[*1]

Supreme Court, Appellate Term, Second Department, 2d, 11th and 13th Judicial Districts, December 9, 2022

APPEARANCES OF COUNSEL

Hollander Legal Group, P.C. (Allan S. Hollander and Jennifer B. Ettenger of counsel) for appellant.

Kopelevich & Feldsherova, P.C. (David Landfair of counsel) for respondent.

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

In this action by a provider to recover assigned first-party no-fault benefits, defendant appeals from so much of an order of the Civil Court as denied defendant’s motion which had sought summary judgment dismissing the complaint on the ground that plaintiff’s assignor had failed to appear for duly scheduled examinations under oath (EUOs).

Contrary to defendant’s contention on appeal, defendant’s motion failed to establish that defendant had timely denied plaintiff’s claims after plaintiff’s assignor failed to appear at both an initial and a follow-up EUO (see Island Life Chiropractic Pain Care, PLLC v 21st Century Ins. Co., 74 Misc 3d 17 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2021]; Quality Health Supply Corp. v Nationwide Ins., 69 Misc 3d 133[A], 2020 NY Slip Op 51226[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2020]). Upon receipt of the claim forms at issue on March 18, [*2]2018, the first EUO was scheduled, by letter sent to assignor’s counsel on March 26, 2018, for April 9, 2018. Neither the assignor nor her counsel appeared on April 9, 2018. On April 12, 2018, defendant sent a letter scheduling the “final date” for the EUO for May 8, 2018. Neither the assignor nor her counsel appeared on May 8, 2018. On May 10, 2018, defendant sent a letter scheduling an EUO for June 6, 2018. The assignor did not appear, but apparently on that day, defendant received a call from the assignor’s counsel, asking for the EUO to be scheduled for June 13, 2018. On June 7, 2018, defendant sent a letter scheduling an EUO for June 13, 2018. On June{**77 Misc 3d at 17} 13, 2018, the assignor again did not appear. For each of these four scheduled dates, defendant’s counsel put a statement on the record documenting the nonappearance. On June 23, 2018, defendant issued a denial of the relevant claims, which denial states, “The claimant failed to attend an [EUO] scheduled on 4/9/18, 5/8/18, 6/6/18 and 6/13/18, which is a breach of the above policy condition . . . .” Defendant argues on appeal that this denial was timely because it was issued within 30 days of the June 13, 2018 failure to appear.

A no-fault claim must be paid or denied “within 30 calendar days after the insurer receives proof of claim” (11 NYCRR 65-3.8 [a] [1]; see e.g. New York & Presbyt. Hosp. v Allstate Ins. Co., 31 AD3d 512 [2006]), which period may be tolled by timely and proper requests for verification, including an EUO request. Here, defendant properly commenced a toll of its time to pay or deny these claims by sending an EUO scheduling letter within 15 business days of its receipt of the claim forms (see 11 NYCRR 65-3.5 [b]).^[FN*] Defendant also properly continued the toll by sending a follow-up letter within 10 days of the April 9, 2018 failure to appear, giving the assignor a second opportunity to provide the requested EUO on May 8, 2018 (see 11 NYCRR 65-3.6 [b]). The assignor did not appear on May 8, 2018. As we have held before,

“[w]here, as here, no other verification request is outstanding, the 30-day period for an insurer to pay or deny a claim (see 11 NYCRR 65-3.8 [a] [1]) based upon a failure to appear for an EUO begins to run on the date of the second EUO nonappearance, when an insurer is permitted to conclude that there was a failure to comply with a condition precedent to coverage” (Quality Health Supply Corp. v Nationwide Ins., 69 Misc 3d 133[A], 2020 NY Slip Op 51226[U], *1-2 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2020] [citation omitted][*3][Quality]).

In view of the foregoing, once the assignor failed to appear on{**77 Misc 3d at 18} May 8, 2018, defendant’s 30-day time period to pay or deny the claims at issue began to run, making defendant’s deadline to pay or deny those claims June 7, 2018.

In spite of the rule set forth in Quality, defendant argues that its June 23, 2018 denial was timely. Defendant notes that, under the no-fault regulations, insurers are not to treat their insureds in an adversarial fashion (see 11 NYCRR 65-3.2 [b]). Defendant asserts that it was acting in good faith in scheduling a third EUO due to confusion as to the date of the first EUO and that the fourth EUO was scheduled at the request of the assignor’s counsel. Thus, defendant contends, the facts herein are distinguishable from Quality. In any event, defendant argues, it should not be limited to offering a claimant only two opportunities to appear for an EUO.

While we agree that there is nothing in the no-fault regulations preventing an insurer from offering a claimant more than two opportunities to appear for an EUO, that issue is distinct from whether an insurer has properly continued a toll of its time to pay or deny a particular claim (see 11 NYCRR 65-3.6 [b]). For example, had the assignor appeared on June 6, 2018, the third scheduled date, or June 13, 2018, the fourth scheduled date, defendant could have properly conducted the EUO. However, the toll of defendant’s time to pay or deny the claims at issue ended on May 8, 2018, when the assignor failed to appear for the second scheduled EUO, and any denial based upon a precludable defense—like the defense that the assignor failed to appear for duly scheduled EUOs—would have had to have been issued by June 7, 2018, in order to be timely.

Neither the May 10, 2018 letter scheduling the EUO for June 6, 2018, nor the June 7, 2018 letter scheduling the EUO for June 13, 2018, continued the toll because the no-fault regulations only contemplate one follow-up request for verification (see 11 NYCRR 65-3.6 [b]) and that follow-up request was made on April 12, 2018, in a letter that scheduled a “final date” for the EUO for May 8, 2018. Once the assignor’s second and “final” opportunity to appear for an EUO was scheduled for May 8, 2018, to further toll defendant’s time to pay or deny the claims past June 7, 2018, the parties could have rescheduled that examination for a later date (see Progressive Health Chiropractic, P.C. v American Tr. Ins. Co., 55 Misc 3d 142[A], 2017 NY Slip Op 50603[U] [App Term, 2d Dept, 9th & 10th Jud Dists 2017]; Five Boro Psychological Servs., P.C. v Utica Mut. Ins. Co., 41 Misc 3d 140[A], 2013 NY Slip Op 52005[U] [App{**77 Misc 3d at 19} Term, 2d Dept, 2d, 11th & 13th Jud Dists 2013]; see also Nationwide Affinity Ins. Co. of Am. v George, 183 AD3d 755 [2020]). However, rather than claiming that there was a rescheduling of a scheduled EUO that would have continued the toll past June 7, 2018, defendant clearly treated each of the four scheduled EUOs as a nonappearance, choosing to deny the claim after the fourth one. The no-fault regulations do not permit an insurer to indefinitely extend the toll to pay or deny a claim beyond a second nonappearance by scheduling successive additional EUOs and then arbitrarily choosing when to end its toll.

As defendant has not demonstrated that its June 23, 2018 denial was timely, it has not established that it is not precluded from raising the assignor’s nonappearance at duly scheduled EUOs as a defense (see Westchester Med. Ctr. v Lincoln Gen. Ins. Co., 60 AD3d 1045 [2009]). [*4]Thus, its motion for summary judgment dismissing the complaint was properly denied.

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

Aliotta, P.J., Weston and Buggs, JJ., concur.

Footnotes

Footnote *:Indeed, here defendant had initially sent a letter on March 12, 2018, prior to receiving the claims at issue, which letter scheduled an EUO for April 8, 2018. Upon realizing that April 8, 2018, was a Sunday, defendant sent the March 26, 2018 letter changing the date of the EUO to April 9, 2018. It is noted that the March 12, 2018 pre-claim EUO scheduling letter was also sufficient to commence a toll for the bills subsequently received on March 18, 2018 (see ARCO Med. N.Y., P.C. v Lancer Ins. Co., 34 Misc 3d 134[A], 2011 NY Slip Op 52382[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2011]).

[*1]

Supreme Court, Appellate Term, Second Department, 2d, 11th and 13th Judicial Districts, August 12, 2022

APPEARANCES OF COUNSEL

The Rybak Firm, PLLC (Damin J. Toell and Richard Rozhik of counsel) for appellant.

Abrams, Cohen & Associates, P.C. (Frank Piccininni of counsel) for respondent.

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

In this action by a provider to recover assigned first-party no-fault benefits from the alleged insurer of its assignor, defendant failed to appear or answer the complaint, and a default judgment was entered on July 26, 2018. On September 6, 2018, defendant served an answer and, in November 2018, it moved to vacate the default judgment. Plaintiff appeals from an order of the Civil Court entered October 21, 2019, granting defendant’s motion, finding that defendant had demonstrated a reasonable excuse for its default and a meritorious defense.

In its moving papers, defendant explained that its default had been due to its own failure to forward the complaint to its attorneys. However, it asserted that it had not ignored the matter, but rather had informed plaintiff several months prior to the commencement of the action that it was not the insurance carrier for plaintiff’s assignor—an assertion which plaintiff has never contradicted. Upon receiving notice of the default judgment, defendant requested that the action [*2]be “withdrawn.” Defendant thereafter referred the matter to its counsel, which promptly served an answer and then moved to vacate the default judgment.

A defendant seeking to vacate a default judgment pursuant to CPLR 5015 (a) (1) must demonstrate a reasonable excuse for the default and a potentially meritorious defense to the action (see Eugene Di Lorenzo, Inc. v A.C. Dutton Lbr. Co., 67 NY2d 138, 141 [1986]). The determination of what constitutes a reasonable{**76 Misc 3d at 16} excuse for a default generally lies within the sound discretion of the motion court (see Nationstar Mtge., LLC v Ramnarine, 172 AD3d 886, 886 [2019]). Here, in light of the absence of an evident pattern of neglect and counsel’s prompt actions, upon entering the case, in seeking to vacate the default (see Barajas v Toll Bros., 247 AD2d 242, 242-243 [1998]), the meritorious defense of lack of coverage, which plaintiff has never disputed, plaintiff’s failure to claim any prejudice by reason of the brief delay involved (see New York Univ. Hosp. Tisch Inst. v Merchants Mut. Ins. Co., 15 AD3d 554, 555 [2005]; see also Matter of A&F Scaccia Realty Corp. v New York City Dept. of Envtl. Protection, 200 AD3d 875, 878 [2021]; Allstate Ins. Co. v North Shore Univ. Hosp., 163 AD3d 745, 746 [2018]), and the public policy favoring the resolution of cases on the merits (see Allstate Ins. Co. v North Shore Univ. Hosp., 163 AD3d at 746; Westchester Med. Ctr. v Hartford Cas. Ins. Co., 58 AD3d 832, 833 [2009]; Legion Ins. Co. v James, 27 Misc 3d 128[A], 2010 NY Slip Op 50593[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2010]), we conclude that the Civil Court providently exercised its discretion in granting defendant’s motion.

Accordingly, the order is affirmed.

Weston, J. (dissenting and voting to reverse the order and deny defendant’s motion to vacate the default judgment in the following memorandum).

When defendant was served with a summons and complaint on May 29, 2018, it elected not to forward the matter to its attorney to serve and file an answer because it believed that plaintiff’s claim is meritless. Defendant did not answer until September 6, 2018, approximately six weeks after a default judgment had been entered on July 26, 2018, and more than three months after service. A party may not choose when to answer and, given the lengthy delay in answering, it is clear that defendant’s default was intentional and, therefore, inexcusable (see Fok v Insurance Co. of N. Am., 151 AD2d 722, 722 [1989]). Since defendant failed to establish a reasonable excuse for its default in answering the complaint, defendant’s motion should have been denied without the need to consider whether defendant demonstrated the existence of a potentially meritorious defense (see Nationstar Mtge., LLC v Ramnarine, 172 AD3d 886, 887 [2019]; New Century Mtge. Corp. v Adeyan-Ju, 139 AD3d 683, 684 [2016]).

Accordingly, I vote to reverse the order and deny defendant’s motion to vacate the default judgment.{**76 Misc 3d at 17}

Aliotta, P.J., and Buggs, J., concur; Weston, J., dissents in a separate memorandum.

[*1]

Supreme Court, Appellate Term, Second Department, 2d, 11th and 13th Judicial Districts, July 22, 2022

APPEARANCES OF COUNSEL

The Rybak Firm, PLLC (Damin J. Toell and Richard Rozhik of counsel) for appellant.

Gullo & Associates, LLC (Kristina O’Shea of counsel) for respondent.

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

Jules Francois Parisien, M.D., commenced this action against Kemper Insurance Company to recover assigned first-party no-fault benefits for medical services provided to his assignor, Jeremy Jagdeo, as a result of injuries Jagdeo allegedly sustained in an automobile accident on June 17, 2013. In its answer to the complaint, dated April 21, 2016, defendant identified itself as Unitrin Advantage Insurance Company (Unitrin). Before Parisien commenced this action, a declaratory judgment action had been commenced in Supreme Court, New York County, by Unitrin against Parisien, eight other providers, and the assignor herein, Jagdeo, alleging that Jagdeo had breached the terms of the insurance policy in question by failing to appear for duly scheduled independent medical examinations. Parisien appeared and interposed an answer in the declaratory judgment action. In an order entered September{**76 Misc 3d at 20} 11, 2017, the Supreme Court, upon granting an unopposed motion by Unitrin for summary judgment, declared [*2]that Parisien and five other providers were “not entitled to no-fault coverage for the motor vehicle accident that occurred on June 17, 2013 involving Jeremy Jagdeo.”

Plaintiff moved in the Civil Court for summary judgment, and defendant cross-moved for, in effect, summary judgment dismissing the complaint on the ground that the instant action is barred by virtue of the order in the declaratory judgment action. By order entered August 10, 2021, the Civil Court denied plaintiff’s motion and granted defendant’s cross motion.

Collateral estoppel, or issue preclusion, 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]). While “[a]n issue is not actually litigated if, for example, there has been a default” (Kaufman v Eli Lilly & Co., 65 NY2d 449, 456-457 [1985]), “ ’collateral estoppel may be properly applied to default judgments where the party against whom preclusion is sought appears in the prior action, yet willfully and deliberately refuses to participate in those litigation proceedings, or abandons them, despite a full and fair opportunity to do so’ ” (Miller v Falco, 170 AD3d 707, 709 [2019], quoting Matter of Abady, 22 AD3d 71, 85 [2005]). The party seeking to rely on collateral estoppel has the burden of establishing that the issue actually litigated and determined in the prior action is identical to the issue on which preclusion is sought (see Forcino v Miele, 122 AD2d 191, 193 [1986]; Triboro Quality Med. Supply, Inc. v State Farm Mut. Auto. Ins. Co., 36 Misc 3d 131[A], 2012 NY Slip Op 51289[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012]). The party attempting to defeat the application of collateral estoppel has the burden of establishing the absence of a full and fair opportunity to litigate (see D’Arata, 76 NY2d at 664; Uptodate Med. Servs., P.C. v State Farm Mut. Auto. Ins. Co., 23 Misc 3d 42, 44 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2009]).

Here, defendant established that the issue of whether plaintiff was entitled to receive no-fault benefits in connection with the June 17, 2013 accident involving Jagdeo was identical{**76 Misc 3d at 21} to the issue previously decided in the declaratory judgment action. The order in the declaratory judgment action indicates that Jagdeo was not entitled to receive no-fault benefits without regard to who the provider might be. Although plaintiff herein did not submit opposition to the motion giving rise to the order in the declaratory judgment action, he did appear and answer the complaint in that action. Therefore, plaintiff failed to establish that he did not receive a full and fair opportunity to litigate in the declaratory judgment action (see Reid v Reid, 198 AD3d 993, 994 [2021]; Miller, 170 AD3d at 709; David v State of New York, 157 AD3d 764, 765-766 [2018]; Matter of Abady, 22 AD3d at 85). Thus, defendant was entitled to summary judgment dismissing the complaint on the ground of collateral estoppel.

We reject plaintiff’s argument that defendant was required to establish privity between itself and Unitrin in order for the Civil Court complaint to be dismissed based upon the order in the declaratory judgment action. Privity between the party seeking to invoke the doctrine and a party to the prior action is an element of res judicata (see Matter of Hunter, 4 NY3d 260, 269[*3][2005]; Schuylkill Fuel Corp. v Nieberg Realty Corp., 250 NY 304 [1929]), not collateral estoppel (see B. R. DeWitt, Inc. v Hall, 19 NY2d 141, 147-148 [1967]; Windowizards, Inc. v S & S Improvements, Inc., 11 Misc 3d 128[A], 2006 NY Slip Op 50310[U] [App Term, 2d Dept, 2d & 11th Jud Dists 2006]). We note that the Civil Court, in granting defendant’s cross motion, did not specifically rely on res judicata.

We further note that, while defendant failed to raise the affirmative defense of collateral estoppel in its April 21, 2016 answer, defendant had no basis to assert that defense before September 11, 2017, when the order in the declaratory judgment action was entered (see Metro Health Prods., Inc. v Nationwide Ins., 52 Misc 3d 138[A], 2016 NY Slip Op 51122[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2016]; 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]). While the better practice would have been for defendant to move to amend its answer after September 11, 2017, we deem defendant’s answer amended to assert the affirmative defense of collateral estoppel (see Barrett v Kasco Constr. Co., 84 AD2d 555, 556 [1981], affd 56 NY2d 830 [1982]; Active Chiropractic, P.C. v Allstate Ins., 58 Misc 3d 156[A], 2018 NY Slip Op 50201[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2018]). {**76 Misc 3d at 22}In any event, “an unpleaded defense may serve as the basis for granting summary judgment in the absence of surprise or prejudice to the opposing party” (Sullivan v American Airlines, Inc., 80 AD3d 600, 602 [2011]; see Renelique, 2016 NY Slip Op 50096[U]).

Accordingly, the order is affirmed.

Weston, J.P., Golia and Buggs, JJ., concur.

[*1]

Supreme Court, Appellate Term, Second Department, 2d, 11th and 13th Judicial Districts, May 13, 2022

New Generation Wellness Chiropractic P.C. v Country-Wide Ins. Co., 66 Misc 3d 1207(A), 2020 NY Slip Op 50017(U), reversed.

APPEARANCES OF COUNSEL

Glinkenhouse Queen (Alan S. Queen of counsel) for appellant.

The Law Office of Thomas Torto (Jason Levine of counsel) for respondent.

Ordered that the order, insofar as appealed from, is reversed, with $30 costs, the branch of plaintiff’s motion seeking to recalculate, from a simple rate to a compound rate, an award of statutory no-fault interest in a judgment entered December 12, 2017, is granted, and defendant’s cross motion to vacate the judgment and dismiss the complaint is denied.

In or about July 2002, plaintiff commenced this action to recover assigned first-party no-fault benefits for services it rendered in August through October 2000 to its assignor who was injured in a motor vehicle accident on August 20, 2000. Defendant appeared and answered. On July 29, 2009, the State of New York dissolved plaintiff by proclamation. A settlement letter was drafted, which was signed by plaintiff’s attorney on August 12, 2009, which stated that the parties agreed that the action would be discontinued after defendant paid plaintiff{**75 Misc 3d at 56} $621, which sum was inclusive of attorney’s fees, costs and interest. The third paragraph of the letter referenced the provisions of CPLR 5003-a, while a sentence following that paragraph stated, “Please mail your settlement check promptly according to CPLR 5003 [sic, presumably CPLR 5003-a].” On August 13, 2009, defendant’s attorney signed the letter after modifying it by striking out its third paragraph and by adding handwritten language, to wit, “Payment to issue within 90 days with 14 days prior written notice to deft attorneys; judgment to issue in settled amount.” The sentence requesting prompt payment in accordance with the CPLR was not stricken. It is uncontroverted that defendant did not pay the amount set forth in the settlement. [*2]In May 2017, plaintiff sought to enter a judgment and submitted, among other things, a copy of the modified settlement letter and an ex parte proposed judgment to the clerk of the Civil Court. On December 12, 2017, a judgment was entered awarding plaintiff, insofar as is relevant to this appeal, $1,151.90 in interest accruing from August 12, 2009.

In January 2018, plaintiff moved to, among other things, recalculate the interest awarded in the judgment on the ground that it had erroneously been calculated at a simple rate instead of at a compound rate as allowed by Insurance Department Regulations (11 NYCRR) former § 65.15 (h). Defendant opposed the motion and cross-moved for “an Order . . . vacating the judgment . . . in favor of plaintiff and dismissing this action upon the grounds that the Secretary of State dissolved plaintiff and annulled its authority on July 29, 2009 and it has not been reinstated.” Plaintiff opposed the cross motion, to which defendant replied.

By order entered January 3, 2020, the Civil Court denied plaintiff’s motion and granted defendant’s cross motion. The court vacated the judgment pursuant to CPLR 5015 and dismissed the complaint pursuant to CPLR 1017 and 1021 “due to the failure to substitute the Plaintiff as a party within a reasonable time after Plaintiff dissolved” (New Generation Wellness Chiropractic P.C. v Country-Wide Ins. Co., 66 Misc 3d 1207[A], 2020 NY Slip Op 50017[U], *6 [2020]). The court noted that the “record lacks any indication that the seven-year gap [between the August 2009 settlement letter and when plaintiff sought to enter judgment in May 2017] constitutes a reasonable time for Plaintiff to wind up its affairs” (2020 NY Slip Op 50017[U], *9). The Civil Court also found that the settlement{**75 Misc 3d at 57} “included a notice requirement” and that the judgment was “also properly vacated pursuant to CPLR 5015(a)(4) because Plaintiff failed to provide notice prior to entry” (id. at *4, *5). Plaintiff’s motion was denied as moot.

On appeal, plaintiff contends that the branch of its motion seeking to recalculate the statutory no-fault interest should have been granted and that defendant’s cross motion should have been denied, arguing, among other things, that the Civil Court improperly vacated the judgment pursuant to CPLR 5015; that Business Corporation Law §§ 1005 and 1006 control in the case at bar, not CPLR 1017 and 1021; and that the Civil Court improperly determined that plaintiff was not in the process of winding up its business affairs.

Contrary to the determination of the Civil Court, substitution was not required here under CPLR 1017 and 1021. Pursuant to Business Corporation Law §§ 1005 and 1006, following its dissolution, plaintiff was allowed to enter judgment and make its motion as part of the winding up of its business affairs. To the extent that Business Corporation Law §§ 1005 and 1006 can be deemed to be inconsistent with CPLR 1017 and 1021, the Business Corporation Law provisions govern (see CPLR 101). Business Corporation Law § 1005 (a) (2) “defines ‘winding up’ as the performance of acts directed toward the liquidation of the corporation, including the collection and sale of corporate assets” (Matter of 172 E. 122 St. Tenants Assn. v Schwarz, 73 NY2d 340, 349 [1989]). Business Corporation Law § 1006 includes, as part of “winding up,” the right of a dissolved corporation to participate in actions and proceedings, whether judicial, administrative, arbitrative or otherwise, in its corporate name (Business Corporation Law § 1006 [a] [4]). Since Business Corporation Law § 1006 does not include any time limit for winding up the dissolved corporation’s affairs, it is proper for courts to imply a reasonable period of time (see e.g. Spiegelberg v Gomez, 44 NY2d 920, 921 [1978]).

As the party moving for vacatur of a judgment and dismissal of the complaint on the [*3]ground that plaintiff lacked the capacity to enter judgment or to move to recalculate interest, defendant had the burden of demonstrating, prima facie, that plaintiff was not still winding up its affairs (see e.g. Greater Bright Light Home Care Servs., Inc. v Jeffries-El, 151 AD3d 818 [2017]; Singer v Riskin, 137 AD3d 999, 1000 [2016]; Brooklyn Elec. Supply Co., Inc. v Jasne & Florio, LLP, 84 AD3d 997 [2011]; Brach v Levine, 36 Misc 3d 1213[A], 2012 NY Slip Op{**75 Misc 3d at 58}51312[U] [Sup Ct, Kings County 2012]). A review of defendant’s initial moving papers shows that it did not argue that plaintiff was not winding up its affairs. For the first time in reply, defendant argued that plaintiff had offered no explanation for its failure to move for entry of a judgment within a reasonable time following defendant’s failure to pay the settlement and that “upon information and belief,” plaintiff has not been engaged in active business operations since 2000. Since all the averments defendant made in support of its motion, both in its initial moving papers and in reply, were insufficient to show that plaintiff was not winding up its business affairs between the time of the August 2009 settlement letter and the time when plaintiff sought to enter judgment in May 2017, defendant failed to show that plaintiff lacked capacity. We note that numerous cases have held that a substantial number of years was not an unreasonable amount of time for a corporation to wind up its affairs (see Lamarche Food Prods. Corp. v 438 Union, LLC, 178 AD3d 910 [2019] [24 years between dissolution and action giving rise to lawsuit]; Greater Bright Light Home Care Servs., Inc. v Jeffries-El, 151 AD3d at 821 [11 years between dissolution and the motion to dismiss cross claims]; Moran Enters., Inc. v Hurst, 66 AD3d 972 [2009] [seven years between dissolution and the commencement of the lawsuit]; cf. Lance Intl., Inc. v First Natl. City Bank, 86 AD3d 479, 480 [2011]). Consequently, defendant did not demonstrate that its cross motion should be granted on the ground that plaintiff is not winding up its affairs.

As acknowledged by the Civil Court (see New Generation Wellness Chiropractic P.C. v Country-Wide Ins. Co., 2020 NY Slip Op 50017[U], *3), defendant did not argue in its cross motion that the settlement letter, as modified, required plaintiff to “provide notice prior to entry” of the judgment (id. at *4) or that the judgment should be vacated on the ground that plaintiff failed to provide such notice. Contrary to the Civil Court’s order, this was not, under the circumstances presented, a proper alternative basis upon which to grant defendant’s cross motion.

Plaintiff properly argues that the statutory no-fault interest awarded in the judgment from August 12, 2009, to the judgment date, December 12, 2017, should be recalculated from a simple rate to a compound rate (see Health Value Med., P.C. v Country Wide Ins. Co., 66 Misc 3d 127[A], 2019 NY Slip Op 52036[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2019]). {**75 Misc 3d at 59}Defendant had the opportunity to pay the settlement amount without the accrual of additional interest (see CPLR 5003-a [a]). Its failure to do so (either within the statutory time frame or the 90 days enumerated by modified letter, a determination which we need not make) allowed plaintiff to enter a judgment for that amount “together with costs and lawful disbursements, and interest” (CPLR 5003-a [e]). Contrary to defendant’s argument in its respondent’s brief, nine percent pursuant to CPLR 5004 is not the correct rate of interest because “Insurance Law § 5106 (a) and former 11 NYCRR 65.15 (h), which were specific directives, supersede the interest provisions contained in CPLR 5004, the more general statute” (Matter of B.Z. Chiropractic, P.C. v Allstate Ins. Co., 197 AD3d 144, 156 [2021]). The calculation of interest on the claims at issue is governed by the former no-fault regulations providing for compound interest (see Health Value [*4]Med., P.C. v Country Wide Ins. Co., 2019 NY Slip Op 52036[U]; Belt Parkway Imaging, P.C. v State Wide Ins. Co., 30 Misc 3d 127[A], 2010 NY Slip Op 52229[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2010]).

Accordingly, the order, insofar as appealed from, is reversed, the branch of plaintiff’s motion seeking to recalculate, from a simple rate to a compound rate, an award of statutory no-fault interest in a judgment entered December 12, 2017, is granted and defendant’s cross motion to vacate the judgment and dismiss the complaint is denied.

Aliotta, P.J., Weston and Toussaint, JJ., concur.

[*1]

Supreme Court, Appellate Term, Second Department, 2d, 11th and 13th Judicial Districts, December 17, 2021

APPEARANCES OF COUNSEL

Law Offices of Buratti, Rothenberg & Burns (Kenneth F. Popper of counsel) for appellant.

Goldman Law Offices (Anna Goldman of counsel) for respondent.

Ordered that the order, insofar as appealed from, is reversed, with $30 costs, and the matter is remitted to the Civil Court for a new determination, following a traverse hearing, of the branches of defendant’s motion seeking to, in effect, vacate the order entered April 20, 2017, granting plaintiff’s motion to enter a default judgment and, upon such vacatur, to dismiss the complaint.

In this action by a provider to recover assigned first-party no-fault benefits, defendant did not appear or answer the complaint. By order entered April 20, 2017, the Civil Court (Susan Quirk, J.) granted, on default, plaintiff’s motion to enter a default judgment. In September 2017, defendant moved to, among other things, in effect, vacate the April 20, 2017 order, alleging that it had not received plaintiff’s motion, and, upon such vacatur, to dismiss the complaint for lack of personal jurisdiction. Plaintiff opposed the motion. As limited by its brief, defendant appeals from so much of an order entered July 12, 2019, as denied the foregoing branches of defendant’s motion.

“It is axiomatic that the failure to serve process in an action leaves the court without [*2]personal jurisdiction over the defendant, and all subsequent proceedings are thereby rendered null and void” (Emigrant Mtge. Co., Inc. v Westervelt, 105 AD3d 896, 897 [2013] [internal quotation marks omitted]). Lack of personal jurisdiction, and thus the question of whether there ever was a default, is a “threshold issue” (McSpedon v Levine, 158 AD3d 618, 620 [2018]). Here, defendant submitted a detailed affidavit by the claims clerk alleged to have received service of process, which affidavit was sufficient to rebut the{**74 Misc 3d at 43} process server’s affidavit and raise an issue of fact necessitating a traverse hearing (see Cautious Care Med., P.C. v 21st Century Ins. Co., 72 Misc 3d 140[A], 2021 NY Slip Op 50785[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2021]).

We note that, while CPLR 3215 (c) requires a plaintiff which seeks to enter a default judgment more than one year after the default to show sufficient cause why the complaint should not be dismissed, on the record before us, there is no basis to find that plaintiff herein failed to make such a showing. Plaintiff’s motion papers are not included in the record and defendant did not raise this argument in the Civil Court.

Accordingly, the order, insofar as appealed from, is reversed and the matter is remitted to the Civil Court for a new determination, following a traverse hearing, of the branches of defendant’s motion seeking to, in effect, vacate the order entered April 20, 2017, granting plaintiff’s motion to enter a default judgment and, upon such vacatur, to dismiss the complaint.

Weston, J. (concurring in part and dissenting in part, and voting to reverse the order, insofar as appealed from, and grant the branches of defendant’s motion seeking to vacate the order entered April 20, 2017, and to dismiss the complaint as abandoned). On or about December 10, 2010, plaintiff, a provider, commenced this action seeking to recover assigned first-party no-fault benefits. Seven years later, plaintiff moved for the entry of a default judgment, which motion was granted. Plaintiff alleged that defendant was served on or about December 16, 2010, by leaving a copy of the summons and complaint with an authorized agent for the corporation. The April 20, 2017 order granting the entry of a default judgment makes no mention that any excuse for the delay was offered or that good cause was shown.

In September 2017, defendant moved to vacate the April 20, 2017 order on the grounds that defendant was not personally served. An affidavit from the person allegedly served denying service was attached to the papers. Further, pursuant to CPLR 5015 (a) (1), defendant asserted that the lack of service provided a reasonable excuse for the default and submitted a meritorious defense to the action.

It is well settled that “[w]hen a plaintiff fails to seek leave to enter a default judgment within one year after the default has occurred, the action is deemed abandoned” (Solano v Castro, 72 AD3d 932, 932-933 [2d Dept 2010]; see CPLR 3215 [c]; Perricone v City of New York, 62 NY2d 661, 663 [1984];{**74 Misc 3d at 44} Staples v Jeff Hunt Devs., Inc., 56 AD3d 459 [2d Dept 2008]; Mattera v Capric, 54 AD3d 827 [2d Dept 2008]; Kay Waterproofing Corp. v Ray Realty Fulton, Inc., 23 AD3d 624, 625 [2d Dept 2005]; Monzon v Sony Motor, 115 AD2d 714 [2d Dept 1985]). The procedure for obtaining a default judgment is plainly set forth in CPLR 3215 (c). CPLR 3215 (c) provides

“[i]f the plaintiff fails to take proceedings for the entry of judgment within one year after the default, the court shall not enter judgment but shall dismiss the complaint as abandoned, without costs, upon its own initiative or on motion, unless sufficient cause is shown why the [*3]complaint should not be dismissed” (see Pipinias v J. Sackaris & Sons, Inc., 116 AD3d 749, 750 [2d Dept 2014]; see also Baruch v Nassau County, 134 AD3d 658, 659 [2d Dept 2015]).

“The language of CPLR 3215 (c) is not, in the first instance, discretionary, but mandatory, inasmuch as courts ‘shall’ dismiss claims (CPLR 3215 [c]) for which default judgments are not sought within the requisite one-year period, as those claims are then deemed abandoned” (Giglio v NTIMP, Inc., 86 AD3d 301, 307-308 [2d Dept 2011]; see Bank of N.Y. v Kushnir, 150 AD3d 946 [2d Dept 2017]; Butindaro v Grinberg, 57 AD3d 932 [2d Dept 2008]; County of Nassau v Chmela, 45 AD3d 722 [2d Dept 2007]). It is not necessary that a motion to dismiss be made, since the statute provides the court with the authority not to enter judgment on an abandoned complaint. The court on its own initiative should dismiss the complaint in the absence of compliance with the statute (see U.S. Bank, N.A. v Laulicht, 176 AD3d 892, 893 [2d Dept 2019]; Ibrahim v Nablus Sweets Corp., 161 AD3d 961, 963 [2d Dept 2018]).

Here, it is undisputed that plaintiff failed to seek entry of a judgment within one year of the alleged default. There is no explanation for this failure in the record. The court below should not have entered judgment in favor of plaintiff, but rather should have dismissed the complaint as abandoned. Inasmuch as defendant now seeks to vacate the order granting entry of a default judgment, the mandatory language of CPLR 3215 (c) requires the dismissal of the complaint.

Moreover, the authority for this court to dismiss the complaint is plain. Pursuant to CPLR 3215 (c), the court upon its own initiative can dismiss an action which has been deemed abandoned. In Perricone v City of New York (62 NY2d at 663), the Court noted:{**74 Misc 3d at 45}

“Having failed to comply with the statutory requirements, plaintiff’s complaint was dismissed by the Appellate Division and we find no legal error in that decision. (See Chin v Hooker, 95 AD2d 790; Winkelman v H & S Beer & Soda Discounts, 91 AD2d 660.)

“Plaintiff’s argument that the city waived its right to move for dismissal of the complaint is unpersuasive inasmuch as the Appellate Division exercised its authority under CPLR 3215 (subd [c]) and dismissed the complaint on its own initiative. Nor can plaintiff be heard to complain that he had no notice that the Appellate Division intended to act pursuant to the statute and, therefore, had no opportunity to demonstrate sufficient cause why the complaint should not be dismissed. Plaintiff was aware for more than ten years that the city had not answered, yet failed to move for a default judgment.”

Under the circumstances presented here, the seven-year delay in proceeding to enter judgment after the default should not be excused. The motion for the entry of a default judgment should have been denied (see Shinn v City of New York, 65 AD3d 621, 622-623 [2d Dept 2009]; Butindaro v Grinberg, 57 AD3d at 933; Staples v Jeff Hunt Devs., Inc., 56 AD3d at 460; Mattera v Capric, 54 AD3d at 828). A traverse hearing would not resolve the underlying delay by plaintiff in seeking a default judgment and the consequences of CPLR 3215 (c) thereto. Accordingly, defendant’s motion to vacate the April 20, 2017 order should be granted and the complaint dismissed.

Toussaint, J.P., and Elliot, J., concur; Weston, J., concurs in part and dissents in part in a separate memorandum.

[*1]

Supreme Court, Appellate Term, Second Department, 2d, 11th and 13th Judicial Districts, December 10, 2021

APPEARANCES OF COUNSEL

The Rybak Firm, PLLC (Damin J. Toell and Karina Barska of counsel) for appellant.

Law Offices of Buratti, Rothenberg & Burns (Konstantinos Tsirkas of counsel) for respondent.

Ordered that the order is modified by providing that the branch of defendant’s motion seeking summary judgment dismissing so much of the complaint as sought to recover upon the claim in the sum of $1,314 submitted on November 26, 2014, 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, defendant moved for summary judgment dismissing the complaint on the ground that defendant had timely denied the claims based upon plaintiff’s assignor’s failure to appear for duly scheduled examinations under oath (EUOs). Plaintiff opposed the motion and cross-moved for summary judgment. By order entered September 18, 2019, the Civil Court granted defendant’s motion and, in effect, denied plaintiff’s cross motion as untimely pursuant to the parties’ adjournment stipulation, which had been executed by both parties’ attorneys.

At issue are three claims, for $1,314, $620.07 and $620.07. Plaintiff alleges in its complaint that the claim for $1,314 was mailed to defendant on November 26, 2014, and that the two claims for $620.07 were each mailed on February 13, 2015. It{**74 Misc 3d at 19} is undisputed on this appeal that defendant scheduled EUOs of plaintiff’s assignor to be held on December 12, 2014, January 22, 2015, and February 17, 2015; that plaintiff’s assignor did not appear for any of these [*2]scheduled EUOs; that the November 26, 2014 claim was denied on February 24, 2015; and that the February 13, 2015 claims were denied on March 2, 2015. On appeal, plaintiff argues that defendant was required to deny all three claims within 30 days of plaintiff’s assignor’s failure to appear for the second scheduled EUO, on January 22, 2015, and therefore that defendant is precluded from raising this defense.

Plaintiff correctly argues that defendant, by claiming that it had mailed the denial of the November 26, 2014 claim on February 24, 2015, failed to establish, under the circumstances presented, that it had timely denied that claim. A no-fault claim must be paid or denied “within 30 calendar days after the insurer receives proof of claim” (11 NYCRR 65-3.8 [a] [1]; see e.g. New York & Presbyt. Hosp. v Allstate Ins. Co., 31 AD3d 512 [2006]). While it is not disputed on this appeal that defendant tolled its time to pay or deny the November 26, 2014 claim by timely scheduling an EUO of plaintiff’s assignor (see 11 NYCRR 65-3.8 [a] [1]; see also e.g. Sound Shore Med. Ctr. v New York Cent. Mut. Fire Ins. Co., 106 AD3d 157 [2013]; 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 2014]), the toll ended when plaintiff’s assignor failed to appear at the second EUO on January 22, 2015 (Quality Health Supply Corp. v Nationwide Ins., 69 Misc 3d 133[A], 2020 NY Slip Op 51226[U], *1-2 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2020]). As defendant did not demonstrate that it denied the November 26, 2014 claim within 30 days of the end of the toll, it has not demonstrated that it is not precluded from raising its proffered EUO no-show defense (see Westchester Med. Ctr. v Lincoln Gen. Ins. Co., 60 AD3d 1045 [2009]; see also Nationwide Affinity Ins. Co. of Am. v Jamaica Wellness Med., P.C., 167 AD3d 192 [2018]) as to that claim, and the branch of defendant’s motion seeking summary judgment dismissing the November 26, 2014 claim should have been denied.

However, there is no merit to plaintiff’s argument that the branch of defendant’s motion seeking summary judgment dismissing the February 13, 2015 claims should have been denied because defendant was similarly required to deny those{**74 Misc 3d at 20} claims within 30 days of plaintiff’s assignor’s failure to appear on January 22, 2015. Rather, defendant demonstrated that those claims were properly denied on March 2, 2015, within 30 days of their receipt, based upon the prior nonappearance (see 11 NYCRR 65-3.8 [a]; ARCO Med. N.Y., P.C. v Lancer Ins. Co., 34 Misc 3d 134[A], 2011 NY Slip Op 52382[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2011]).

It has been long held that “[t]he failure to comply with the provision of an insurance policy requiring the insured to submit to an examination under oath . . . is a material breach of the [no-fault] policy, precluding recovery of the policy proceeds” (Interboro Ins. Co. v Clennon, 113 AD3d 596, 597 [2014] [internal quotation marks omitted]; see Nationwide Affinity Ins. Co. of Am. v Jamaica Wellness Med., P.C., 167 AD3d 192 [2018]). While this failure has been termed “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]; see Quality Health Supply Corp. v Nationwide Ins., 2020 NY Slip Op 51226[U]), it is more appropriately characterized as a “breach of an existing policy condition” (Nationwide Affinity Ins. Co. of Am. v Jamaica Wellness Med., P.C., 167 AD3d at 197). It would be contrary to 11 NYCRR 65-3.8 (a) (1), and, in effect, render that paragraph a nullity, if, as plaintiff suggests, a no-show defense were to expire 30 days after the second nonappearance—in this instance, defendant’s time to pay [*3]or deny the February 13, 2015 claims would have expired well before the 30 days permitted by the regulations. Indeed, under plaintiff’s interpretation, an eligible injured person and his or her assignees could simply wait 30 days after failing to appear to submit any new claims, and the insurer would then be prohibited from denying those claims based upon the nonappearance.

To the extent that plaintiff argues that a failure to timely deny any one claim based upon a nonappearance at an EUO or independent medical examination (IME) once that defense has accrued constitutes a waiver of the right to thereafter assert that defense as to any and all subsequent claims submitted upon the same covered event, that argument is without merit. In other words, defendant’s failure to timely deny the November 26, 2014 claim based on the January 22, 2015 nonappearance was not a waiver of defendant’s right to timely deny, as it did, the February 13, 2015 claims based upon the same prior nonappearance (see ARCO Med. N.Y., P.C. v Lancer Ins. Co., 2011{**74 Misc 3d at 21}  NY Slip Op 52382[U]). Each such claim is treated on an individual basis (cf. Shtarkman v Allstate Ins. Co., 8 Misc 3d 129[A], 2005 NY Slip Op 51028[U] [App Term, 2d Dept, 2d & 11th Jud Dists 2005] [a “blanket” or “general” denial purporting to deny all future claims does not constitute a valid denial of any subsequent claim]; A&S Med. v Allstate Ins. Co., 196 Misc 2d 322 [App Term, 1st Dept 2003], affd 15 AD3d 170 [2005]). We note that, in this respect, EUO and IME nonappearances are treated differently from the failure to provide requested written verification, which is only a proper basis for the denial of claims for which the written verification was specifically requested and cannot, based on the regulations and the case law, be asserted as a basis for a denial of any subsequently submitted claim (see 11 NYCRR 65-3.8 [b] [3]; see generally Shtarkman v Allstate Ins. Co., 2005 NY Slip Op 51028[U]; A&S Med. v Allstate Ins. Co., 196 Misc 2d 322 [2003]).

Accordingly, the order is modified by providing that the branch of defendant’s motion seeking summary judgment dismissing so much of the complaint as sought to recover upon the claim in the sum of $1,314 submitted on November 26, 2014, is denied.

Aliotta, P.J., Weston and Toussaint, JJ., concur.

[*1]

Supreme Court, Appellate Term, Second Department, 2d, 11th and 13th Judicial Districts, December 10, 2021

APPEARANCES OF COUNSEL

The Rybak Firm, PLLC (Damin J. Toell of counsel) for appellant.

Freiberg, Peck & Kang, LLP (Yilo J. Kang of counsel) for respondent.

Ordered that the order, insofar as appealed from, is affirmed, with $25 costs; and it is further ordered that, on the court’s own motion, counsel for the respective parties and Damin J.{**74 Misc 3d at 10} Toell, Esq., are directed to show cause why an order should or should not be made and entered imposing such sanctions and costs, if any, against The Rybak Firm, PLLC, and Damin J. Toell, Esq., pursuant to Rules of the Chief Administrator of the Courts (22 NYCRR) § 130-1.1 (c) as this court may deem appropriate, by each filing a digital copy of an affidavit or affirmation on that issue, with proof of service, onto the court’s digital portal, Records, Briefs & Motions Drop Off, found on the court’s website at: https://nycourts.sharepoint.com/sites/AT2-DCS/Site Pages/Home.aspx, on or before January 10, 2022; and it is further ordered that the clerk of this court, or his designee, is directed to serve a copy of this decision and order to show cause by regular mail upon counsel for the respective parties and Damin J. Toell, Esq.

In this action by a provider to recover assigned first-party no-fault benefits, defendant moved to dismiss the complaint pursuant to CPLR 3211 (a) (8). In multiple affidavits in support of the motion, defendant’s employees asserted that defendant is a Pennsylvania company, which is not licensed to do business in New York, maintains no offices in New York, has no agents operating out of, or representatives soliciting business in, New York, and does not own, use or [*2]possess any real property in New York. Furthermore, defendant argued that it had been held in prior cases that the courts in the State of New York cannot exercise personal jurisdiction over this defendant (see e.g. Matter of Eagle Ins. Co. v Gutierrez-Guzman, 21 AD3d 489 [2005]). Plaintiff cross-moved for summary judgment and opposed the motion with an affirmation of its counsel, who made unsupported assertions that, among other things, defendant had transacted business in New York by knowingly issuing policies to New York drivers, and that defendant had established an ongoing relationship with defense counsel in New York, thereby subjecting defendant to jurisdiction in New York. Defendant’s attorney asserted in a reply affirmation that the arguments raised by plaintiff had been rejected by this court in Compas Med., P.C. v American Ind. Ins. Co. (47 Misc 3d 134[A], 2015 NY Slip Op 50481[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2015]). Plaintiff appeals, as limited by its brief, from so much an order of the Civil Court entered February 5, 2018, as granted defendant’s motion to dismiss the complaint.

[1] Contrary to plaintiff’s contention, defendant made a prima facie showing that personal jurisdiction had not been obtained over it (see Gentlecare Ambulatory Anesthesia Servs. v {**74 Misc 3d at 11}American Ind. Ins. Co., 63 Misc 3d 144[A], 2019 NY Slip Op 50635[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2019]; Lida’s Med. Supply, Inc. v American Ind. Ins. Co., 63 Misc 3d 137[A], 2019 NY Slip Op 50502[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2019]; Pavlova v American Ind. Ins. Co., 60 Misc 3d 128[A], 2018 NY Slip Op 50943[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2018]). “In opposing a motion to dismiss the complaint pursuant to CPLR 3211 (a) (8) on the ground of lack of personal jurisdiction, a plaintiff need only make a prima facie showing that such jurisdiction exists” (Hopstein v Cohen, 143 AD3d 859, 860 [2016] [internal quotation marks omitted]; see also Lang v Wycoff Hgts. Med. Ctr., 55 AD3d 793 [2008]). In the case at bar, the affirmation of plaintiff’s attorney was insufficient to demonstrate that personal jurisdiction over defendant existed under the Civil Court’s long-arm statute (see CCA 404 [a]), as plaintiff’s counsel failed to establish that he possessed personal knowledge of the facts.

Plaintiff’s contention that Matter of American Ind. Ins. Co. v Nova Acupuncture, P.C. (137 AD3d 1270 [2016]) (Nova) stands for the proposition that New York courts might have personal jurisdiction over American Independent Insurance Company (AIIC) lacks merit. In Nova, the issue was limited to whether AIIC could be compelled to arbitrate a claim for first-party no-fault benefits. However, as the Appellate Division, Second Department, had previously noted, “[a]t this pre-arbitration stage, the issue is not whether New York courts have jurisdiction over AIIC, but whether the arbitrator has authority under the terms of the insurance contract to award no-fault benefits to the appellants” and “[w]hile personal jurisdiction is required for the exercise of the state’s judicial power over a party, arbitration is a form of dispute resolution almost wholly independent of the court system” (American Ind. Ins. Co. v Art of Healing Medicine, P.C., 104 AD3d 761, 762-763 [2013]).

To the extent plaintiff argues that “facts essential to justify opposition may exist but cannot then be stated” (CPLR 3211 [d]), this argument is not properly before us, as plaintiff’s contention that it needs discovery “regarding the nature and extent of [defendant’s] relationship with parent/subsidiary companies and, in particular, the extent of activity in New York State by these companies” is raised by plaintiff for the first time on appeal (see Copp v Ramirez, 62 AD3d 23 [2009]; Compas Med., P.C. v American Ind. Ins. Co., 47 Misc 3d 134[A], {**74 Misc 3d at 12}2015 NY Slip Op [*3]50481[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2015]). Even if the argument were properly before us, neither the unverified complaint nor the conclusory affirmation of plaintiff’s counsel in opposition to defendant’s motion constituted the “tangible evidence” (Mandel v Busch Entertainment Corp., 215 AD2d 455, 455 [1995]) necessary to substantiate plaintiff’s allegations that jurisdiction could exist, thereby demonstrating that plaintiff’s assertion of the existence of a jurisdictional predicate was not “frivolous” (Peterson v Spartan Indus., 33 NY2d 463, 467 [1974]). Thus, plaintiff did not make a “sufficient start” (id.) by showing that essential jurisdictional facts might exist to warrant discovery on the issue of personal jurisdiction over defendant (see Compas Med., P.C., 2015 NY Slip Op 50481[U]).

[2] We conclude that sanctions may be warranted for the conduct of The Rybak Firm, PLLC, and Damin J. Toell, Esq., as their conduct appears to be frivolous (see Flushing Expo, Inc. v New World Mall, LLC, 116 AD3d 826 [2014]; Ram v Torto, 111 AD3d 814 [2013]). As relevant here, frivolous conduct includes the assertion of arguments that are “completely without merit in law and [which] cannot be supported by a reasonable argument for an extension, modification or reversal of existing law” (Rules of Chief Admin of Cts [22 NYCRR] § 130-1.1 [c] [1]). Here, the appellant’s brief submitted on behalf of plaintiff is substantially the same as the appellant’s brief submitted by The Rybak Firm, PLLC, and Damin J. Toell, Esq., in Excel Prods., Inc. v American Ind. Ins. Co. (65 Misc 3d 157[A], 2019 NY Slip Op 51964[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2019]) in which, although the plaintiff provider was appealing from a 2017 order of the Civil Court which

“expressly stated that plaintiff’s arguments and the ‘evidence’ upon which plaintiff relied had previously been considered and rejected by this court and that plaintiff’s remaining arguments were either contrary to a prior decision by the Appellate Division, Second Department, or predicated upon ‘speculative factual arguments,’ plaintiff’s appellate brief d[id] not appear to mention, let alone address, the prior decisions of this court or of the Appellate Division which may have rendered plaintiff’s appellate arguments frivolous” (2019 NY Slip Op 51964[U], *2).

{**74 Misc 3d at 13}Similarly, the appellant’s brief submitted on behalf of plaintiff in the instant case is also substantially the same as the respondent’s brief submitted by The Rybak Firm, PLLC, and Damin J. Toell, Esq., in Parisien v American Ind. Ins. Co. (65 Misc 3d 157[A], 2019 NY Slip Op 51965[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2019]).

In light of the foregoing, the order, insofar as appealed from, is affirmed and, on the court’s own motion, counsel for the respective parties and Damin J. Toell, Esq., are directed to show cause why an order should or should not be made and entered imposing such sanctions and costs, if any, against The Rybak Firm, PLLC, and Damin J. Toell, Esq., pursuant to Rules of the Chief Administrator of the Courts (22 NYCRR) § 130-1.1 (c) as this court may deem appropriate, by each filing a digital copy of an affidavit or affirmation on that issue, with proof of service, onto the court’s digital portal, Records, Briefs & Motions Drop Off, found on the court’s website at: https://nycourts.sharepoint.com/sites/AT2-DCS/Site Pages/Home.aspx, on or before January 10, 2022.

Aliotta, P.J., Elliot and Golia, JJ., concur.

[*1]

Supreme Court, Appellate Term, Second Department, 2d, 11th and 13th Judicial Districts, November 27, 2020

APPEARANCES OF COUNSEL

Glinkenhouse, Floumanhaft & Queen, by Glinkenhouse Queen (Alan Queen and Stephen J. Green of counsel), for appellant.

Jaffe & Velazquez, LLP (Jean H. Kang of counsel) for respondent.

Ordered that the appeal is dismissed.

This action by a provider to recover assigned first-party no-fault benefits was settled by a two-attorney stipulation dated June 16, 2003. Defendant did not pay the settlement amount, and a judgment was entered on January 12, 2017, pursuant to CPLR 5003-a. Plaintiff subsequently moved, pursuant to CPLR 5019 (a), in effect, to correct the January 12, 2017 judgment by recalculating the interest. By order entered February 20, 2018, the Civil Court granted the motion, but, sua sponte, stayed the accrual of statutory no-fault interest from June 16, 2003, through February 22, 2017. Plaintiff appeals from so much of the order as, sua sponte, stayed the accrual of interest.

The portion of the order which tolled the accrual of interest did not address a demand for relief made on notice and was, therefore, sua sponte. Thus, that portion of the order is not appealable as of right (see CCA 1702 [a] [2]; Sholes v Meagher, 100 NY2d 333 [2003]; Active Care Med. Supply Corp. v Delos Ins. Co., 55 Misc 3d 144[A], 2017 NY Slip Op 50650[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2017]), and we decline to grant leave to appeal. Plaintiff “could properly have moved to vacate the order and appealed as of right” to this court in the event that the motion was denied (Sholes, 100 NY2d at 335; see Active Care Med. Supply Corp., 55 Misc 3d 144[A], 2017 NY Slip Op 50650[U]; see also CCA 1702 [a] [3]), but plaintiff failed to make such a motion.

With respect to the position of the dissenting justice, we submit that deeming the appeal [*2]as something other than an improper appeal without permission should not be done{**71 Misc 3d at 13} routinely, particularly as there have been numerous such appeals made without permission in cases similar to this.

Accordingly, the appeal is dismissed.

Weston, J. (dissenting and voting to, on the court’s own motion, treat the notice of appeal as an application for leave to appeal and grant leave, and, thereupon, to reverse the order, insofar as appealed from, and to vacate so much of the order as stayed the accrual of statutory no-fault interest, in the following memorandum). This is yet another case in which this court has had to address the Civil Court’s sua sponte stay of the accrual of statutory no-fault interest. While it may be expedient to dismiss the appeal, in my opinion, plaintiff’s notice of appeal should be treated as a motion for leave to appeal and such leave granted. Alternatively, plaintiff’s motion may be treated as a motion to resettle the judgment, and the court’s order, which materially changed the prior judgment, is appealable (see Weksler v Weksler, 81 AD3d 401 [2011]; Gormel v Prudential Ins. Co. of Am., 151 AD2d 1048 [1989]). Upon granting leave, I would reverse so much of the order as stayed the accrual of no-fault statutory interest.

This action by a provider to recover assigned first-party no-fault benefits was settled in June 2003. Defendant did not pay the settlement amount, and a judgment was subsequently entered on January 12, 2017, pursuant to CPLR 5003-a. Plaintiff appeals from so much of an order of the Civil Court entered February 20, 2018, as sua sponte stayed the accrual of no-fault statutory interest from June 16, 2003, through February 22, 2017.

The Civil Court erred in staying interest from the date of the settlement of the action to the date when the motion was made. Once the case settled, defendant was obligated to pay the agreed-upon amount to plaintiff (see CPLR 5003-a) and “plaintiff, as the prevailing party, was not required to make a demand for the money” (B.Z. Chiropractic, P.C. v Allstate Ins. Co., 56 Misc 3d 139[A], 2017 NY Slip Op 51091[U], *2 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2017]; see CPLR 5003-a [e]). Defendant did not demonstrate that plaintiff had prevented defendant in any way from paying the settlement amount (see ERHAL Holding Corp. v Rusin, 252 AD2d 473, 474 [1998]; Juracka v Ferrara, 120 AD2d 822 [1986]; Craniofacial Pain Mgt. v Allstate Ins. Co., 61 Misc 3d 155[A], 2018 NY Slip Op 51825[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2018]; B.Z. Chiropractic, P.C., 56 Misc 3d 139[A], 2017 {**71 Misc 3d at 14}NY Slip Op 51091[U]). Therefore, the Civil Court erred in tolling the accrual of interest (see Craniofacial Pain Mgt., 61 Misc 3d 155[A], 2018 NY Slip Op 51825[U]; B.Z. Chiropractic, P.C., 56 Misc 3d 139[A], 2017 NY Slip Op 51091[U]).

Accordingly, the order, insofar as appealed from, should be reversed, and so much of the order as stayed the accrual of statutory no-fault interest from June 16, 2003, through February 22, 2017, should be vacated.

Aliotta and Siegal, JJ., concur; Weston, J.P., dissents in a separate memorandum.

[*1]

Supreme Court, Appellate Term, Second Department, 2d, 11th and 13th Judicial Districts, October 30, 2020

APPEARANCES OF COUNSEL

Gary Tsirelman, P.C. (Selina Chin and David M. Gottlieb of counsel) for appellant.

Law Office of Goldstein, Flecker & Hopkins (Lawrence J. Chanice of counsel) for respondent.

Ordered that the order is reversed, with $30 costs, and defendant’s motion for, in effect, summary judgment dismissing the complaint is denied.

In this action by a corporate provider to recover assigned first-party no-fault benefits for services rendered to plaintiff’s assignor in 2009, defendant moved for, in effect, summary judgment dismissing the complaint. Defendant argued that plaintiff professional corporation could not enforce its claims because its sole shareholder had been legally disqualified from rendering professional services upon the revocation of his chiropractic license on June 28, 2010. The Civil Court granted defendant’s motion.

Initially, it is noted that defendant’s motion to dismiss the complaint pursuant to CPLR 3211 was made after issue had been joined. Generally, such a motion must be made “before service of the responsive pleading is required” (CPLR 3211 [e]), although “[w]hether or not issue [*2]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 it is uncontested that the Civil Court did not notify the parties that it was treating the motion as one for summary judgment, an exception to the notice requirement is applicable here, as defendant’s motion exclusively involved “a purely legal question rather than any issues of fact” (Mihlovan v Grozavu, 72 NY2d 506, 508 [1988]; 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]). All the relevant facts are undisputed. Consequently, as the sole issue was the application of the Business Corporation Law, it was proper for the Civil Court to, in effect, 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).

Pursuant to Business Corporation Law §§ 1509 and 1510, when professionals lose their license, they are required to sever{**70 Misc 3d at 28} their ties with the professional service corporation. If the professional does not sever those ties, section 1509 grants the professional service corporation the authority to force the professional to do so, and failure to enforce this requirement constitutes a ground for forfeiture of the professional service corporation’s certificate of incorporation and its dissolution. Section 1510, among other things, directs the professional service corporation to repurchase the professional’s shares within six months of his disqualification. None of these requirements is self-executing.

Here, the professional has not complied with section 1509 and the professional service corporation has not repurchased his shares pursuant to section 1510, so the professional remains the corporation’s sole shareholder. No one has moved for forfeiture of plaintiff’s certificate of incorporation or its dissolution. Despite revocation of its shareholder’s professional license, plaintiff continued to exist and is entitled to wind up its affairs and seek to recover no-fault benefits for the services it rendered to its assignor prior to June 28, 2010 (see A.B. Med. Servs., PLLC v National Grange Mut. Ins. Co., 34 Misc 3d 145[A], 2012 NY Slip Op 50154[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012]; Kipor Medicine, P.C. v GEICO, 28 Misc 3d 129[A], 2010 NY Slip Op 51247[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2010]; see e.g. A.B. Med. Servs., PLLC v Travelers Indem. Co., 26 Misc 3d 69 [App Term, 2d Dept, 9th & 10th Jud Dists 2009]).

The case of Ocean Diagnostic Imaging, P.C. v Merchants Mut. Ins. Co. (15 Misc 3d 9 [App Term, 2d Dept, 2d & 11th Jud Dists 2007]) is distinguishable. In that case, the death of the doctor who was the sole officer, director and shareholder of a professional service corporation required the dismissal of its appeal because no one remained with authority to prosecute the action. Here, however, the sole shareholder is alive and continues to have authority to act for the professional corporation as “an administrator, whose role is to preserve the value of, and prevent loss to, the [professional service corporation]” (Eastern Star Acupuncture, P.C. v Allstate Ins. Co., 36 Misc 3d 41, 43 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012]), rather than as a member of the profession from which he has been barred.

Section 1510 directs plaintiff to take actions that it concededly failed to do. It does not hold, however, that such a violation makes otherwise valid contracts unenforceable or that the{**70 Misc 3d at 29} corporation’s debtor should be entitled to withhold payment for services legally rendered. Consequently, there is no bar to plaintiff’s pursuit of reimbursement for services rendered to its assignor.

Accordingly, the order is reversed and defendant’s motion for, in effect, summary judgment dismissing the complaint is denied.

Aliotta, P.J., Siegal and Toussaint, JJ., concur.

[*1]

Supreme Court, Appellate Term, Second Department, 2d, 11th and 13th Judicial Districts, January 11, 2019

APPEARANCES OF COUNSEL

Marshall & Marshall, PLLC (Naim M. Peress and Jeffrey Kadushin of counsel) for appellant.

Zara Javakov, P.C. (Zara Javakov of counsel) for respondent.

Ordered that the judgment is reversed, with $30 costs, and the matter is remitted to the Civil Court for the entry of a judgment in favor of defendant dismissing the complaint.

At the commencement of a nonjury trial in this action by a provider to recover assigned first-party no-fault benefits from Motor Vehicle Accident Indemnification Corporation (sued herein as MVAIC Ins. Co.), the parties stipulated that since the sole issue was whether plaintiff had exhausted its remedies, “if [MVAIC] can prove . . . that there was potential coverage through the assignor’s son who . . . lived with him on the date of the loss, then MVAIC has no burden to pay . . . these claims.” The only witness at trial was an employee of the New York Liquidation Bureau (NYLB), who testified pursuant to a subpoena served by MVAIC. He stated that, after the Supreme Court had entered an order placing Long Island Insurance Company (LIIC) into liquidation, NYLB had seized all of LIIC’s books and records, and administered LIIC’s claims, and that LIIC was closed. In response to the subpoena, he reviewed documents in a file seized from LIIC regarding a particular date of loss, a named person and a claim number. Among the documents he reviewed was an insurance policy from LIIC which was apparently issued to a [*2]person living at the same address as plaintiff’s assignor and whose name was the same as the assignor’s son with the exception of one letter. The Civil{**62 Misc 3d at 74} Court held that the documents were not admissible because the NYLB witness was unable to establish that the documents were admissible as business records pursuant to CPLR 4518. Although the court stated that the witness was credible, the court held that the issue to be resolved “was whether or not there was an insurance policy or coverage at the time of the accident” and that MVAIC had failed to sustain its burden.

[1, 2] The record establishes that NYLB seized records of LIIC after an order of liquidation of LIIC had been entered by the Supreme Court. Moreover, claims examiners employed by NYLB utilize the records to administer outstanding no-fault claims which have been submitted to LIIC. As NYLB incorporates and relies upon the records of LIIC, the records are admissible (see People v DiSalvo, 284 AD2d 547 [2001]; Plymouth Rock Fuel Corp. v Leucadia, Inc., 117 AD2d 727 [1986]; cf. West Val. Fire Dist. No. 1 v Village of Springville, 294 AD2d 949 [2002]). Since the pretrial stipulation simply required MVAIC to prove “that there was potential coverage,” MVAIC was not required to prove that “there was an insurance policy or coverage at the time of the accident.” In light of the foregoing, MVAIC sustained its burden of proving “that there was potential coverage.” Plaintiff, as assignee, was required to exhaust its remedies against all potential insurance carriers before seeking relief from defendant (see Hauswirth v American Home Assur. Co., 244 AD2d 528 [1997]; Orlin & Cohen Orthopedic Assoc. v Motor Veh. Acc. Indem. Corp., 58 Misc 3d 132[A], 2017 NY Slip Op 51778[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2017]). Here, plaintiff did not demonstrate that it had exhausted its remedies.

Accordingly, the judgment is reversed and the matter is remitted to the Civil Court for the entry of a judgment in favor of defendant dismissing the complaint.

Pesce, P.J., Aliotta and Elliot, JJ., concur.