October 20, 2004

S & M Supply Inc. v State Farm Mut. Auto. Ins. Co. (2004 NY Slip Op 51250(U))

Headnote

The court considered the claim by S & M Supply Inc. to recover first-party no-fault benefits for medical equipment provided to its assignors. S & M Supply Inc. established its entitlement to summary judgment by submitting properly executed claim forms. The main issue decided was that the defendant, State Farm Mutual Automobile Insurance Company, failed to pay or deny the claims within 30 days of receipt, which precluded its defense based on the assignors' failures to attend examinations under oath. However, the preclusion rule was found to be inapplicable to a claim that the underlying traffic incident was deliberate and staged as part of a scheme to defraud, which would constitute a complete defense to the action. The holding of the case was that the defendant's submissions sufficed to demonstrate a "founded belief that the alleged injury did not arise out of an insured incident," which supported their defense.

Reported in New York Official Reports at S & M Supply Inc. v State Farm Mut. Auto. Ins. Co. (2004 NY Slip Op 51250(U))

S & M Supply Inc. v State Farm Mut. Auto. Ins. Co. (2004 NY Slip Op 51250(U)) [*1]

S & M Supply Inc. v State Farm Mut. Auto. Ins. Co.

2004 NY Slip Op 51250(U)

Decided on October 20, 2004

Appellate Term, Second Department

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

This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on October 20, 2004

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 9th and 10th JUDICIAL DISTRICTS

PRESENT: October 20, 2004 SUPREME COURT OF THE STATE OF NEW YORK APPELLATE TERM : 9th and 10th JUDICIAL DISTRICTS PRESENT : McCABE, P.J., COVELLO and TANENBAUM, JJ.
2003-1662 N C

S & M SUPPLY INC. a/a/o Nancy Numa Yves Marilyn Numa Muriane Numa Jean St. Cyr, Appellant,
against
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Respondent.

Appeal by plaintiff from so much of an order of the District Court, Nassau County (S. Pardes, J.), entered October 10, 2003, as denied its motion for summary judgment.

Order insofar as appealed from unanimously affirmed without costs.

In this action to recover first-party no-fault benefits for medical equipment provided its assignors, plaintiff established its entitlement to summary judgment prima
facie by proof it submitted properly executed claim forms setting forth the fact and amount of the loss sustained (A.B. Med. Servs. v Eagle Ins. Co., 3 Misc 3d 8, 9 [App Term, 9th & 10th Jud Dists 2003]; Damadian MRI in Garden City v Liberty Mut. Ins. Co., 2 Misc 3d 128 [A], 2003 NY Slip Op 51702 [U] [App Term, 9th & 10th Jud Dists]). As defendant concededly failed to pay or deny the claims within 30 days of receipt (Insurance Law § 5106 [a];11 NYCRR 65.15 [g] [3]), defendant cannot avoid the consequence of the untimely denials (Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 199 [1997]), namely the preclusion of its defense based on the assignors’ failures to attend examinations under oath (EUOs). In any event, defendant failed to prove that the EUO requests were timely (11 NYCRR 65.15 [d] [1]), or that when [*2]plaintiff filed the claims the insurance regulations provided for such a procedure (A.B. Med. Servs. v Eagle Ins. Co., 3 Misc 3d at 10; see also Ocean Diagnostic Imaging v Geico Ins., ___ Misc 3d ___ [A], [2004 NY Slip Op 50511 [U] [App Term, 9th & 10th Jud Dists]). However, the preclusion rule is inapplicable to a claim that the underlying traffic incident was a deliberate event staged in furtherance of a scheme to defraud (Matter of Metro Med. Diagnostics v Eagle Ins. Co., 293 AD2d 751, 752 [2002]) which claim, if substantiated, constitutes a complete defense to the action (Matter of Government Empls. Ins. Co. v Shaulskaya, 302 AD2d 522 [2003]). In our view, defendant’s [*3]
submissions sufficed to demonstrate a “founded belief that the alleged injury d[id] not arise out of an insured incident” (Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d at 199).
Decision Date: October 20, 2004