Decided on February 19, 2021

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

Decided on February 19, 2021

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

[*1]

Gary Tsirelman, P.C., Brooklyn (Gary Tsirelman of counsel), for appellant.

Jaffe & Velazquez LLP, New York (Thomas Torto of counsel), for respondent.

Order, Supreme Court, New York County (Lynn R. Kotler, J.), entered June 8, 2018, which, in effect, granted reargument and adhered to the original determination, which granted the petition to vacate a master arbitrator’s award in favor of respondent, unanimously reversed, on the law, without costs, the petition denied, the master arbitrator’s award confirmed, and the matter remanded for a determination of respondent’s attorneys’ fees.

Although the motion court purported to deny respondent’s motion for reargument, it effectively granted the motion by addressing the merits. Accordingly, the order is appealable (CPLR 5701 [a] [2] [viii]; Castillo v Mount Sinai Hosp., 140 AD3d 619, 620 [1st Dept 2016], lv denied 28 NY3d 913 [2017]).

As respondent argued, the court overlooked existing authority confirming that CPLR 7511 (b) limits courts’ vacatur of arbitration awards to circumstances not present in this case (see Matter of New York State Correctional Officers & Police Benevolent Assn. v State of New York, 94 NY2d 321, 326 [1999] [“(E)ven in circumstances where an arbitrator makes errors of law or fact, courts will not assume the role of overseers to conform the award to their sense of justice”]).

The order that vacated the arbitration award cited no basis for vacatur under CPLR 7511 (b), finding only that the arbitrator and master arbitrator applied the wrong burden of proof to plaintiff’s fraudulent incorporation defense. Although on reargument the motion court determined that this Court’s decision in Country-Wide Ins. Co. v TC Acupuncture, P.C. (140 AD3d 643 [1st Dept 2016]), decided June 28, 2016, could not apply to the petition decided on June 9, 2016, Country-Wide did not state a new proposition of law, but merely cited existing authority (id. at 643-644 [“Even assuming, without deciding, that the master arbitrator applied the wrong burden of proof, the award is not subject to vacatur on that ground”], citing New York State Correctional Officers, 94 NY2d at 326).

Respondent is entitled to its reasonable attorneys’ fees on appeal (11 NYCRR 65-4.10 [j] [4]; Matter of Country-Wide Ins. Co. v TC Acupuncture P.C., 179 AD3d 414, 415 [1st Dept 2020]). We therefore remand the matter to Supreme Court for the calculation of those fees. Concur—Renwick, J.P., Kern, Singh, Shulman, JJ.

CV-734629-18

Plaintiff’s Firm
Richard Rozhik
The Rybak Firm, PLLC
1810 Voorhies Avenue, Suite 7
Brooklyn, New York 11235
Telephone: (718) 975 – 2035
Facsimile: (718) 975 – 2037
rrozhik@rybakfirm.com

Defendant’s Firm
Sabiha Farkas, Esq.
Law Office of Patrick Neglia
200 Broadhollow Road, Suite 207
Melville, New York 11747
(T) (866) 543-0404 x60405
(F) (877) 389-1097
sfarkas@mercuryinsurance.com

Upon the foregoing cited papers and after oral arguments on January 8, 2021, pursuant to [*2]CPLR §3212(g), the Decision and Order on Defendant’s Motion for Summary Judgment and Plaintiff’s Cross-Motion for Summary Judgment, is as follows:

PROCEDURAL POSTURE:

In this No-Fault proceeding, Mercury Casualty Insurance Company (“Defendant/Insurer”), appearing through its attorney, pursuant to CPLR §3212(a) moves for Summary Judgment and dismissal of the complaint as barred by the doctrines of collateral estoppel and res judicata. In the alternative, Defendant moves for partial Summary Judgment seeking a prima facie finding that it timely and properly denied the bills in dispute. Total Chiropractic, P.C. (“Plaintiff/Provider”), appearing through its attorney, opposes Defendant’s motion. Pursuant to CPLR §3212(a), Plaintiff cross-moves for an Order granting Summary Judgment seeking a prima facie finding that it timely and properly mailed said bills totaling $2,100.00. Plaintiff further submits that the Declaratory Judgment issued against it, was entered on default, the issues have not been litigated therefore collateral estoppel and res judicata do not apply.^[FN1] Based on the foregoing, Defendant’s motion is GRANTED and Plaintiff’s cross-motion is DENIED.

FACTUAL BACKGROUND:

Plaintiff commenced the instant No-Fault action seeking payment for medical services it rendered to Assignor Santia Louis as a result of alleged injuries related to a July 10, 2015 motor vehicle accident under claim number 2015004500398710.

Defendant commenced the Declaratory Judgment action against Plaintiff on October 6, 2016, in Supreme Court of the State of New York in Orange County, under Index Number EF 004083-2016 seeking an Order that Plaintiff not be entitled to payment for the claims submitted to Defendant. Specifically, Defendant alleged that the Assignor made material misrepresentations about her actual place of residence, which began with the procurement of the policy and continued until the date of motor vehicle accident. The Assignor’s misrepresentation reduced the amount of her policy premiums.^[FN2]

Defendant was granted its application for a Declaratory Judgment on December 5, 2016, where Orange County Supreme Court Justice Vazquez-Doles concluded “…the [Defendant] has no duty to provide any first party benefits coverage to [Assignor], and other interested parties [*3]listed as defendants,” and that Defendant “is entitled to monetary relief against [Assignor]”^[FN3] . Plaintiff failed to file an answer or a motion to renew or re-argue or appeal the Orange County Declaratory Judgment action. On December 13, 2016, Defendant served the Plaintiff the Orange County Declaratory Judgment.^[FN4]

Plaintiff commenced the instant No-Fault action on August 2, 2018 and issue was joined on September 19, 2018.^[FN5]

POSITION OF THE PARTIES:

Defendant avers its Motion for Summary Judgment should be granted in its entirety and Plaintiff’s complaint should be dismissed with prejudice. Defendant relies on the above-referenced Orange County Declaratory Judgement in support of its collateral estoppel and res judicata position since said Declaratory Judgment ordered that Mercury “has no duty to provide any first party benefits coverage to Defendant Santia Louis, and other interested parties listed as Defendants, arising out of the same July 10, 2015 motor vehicle accident as in the instant matter, given the Defendant’s misrepresentation of her place of residence was “material” as defined in Insurance Law §3105(b).” The Defendant also relies on the October 23, 2017 Decision and Order issued by Kings County Civil Court Judge Richard Montelione dismissing with prejudice a related matter bearing the caption Total Chiropractic, P.C. a/a/o Santia Louis, et. al., Index Number 073058/15, that also relied on the same Orange County Declaratory Judgment.

Plaintiff avers that said Declaratory Judgment has no preclusive effect in this case because it applies only to the Assignor and not the service provider Plaintiff in this matter. Plaintiff points to Jamaica Wellness Med., P.C. v. Mercury Cas. Co. where the Appellate Term opined the “Supreme Court order in the declaratory judgment action merely awarded a default judgment to Mercury against [Plaintiff]’s assignor, but did not declare the rights of Mercury as against [Plaintiff], the Supreme Court order cannot be considered a conclusive final determination of [Plaintiff]’s rights and, thus, can have no preclusive effect on the no-fault action at bar.”^[FN6]

Plaintiff also argues that Defendant failed to establish it timely and properly denied Plaintiff’s claim and is now precluded from raising the defense of the Assignor’s material misrepresentations to procure the underlying insurance policy. Plaintiff relies on the Appellate Division holding in Westchester Med. Ctr. v. GMAC Ins. Co. Online, Inc, which found that “although the defendants contend that they submitted evidence showing that the plaintiff’s assignor misrepresented his state of residence in connection with the issuance of the subject insurance policy, the defendants are precluded from asserting that defense, as a result of their [*4]untimely denial of the claim.”^[FN7] See also Gutierrez v. United Servs. Auto. Assn., holding that “Plaintiff correctly argues that defendant failed to demonstrate that it is not precluded from asserting its proffered defense—that the insurance policy at issue was fraudulently procured—as it failed to establish that it had timely denied plaintiff’s claim on that ground.”^[FN8] Any so-called global or blanket denial of claim form that does not specifically address Plaintiff’s claim is insufficient to avoid the preclusion of the defense.^[FN9]

ANALYSIS:

In deciding a motion for Summary Judgment, the Court’s role is solely to determine if any triable issues exist, not to determine the merits of any such issues. Sillman v. Twentierth Centry-Fox Film Corp., 3 NY.2d 395 (1957). Summary Judgment may only be granted if no genuine triable issue of fact is presented. See Gomes v. Courtesy Bus Co., 251 AD2d 625 (2nd Dep’t 1998).

The movant must establish the cause of action “sufficiently to warrant the court as a matter of law in directing judgment” in the movant’s favor and must do so by evidentiary proof in admissible form. See CPLR §3212(b); Friends of Animals, Inc. v. Associated Fur Mfrs., 46 NY2d 1065 (1979). “The proponent of a Summary Judgment motion must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to eliminate any material issues of fact from the case.” Winegrad v. New York University Medical Center, 64 NY2d 851, 853 (1986).

Once such entitlement has been demonstrated by the movant, then the burden shifts to the party opposing the motion to demonstrate by admissible evidence that existence of a factual issue requiring a trial of the action or tender an acceptable excuse for his failure to do so. Zuckerman v. City of New York, 49 NY2d 557, 560 (1980). However, the Court of Appeals has made clear that bare allegations or conclusory assertions are insufficient to create genuine, bona fide issues of fact necessary to defeat such a motion. Rotuba Extruders, Inc. v. Ceppos, 46 NY2d 223, 231 (1978).

Under New York state law, Default Judgments that have not been vacated, are final orders and can preclude Plaintiff’s claims for payment. See Lazides v P & G Enters., 58 AD3d 607, 871 NYS2d 357 [2nd Dept 2009], revg 2007 WL 6861118 [Sup Ct, Kings County 2007]. The courts have reasoned that to hold otherwise would destroy or impair the rights or interests established by Default Judgments. See Schuylkill Fuel Corp. v Nieberg Realty Corp., 250 NY 304, 306-307, 165 NE 456 [1929]; Great Health Care Chiropractic, P.C. v Progressive Ins. Co., 48 Misc 3d 134[A], 18 NYS3d 579, 2015 NY Slip Op 51077[U] [App Term, 2nd Dept, 2d, 11th & 13th Jud. Dists. 2015] An order specifying the court’s Declaratory Judgment is a conclusive [*5]final determination, notwithstanding that it was entered on default. See Metro Health Prods., Inc. v Nationwide Ins., 48 Misc 3d 85, 16 NYS3d 366 [App. Term, 2nd Dept, 2d, 11th & 13th Jud. Dists., 2015].

New York State Insurance Law and Regulations 11 NYCRR §65 (“Regulations”) provide that an insurer must pay or deny a claim for No-Fault benefits within thirty days from the receipt of the claim. See Insurance Law§5106 and Regulations §65-3. Defendant must produce legally sufficient evidence that a denial form was generated and mailed within 30-days of the receipt of the claim for No-Fault benefits, or the time was tolled by issuing a proper verification request. Jul Pol Corp. v State Farm Fire and Casualty Company, 2003 NY Slip 51153 (U) (App. Term, 2nd and 11th Jud. Distrs., July 9, 2003).

The threshold issue hereis whether a default judgment that was not vacated has preclusive effects to permit the Plaintiff to collect payment for a claim submitted as first party benefits under New York’s No-Fault Insurance law. If established, this Court does not have to consider the issue of whether Plaintiff met its prima facie burden warranting payment for medical services or whether the Defendant established the bills in dispute were appropriately denied.

The Court finds that the Orange County Declaratory Judgment is a final Order that names both the Assignor and the Plaintiff and clearly delineates the rights and obligations of the parties.^[FN10] The Declaratory Judgment clearly recites the relief requested by the Defendant and decrees the Defendant “has no duty to provide any first party benefits coverage to [Assignor], and other interested parties listed as defendants.”^[FN11] The Plaintiff and Assignors are named Defendants on the Orange County Declaratory Judgment.^[FN12] In its affidavits, Plaintiff failed to produce any evidence to raise a triable issue of fact regarding whether it is covered as a Defendant in the Orange County Declaratory Judgment.

The Court is not persuaded by Plaintiff’s reliance on Jamaica Wellness Med P.C. v. Mercury Cas. Co., 2018 NY Slip Op 51128 (U), as its inapplicable to the instant matter. The default judgment granted in the Jamaica Wellness Medical case was only against the Assignor, as the Plaintiff provider had appeared in the action and served an Answer. The Appellate Term specifically notes that “upon review of the record, we find that, as the March 23, 2016 Supreme Court order in the declaratory judgment action merely awarded a default judgment action to Mercury against Jamaica’s assignor, but did not declare the rights of Mercury as against Jamaica.”^[FN13] Therefore the facts here are distinguishable given that Mercury’s Declaratory Judgment Order entered on default was specifically against both Assignor Santia Louis and Plaintiff provider Total Chiropractic P.C., who were both named in the Orange County Declaratory Judgment action and the case herein, and both failed to respond to the Orange County Declaratory Judgment action.

Finally, the Appellate Division, 2nd Department held that when an accident victim assigns his or her No-Fault claim to a medical provider, pursuant to 11 NYCRR 65-3.11, the medical provider as the “assignee ‘stands in the shoes’ of an assignor and thus acquires no greater rights than its assignor.” Long Island Radiology v. Allstate Ins. Co., 36 AD3d 763, 830 N.Y.S.2d 192 (2nd Dept. 2007). If a certain defense may be raised by the Defendants against the injured party, it is available as against the provider who accepts the assignments of no-fault benefits. As such, a finding of material misrepresentation of an assignor would be imputed onto the health care provider who takes an assignment of benefits and assumes this risk when accepting the assignment.

CONCLUSION:

Accordingly, the Orange County Declaratory Judgment declared the rights and obligations of both the Plaintiff and the Assignor which found there is no coverage based on the Assignor’s material misrepresentations about her residence. The Court need not consider whether either party established their respective prima facie cases.

The Defendant’s motion is GRANTED and the Plaintiff’s motion is DENIED as moot. The complaint is dismissed with prejudice.

This constitutes the Decision and Order of the Court.

Date: February 8, 2021
Brooklyn, New York
Hon. Patria Frias-Colón
Civil Court, Kings County

Footnotes

Footnote 1:On January 11, 2017 Defendant held an inquest against the Assignor wherein Defendant was awarded judgment in the amount of $81,021.15 for damages plus $5,745.50 in court costs and attorney fees. See the Trial Decision in Defendant’s Exhibit G.

Footnote 2:See Defendant’s Exhibit C, Summons and Verified Complaint, Index Number EF 004083-2016 and Exhibit E, Transcript of Santia Louis Examination Under Oath (EUO) dated November 4, 2015.

Footnote 3:See Defendant’s Motion Exhibit A, Judgment, Notice of Entry, and Affidavit of Service.

Footnote 4:Id.

Footnote 5:See Plaintiff’s Exhibit 2 and 3.

Footnote 6:60 Misc 3d 139(A) (App. Term, 2d Dep’t, 2018).

Footnote 7:80 AD3d 603, 604 (2d Dep’t, 2011).

Footnote 8:47 Misc 3d 152(A) (App. Term, 2d Dep’t, 2015).

Footnote 9:See St. Barnabas Hosp. v. Allstate Ins. Co., 66 AD3d 996 (2d Dep’t, 2009); A & S Med. P.C. v. Allstate Ins. Co., 15 AD3d 170 (1st Dep’t, 2005), affirming 196 Misc 2d 322 (App. Term, 1st Dep’t, 2003).

Footnote 10:See Defendant Motion Exhibit A, Judgment, Notice of Entry, and Affidavit of Service.

Footnote 11:Id.

Footnote 12:Id.

Footnote 13:Jamaica Wellness Med P.C. v. Mercury Cas. Co., 2018 NY Slip Op 51128 (U)

Hollander Legal Group , P.C. (Allan S. Hollander of counsel), for appellant. The Rybak Firm, PLLC (Damin J. Toell and Karina Barska of counsel), for respondent.

Appeal from an order of the Civil Court of the City of New York, Kings County (Odessa Kennedy, J.), entered May 31, 2019. The order, insofar as appealed from as limited by the brief, denied defendant’s motion for, in effect, summary judgment dismissing the complaint.

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

Plaintiff Allay Medical Services, P.C. (Allay) commenced this action on June 1, 2016 to recover assigned first-party no-fault benefits for injuries sustained by “Miller, Nichole” in an accident on October 31, 2015, the complaint stating that claim number 363323-GC had been assigned to the matter. Defendant Nationwide Ins. (Nationwide) served an answer and, thereafter, moved to dismiss the complaint pursuant to CPLR 3211 (a) (5), contending that plaintiff’s action was barred, insofar as is relevant, under the doctrine of res judicata, by an order and judgment in a Supreme Court declaratory judgment action. The Supreme Court order and judgment, entered April 25, 2016 upon the default of Allay in opposing a motion by Nationwide, declared that Nationwide was “under no obligation to pay any of the claims identified in Exhibit 1 to the Complaint.” Among other things, Exhibit 1 identified claim number 363323-GC and an accident on October 31, 2015, and listed the eligible injured person as having the initials N.M. Plaintiff opposed defendant’s motion in the Civil Court. As limited by its brief, defendant appeals from so much of an order of the Civil Court entered May 31, 2019 as denied the motion.

For the reasons stated in Allay Med. Servs., as Assignee of Diop, Gregoria v Nationwide Ins. (— Misc 3d &mdash, 2021 NY Slip Op _____ [appeal No. 2019-1180 K C], decided herewith), the order, insofar as appealed from, is reversed, and defendant’s motion for, in effect, summary judgment dismissing the complaint is granted.

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

Hollander Legal Group , P.C. (Allan S. Holllander of counsel), for appellant. The Rybak Firm, PLLC (Damin J. Toell and Karina Barska of counsel), for respondent.

Appeal from an order of the Civil Court of the City of New York, Kings County (Odessa Kennedy, J.), dated May 31, 2019. The order, insofar as appealed from as limited by the brief, denied defendant’s motion for, in effect, summary judgment dismissing the complaint.

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

Plaintiff Allay Medical Services, P.C. (Allay) commenced this action on June 1, 2016 to recover assigned first-party no-fault benefits for injuries sustained by “Diop, Gregoria” in an accident on July 3, 2015, the complaint stating that claim number 859968 had been assigned to the matter. Defendant Nationwide Ins. (Nationwide) served an answer and, thereafter, moved to dismiss the complaint pursuant to CPLR 3211 (a) (5), contending that plaintiff’s action was barred, insofar as is relevant, under the doctrine of res judicata, by an order and judgment in a Supreme Court declaratory judgment action. The Supreme Court order and judgment, entered April 25, 2016 upon the default of Allay in opposing a motion by Nationwide, declared that Nationwide was “under no obligation to pay any of the claims identified in Exhibit 1 to the Complaint.” Among other things, Exhibit 1 identified claim number 859968 and an accident on July 3, 2015, and listed the eligible injured person as having the initials G.D. Plaintiff opposed defendant’s motion in the Civil Court. As limited by the brief, defendant appeals from so much of an order of the Civil Court entered May 31, 2019 as denied the motion.

Initially, we note that, although defendant’s motion was denominated as one to dismiss the complaint pursuant to CPLR 3211 (a) (5), the motion was made after issue was joined (see generally CPLR 3211 [e]). “Whether or not issue has been joined, the court, after adequate notice to the parties, may treat the motion as a motion for summary judgment” (CPLR 3211 [c]). While the Civil Court never notified the parties that it was treating the motion as one for [*2]summary judgment, an exception to the notice requirement is applicable, as defendant’s motion exclusively involved “a purely legal question rather than any issues of fact” (Mihlovan v Grozavu, 72 NY2d 506, 508 [1988]; see Four Seasons Hotels v Vinnik, 127 AD2d 310, 320 [1987]; Renelique v State-Wide Ins. Co., 50 Misc 3d 137[A], 2016 NY Slip Op 50095[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2016]). Consequently, it was proper for the Civil Court to treat defendant’s motion to dismiss as one for summary judgment “without first giving notice of its intention to do so” (Four Seasons Hotels, 127 AD2d at 320).

“Under the doctrine of res judicata, a final adjudication of a claim on the merits precludes relitigation of that claim and all claims arising out of the same transaction or series of transactions by a party or those in privity with a party” (Ciraldo v JP Morgan Chase Bank, N.A., 140 AD3d 912, 913 [2016]; see Matter of Hunter, 4 NY3d 260, 269 [2005]; Schuylkill Fuel Corp. v Nieberg Realty Corp., 250 NY 304, 306-307 [1929]).

As defendant’s moving papers sufficiently established that the claim number and the date of the subject accident in the action at bar are identical to those in the prior action where there has been a final adjudication of the claim on the merits (see Ciraldo, 140 AD3d at 913), plaintiff’s present action in the Civil Court was precluded under the doctrine of res judicata. Consequently, in light of the Supreme Court’s order and judgment, the Civil Court should have granted defendant’s motion (see EBM Med. Health Care, P.C. v Republic W. Ins., 38 Misc 3d 1 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012]), as any judgment in favor of plaintiff in this action would destroy or impair rights or interests established by the judgment and order in the declaratory judgment action (see Schuylkill Fuel Corp., 250 NY at 306-307; Flushing Traditional Acupuncture, P.C. v Kemper Ins. Co., 42 Misc 3d 133[A], 2014 NY Slip Op 50052[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2014]; EBM Med. Health Care, P.C., 38 Misc 3d at 2).

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

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

Law Office of David O’Connor, P.C. (David O’Connor of counsel), for appellant. Rivkin Radler, LLP (Stuart M. Bodoff and Cheryl F. Korman of counsel), for respondent.

Appeal from an order of the Civil Court of the City of New York, Queens County (Philip Hom, J.), entered February 20, 2019. The order granted the branch of defendant’s motion seeking dismissal of the complaint on the ground that plaintiff’s action is barred by the doctrine of collateral estoppel.

ORDERED that the order is reversed, with $30 costs, the branch of defendant’s motion seeking dismissal of the complaint on the ground that plaintiff’s action is barred by the doctrine of collateral estoppel is denied and the matter is remitted to the Civil Court for a determination of the remaining branches of defendant’s motion.

Plaintiff commenced this action in 2003 to recover first-party no-fault benefits as assignee of the eligible injured person for services provided to its assignor, who was allegedly injured in a motor vehicle accident on August 26, 2002. Thereafter, State Farm commenced a declaratory judgment action in Supreme Court, Nassau County, against the assignor and a number of other individuals. Upon the default of the assignor, among others, in submitting opposition to State Farm’s motion for declaratory relief, the Supreme Court, in a judgment entered on November 22, 2006, declared that the August 26, 2002 collision had been a staged accident; that the insurance policy at issue is null and void with regard to any claim arising out of that collision; and that State Farm has no duty to provide no-fault benefits to the assignor herein and the other individual defendants. Defendant then moved in the Civil Court for an order dismissing the complaint on several grounds, including a lack of coverage due to a staged accident, as previously determined by the Supreme Court. In opposition, plaintiff argued that it did not have a “full and fair” opportunity to litigate the declaratory judgment action. By order entered February 20, 2019, the Civil Court granted defendant’s motion, finding that plaintiff’s claim is barred under the doctrine of collateral estoppel.

“Collateral estoppel precludes a party from relitigating an issue where “the issue in the second action is identical to an issue which was raised, necessarily decided and material in the first action, and the plaintiff had a full and fair opportunity to litigate the issue in the earlier action” (Parker v Blauvelt Volunteer Fire Co., 93 NY2d 343, 349 [1999]; see D’Arata v New York Cent. Mut. Fire Ins. Co., 76 NY2d 659 [1990]; Manko v Gabay, 175 AD3d 484 [2019]). As the declaratory judgment was obtained on default and not actually litigated on the merits in the Supreme Court, there is no identity of issues between the present action and the prior determination in the declaratory judgment action (see Kaufman v Eli Lilly & Co., 65 NY2d 449, 456-457 [1985]; Matter of Hereford Ins. Co. v McKoy, 160 AD3d 734, 736 [2018]; 47 Thames Realty, LLC v Rusconie, 85 AD3d 853, 853 [2011]). Moreover, as plaintiff commenced this action in 2003 as assignee of the eligible injured person, plaintiff and its assignor were not in privity when the declaratory judgment action was commenced in 2005. Consequently, contrary to the determination of the Civil Court, plaintiff’s action is not barred under the doctrine of collateral estoppel.

As the Civil Court did not address the alternate grounds asserted by defendant in its motion seeking dismissal of the complaint, the matter must be remitted to the Civil Court for a determination of those remaining grounds (see Magic Recovery Med. & Surgical Supply Inc. v State Farm Mut. Auto. Ins. Co., 27 Misc 3d 67 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2010]; see also McElroy v Sivasubramaniam, 305 AD2d 944 [2003]).

Accordingly, the order is reversed, the branch of defendant’s motion seeking dismissal of the complaint on the ground that plaintiff’s action is barred by the doctrine of collateral estoppel is denied and the matter is remitted to the Civil Court for a determination of the remaining branches of defendant’s motion.

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

Decided on February 5, 2021

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

The Rybak Firm, PLLC (Damin J. Toell and Karina Barska of counsel), for appellant. Law Offices of Buratti, Rothenberg & Burns (Bryan M. Rothenberg of counsel), for respondent.

Appeal from an order of the Civil Court of the City of New York, Kings County (Richard J. Montelione, J.), entered July 5, 2018. The order granted defendant’s motion to vacate an order of that court (Reginald A. Boddie, J.) entered April 23, 2012 which granted plaintiff’s prior unopposed motion for summary judgment and, upon such vacatur, to dismiss plaintiff’s motion and for summary judgment dismissing the complaint.

ORDERED that the order is affirmed, with $25 costs.

Plaintiff commenced this action on July 23, 2010 to recover assigned first-party no-fault benefits for services provided to Quintero Nathaniel, who was allegedly injured in a motor vehicle accident on November 23, 2009. On August 12, 2011, plaintiff moved for summary judgment. Under an adjournment stipulation executed by the parties’ counsel, opposition by defendant, 21st Century Insurance Company (21st Century), to plaintiff’s motion was to be served on or before January 23, 2012, and the motion was adjourned to April 23, 2012. Defendant failed to oppose the motion. By order entered April 23, 2012, the Civil Court (Reginald A. Boddie, J.) granted plaintiff’s motion, finding, among other things, that defendant had failed to appear for the calendar call on the return date of the motion. There is no indication that a judgment has been entered pursuant to the April 23, 2012 order.

In May 2012, defendant moved to vacate the April 23, 2012 order and, upon such vacatur, to dismiss plaintiff’s motion for summary judgment and to grant summary judgment to defendant dismissing the complaint on the ground, among others, that defendant had a reasonable excuse for failing to oppose plaintiff’s motion, in that, before the return date of plaintiff’s motion, the action had been stayed by an order of the Supreme Court, Nassau County, dated December 19, 2011, in a declaratory judgment action. Plaintiff opposed defendant’s motion in the Civil Court. [*2]By order entered July 5, 2018, the Civil Court (Richard J. Montelione, J.) granted defendant’s motion and dismissed the complaint with prejudice. As noted by the Civil Court, defendant’s motion had been adjourned numerous times from 2012 until it was heard in 2018. The Civil Court took judicial notice of a judgment that had been entered on February 4, 2016 in the Supreme Court upon a prior order of the Supreme Court, granting 21st Century’s motion for summary judgment and declaring that the November 23, 2009 accident, among other named collisions, was intentional, that 21st Century has no duty to provide coverage for any no-fault claim in connection with the November 23, 2009 collision, and that the insurance policy at issue was null and void.

Defendant sufficiently established a reasonable excuse for its default (see CPLR 5015 [a] [1]) in opposing plaintiff’s motion in the Civil Court by demonstrating that a stay issued by the Supreme Court in its December 19, 2011 order was in effect when defendant’s opposition papers would have been due pursuant to the parties’ briefing stipulation, and that the stay remained in effect on the adjourned date of plaintiff’s motion.

With respect to a potentially meritorious defense to the action, the Civil Court properly found that, by virtue of the Supreme Court declaratory judgment, dated February 4, 2016, of which the Civil Court took judicial notice (see Kingsbrook Jewish Med. Ctr. v Allstate Ins. Co., 61 AD3d 13 [2009]; Matter of Khatibi v Weill, 8 AD3d 485 [2005]; Renelique v State-Wide Ins. Co., 50 Misc 3d 137[A], 2016 NY Slip Op 50096[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2016]), there has been a conclusive determination of the merits of the claim in question (see Bayer v City of New York, 115 AD3d 897 [2014]; Panagiotou v Samaritan Vil., Inc., 88 AD3d 779 [2011]; Methal v City of New York, 50 AD3d 654 [2008]). Consequently, in light of the declaratory judgment, defendant’s motion in the Civil Court was properly granted under the doctrine of res judicata (see EBM Med. Health Care, P.C. v Republic W. Ins., 38 Misc 3d 1 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012]), as any judgment in favor of plaintiff in the present action would destroy or impair rights or interests established by the judgment in the declaratory judgment action (see Schuylkill Fuel Corp. v Nieberg Realty Corp., 250 NY 304 [1929]; Healing Art Acupuncture, P.C. v 21st Century Ins. Co., 59 Misc 3d 139[A], 2018 NY Slip Op 50583[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2018]; Flushing Traditional Acupuncture, P.C. v Kemper Ins. Co., 42 Misc 3d 133[A], 2014 NY Slip Op 50052[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2014]).

Accordingly, the order is affirmed.

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

[*1]

Supreme Court, New York County, February 4, 2021

APPEARANCES OF COUNSEL

[*2]Jaffe & Velazquez, LLP, New York City (Carl J. Gedeon of counsel), for plaintiff.

The Rybak Firm, PLLC, Brooklyn (Oleg Rybak of counsel), for Healthway Medical Care P.C. and others, defendants.

This motion concerns plaintiff Country-Wide Insurance Company’s potential obligation to pay no-fault insurance benefits. Defendant Jeffrey Delacruz was the driver of a vehicle that was involved in a collision. The vehicle was covered by a no-fault insurance policy issued by Country-Wide. Delacruz assigned the right to collect no-fault benefits under that policy to various treating medical providers. Those providers applied for no-fault benefits from Country-Wide but were denied.

Country-Wide then brought this action for a declaratory judgment that it is not required to pay no-fault benefits to Delacruz or to the other defendants (all medical-provider assignees of Delacruz). Country-Wide moved for, and was granted, a default judgment under CPLR 3215 against Delacruz and several non-appearing medical providers.

Country-Wide now moves for summary judgment under CPLR 3212 against the remaining medical-provider defendants: Healthway Medical Care P.C., Acupuncture Now P.C., SB Chiropractic, P.C., and Dr. Jules Francois Parisien. The motion is denied.

Discussion

Country-Wide argues that it is entitled to summary judgment because Delacruz’s failure to appear for scheduled examinations under oath (EUOs) defeats coverage under the no-fault policy, and thus forecloses the remaining medical providers’ claim to benefits.

A no-fault insurer seeking a declaration of no coverage due to asserted violations of the terms of the policy must first demonstrate that it complied with each of the procedural and timeliness requirements of 11 NYCRR 65-3.5, governing the handling of no-fault claims. (See American Tr. Ins. Co. v Longevity Med. Supply, Inc., 131 AD3d 841, 841 [1st Dept 2015].) A no-fault-benefits claimant must appear for an EUO when reasonably requested to do so by the insurer. (See 11 NYCRR 65-1.1.) And a claimant’s failure without reasonable cause to appear for a timely and properly scheduled EUO is grounds to deny coverage. An EUO request, though, “must be based upon the application of objective standards so that there is specific{**71 Misc 3d at 249} objective justification supporting the use of such examination.” (Id. § 65-[*3]3.5 [e].) And the request must be made within 15 days of the insurer’s receipt of the forms that it requires to verify no-fault claims (such as the standard NF-3 form). (See id. § 65-3.5 [a]-[b].)

This court agrees that Country-Wide has demonstrated that its EUO request was timely made and properly transmitted to Delacruz, and that Delacruz nonetheless failed twice to appear for his EUO. Defendants have, however, questioned whether Country-Wide had sufficient justification to have made that EUO request in the first place. Defendants also have shown that they requested—but have not yet received—material discovery from Country-Wide on this issue. This court concludes, therefore, that Country-Wide’s motion for summary judgment must be denied as premature under CPLR 3212 (f).

I. Whether Country-Wide Has Established That it Timely Requested Delacruz’s Appearance at an EUO

Here, the documents submitted by Country-Wide in support of summary judgment do not include any NF-3 forms submitted by Dr. Parisien. Country-Wide thus has not shown that it satisfied section 65-3.5’s 15-business-day time frame with respect to defendant Dr. Parisien. The motion for summary judgment is denied as to Dr. Parisien.

The absence of evidence as to Dr. Parisien, however, does not alone foreclose Country-Wide from obtaining the requested declaratory judgment as to the other medical providers. (See Unitrin Advantage Ins. Co. v Dowd, 67 Misc 3d 1219[A], 2020 NY Slip Op 50594[U], *3 [Sup Ct, NY County, May 21, 2020] [holding that where an “insurer’s EUO request is timely as to some (benefits) claims and untimely as to others, the insurer is entitled to deny coverage . . . as to those claims for which it timely requested verification”].)

With respect to the remaining three providers, Country-Wide has met its prima facie burden to establish its compliance with sections 65-3.5 (b) and 65-3.6 (b). Country-Wide has provided documentary evidence that (i) Country-Wide received verification forms from the medical providers on May 8, 2018 (see generally NY St Cts Elec Filing [NYSCEF] Doc No. 61 [NF-3 forms with date stamps indicating receipt]); (ii) Country-Wide first mailed its EUO request to Delacruz on May 16, 2018 (see NYSCEF Doc No. 53); and (iii) Country-Wide mailed the request to the address appearing on Delacruz’s NF-2 benefits-application form (compare NYSCEF Doc No. 19 [NF-2 form], with NYSCEF{**71 Misc 3d at 250} Doc No. 53 [first EUO letter]).^[FN1] Country-Wide also has provided documentary evidence that after the EUO was initially rescheduled, Delacruz twice failed to appear for his EUO despite receiving proper advance notice of the rescheduled EUO dates. (See NYSCEF Doc Nos. 54-57, 59.)

In opposing summary judgment, defendants argue that Country-Wide’s submissions are [*4]insufficient because those submissions do not demonstrate that the NF-3 forms relied on by Country-Wide were the earliest such forms that Country-Wide received in this case. (See NYSCEF Doc No. 63 ¶ 27.) This court disagrees. The forms Country-Wide submitted reflect billing by each defendant for treatments provided within a week of the underlying collision, and in some cases as early as one or two days after the collision. (See e.g. NYSCEF Doc No. 61 at 3, 6, 10.) On the record before the court, therefore, it is difficult to see how defendants could have (i) provided earlier treatments that were (ii) included in separate earlier NF-3 forms submitted to Country-Wide, and which (iii) Country-Wide would have received more than 15 business days before it mailed its first EUO request. At the very least Country-Wide has submitted sufficient evidence to meet its initial prima facie burden to show that the first EUO request was timely.^[FN2]

II. Whether Country-Wide Still Owes Defendants Material Discovery on Whether Country-Wide’s EUO Request was Reasonable

Defendants’ opposition papers do not provide countervailing evidence that would create a dispute of fact about whether Country-Wide timely asked Delacruz to appear for an EUO; or whether Delacruz failed to appear despite timely notice having been properly mailed to him. Instead, defendants argue that material discovery remains outstanding, rendering Country-Wide’s summary-judgment motion premature. (See NYSCEF Doc No. 63 at 20-23.) This court agrees.{**71 Misc 3d at 251}

A. Whether Country-Wide Has Sufficiently Established That its EUO Request was Reasonable Even Absent Discovery

As noted above, an insurer’s request that a no-fault applicant appear for an EUO must be reasonable and have a specific objective justification. The EUO notices that Country-Wide provided here to Delacruz did not include that justification on their face—they stated only that Country-Wide “would like to clarify some of the facts and circumstances surrounding this claim.” (E.g. NYSCEF Doc No. 53 at 2.) The defendants served a request for Country-Wide’s investigative file in the case (among other discovery) to learn the basis for the EUO request made to Delacruz. That request undisputedly remained pending when Country-Wide moved for summary judgment. (See NYSCEF Doc No. 63 ¶ 81.) The motion is therefore premature under CPLR 3212 (f). (See Kemper Independence Ins. Co. v AB Med. Supply, Inc., 187 AD3d 671, 671 [1st Dept 2020] [affirming denial of summary judgment as premature because plaintiff insurer had not yet provided defendant providers with the justification for its EUO request]; American Tr. Ins. Co. v Jaga Med. Servs., P.C., 128 AD3d 441, 441 [1st Dept 2015] [reversing grant of summary judgment because “(t)he reason for the EUO request is a fact essential to justify [*5]opposition to plaintiff’s summary judgment motion . . . and such fact is exclusively within the knowledge and control of the movant”].)

Country-Wide makes several arguments for why summary judgment may properly be granted even absent this discovery. None are persuasive.

Country-Wide suggests that the Mena-Sibrian affidavit included in its motion papers sufficiently explained the “factors that raised questions as to the legitimacy of the claim” (thereby prompting the underlying EUO request). (NYSCEF Doc No. 79 ¶ 28; see also id. ¶ 37.) Country-Wide does not, however, explain why it should be sufficient only to provide selected documents supporting the reasonableness of its EUO request at the time of the motion itself. Ordinarily, one would expect Country-Wide instead to have to turn over all relevant and responsive documents on the issue to defendants in discovery before moving for summary judgment.

Additionally, the Mena-Sibrian affidavit relied upon by Country-Wide states only that “material facts surrounding the accident required clarification.” (NYSCEF Doc No. 58 ¶ 10.) It does not identify what facts required clarification, or why. Although that paragraph of the affidavit refers also to “objective {**71 Misc 3d at 252}criteria stated herein” for making EUO requests (id.), no such criteria are in fact stated.^[FN3] Thus, even assuming Country-Wide could satisfy its burden to show a proper objective basis for its EUO request merely through its summary-judgment papers, Country-Wide has not done so here. (Cf. State Farm Mut. Auto. Ins. Co. v Sweetwater Chiropractic, P.C., 60 Misc 3d 1219[A], 2018 NY Slip Op 51177[U], *3 [Sup Ct, NY County, Aug. 6, 2018] [denying summary judgment as premature where an affidavit submitted by the insurer at summary judgment was not sufficiently specific about why the insurer requested an EUO in the case]; Unitrin Advantage Ins. Co. v Better Health Care Chiropractic, P.C., 2016 NY Slip Op 30837[U], *9 [Sup Ct, NY County, May 4, 2016] [adhering to denial of medical providers’ motion to compel discovery about the insurer’s EUO request in light of a detailed affidavit from the insurer’s claim representative about the basis to suspect that the collision was staged].)

B. Whether Any Challenge to the Justification for Country-Wide’s EUO Request Has Been Waived

Country-Wide also contends that defendants’ present challenge to the justification for the EUO request was waived because neither Delacruz nor his medical-provider assignees questioned the need for the EUO when it was first requested. (See NYSCEF Doc No. 79 ¶ 26, [*6]citing Longevity Med. Supply, Inc. v IDS Prop. & Cas. Ins. Co., 44 Misc 3d 137[A], 2014 NY Slip Op 51244[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists, July 28, 2014].) The cited Longevity Med. Supply decision, though—and indeed, nearly all of the cases that it cites in turn^[FN4]—was issued by the Appellate Term of Supreme Court, rather than by the Appellate Division. These cases are therefore at most persuasive authority.^[FN5] (See Kattan v 119 Christopher LLC, 69 Misc 3d 1223[A], 2020 NY Slip Op {**71 Misc 3d at 253}51469[U], *3-4 [Sup Ct, NY County, Dec. 11, 2020] [collecting cases].)

This court sees no basis to impose what would be in effect an exhaustion requirement on challenges to the basis for an insurer’s EUO request. The court reaches this conclusion for several reasons. The governing no-fault regulations give significant weight to the insurer’s obligation to limit EUO requests only to those cases where they are actually warranted. That is, the regulations require not merely that the insurer have a specific, objective justification for requesting an EUO in a given case, but also that the justification stems from applying preexisting objective standards prepared by the insurer, and that these standards be made “available for review by [Insurance Department] examiners.”^[FN6] (11 NYCRR 65-3.5 [e].) Imposing an exhaustion requirement on challenges to the basis for an EUO request would run contrary to the Insurance Department’s evident policy aim of policing insurers’ use of EUO requests.

Nor is there an offsetting policy interest here that favors exhaustion. Requiring a no-fault claimant to seek more information about the basis for an EUO request when made would not ward off disputes about whether a given EUO request was justified. Nor would it enable a specialist expert to resolve such disputes at the outset. Instead, it would simply mean that the issue of EUO justification could potentially arise twice—first at the time of the request itself, [*7]then later during any coverage{**71 Misc 3d at 254} litigation should the claimant not appear for the requested EUO.^[FN7]

Further, an exhaustion requirement would be particularly anomalous in the no-fault context. That is, the party required in the first instance to object to the lack of a basis for the EUO request would be no-fault claimants themselves. But the party foreclosed later from raising the challenge in litigation absent an objection often would be not claimants, but their medical-provider assignees. Those assignees likely would be unable to ensure that the claimant raised the issue at the time of the EUO request; yet they would be bound anyway by the absence of such a request. Such a result would be neither fair nor efficient.

This court therefore concludes that the provider defendants may still raise an argument that Country-Wide’s EUO request lacked the required specific and objective justification, and that defendants are entitled to obtain discovery from Country-Wide on that issue.

Accordingly, it is hereby ordered that the branch of Country-Wide’s motion under CPLR 3212 seeking summary judgment in its favor as to defendant Dr. Parisien is denied; and it is further ordered that the branch of Country-Wide’s motion under CPLR 3212 seeking summary judgment in its favor as to defendants Healthway Medical Care, Acupuncture Now, and SB Chiropractic is denied without prejudice as premature under CPLR 3212 (f); and it is further ordered that the parties shall appear for a telephonic status conference on February 17, 2021, to discuss an appropriate discovery schedule in this action going forward.

Footnotes

Footnote 1:The NF-2 form included in Country-Wide’s summary-judgment papers appears to have been taken inadvertently from a different, unrelated benefits claim. (See NYSCEF Doc No. 52.) But Country-Wide’s default-judgment motion papers attached the correct NF-2 form submitted by Delacruz. (See NYSCEF Doc No. 19.)

Footnote 2:To the extent defendants are arguing that even the forms submitted by Country-Wide do not “demonstrate the dates when Plaintiff received Provider Defendants’ verification forms” (see NYSCEF Doc No. 63 ¶¶ 40, 42), that argument is refuted not only by the affidavit of Jessica Mena-Sibrian (see NYSCEF Doc No. 58 ¶ 9), but also by date stamps evidencing receipt that appear on the forms themselves (see generally NYSCEF Doc No. 61).

Footnote 3:Similarly, Country-Wide’s reply references certain facts that might call into question the legitimacy of a no-fault claim—and suggests that those facts are set forth in the Mena-Sibrian affidavit submitted in support of summary judgment. (See NYSCEF Doc No. 79 ¶ 37.) They are not. (See NYSCEF Doc No. 58.) Nor does any other document submitted by Country-Wide establish that it believed the referenced facts to be present in this case, or that this belief prompted Country-Wide’s EUO request.

Footnote 4:The lone exception, Westchester County Med. Ctr. v New York Cent. Mut. Fire Ins. Co., addresses a different issue not presented here—whether two demands by an insurer for further verification of a no-fault claim sufficed to toll the insurer’s time to pay or deny the claim. (See 262 AD2d 553, 555 [2d Dept 1999].)

Footnote 5:Additionally, Longevity Med. Supply v IDS Prop. & Cas., and the cases it cites, are decisions of the Appellate Term, Second Department, which in turn is bound by precedent of the Appellate Division, Second Department. And that precedent has imposed a greater burden on medical-provider assignees challenging the basis for an insurer’s EUO request than exists in the Appellate Division, First Department. (Compare Interboro Ins. Co. v Clennon, 113 AD3d 596, 597 [2d Dept 2014] [rejecting medical providers’ argument that the insurer’s summary-judgment motion was premature absent discovery into the specific justifications for the insurer’s EUO request], with Jaga Med. Servs., 128 AD3d at 441 [accepting this argument], and AB Med. Supply, 187 AD3d at 671 [same].)

Footnote 6:It also appears relevant, if perhaps not dispositive, that the requirement that an insurer have a specific justification for its EUO requests appears in section 65-3.5: With respect to several other requirements governing EUO requests in section 65-3.5, the First Department has held that an insurer moving for summary judgment must affirmatively establish its compliance with those requirements. (See e.g. Hertz Vehicles, LLC v Best Touch PT, P.C., 162 AD3d 617, 617-618 [1st Dept 2018].)

Footnote 7:Indeed, given the possibility of no-fault arbitration and ensuing de novo litigation (see Insurance Law § 5106), the issue might in fact come up three different times in a single case.