Appellate Division, First Department
May 23, 2017
2017 NY Slip Op 04068
Provider prevailed
⚠ Not followed by Matter of Country-Wide Ins. Co. v Bay Needle Care Acupuncture, P.C. (2018 NY Slip
Op 03929)
The insurer failed to establish grounds to vacate an award rejecting its fraudulent incorporation defense. The Appellate Division, First Department, affirmed judgment for the provider under CPLR 7511 (b) and (c). Assuming without deciding that the defense could not be precluded, it upheld the master arbitrator's confirmation of the award under Mallela and 11 NYCRR 65-3.16 (a) (12). Submissions concerning the owner's spouse's guilty plea never mentioned the provider; a later arbitration apparently relied on different documents. No default occurred, and detailed law office failure excused any brief opposition delay. Appellate attorney fees were awarded under 11 NYCRR 65-4.10 (j) (4), calculated at 20% of benefits under 11 NYCRR 65-4.6 (b).
Appellate Division, Second Department
May 17, 2017
2017 NY Slip Op 03979
Provider prevailed
The insurer failed to show that deposing the provider's estate administrator would yield relevant evidence or information bearing on its claims. The Appellate Division, Second Department, reversed the order, insofar as appealed from, directing the administrator to appear for a deposition in the insurer's declaratory judgment action concerning no-fault claims for services purportedly rendered by the deceased provider. CPLR 3101 (a) (1) requires liberal disclosure of material and necessary information, but discovery is not unlimited. The insurer made no showing that the proposed deposition would disclose relevant evidence or was reasonably calculated to lead to information bearing on its claims.
Appellate Division, First Department
May 16, 2017
2017 NY Slip Op 03888
Insurer prevailed
A provider with no assigned right to a defense cannot recover attorney fees under the exception for an insurer's duty to defend. The Appellate Division, First Department, affirmed denial of the provider's fee motion in the insurer's no-fault declaratory judgment action. A prevailing party generally may recover fees only when authorized by statute, agreement, or court rule. The exception for successfully defending an insurer's coverage action rests on the insurer's duty to defend. Here, the insurer owed no such duty to the injured taxi claimant or the provider seeking chiropractic reimbursement. The assignment transferred no greater rights than the claimant possessed and therefore conveyed no right to a defense.
Appellate Term, First Department
May 25, 2017
2017 NY Slip Op 50674(U)
Split result
The insurer's submissions raised triable issues about whether its insured was involved in the accident, defeating summary dismissal. The insurer offered a conclusory affidavit denying involvement, but also an unsworn statement placing the insured at the scene making a left turn when a person appeared on the ground in front of the vehicle. The assignor's EUO testimony described being struck while crossing the intersection. Construing the evidence favorably to the provider, the court considered the unsworn statement because hearsay may be considered in opposition when it is not the sole basis for the determination. The Appellate Term, First Department, modified the order to deny the insurer's motion and reinstate the complaint, while affirming denial of the provider's cross motion.
Appellate Term, Second Department
May 23, 2017
2017 NY Slip Op 50706(U)
Provider prevailed
The insurer lacked expert fee-schedule proof, and the provider's treating acupuncturist raised a factual issue on medical necessity. The insurer timely denied all claims on fee-schedule grounds and some additionally on medical-necessity grounds after an IME. It supplied no expert affidavit explaining its fee-schedule interpretation. Although the IME report supplied a factual basis and medical rationale for ending treatment, the treating acupuncturist's submission sufficiently rebutted its conclusions. Under CPLR 2001, omission of a jurat was not fatal, particularly absent substantial prejudice. The insurer waived the objection that an acupuncturist could not submit an affirmation under CPLR 2106 (a) by never raising it below or on appeal. The Appellate Term, Second Department, reversed and denied the insurer's summary judgment motion.
Appellate Term, Second Department
May 23, 2017
2017 NY Slip Op 50723(U)
Provider prevailed
The insurer failed to establish a reasonable excuse for its default in answering and opposing the provider's default-judgment motion. Under CPLR 5015 (a) (1), vacatur for excusable default required both a reasonable excuse and a potentially meritorious defense. The claims examiner merely described the failure to forward the summons and complaint to counsel as a mistake. The examiner also stated that the default motion was scanned into the insurer's system only on its return date and sent to counsel the following day. The Appellate Term, Second Department, affirmed denial of vacatur, finding the excuse insufficient; it did not reach whether the insurer had a potentially meritorious defense.
Appellate Term, Second Department
May 19, 2017
2017 NY Slip Op 50687(U)
Provider prevailed
The defendant's motion to compel acceptance of its late answer failed because it did not seek vacatur of the existing default judgment. The provider rejected the untimely answer and obtained a default judgment. The Civil Court later deemed the answer timely served and directed the defendant to move to vacate the judgment. Because the defendant had not sought vacatur and the court had not treated the motion as seeking that relief, the Appellate Term, Second Department, reversed the order, insofar as appealed from, and denied the motion to compel acceptance. It did not consider the defendant's proffered excuse for default.
Appellate Term, Second Department
May 19, 2017
2017 NY Slip Op 50685(U)
Provider prevailed
The insurer failed to show a potentially meritorious defense because its staged-accident proof and declaration concerned a different accident date. The provider's complaint concerned a June 20, 2010 accident, while the insurer's founded-belief evidence and Supreme Court declaration addressed a June 21, 2010 collision. Without an explanation of that discrepancy, the insurer did not establish that the alleged injuries fell outside coverage or that the declaration conclusively barred recovery. Under CPLR 5015 (a), default vacatur required both a reasonable excuse and a potentially meritorious defense. The Appellate Term, Second Department, affirmed denial of the insurer's motion to vacate the provider's default judgment; it did not reach the adequacy of the insurer's excuse.
Appellate Term, Second Department
May 15, 2017
2017 NY Slip Op 50676(U)
Insurer prevailed
The providers' postjudgment enforcement issues were not novel or unique enough to warrant excess no-fault attorney fees. Former 11 NYCRR 65-4.6 (f), now 11 NYCRR 65-4.6 (e), allowed excess fees for issues requiring extraordinary skills or services. The Civil Court's injunctive power was settled in the department, and entitlement to a stay pending appeal depended on a plain reading of CPLR 5519 (a). Counsel's timesheets reflected less than two and a half hours of research on the assertedly novel issues. The Appellate Term, Second Department, affirmed the order, insofar as appealed from, denying excess fees, while assuming without deciding that the regulation could apply to postjudgment enforcement litigation.
Appellate Term, Second Department
May 12, 2017
2017 NY Slip Op 50650(U)
Insurer prevailed
A sua sponte fee award is not appealable as of right under CCA 1702 (a) (2). The provider limited its appeal to an award to defense counsel entered alongside dismissal of its no-fault action. The Appellate Term, Second Department, assumed that the award rested on 22 NYCRR 130-1.1 (a), permitting reimbursement for frivolous conduct after an opportunity to be heard and written findings. Following Sholes v Meagher, it dismissed the appeal and declined leave to appeal. It noted that the provider could have moved to vacate the award and appealed a denial as of right under CCA 1702 (a) (3).
Appellate Term, Second Department
May 12, 2017
2017 NY Slip Op 50651(U)
Insurer prevailed
The provider's appeal from a sua sponte fee award to defense counsel was dismissed. The Appellate Term, Second Department, relied on the reasons stated in the companion appeal decided the same day, No. 2015-2811 Q C. The appeal was limited to the fee award and did not challenge the dismissal of the no-fault action on declaratory-judgment preclusion grounds.
Appellate Term, Second Department
May 12, 2017
2017 NY Slip Op 50652(U)
Insurer prevailed
The provider's appeal from a sua sponte fee award to defense counsel was dismissed. The Appellate Term, Second Department, relied on the reasons stated in the companion appeal decided the same day, No. 2015-2811 Q C. The appeal was limited to the fee award and did not challenge the dismissal of the no-fault action on declaratory-judgment preclusion grounds.
Trial court, Second Department
May 30, 2017
2017 NY Slip Op 27181
Provider prevailed
An insurer bears the burden of proving its affirmative defense that requested verification remains outstanding. A prior order established the provider's prima facie case and limited the bench trial to outstanding verification. Neither side presented witnesses. The insurer argued that proof of mailing verification requests and a 120-day denial satisfied its burden, but the Civil Court, Kings County, required proof of nonreceipt of a response. Under 11 NYCRR 65-3.5 (o), denial after 120 days depends on failure to provide verification or written reasonable justification. Because the insurer offered no witness to prove nonreceipt, the court directed judgment for the provider and declined to consider discovery issues outside the trial's scope.
Trial court, Second Department
May 26, 2017
2017 NY Slip Op 27189
Insurer prevailed
The insurer's one-day delay in sending a follow-up EUO request did not excuse the provider's four nonappearances on this record. The Civil Court, Kings County, treated the delay beyond 11 NYCRR 65-3.6 (b)'s 10-day period as excusable under 11 NYCRR 65-3.5 (p), emphasizing three timely scheduled prior EUOs and no provider response. Initial demands one to two business days late reduced the denial period under 11 NYCRR 65-3.8 (l). A mailing affidavit and counsel's affirmation established mailing and nonappearance; an unprejudicial affidavit defect was waived under CPLR 2101 (a) and (f). Limiting its ruling to these circumstances, the court denied the provider's summary judgment motion, granted the insurer's cross motion and dismissed the complaint.
Trial court, Second Department
May 11, 2017
2017 NY Slip Op 50675(U)
Insurer prevailed
The insurer's subpoena for the provider's bank records was enforceable because the records were material to its fraudulent-incorporation defense. The District Court, Suffolk County, denied the provider's motion to quash, lifted the stay, and struck the notice of trial and certificate of readiness under 22 NYCRR 212.17 (c) because discovery remained outstanding. The investigative affidavit supported disclosure under Mallela, and the subpoena satisfied CPLR 3101 (a) (4). Under Matter of Kapon v Koch, the insurer need not show that the records were unavailable elsewhere; the provider failed to establish irrelevance or inevitable futility. The bank accepted fax service without objection. The court made no ruling compelling discovery because the insurer had not sought that relief under CPLR 3124.
