February 22, 2011

M.N. Dental Diagnostics, P.C. v Government Empls. Ins. Co. (2011 NY Slip Op 01333)

Headnote

The main issue in this case was whether the responsibility for the payment of first-party benefits should be submitted to arbitration. The defendant argued that its denial of benefits raised an issue of coverage rather than payment, but the court found that any controversy between insurers involving the responsibility or obligation to pay first-party benefits is not considered a coverage question and must be submitted to mandatory arbitration. The court held that the defendant was responsible for the payment of the no-fault benefits for the health services provided by the plaintiff, irrespective of any issues of priority or source of payment. Therefore, the order of the Appellate Term of the Supreme Court in the First Judicial Department affirming the order of the Civil Court of the City of New York, Bronx County, which found that the issue of which insurer is the primary insurer must be submitted to arbitration, was unanimously affirmed with costs.

Reported in New York Official Reports at M.N. Dental Diagnostics, P.C. v Government Empls. Ins. Co. (2011 NY Slip Op 01333)

M.N. Dental Diagnostics, P.C. v Government Empls. Ins. Co.

2011 NY Slip Op 01333 [81 AD3d 541]

February 22, 2011

Appellate Division, First Department

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

As corrected through Wednesday, March 30, 2011

M.N. Dental Diagnostics, P.C., as Assignee of Daniel Burgos, Respondent,
v
Government Employees Insurance Company, Appellant.

—[*1] Law Offices of Teresa M. Spina, Woodbury (Peter J. Molesso of counsel), for appellant. Steven J. Neuwirth, Garden City, for respondent.

Order of the Appellate Term of the Supreme Court in the First Judicial Department, entered June 24, 2009, which affirmed an order of the Civil Court of the City of New York, Bronx County (Julia I. Rodriguez, J.), entered on or about February 15, 2007, finding the issue of which insurer is the primary insurer must be submitted to arbitration, unanimously affirmed, with costs.

Insurance Law § 5105 (b) requires that mandatory arbitration be used to resolve all disputes between insurers as to their responsibility for the payment of first-party benefits. 11 NYCRR 65-3.12 (b) provides that “[i]f a dispute regarding priority of payment arises among insurers who otherwise are liable for the payment of first-party benefits, then the first insurer to whom notice of claim is given . . . shall be responsible for payment to such person. Any such dispute shall be resolved in accordance with the arbitration procedures established pursuant to section 5105 of the Insurance Law and section 65-4.11 of this Part.”

Defendant argues that its denial of benefits raised an issue of coverage, rather than of payment, because it was not “otherwise . . . liable” for the payment of first-party benefits. However, 11 NYCRR 65-4.11 (a) (6) provides that “any controversy between insurers involving the responsibility or the obligation to pay first-party benefits (i.e., priority [of] payment or sources of payment as provided in section 65-3.12 of this Part) is not considered a coverage question and must be submitted to mandatory arbitration under this section.” Thus, as “the first insurer to whom notice of claim [was] given” (11 NYCRR 65-3.12 [b]), defendant was responsible or obligated to pay the no-fault benefits for the health services provided by plaintiff, irrespective of any issues of priority or source of payment. By denying plaintiff’s claim on the stated ground that no-fault benefits were payable by another insurer (Fidelity and Guaranty Insurance Co.), defendant raised an issue as to which insurer was obligated to pay first-party [*2]benefits, which “[c]learly . . . is an inter-company dispute subject to mandatory arbitration” (see Paramount Ins. Co. v Miccio, 169 AD2d 761, 763 [1991], lv denied 78 NY2d 851 [1991]; Matter of Pacific Ins. Co. v State Farm Mut. Auto. Ins. Co., 150 AD2d 455, 456 [1989]). Concur—Saxe, J.P., Friedman, DeGrasse, Freedman and Abdus-Salaam, JJ. [Prior Case History: 24 Misc 3d 43.]