Liberty Mut. Ins. Co. v Mercado (2025 NY Slip Op 00631)

Reported in New York Official Reports at Liberty Mut. Ins. Co. v Mercado (2025 NY Slip Op 00631)

Liberty Mut. Ins. Co. v Mercado
2025 NY Slip Op 00631
Decided on February 04, 2025
Appellate Division, First Department
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and subject to revision before publication in the Official Reports.


Decided and Entered: February 04, 2025
Before: Friedman, J.P., Gesmer, González, Scarpulla, Pitt-Burke, JJ.

Index No. 650161/20 Appeal No. 3617 Case No. 2023-06400

[*1]Liberty Mutual Insurance Company et al., Plaintiffs-Respondents,

v

Dilia Escano Mercado et al., Defendants, Bronx Medical Health Provider et al., Defendants-Appellants, Chang Health Physical Therapy PC, et al., Defendants.




The Rybak Firm, PLLC, Brooklyn (Michael Kroopnick of counsel), for appellants.

Correia, Conway & Stiefeld, White Plains (Nicole E. Duke of counsel), for respondents.



Order, Supreme Court, New York County (Debra A. James, J.), entered on or about November 24, 2023, which granted plaintiffs’ motion for summary judgment and adjudged and declared that plaintiffs are not obligated to honor or pay claims for reimbursement to defendants Bronx Medical Health Provider and Burke Physical Therapy PC, as assignees of defendants Dilia Mercado, Jose Mercado, and Miguel Angel Santiago (the individual defendants), with respect to no-fault benefits for an alleged motor vehicle collision that occurred on April 15, 2019, unanimously affirmed, with costs.

The individual defendants were allegedly involved in a vehicle collision with another vehicle. According to plaintiffs, which are the no-fault insurance providers, no injuries were reported at the scene, and no citations were issued. After the collision, the individual defendants sought medical treatment from defendant medical providers for their alleged injuries; the medical providers then sought and were denied reimbursement as assignees of the individual defendants.

Plaintiffs established their entitlement to summary judgment by providing a specific objective justification for conducting examinations under oath (EUOs) of the individual defendants (11 NYCRR 65-3.5[e]; see Country-Wide Ins. Co. v Delacruz, 205 AD3d 473, 473 [1st Dept 2022]). Although the explanation that plaintiffs provided was not particularly extensive, it was sufficient to establish the justification and to establish that defendants had not requested these EUOs arbitrarily or as a matter of routine. We note that plaintiffs moved for summary judgment after the close of discovery, during which they had disclosed to defendants the basis for their requests (cf. Delacruz, 205 AD3d at 473).

Furthermore, Supreme Court correctly concluded that, with respect to these defendants, plaintiffs established that they sent timely requests for the EUOs. Thus, the individual defendants’ failure to appear for EUOs constitutes a breach of a condition precedent to coverage and voids the policy ab initio (see Unitrin Advantage Ins. Co. v Dowd, 194 AD3d 507, 508 [1st Dept 2021]).

We have considered defendants’ remaining arguments and find them unavailing.

THIS CONSTITUTES THE DECISION AND ORDER OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.

ENTERED: February 4, 2025



Hereford Ins. Co. v Interdependent Acupuncture PLLC (2025 NY Slip Op 00021)

Reported in New York Official Reports at Hereford Ins. Co. v Interdependent Acupuncture PLLC (2025 NY Slip Op 00021)

Hereford Ins. Co. v Interdependent Acupuncture PLLC
2025 NY Slip Op 00021
Decided on January 02, 2025
Appellate Division, First Department
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and subject to revision before publication in the Official Reports.


Decided and Entered: January 02, 2025
Before: Kern, J.P., Kennedy, Gesmer, Higgitt, Michael, JJ.

Index No. 152296/19 Appeal No. 3388 Case No. 2024-02707

[*1]Hereford Insurance Company, Plaintiff-Respondent,

v

Interdependent Acupuncture PLLC, et al., Defendants, Shelly Sarbensarpong, et al., Defendants-Appellants.




Law Office of Yuriy Prakhin, P.C., Brooklyn (Yuriy Prakhin of counsel), for appellants.

Goldberg, Miller & Rubin, P.C., New York (Victoria Tarasova of counsel), for respondent.



Order, Supreme Court, New York County (David B. Cohen, J.), entered April 11, 2024, which denied the motion of defendants-appellants Shelly Sarben-Sarpong and Corey Hargrove to vacate orders and judgments, entered August 14, 2019 and February 17, 2023, granting plaintiff’s motions for entry of default judgments against them and declaring that they were not entitled to no-fault coverage, unanimously affirmed, without costs.

The court providently exercised its discretion in denying appellants’ motion to vacate the default judgments pursuant to CPLR 5015(a)(1) because appellants failed to demonstrate a reasonable excuse for their defaults (CPLR 5015[a][1]; see Towncenter Partners LLC v A.A. Castro Complex Litig., 203 AD3d 528, 529 [1st Dept 2022]). Appellants offered no explanation as to why they failed to respond to the complaint despite conceding that they received service of process. Their counsel’s suggestion that they were confused by the pendency of their separate personal injury action, in which they were represented by counsel, does not constitute a reasonable excuse (see Buckley v Nicklous, 210 AD3d 575, 575 [1st Dept 2022]). Appellants provide no support for their argument that plaintiff should have notified their counsel, who represented them in a separate personal injury action against plaintiff’s insured, of the commencement of this declaratory judgment action. In any event, appellants did not provide any affidavits to explain why they did not provide the pleadings in this action to their counsel after they were served. Since appellants’ proffered excuse for their defaults was not reasonable, the court did not need to consider whether they showed a potentially meritorious defense to the declaratory judgment action (see Besler v Uzieri, 179 AD3d 628, 628-629 [1st Dept 2020]).

As for appellants’ argument that the default judgments are a nullity because plaintiff failed to make an evidentiary showing as required by CPLR 3215(f), the Court of Appeals has held that a failure to submit the proof required by CPLR 3215(f) is “not a jurisdictional defect” and therefore “does not justify treating the judgment as a nullity” (Manhattan Telecom. Corp. v H & A Locksmith, Inc., 21 NY3d 200, 203-204 [1st Dept 2013]). Appellants’ remedy was to move pursuant to CPLR 5015(a)(1) to vacate the default judgments, which required them to show a reasonable excuse for their defaults (see id.; Frazier v 811 E. 178th St. Realty Corp., 183 AD3d 413, 414 [1st Dept 2020]). In any event, plaintiff did submit admissible evidence supporting its assertion that it properly disclaimed coverage based on a founded belief that the treatment appellants received was not medically necessary or causally related to the subject motor vehicle accident (see State Farm Fire & Cas. Co. v AA Acupuncture Serv., P.C., 217 AD3d 643 [1st Dept 2023]).

We have considered appellants’ remaining arguments and find them unavailing.

THIS CONSTITUTES THE DECISION AND ORDER OF THE SUPREME [*2]COURT, APPELLATE DIVISION, FIRST DEPARTMENT.

ENTERED: January 2, 2025



Quick v State Farm Mut. Auto. Ins. Co. (2024 NY Slip Op 06268)

Reported in New York Official Reports at Quick v State Farm Mut. Auto. Ins. Co. (2024 NY Slip Op 06268)

Quick v State Farm Mut. Auto. Ins. Co.
2024 NY Slip Op 06268
Decided on December 12, 2024
Appellate Division, Third Department
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and subject to revision before publication in the Official Reports.


Decided and Entered:December 12, 2024

CV-24-0456

[*1]Gary Quick, Appellant,

v

State Farm Mutual Automobile Ins. Co., Respondent.


Calendar Date:October 15, 2024
Before:Clark, J.P., Pritzker, Lynch, Fisher and Powers, JJ.

Basch & Keegan, LLP, Kingston (Derek J. Spada of counsel), for appellant.

Abrams, Cohen & Associates, New York City (Frank Piccininni of counsel), for respondent.



Powers, J.

Appeal from an order of the Supreme Court (Sharon A. Graff, J.), entered February 16, 2024 in Ulster County, which, among other things, granted defendant’s motion for summary judgment dismissing the complaint.

In January 2021, plaintiff was operating a Peterbilt tractor trailer in the course of his employment with Casa Builders, Inc. when he was injured. The tractor trailer had been leased from FTC Leasing, LLC, who had insured the vehicle through defendant. In March 2021, plaintiff applied for no-fault benefits through defendant and specified on this application that, although he was eligible for workers’ compensation benefits, Casa Builders did not hold workers’ compensation insurance. After seeking wage verification, defendant sent plaintiff a letter indicating that there is a question as to whether he is eligible for workers’ compensation coverage for the injury and, subsequently, denied the application on the basis that plaintiff was injured while in the course of employment. Therefore, according to defendant, plaintiff’s primary source of recovery for basic economic loss was through workers’ compensation. Defendant further advised plaintiff to provide verification if plaintiff’s application for workers’ compensation benefits was denied so defendant may then consider recovery pursuant to the no-fault insurance policy. Plaintiff challenged this denial on the basis that his employer did not possess workers’ compensation coverage and, further, had found him to be an independent contractor. Defendant, in response, instructed plaintiff to submit a 1099 form if he was an independent contractor but, otherwise, “to file a claim with the New York State Insurance Fund.”

Based upon the foregoing, plaintiff commenced the instant action alleging that defendant had wrongfully denied his no-fault insurance claim which had sought recovery of lost wages, medical expenses and other economic losses sustained because of the accident. Following joinder of issue, defendant moved for summary judgment dismissing the complaint on the basis that plaintiff was required to seek workers’ compensation benefits either through the Workers’ Compensation Board or the Uninsured Employers’ Fund before seeking no-fault coverage. Plaintiff cross-moved claiming that he could not have applied for workers’ compensation benefits because, as indicated in his application for no-fault benefits, his employer did not carry workers’ compensation coverage. Supreme Court granted defendant’s motion for summary judgment finding that, because plaintiff had failed to seek benefits through the Uninsured Employers’ Fund prior to applying for no-fault benefits, the instant action was improper. Plaintiff appeals.

“As a general rule, when an employee is injured in the course of his or her employment, his or her sole remedy against the employer lies in his or her entitlement to a recovery under the Workers’ Compensation Law” (Pringle v AC Bodyworks & Sons, LLC, 145 AD3d 1410, 1411 [3d Dept 2016] [[*2]internal quotation marks, brackets and citations omitted; see Workers’ Compensation Law § 11). However, ” ‘[w]here an employer fails to secure workers’ compensation coverage, an injured employee can simultaneously pursue both workers’ compensation benefits and a personal injury action’ ” (Rueda v Elmhurst Woodside, LLC, 116 AD3d 1027, 1027-1028 [2d Dept 2014], quoting Matter of Ocasio v Sang Soo Kim, 307 AD2d 662, 663 [3d Dept 2003], lv denied 3 NY3d 612 [2004]). The parties do not contest that plaintiff’s employer did not have workers’ compensation coverage at the time plaintiff sustained his injuries, and, therefore, plaintiff was able to commence a plenary action against his employer (see Rosario v Montalvo & Son Auto Repair Ctr., Ltd., 149 AD3d 885, 886 [2d Dept 2017]).

As is relevant here, plaintiff commenced a separate personal injury action against the employer that has since settled (NY St Cts Elec Filing [NYSCEF] Doc No. 1, summons and complaint, Doc No. 36, stipulation of discontinuance, in Quick v Casa Builders, Inc., Sup Ct, Ulster County, index No. EF2021-1112). However, plaintiff’s recovery in that action was limited inasmuch as Insurance Law § 5104 precludes recovery for basic economic loss “in any action by or on behalf of a covered person against another covered person for personal injuries arising out of negligence in the use or operation of a motor vehicle in this state” (Insurance Law § 5104 [a]). As a result, plaintiff sought no-fault insurance benefits through defendant to recover his basic economic loss. The gravamen of plaintiff’s application for benefits was that because his employer did not possess workers’ compensation coverage at the time of his accident, he was free to pursue recovery of basic economic loss through no-fault insurance benefits. For these same reasons, plaintiff maintains that his application for benefits was improperly denied and, therefore, Supreme Court erred in granting defendant’s motion for summary judgment dismissing the complaint and, similarly, in denying his own cross-motion.

“In accordance with the No-Fault Law, automobile insurers, like [defendant], must provide up to $50,000 of coverage for an insured’s ‘basic economic loss’ ” (Government Empls. Ins. Co. v Avanguard Med. Group, PLLC, 27 NY3d 22, 26 [2016], quoting Insurance Law § 5102 [a]). However, because no-fault benefits and workers’ compensation benefits are meant to cover generally the same types of loss, “payments to reimburse a person for basic economic loss on account of personal injury arising out of the use or operation of a motor vehicle” may be reduced by the “[a]mount[ ] recovered or recoverable on account of such injury under . . . workers’ compensation benefits” (Insurance Law § 5102 [b] [2]; see Dietrick v Kemper Ins. Co. [American Motorists Ins. Co.], 76 NY2d 248, 251 [1990]; Matter of New Millennium Pain & Spine Medicine, P.C. v Garrison Prop. & Cas. Ins. Co., 224 AD3d 428, 430 [1st Dept 2024]; see also 11 NYCRR 65-3.16[*3][a] [9]). Based upon this, “[a]s between no-fault and workers’ compensation, the latter is primary and an injured party may not elect between workers’ compensation benefits and no-fault benefits” (Arvatz v Empire Mut. Ins. Co., 171 AD2d 262, 268 [1st Dept 1991] [internal quotation marks and citations omitted]). This is so even when the employer has failed to provide workers’ compensation coverage as the Uninsured Employers’ Fund steps into the shoes of the carrier by acting as a surety (see generally Workers’ Compensation Law § 26-a; Matter of Salvia v Nutritional Frontiers LLC, 221 AD3d 1376, 1377 [3d Dept 2023], lv denied 41 NY3d 910 [2024]; Matter of McCray v CTS Enters., Inc., 166 AD3d 1356, 1357 [3d Dept 2018]; Matter of Passero v Uninsured Employers’ Fund, 154 AD3d 1037, 1038 [3d Dept 2017]; Zeng Xi Chen v Spitz, 77 AD3d 529, 529 [1st Dept 2010]).

The fact that plaintiff’s employer did not possess workers’ compensation coverage at the time of the accident does not render him ineligible for Workers’ Compensation benefits; instead it changes the potential source of payment. As such, plaintiff was required to seek workers’ compensation benefits as the primary source of payment for his basic economic loss, and only thereafter could he seek payment of no-fault benefits with his recovery correspondingly reduced by what he received through workers’ compensation.[FN1]

“It is fundamental that a court, in interpreting a statute, should attempt to effectuate the intent of the Legislature” (Majewski v Broadalbin-Perth Cent. School Dist., 91 NY2d 577, 583 [1998] [internal quotation marks and citations omitted]). The determination plaintiff seeks would not only run contrary to the exclusivity provision contained within Workers’ Compensation Law § 11 but, also, to the very purpose for which the Uninsured Employers’ Fund was created. Accordingly, Supreme Court properly granted defendant’s motion for summary judgment dismissing the complaint, and consequently properly denied plaintiff’s cross-motion (cf. Matter of Global Liberty Ins. Co. of N.Y. v North Shore Family Chiropractic, PC, 178 AD3d 525, 526 [1st Dept 2019]; Alam v Taxi Wheels To Lease, Inc., 35 AD3d 771, 771 [2d Dept 2006]; see generally Matter of Shand [Aetna Ins. Co.], 74 AD2d 442, 455 [2d Dept 1980]).

Clark, J.P., Pritzker, Lynch and Fisher, JJ., concur.

ORDERED that the order is affirmed, with costs.

Footnotes


Footnote 1: Although plaintiff does not directly contest that he was injured in the course of his employment, the Court of Appeals has made clear that “[t]he Workers’ Compensation Board . . . has primary jurisdiction over the issue of the availability of coverage” and “the court should not express an opinion as to the availability of compensation” (Liss v Trans Auto Sys., 68 NY2d 15, 21 [1986]). Accordingly, any determination with respect to plaintiff’s eligibility for benefits must first be made by the Workers’ Compensation Board (see LMK Psychological Serv., P.C. v American Tr. Ins. Co., 64 AD3d 752, 754 [2d Dept 2009]; O’Hurley-Pitts v Diocese of Rockville Ctr., 57 AD3d 633, 634 [2d Dept 2008]; Nunes v Window Network, LLC, 54 AD3d 834, 835 [2d Dept 2008]). By doing so, “the possibility of contrary decisions in different forums which may result in the denial of intended first party benefits to a claimant [is diminished] and successive legal challenges on the same issues [are eliminated,] resulting in a more timely resolution and more efficient use of both administrative and judicial resources while protecting the panoply of rights afforded [workers’ compensation] claimants” (Matter of Esposito v Petruzzi, 278 AD2d 698, 701 [3d Dept 2000]).



State Farm Mut. Auto. Ins. Co. v Equinox Physical Therapy, P.C. (2024 NY Slip Op 05193)

Reported in New York Official Reports at State Farm Mut. Auto. Ins. Co. v Equinox Physical Therapy, P.C. (2024 NY Slip Op 05193)

State Farm Mut. Auto. Ins. Co. v Equinox Physical Therapy, P.C.
2024 NY Slip Op 05193
Decided on October 22, 2024
Appellate Division, First Department
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and subject to revision before publication in the Official Reports.


Decided and Entered: October 22, 2024
Before: Webber, J.P., Friedman, Mendez, Shulman, O’Neill Levy, JJ.

Index No. 160355/20 Appeal No. 2863 Case No. 2023-03172

[*1]State Farm Mutual Automobile Insurance Company, Plaintiff-Respondent,

v

Equinox Physical Therapy, P.C., et al., Defendants, Grand Medical Supply Corp. et al., Defendants-Appellants.




The Rybak Firm, PLLC, Brooklyn (Maksim Leyvi of counsel), for appellants.

Rivkin Radler LLP, Uniondale (Stuart M. Bodoff of counsel), for respondent.



Order, Supreme Court, New York County (David B. Cohen, J.), entered on or about April 14, 2023, which granted plaintiff insurer’s motion for summary judgment on its causes of action for declaratory judgment, unanimously affirmed, with costs.

Plaintiff established its prima facie entitlement to summary judgment on its first cause of action for declaratory relief by submitting evidence that claimants failed to appear at properly scheduled examinations under oath (EUOs), thus vitiating the insurance policy (see PV Holding Corp. v Hank Ross Med., P.C., 188 AD3d 429, 430 [1st Dept 2020]). A claim specialist submitted an affidavit of merit and affidavits of service for the EUO notices sent to the claimants’ residences directing them to appear for two separate EUOs. In addition, plaintiff submitted an attorney’s affirmation, based on the attorney’s personal knowledge, averring that the claimants failed to appear for their scheduled EUOs and attaching deposition transcripts memorializing the claimants’ nonappearance at the EUOs. Because the record demonstrates that plaintiff mailed its notices to take the claimants’ EUOs before it received defendants’ no-fault verification forms, plaintiff did not have to comply with the 15-day time frame for sending EUO notices set forth in 11 NYCRR 65-3.5 (see State Farm Mut. Auto. Ins. Co. v Surgicore of Jersey City LLC, 195 AD3d 454, 455 [1st Dept 2021]; Mapfre Ins. Co. of N.Y. v Manoo, 140 AD3d 468, 469 [1st Dept 2016]).

In opposition, defendants failed to raise a triable issue of fact. Defendants offer nothing more than speculation to support their argument that they need further discovery, nor does the record support the argument. Defendants have also not submitted an affidavit to establish that essential facts may exist but cannot yet be stated (CPLR 3212[f]; 354 Chauncey Realty, LLC v Brownstone Agency, Inc., 213 AD3d 544, 545 [1st Dept 2023]).

Because the policy is vitiated, State Farm did not have to establish that it timely denied defendants’ claims (see PV Holding Corp., 188 AD3d at 430).

We have considered defendants’ remaining arguments and find them unavailing.

THIS CONSTITUTES THE DECISION AND ORDER OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.

ENTERED: October 22, 2024



Sakandar v American Tr. Ins. Co. (2024 NY Slip Op 04792)

Reported in New York Official Reports at Sakandar v American Tr. Ins. Co. (2024 NY Slip Op 04792)

Sakandar v American Tr. Ins. Co.
2024 NY Slip Op 04792
Decided on October 2, 2024
Appellate Division, Second Department
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and subject to revision before publication in the Official Reports.


Decided on October 2, 2024 SUPREME COURT OF THE STATE OF NEW YORK Appellate Division, Second Judicial Department
COLLEEN D. DUFFY, J.P.
LINDA CHRISTOPHER
WILLIAM G. FORD
LAURENCE L. LOVE, JJ.

2022-03323
(Index No. 707562/19)

[*1]Iqbal Sakandar, respondent,

v

American Transit Insurance Company, appellant.




Short & Billy, P.C. (Greenberg Traurig, LLP, New York, NY [James W. Perkins, John C. Molluzzo, Jr., and Katherine M. Clemente], of counsel), for appellant.

Fass & D’Agostino, P.C., Melville, NY (Joseph D’Agostino of counsel), for respondent).



DECISION & ORDER

In an action, inter alia, to recover no-fault benefits for medical expenses and lost wages, the defendant appeals from an order of the Supreme Court, Queens County (Frederick D.R. Sampson, J.), entered April 13, 2022. The order denied the defendant’s motion pursuant to CPLR 3211(a) to dismiss the third, fourth, and fifth causes of action in the third amended complaint.

ORDERED that the order is reversed, on the law, with costs, and the defendant’s motion pursuant to CPLR 3211(a) to dismiss the third, fourth, and fifth causes of action in the third amended complaint is granted.

The plaintiff commenced this action against the defendant, American Transit Insurance Company, inter alia, to recover no-fault benefits for medical expenses and lost wages relating to a motor vehicle accident. The third amended complaint alleged that in August 2016, the plaintiff was involved in a motor vehicle accident, that his vehicle was insured by the defendant, and that the defendant refused to pay to the plaintiff his lost wages and certain medical expenses.

The third cause of action alleged bad faith, the fourth cause of action alleged a violation of General Business Law § 349, and the fifth cause of action alleged breach of contract pertaining to no-fault benefits. The defendant moved pursuant to CPLR 3211(a) to dismiss the third, fourth, and fifth causes of action. In an order entered April 13, 2022, the Supreme Court denied the motion. The defendant appeals. We reverse.

Contrary to the determination of the Supreme Court, the third cause of action, alleging bad faith in the insurance context, was subject to dismissal. In reading the third cause of action, alleging bad faith, liberally and giving the plaintiff the benefit of every reasonable inference that may be drawn therefrom (see Leon v Martinez, 84 NY2d 83, 87-88), the plaintiff failed to state a cause of action alleging bad faith, as “there is no separate cause of action in tort for an insurer’s bad faith failure to perform its obligations” under an insurance contract (Zawahir v Berkshire Life Ins. Co., 22 AD3d 841, 842 [internal quotation marks omitted]; Continental Cas. Co. v Nationwide Indem. Co., 16 AD3d 353, 355).

The plaintiff also failed to state a cause of action alleging a violation of General Business Law § 349. This action involves a private contract dispute regarding insurance coverage under the policy at issue, in contrast to the consumer-oriented, deceptive conduct aimed at the public at large that General Business Law § 349 is designed to address (see New York Univ. v Continental Ins. Co., 87 NY2d 308, 320-321; Abraham v Torati, 219 AD3d 1275, 1281).

The Supreme Court also should have granted dismissal of the fifth cause of action, alleging breach of contract related to payment of no-fault benefits, since the plaintiff assigned his right to no-fault benefits to the medical provider (see Noel v Nationwide Ins. Co. of Am., 170 AD3d 1186, 1187).

In light of our determination, we need not reach the defendant’s remaining contention.

DUFFY, J.P., CHRISTOPHER, FORD and LOVE, JJ., concur.

ENTER:

Darrell M. Joseph

Clerk of the Court



Matter of Government Empls. Ins. Co. v Bermeo (2024 NY Slip Op 04388)

Reported in New York Official Reports at Matter of Government Empls. Ins. Co. v Bermeo (2024 NY Slip Op 04388)

Matter of Government Empls. Ins. Co. v Bermeo
2024 NY Slip Op 04388
Decided on September 11, 2024
Appellate Division, Second Department
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and subject to revision before publication in the Official Reports.


Decided on September 11, 2024 SUPREME COURT OF THE STATE OF NEW YORK Appellate Division, Second Judicial Department
BETSY BARROS, J.P.
CHERYL E. CHAMBERS
LARA J. GENOVESI
LOURDES M. VENTURA, JJ.

2022-08142
2023-02615
(Index No. 720674/21)

[*1]In the Matter of Government Employees Insurance Company, respondent,

v

Franklin Bermeo, appellant.




Decolator, Cohen & DiPrisco, LLP, Garden City, NY (Carolyn M. Canzoneri and Dominic DiPrisco of counsel), for appellant.

Katie A. Walsh, Melville, NY (Andrew Weber of counsel), for respondent.



DECISION & ORDER

In a proceeding pursuant to CPLR article 75, inter alia, to permanently stay arbitration of a claim for uninsured motorist benefits, Franklin Bermeo appeals from (1) a judgment of the Supreme Court, Queens County (Ulysses B. Leverett, J.), entered September 9, 2022, and (2) an order of the same court entered January 27, 2023. The judgment, after a framed-issue hearing, granted that branch of the petition which was to permanently stay arbitration. The order, insofar as appealed from, in effect, upon reargument, adhered to the determination in the judgment.

ORDERED that the appeal from the judgment is dismissed, as the judgment was superseded by the order, made, in effect, upon reargument; and it is further,

ORDERED that the order is affirmed insofar as appealed from; and it is further,

ORDERED that one bill of costs is awarded to the petitioner.

On August 6, 2020, Franklin Bermeo allegedly was injured when he was struck by a vehicle as he was walking across an intersection with the pedestrian light in his favor near Rockaway Beach. According to the police accident report, the driver of the vehicle, Anthony Mack, was driving an e-bike. Subsequently, Bermeo sought uninsured motorist benefits under an insurance policy issued by the petitioner. The petitioner denied coverage, and Bermeo filed a demand for arbitration of his claim for uninsured motorist benefits.

The petitioner commenced this proceeding pursuant to CPLR article 75, inter alia, to permanently stay arbitration, arguing that Bermeo was struck by an e-bike, which was not a motor vehicle under the terms of the policy, and thus, Bermeo was not entitled to uninsured motorist benefits. In an order dated December 6, 2021, the Supreme Court temporarily stayed arbitration and set the matter down for a framed-issue hearing to determine, among other things, whether the vehicle that struck Bermeo qualified as a motor vehicle under the terms of the policy. The framed-issue hearing was held over the course of three days. Mack was deceased as of the time of the hearing. The parties stipulated to entering the police accident report into evidence, which stated that zero motor vehicles were involved in the accident and that Bermeo was struck by a “CAMLTE” e-bike, [*2]and which did not include any license or registration information for Mack. Following the framed-issue hearing, in a judgment entered September 9, 2022, the court granted that branch of the petition which was to permanently stay arbitration. Subsequently, Bermeo moved for leave to reargue. In an order entered January 27, 2023, the court, in effect, granted reargument and, upon reargument, adhered to the prior determination. Bermeo appeals.

As the Supreme Court reviewed Bermeo’s contentions on his motion for leave to reargue, the court, in effect, granted reargument and, upon reargument, adhered to the prior determination (see Matter of Infinity Indem. Ins. Co. v Leo, 213 AD3d 936, 938). Therefore, the order entered January 27, 2023, is appealable.

“‘The party seeking a stay of arbitration has the burden of showing the existence of sufficient evidentiary facts to establish a preliminary issue which would justify the stay'” (Matter of Travelers Personal Ins. Co. v Dratch, 219 AD3d 1526, 1527, quoting Matter of Government Empls. Ins. Co. v Tucci, 157 AD3d 679, 680; see Matter of Allstate Ins. Co. v Robinson, 188 AD3d 1186, 1188). “‘Thereafter, the burden shifts to the party opposing the stay to rebut the prima facie showing'” (Matter of Travelers Personal Ins. Co. v Dratch, 219 AD3d at 1527, quoting Matter of Merchants Preferred Ins. Co. v Waldo, 125 AD3d 864, 865). “‘Where, as here, a matter is determined after a hearing, this Court’s power to review the evidence is as broad as that of the hearing court, taking into account in a close case the fact that the hearing court had the advantage of seeing the witnesses'” (Matter of Travelers Home & Mar. Ins. Co. v Miller, 220 AD3d 875, 877, quoting Matter of State Farm Mut. Auto. Ins. Co. v Rodriguez, 195 AD3d 727, 728).

Here, by introducing into evidence the police accident report that indicated, inter alia, that the vehicle Mack was driving was an e-bike and that zero motor vehicles were involved in the accident, the petitioner met its prima facie burden of providing evidence that a motor vehicle was not involved in the accident (see Matter of Government Empls. Ins. Co. v McCracken, 207 AD3d 721, 722).

In response, Bermeo failed to sufficiently rebut the petitioner’s prima facie showing (see id.). Contrary to Bermeo’s contention, he did not submit overwhelming evidence that the vehicle was, in fact, a motorcycle. Among other things, while an eyewitness testified that the vehicle involved was a motorcycle, she testified that she only observed the vehicle during the accident. She did not observe the vehicle after the accident and did not testify to seeing a license plate, engine, gas tank, or source of power for the vehicle. Further, she conceded that she could not describe the different parts of the vehicle because her focus was on Bermeo.

Thus, a review of the totality of the evidence adduced at the hearing, as well as the deference accorded to the Supreme Court’s vantage point of seeing and hearing all of the witnesses, demonstrate that the court did not err in concluding that a motor vehicle was not involved in the accident (see e.g. id.; Matter of Farmers Ins./Truck Ins. Exch. v Terzulli, 112 AD3d 628, 628; cf. Matter of Hertz Corp. v Holmes, 127 AD3d 1193, 1195).

Bermeo’s contention that the petitioner should not be allowed to disclaim uninsured motorist benefits because the petitioner already paid his medical bills pursuant to the no-fault provision of the policy was improperly raised for the first time on reargument (see FPG CH 94 Amity, LLC v Pizzarotti, LLC, 218 AD3d 651, 654).

Accordingly, the Supreme Court, upon reargument, properly adhered to its prior determination granting that branch of the petition which was to permanently stay arbitration.

BARROS, J.P., CHAMBERS, GENOVESI and VENTURA, JJ., concur.

ENTER:

Darrell M. Joseph

Clerk of the Court



Matter of Floral Park Drugs, Inc. v Nationwide Gen. Ins. Co. (2024 NY Slip Op 01114)

Reported in New York Official Reports at Matter of Floral Park Drugs, Inc. v Nationwide Gen. Ins. Co. (2024 NY Slip Op 01114)

Matter of Floral Park Drugs, Inc. v Nationwide Gen. Ins. Co.
2024 NY Slip Op 01114
Decided on February 29, 2024
Appellate Division, First Department
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and subject to revision before publication in the Official Reports.


Decided and Entered: February 29, 2024
Before: Manzanet-Daniels, J.P., Moulton, Scarpulla, Mendez, O’Neill Levy, JJ.

Index No. 654950/22 Appeal No. 1778 Case No. 2023-02403

[*1]In the Matter of Floral Park Drugs, Inc., Petitioner-Appellant,

v

Nationwide General Ins. Co., Respondent-Respondent.




Gary Tsirelman, P.C., Brooklyn (Stefan Belinfanti of counsel), for appellant.

Hollander Legal Group, P.C., Melville (Brian Kaufman of counsel), for respondent.



Order, Supreme Court, New York County (Arthur F. Engoron, J.), entered on or about March 13, 2023, which denied the petition to vacate the award of a master arbitrator dated October 30, 2022, unanimously affirmed, without costs.

Petitioner, a pharmacy and the assignee of a person injured in a motor vehicle accident, sought coverage from respondent, an insurance company, for prescription drug services (see 11 NYCRR 65-1.1[d]). Respondent denied no-fault coverage based on evidence that petitioner filled prescriptions that were not electronic, thus failing to comply with Public Health Law § 281, which provides that electronic prescriptions are required. On that basis, respondent concluded that there was no valid prescription, and accordingly, that it was not obliged to provide the requested coverage. The arbitrator issued an award ruling in favor of respondent and denying petitioner’s claim, and the master arbitrator upheld that award.

The arbitrators’ conclusions in denying petitioner’s claim were neither irrational nor contrary to settled law (see Matter of Kane v Fiduciary Ins. Co. of Am., 114 AD3d 405 [1st Dept 2014]), nor did they violate a strong public policy or clearly exceed a specifically enumerated limitation on the arbitrators’ powers (Matter of Falzone [New York Cent. Mut. Fire Ins. Co.], 15 NY3d 530, 534 [2010]). On the contrary, the evidence submitted at the arbitration supports the conclusion that the prescriptions filled by petitioner were not electronic and therefore did not comply with the Public Health Law requirements for prescriptions (Public Health Law § 281[3]; Education Law § 6810). Furthermore, that an exclusion or defense is not listed as such in the mandatory endorsement set forth in 11 NYCRR 65-1.1(d) does not, by itself, render respondent’s defense to payment in this matter illegitimate (see State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313, 319 [2005]).

We reject petitioner’s arguments that it was entitled to fill an oral prescription based on Education Law § 6810(4) and that applicable regulations do not require the pharmacy to verify the reason for an oral prescription. A plain reading of Public Health Law § 281, which by its terms applies “[n]otwithstanding . . . any other law to the contrary.” In addition, there is no indication that petitioner made these arguments before either arbitrator or cited the regulations adopted in connection with Public Health Law § 281; thus, there is no evidence that the master arbitrator irrationally rejected those arguments (see Matter of Falzone 15 NY3d at 534).

We also reject petitioner’s argument that Supreme Court should have entered a default judgment, as petitioner did not seek to hold respondent in default. The sole affidavit of service in the record states that respondent was served with the notice of petition, the petition, and the affirmation in support, along with a request for judicial intervention and notice of electronic filing, by mail. Insofar as petitioner [*2]attempted service under CPLR 312-a, the affidavit was facially defective, as it did not state that respondent was served with two copies of the statement of service by mail and acknowledgment of receipt (CPLR 312-a [a]; see Carney v Metropolitan Transp. Auth., 221 AD3d 447, 449 [1st Dept 2023]).

We have considered petitioner’s remaining arguments and find them unavailing.

THIS CONSTITUTES THE DECISION AND ORDER OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.

ENTERED: February 29, 2024



State Farm Mut. Auto. Ins. Co. v Amtrust N. Am., Inc. (2024 NY Slip Op 00646)

Reported in New York Official Reports at State Farm Mut. Auto. Ins. Co. v Amtrust N. Am., Inc. (2024 NY Slip Op 00646)

State Farm Mut. Auto. Ins. Co. v Amtrust N. Am., Inc.
2024 NY Slip Op 00646
Decided on February 7, 2024
Appellate Division, Second Department
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and subject to revision before publication in the Official Reports.


Decided on February 7, 2024 SUPREME COURT OF THE STATE OF NEW YORK Appellate Division, Second Judicial Department
FRANCESCA E. CONNOLLY, J.P.
JOSEPH J. MALTESE
PAUL WOOTEN
DEBORAH A. DOWLING, JJ.

2022-03088
(Index No. 705856/21)

[*1]State Farm Mutual Automobile Insurance Company, etc., appellant,

v

Amtrust North America, Inc., respondent.




Nicolini, Paradise, Ferretti & Sabella, PLLC, Mineola, NY (Neil Khiani and Joseph T. Darr of counsel), for appellant.

Marschhausen & Fitzpatrick, P.C., Hicksville, NY (Kevin P. Fitzpatrick of counsel), for respondent.



DECISION & ORDER

In a subrogation action to recover damages for unjust enrichment, the plaintiff appeals from an order of the Supreme Court, Queens County (Frederick D.R. Sampson, J.), dated March 17, 2022. The order granted the defendant’s motion pursuant to CPLR 3211(a)(2) to dismiss the complaint.

ORDERED that the order is reversed, on the law, without costs or disbursements, and the matter is remitted to the Supreme Court, Queens County, for a new determination of the defendant’s motion pursuant to CPLR 3211(a)(2) to dismiss the complaint after final resolution of a prompt application to the Workers’ Compensation Board to determine the parties’ rights under the Workers’ Compensation Law.

In July 2018, the subrogors of the plaintiff no-fault insurer, State Farm Mutual Automobile Insurance Company, allegedly were injured in a motor vehicle accident while traveling in a vehicle insured by the plaintiff. After the plaintiff provided payments for medical services on behalf of the subrogors, it learned that the subrogors had applied for workers’ compensation benefits and that the Workers’ Compensation Board had directed the defendant workers’ compensation insurer, Amtrust North America, Inc., to pay for necessary medical treatments for the subrogors. Thereafter, the plaintiff demanded that the defendant reimburse it for the full amount of no-fault benefits the plaintiff had provided on behalf of its subrogors.

In March 2021, the plaintiff commenced this action against the defendant to recover the benefits paid, alleging causes of action sounding in unjust enrichment. Thereafter, the defendant moved pursuant to CPLR 3211(a)(2) to dismiss the complaint on the ground that the Workers’ Compensation Board had jurisdiction over the coverage dispute. In an order dated March 17, 2022, the Supreme Court granted the defendant’s motion. The plaintiff appeals.

“[W]here the availability of workmen’s compensation hinges upon the resolution of questions of fact or upon mixed questions of fact and law, the plaintiff may not choose the courts as the forum for the resolution of such questions” (O’Rourke v Long, 41 NY2d 219, 228; see Liss v Trans Auto Sys., 68 NY2d 15, 20-21). “Since ‘primary jurisdiction with respect to determinations [*2]as to the applicability of the Workers’ Compensation Law has been vested in the Workers’ Compensation Board,’ it is ‘inappropriate for the courts to express views with respect thereto pending determination by the board'” (Chin v Doherty Enters., 207 AD3d 514, 516, quoting Botwinick v Ogden, 59 NY2d 909, 911).

Here, the Workers’ Compensation Board has primary jurisdiction over the coverage issues raised, including the extent to which the medical expenses incurred by the plaintiff’s subrogors are causally related to the subject accident and compensable under the Workers’ Compensation Law (see Matter of Brennan v Village of Johnson City, 213 AD3d 1058, 1059; Matter of Bland v Gellman, Brydges & Schroff, 151 AD3d 1484, 1487). Contrary to the plaintiff’s contention, having not sought review or reopening of the workers’ compensation hearing, the plaintiff has not established that it lacks recourse before the Workers’ Compensation Board (see Workers’ Compensation Law § 142(7); 12 NYCRR 300.13[a][4], [b][2][iv]; 300.14[a]; Matter of Lutheran Med. Ctr. v Hereford Ins. Co., 43 AD3d 1064, 1065). Therefore, the Supreme Court should have referred the matter to the Workers’ Compensation Board (see Lall v Harnick, 212 AD3d 606, 607; Chin v Doherty Enters., 207 AD3d at 516).

The defendant’s remaining contention is not properly before this Court.

Accordingly, we remit the matter to the Supreme Court, Queens County, for a new determination of the defendant’s motion after final resolution of a prompt application to the Workers’ Compensation Board to determine the parties’ rights under the Workers’ Compensation Law.

CONNOLLY, J.P., MALTESE, WOOTEN and DOWLING, JJ., concur.

ENTER:

Darrell M. Joseph

Acting Clerk of the Court



Matter of New Millennium Pain & Spine Medicine, P.C. v Garrison Prop. & Cas. Ins. Co. (2024 NY Slip Op 00599)

Reported in New York Official Reports at Matter of New Millennium Pain & Spine Medicine, P.C. v Garrison Prop. & Cas. Ins. Co. (2024 NY Slip Op 00599)

Matter of New Millennium Pain & Spine Medicine, P.C. v Garrison Prop. & Cas. Ins. Co.
2024 NY Slip Op 00599
Decided on February 06, 2024
Appellate Division, First Department
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and subject to revision before publication in the Official Reports.


Decided and Entered: February 06, 2024
Before: Singh, J.P., Moulton, Gesmer, Mendez, Rodriguez, JJ.

Index No. 651264/23, 650919/23 Appeal No. 1590-1591 Case No. 2023-03313, 2023-03164

[*1]In the Matter of New Millennium Pain & Spine Medicine, P.C., as Assignee of Michelle Hicks, Petitioner-Appellant,

v

Garrison Property & Casualty Insurance Company, Respondent-Respondent.



In the Matter of New Millennium Pain & Spine Medicine, P.C., as Assignee of Tracey Simpson, Petitioner-Appellant,

v

GEICO Casualty Company, Respondent-Respondent.




Roman Kravchenko, Melville, for appellant.

Marshall, Dennehey, Warner, Coleman & Goggin, P.C., New York (Richard Lane of counsel), for Garrison Property & Casualty Insurance Company, respondent.

Rivkin Radler LLP, Uniondale (Cheryl F. Korman of counsel), for GEICO Casualty Company, respondent.



Order and judgment (one paper), Supreme Court, New York County (Erika M. Edwards, J.), entered July 3, 2023, which denied petitioner’s application pursuant to CPLR article 75 to vacate a master arbitration award, dated January 12, 2023, affirming an arbitrator’s award denying petitioner’s claim for no-fault benefits for medical services rendered to the insured, unanimously affirmed, without costs. Order, Supreme Court, New York County (Sabrina Kraus, J.), entered on or about May 12, 2023, which denied petitioner’s application pursuant to CPLR article 75 to vacate a master arbitration award, dated February 1, 2023, affirming an arbitrator’s award denying petitioner’s claim for no-fault benefits for medical services rendered to the insured, unanimously affirmed, without costs.

Supreme Court correctly denied the petitions to vacate the master arbitration awards. “Generally, a court will not set aside an arbitrator’s award for errors of law or fact unless the award is so irrational as to require vacatur” (see New Millenium Pain & Spine Medicine, P.C. v Progressive Casualty Insurance Company (220 AD3d 578, 578 [1st Dept 2023], quoting Matter of Carty v Nationwide Ins. Co., 212 AD2d 462, 462 [1st Dept 1995]), “The fact that the arbitrator[s] followed First Department precedent in (Harmonic Physical Therapy, P.C. v Praetorian Ins. Co., 47 Misc 3d 137[A], 2015 NY Slip Op 50525[U] [App Term, 1st Dept 2015]) rather than Second Department precedent in (Alleviation Med. Servs., P.C. v Allstate Ins. Co., 55 Misc 3d 44 [App Term, 2d Dept 2017], affd on other grounds 191 AD3d 934 [2d Dept 2021]) does not warrant reversal. To the contrary, this Court has held that, in awarding a claim after a policy has been exhausted, an arbitrator exceeded his or her power since an insurer’s duties cease upon the insurer’s payment of the contractual limit on its no-fault policy (see Matter of DTR Country—Wide Ins. Co. v Refill Rx Pharm., Inc., 212 AD3d 481 [1st Dept 2023], lv denied 40 NY3d 904 [2023])” (id).

New Millennium was not precluded from arguing for the first time in its petitions that respondent insurer took the 20% wage offset twice, first, when issuing payment against gross wages, and second, when taken against the no-fault personal injury protection limit of liability (Insurance Law§ 5102[b]; 11 NYCRR 65-1.1; Matter of DTR Country-Wide Ins. Co. v Refill Rx Pharm., Inc., 212 AD3d at 481). However, the argument is unavailing because Insurance Law § 5102(b) allows an insurer to deduct from first-party benefits to reimburse a person for basic economic loss on account of personal injury arising out of the use or operation of a motor vehicle, 20% of lost earnings plus any other setoffs, such as amounts recovered or recoverable for Social Security disability or Worker Compensation benefits, or disability benefits under article 9 of the Workers Compensation Law (Matter of Lam Quam, MD, PC v GEICO, — AD3d —, 2024 NY Slip Op 00174 [1st Dept 2024]; Normile v Allstate [*2]Ins. Co., 87 AD2d 721 [3d Dept 1982], affd 60 NY2d 1003 [1983]).

New Millennium is not the prevailing party, therefore it is not entitled to attorneys’ fees pursuant to 11 NYCRR 65-4.10 (j)(4) (see Matter of Country-Wide Ins. Co. v TC Acupuncture P.C., 179 AD3d 414, 414-415 [1st Dept 2020]).

THIS CONSTITUTES THE DECISION AND ORDER OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.

ENTERED: February 6, 2024



Matter of Lam Quan, MD, PC v GEICO Gen. Ins. Co. (2024 NY Slip Op 00174)

Reported in New York Official Reports at Matter of Lam Quan, MD, PC v GEICO Gen. Ins. Co. (2024 NY Slip Op 00174)

Matter of Lam Quan, MD, PC v GEICO Gen. Ins. Co.
2024 NY Slip Op 00174
Decided on January 16, 2024
Appellate Division, First Department
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and subject to revision before publication in the Official Reports.


Decided and Entered: January 16, 2024
Before: Moulton, J.P., Kapnick, Scarpulla, Higgitt, O’Neill Levy, JJ.

Index No. 651286/23 Appeal No. 1423 Case No. 2023-03165

[*1]In the Matter of Lam Quan, MD, PC, as Assignee of Ginaldi Mirambeaux, Petitioner-Appellant,

v

GEICO General Insurance Company, Respondent-Respondent.




Roman Kravchenko, Melville, for appellant.

Rivkin Radler LLP, Uniondale (Cheryl F. Korman of counsel), for respondent.



Order and judgment (one paper), Supreme Court, New York County (Arlene P. Bluth, J.), entered May 8, 2023, which denied petitioner Quan’s petition to vacate a master arbitrator’s award, dated February 26, 2023, affirming a lower arbitrator’s award, dated January 11, 2023, unanimously affirmed, without costs.

The motion court correctly upheld the master arbitrator’s determination that there were no grounds to vacate the initial arbitration award, as the master arbitrator found that the no-fault arbitrator reached the decision in a rational manner and that the decision was not arbitrary and capricious, incorrect as a matter of law, in excess of policy limits, or in conflict with other no-fault arbitration proceedings (see Matter of Miller v Elrac, LLC, 170 AD3d 436, 437 [1st Dept 2019]). As stated in Matter of New Millenium Pain & Spine Medicine., PC v Progressive Cas. Ins. Co. “[t]he fact that the arbitrator followed First Department precedent in Harmonic Physical Therapy, P.C. v Praetorian Ins. Co. (47 Misc 3d 137[A], 2015 NY Slip Op 50525[U] [App Term, 1st Dept 2015]), rather than Second Department precedent in Alleviation Med. Servs., P.C. v Allstate Ins. Co. (55 Misc 3d 44, 49 [App Term, 2d Dept 2017], affd on other grounds 191 AD3d 934 [2d Dept 2021]), does not warrant reversal. To the contrary, this Court has held that, in awarding a claim after a policy has been exhausted, an arbitrator exceeded his or her power since an insurer’s duties cease upon the insurer’s payment of the contractual limit on its no-fault policy” (220 AD3d 578, 578 [1st Dept 2023]).

Quan’s argument that GEICO took the 20% wage offset twice—first, when issuing payment against gross wages; and second, when taken against the no-fault personal injury protection limit of liability (see Insurance Law § 5102[b]; 11 NYCRR 65-1.1) is unpreserved and, if considered (see Matter of DTR Country-Wide Ins. Co. v Refill Rx Pharm., Inc., 212 AD3d 481 [1st Dept 2023], affd 40 NY3d 904 [2023]), is unavailing (see Normile v Allstate Ins. Co., 87 AD2d 721 [3d Dept 1982], affd 60 NY2d 1003 [1983]).

Quan is not entitled to attorneys’ fees pursuant to 11 NYCRR 65-4.10 (j)(4) (see Matter of Country-Wide Ins. Co. v TC Acupuncture P.C., 179 AD3d 414, 414-415 [1st Dept 2020]).THIS CONSTITUTES THE DECISION AND ORDER

OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.

ENTERED: January 16, 2024