[*1]

Law Office of Jason Tenenbaum, P.C., Garden City, NY, for appellant.

In an action for a judgment declaring that the plaintiff is not obligated to pay a claim for no-fault insurance benefits submitted by the defendant on behalf of its assignor John Thomas, the plaintiff appeals from an order of the Supreme Court, Nassau County (Anthony L. Parga, J.), entered October 30, 2017. The order denied the plaintiff’s unopposed motion for leave to enter a default judgment against the defendant.

Ordered that the order is reversed, on the law, with costs, the plaintiff’s motion for leave to enter a default judgment against the defendant is granted, and the matter is remitted to the Supreme Court, Nassau County, for the entry of a judgment declaring that the plaintiff is not obligated to pay a claim for no-fault insurance benefits submitted by the defendant on behalf of its assignor John Thomas.

The plaintiff, a no-fault insurance carrier, commenced this action seeking a de novo adjudication of an insurance dispute concerning the denial of a no-fault claim involving the defendant (see Insurance Law § 5106 [c]). The plaintiff sought a judgment declaring that the plaintiff is not obligated to pay the claim for no-fault insurance benefits submitted by the defendant on behalf of its assignor John Thomas, on the grounds that the services were not medically necessary, were not related to the subject motor vehicle accident, and/or were billed in excess of the fee schedule. The defendant had been awarded more than $5,000 against the plaintiff as a result of a master arbitration award.

The plaintiff moved for leave to enter a default judgment against the defendant based upon the defendant’s failure to answer the complaint or appear in this action. The defendant failed to oppose the motion. The Supreme Court denied the plaintiff’s motion on the basis that the master arbitration award confirming an original arbitration award was supported by evidence in the record, was rationally based, and was not arbitrary or capricious. The plaintiff appeals.

On a motion for leave to enter a default judgment pursuant to CPLR 3215, the movant is required to file proof of (1) service of the summons and complaint, (2) the facts constituting the claim, and (3) the other party’s default (see CPLR 3215 [f]; Global Liberty Ins. Co. v W. Joseph Gorum, M.D., P.C., 143 AD3d 768, 769 [2016]; Liberty County Mut. v Avenue I Med., P.C., 129 AD3d 783, 784-785 [2015]; Fried v Jacob Holding, Inc., 110 AD3d 56, 59 [2013]). To demonstrate the facts constituting the claim, the movant need only submit sufficient proof to enable a court to determine if the claim is viable (see Woodson v Mendon Leasing Corp., 100 NY2d 62, 71 [2003]; Fried v Jacob Holding, Inc., 110 AD3d at 60; Neuman v Zurich N. Am., 36 AD3d 601, 602 [2007]).

In support of its motion, the plaintiff submitted proof of service of the summons and complaint via the Secretary of State (see Business Corporation Law §§ 306 [b]; 1513; CPLR 311 [a] [1]), and an additional copy of the summons and complaint upon the defendant pursuant to CPLR 3215 (g) (4). In further support, the plaintiff submitted its attorney’s affirmation, inter alia, attesting to the defendant’s failure to answer or appear in this action, thereby admitting all traversable allegations (see Rokina Opt. Co. v Camera King, 63 NY2d 728, 730 [1984]). It also submitted, inter alia, a copy of the complaint verified by its attorney (see CPLR 105 [u]; 3020 [d] [3]; 3215 [f]; Clarke v Liberty Mut. Fire Ins. Co., 150 AD3d 1192, 1195 [2017]; Martin v Zangrillo, 186 AD2d 724 [1992]), its expert’s affirmed peer review, the arbitration award in excess of $5,000, and the master arbitration award confirming the original arbitration award, which were sufficient to establish that the plaintiff had a viable cause of action against the defendant (see Woodson v Mendon Leasing Corp., 100 NY2d at 71; Global Liberty Ins. Co. v W. Joseph Gorum, M.D., P.C., 143 AD3d at 770). The defendant failed to oppose the plaintiff’s motion (see Fried v Jacob Holding, Inc., 110 AD3d at 60).

Accordingly, the plaintiff’s motion for leave to enter a default judgment against the defendant should have been granted. Since this is a declaratory judgment action, the matter must be remitted to the Supreme Court, Nassau County, for the entry of a judgment declaring that the plaintiff is not obligated to pay a claim for no-fault insurance benefits submitted by the defendant on behalf of its assignor John Thomas (see Lanza v Wagner, 11 NY2d 317, 334 [1962]). Mastro, J.P., Balkin, LaSalle and Connolly, JJ., concur.

[*1]

Law Office of Jason Tenenbaum, P.C., Garden City (Jason Tenenbaum of counsel), for appellant.

Israel, Israel & Purdy, LLP, Great Neck (William M. Purdy of counsel), for respondent.

Judgment, Supreme Court, Bronx County (Julia I. Rodriguez, J.), entered August 29, 2016, against petitioner in favor of respondent, and bringing up for review an order, same court and Justice, entered January 12, 2016, which denied petitioner’s motion to vacate an arbitral award and remand to the lower arbitrator for a de novo hearing, and granted respondent’s motion to confirm the award, unanimously reversed, on the law, without costs, the judgment vacated, petitioner’s motion granted, and respondent’s motion denied.

Respondent seeks from petitioner no-fault insurance benefits for medical equipment that respondent provided to its assignor, who was involved in a motor vehicle accident. In denying respondent’s claim, petitioner relied on a peer review report that concluded, based on a review of the medical records, that the assignor’s condition was degenerative in nature and not post-traumatic and therefore that the surgery undergone by the assignor was “not medically necessary in relation to the accident” (emphasis supplied). The arbitral award must be vacated and a de novo hearing held, because, on the record before us, as argued, it would be irrational to conclude that the need for the subject medical equipment was causally related to the accident (see Matter of Smith [Firemen’s Ins. Co.], 55 NY2d 224, 232 [1982]; Mount Sinai Hosp. v Triboro Coach, 263 AD2d 11, 18-19 [2d Dept 1999]; Shahid Mian, M.D., P.C. v Interboro Ins. Co., 39 Misc 3d 135[A], 2013 NY Slip Op 50589[U] [App Term, 1st Dept 2013]). Concur—Friedman, J.P., Renwick, Webber, Kahn, Kern, JJ.

[*1]

Thomas Torto, New York (Jason Levine of counsel), for appellant.

Gary Tsirelman, P.C., Brooklyn (Gary Tsirelman of counsel), for respondent.

Judgment, Supreme Court, New York County (Arlene P. Bluth, J.), entered June 5, 2017, in favor of respondent, unanimously affirmed, with costs, and the matter is remanded to Supreme Court for a determination of respondent’s reasonable attorneys’ fees for this appeal.

Petitioner failed to demonstrate that the arbitration award underlying the judgment was irrational and incorrect as a matter of law and that therefore the master arbitrator exceeded his power in affirming it (see CPLR 7511 [b] [1] [iii]). Petitioner’s primary argument is that the no-fault arbitrator’s refusal to accept its untimely opposition papers asserting a Mallela defense (State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313 [2005]) was irrational and incorrect because such a defense may not be waived or precluded on the ground of untimeliness (see Matter of Acuhealth Acupuncture, P.C. v Country-Wide Ins. Co., 149 AD3d 828 [2d Dept 2017]). We reject this argument.

We find that petitioner’s defense is not a Mallela defense. It is based on the guilty plea of Andrey Anikeyev, who, according to petitioner, is respondent’s “de facto owner,” to conspiracy to commit health care fraud and mail fraud. Anikeyev pleaded guilty to billing insurance companies “for health care services for time periods in excess of the actual time period the patient spent with [the] acupuncturist.” This plea supports nothing more than “a defense that the billed-for services were never rendered,” which is “more like a ‘normal’ exception from coverage (e.g., a policy exclusion) [than] a lack of coverage in the first instance” (Fair Price Med. Supply Corp. v Travelers Indem. Co., 10 NY3d 556, 565 [2008]), and therefore does not fall into the “settled law recognizing a narrow exception to the 30-day deadline for defenses based on lack of coverage” (Matter of MVAIC v Interboro Med. Care & Diagnostic PC, 73 AD3d 667, 667 [1st Dept 2010] [citation omitted]).

Petitioner failed to present any evidence that respondent was improperly or fraudulently incorporated. In fact, there is no evidence in this record that Andrey Anikeyev was the owner of respondent so that his actions could be imputed to respondent. In any event, Anikeyev’s guilty plea does not amount to an admission of improper incorporation.

Respondent is entitled to reasonable attorneys’ fees for this appeal, to be determined by [*2]Supreme Court (11 NYCRR 65-4.10 [j] [4]; see Matter of Country-Wide Ins. Co. v Bay Needle Care Acupuncture, P.C., 162 AD3d 407 [1st Dept 2018]).

We have considered petitioner’s remaining arguments and find them unavailing. Concur—Acosta, P.J., Renwick, Mazzarelli, Gesmer, Singh, JJ.

[*1]

Fourth Department, November 16, 2018

Nationwide Affinity Ins. Co. of Am. v Jamaica Wellness Med., P.C., 2017 NY Slip Op 32943(U), reversed.

APPEARANCES OF COUNSEL

Kopelevich & Feldsherova, P.C., Brooklyn (Mikhail Kopelevich of counsel), for defendant-appellant.

Hollander Legal Group, P.C., Melville (Allan Hollander of counsel), and Harris J. Zakarin, P.C., for plaintiffs-respondents.

In this appeal, we must determine whether an insurer in a no-fault benefits case may be precluded from asserting a defense premised upon the failure of the insured or that person’s assignee to appear at an examination under oath (EUO) where the insurer has not timely denied coverage. We hold that such a defense is subject to preclusion.

I.

Defendant is a medical professional corporation that was assigned claims for no-fault benefits by individuals who purportedly received treatment for injuries allegedly sustained in motor vehicle accidents. Defendant submitted bills for the services it purportedly rendered, along with the assignment of benefit forms, to the insurance carrier plaintiffs (hereinafter, Nationwide) seeking reimbursement pursuant to the No-Fault Law and regulations (see Insurance Law art 51; 11 NYCRR part{**167 AD3d at 194} 65). As part of an investigation of the validity of the claims, Nationwide sought additional information and requested that defendant submit to EUOs. Despite Nationwide’s repeated requests, defendant failed to appear at any of the scheduled EUOs.

Thereafter, Nationwide commenced this declaratory judgment action alleging that, by failing to appear for properly scheduled and noticed EUOs, defendant “breached a material condition precedent to coverage” under the insurance policies and no-fault regulations. Nationwide moved for summary judgment declaring that, as a result of such breach, it was under no obligation to pay or reimburse any of the subject claims, and defendant cross-moved for, inter [*2]alia, summary judgment dismissing the complaint.

Supreme Court subsequently granted the motion, and denied the cross motion. The court declared, among other things, that defendant breached a condition precedent to coverage by failing to appear at the scheduled EUOs and determined that Nationwide therefore had the right to deny all claims retroactively to the date of loss, regardless of whether it had issued timely denials.

As limited by its brief on appeal, defendant contends that the court erred in granting the motion because, in pertinent part, an insurer is precluded from asserting a litigation defense premised upon nonappearance at an EUO in the absence of a timely denial of coverage and that Nationwide failed to meet its burden of establishing that it issued timely denials. We agree with defendant for the reasons that follow.

II.

“The Comprehensive Motor Vehicle Insurance Reparations Act, commonly referred to as the ‘No-Fault Law’ (see Insurance Law art 51) is aimed at ensuring ‘prompt compensation for losses incurred by accident victims without regard to fault or negligence, to reduce the burden on the courts and to provide substantial premium savings to New York motorists’ ” (Viviane Etienne Med. Care, P.C. v Country-Wide Ins. Co., 25 NY3d 498, 504-505 [2015]).

As relevant here, “[w]here an insurer fails to pay or deny a [no-fault] claim within the requisite 30 days under the statute and{**167 AD3d at 195} regulations following its receipt of the proof of claim, the insurer is subject to substantial consequences, namely, preclusion from asserting a defense against payment of the claim” (id. at 506 [internal quotation marks omitted]; see Fair Price Med. Supply Corp. v Travelers Indem. Co., 10 NY3d 556, 562-563 [2008]; Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co., 9 NY3d 312, 317-318 [2007]; Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 282 [1997], rearg denied 90 NY2d 937 [1997]). Although the preclusion remedy “may require an insurer to pay a no-fault claim it might not have had to honor if it had timely denied the claim,” the Court of Appeals has “emphasized that the great convenience of ‘prompt uncontested, first-party insurance benefits’ is ‘part of the price paid to eliminate common-law contested lawsuits’ ” (Viviane Etienne Med. Care, P.C., 25 NY3d at 506; see Fair Price Med. Supply Corp., 10 NY3d at 565; Presbyterian Hosp. in City of N.Y., 90 NY2d at 285).

The sole exception to the preclusion remedy “arises where an insurer raises lack of coverage as a defense” (Viviane Etienne Med. Care, P.C., 25 NY3d at 506).

“In such cases, an insurer who fails to issue a timely disclaimer is not prohibited from later raising th[at] defense because ‘the insurance policy does not contemplate coverage in the first instance, and requiring payment of a claim upon failure to timely disclaim would create coverage where it never existed’ ” (Hospital for Joint Diseases, 9 NY3d at 318).

The Court of Appeals has characterized the no-coverage exception to the preclusion remedy as an “exceptional exemption” of “narrow[ ] . . . sweep” (Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 199 [1997]; see Fair Price Med. Supply Corp., 10 NY3d at 563-564; Hospital for Joint Diseases, 9 NY3d at 318). In determining whether a specific defense is subject to the preclusion remedy or falls under the no-coverage exception, a court must answer the following question: “Is the defense more like a ‘normal’ exception from coverage (e.g., a policy exclusion), or a lack of coverage in the first instance (i.e., a defense ‘implicat[ing] a coverage matter’)?” (Fair Price Med. Supply Corp., 10 NY3d at 565).

III.

The specific defense at issue here, based on nonappearance at EUOs, originates from the mandatory personal injury{**167 AD3d at 196} protection endorsement included as part of all automobile insurance policies (see 11 NYCRR 65-1.1 [b] [1]), which provides that “[n]o action shall lie against the [insurer] unless, as a condition precedent thereto, there shall have been full compliance with the terms of this coverage” (11 NYCRR 65-1.1 [d]). Those terms include providing written notice of the accident to the insurer, as well as written proof of claim for health service expenses (see id.). With respect to proof of claim, the endorsement states that, upon request by the insurer, the insured or that person’s assignee must, among other things, submit to EUOs as may be reasonably required (see id.; see also 11 NYCRR 65-3.5 [e]).

We conclude that a defense premised upon nonappearance at an EUO is “more like a ‘normal’ exception from coverage (e.g., a policy exclusion)” than one involving “a lack of coverage in the first instance (i.e., a defense ‘implicat[ing] a coverage matter’)” (Fair Price Med. Supply Corp., 10 NY3d at 565; see also Hospital for Joint Diseases, 9 NY3d at 319-320; Presbyterian Hosp. in City of N.Y., 90 NY2d at 281-286; see generally Central Gen. Hosp., 90 NY2d at 199). Unlike defenses where preclusion thereof would result in coverage where it never existed, such as those premised upon the lack of a contract with the person claiming coverage or for the vehicle involved in the accident, the termination of the contract prior to the accident, or the cause of the purported injuries being something other than a vehicular accident (see Hospital for Joint Diseases, 9 NY3d at 319; Central Gen. Hosp., 90 NY2d at 200; Zappone v Home Ins. Co., 55 NY2d 131, 136-138 [1982]), the EUO nonappearance defense allows the insurer to avoid liability for the payment of no-fault benefits where the insured or assignee has breached a condition in an existing policy providing coverage (see IDS Prop. Cas. Ins. Co. v Stracar Med. Servs., P.C., 116 AD3d 1005, 1007 [2d Dept 2014]). In other words, “ ’coverage legitimately . . . exist[s]’ ” where there is a valid, unexpired policy under which a covered person seeks recovery following “an actual accident” involving a covered vehicle that results in the person sustaining “actual injuries” (Fair Price Med. Supply Corp., 10 NY3d at 565). In that event, the insured or assignee must meet certain obligations to the insurer to receive payment, including submitting to reasonably requested EUOs, and the insurer must meet certain obligations to the insured or assignee, including making timely payment of benefits that are supported by the requisite proof (see Insurance Law § 5106 [a]; 11 NYCRR 65-1.1 [d]). Thus, coverage under the policy exists in{**167 AD3d at 197} the first instance, but the failure of the insured or assignee to comply with the provision requiring submission to reasonably requested EUOs allows the insurer to deny payment of a claim based on such a material breach of the policy and thus relieves the insurer of liability for the payment of policy proceeds (see 11 NYCRR 65-1.1 [d]; Interboro Ins. Co. v Clennon, 113 AD3d 596, 597 [2d Dept 2014]; Westchester Med. Ctr. v Lincoln Gen. Ins. Co., 60 AD3d 1045, 1046-1047 [2d Dept 2009], lv denied 13 NY3d 714 [2009]).

Nationwide nonetheless contends that the court properly relied upon First Department precedent holding that the failure to appear at a duly requested EUO constitutes “a breach of a condition precedent to coverage under the no-fault policy, and therefore fits squarely within the [no-coverage] exception to the preclusion [remedy]” (Unitrin Advantage Ins. Co. v Bayshore Physical Therapy, PLLC, 82 AD3d 559, 560 [1st Dept 2011], lv denied 17 NY3d 705 [2011] [emphasis added]; see Mapfre Ins. Co. of N.Y. v Manoo, 140 AD3d 468, 470 [1st Dept 2016]; Hertz Corp. v Active Care Med. Supply Corp., 124 AD3d 411, 411 [1st Dept 2015]; Allstate Ins. Co. v Pierre, 123 AD3d 618, 618 [1st Dept 2014]). We disagree.

“Most conditions precedent describe acts or events which must occur before a party is obliged to perform a promise made pursuant to an existing contract, [which is] a situation to be distinguished conceptually from a condition precedent to the formation or existence of the contract itself . . . In the latter situation, no contract arises ‘unless and until the condition occurs’ ” (Oppenheimer & Co. v Oppenheim, Appel, Dixon & Co., 86 NY2d 685, 690 [1995]).

Contrary to the determination of the First Department, we conclude that the requirement that an insured or assignee submit to an EUO is not a condition precedent to the existence of coverage itself; rather, submission to a reasonably requested EUO represents an event that “must occur before [the insurer] is obliged to perform a promise made pursuant to an existing [policy],” i.e., rendering payment of benefits (id.; see 11 NYCRR 65-1.1 [d]). In sum, the failure to appear at a reasonably requested EUO constitutes a breach of an existing policy condition, which is distinguishable from lack of coverage in the first instance (see generally Fair Price Med. Supply Corp., 10 NY3d at 565; Central Gen. Hosp., 90 NY2d at 199).{**167 AD3d at 198}

We further agree with defendant that, contrary to the court’s determination and Nationwide’s contention, our holding in Interboro Ins. Co. v Tahir (129 AD3d 1687 [4th Dept 2015]) is not controlling. The no-coverage exception to the preclusion remedy was not at issue and the insurer disclaimed coverage in that case; thus, it is factually distinguishable and legally unpersuasive inasmuch as the broad language regarding vitiation of the contract for failure to comply with a condition precedent was not central to the holding and did not account for the conceptual differences between types of conditions precedent (see id. at 1688).

IV.

We agree with defendant that, inasmuch as the defense based on nonappearance at an [*4]EUO is subject to the preclusion remedy, Nationwide was required to establish that it issued timely denials on that ground, and that Nationwide failed to meet its initial burden on the motion. The assertions in the affidavit of Nationwide’s claims specialist that Nationwide issued timely denial forms to defendant for nonappearance at the EUOs are conclusory and unsupported by any such denial forms; therefore, Nationwide did not establish as a matter of law that it issued timely and proper denials. Inasmuch as Nationwide “failed to establish [its] prima facie entitlement to judgment as a matter of law on the issue of [its] timely and proper denial of coverage, summary judgment should have been denied regardless of the sufficiency of . . . defendant’s opposition” (Progressive Cas. Ins. Co. v Infinite Ortho Prods., Inc., 127 AD3d 1050, 1052 [2d Dept 2015]).

V.

Accordingly, we conclude that the judgment insofar as appealed from should be reversed, the motion should be denied, and the declarations should be vacated.

Centra, J.P., Carni, Curran and Winslow, JJ., concur.

It is hereby ordered that the judgment insofar as appealed from is unanimously reversed on the law without costs, the motion is denied, and the declarations are vacated.

[*1]

Carman, Callahan & Ingham, LLP, Farmingdale, NY (James M. Carman and Paul Barrett of counsel), for appellant.

Jones Jones LLC, New York, NY (Jacqueline R. Mancino of counsel), for respondent.

In a proceeding pursuant to CPLR article 75 to vacate an arbitration award dated May 5, 2016, the petitioner appeals from an order of the Supreme Court, Queens County (Darrell L. Gavrin, J.), entered February 3, 2017. The order denied the petition to vacate the arbitration award.

Ordered that the order is affirmed, with costs.

This appeal involves an award pursuant to the mandatory arbitration provision of Insurance Law § 5105, which governs certain disputes regarding loss transfers between insurers and compensation providers. The respondent, New York City Transit Authority (hereinafter NYCTA), sought reimbursement from the petitioner, Progressive Advanced Insurance Company (hereinafter Progressive), for workers’ compensation benefits that NYCTA had paid in lieu of first party benefits. NYCTA paid the funds to its employee, who was a passenger in an NYCTA vehicle that was involved in a collision with a vehicle operated by Progressive’s insured. Progressive admitted that its insured was 100% at fault in the happening of the collision; the only issue at arbitration related to the amount of damages NYCTA was entitled to recoup pursuant to the loss transfer provision.

The arbitrator determined that a 20% no-fault offset set forth in Insurance Law § 5102 (b) did not apply to the workers’ compensation wages portion of the benefits NYCTA had paid, because a one-third offset had already been applied to the wages pursuant to the Workers’ Compensation Law. Progressive commenced this proceeding pursuant to CPLR article 75 to vacate the arbitration award, and the Supreme Court denied the petition. Progressive appeals.

To be upheld, an award in a compulsory arbitration proceeding such as this one (see Insurance Law § 5105 [b]) “must have evidentiary support and cannot be arbitrary and capricious” (Matter of Motor Veh. Acc. Indem. Corp. v Aetna Cas. & Sur. Co., 89 NY2d 214, 223 [1996]; see Matter of Fiduciary Ins. Co. v American Bankers Ins. Co. of Florida, 132 AD3d 40, 45-46 [2015]). “Moreover, with respect to determinations of law, the applicable standard in mandatory no-fault arbitrations is whether ‘any reasonable hypothesis can be found to support the questioned interpretation’ ” (Matter of Fiduciary Ins. Co. v American Bankers Ins. Co. of Florida, 132 AD3d at 46, quoting Matter of Shand [Aetna Ins. Co.], 74 AD2d 442, 454 [1980]; see [*2]Matter of Furstenberg [Aetna Cas. & Sur. Co.—Allstate Ins. Co.], 49 NY2d 757, 758 [1980]).

Here, the arbitrator’s determination was supported by a “reasonable hypothesis” and cannot be said to be arbitrary or capricious (Matter of Fiduciary Ins. Co. v American Bankers Ins. Co. of Florida, 132 AD3d at 46; see Matter of Furstenberg [Aetna Cas. & Sur. Co.—Allstate Ins. Co.], 49 NY2d at 758-759).

Accordingly, we agree with the Supreme Court’s determination to deny the petition to vacate the arbitration award. Mastro, J.P., Roman, Duffy and Brathwaite Nelson, JJ., concur.

[*1] (July 18, 2018)

Russell Friedman, Lake Success, NY (Dara C. Goodman of counsel), for appellant.

Peter C. Merani, P.C., New York, NY (Eric M. Wahrburg of counsel), for respondent.

In an action pursuant to Insurance Law § 5106 (c) for a de novo determination of claims for no-fault insurance benefits, the defendant appeals from an order of the Supreme Court, Nassau County (James P. McCormack, J.), entered October 19, 2016. The order denied the defendant’s motion pursuant to CPLR 5015 (a) (1) to vacate its default in answering the complaint and pursuant to CPLR 2004 and 3012 (d) to extend its time to answer the complaint.

Ordered that the order is reversed, on the facts and in the exercise of discretion, with costs, and the defendant’s motion pursuant to CPLR 5015 (a) (1) to vacate its default in answering the complaint and pursuant to CPLR 2004 and 3012 (d) to extend its time to answer the complaint is granted.

This action pursuant to Insurance Law § 5106 (c) for a de novo determination of claims for no-fault insurance benefits arises from a motor vehicle accident that occurred on July 28, 2013. Jude M. Blanc allegedly was injured in the accident, and he underwent hip surgery at the defendant hospital. The defendant submitted a claim to the plaintiff insurer for no-fault benefits for the surgery and related care. The plaintiff denied the claim.

The defendant submitted the matter to arbitration. The arbitrator determined that the defendant was entitled to no-fault compensation in the amount of $16,134.83, plus interest and attorney’s fees. The plaintiff appealed the award to a master arbitrator, who affirmed the award.

On January 29, 2015, the plaintiff commenced this action pursuant to Insurance Law § 5106 (c) for a de novo determination of the defendant’s claims for recovery of no-fault benefits. The plaintiff then moved for leave to enter a default judgment because the defendant failed to timely appear or answer the complaint. In an order entered April 21, 2015, the Supreme Court granted the plaintiff’s motion for leave to enter a default judgment. On June 8, 2015, the court entered a default judgment.

In July 2016, the defendant moved pursuant to CPLR 5015 (a) (1) to vacate its default, and pursuant to CPLR 2004 and 3012 (d) to extend its time to answer the complaint. In an order entered October 19, 2016, the Supreme Court denied the motion, and the defendant appeals.

The defendant’s motion was timely made (see CPLR 5015 [a] [1]; 2103 [b] [2]). A defendant seeking to vacate a default pursuant to CPLR 5015 (a) (1) on the ground of excusable default must demonstrate a reasonable excuse for the default and a potentially meritorious defense to the action (see CPLR 5015 [a] [1]; Eugene Di Lorenzo, Inc. v A.C. Dutton Lbr. Co., 67 NY2d 138, 141 [1986]; EMC Mtge. Corp. v Toussaint, 136 AD3d 861, 862 [2016]; Lane v Smith, 84 AD3d 746, 748 [2011]). Here, the defendant demonstrated a reasonable excuse for its default and a potentially meritorious defense to the action (see CPLR 5015 [a] [1]; Matter of Williams v Williams, 148 AD3d 917, 918 [2017]; Matter of Gasby v New York City Hous. Auth./Walt Whitman Houses, 142 AD3d 1018, 1019 [2016]; Youth v Grant, 126 AD3d 893, 893 [2015]). Furthermore, the plaintiff did not assert before the Supreme Court that the defendant’s delay in answering resulted in prejudice, the record does not reflect that the defendant acted willfully, and public policy favors resolution on the merits (see Matter of Gasby v New York City Hous. Auth./Walt Whitman Houses, 142 AD3d at 1019; Youth v Grant, 126 AD3d at 894; Curran v Graf, 13 AD3d 409 [2004]).

Accordingly, the Supreme Court improvidently exercised its discretion in denying the defendant’s motion pursuant to CPLR 5015 (a) (1) to vacate its default in answering the complaint and pursuant to CPLR 2004 and 3012 (d) to extend its time to answer the complaint. Chambers, J.P., Austin, Miller and Maltese, JJ., concur.

[*1]

Jason Tenenbaum, P.C., Garden City, NY, for appellant.

Gail S. Lauzon (Russo & Tambasco, Melville, NY [Susan J. Mitola], of counsel), for respondent.

In a proceeding pursuant to CPLR article 75 to vacate an arbitration award, the petitioner appeals from an order of the Supreme Court, Queens County (Thomas D. Raffaele, J.), dated January 22, 2016. The order denied the petition pursuant to CPLR article 75 to vacate the arbitration award.

Ordered that the order is affirmed, with costs.

On August 6, 2012, a vehicle owned and operated by the petitioner was struck in the rear by a vehicle owned and operated by Omau Kwende Channer. Both vehicles were insured by the respondent, GEICO Insurance Company (hereinafter GEICO). Following the accident, the petitioner commenced an action against Channer to recover damages for personal injuries she allegedly sustained as a result of the accident. She obtained summary judgment in her favor on the issue of liability, after which GEICO settled that action for the sum of $25,000, which was the full limit on the insurance policy held by Channer. Thereafter, the petitioner made a claim, under her own policy with GEICO, for supplemental underinsured motorist (hereinafter SUM) benefits in the amount of $275,000. GEICO denied the SUM claim, arguing that the injury for which the petitioner sought SUM compensation (hereinafter the subject injury) was not the result of the motor vehicle accident. In response, the petitioner made a demand for arbitration.

A SUM arbitration hearing was held on January 23, 2015, and the parties submitted, inter alia, the petitioner’s medical records and independent medical examination and peer review reports commissioned by GEICO. In an award dated March 2, 2015, the arbitrator concluded that the subject injury was not the result of the motor vehicle accident, and therefore denied the petitioner’s SUM claim. Thereafter, the petitioner commenced this CPLR article 75 proceeding to vacate the SUM arbitration award. She argued that the award was arbitrary and capricious, irrational, and that the arbitrator exceeded his authority by failing to preclude GEICO from disputing causation since GEICO had taken a prior inconsistent position on that issue by paying no-fault benefits related to the subject injury. By order dated January 22, 2016, the Supreme Court denied the petition. The petitioner appeals.

Judicial review of arbitration awards is extremely limited (see Matter of County of Nassau v Civil Serv. Empls. Assn., 150 AD3d 1230, 1230 [2017]; Matter of Fiduciary Ins. Co. v American Bankers Ins. Co. of Florida, 132 AD3d 40, 45 [2015]). Pursuant to CPLR 7511 (b) (1) (iii), a court may [*2]vacate an arbitration award if the arbitrator “exceeded his power or so imperfectly executed it that a final and definite award upon the subject matter submitted was not made.” However, vacatur of an award pursuant to this provision is warranted “ ’only if it violates a strong public policy, is irrational, or clearly exceeds a specifically enumerated limitation on the arbitrator’s power’ ” (Matter of Vintage Flooring & Tile, Inc. v DCM of NY, LLC, 123 AD3d 731, 732 [2014], quoting Matter of Falzone [New York Cent. Mut. Fire Ins. Co.], 15 NY3d 530, 534 [2010]; see Matter of Peterson v Katonah-Lewisboro UFSD, 134 AD3d 1125, 1125 [2015]). “ ’An award is irrational when there is no proof whatever to justify the award’ ” (Matter of Peterson v Katonah-Lewisboro UFSD, 134 AD3d at 1125, quoting Matter of Vintage Flooring & Tile, Inc. v DCM of NY, LLC, 123 AD3d at 732; see Matter of Falzone [New York Cent. Mut. Fire Ins. Co.], 15 NY3d at 534).

Where, as here, an arbitration award is the product of compulsory arbitration, the award “ ’must satisfy an additional layer of judicial scrutiny—it must have evidentiary support and cannot be arbitrary and capricious’ ” (Matter of Liberty Mut. Fire Ins. Co. v Global Liberty Ins. Co. of N.Y., 144 AD3d 1160, 1161 [2016] [internal quotation marks omitted], quoting City School Dist. of the City of N.Y. v McGraham, 17 NY3d 917, 919 [2011]; see Matter of Motor Veh. Acc. Indem. Corp. v Aetna Cas. & Sur. Co., 89 NY2d 214, 223 [1996]; Matter of Fiduciary Ins. Co. v American Bankers Ins. Co. of Florida, 132 AD3d at 46).

Here, the arbitrator’s determination was rational, supported by evidence, and not arbitrary and capricious. Moreover, while the petitioner contends that the arbitrator exceeded the scope of his authority by disregarding GEICO’s prior inconsistent position, taken in the no-fault context, the alleged error was, at most, an error of law which would not warrant vacatur of the arbitration award (see Matter of Falzone [New York Cent. Mut. Fire Ins. Co.], 15 NY3d at 534).

The petitioner’s remaining contentions are without merit. Mastro, J.P., Rivera, Hinds-Radix and Iannacci, JJ., concur.

[*1]

Mura & Storm, PLLC, Buffalo (Roy A. Mura of counsel), for petitioners-appellants.

Nixon Peabody LLP, Buffalo (Sheldon K. Smith of counsel), for respondent-respondent.

Appeal from an order of the Supreme Court, Erie County (John F. O’Donnell, J.), entered April 20, 2017, in a proceeding pursuant to CPLR article 75. The order denied the petition.

It is hereby ordered that the order so appealed from is unanimously affirmed without costs.

Memorandum: Petitioners issued a number of personal automobile insurance policies that included a Mandatory Personal Injury Protection Endorsement. Respondent, a company that supplies durable medical equipment including a Multi-Mode Stimulator Kit (Kit), supplied the Kit to various patients insured by petitioners. After the patients assigned to respondent their rights under the policies, respondent sought reimbursement from petitioners on behalf of those patients. Petitioners sought information by an informational demand in the form of verification requests, as provided under the 120-day rule (see 11 NYCRR 65-3.8 [b] [3]), including respondent’s acquisition costs and other pricing information for the Kit. Respondent refused to provide that information within the 120 days as required under the rule, maintaining that disclosure thereof would expose trade secrets or proprietary information. In addition, respondent took the position that, when the supplier of the equipment is also the manufacturer of the equipment, the reimbursement is “the usual and customary price charged to the general public” and thus the information requested by petitioners was not necessary for reimbursement. Thereafter, petitioners denied respondent’s claims and, at respondent’s request, the parties proceeded to mandatory arbitration. The arbitrator issued 14 identical awards denying each of respondent’s claims. Respondent appealed the arbitrator’s awards to the master arbitrator, who vacated the arbitrator’s awards and remitted the matters for new hearings.

Petitioners filed the instant CPLR article 75 proceeding seeking to vacate the master arbitration awards, alleging that the master arbitrator, among other things, exceeded his authority. Supreme Court disagreed, and denied the petition. We affirm.

The “role of the master arbitrator is to review the determination of the arbitrator to assure that the arbitrator reached his [or her] decision in a rational manner, that the decision was not arbitrary and capricious . . . , incorrect as a matter of law . . . , in excess of the policy limits . . . or in conflict with other designated no-fault arbitration proceedings” (Matter of Petrofsky [Allstate Ins. Co.], 54 NY2d 207, 212 [1981]). This power “does not include the power to review, de novo, the matter originally presented to the arbitrator” (Matter of Allstate Ins. Co. v Keegan, 201 AD2d 724, 725 [2d Dept 1994]). Here, we agree with the court that the master arbitrator properly exercised his authority and limited his review of the arbitrator’s awards to assessing whether the awards were incorrect as a matter of law (see Matter of Smith [Firemen’s Ins. Co.], 55 NY2d 224, 231 [1982]; Petrofsky, 54 NY2d at 210-211). In his awards, the master arbitrator found that the arbitrator had misapplied the 120-day rule, reasoning that, pursuant to that rule, a claimant who responds within the requisite 120-day period with a “reasonable justification” is permitted to have that objection decided by the arbitrator and, if overruled by the arbitrator, is to be afforded the opportunity to produce the requested information and allow the insurer to base its decision on such information (11 NYCRR 65-3.8 [b] [3]). Contrary to petitioners’ contention, the master arbitrator did not impermissibly perform a de novo review of the evidence. Rather, the master arbitrator vacated the arbitrator’s awards based on “an alleged error of a rule of substantive law” (Matter of Acuhealth Acupuncture, P.C. v Country-Wide Ins. Co., 149 AD3d 828, 829 [2d Dept 2017] [internal quotation marks omitted]). Thus, we conclude that the court’s decision to uphold the master arbitrator’s awards in this case was rational (cf. id.). Present—Whalen, P.J., Peradotto, Lindley, Curran and Troutman, JJ.

[*1]

Thomas Torto, New York (Jason Levine of counsel), for appellant.

Gary Tsirelman, P.C., Brooklyn (Gary Tsirelman of counsel), for respondent.

Judgment, Supreme Court, New York County (Joan M. Kenney, J.), entered February 23, 2017, in favor of respondent, unanimously affirmed, without costs, and the matter is remanded for a determination of respondent’s reasonable attorney’s fees for this appeal. Appeal from judgment entered February 14, 2017, unanimously dismissed, without costs, as superseded by the appeal from the February 23, 2017 judgment.

Respondent commenced an arbitration against petitioner seeking reimbursement of bills for health care services it had rendered to an individual injured in a motor vehicle accident. Petitioner asserted a Mallela defense (see State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313 [2005]), i.e., that it could withhold payment for the services because respondent was fraudulently incorporated. After a hearing, an arbitrator found that petitioner failed to meet its burden of providing clear and convincing evidence of fraudulent incorporation, and awarded respondent full reimbursement. The award was affirmed by the master arbitrator.

Petitioner argues that it was held to an incorrect standard of proof and that the correct standard is a preponderance of the evidence. However, the award is not subject to vacatur under either standard (see Country-Wide Ins. Co. v TC Acupuncture, P.C., 140 AD3d 643 [1st Dept 2016]; Nationwide Affinity Ins. Co. of Am. v Acuhealth Acupuncture, P.C., 155 AD3d 885, 886-887 [2d Dept 2017]). Petitioner failed to present any evidence that respondent was fraudulently incorporated.

We reject petitioner’s contention that the master arbitrator’s determination affirming the award was irrational because the arbitrator’s failure to set forth his reasons for rejecting petitioner’s Mallela defense precluded meaningful review of the award (see Matter of Guetta [Raxon Fabrics Corp.], 123 AD2d 40 [1st Dept 1987]; Matter of Nationwide Mut. Ins. Co. v Steiner, 227 AD2d 563 [2d Dept 1996]; see also Purpura v Bear Stearns Cos., 238 AD2d 216 [1st Dept 1997], lv denied 90 NY2d 806 [1997]). In any event, the master arbitrator’s determination, which considered the arbitrator’s familiarity with similar cases and past decisions on the issues presented, was rational.

Respondent is entitled to reasonable attorney’s fees for this appeal. Supreme Court has authority to award attorneys fees as this is an appeal from a master arbitration award pursuant to 11 NYCRR 65-4.10 (j) (4), which, in pertinent part, provides: “The attorney’s fee for services rendered in connection with . . . a court appeal from a master arbitration award and any further appeals, shall be fixed by the court adjudicating the matter” (see also Matter of GEICO Ins. Co. v AAAMG Leasing Corp., 148 AD3d 703 [2d Dept 2017], recalling and vacating Matter of GEICO Ins. Co. v AAAMG Leasing Corp., 139 AD3d 947 [2d Dept 2016]). Accordingly, we remand the matter to Supreme Court for a determination of respondent’s reasonable attorney’s [*2]fees for this appeal. To the extent Country-Wide Ins. Co. v Valdan Acupuncture, P.C. (150 AD3d 560, 561 [1st Dept 2017]) takes a different approach to calculating attorneys’ fees, we decline to follow it. Concur—Renwick, J.P., Manzanet-Daniels, Mazzarelli, Gesmer, Oing, JJ.

[*1]

Printz & Goldstein, Woodbury, NY (Lawrence J. Chanice of counsel), for appellant-respondent.

Israel Israel & Purdy, LLP, Great Neck, NY (Justin Skaferowsky and Jennifer Howard of counsel), for respondent-appellant.

In a proceeding pursuant to CPLR article 75, inter alia, to vacate an arbitration award, Government Employees Ins. Co. appeals, and the petitioner cross-appeals, from an order of the Supreme Court, Queens County (Robert J. McDonald, J.), entered August 7, 2015. The order, insofar as appealed from, granted that branch of the petition which was to vacate an arbitration award dated October 10, 2014, and a master arbitration award dated January 16, 2015, and referred the matter to the arbitrator for further proceedings. The order, insofar as cross-appealed from, denied the petitioner’s application for an award of an attorney’s fee.

Ordered that the order is affirmed insofar as appealed and cross-appealed from, with one bill of costs to the petitioner.

The petitioner, Fast Care Medical Diagnostics, PLLC, named herein as Fast Care Medical Diagnostics, PLLC/PV (hereinafter Fast Care), provided certain medical services to its assignor, “PV,” in connection with injuries purportedly sustained by PV in a motor vehicle accident. At the time of such treatment, PV was 15 years old. PV and his mother executed an assignment of benefits, which assigned all rights and remedies to payment for health care services provided by Fast Care to which PV was entitled under article 51 of the Insurance Law. Fast Care submitted claims for these services to Government Employees Insurance Co. (hereinafter GEICO), for reimbursement of first-party no-fault insurance benefits (see Insurance Law § 5102). GEICO denied the claims on grounds of purported lack of medical necessity.

Fast Care sought arbitration of the dispute. The arbitrator dismissed the proceeding without prejudice, on the ground that Fast Care had failed to comply with CPLR 1209, which provides, in relevant part, that “[a] controversy involving an infant . . . shall not be submitted to arbitration except pursuant to a court order made upon application of the representative of such infant,” subject to an exception that is not applicable here. Fast Care appealed to a master arbitrator, who confirmed the determination. The master arbitrator further found that Fast Care lacked [*2]standing, because the parent of the infant patient, rather than the infant himself, was required to execute an assignment of benefits. Fast Care then instituted this proceeding pursuant to CPLR article 75, inter alia, to vacate the arbitration award.

An arbitration award may be vacated if the court finds that the rights of a party were prejudiced by (1) corruption, fraud, or misconduct in procuring the award; (2) partiality of an arbitrator; (3) the arbitrator exceeding his or her power; or (4) the failure to follow the procedures of CPLR article 75 (see CPLR 7511 [b]). In addition, an arbitration award may be vacated “if it violates strong public policy, is irrational, or clearly exceeds a specifically enumerated limitation on the arbitrator’s power” (Matter of Slocum v Madariaga, 123 AD3d 1046, 1046 [2014]; see Matter of Kowaleski [New York State Dept. of Correctional Servs.], 16 NY3d 85, 90 [2010]; Matter of United Fedn. of Teachers, Local 2, AFT, AFL-CIO v Board of Educ. of City School Dist. of City of N.Y., 1 NY3d 72, 79 [2003]). An arbitration award may also be vacated where it is in “ ’explicit conflict’ ” with established laws and “the ‘strong and well-defined policy considerations’ embodied therein” (Matter of City of Oswego [Oswego City Firefighters Assn., Local 2707], 21 NY3d 880, 882 [2013] [emphasis omitted], quoting Matter of New York State Correctional Officers & Police Benevolent Assn. v State of New York, 94 NY2d 321, 327 [1999]).

We agree with the Supreme Court that the arbitrator’s award was irrational and in conflict with CPLR 1209, which applies “only where [an] infant [is] a party” to an arbitration proceeding (Goldenberg v Goldenberg, 25 AD2d 670, 670 [1966], affd 19 NY2d 759 [1967]; see Schneider v Schneider, 17 NY2d 123, 127 [1966]). The infant patient was not a party to the arbitration; rather, Fast Care, as the infant’s assignee, was the party that brought the arbitration (see 11 NYCRR 65-3.11 [a]). Therefore, we agree with the court that the arbitrator disregarded established law in determining that the requirements of CPLR 1209 applied here (Schneider v Schneider, 17 NY2d at 127; see Goldenberg v Goldenberg, 25 AD2d at 670). Furthermore, the master arbitrator’s determination that the assignment of benefits was not effective was not based on any requirement set forth in established law or regulations (see generally 11 NYCRR 65-2.4 [c]).

Accordingly, we agree with the Supreme Court’s determination to vacate the awards and direct further arbitration proceedings as to the merits of Fast Care’s claims (see Matter of City of Oswego [Oswego City Firefighters Assn., Local 2707], 21 NY3d at 882; see also Matter of Local 342 v Town of Huntington, 52 AD3d 720, 721 [2008]; Matter of Kocsis [New York State Div. of Parole], 41 AD3d 1017, 1020 [2007]; Matter of Rockland County Bd. of Coop. Educ. Servs. v BOCES Staff Assn., 308 AD2d 452, 454 [2003]).

Fast Care did not demonstrate its entitlement to an award of an attorney’s fee, as the arbitrator did not reach the issue of whether the subject claims were “overdue” (Insurance Law § 5106 [a]; see generally Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 278 [1997]). Balkin, J.P., Chambers, Austin and LaSalle, JJ., concur. [Prior Case History: 2015 NY Slip Op 32714(U).]