—[*1] Crafa & Sofield, P.C., Rockville Centre, N.Y. (Joseph R. Crafa of counsel), for appellant.

Gregory J. Cannata, New York, N.Y. (Alison Cannata Hendele of counsel), for respondents.

In an action to recover damages pursuant to the supplementary uninsured/underinsured motorist endorsement of an insurance policy, the defendant appeals from an order of the Supreme Court, Kings County (Bunyan, J.), dated March 10, 2011, which granted those branches of the plaintiffs’ motion which were, in effect, for summary judgment determining that the amount of supplementary uninsured/underinsured motorist coverage available to the plaintiffs pursuant to the subject insurance policy is $400,000 and to dismiss the third and fourth affirmative defenses pursuant to CPLR 3211, and denied its cross motion, in effect, for summary judgment determining that the amount of supplementary uninsured/underinsured motorist coverage available to the plaintiffs pursuant to the subject insurance policy is limited to $145,000.

Ordered that the order is reversed, on the law, with costs, those branches of the plaintiffs’ motion which were, in effect, for summary judgment determining that the amount of supplementary uninsured/underinsured motorist coverage available to the plaintiffs pursuant to the subject insurance policy is $400,000 and to dismiss the third and fourth affirmative defenses pursuant to CPLR 3211 are denied, and the defendant’s cross motion, in effect, for summary judgment determining that the amount of supplementary uninsured/underinsured motorist coverage available to the plaintiffs pursuant to the subject insurance policy is limited to $145,000 is granted.

On March 4, 2003, Rifka and Anton Goldenberg were killed when a vehicle operated by a drunk driver, Michael McGibbon, collided with their vehicle. The insurance policy covering McGibbon’s vehicle contained coverage limits of $50,000 per person and $100,000 per accident. The Goldenbergs’ automobile insurance policy (hereinafter the subject policy), issued by the defendant, Tri-State Consumer Insurance Company (hereinafter Tri-State), included a supplementary uninsured/underinsured motorist (hereinafter SUM) endorsement which contained a coverage limit of $250,000 per person and $500,000 per accident. The plaintiffs in this action, the Goldenbergs’ daughters, who are the administrators of their estates, commenced an action to recover damages from, among others, McGibbon’s estate, the owner of McGibbon’s vehicle, and a bar and a diner that had served McGibbon alcohol before the accident. The insurer of McGibbon’s vehicle agreed to pay [*2]the $100,000 maximum coverage limit of its policy in settlement of the claims against McGibbon’s estate and the owner of his vehicle. The bar and the diner (hereinafter together the Dram Shop defendants), and their insurers, agreed to pay a total of $255,000 in settlement of the “Dram Shop” claims asserted against them (hereinafter the Dram Shop recovery). Thus, the plaintiffs settled the prior action for a total of $355,000.

The plaintiffs submitted a claim to Tri-State for recovery under the SUM endorsement of the subject policy. Tri-State asserted that the amount available to the plaintiffs under the SUM endorsement was limited to $145,000 (the $500,000 coverage amount less the total amount of the $355,000 settlement in the prior action). Thereafter, the plaintiffs commenced this action against Tri-State seeking to recover damages pursuant to the SUM endorsement in the amount of $400,000. In the complaint, they alleged that the SUM endorsement’s $500,000 coverage limit could properly be reduced only by the $100,000 attributable to McGibbon’s policy, and not by the amount of the Dram Shop recovery. In its answer, the defendant alleged, under the third and fourth affirmative defenses, that the amount of SUM coverage available to the plaintiffs is reduced by the amount of the Dram Shop recovery. The plaintiffs moved, inter alia, in effect, for summary judgment determining that the amount of SUM coverage available to them pursuant to the subject policy is $400,000 and to dismiss the third and fourth affirmative defenses pursuant to CPLR 3211, and Tri-State cross-moved, in effect, for summary judgment determining that the amount of such coverage is limited to $145,000. The Supreme Court granted the aforementioned branches of the plaintiffs’ motion and denied Tri-State’s cross motion. Tri-State appeals, and we reverse.

The subject policy contained the standard SUM endorsement prescribed by the Superintendent of Insurance in Regulation No. 35-D (11 NYCRR 60-2.3 [c], [f]). Two conditions in the endorsement are directly at issue in this appeal. Condition 6 provides:

“6. Maximum SUM Payments. Regardless of the number of insureds, our maximum payment under this SUM endorsement shall be the difference between:

“(a) The SUM limits; and

“(b) The motor vehicle bodily injury liability insurance or bond payments received by the insured or the insured’s legal representative, from or on behalf of all persons that may be legally liable for the bodily injury sustained by the insured.

“The SUM limit shown on the Declarations for ‘Each Person’ is the amount of coverage for all damages due to bodily injury to one person. The SUM limit shown under ‘Each Accident’ is, subject to the limit for each person, the total amount of coverage for all damages due to bodily injury to two or more persons in the same accident.”

Condition 11 provides:

“11. Non-Duplication. This SUM coverage shall not duplicate any of the following:

“(a) Benefits payable under workers’ compensation or other similar laws;

“(b) Non-occupational disability benefits under article nine of the Workers’ Compensation Law or other similar law;

“(c) Any amounts recovered or recoverable pursuant to article fifty-[*3]one of the New York Insurance Law or any similar motor vehicle insurance payable without regard to fault;

“(d) Any valid or collectible motor vehicle medical payments insurance; or

“(e) Any amounts recovered as bodily injury damages from sources other than motor vehicle bodily injury liability insurance policies or bonds.”

SUM coverage in New York is a converse application of the golden rule; its purpose is “to provide the insured with the same level of protection he or she would provide to others were the insured a tortfeasor in a bodily injury accident” (Matter of Prudential Prop. & Cas. Co. v Szeli, 83 NY2d 681, 687 [1994]; see Matter of Allstate Ins. Co. v Rivera, 12 NY3d 602, 608 [2009]; Raffellini v State Farm Mut. Auto. Ins. Co., 9 NY3d 196, 204 [2007]; see generally Norman H. Dachs and Jonathan A. Dachs, SUM Insurance Dilemma Hits the Mainstream, NYLJ, Sept. 19, 2012 at 3, col 1). With this limited purpose, SUM coverage does not function as a stand-alone policy to fully compensate the insureds for their injuries (cf. Bauter v Hanover Ins. Co., 247 NJ Super 94, 96-97, 588 A2d 870, 872 [1991], cert denied 126 NJ 335, 598 A2d 893 [1991]). The conditions quoted above make this clear, as do other conditions not directly at issue in this case.

Here, the maximum SUM coverage of the subject policy was $500,000 per accident. The amount payable under that coverage was reduced, under Conditions 6 (a) and (b), by the $100,000 paid by McGibbon’s insurer, inasmuch as that amount constituted a “motor vehicle bodily injury liability insurance . . . payment[ ]” that the plaintiffs received (11 NYCRR 60-2.3 [f]). Further, the Dram Shop claims were settled for a total of $255,000. The Dram Shop recovery constitutes, under Condition 11 (e), an amount “recovered as bodily injury damages from sources other than motor vehicle bodily injury liability insurance policies or bonds.” Condition 11 does not allow duplicate recovery of such damages. Consequently, under the terms of the SUM endorsement, the plaintiffs’ receipt of the Dram Shop recovery reduces, by that same $255,000, the amount payable under the SUM endorsement. The plaintiffs are not penalized by this reduction, since they received the maximum amount for which they are covered under the SUM endorsement: $100,000 from McGibbon’s policy, $255,000 from or on behalf of the Dram Shop defendants, and $145,000 from Tri-State.

We reject the plaintiffs’ argument that 11 NYCRR subpart 60-2, which includes the nonduplication provision, is inconsistent with Insurance Law § 3420 (f) (2) (A). When the Legislature enacted the no-fault structure in 1977, its concern about duplicate payments was reflected in the law itself (see L 1977, ch 892, § 7; see also Mem of State Executive Department, 1977 McKinney’s Session Laws at 2448). The adoption by the Superintendent of Insurance of additional provisions regarding duplication furthers the Legislature’s goal, and is not inconsistent with it (cf. Raffellini v State Farm Mut. Auto. Ins. Co., 9 NY3d at 201-202).

Finally, as the plaintiffs point out, a claimant has the right to submit a SUM claim upon exhaustion of the full liability limits of just one tortfeasor (see e.g. S’Dao v National Grange Mut. Ins. Co., 87 NY2d 853 [1995]). However, that does not mean that a claimant’s ultimate entitlement to payment under the SUM endorsement may not be reduced or eliminated, depending on amounts recovered from additional tortfeasors (see Matter of Central Mut. Ins. Co. [Bemiss], 12 NY3d 648, 657-659 [2009]; Matter of Liberty Mut. Ins. Co. v Walker, 84 AD3d 960, 961 [2011]).

Accordingly, the Supreme Court should have denied those branches of the plaintiffs’ motion which were, in effect, for summary judgment determining that the amount of SUM coverage available to them pursuant to the subject insurance policy is $400,000 and to dismiss the third and fourth affirmative defenses pursuant to CPLR 3211, and should have granted the defendant’s cross motion, in effect, for summary judgment determining that the amount of such coverage is limited to $145,000. Florio, J.P., Balkin, Hall and Miller, JJ., concur.

—[*1] Joseph Henig, P.C., Bellmore, N.Y., for appellant.

Law Offices of Moira Doherty, P.C., Bethpage, N.Y. (Janice Rosen and Maureen Knodel of counsel), for respondent.

In an action to recover no-fault benefits under a policy of automobile insurance, the plaintiff appeals from an order of the Supreme Court, Nassau County (Galasso, J.), entered March 7, 2012, which granted the defendant’s motion to vacate a clerk’s judgment of the same court entered December 1, 2011, which, upon the defendant’s default in appearing or answering the complaint, was in favor of the plaintiff and against the defendant in the sum of $38,645, and to compel the plaintiff to accept the defendant’s answer.

Ordered that the order is affirmed, with costs.

The Supreme Court providently exercised its discretion in granting the defendant’s motion to vacate the default judgment and to compel the plaintiff to accept its answer (see CPLR 3012 [d]). In light of the lack of any prejudice to the plaintiff resulting from the minimal delay in serving an answer to the complaint, the lack of willfulness on the part of the defendant, the existence of a potentially meritorious defense, and the public policy favoring the resolution of cases on the merits, the defendant’s default in appearing or answering the complaint was properly excused (see CPLR 2004; Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 199 [1997]; Vinny Petulla Contr. Corp. v Ranieri, 94 AD3d 751, 752 [2012]; Zeccola & Selinger, LLC v Horowitz, 88 AD3d 992, 993 [2011]; Mount Sinai Hosp. v Triboro Coach, 263 AD2d 11, 18-20 [1999]). Angiolillo, J.P., Balkin, Austin and Miller, JJ., concur.

—[*1] Brown & Kelly, LLP, Buffalo (Joseph M. Schnitter of counsel), for respondent-appellant.

Damon Morey LLP, Buffalo (Michael J. Willett of counsel), for petitioner-respondent.

Appeal from an order of the Supreme Court, Erie County (Patrick H. NeMoyer, J.), entered March 7, 2011 in a proceeding pursuant to CPLR article 75. The order, among other things, granted the petition to vacate an arbitration award.

It is hereby ordered that the order so appealed from is reversed on the law without costs, the petition is denied, the cross motion is granted and the arbitration award is confirmed.

Memorandum: Petitioner commenced this proceeding pursuant to CPLR 7511 (b) seeking vacatur of the arbitration award on the ground that arbitration was not available because under Insurance Law § 5105 (a) neither of the vehicles involved in the collision was “used principally for the transportation of persons or property for hire.” We conclude that Supreme Court erred in granting the petition to vacate the arbitration award and in denying the cross motion to confirm the award. Inasmuch as petitioner failed to apply for a stay of arbitration before arbitration, petitioner waived its contention that respondent’s claim for reimbursement of first-party benefits is not arbitrable under Insurance Law § 5105 (see Matter of Liberty Mut. Ins. Co. [Allstate Ins. Co.], 234 AD2d 901 [1996]). In view of that waiver, petitioner may not thereafter seek to vacate the arbitration award on the ground that the arbitration panel exceeded its power (see id.; Matter of Utica Mut. Ins. Co. v Incorporated Vil. of Floral Park, 262 AD2d 565, 566 [1999]; see also Rochester City School Dist. v Rochester Teachers Assn., 41 NY2d 578, 583 [1977]).

Were we to reach the issue whether respondent’s vehicle was used principally for the transportation of persons or property for hire under Insurance Law § 5105, we would agree with our dissenting colleagues that the appropriate standard of review is whether the award was arbitrary and capricious (see Matter of Motor Veh. Acc. Indem. Corp. v Aetna Cas. & Sur. Co., 89 NY2d 214, 223 [1996]). However, despite acknowledging that we must apply a deferential standard of review, the dissent proceeds to conduct, with laser-like precision, a comprehensive legal analysis of the statutory phrase “vehicle used principally for the transportation of persons or [*2]property for hire” (§ 5105). In reaching a legal conclusion as to the appropriate definition to be assigned to the subject phrase, the dissent relies upon eight different definitions of or references to the phrase “vehicle for hire,” which the dissent concedes arise in “other [statutory or legal] contexts.” Notably, none of those definitions or references relied upon by the dissent was raised during arbitration or on appeal.

As the court recognized, petitioner has “contended from the outset that there is no legal or factual basis here for loss transfer pursuant to [Insurance Law § ] 5105,” and we disagree with the dissent’s conclusion that “at no point during the course of the proceedings in this matter did petitioner take the position that the claim was not arbitrable.” Indeed, in addition to labeling its defense as one for “lack of jurisdiction,” petitioner twice asserted in the arbitration that it was “not subject to the loss transfer procedure.” Thus, we have no difficulty concluding that petitioner took the position that the claim was not arbitrable. In concluding that the phrase assigned to petitioner’s defense (lack of jurisdiction) is not dispositive, our dissenting colleagues fail to offer any explanation of what was otherwise meant thereby. Moreover, the dissent’s reliance on Matter of Progressive Cas. Ins. Co. v New York State Ins. Fund (47 AD3d 633 [2008]) is misplaced because, unlike here, the petitioner in Progressive “at no point during the course of the proceedings . . . [took] the position that the arbitration panel lacked jurisdiction or that the . . . claim was not arbitrable” (id. at 634 [emphasis added]). Thus, that case does not support the dissent’s position that petitioner, despite labeling its defense as one for “lack of jurisdiction,” did not assert that the claim was not arbitrable.

Both the dissent and the court disregard controlling precedent of this Court in determining that petitioner’s contention was not waived (see Liberty Mut. Ins. Co., 234 AD2d 901). The doctrine of stare decisis “recognizes that legal questions, once resolved, should not be reexamined every time they are presented” (Dufel v Green, 198 AD2d 640, 640 [1993], affd 84 NY2d 795 [1995]). ” ‘The doctrine . . . rests upon the principle that a court is an institution, not merely a collection of individuals, and that governing rules of law do not change merely because the personnel of the court changes’ ” (People v Taylor, 9 NY3d 129, 148 [2007], quoting People v Bing, 76 NY2d 331, 338 [1990], rearg denied 76 NY2d 890 [1990]). Stare decisis ” ‘is the preferred course because it promotes the evenhanded, predictable, and consistent development of legal principles, fosters reliance on judicial decisions, and contributes to the actual and perceived integrity of the judicial process’ ” (id.; see People v Damiano, 87 NY2d 477, 488-489 [1996] [Simons, J., concurring]; Baden v Staples, 45 NY2d 889, 892 [1978]).

Here, this Court has previously held that, by failing to apply for a stay before arbitration, an insurer waives the contention that the claim is not arbitrable under Insurance Law § 5105 (Liberty Mut. Ins. Co., 234 AD2d 901). In the instant matter, the court acknowledged our decision in Liberty Mut. Ins. Co., but concluded that it was overruled by Motor Veh. Acc. Indem. Corp. (89 NY2d 214). That was error. Indeed, the Court of Appeals in Motor Veh. Acc. Indem. Corp. did not hold that insurers are precluded from obtaining judicial review of the threshold question of whether a claim was subject to loss-transfer arbitration under section 5105. Rather, the courts of this State have long recognized that a court has the power to resolve the threshold question whether a loss-transfer arbitration should be stayed under CPLR article 75 (see Matter of State Farm Mut. Auto Ins. Co. v Aetna Cas. & Sur. Co.132 AD2d 930, 931 [1987], affd 71 NY2d 1013 [1988]; City of Syracuse v Utica Mut. Ins. Co., 90 AD2d 979 [1982], affd 61 NY2d 691 [1984]; Utica Mut. Ins. Co., 262 AD2d 565; Liberty Mut. Ins. Co., 234 AD2d 901).

Motor Veh. Acc. Indem. Corp. (89 NY2d 214), also relied upon by the dissent as a basis for concluding that the award is arbitrary and capricious, involved an “erroneous application of the Statute of Limitations” by the arbitrator (id. at 224). In concluding that such an error of law was not arbitrary and capricious as a matter of law, the Court in Motor Veh. Acc. Indem. Corp. [*3]noted the varying interpretations of the limitations rule by the courts. Here, there is a paucity of decisions interpreting the phrase “for hire” in the Insurance Law § 5105 context, and our own decision on this point noted that the statute is “inartfully drafted” and does not limit the universe of vehicles embraced thereby to “taxis and buses, and livery vehicles” (State Farm Mut. Auto. Ins. Co., 132 AD2d at 931). Therefore, even assuming, arguendo, that we could reach the issue, we would conclude that, under the circumstances presented, it cannot be said that the arbitration panel’s award was arbitrary and capricious or was unsupported by any reasonable hypothesis (see Motor Veh. Acc. Indem. Corp., 89 NY2d at 224).

All concur except Peradotto and Sconiers, JJ., who dissent and vote to affirm in the following memorandum.

Peradotto and Sconiers, JJ. (dissenting).We respectfully dissent. Unlike the majority, we conclude that petitioner did not waive its contention that the vehicle owned by its insured and involved in the subject accident was not “used principally for the transportation of persons or property for hire” within the meaning of Insurance Law § 5105 (a). We further conclude that there is no evidentiary support or rational basis for the arbitration panel’s determination that the at-issue vehicle—a minivan owned by a nonprofit community residence for developmentally disabled individuals and used by its employees to transport the six residents of the group home—is a vehicle “for hire” under that section.

Petitioner’s insured, Rivershore, Inc. (Rivershore), is a private, nonprofit organization that provides residential and community support services to individuals with developmental disabilities. Rivershore operates several state-funded community residences for people with disabilities, including a residence on 17th Street in Niagara Falls. On May 11, 2009, Rivershore employee Thomas Beckhorn, a night program manager at the 17th Street residence, was on his way to pick up one of the residents from her mother’s home when he was involved in a motor vehicle accident with a vehicle owned by Mary D. Farmel and operated by Cheryl K. French. French sustained injuries in the accident. At the time of the accident, Beckhorn was operating a minivan owned by Rivershore and insured by petitioner. The Farmel vehicle was insured by respondent. After paying first-party personal injury protection (first-party) benefits to and on behalf of French, respondent filed an application for inter-company arbitration, seeking reimbursement of those benefits from petitioner pursuant to the loss-transfer provisions of Insurance Law § 5105. In a contentions sheet submitted to the arbitration panel, petitioner contended that it was “not subject to the loss[-]transfer procedure because not one of the vehicles in the accident weighed more than 6,500 lbs. and/or neither vehicle was used principally for transportation of persons or property for hire.” In an amended contentions sheet, petitioner specifically contended that the minivan operated by Beckhorn weighed between 5,001 and 6,000 pounds, and that it was not used for the transportation of persons or property for hire. Rather, petitioner asserted that the minivan “was used in the course of providing general services to a disabled person, services that are regularly provided by Rivershore[ ] . . . to its developmentally disabled residents.”

The arbitration panel determined that the Rivershore minivan “meet[s] the definition of a livery for this loss” and awarded respondent the full amount of the first-party benefits respondent had paid to French. Petitioner then commenced this proceeding seeking to vacate the arbitration award pursuant to CPLR 7511 (b) on the ground that the award was without evidentiary support or rational basis and thus was arbitrary and capricious insofar as the arbitration panel determined that the minivan was a vehicle for hire within the meaning of Insurance Law § 5105. Respondent cross-moved to confirm the award. Supreme Court granted the petition, denied the cross motion, and vacated the arbitration award on the ground that the arbitrators “acted irrationally and without an evidentiary basis” in concluding that the minivan was “used principally for the transportation of persons or property for hire” (§ 5105). We would affirm. [*4]

As relevant here, Insurance Law § 5105 (a) provides that “[a]ny insurer liable for the payment of first[-]party benefits . . . which another insurer would otherwise be obligated to pay . . . but for the provisions of th[e No Fault Statute]” has a “right to recover [those benefits] . . . only if at least one of the motor vehicles involved . . . [weighs] more than [6,500] pounds unloaded or is . . . used principally for the transportation of persons or property for hire” (emphasis added). Thus, the right to recovery under that statute’s loss-transfer provision is limited to accidents in which one of the involved vehicles (1) exceeds 6,500 pounds, or (2) transports persons or property “for hire.” The Legislature amended section 5105 (a) in 1977 to add those alternative conditions with the intention of “limit[ing] the right of insurance carriers to recover first-party payments” (Matter of State Farm Mut. Auto. Ins. Co. v Aetna Cas. & Sur. Co., 132 AD2d 930, 931 [1987], affd 71 NY2d 1013 [1988]; see Matter of Progressive Northeastern Ins. Co. [New York State Ins. Fund], 56 AD3d 1111, 1112 [2008], lv denied 12 NY3d 713 [2009]). Pursuant to section 5105 (b), “mandatory arbitration is the sole remedy regarding disputes between insurers over responsibility for payment of first-party benefits” (State Farm Mut. Auto. Ins. Co. v Nationwide Mut. Ins. Co., 150 AD2d 976, 977 [1989]; see also NY St Ins Dept 2005 Circular Letter No. 10, RE: PIP [No-fault] inter-company loss transfer procedures [“If there is a dispute with respect to a claim arising pursuant to [s]ection 5105, the sole remedy of any insurer or compensation provider is via the submission of the controversy to a mandatory arbitration program”]).

Contrary to the contention of respondent and the conclusion of the majority, we conclude that at no point during the course of the proceedings in this matter did petitioner assert that the claim was not arbitrable, i.e., that the arbitrators lacked the authority to adjudicate the claim (see Matter of Progressive Cas. Ins. Co. v New York State Ins. Fund, 47 AD3d 633, 634 [2008]; cf. Matter of Liberty Mut. Ins. Co. [Allstate Ins. Co.], 234 AD2d 901 [1996]). During arbitration, petitioner did not object to proceeding in the arbitral forum or contend that the claim was not subject to arbitration, and does not so contend on appeal. Rather, petitioner asserted on the merits that respondent could not recover pursuant to the loss-transfer provisions of Insurance Law § 5105 because neither vehicle involved in the accident weighed more than 6,500 pounds or was used principally for the transportation of persons or property for hire. Thus, petitioner’s “participation in the arbitration proceeding without first moving for a stay of arbitration did not constitute a waiver of its contention that the [minivan] was not . . . [a vehicle for hire] within the meaning of . . . [section] 5105” (Progressive Cas. Ins. Co., 47 AD3d at 634). The fact that petitioner’s contentions sheet labeled its defense as one for “lack of jurisdiction” is not dispositive of the issue whether petitioner asserted that the claim was not arbitrable. The substance of petitioner’s contention, i.e., that the minivan did not qualify as a vehicle for hire, “is a condition precedent to ultimate recovery [under section 5105], not a condition precedent to ‘access to the arbitral forum‘ ” (id., quoting Matter of County of Rockland [Primiano Constr. Co.], 51 NY2d 1, 7 [1980] [emphasis added]; see Progressive Northeastern Ins. Co., 56 AD3d at 1112). In light of the broad scope of the mandatory arbitration provision in Insurance Law § 5105 (b), we conclude that petitioner properly submitted the issue whether the minivan was a “vehicle . . . for hire” to the arbitration panel for determination (§ 5105 [a]; see Progressive Cas. Ins. Co., 47 AD3d at 634) and, arguably, had no choice but to do so (see § 5105 [b]; Paxton Natl. Ins. Co. v Merchants Mut. Ins. Co., 74 AD2d 715, 716 [1980], affd 53 NY2d 646 [1981] [“Arbitration provides the sole remedy in loss transfer between insurers and the arbitration panel is the proper forum . . . for the determination of all questions of law and fact which may arise in connection with the remedy that respondent seeks”]).

With respect to the merits, “[w]here, as here, the parties are obligated by statutory mandate to submit their dispute to arbitration (see Insurance Law § 5105 [b]), the arbitrator’s determination is subject to ‘closer judicial scrutiny’ than with voluntary arbitration” (Progressive Northeastern Ins. Co., 56 AD3d at 1113, quoting Matter of Motor Veh. Acc. Indem. Corp. v Aetna Cas. & Sur. Co., 89 NY2d 214, 223 [1996]; see Matter of Furstenberg [Aetna Cas. & Sur. Co.—Allstate Ins. Co.], 49 NY2d 757, 758 [1980]). “To be upheld, an award in a compulsory arbitration proceeding must have evidentiary support and cannot be arbitrary and capricious” (Motor Veh. Acc. Indemn. Corp., 89 NY2d at 223). Further, “article 75 review questions whether the decision was rational or had a plausible basis” (Matter of Petrofsky [Allstate Ins. Co.], 54 NY2d 207, 211 [1981]; see Progressive Cas. Ins. Co., 47 AD3d at 634).

It was respondent’s burden, as the party seeking reimbursement, to establish its right to recovery under Insurance Law § 5105 (a) (see Progressive Northeastern Ins. Co., 56 AD3d at 1112; see also Matter of Hanover Ins. Co. v State Farm Mut. Auto. Ins. Co., 226 AD2d 533, 534 [1996]). Here, we conclude not only that respondent failed to meet its burden, but we also conclude that there is no evidentiary support or rational basis for the arbitrators’ determination that the minivan was principally used to transport persons “for hire,” a condition precedent to respondent’s entitlement to reimbursement under section 5105 (a) (see Progressive Northeastern Ins. Co., 56 AD3d at 1113). As this Court held in State Farm Mut. Auto Ins. Co. (132 AD2d at 931), “the words ‘for hire’ modify the word ‘vehicle’ and . . . the statute covers only those vehicles hired to transport people, such as taxis and buses, and livery vehicles hired to transport property” (emphasis added). We agree with the court that, under the circumstances of this case, “the Rivershore minivan cannot be categorized as or even likened to a taxi or bus.”

The term “vehicle for hire” is commonly understood and defined in other contexts as a vehicle held out to the public for the provision of transportation services in exchange for a fee (see generally Penal Law § 60.07 [2] [b] [defining ” ‘for-hire vehicle’ ” as “a vehicle designed to carry not more than five passengers for compensation and such vehicle is a taxicab, . . . a livery, . . . or a ‘black car’ “]; Vehicle and Traffic Law § 121-e [defining “livery” as “(e)very motor vehicle, other than a taxicab or a bus, used in the business of transporting passengers for compensation”]; Vehicle and Traffic Law § 401 [5-a] [a] [ii] [defining “motor vehicle operated for hire” as “mean(ing) and includ(ing) a taxicab, livery, coach, limousine or tow truck”]; Ops Gen Counsel NY Ins Dept No. 01-01-11 [Jan. 2001] [“The phrase ‘a motor vehicle used principally for the transportation of persons or property for hire’ refers to vehicles hired to transport people and livery vehicles hired to transport property”]). Such vehicles are typically operated by drivers who are required to have a particular certification or license, and are subject to specialized licensing, insurance, safety, and other requirements (see e.g. Vehicle and Traffic Law § 148-a [defining a “taxicab” as “[e]very motor vehicle, other than a bus, used in the business of transporting passengers for compensation, and operated in such business under a license or permit issued by a local authority”]; Vehicle and Traffic Law § 370 [1] [requiring filing of indemnity bond or insurance policy by every person or entity “engaged in the business of carrying or transporting passengers for hire in any motor vehicle”]; Vehicle and Traffic Law § 375 [23] [“Every motor vehicle operated for hire upon the public highways of this state shall be equipped with handles or other devices which shall permit the door or doors to the passenger compartment to be readily opened from the interior of the vehicle”]; see generally Vehicle and Traffic Law § 498 [governing interjurisdictional pre-arranged for-hire vehicle operations]).

The evidence before the arbitration panel in this case consisted of the deposition testimony of Beckhorn, the driver of the minivan, and material from Rivershore’s website. Such evidence establishes that Rivershore is not in the business of transporting members of the public for compensation, and that the Rivershore minivan was not used for that purpose. Rivershore’s website states that it supports 12 state-funded community residences for individuals with developmental disabilities, and “serves many more people in their private homes throughout Niagara County.” In addition to its residential services, Rivershore “provides life planning services, clinical services, and support with employment and volunteer pursuits.” Beckhorn testified that he worked at the 17th Street community residence as a nighttime program manager, and that, at the time of the accident, he was driving to pick up one of the residents from [*5]her mother’s house. Beckhorn testified that he was not specifically hired to pick up the resident; rather, transporting residents of the group home was only one of his many duties as a program manager. Beckhorn did not charge a fare, and he was not paid per trip. Further, the record establishes that Beckhorn possessed a “regular” driver’s license and that the minivan bore passenger plates rather than livery or commercial license plates.

In determining that the minivan constituted a vehicle for hire under Insurance Law § 5105 (a), the arbitrators relied upon Beckhorn’s testimony that he “was going to pick up one of Rivershore’s customers,” as well as materials from Rivershore’s website, which, according to the arbitrators, “proves that [Rivershore] offers a series of services for their customers . . . [including] transportation to appointments.” Beckhorn’s testimony, however, establishes that he was on his way to pick up not simply a “customer[ ]” of Rivershore; rather, he was picking up a resident of the 17th Street community residence in a minivan used by Rivershore staff for group home purposes. With respect to Rivershore’s website, none of the materials submitted to the arbitration panel refer to Rivershore’s provision of transportation services, let alone the transportation of customers “for hire.” The portion of the website relied upon by the arbitrators applies to Rivershore’s individualized service environment program, which is “designed for people who live in their own apartment or house, or in a family dwelling” (emphasis added), not for individuals who live in a community residence. In any event, even if that program was involved here, the website does not state that Rivershore provides transportation services to program participants. Rather, it states that “[h]ighly trained staff will visit [participants’] home[s] and provide supports to help [them] achieve [their] goals, which are specific and individualized to [each participant]. These supports include assisting [participants] in completing all necessary daily activities, assisting [them] with attending any needed medical appointments, and gaining further independence, productivity and inclusion in [their] community” (emphasis added).

In sum, the record establishes that the Rivershore minivan was not held out to the community as a vehicle transporting people “for hire.” To the contrary, the minivan was assigned to the 17th Street community residence for the exclusive purpose of assisting the six individuals who live there with activities of daily living, i.e., shopping, attending events, family visits, etc. The driver of the minivan was not hired for the purpose of providing transportation and did not possess a specialized license to provide transportation services; rather, he was hired to provide residential services to the residents of the group home that, from time to time, included driving them to various activities. We therefore conclude that the arbitration panel’s determination that the at-issue minivan was “used principally for the transportation of persons . . . for hire” lacks evidentiary support or a rational basis, and thus that the court properly vacated the arbitration award on that ground (Insurance Law § 5105 [a]; see generally Progressive Northeastern Ins. Co., 56 AD3d at 1113-1114; Progressive Cas. Ins. Co., 47 AD3d at 634). Present—Centra, J.P., Peradotto, Carni, Lindley and Sconiers, JJ.

—[*1] Joseph Henig, P.C., Bellmore, N.Y., for appellant.

Lawrence R. Miles, Long Island City, N.Y., for respondent.

In an action to recover no-fault benefits under an insurance contract, the plaintiff appeals, as limited by its notice of appeal and brief, from so much of an order of the Supreme Court, Nassau County (Sher, J.), entered September 1, 2011, as denied its motion for summary judgment on the complaint.

Ordered that the order is reversed insofar as appealed from, on the law, with costs, and the plaintiff’s motion for summary judgment on the complaint is granted.

The plaintiff made a prima facie showing of entitlement to judgment as a matter of law by submitting evidence that the prescribed statutory billing form had been mailed to and received by the defendant insurer, which failed to either pay or deny the claim within the requisite 30-day period (see Insurance Law § 5106 [a]; 11 NYCRR 65-3.8 [c]; NYU-Hosp. for Joint Diseases v American Intl. Group, Inc., 89 AD3d 702, 703 [2011]; Mount Sinai Hosp. v Country Wide Ins. Co., 85 AD3d 1136, 1137 [2011]; Westchester Med. Ctr. v Lincoln Gen. Ins. Co., 60 AD3d 1045, 1045-1046 [2009]).

In opposition to the plaintiff’s motion, the defendant failed to raise a triable issue of fact. A presumption of receipt was created by the certified mail receipt and the signed return receipt card, such that the defendant’s mere denial of receipt was insufficient to raise a triable issue of fact (see New York & Presbyt. Hosp. v Countrywide Ins. Co., 44 AD3d 729, 730-731 [2007]; Westchester Med. Ctr. v Liberty Mut. Ins. Co., 40 AD3d 981, 982-983 [2007]). Further, the defendant’s failure to respond to the no-fault billing within the requisite 30-day period precluded it from raising the defenses that it was not provided with timely notice of the underlying motor vehicle accident or proof of claim (see Bayside Rehab & Physical Therapy, P.C. v GEICO Ins. Co., 24 Misc 3d 542, 545 [2009]; Rockman v Clarendon Natl. Ins. Co., 21 Misc 3d 1118[A], 2008 NY Slip Op 52093[U] [Civ Ct, Richmond County 2008]; Vincent Med. Servs., P.C. v New York Cent. Mut. Fire Ins. Co., 21 Misc 3d 142[A], 2008 NY Slip Op 52442[U] [App Term, 2d Dept 2008]). Finally, although the defense of lack of coverage is not precluded by the defendant’s failure to pay or deny the subject no-fault claim within the requisite 30-day period (see Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co., 9 NY3d [*2]312, 318 [2007]; Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 199 [1997]), here, the defendant’s submissions were insufficient to raise triable issues of fact with respect to a lack of coverage defense (see Mercury Cas. Co. v Encare, Inc., 90 AD3d 475 [2011]; D.S. Chiropractic, P.C. v Country-Wide Ins. Co., 24 Misc 3d 138[A], 2009 NY Slip Op 51584[U] [App Term, 2d Dept 2009]). Accordingly, the Supreme Court should have granted the plaintiff’s motion for summary judgment on the complaint. Rivera, J.P., Belen, Sgroi and Miller, JJ., concur. [Prior Case History: 2011 NY Slip Op 32398(U).]

—[*1] Joseph Henig, P.C., Bellmore, N.Y., for appellant.

Bruno, Gerbino & Soriano, LLP, Melville, N.Y. (Mitchell L. Kaufman of counsel), for respondent.

In an action to recover no-fault medical payments under a policy of automobile insurance, the plaintiff appeals from so much of an order of the Supreme Court, Nassau County (Marber, J.), entered September 12, 2011, as denied its motion for summary judgment on the complaint.

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

The plaintiff demonstrated its prima facie entitlement to judgment as a matter of law on its complaint to recover no-fault payments, by submitting evidence that the prescribed statutory billing form had been mailed and received by the defendant insurer, which failed to either pay or deny the claim within the requisite 30-day period (see Insurance Law § 5106 [a]; 11 NYCRR 65-3.5; NYU-Hosp. for Joint Diseases v American Intl. Group, Inc., 89 AD3d 702 [2011]; Mount Sinai Hosp. v Country Wide Ins. Co., 85 AD3d 1136 [2011]; Mount Sinai Hosp. v Government Empls. Ins. Co., 85 AD3d 1135 [2011]; New York & Presbyt. Hosp. v Selective Ins. Co. of Am., 43 AD3d 1019 [2007]). In opposition to the motion, however, the defendant established that it had made a timely request for additional verification and that it timely denied the claim within 30 days of receipt of the requested information (see 11 NYCRR 65-3.8 [a] [1]; 65-3.5 [b]; 65-3.6 [b]; Westchester Med. Ctr. v American Tr. Ins. Co., 60 AD3d 848, 849 [2009]; New York Univ. Hosp. Rusk Inst. v Government Empls. Ins. Co., 39 AD3d 832 [2007]; New York & Presbyt. Hosp. v Allstate Ins. Co., 31 AD3d 512, 513 [2006]; see generally Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co., 9 NY3d 312, 317 [2007]).

The parties’ remaining contentions are without merit.

Accordingly, the Supreme Court properly denied the plaintiff’s motion for summary judgment on the complaint. Skelos, J.P., Dillon, Eng and Austin, JJ., concur.

—[*1] Carman, Callahan & Ingham, LLP, Farmingdale, N.Y. (Joseph A. Niemczyk of counsel), for appellant.

Joseph Henig, P.C., Bellmore, N.Y., for respondent.

In an action to recover no-fault medical payments under certain policies of automobile insurance, the defendant appeals, as limited by its brief, from so much of an order of the Supreme Court, Nassau County (Brandveen, J.), entered May 19, 2010, as, upon reargument, vacated the determination in an order of the same court dated August 19, 2009, denying the plaintiff’s motion for summary judgment on the complaint, and thereupon granted the plaintiff’s motion for summary judgment on the complaint.

Ordered that the order entered May 19, 2010, is modified, on the law, by deleting the provisions thereof, upon reargument, vacating the determination in the order dated August 19, 2009, denying those branches of the plaintiff’s motion which were for summary judgment on the first and third causes of action, and thereupon granting those branches of the motion, and substituting therefor a provision, upon reargument, adhering to the determination in the order dated August 19, 2009, denying those branches of the motion; as so modified, the order entered May 19, 2010, is affirmed insofar as appealed from, without costs or disbursements.

In an action to recover no-fault benefits, a plaintiff makes a prima facie showing of entitlement to judgment as a matter of law by submitting evidentiary proof that the prescribed statutory billing forms were mailed to and received by the relevant insurance carrier, and that payment of no-fault benefits was overdue (see Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274 [1997]; New York & Presbyt. Hosp. v Selective Ins. Co. of Am., 43 AD3d 1019 [2007]). No-fault benefits are overdue if not paid within 30 days after the insurer receives proof of claims, including verification of all relevant information requested (see 11 NYCRR 65-3.5, 65-3.8 [a]; New York & Presbyt. Hosp. v Selective Ins. Co. of Am., 43 AD3d 1019 [2007]).

With respect to the first cause of action, in which the plaintiff sought benefits as assignee of Gregoria Young, the plaintiff made a prima facie showing that it had mailed the prescribed statutory billing form to the defendant, and did not receive payment within the requisite 30-day period. In opposition to that showing, however, the defendant insurer submitted proof that it timely issued a denial of this claim. Inasmuch as the plaintiff sought summary judgment only on the basis that the defendant failed to timely pay or deny the claim, the Supreme Court, upon [*2]reargument, should have adhered to its prior determination denying summary judgment to the plaintiff on this cause of action without regard to the merits of the defendant’s denial of the claim (see Lenox Hill Hosp. v Government Empls. Ins. Co., 89 AD3d 905 [2d Dept 2011]; Westchester Med. Ctr. v Clarendon Natl. Ins. Co., 57 AD3d 659, 659-660 [2008]; see generally Stukas v Streiter, 83 AD3d 18, 24 [2011]).

With respect to the second cause of action, in which the plaintiff sought benefits as assignee of Loicyra Bulado, also known as Loicyra Almeda, the plaintiff offered proof that it had mailed the prescribed statutory billing form and did not receive payment therefor within 30 days after complying with the defendant’s verification requests (see Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274 [1997]). In opposition thereto, the defendant failed to raise a triable issue of fact. Accordingly, upon reargument, the plaintiff was properly awarded summary judgment on the second cause of action (see generally Alvarez v Prospect Hosp., 68 NY2d 320 [1986]).

With respect to the third cause of action, in which the plaintiff sought benefits as assignee of Anthony Prunella, the plaintiff submitted proof that it did not receive payment of its claim within 30 days after submission thereof to the defendant. However, in opposition thereto, the defendant established that it timely requested verification of this claim, and that it paid the claim within 30 days after receipt of the requested verification (see 11 NYCRR 65-3.5 [b]; see also New York & Presbyt. Hosp. v Selective Ins. Co. of Am., 43 AD3d 1019 [2007]; Mount Sinai Hosp. v Chubb Group of Ins. Cos., 43 AD3d 889 [2007]). Accordingly, upon reargument, the Supreme Court should have adhered to its prior determination denying that branch of the plaintiff’s motion which was for summary judgment on the third cause of action. Prudenti, P.J., Skelos, Balkin and Sgroi, JJ., concur.

—[*1] The Zuppa Firm PLLC, Brooklyn, N.Y. (Raymond J. Zuppa of counsel), for appellants.

McDonnell & Adels, PLLC, Garden City, N.Y. (Rivkin Radler LLP [Evan H. Krinick, Cheryl F. Korman, Barry I. Levy, and Stuart M. Bodoff], of counsel), for respondent.

In an action, inter alia, for a judgment declaring that the plaintiff has no obligation to pay no-fault claims submitted to it by the defendants Ava Acupuncture, P.C., Crossbay Acupuncture, P.C., Ditmas Acupuncture, P.C., Downtown Acupuncture, P.C., East Acupuncture, P.C., Empire Acupuncture, P.C., First Help Acupuncture, P.C., Great Wall Acupuncture, P.C., Lexington Acupuncture, P.C., Madison Acupuncture, P.C., Midborough Acupuncture, P.C., Midwood Acupuncture, P.C., New Era Acupuncture, P.C., N.Y. First Acupuncture, P.C., North Acupuncture, P.C., and VA Accutherapy Acupuncture, P.C., the defendants appeal, as limited by their brief, from so much of an order of the Supreme Court, Nassau County (McCarty III, J.), entered September 3, 2010, as denied those branches of their motion which were pursuant to CPLR 3211 (a) (7) to dismiss the first and second causes of action for failure to state a cause of action.

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

The plaintiff commenced this action seeking, among other things, a judgment declaring that it had no obligation to pay no-fault claims submitted to it by the defendants Ava Acupuncture, P.C., Crossbay Acupuncture, P.C., Ditmas Acupuncture, P.C., Downtown Acupuncture, P.C., East Acupuncture, P.C., Empire Acupuncture, P.C., First Help Acupuncture, P.C., Great Wall Acupuncture, P.C., Lexington Acupuncture, P.C., Madison Acupuncture, P.C., Midborough Acupuncture, P.C., Midwood Acupuncture, P.C., New Era Acupuncture, P.C., N.Y. First Acupuncture, P.C., North Acupuncture, P.C., and VA Accutherapy Acupuncture, P.C. (hereinafter collectively the professional corporation defendants). The first cause of action sought a judgment declaring that the professional corporation defendants were unlawfully incorporated and, thus, ineligible to collect or recover no-fault benefits. The second cause of action sought a judgment declaring that the services provided by the professional corporation defendants were performed by independent contractors or other nonemployees, and that the professional corporations were, therefore, not entitled to collect or recover no-fault benefits.

The professional corporation defendants, along with the defendants Valentina Anikeyeva and Andrey Anikeyev (hereinafter collectively the defendants), moved, among other things, pursuant to CPLR 3211 (a) (7) to dismiss the first and second causes of action for failure to [*2]state a cause of action. In an order entered September 3, 2010, the Supreme Court, inter alia, denied those branches of the defendants’ motion. We affirm the order insofar as appealed from.

“In determining a motion to dismiss pursuant to CPLR 3211 (a) (7), the court must afford the pleading a liberal construction, accept the facts as alleged in the complaint as true, accord the plaintiff the benefit of every favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory” (Integrated Constr. Servs., Inc. v Scottsdale Ins. Co., 82 AD3d 1160, 1162 [2011] [internal quotation marks omitted]).

“A motion to dismiss a declaratory judgment action prior to the service of an answer presents for consideration only the issue of whether a cause of action for declaratory relief is set forth, not the question of whether the plaintiff is entitled to a favorable declaration” (Staver Co. v Skrobisch, 144 AD2d 449, 450 [1988]; see Rockland Light & Power Co. v City of New York, 289 NY 45, 51 [1942]; Matter of Tilcon N.Y., Inc. v Town of Poughkeepsie, 87 AD3d 1148, 1150 [2011]; Law Research Serv. v Honeywell, Inc., 31 AD2d 900, 901 [1969]; see also 5-3001 Weinstein-Korn-Miller, NY Civ Prac CPLR ¶ 3001.13).

Accordingly, where a cause of action is sufficient to invoke the court’s power to “render a declaratory judgment . . . as to the rights and other legal relations of the parties to a justiciable controversy” (CPLR 3001; see 3017 [b]), a motion to dismiss that cause of action should be denied (see St. Lawrence Univ. v Trustees of Theol. School of St. Lawrence Univ., 20 NY2d 317, 325 [1967]; Rockland Light & Power Co. v City of New York, 289 NY at 51; Tilcon N.Y., Inc. v Town of Poughkeepsie, 87 AD3d at 1150; Staver Co. v Skrobisch, 144 AD2d at 450; Ackert v Union Pac. R. R. Co., 4 AD2d 819, 821 [1957]; see also 5-3001 Weinstein-Korn-Miller, NY Civ Prac ¶ 3001.13).

Here, contrary to the defendants’ contention, the allegations in the first and second causes of action presented justiciable controversies sufficient to invoke the Supreme Court’s power to render a declaratory judgment (see CPLR 3001; Waldman v 853 St. Nicholas Realty Corp., 64 AD3d 585, 587 [2009]; cf. State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313, 321 [2005]; One Beacon Ins. Group, LLC v Midland Med. Care, P.C., 54 AD3d 738, 740 [2008]; A.M. Med. Servs., P.C. v Progressive Cas. Ins. Co., 22 Misc 3d 70, 71 [2008]).

The defendants’ remaining contentions are without merit.

Accordingly, the Supreme Court properly denied those branches of the defendants’ motion which were to dismiss the first and second causes of action pursuant to CPLR 3211 (a) (7) for failure to state a cause of action. Mastro, J.P., Dillon, Cohen and Miller, JJ., concur.

—[*1] Joseph Henig, P.C., Bellmore, N.Y., for appellant.

Teresa M. Spina, Woodbury, N.Y. (Jeanne M. Ortega and P. Stephanie Estevez of counsel), for respondent.

In an action to recover payment of no fault benefits under a policy of automobile insurance, the plaintiff Lenox Hill Hospital, as assignee of Hector Jamie Robles, appeals from an order of the Supreme Court, Nassau County (Mahon, J.), entered April 21, 2011, which denied its motion for summary judgment on the first cause of action.

Ordered that the order is affirmed, with costs.

Given the limited nature of the plaintiff’s motion for summary judgment, which established the plaintiff’s prima facie entitlement to judgment as a matter of law solely on the ground that the defendant did not pay or deny the subject claim within 30 days (see 11 NYCRR 65-3.8 [c]), the defendant’s only burden in opposition to the motion was to raise a triable issue of fact regarding its timely payment or denial of the claim (see e.g. Westchester Med. Ctr. v Clarendon Natl. Ins. Co., 57 AD3d 659, 659-660 [2008]; see generally Stukas v Streiter, 83 AD3d 18, 24 [2011]). The defendant succeeded in raising such an issue of fact by submitting evidence that it sent the plaintiff a denial of claim form within the 30-day time limit. Accordingly, the motion was properly denied without regard to the plaintiff’s additional contention, improperly raised for the first time in its reply papers on the motion (see Djoganopoulos v Polkes, 67 AD3d 726, 727 [2009]; Crummell v Avis Rent A Car Sys., Inc., 62 AD3d 825, 826 [2009]), that the medical reports upon which the defendant relied to establish the merits of its denial of the claim were not in proper evidentiary form. Mastro, J.P., Chambers, Sgroi and Miller, JJ., concur.

—[*1] Peter C. Merani, New York, N.Y. (Mark J. Fenelon and William Larkin of counsel), for appellant.

Economou & Economou, LLP, Syosset, N.Y. (Ralph C. Caio of counsel), for respondent.

In an action pursuant to Insurance Law § 5106 (c) for a de novo determination of a claim for no-fault insurance benefits, the plaintiff appeals from an order of the Supreme Court, Kings County (Schack, J.), dated June 19, 2010, which denied its motion for summary judgment on the complaint and granted the defendant’s cross motion for summary judgment dismissing the complaint and on his counterclaims, and to confirm the award of a master arbitrator dated December 31, 2008.

Ordered that the order is reversed, on the law, with costs, that branch of the defendant’s cross motion which was to confirm the award of the master arbitrator is denied as academic, and the matter is remitted to the Supreme Court, Kings County, for a consideration of the merits of the plaintiff’s motion for summary judgment on the complaint and those branches of the defendant’s cross motion which were for summary judgment dismissing the complaint and on his counterclaims, and a new determination thereafter of the motion and those branches of the cross motion.

The plaintiff was entitled to commence this action to compel the de novo adjudication of the insurance dispute at issue since a master arbitrator’s award in favor of the defendant exceeded the statutory threshold sum of $5,000 (see Insurance Law § 5106 [c]; Matter of Greenberg [Ryder Truck Rental], 70 NY2d 573, 576-577 [1987]).

The Supreme Court, inter alia, denied the plaintiff’s motion for summary judgment on the complaint and granted those branches of the defendant’s cross motion which were for summary judgment dismissing the complaint and on his counterclaims, upon concluding that an award of a master arbitrator dated December 31, 2008, made pursuant to an arbitration proceeding instituted pursuant to Insurance Law § 5106 (b), was not arbitrary and capricious.

The Supreme Court erred in denying the plaintiff’s motion for summary judgment on the complaint solely on the basis that the award of the master arbitrator was not arbitrary and capricious. The plaintiff did not seek to vacate the award of the master arbitrator, and, once the [*2]plaintiff properly invoked its right to de novo review, the issue of whether the award was arbitrary and capricious was rendered academic. For the same reason, the Supreme Court also erred in granting the defendant’s cross motion to confirm the award of the master arbitrator and for summary judgment dismissing the complaint and on his counterclaims, based on the conclusion that the award was not arbitrary and capricious (see Progressive Ins. Co. v Strough, 55 AD3d 1402 [2008]; Matter of Capuano v Allstate Ins. Co., 122 AD2d 138 [1986]; see also Matter of Gersten v American Tr. Ins. Co., 161 Misc 2d 57 [1994]).

Since the Supreme Court did not consider the merits of the plaintiff’s motion or those branches of the defendant’s cross motion which were for summary judgment dismissing the complaint and on his counterclaims, the matter must be remitted to the Supreme Court, Kings County, for a consideration of the merits of the motion and those branches of the cross motion, and a new determination thereafter (see Hunter Sports Shooting Grounds, Inc. v Foley, 73 AD3d 702, 705 [2010]).

In light of our determination, we need not reach the plaintiff’s remaining contentions. Rivera, J.P., Florio, Austin and Sgroi, JJ., concur.

—[*1] McDonnell & Adels, PLLC, Garden City, N.Y. (Anita Nissan Yehuda of counsel), for appellant.

In an action for a judgment declaring that the plaintiff is not obligated to pay no-fault insurance claims submitted by the defendants, the plaintiff appeals, as limited by its brief, from so much of an order of the Supreme Court, Kings County (Battaglia, J.), dated November 25, 2009, as, sua sponte, severed the action with respect to certain defendants and denied those branches of the plaintiff’s motion which were pursuant to CPLR 3211 (a) (3) and (7) to dismiss the defendants’ counterclaims, with leave to renew after joinder of issue on an amended complaint.

Ordered that on the Court’s own motion, the appeal from so much of the order as, sua sponte, severed the action with respect to certain defendants is deemed an application for leave to appeal from that portion of the order, and leave to appeal is granted (see CPLR 5701 [c]); and it is further,

Ordered that the order is modified, on the law, on the facts, and in the exercise of discretion, (1) by deleting the provision thereof severing the action with respect to certain defendants, and (2) by deleting the provision thereof denying that branch of the plaintiff’s motion which was pursuant to CPLR 3211 (a) (7) to dismiss the defendants’ counterclaims, with leave to renew after joinder of issue on an amended complaint, and substituting therefor a provision granting that branch of the motion; as so modified, the order is affirmed insofar as appealed from; and it is further,

Ordered that one bill of costs is awarded to the plaintiff.

The plaintiff insurance company issues automobile insurance policies in New York State which include coverage under the “no-fault” insurance law (see Insurance Law § 5101 et seq.). The plaintiff commenced this action against John McGee (hereinafter Dr. McGee), a licensed physician, and 12 professional medical service corporations owned and operated by Dr. McGee (hereinafter collectively the PCs), alleging that the PCs were fraudulently incorporated in Dr. McGee’s name when they were actually owned, operated, and controlled by unlicensed persons and their management companies in violation of applicable statutes and regulations. The plaintiff seeks a judgment declaring that it is not obligated to pay outstanding and future no-fault insurance claims submitted by the PCs on the primary theory that they were fraudulently incorporated in Dr. McGee’s name to circumvent New York law prohibiting nonphysicians from sharing ownership in medical [*2]service corporations. The plaintiff also seeks declaratory relief on the alternate theories that the PCs failed to provide requested verification of their eligibility to receive no-fault benefits, failed to attend requested examinations under oath in various actions and arbitration proceedings initiated by them to recover no-fault benefits, and submitted bills seeking payment of no-fault benefits for services that were not provided.

Shortly after the defendants joined issue by serving an answer with counterclaims, the plaintiff moved, inter alia, pursuant to CPLR 3211 (a) (3) and (7) to dismiss the counterclaims. On the return date of the motion, the Supreme Court, sua sponte, raised the issue of severance as to the relief sought against each of the 12 PCs and, at the court’s request, the parties submitted supplemental memoranda on the issue. In the order appealed from, the Supreme Court, among other things, sua sponte, severed the action as to the 12 PCs, but permitted the plaintiff to serve an amended complaint against Dr. McGee and three PCs of the plaintiff’s choosing on a theory of fraudulent incorporation. The Supreme Court also denied those branches of the plaintiff’s motion which were pursuant to CPLR 3211 (a) (3) and (7) to dismiss the defendants’ counterclaims, with leave to renew after joinder of issue on an amended complaint.

The Supreme Court improvidently exercised its discretion in, sua sponte, severing the action as to the 12 PCs, and, in effect, permitting the action to continue only against Dr. McGee and 3 of the 12 PCs. “Although it is within a trial court’s discretion to grant a severance, this discretion should be exercised sparingly” (Shanley v Callanan Indus., 54 NY2d 52, 57 [1981]; see Curreri v Heritage Prop. Inv. Trust, Inc., 48 AD3d 505, 507 [2008]; Lelekakis v Kamamis, 41 AD3d 662, 666 [2007]). Severance is inappropriate where the claims against the defendants involve common factual and legal issues, and the interests of judicial economy and consistency of verdicts will be served by having a single trial (see Bentoria Holdings, Inc. v Travelers Indem. Co., 84 AD3d 1135 [2011]; Curreri v Heritage Prop. Inv. Trust, Inc., 48 AD3d at 507-508; Lelekakis v Kamamis, 41 AD3d at 666; Naylor v Knoll Farms of Suffolk County, Inc., 31 AD3d 726, 727 [2006]). Here, the complaint alleged the existence of a common scheme to fraudulently incorporate the PCs through the use of Dr. McGee’s professional license, which, if established, would render all of the PCs ineligible to recover no-fault benefits (see State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313, 319-322 [2005]). The common factual and legal issues presented as to whether the 12 PCs were fraudulently incorporated predominate the action and, thus, the interests of judicial economy and consistency of verdicts would be not be served by requiring the plaintiff to commence multiple actions. To the contrary, such fragmentation would increase litigation and place “an unnecessary burden on court facilities” (Shanley v Callanan Indus., 54 NY2d at 57), by requiring four separate trials instead of one.

Furthermore, the Supreme Court should have granted that branch of the plaintiff’s motion which was to dismiss the defendants’ counterclaims pursuant to CPLR 3211 (a) (7). The counterclaims are predicated on the defendants’ allegation that they are entitled to reimbursement for medical services provided under the medical payments coverage provisions of the subject insurance policies rather than the no-fault coverage provisions. However, medical payments coverage is excess coverage over mandatory no-fault coverage (see 11 NYCRR 65-1.1), and the defendants have failed to allege or otherwise demonstrate that the payments they seek exceed the no-fault threshold of $50,000 for basic economic loss of an eligible injured person for a single accident. Since the defendants have failed to allege facts which, if true, would entitle them to recover for medical services rendered under medical payments coverage, the counterclaims fail to state a cause of action (see generally Leon v Martinez, 84 NY2d 83, 87-88 [1994]; Jaymer Communications, Inc. v Associated Locksmiths of Am., Inc., 84 AD3d 888 [2011]).

The plaintiff’s remaining contention that the Supreme Court should have granted that branch of their motion which was pursuant to CPLR 3211 (a) (3) to dismiss the counterclaims because the defendants lacked standing to assert them is without merit. Rivera, J.P., Eng, Roman and Miller, JJ., concur. [Prior Case History: 25 Misc 3d 1232(A), 2009 NY Slip Op 52385(U).]