lake Success is entitled to a lien against any award the plaintiff obtains in his arbitration for underinsured motorist benefits in the amount paid to him pursuant to General Municipal Law § 207-c, and (2) the order dated July 22, 2005, as denied its motion which was denominated as one for leave to renew and reargue, but which was, in actuality, for leave to reargue that branch of its prior motion which was for summary judgment declaring that the plaintiff is not obligated to reimburse it for the money paid to the plaintiff pursuant to General Municipal Law § 207-c and the prior cross motion of the defendant Incorporated Village of Lake Success.

Ordered that the appeals from the order dated July 22, 2005 are dismissed, as no appeal lies from an order denying reargument (see Fischer v RWSP Realty, LLC, 19 AD3d 540 [2005]; Matter of Lloida W., 18 AD3d 665, 666 [2005]); and it is further,

Ordered that the order entered March 23, 2005 is reversed insofar as appealed from, on the law, the cross motion is denied, that branch of the plaintiff’s motion which was for summary judgment declaring that he is not obligated to reimburse the defendant Incorporated Village of Lake Success for the money paid to him pursuant to General Municipal Law § 207-c is granted, that branch of the motion of the defendant American Protection Insurance Company which was for summary judgment declaring that the defendant Incorporated Village of Lake Success is not entitled to a lien in the amount it paid the plaintiff pursuant to General Municipal Law § 207-c against any underinsured motorist arbitration award that is made to the plaintiff is granted, and the matter is remitted to the Supreme Court, Nassau County, for the entry of a judgment declaring that the defendant Incorporated Village of Lake Success is not entitled to a lien in the amount it paid the plaintiff pursuant to General Municipal Law § 207-c against any underinsured motorist arbitration award that is made to the plaintiff, and that the plaintiff is not obligated to reimburse the defendant Incorporated Village of Lake Success for the money paid to him pursuant to General Municipal Law § 207-c; and it is further,

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

The plaintiff, a police officer employed by the defendant Incorporated Village of Lake Success (hereinafter the Village), was injured in the line of duty when an underinsured motorist collided with his police vehicle. Pursuant to General Municipal Law § 207-c, the Village paid the plaintiff’s salary and medical expenses during the period of his disability. The plaintiff received a settlement from the underinsured motorist’s liability insurer, and thereafter filed a claim for underinsured motorist benefits (hereinafter the UIM claim) with the defendant American Protection Insurance Company (hereinafter API), the insurer of the police vehicle. When the UIM claim was set down for arbitration, the Village sought to assert a lien against any arbitration award the plaintiff might recover from API, in the amount that the Village had paid to the plaintiff pursuant to General Municipal Law § 207-c. The Supreme Court determined that the Village had a lien against any such award. We reverse.

General Municipal Law § 207-c (1) provides, inter alia, that a village must pay an officer on its police force who is injured in the line of duty the “full amount of his regular salary or wages . . . until his disability arising therefrom has ceased,” in addition to covering the costs of “all medical treatment and hospital care necessitated by reason of such injury.” The Village predicates its entitlement to the lien it seeks on General Municipal Law § 207-c (6), which provides that “a cause of action shall accrue to the municipality for reimbursement in such sum or sums actually paid as salary or wages and or for medical treatment and hospital care as against any third party against whom the policeman shall have a cause of action for the injury sustained or sickness caused [*3]by such third party.” Contrary to the Village’s position, that provision does not provide a basis for the lien it asserts here.

A municipality’s right, pursuant to General Municipal Law § 207-c (6), to the reimbursement of the salary and medical expenses it had previously paid to or on behalf of an officer injured in the line of duty, is subject to the limitations articulated in the no-fault provisions of Insurance Law § 5104 (see Village of Suffern v Baels, 215 AD2d 751 [1995]). Insurance Law § 5104 (a) limits the items of damage that may be recovered in an action commenced by a person injured in a motor vehicle accident against another motor vehicle operator or owner, here the uninsured motorist, to noneconomic loss, i.e., pain and suffering (see Insurance Law § 5102 [c]), plus only that economic loss which exceeds basic economic loss, defined by statute as $50,000 for medical and hospital expenses, lost wages, and incidental expenses, with certain exceptions not applicable here (see Insurance Law § 5102 [a]; see generally Matter of Adams [Government Empls. Ins. Co.], 52 AD2d 118, 120 [1976]). The plaintiff’s UIM claim, by definition, could only seek recovery only for noneconomic loss and economic loss greater than basic economic loss (see Matter of Shutter v Philips Display Components Co., 90 NY2d 703, 710 [1997]). Thus, there can be no Insurance Law § 5104 (b) lien imposed upon any amount he might recover on account of noneconomic loss in the arbitration which will determine that claim (see Matter of Adams [Government Empls. Ins. Co.], supra). Where no Insurance Law § 5104 (b) lien attaches, there can be no recovery under General Municipal Law § 207-c (6) (see Village of Suffern v Baels, supra).

“[A]n insured who has sustained personal injury should not be required to pay for his no-fault benefits out of his recovery for pain and suffering” (Aetna Cas. & Sur. Co. v Jackowe, 96 AD2d 37, 42; see Aetna Life & Cas. Co. v Nelson, 67 NY2d 169, 176 [1986]; Lang v City of New York, 98 AD2d 792, 793 [1983]; see also Dymond v Dunn, 148 AD2d 56, 59 [1989]; Matter of Celona v Royal Globe Ins. Co., 85 AD2d 635, 636 [1981]; Matter of Adams [Government Empls. Ins. Co.], supra at 119). As it pertains to the plaintiff’s arbitration claim for noneconomic loss, the situation presented here is no different.

Moreover, the statutory lien sought to be asserted by a third party on a recovery obtained by a person injured in a motor vehicle accident, on account of the sums paid by the third party to compensate the injured person for lost wages and medical expenses (see Insurance Law § 5104 [b]), extends only to so much of the recovery as also compensated the injured person for lost wages and medical expenses (see Aetna Cas. & Sur. Co. v Jackowe, 96 AD2d 37, 42 [1983]). Here, it is unclear whether the plaintiff, by pursuing arbitration with API, seeks to recover economic loss greater than basic economic loss, and thus, whether part of his claim is for lost wages and medical expenses greater than $50,000. In any event, while the Village has, in fact, compensated the plaintiff for lost wages and medical expenses in excess of basic economic loss, and thus asserts that the plaintiff, if successful, would unfairly recover the identical sum in arbitration, the lien created by Insurance Law § 5104 (b), by its terms, applies only to a recovery obtained by an injured person “in any action.” The recovery sought by the plaintiff from API is not pursuant to an action. The plaintiff, by seeking arbitration pursuant to the SUM endorsement contained in the policy issued by API, is not commencing an “action . . . against a non-covered person,” as required by Insurance Law § 5104 (b), but is instead seeking to enforce a contractual right he has pursuant to statute against API. Hence, the limitations on the assertion of a lien, imposed by Insurance Law § 5104, as applied to General Municipal Law § 207-c (6), preclude the result sought by the Village here.

Finally, General Municipal Law § 207-c (6) permits a municipality to seek reimbursement of wages and medical expenses only from “any third party against whom the policeman shall have a cause of action for the injury sustained . . . caused by such third party.” The plaintiff, from whom the Village seeks reimbursement, and API, upon whose obligation the Village [*4]seeks to impose a lien, are not parties who caused the injury. Hence, the cause of action created by General Municipal Law § 207-c (6) is not available to the Village insofar as it seeks to assert it against either the plaintiff or API. Furthermore, General Municipal Law § 207-c, “includes no . . . provision for an equitable lien. It ‘merely gives the [municipality] a direct remedy against the person liable to the employee in negligence’ ” (Foy v Florczuk, 51 AD2d 534, 535 [1976] quoting City of Buffalo v Maggio, 21 NY2d 1017, 1018 [1968]).

Contrary to the Village’s contention, Matter of City of Newburgh v Travis (228 AD2d 497 [1996]) does not require a contrary result. In that case, the self-insured City of Newburgh, which was required to arbitrate an employee’s underinsured motorist claim, was entitled, pursuant to a specific provision of the subject insurance policy, to offset the payments it already made against the employee’s arbitration award (see Matter of City of Newburgh v Travis, supra at 498-499). Unlike the City of Newburgh, the Village is not self-insured, and it has nothing to offset, as any arbitration award will be paid by the insurer, API. Nor does the API insurance policy contain a specific offset provision. The “non-duplication” provision in the API policy relied upon by the Village does not similarly create a right of offset (see generally Reilly v United States Fid. & Guar. Co., 139 AD2d 796, 797 [1988]).

For all of these reasons, the Village is not entitled to assert a lien pursuant to General Municipal Law § 207-c (6), and the Supreme Court therefore improperly granted the Village’s cross-motion. Rather, it should have granted the relevant branch of the plaintiff’s motion for summary judgment and the relevant branch of API’s motion for summary judgment.

Since this is a declaratory judgment action, we remit the matter to the Supreme Court, Nassau County, for the entry of a judgment declaring that the Village is not entitled to a lien, in the amount of salary and medical expenses it paid to the plaintiff pursuant to General Municipal Law § 207-c, against any award the plaintiff receives in his underinsured motorist arbitration, and that the plaintiff is not obligated to reimburse the Village for the money it paid pursuant to General Municipal Law § 207-c (see Lanza v Wagner, 11 NY2d 317, 334 [1962], appeal dismissed 371 US 74 [1962], cert denied 371 US 901 [1962]). Miller, J.P., Goldstein, Spolzino and Dillon, JJ., concur.

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd and 11th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Queens County (Charles John Markey, J.), entered on March 3, 2005. The order, insofar as appeal from as limited by plaintiff’s brief, denied plaintiff’s motion for summary judgment seeking to recover the sum of $1,856.42.

Order, insofar as appealed from, reversed without costs, plaintiff’s motion for summary judgment in the sum of $1,856.42 granted and matter remanded to the court below for the calculation of statutory interest and an assessment of attorney’s fees.

In this action to recover first-party no-fault benefits for health care services rendered to its assignor, plaintiff established a prima facie entitlement to summary judgment, which, on appeal, plaintiff has limited to the sum of $1,856.42 (see Insurance Law § 5106 [a]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2004]; A.B. Med. Servs. PLLC v Lumbermens Mut. Cas. Co., 4 Misc 3d 86 [App Term, 2d & 11th Jud Dists 2004]). In opposition, defendant argued that it properly denied the claim for $731.04 because the fees were not in accordance with the Workers’ Compensation fee schedules due to the fact that the treatment rendered constituted “concurrent care.” Defendant further argued that the remaining claims, which totaled $1,125.38, were properly denied based upon the assignor’s failure to attend independent medical examinations (IMEs).

Plaintiff was entitled to summary judgment upon the $731.04 claim as defendant failed to proffer sufficient evidence in admissible form to demonstrate the existence of a triable issue of fact pertaining to this claim (see Abraham v Country-Wide Ins. Co., 3 Misc 3d 130[A], 2004 NY Slip Op 50388[U] [App Term, 2d & 11th Jud Dists]). With respect to the claims which totaled $1,125.38, where “an insurer timely asserts in its claim denial form an injured person’s failure to comply with a reasonable and proper pre-claim IME request, and establishes such failure in [*2]admissible form in opposition to a plaintiff’s motion for summary judgment, the presumption of medical necessity which attaches to the claim form is rebutted . . . and such proof defeats the motion” (Stephen
Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 7 Misc 3d 18 [App Term, 2d & 11th Jud Dists 2004]; see also S&M Supply Inc. v Peerless Ins. Co., 6 Misc 3d 127[A], 2004 NY Slip Op 51683[U] [App Term, 2d & 11th Jud Dists]). While defendant timely denied claims based on the nonattendance of plaintiff’s assignor at the pre-claim IMEs, defendant failed to submit proof in admissible form of actual mailing of the letters requesting IMEs (see e.g. Presbyterian Hosp. In City of N.Y. v Maryland Cas. Co., 226 AD2d 613 [1996]) and defendant did not create a presumption of mailing by submission of an affidavit describing the standard office practice or procedure used by defendant to ensure that such letters were properly addressed and mailed on the dates claimed (see Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679 [2001]). As a result, the assignor’s failure to attend the pre-claim IMEs did not raise an issue of fact warranting the denial of plaintiff’s motion for summary judgment (see Ocean Diagnostic Imaging, P.C. v New York Cent. Mut. Fire Ins. Co., 9 Misc 3d 138[A], 2005 NY Slip Op 51772[U] [App Term, 2d & 11th Jud Dists]; A.B. Med. Servs. PLLC v USAA Cas. Ins. Co., 6 Misc 3d 126[A], 2004 NY Slip Op 51682[U] [App Term, 2d & 11th Jud Dists]).

Accordingly, summary judgment is granted in favor of plaintiff in the sum of $1,856.42, and the matter is remanded to the court below for the calculation of statutory interest and an assessment of attorney’s fees pursuant to Insurance Law § 5106 (a) and the regulations promulgated thereunder.

Pesce, P.J., Weston Patterson and Belen, JJ., concur.
Decision Date: September 14, 2006

APPELLATE TERM OF THE SUPREME COURT, FIRST DEPARTMENT

Defendants appeal from so much of an order of the Civil Court, Bronx County (Larry Schachner, J.), entered January 31, 2005, as denied their motion for summary judgment dismissing the complaint.

PER CURIAM:

Order (Larry Schachner, J.), entered January 31, 2005, insofar as appealed from, reversed, without costs, and defendants’ motion for summary judgment dismissing the complaint granted. The Clerk is directed to enter judgment accordingly.

In this action to recover assigned first party no-fault benefits, the defendant insurers established their entitlement to summary judgment dismissing the complaint. Defendants timely denied the claims in the amounts of $818.89, $620.97 and $1,060.01 on the stated ground that plaintiff’s assignors did not respond to their requests for statements regarding the accident and medical treatment. Since it is uncontroverted on this record that plaintiff’s assignors did not comply with defendants’ repeated requests for statements, defendants’ motion for summary judgment dismissing the causes of action pertaining to the foregoing claims should have been granted (see 11 NYCRR 65.1-1 [d]; Inwood Hill Med., P.C. v General Assur. Co., 10 Misc 3d 18 [2005]).

Defendants are also entitled to summary judgment dismissing the remaining claims in the amounts of $793.24 and $604.34 on the ground of non-receipt of said claims, inasmuch as plaintiff’s submissions in opposition were insufficient to raise triable issues of fact.

This constitutes the decision and order of the court.
Decision Date: September 13, 2006

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 9th and 10th JUDICIAL DISTRICTS

Appeal from an order of the District Court of Nassau County, Third District (Howard S. Miller, J.), dated September 26, 2005. The order, insofar as appealed from, denied plaintiff’s motion for summary judgment.

Order, insofar as appealed from, affirmed without costs.

In this action to recover assigned first-party no-fault benefits, plaintiff moved for summary judgment and defendant cross-moved for summary judgment dismissing the action. Plaintiff appeals from so much of the order as denied its motion for summary judgment. Plaintiff’s motion for summary judgment was properly denied because plaintiff’s submission of inconsistent affidavits from its treating physician raised a triable issue of fact (see generally Amaze Med. Supply Inc. v Eagle Ins. Co., 3 Misc 3d 130[A], 2004 NY Slip Op 50389[U] [App Term, 2d & 11th Jud Dists]).

Rudolph, P.J., Angiolillo and Lippman, JJ., concur.
Decision Date: August 22, 2006

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd and 11th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Queens County (Joseph Esposito, J.), entered June 17, 2005. The order denied plaintiff’s motion for summary judgment.

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

In an action to recover first-party no-fault benefits for medical supplies furnished to its assignor, a provider generally establishes a prima facie entitlement to summary judgment by proof that it submitted a claim, setting forth the fact and the amount of the [*2]
loss sustained, and that payment of no-fault benefits was overdue (see Insurance Law § 5106 [a]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2004]; Amaze Med. Supply v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U] [App Term, 2d & 11th Jud Dists]). A provider establishes the “submission” of the claim form by demonstrating proof of proper mailing, which gives rise to the presumption that the claim form was received by the addressee. In the instant case, the lower court properly found that plaintiff’s moving papers were insufficient to demonstrate that any of the claim forms were properly mailed. However, said deficiency was cured by defendant’s acknowledgment of receipt in its denial of claim forms (see A.B. Med. Servs. v New York Cent. Mut. Fire Ins. Co., 3 Misc 3d 136[A], 2004 NY Slip Op 50507[U] [App Term, 2d & 11th Jud Dists]; A.B. Med. Servs. v State Farm Mut. Auto. Ins. Co., 3 Misc 3d 130[A], 2004 NY Slip Op 50387[U] [App Term, 2d & 11th Jud Dists]) and by the admissions of the claims’ receipt in the affidavits of defendant’s claims adjusters. Accordingly, plaintiff established a prima facie case, and the burden then shifted to defendant to demonstrate a triable issue of fact (see Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]).

Contrary to the determination of the court below, defendant failed to establish that the denial of claim forms were timely mailed to plaintiff. The affidavits of defendant’s claims adjusters merely stated that the claims were timely denied without asserting personal knowledge of the mailing or setting forth sufficient facts to create a presumption of mailing (see Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679 [2001]; Careplus Med. Supply Inc. v Travelers Home & Mar. Ins. Co., 7 Misc 3d 133[A], 2005 NY Slip Op 50648[U] [App Term, 2d & 11th Jud Dists]; Amaze Med. Supply v Allstate Ins. Co., 3 Misc 3d 133[A], 2004 NY Slip Op 50447[U] [App Term, 2d & 11th Jud Dists]). Accordingly, since defendant failed to demonstrate that it denied the claims within the 30-day prescribed period following their receipt (Insurance Law § 5106 [a]; 11 NYCRR 65-3.8 [c]), it was precluded from raising its defenses, with exceptions not herein relevant (see Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 282 [1997]; PDG Psychological P.C. v Utica Mut. Ins. Co., 11 Misc 3d 128[A], 2006 NY Slip Op 50246[U] [App Term, 2d & 11th Jud Dists]).

We need not reach the issue of whether the letters which stated that payment of benefits was being delayed pending receipt of hospital/physician records were, in effect, verification requests since defendant’s acknowledged receipt of the information recommenced the running of the 30-day claim determination period. Since defendant failed to submit adequate proof of having mailed the claim denials within that period, it did not meet its burden of raising a triable issue of fact.

In view of the foregoing, the court below erred in denying plaintiff’s motion for summary judgment. Accordingly, the order is reversed, plaintiff’s motion for summary [*3]
judgment granted, and the matter is remanded to the court below for the calculation of statutory interest and an assessment of attorney’s fees pursuant to Insurance Law § 5106 (a) and the regulations promulgated thereunder.

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

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

I am constrained to agree with the ultimate disposition in the decision reached by the majority. I am constantly amazed by the continued failure of defendants to obtain and submit affidavits by someone with personal knowledge in order to establish sufficient proof of mailing of documents such as denials (NF-10), verifications, requests for independent medical examinations, etc.

Nevertheless, I wish to note that I do not agree with certain propositions of law set forth in cases cited by the majority which are inconsistent with my prior expressed positions and generally contrary to my views.

I further wish to note that I would find that the letters sent to plaintiff herein denoted as “delay letters” should serve to toll the 30-day claim determination period. They are, in fact, verification requests irrespective of terminology, indeed at the very least they are a functional equivalent of a verification request.

In support of this finding, I cite the majority opinion in the case of Ocean Diagnostic Imaging P.C. v Citiwide Auto Leasing Inc. (8 Misc 3d 138[A], 2005 NY Slip Op 51314[U] [App Term, 2d & 11th Jud Dists]). Whereas I filed a concurrence in that case and did not reach the issue at hand, the case held that even if a document is labeled a verification request, it will not serve to toll the 30-day period if it merely informs that the claim is delayed pending an investigation but fails to specify the particular information sought.

The “delay letters” in the case at bar not only informed the plaintiff that payment of the claim was being delayed, but also specifically set forth the particular information sought, to wit: the hospital/physician records. Clearly these “delay letters” must serve as a verification request inasmuch as the plaintiff was well aware of what information was required to complete the claims filed. They therefore serve the same purpose. For me, this is a matter of substance over form.

I point to plaintiff’s counsel’s assertion in his moving papers that this information should have been requested from the prescribing physician and not from the plaintiff herein which does not maintain or have direct access to a medical file. Given that assertion, plaintiff has effectively acknowledged that the defendant must seek the requested information from a different source. That is exactly what the defendant herein did.

Decision Date: August 18, 2006

Supreme Court, New York County

105241/06

Eileen Bransten, J.

Pursuant to CPLR 7502 and 7503, Allstate Insurance Company (“Allstate”) petitions for a Judgment, among other things, staying an arbitration commenced by respondent Sallie Merrick (“Ms. Merrick”).

Background

By Denial of Claim form dated September 27, 1996, Allstate informed Ms. Merrick that “all no-fault claims benefits will be denied effective 10/04/96.” Affirmation in Support (“Supp.”), Ex. B.

Ms. Merrick contends that in April 2002, “within the six-year period of the statute of limitations,” she “properly commenced” an arbitration before the American Arbitration Association (“AAA”), contesting Allstate’s denial of no-fault benefits. Affirmation in Opposition (“Opp.”), at ¶ 3. In May 2002, Ms. Merrick provided additional information responsive to an inquiry from AAA.

On January 9, 2003, after receiving no further communications, a paralegal for Ms. Merrick’s counsel contacted AAA to ascertain a date for arbitration proceedings. The paralegal swears that AAA advised her that “they were unable to locate the file” and that an Arbitration Request Form and check for $40 should be resubmitted. Opp., Ex. C, at ¶ 7. That very day, the paralegal resubmitted the materials. Id.

Again, the paralegal contacted AAA inquiring about the status of Ms. Merrick’s arbitration. She “continued to call every six months and received the same response that [Ms. Merrick] would be hearing by way of a letter indicating the name of the Arbitrator and the date of the arbitration.” Opp., Ex. C, at ¶ 8. After “many calls,” the paralegal was advised to resubmit yet another set of papers. Id., at ¶ 9. On February 17, 2005, Ms. [*2]Merrick’s attorney forwarded the papers to AAA, along with a new check and a letter indicating that “the enclosed request was previously submitted.” Opp., Ex. E. AAA returned the arbitration request because it was incomplete. Opp., Ex. F.

AAA received additional papers on June 8, 2005. Supplemental Affirmation from Allstate (“Allstate Aff.”), Ex. A. On June 15, 2005, AAA confirmed “acceptance of an arbitration request.” Id.

On September 19, 2005, in response to an email from the AAA no-fault conciliator assigned to the matter informing Allstate that there was “no record of receiving a submission from Allstate to date,” a Staff Claim Adjuster explained that the company had “no notice of this arbitration * * * This case has never been assigned we never [received AAA] notice.” Allstate Aff., Ex. A. That very day, the conciliator offered to forward Allstate a copy of the filings and notices. Id.

Subsequently, in a September-26-2005 email to the AAA no-fault conciliator, an Allstate Senior Staff Claim Service Representative noted that the file on the claim was old and stated: “I would suspect that there are some statute of limitations applicable here.” Allstate Aff., Ex. C. (There is no indication that Ms. Merrick’s attorney received a copy of the email.)

On October 19, 2005, counsel for Ms. Merrick and Allstate were informed that an arbitrator had been appointed and that a hearing was scheduled for November 22, 2005. Supplementary Affirmation in Opposition (“Supp. Opp.”), Ex. A. Counsel were advised to “attend promptly with * * * witnesses and be prepared to present * * * proofs.” Id. A few days before the hearing, on November 17, 2005, attorney Peter C. Merani wrote the AAA case manager assigned to Ms. Merrick’s claim, advising that “the above captioned matter has been assigned to our office to appear as counsel to the insurer in the pending No-Fault arbitration. Please note your files accordingly, advise us of all scheduled hearing dates, adjourned dates, direct all correspondences and awards to our offices.” Supp. Opp., Ex. B.

Proceedings were conducted on November 22, 2005. “Briefs were submitted and testimony was taken on that day.” Opp., at ¶ 10. Attorney Sammy Lesman, an associate in the office of Peter C. Merani, Esq., delivered an opening statement and cross-examined Ms. Merrick. Supp. Opp., at ¶ 6. After “oral testimony was declared closed” by the arbitrator, Mr. Lesman requested to respond by producing Allstate’s No-Fault records regarding Ms. Merrick’s claim. Id., at ¶ 7. On November 25, 2005, Mr. Lesman sent “a copy of [Allstate’s] submissions for the No-Fault Matter” to the AAA, requesting that the materials be forwarded to the assigned arbitrator. Allstate’s counsel made no mention of any statute of limitations defense at the hearing or in its post-hearing submissions. Opp., at ¶ 10; Supp. Opp., at ¶ 9.In late February, the Arbitrator requested production of Ms. Merrick’s 1996-1997 tax returns and proof that she did not work following the accident. [*3]Opp., at ¶ 11; Supp. Opp., at ¶ 11. Ms. Merrick’s attorney submitted the materials to AAA and Allstate’s counsel on March 3, 2006. Opp., at ¶’11. On March 10, 2006, Ms. Merrick’s attorney was notified that a further hearing was scheduled for April 18, 2006. Id. He was subsequently advised, however, that the April 18, 2006 hearing was cancelled and “that there would be a decision fairly soon.” Opp., at ¶ 11.

On April 17, 2006, Allstate commenced this proceeding, seeking a Judgment staying Ms. Merrick’s arbitration on the ground that more than six years passed since denial of no-fault benefits. Supp., at ¶ 6. Allstate contends that a “review of the Arbitration Request[] Forms of Sallie Merrick stamped by [AAA] as found on their website adr.org, and in her submission shows that the earliest possible receipt date of her application is February 22, 2005,” which is beyond the statute of limitations. Supp., at ¶ 5. Allstate also requests an Order “staying the enforcement of any judgment” entered in accordance with the arbitration. Order to Show Cause, at 2; Supp., at ¶ 7.

The following day, “an attorney from the Law Offices of Peter C. Merani appeared on behalf of [Allstate] for the hearing on April 18, 2006.” Reply, at ¶ 9. Ms. Merrick’s counsel, believing that the session had been canceled, did not appear. Supp. Opp., at ¶ 12.

On April 19, 2006, Ms. Merrick’s attorney received Allstate’s Verified Petition. Supp. Opp., at ¶ 13. Ms. Merrick strongly opposes Allstate’s application. She urges that she should not be prejudiced simply because her submissions were misfiled once in 2002, and again in 2003. Opp., at ¶ 14. Ms. Merrick points out that the initial April 2002 arbitration request was sent to Allstate’s counsel; thus, Allstate had notice of the dispute and the AAA filing within the statute of limitations.

Analysis

Because Allstate participated in the arbitration proceeding—Allstate’s counsel made an opening statement, cross-examined Ms. Merrick and submitted evidence—it waived its rights to seek a judicial stay. CPLR 7503(b) provides that “a party who has not participated in the arbitration * * * may apply to stay arbitration on the ground that * * * the claim sought to be arbitrated is barred” by the statute of limitations applicable to the same causes of action under New York law. See also, Matter of Civil Service Employees Assn. [County of Erie], 303 AD2d 1050, 1051 (4th Dept. 2003) (“participation in the arbitration constituted a waiver of any right * * * to raise a statute of limitations defense in court or obtain a stay of arbitration on statute of limitations grounds”); Alexander, Practice Commentaries, McKinney’s Cons Laws of NY, Book 7B, CPLR C7503:2 (“participation in the arbitration will constitute a waiver of the right to seek a judicial stay and thus foreclose raising, in court, threshold defenses relating to arbitrability and the statute of limitations. The opponent’s participation in arbitration is deemed inconsistent with his position that the dispute is nonarbitrable”); Siegel, NY Prac. § 592, [*4]at 1043 (4th ed.).

Allstate argues that because Ms. Merrick did not comply with the provisions of CPLR 7503(c), which provides that a “party may serve upon another party a demand for arbitration or notice of intention to arbitrate” that must be served in a particular manner and must set forth specified information, it is still free to seek a stay notwithstanding its participation. Allstate is wrong.

CPLR 7503(c) affords a party desirous of arbitrating a claim with a mechanism to impose a very short and strict 20-day deadline for challenging arbitrability, including raising the argument that arbitration is time barred. Within 20 days of proper service of a valid CPLR 7503(c) notice or demand, a party seeking to avoid arbitration on statute-of-limitations grounds must apply to stay arbitration or suffer the consequences of being precluded from raising the argument in court at any time—before or after the arbitration—regardless of whether the party actually participates in the proceedings. See, CPLR 7503(c); CPLR 7511(b)(2)(iv).

In contrast, when, as here, there has been no CPLR 7503(c) notice or demand to arbitrate, there is no strict 20-day limit for applying to stay arbitration and a party that did not participate in the proceedings retains the right to challenge the award because the arbitrated claim was time barred. CPLR 7503(c), however, does not in any way nullify the rule that a participant in the arbitration cannot subsequently seek a judicial stay based on passage of the statute of limitations.

That Allstate informed the AAA in an informal email that it suspected “there are some statute of limitations” issues, is equally unavailing. To obtain a judicial stay on statute-of-limitations grounds, Allstate was required to commence a special proceeding before participating in the arbitration. It cannot make arguments before the arbitrator, conduct cross-examination and submit evidence—costing all of the parties time and money—and then, for the first time, argue to the Court that the matter should never have gone to arbitration in the first place because the claim is time barred.

Accordingly, it is

ORDERED and ADJUDGED that the petition is denied and the proceeding is dismissed.

This constitutes the Decision, Order and Judgment of the Court.

Dated: New York, New York

August 17, 2006

E N T E R

[*5]

Hon. Eileen Bransten