Index No. 159037/2018

Law Offices of Daniel J. Tucker, Brooklyn NY (Megan Harris of counsel), for plaintiff.

Law Offices of Gabriel & Shapiro LLC, Rockville Centre, NY (Joseph Padrucco of counsel), for defendant Janan S. Syed, DC.

This motion concerns the potential obligation to pay no-fault insurance benefits of plaintiff American Transit Insurance Company. Nonparty Tynise Watson was a passenger in a vehicle that was allegedly involved in a collision. The vehicle was covered by a no-fault insurance policy issued by American Transit. Various medical providers applied for no-fault benefits as assignees of Watson, which American Transit denied.

In this action, American Transit seeks a declaratory judgment that it is not required to pay no-fault benefits to the various medical provider defendants. American Transit now moves for summary judgment under CPLR 3212 against defendant Janan S. Syed, DC, and moves for default judgment under CPLR 3215 against the properly served and non-appearing defendants [*2]who remain in the action.

American Transit’s motion for summary judgment and for default judgment is denied.

DISCUSSION

Both branches of American Transit’s motion rely on the same legal theory and supporting evidence. American Transit contends, in essence, that it has good reason to believe that the collision putatively giving rise to Watson’s need for medical treatment was staged, which is a proper ground for denying coverage.

A no-fault insurer seeking a declaration of no coverage based on a conclusion that the underlying collision was staged must establish as a “fact or founded belief that the alleged injury does not arise out of an insured incident.” (Central Gen. Hosp. v Chubb Grp. of Ins. Cos., 90 NY2d 195, 199 [1997].) Here, American Transit submits an affidavit from a claims investigator familiar with the case to support its conclusion that the collision was not genuine. That affidavit, however, is insufficient to meet American Transit’s burden. The affidavit’s account of the circumstances of the accident—and thus the various “red flag” indicators of a staged collision—it is based largely on inadmissible evidence, namely a police accident report and the unsigned transcript of Watson’s examination under oath (EUO).

A police accident report is admissible as a business record if, when prepared, it was based on the preparing officer’s personal observations at the scene, or if the information in the report came from an eyewitness with a business duty to report to the officer. (See Pena v. Slater, 100 AD3d 488, 489 [1st Dept 2012]; State Farm Mut. Auto Ins. Co. v Langan, 18 AD3d 860, 862 [2d Dept 2005].) Here, however, the police report states expressly that the preparing officer did not witness the underlying collision at issue (see NYSCEF No. 13, at 3); indeed, the report appears to indicate that the officer was not present at the scene at the time she investigated the circumstances of the collision (see id. at 1). Nor does American Transit attempt to establish that the occupants of the vehicle (the presumptive sources of the information in the report) were under a business duty to report to the investigating officer. The police report here is thus inadmissible for the hearsay purpose for which American Transit seeks to use it: establishing as fact the circumstances under which the alleged collision occurred. (See Jupa v Zaidi, 309 AD2d 606, 607 [1st Dept 2003]; accord Langan, 18 AD3d at 862.)

The affidavit of American Transit’s investigator also draws heavily on Watson’s EUO transcript. But that transcript is not signed or notarized. (See NYSCEF No. 14 at 76.) And although the transcript itself suggests that American Transit intended to send a copy of the transcript to Watson to review, sign, notarize, and return (see id.), American Transit has not met its burden to establish that it actually followed through and provided Watson the transcript, as required by CPLR 3116 (a). (See Ramirez v Willow Ridge Country Club, 84 AD3d 452, 453 [1st Dept 2011] [noting that the proponent of a deposition transcript bears the burden to show compliance with CPLR 3116 (a)].) On this record, therefore, the transcript is inadmissible hearsay as well. (See Santos v. Intown Assocs., 17 AD3d 564, 565 [2d Dept 2005].)

As hearsay, neither the police report nor the EUO transcript in this case are competent evidence to support American Transit’s motion for summary judgment. (See Jupa, 309 AD2d at 607; Santos, 17 AD3d at 565.) Nor can American Transit rely upon them to support a motion for default judgment. (See Martinez v Reiner, 104 AD3d 477, 478 [1st Dept 2013]; Zelnik v Bidermann Indus. U.S.A., Inc., 242 AD2d 227, 228 [1st Dept 1997].)

Excluding facts gleaned from the police report and Watson’s EUO transcript, the affidavit of American Transit’s investigator is based on little more than the day, time, and location of the collision. But those facts, standing alone, are not sufficient to establish a founded belief that the collision was staged—either on a prima facie basis for purposes of default judgment, or as a matter of law for purposes of summary judgment.

Accordingly, it is hereby

ORDERED that the branch of American Transit’s motion seeking summary judgment under CPLR 3212 against defendant Janan S. Syed, DC, is denied; and it is further

ORDERED that the branch of American Transit’s motion seeking default judgment under CPLR 3215 against the remaining properly served and non-appearing defendants is denied; and it is further

ORDERED that the parties shall confer and shall prepare a joint request for a preliminary conference with this court, as set forth in the Remote Conference Protocol available on this court’s website, http://ww2.nycourts.gov/courts/1jd/supctmanh/index.shtml.

Date: 5/07/20

[*1]

Peter C. Merani, P.C., New York, NY (Stephen C. Lanzone and Samuel A. Kamara of counsel), for appellant.

The Law Office of Jason Tenenbaum, P.C., Garden City, NY, for respondent.

In an action pursuant to Insurance Law § 5106 (c) for a de novo determination of claims for no-fault insurance benefits, the plaintiff appeals from an order of the Supreme Court, Nassau County (George R. Peck, J.), entered April 3, 2017. The order, insofar as appealed from, denied those branches of the plaintiff’s motion which were for summary judgment on the complaint and dismissing the defendant’s counterclaim for no-fault benefits, or, in the alternative, pursuant to CPLR 3211 (a) (3) to dismiss the defendant’s counterclaim for no-fault benefits for lack of standing, and granted those branches of the defendant’s cross motion which were for summary judgment dismissing so much of the complaint as alleged that she lacked standing and, in effect, for a determination that she had standing to seek recovery of no-fault insurance benefits from the plaintiff.

Ordered that the order is affirmed insofar as appealed from, with costs.

The defendant, Stacey Kapeleris, was involved in a motor vehicle collision on April 15, 2008. In October 2008, Kapeleris underwent spinal surgery at Winthrop University Hospital (hereinafter Winthrop), which was performed by a physician associated with Long Island Neurosurgical Associates, P.C. (hereinafter LI Neurosurgical). Nassau Anesthesia Associates (hereinafter Nassau Anesthesia) provided the anesthesia services for the surgery. Kapeleris assigned her right to no-fault insurance benefits for medical expenses to Winthrop and to Nancy E. Epstein, a physician who was associated with LI Neurosurgical. On appeal, the parties do not dispute that the assignment to Winthrop constituted a valid assignment at the time of its execution within the meaning of the relevant no-fault regulations.

In November 2008, Winthrop submitted a claim to Kapeleris’s insurer, the plaintiff, Allstate Insurance Company (hereinafter Allstate), for no-fault insurance benefits for Kapeleris’s surgery and related care in the amount of $51,489.16. That same month, LI Neurosurgical submitted a claim to Allstate in the amount of $6,348.99, and Nassau Anesthesia submitted a claim for $1,263.63. Allstate denied all three claims on the ground that the services were not medically necessary based upon an independent medical examination that was performed in August 2008. Subsequently, the three providers billed Kapeleris directly for their services. In August 2011, Kapeleris settled the bills submitted by the three providers through direct payments made from an attorney trust account by the attorneys representing Kapeleris in connection with her personal injury action stemming from the underlying accident. Payment was made to Winthrop in the amount of $21,317.02, to LI Neurosurgical in the amount of $2,250, and to Nassau Anesthesia in the amount of $1,542.86.

In February 2014, Kapeleris submitted the matter to arbitration seeking $33,588.11 in connection with the three claims at issue. In March 2015, the arbitrator rendered an award in favor of Kapeleris in the sum of $10,682.87. Allstate appealed the award to a master arbitrator, who affirmed the award.

On August 6, 2015, Allstate commenced this action pursuant to Insurance Law § 5106 (c) for a de novo determination of Kapeleris’s claims for no-fault insurance benefits. Kapeleris served an answer to the complaint containing, inter alia, a counterclaim for no-fault benefits. Allstate moved, inter alia, for summary judgment on the complaint and dismissing Kapeleris’s counterclaim for no-fault benefits or, in the alternative, pursuant to CPLR 3211 (a) (3) to dismiss Kapeleris’s counterclaim for no-fault benefits for lack of standing, arguing that Kapeleris assigned her rights to those benefits to the medical providers that treated her. Kapeleris cross-moved, among other things, for summary judgment dismissing so much of the complaint as alleged that she lacked standing and, in effect, for a determination that she had standing to seek recovery of no-fault insurance benefits from Allstate. The Supreme Court, inter alia, denied Allstate’s motion, and granted the aforementioned branches of Kapeleris’s cross motion. With respect to the issue of standing, the court determined, among other things, that since Kapeleris had tendered payment to Winthrop and LI Neurosurgical from her own proceeds, she had standing to pursue any claims for reimbursement against Allstate for nonpayment.

An accident victim may assign his or her no-fault claim to a medical provider who has provided a medical service (see 11 NYCRR 65-3.11; Long Is. Radiology v Allstate Ins. Co., 36 AD3d 763, 764-765 [2007]). The no-fault regulations provide that assignments must be made on the prescribed statutory forms (see 11 NYCRR 65-3.11 [b] [2]; John T. Mather Mem. Hosp. v Linzer, 32 Misc 3d 59, 61 [App Term, 2d Dept, 9th & 10th Jud Dists 2011]). The prescribed language requires the assignee (treatment provider) to certify that “[t]hey have not received any payment from or on behalf of the assignor [patient] and shall not pursue payment directly from the assignor for services provided by said assignee for injuries sustained due to the [subject] motor vehicle accident” (11 NYCRR Appendix 13 [NYS Forms NF-3, NF-4, NF-5, NF-AOB]; see John T. Mather Mem. Hosp. v Linzer, 32 Misc 3d at 60). In this regard, as set forth in an informal opinion issued by the Office of the General Counsel of the New York State Insurance Department, “a health care provider who has accepted a no-fault assignment of benefits from a no-fault claimant may not pursue the patient directly for health services rendered that have been denied as medically unnecessary, notwithstanding the language of the assignment, which states ‘in the event that the no-fault carrier fails or refuses to pay for the services provided then I, the patient, agree that I will be responsible for the value of services rendered by said Doctor,’ ” as “[t]he use of such language is prohibited under N.Y. Comp. Codes R. & Regs. tit. 11, § 65-3.11(b) (2) (2005) (Regulation 68-C)” (Ops Gen Counsel NY Ins Dept No. 06-05-07 [May 2006]; see John T. Mather Mem. Hosp. v Linzer, 32 Misc 3d at 60; see also A.M. Med. Servs., P.C. v Progressive Cas. Ins. Co., 101 AD3d 53, 64 [2012] [“informal opinion of the General Counsel, while not binding on the courts, is entitled to deference unless irrational or unreasonable” (citation omitted)]).

Here, in support of her cross motion, Kapeleris submitted evidence establishing that although she had assigned her right to no-fault benefits to two medical providers, Winthrop and Nancy E. Epstein, she was billed directly by Winthrop and LI Neurosurgical for their services after the claims of those providers were denied by Allstate for lack of medical necessity (cf. Abruscato v Allstate Prop. & Cas. Ins. Co., 165 AD3d 1209, 1211 [2018]). Further, Kapeleris’s evidentiary submissions showed that she remitted payment to those providers for their services in connection with the subject accident. Thus, Kapeleris’s evidentiary submissions showed that neither Winthrop nor LI Neurosurgical could certify that “[t]hey have not received any payment from or on behalf of the assignor [Kapeleris],” and that they would “not pursue payment directly from the assignor for services provided by said assignee for injuries sustained due to the [subject] motor vehicle accident.” This evidence was sufficient to demonstrate, prima facie, that the assignment to Winthrop and LI Neurosurgical, though valid when made, had been rendered ineffectual, and therefore, Kapeleris had standing to pursue her claims for no-fault benefits against Allstate for services rendered by Winthrop and LI Neurosurgical.

Furthermore, Kapeleris demonstrated that she did not execute an assignment of her rights to collect no-fault benefits to Nassau Anesthesia (see 11 NYCRR 65-3.11 [b] [1], [2]; Lopes v Liberty Mut. Ins. Co., 24 Misc 3d 127[A], 2009 NY Slip Op 51279[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2009]). Thus, Kapeleris also demonstrated, prima facie, that she had standing to pursue her claim for no-fault benefits against Allstate for the payment she made to Nassau Anesthesia.

In opposition, Allstate failed to raise a triable issue of fact (see Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]).

The parties’ remaining contentions either need not be reached in light of our determination, are without merit, or are not properly before this Court.

Accordingly, we agree with the Supreme Court’s determination denying those branches of Allstate’s motion which were for summary judgment on the complaint and dismissing Kapeleris’s counterclaim for no-fault benefits, or, in the alternative, pursuant to CPLR 3211 (a) (3) to dismiss Kapeleris’s counterclaim for no-fault benefits for lack of standing, and granting those branches of Kapeleris’s cross motion which were for summary judgment dismissing so much of the complaint as alleged that she lacked standing and, in effect, for a determination that she had standing to seek recovery of no-fault insurance benefits from Allstate. Rivera, J.P., Roman, Hinds-Radix and Duffy, JJ., concur.

654605/2019

Burke, Conway & Stiefeld, White Plains, NY (Michelle Dunleavy of counsel), for plaintiffs.

The Rybak Firm, PLLC, Brooklyn, NY (Oleg Rybak of counsel), for defendants Agyal Physical Therapy PLLC, Alford A. Smith MD, PC, and Metro Pain Specialists, PC.

Kopelevich & Feldsherova, P.C., Brooklyn, NY (David Landfair of counsel), for defendant M & M Supplies Group, Inc.

The following e-filed documents, listed by NYSCEF document number (Motion 001) 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 47, 48, 49, 50, 51, 52, 53, 54 were read on this motion to/for DEFAULT JUDGMENT

This motion concerns the potential obligation to pay no-fault insurance benefits of plaintiffs Liberty Mutual Insurance Company and LM General Insurance Company (Liberty Mutual). Defendants Trevohn Martin, Dwayne Bailey, and Damell Jackson were in a vehicle that was involved in a collision. The vehicle was covered by a no-fault insurance policy issued by Liberty Mutual. Martin, Bailey, and Jackson (and various medical providers acting as their assignees) applied for no-fault benefits, which Liberty Mutual denied.

In this action, Liberty Mutual is seeking a declaratory judgment that it is not required to pay no-fault benefits to Martin, Bailey, Jackson, or the various medical provider defendants. Liberty Mutual now moves for a default judgment under CPLR 3215 (and other related relief) against defendants. Defendants Agyal Physical Therapy PLLC, Alford A. Smith MD, PC, and Metro Pain Specialists, PC, and defendant M & M Supplies Group, Inc., separately cross-move under CPLR 3012 (d) to extend defendants’ time to answer, and to compel acceptance of defendant’s late answer, respectively.

Liberty Mutual’s motion for default judgment is denied; defendants’ cross-motions are [*2]granted.

DISCUSSION

I. Liberty Mutual’s Motion for Default Judgment

To obtain a default judgment, a plaintiff must among other things submit nonhearsay proof of all the facts necessary to establish its prima facie entitlement to relief. (See CPLR 3215 [f]; Joosten v Gale, 129 AD2d 531, 535 [1st Dept 1987]; Matter of Dyno v Rose, 260 AD2d 694, 698 [3d Dept 1999].) This court concludes that Liberty Mutual has not met that burden here.

Liberty Mutual’s request for declaratory relief rests on two different grounds. As to defendant Jackson (and his medical-provider assignees), Liberty Mutual contends that he failed to appear for a properly scheduled examination under oath (EUO), thereby breaching a condition precedent to coverage. As to defendants Martin and Bailey (and their medical-provider assignees), Liberty Mutual contends, in essence, that it has good reason to believe that Martin and Bailey helped stage the collision that putatively gave rise to their need for medical treatment, which is a proper ground for denying coverage.

A. Liberty Mutual’s Denial of Coverage as to Defendant Jackson and His Assignees

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 Transit Ins. Co. v Longevity Med. Supply, Inc., 131 AD3d 841, 841 [1st Dept 2015].) Liberty Mutual has not satisfied that requirement here. Among other things, § 65-3.5 provides that once an insurer receives a claim for benefits, the insurer has 10 business days to provide the claimant with the forms necessary to verify the claim. (See 11 NYCRR § 65-3.5 [a].) Once the insurer receives the completed verification forms, it then has 15 business days to seek further verification, for example through requesting a claimant to appear for an EUO. (See id. § 65-3.5 [b].) A claimant’s failure without reasonable cause to appear for a properly scheduled EUO is grounds to deny coverage.

As to Jackson, Liberty Mutual has not submitted evidence establishing when it first received a claim for benefits from him or from one of his treating providers, when it provided the necessary verification forms, or when it first received one of those forms back. Absent this evidence, Liberty Mutual cannot show that it timely complied with the procedural requirements of § 65-3.5. At most, Liberty Mutual submits an affidavit of a claims manager, stating in relevant part that based on her knowledge of Liberty Mutual’s procedures and review of Jackson’s claim file, “[a]ll verification requests and denials were timely mailed.”^[FN1] This brief and conclusory statement is not sufficient.

Additionally, Liberty Mutual fails to show that Jackson was properly notified of the scheduled EUOs. Liberty Mutual submits copies of two scheduling letters together with affidavits of service attesting to their mailing. Neither affidavit, however, is signed or dated; and the notarization blank on each affidavit is not filled in. (See NYSCEF No. 11 at 4, 8.) The [*3]affidavits, therefore, are defective.^[FN2] They cannot establish that the scheduling letters were properly mailed. (See Levine v Health First, 147 AD3d 1193, 1195 [3d Dept 2017].) Nor does Liberty Mutual provide any other evidence (in affidavit form or otherwise) that might remedy this deficiency.

Liberty Mutual thus has failed on this motion to provide facts establish a prima facie case that defendant Jackson failed to appear for timely and properly scheduled EUOs, as required to support Liberty Mutual’s request for a declaration of no coverage. Liberty Mutual’s motion for default judgment against Jackson and his assignees is denied.

B. Liberty Mutual’s Denial of Coverage as to Defendants Martin and Bailey and Their Assignees

A no-fault insurer seeking a declaration of no coverage on default based on a conclusion that the underlying collision was staged must establish prima facie the “fact or founded belief that the alleged injury does not arise out of an insured incident.” (Central Gen. Hosp. v Chubb Grp. of Ins. Cos., 90 NY2d 195, 199 [1997].)

Here, Liberty Mutual submits an affidavit from a claims investigator familiar with the case to support its conclusion that the collision was not genuine. That affidavit, in turn, relies heavily on the transcripts from the EUOs of Martin and Bailey. But Liberty Mutual fails to show that those transcripts are admissible. In particular, the transcripts are not signed; and Liberty Mutual does not attempt to establish that it ever provided them to Martin and Bailey to review and sign, as required by CPLR 3116 (a). (See Ramirez v Willow Ridge Country Club, 84 AD3d 452, 453 [1st Dept 2011] [noting that the proponent of a deposition transcript bears the burden to show compliance with CPLR 3116 (a)].)

At least for purposes of this motion, therefore, key portions of the affidavit of Liberty Mutual’s claims investigator are based only on hearsay, and are thus insufficient to support the entry of a default judgment. (See Martinez v Reiner, 104 AD3d 477, 478 [1st Dept 2013]; Zelnik v Bidermann Indus. U.S.A., Inc., 242 AD2d 227, 228 [1st Dept 1997].) The claim by Liberty Mutual’s claims investigator in her affidavit that “the facts and circumstances surrounding the accident are indicative of no-fault fraud patterns, specifically a staged accident” is merely conclusory. To be sure, the affidavit does state that Martin and Bailey had previously been in similar accidents together before, which might be probative on the question of whether the collision here was fake. But the affidavit neither provides any details to support this statement nor identifies the basis of this statement beyond it having been “revealed” by an “investigation.”

On this record, therefore, Liberty Mutual has not established prima facie a founded belief that Martin and Bailey were engaged in no-fault insurance fraud rather than being genuine victims of a car accident. Liberty Mutual’s motion for default judgment against Martin and Bailey (and their respective assignees) is denied.

II. Defendants’ Cross-Motions Regarding Their Answers

In addition to opposing Liberty Mutual’s default-judgment motion, defendants Agyal Physical Therapy PLLC, Alford A. Smith MD, PC, and Metro Pain Specialists, PC, and defendant M & M Supplies Group, Inc., separately cross-move under CPLR 3012 (d) to, in [*4]effect, permit them to answer Liberty Mutual’s complaint. The cross-motions are granted.

The moving defendants’ cross-motions are based on CPLR 317, which permits a defendant to appear and defend the action if “he did not personally receive notice of the summons in time to defend and has a meritorious defense.” These defendants provide affidavits attesting to their lack of receipt of Liberty Mutual’s summons and complaint. For the reasons described above, the moving defendants have a potentially meritorious defense. And although the question is a close one in the circumstances of this case, this court concludes that moving defendants’ affidavits sufficiently establish that they did not personally receive timely notice of the summons.

Accordingly, it is hereby

ORDERED that Liberty Mutual’s motion for default judgment under CPLR 3215 is denied; and it is further

ORDERED that the cross-motion of defendants Agyal Physical Therapy PLLC, Alford A. Smith MD, PC, and Metro Pain Specialists, PC, under CPLR 3012 (d) to extend their time to answer is granted nunc pro tunc, and the answer dated December 6, 2019 is deemed timely served and filed; and it is further

ORDERED that the cross-motion of defendant M & M Supplies Group, Inc., under CPLR 3012 (d) to compel Liberty Mutual to accept its proposed answer dated January 6, 2020, is granted.

Dated: May 4, 2020

Hon. Gerald Lebovits, J.S.C.

Footnotes

Footnote 1:Liberty Mutual’s reply affirmation also attaches what appears to be an NF-3 verification form from one of Jackson’s treating providers. But the affirmation does not offer any information or representations to authenticate the attached verification form. Nor does the affirmation indicate whether this was the first verification form received back by Liberty Mutual.

Footnote 2:By contrast, the affidavit of additional mailing in support of Liberty Mutual’s motion for default judgment—completed by the same person who prepared the affidavits of service for the the EUO scheduling letters—is properly signed, dated, and notarized. (See NYSCEF No. 8 at 2.)

Law Office of David O’Connor, PC (David O’Connor of counsel), for appellant. Law Office of Aloy O. Ibuzor (Theresa M. Carrubba and William Angstreich of counsel), for respondent.

Appeal from an order of the Civil Court of the City of New York, Queens County (Tracy A. Catapano-Fox, J.), entered November 20, 2018. The order denied plaintiff’s motion for leave to renew, in effect, its opposition to the branch of defendant’s motion seeking to toll the accrual of no-fault statutory interest, which prior motion had been granted in an order of that court dated June 18, 2018 to the extent of tolling no-fault interest from August 9, 2002 to August 18, 2017 and, upon renewal, to deny that branch of defendant’s motion.

ORDERED that the order entered November 20, 2018 is affirmed, with $25 costs.

Plaintiff commenced this action in 2002 to recover assigned first-party no-fault benefits for services allegedly rendered in 2001. Plaintiff served a notice of trial dated July 21, 2017. Defendant moved to strike the notice of trial and to dismiss the complaint or, in the alternative, to toll the accrual of no-fault statutory interest. By order dated June 18, 2018, the Civil Court granted the branch of defendant’s motion seeking to toll the accrual of no-fault interest to the extent of tolling the interest from August 9, 2002 to August 18, 2017, and denied the other branches of defendant’s motion. Plaintiff moved for leave to renew, in effect, its opposition to the branch of defendant’s motion seeking to toll the no-fault interest, arguing that there had been a change in the law. By order [*2]entered November 20, 2018, the Civil Court denied the motion.

Pursuant to CPLR 2221 (e) (2) and (3), a motion for leave to renew “(2) shall be based upon new facts not offered on the prior motion that would change the prior determination or shall demonstrate that there has been a change in the law that would change the prior determination and (3) shall contain reasonable justification for the failure to present such facts on the prior motion.” In the June 18, 2018 order, the court tolled the no-fault interest based upon a provision of the No-Fault Regulations which states that, once an action has been commenced, statutory interest accumulates “unless the applicant unreasonably delays the . . . court proceeding” (11 NYCRR 65.15 [h], now 11 NYCRR 65—3.9 [d]; see also Aminov v Country Wide Ins. Co., 43 Misc 3d 87 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2014]). In Eagle Surgical Supply, Inc. v Country-Wide Ins. Co. (58 Misc 3d 154[A], 2018 NY Slip Op 50157[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2018]), this court declined to toll the interest because, in that case, it was not clear from the record that the plaintiff had caused the delay. Plaintiff’s motion for leave to renew was based upon the argument that Eagle Surgical Supply, Inc. represents a change in the law. Since that case merely applied the existing law to a new set of facts, it does not represent a change in the law, and plaintiff’s motion for leave to renew was properly denied.

Accordingly, the order is affirmed.

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

Paul Kenny

Decided on May 1, 2020

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

Decided on May 1, 2020

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

Law Office of David O’Connor, PC (David O’Connor of counsel), for appellant. Law Office of Aloy O. Ibuzor (Theresa M. Carrubba and William Angstreich of counsel), for respondent.

Appeal from an order of the Civil Court of the City of New York, Queens County (Tracy A. Catapano-Fox, J.), entered June 20, 2018. The order, insofar as appealed from, granted the branch of defendant’s motion seeking to toll the accrual of no-fault statutory interest based upon plaintiff’s delay in the prosecution of the action to the extent of tolling that interest from March 24, 2003 to July 13, 2017.

ORDERED that the order, insofar as appealed from, is affirmed, with $25 costs.

Plaintiff commenced this action in 2002 to recover assigned first-party no-fault benefits for services allegedly rendered in 2001. The record demonstrates that issue was joined in July 2002, that plaintiff served responses to defendant’s discovery demands on March 24, 2003, and that plaintiff filed a notice of trial dated July 13, 2017. Defendant moved to strike the notice of trial and to dismiss the complaint or, in the alternative, to toll the accrual of no-fault statutory interest. By order entered June 20, 2018, the Civil Court granted the branch of defendant’s motion seeking to toll the accrual of no-fault interest to the extent of tolling the interest from March 24, 2003 to July 13, 2017, and denied the other branches of defendant’s motion. Plaintiff appeals from so much of the order as tolled the no-fault interest.

Where a provider does not commence a no-fault action within 30 days of receipt of the insurer’s denial of claim form, the Insurance Department Regulations provide that statutory interest (see Insurance Law § 5106 [a]) does not begin to accumulate until an action is commenced (11 NYCRR 65-3.9 [c]). If an action has been commenced, statutory interest accumulates “unless the applicant unreasonably delays the . . . court proceeding” (11 NYCRR 65.15 [h] [now 11 NYCRR 65-3.9 (d)]). In this case, the Civil Court tolled the no-fault interest between the date plaintiff served responses to defendant’s discovery demands and the date plaintiff filed the notice of trial. Plaintiff’s argument on appeal, that it was defendant which had “unreasonably delay[ed]” the action by failing to serve responses to plaintiff’s discovery demands, is not supported by the record and, in any event, lacks merit (see Vitality Chiropractic, P.C. v Countrywide Ins., 59 Misc 3d 150[A], 2018 NY Slip Op 50838[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2018]; Kew Gardens Med & Rehab, P.C. v Country-Wide Ins. Co., 52 Misc 3d 143[A], 2016 NY Slip Op 51240[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2016]).

Accordingly, the order, insofar as appealed from, is affirmed.

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

Paul Kenny

The Rybak Firm, PLLC (Damin J. Toell and Karina Barska of counsel), for appellant. Richard T. Lau & Associates (Anna Peereira of counsel), for respondent.

Appeal from an order of the Civil Court of the City of New York, Kings County (Robin Kelly Sheares, J.), entered July 17, 2018. The order granted defendant’s motion for summary judgment dismissing the complaint and denied plaintiff’s cross motion for summary judgment.

ORDERED that the order is modified by providing that defendant’s motion for summary judgment dismissing the complaint is denied; as so modified, the order is affirmed, without costs.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff appeals from an order of the Civil Court which granted defendant’s motion for summary judgment dismissing the complaint and denied plaintiff’s cross motion for summary judgment.

The motor vehicle accident in question occurred on September 4, 2013. Defendant’s motion was based on its alleged cancellation of the subject insurance policy on August 28, 2013. However, the papers defendant submitted in support of its motion failed to demonstrate, by admissible proof, that it had filed a copy of the notice of cancellation with the Department of Motor Vehicles within 30 days of the effective date of the cancellation as required by Vehicle and Traffic Law § 313 (2) (a) (see Vehicle and Traffic Law § 313 [3]; Matter of Progressive Classic Ins. Co. v Kitchen, 46 AD3d 333 [2007]; Matter of Progressive Northeastern Ins. Co. v Barnes, 30 AD3d 523 [2006]; Advanced [*2]Med. Care, P.C. v Allstate Ins. Co., 50 Misc 3d 137[A], 2016 NY Slip Op 50130[U] [App Term, 2d Dept, 9th & 10th Jud Dists 2016]; GL Acupuncture, P.C. v Geico Ins. Co., 48 Misc 3d 141[A], 2015 NY Slip Op 51239[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2015]). Thus, defendant has not demonstrated that the cancellation of the policy was effective with respect to plaintiff’s assignor, who was not the named insured or a member of the insured’s household (see Vehicle and Traffic Law § 313 [3]). Consequently, defendant’s motion for summary judgment dismissing the complaint should have been denied.

Plaintiff’s cross-moving papers failed to establish either that defendant had failed to deny the claim within the requisite 30-day period or that defendant had issued a timely denial of claim that was conclusory, vague or without merit as a matter of law (see Insurance Law § 5106 [a]; Westchester Med. Ctr. v Nationwide Mut. Ins. Co., 78 AD3d 1168 [2010]; Ave T MPC Corp. v Auto One Ins. Co., 32 Misc 3d 128[A], 2011 NY Slip Op 51292[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2011]). Consequently, the Civil Court properly denied plaintiff’s cross motion for summary judgment.

Accordingly, the order is modified by providing that defendant’s motion for summary judgment dismissing the complaint is denied.

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

Paul Kenny

Index No. 150643/2019

The Law Office of Daniel J. Tucker, Brooklyn, NY (R. Jacob Lamar of counsel), for plaintiff.

Zara Javakov, Esq., P.C., Brooklyn, NY (Victoria Tarasova of counsel), for defendants Dos Manos Chiropractic, P.C., Jules Francois Parisien, M.D., and Medigna Inc.

This motion concerns the potential obligation to pay no-fault insurance benefits of plaintiff American Transit Insurance Company. Defendant Albert Hayes was a passenger in a vehicle that was involved in a collision. The vehicle was covered by a no-fault insurance policy [*2]issued by American Transit. Hayes applied for no-fault benefits, which American Transit denied.

In this action, American Transit seeks a declaratory judgment that it is not required to pay no-fault benefits to Hayes or to the other defendants (medical providers acting as Hayes’s assignees). American Transit now moves for summary judgment on this claim under CPLR 3212 as against those defendants who have appeared in the action, and moves for default judgment under CPLR 3215 as against the remaining, non-appearing defendants. The motion is denied.

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 Transit Ins. Co. v Longevity Med. Supply, Inc., 131 AD3d 841, 841 [1st Dept 2015].) American Transit has not satisfied that requirement here. Among other things, § 65-3.5 provides that once an insurer receives a claim for benefits, the insurer has 10 business days to provide the claimant with the forms that it requires for verification of the claim. (See 11 NYCRR § 65-3.5 [a].) Once the insurer receives the completed verification forms, it then has 15 business days to request further verification, such as an independent medical examination. (See id. § 65-3.5 [b].)

Here, the record reflects that American Transit received an NF-2 benefits claim form from Hayes at the end of April 2018. And the record reflects that American Transit requested in late July 2018 that Hayes appear for an independent medical examination. Yet there is nothing in the record (whether in the form of an affidavit or documentary evidence) that might establish when American Transit sent the necessary verification forms to Hayes, or when American Transit received the completed verification forms back from Hayes. Absent that information, American Transit has failed to satisfy all of the elements of its claim for declaratory relief.

American Transit thus is not entitled to summary judgment under CPLR 3212 against the answering defendants. Similarly, to obtain a default judgment against the non-appearing defendants American Transit is required to provide proof (such as an affidavit) of all the facts necessary to establish its prima facie entitlement to relief. (See CPLR 3215 [f]; Matter of Dyno v Rose, 260 AD2d 694, 698 [3d Dept 1999].) American Transit has not met that requirement here, and thus is not entitled to default judgment, either.

Accordingly, it is hereby

ORDERED that the branch of American Transit’s motion seeking summary judgment under CPLR 3212 against the answering defendants is denied; and it is further

ORDERED that the branch of American Transit’s motion seeking default judgment under CPLR 3215 against the non-appearing defendants is denied.

Date: 4/14/20

Plaintiff appeals from an order of the Civil Court of the City of New York, New York County (Judy H. Kim. J.), entered April 18, 2019, which granted defendant’s motion to vacate so much of the judgment as awarded plaintiff attorneys’ fees pursuant to 11 NYCRR § 65-4.6(c).

Per Curiam.

Order (Judy H. Kim, J.), entered April 18, 2019, affirmed, with $10 costs.

Upon the trial of this action, the court determined that plaintiff-provider established its entitlement to no-fault benefits in the amount of $4,590.72 and that defendant-insurer failed to establish its independent medical examination (IME) no-show defense. This determination is not challenged on appeal. The issue before us is whether plaintiff, who is entitled to attorneys’ fees pursuant to the governing Insurance Department Regulations (see 11 NYCRR § 65-4.6), is entitled to said fees pursuant to the standard fee provision contained 11 NYCRR § 65-4.6(d), which limits attorneys’ fees to 20% of the amount recovered, subject to a then-maximum fee of $850 (now $1,360), or pursuant to the hourly rate fee provision contained in 11 NYCRR § 65-4.6(c). Civil Court held that the standard fee provision contained in section 65-4.6(d) applies in this case. We agree, and therefore affirm.

The hourly rate fee provision contained in 11 NYCRR § 65-4.6(c) governs disputes where “one of the issues involves a policy issue as enumerated on the prescribed denial of claim form(NYS form NF-10)” (emphasis added). However, the “policy issues” enumerated on the denial of claim form at bar are clearly limited to include only: (1) the policy was not in force on the date of the accident (box 3); (2) the injured person is excluded under policy conditions or exclusion (box 4); (3) the policy conditions were violated, which is limited to two categories involving late submission of a notice of claim (box 5); (4) the injured person is not an eligible injured person (box 6); (5) and the injuries did not arise out of use or operation of a motor vehicle (box 7).

The language of 11 NYCRR § 65-4.6(c) and the specifically enumerated policy issues on the denial of claim form are clear and unambiguous; patently they do not include the assignor’s [*2]failure to attend an IME. Therefore, plaintiff was not entitled to hourly attorneys’ fees pursuant to 11 NYCRR 65-4.6(c). Since the standard fee provision applies to “all other disputes” (11 NYCRR § 65-4.6[d]), it was properly applied in this case.

Plaintiff’s arguments to the contrary do not warrant a different result. While the failure to attend an IME “is a breach of a condition precedent to coverage under the no-fault policy” (Unitrin Advantage Ins. Co. v Bayshore Physical Therapy, PLLC, 82 AD3d 559, 560 [2011], lv denied 17 NY3d 705 [2011]), it is not a “policy issue as enumerated on the prescribed denial of claim form” (11 NYCRR § 65-4.6[c]). Nor is defendant’s characterization of its defense as a policy issue dispositive. Construing the regulation strictly, as we must since it is in derogation of the common law rule that parties to a controversy pay their own counsel fees (see McKinney’s Cons Laws of NY, Book 1, Statutes, § 301[a]; Matter of A.G. Ship Maintenance Corp. v Lezak, 69 NY2d 1, 5 [1986]), hourly attorneys’ fees are allowable where one of the specifically enumerated policy issues is involved, not whether one party designates a particular defense as a policy issue.

The opinion letters issued by Department of Financial Services (DFS) relied upon by plaintiff do not interpret the counsel fees regulation at issue. Nor did DFS explicitly state, in interpreting its own regulations, that the failure of the assignor to appear for an IME constitutes a “policy violation” so as to trigger additional attorneys’ fees under Insurance Department Regulations (11 NYCRR § 65-4.6[c]).

THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT.