[*1]

Second Department, October 24, 2006

APPEARANCES OF COUNSEL

Picciano & Scahill, Westbury (Robin Mary Heaney and Francis J. Scahill of counsel), for appellant.

Michael A. Forzano, Brooklyn, for respondent.

{**36 AD3d at 93} OPINION OF THE COURT

Miller, J.P.

The plaintiff settled his action to recover damages for personal injuries against the tortfeasor for $25,000, the limit of the tortfeasor’s automobile liability policy, and subsequently commenced this breach of contract action against his own insurer, State Farm Mutual Automobile Insurance Company (hereinafter State Farm), to recover damages under the supplementary underinsured motorist endorsement of his policy. In this appeal, the issue is whether the insurer may raise as an affirmative defense the fact that the insured did not sustain a serious injury within the meaning of Insurance Law § 5102 (d). An examination of the pertinent statutes leads to the conclusion that it may not. Accordingly, the Supreme Court properly granted the plaintiff’s motion to strike that affirmative defense from the insurer’s answer.

I

On December 29, 1997, the plaintiff purchased an automobile liability insurance policy from State Farm. Among other coverages afforded, the policy provided supplementary uninsured motorist coverage in the sum of $100,000 per occurrence. The policy was in effect when, on April 15, 1998, the plaintiff was involved in an automobile accident; his car was hit by a car driven by Roman Seleznev at an intersection in Brooklyn. The plaintiff sued Seleznev to recover [*2]damages for personal injuries in the Supreme Court, Kings County. While the pleadings in the personal injury action have not been included in the record on this appeal, in his complaint in the instant action, the plaintiff alleged that as a result of the accident, he sustained serious injuries, including herniated lumbar discs, bulging cervical discs, and internal derangement of the spine and of the neck, upper back, and lower back, and allegedly sustained “permanent{**36 AD3d at 94} debilitating injuries, medical expense and a loss of enjoyment of life.” He went into greater detail in a bill of particulars he served in this action, alleging, inter alia, a herniated disc at L4-L5, a bulging disc at C5-C6, impingement on the thecal sac, severe upper and lower back injury, a head injury, and postconcussion syndrome. He claimed that he was unable to sit or stand for long periods of time, and unable to sleep, and that he had been permanently partially disabled. He asserted that following the accident, he made an emergency room visit only and, thereafter, he was confined to his home for one month. He was out of work for one month. He stated that health care expenses were paid by the no-fault carrier, and that there were no out-of-pocket expenses.

The plaintiff timely notified State Farm of the accident, and of the commencement of his personal injury action. Seleznev’s insurer tendered its $25,000 policy limit for liability coverage in settlement of the plaintiff’s personal injury action. The plaintiff notified State Farm of the proposed settlement, and on June 19, 2003, requested its consent. The plaintiff claimed that State Farm did not respond within 30 days and thus it was presumed to have consented to the settlement (see 11 NYCRR 60-2.3).

Thereafter, the personal injury action was settled for the sum of $25,000. The plaintiff claimed that his actual damages “far exceeded” the $100,000 limit of his policy with State Farm. He submitted a claim to State Farm in the sum of $75,000 ($100,000 less the $25,000 he received in his settlement with Seleznev’s insurer). In connection with his claim to State Farm, the plaintiff alleged that he submitted to an examination under oath as well as multiple physical examinations, completed claim forms, and provided medical reports and authorizations.

State Farm did not pay the $75,000 claim.

In its answer to the complaint, State Farm denied the plaintiff’s material allegations and raised five affirmative defenses. As relevant here, in its fifth affirmative defense, State Farm alleged that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102 (d) and, therefore, he had no right to maintain this action; his exclusive remedy was confined to article 51 of the Insurance Law.

By notice of “cross” motion dated January 31, 2005, the plaintiff moved to strike State Farm’s fifth affirmative defense of lack of serious injury. (The motion was styled as a “cross” motion, but there was no recitation in the papers before the Supreme Court, or in the briefs on appeal, that State Farm{**36 AD3d at 95} made a motion in response to which the plaintiff could “cross-move.”) The plaintiff argued that Insurance Law § 5104 (a) provided that the right to recover for pain and suffering was conditioned on the plaintiff sustaining a serious injury in any action by or on behalf of a covered person against another covered person for injuries arising out of negligence in the use or operation of a motor vehicle. This action was not a negligence action by a covered person against another covered person—nor was it a negligence action. It was a breach of contract action. The only way the restriction could apply in this case was if the insurance contract provided for it, but the plaintiff claimed it did not. The record does not contain a copy of the insurance contract.

The plaintiff then explained that, by statute, the serious injury requirement applied to uninsured motorist coverage (the type of coverage that is triggered, for example, when a tortfeasor is unknown, as in a hit-and-run, or where a known tortfeasor has no coverage), pursuant to Insurance [*3]Law § 3420 (f) (1). Supplementary underinsured motorist (hereinafter SUM) coverage, on the other hand, which applies in situations such as the one here, is triggered when a tortfeasor has insurance coverage which is not sufficient to compensate the injured party for the injuries suffered; the SUM coverage then acts as “excess” coverage over that of the tortfeasor. The latter type of coverage is described in Insurance Law § 3420 (f) (2) (A).

Both coverages are statutory, according to the plaintiff, and thus the statutory provisions control. The uninsured motorist statute requires the plaintiff to sustain a serious injury in order to recover such benefits. In contrast, the statutory provision governing underinsurance coverage contains no such requirement. That made sense, the plaintiff argued, because in a case such as this one, insurance is in place with respect to the tortfeasor, and “the serious injury threshold has been dealt with in that case.” The exhaustion of the tortfeasor’s policy “assumes the existence of a serious injury, or nothing should have been paid at all.” For that reason, the plaintiff maintained, the serious injury requirement was not included in the underinsurance coverage provision.

In opposition to the motion to strike, State Farm submitted, inter alia, a copy of what it represented was the subject State Farm policy, but actually was a copy of the policy’s declarations pages.

State Farm contended that the plaintiff’s argument did not refer to 11 NYCRR 60-2.3, which contains mandatory requirements{**36 AD3d at 96} for SUM endorsements. Among other things, the regulation requires such endorsements to contain an exclusion from SUM coverage for noneconomic loss when the insured has not sustained a serious injury as defined in Insurance Law § 5102 (d). In this case, in accordance with that regulation, the subject policy contained such an endorsement, including the above exclusion. State Farm referred to the policy as proof of that point—but, as noted above, it submitted only the declarations pages, and no such exclusion appears in the papers provided. Thus, State Farm maintained, contrary to the plaintiff’s contention, the subject policy did contain a contractual requirement that the policyholder sustain a serious injury in order to recover SUM benefits under the policy.

In reply, the plaintiff pointed out that the endorsement State Farm referred to was not attached to its papers; rather, only the declarations pages were attached. The declarations pages referred to SUM coverage as one of the subject policy’s endorsements, but the endorsement itself was not provided. In any event, the plaintiff argued, the endorsement State Farm referred to differed from the governing statute, in a way that was less favorable to the insured. In other words, the statute said nothing about a serious injury threshold; thus, any endorsement setting such a threshold conflicted with the Insurance Law § 3420 (f) (2).

The Supreme Court granted the plaintiff’s motion to strike State Farm’s affirmative defense of lack of serious injury. The court stated as follows:

“SUM coverage is available when the monetary limit of the insured’s bodily injury liability coverage is, as here, greater than the same coverage of the tortfeasor. In that case, the injured party’s policy supplements the damages which he or she may recover up to the limits of the SUM coverage once the tortfeasor’s coverage is exhausted.

“Insurance Law § 5104 provides, in part, that the right to recover for non-economic loss is conditioned upon plaintiff having sustained a ‘serious injury’ in any action by or on behalf of a ‘covered person’ against another ‘covered person’ for personal injuries. While plaintiff in this case is a covered person, State Farm is not. Further, [*4]while ‘serious injury’ is a necessary predicate to a claim for ‘uninsured{**36 AD3d at 97} motorist coverage’ (Insurance Law § 3420 [f] [1]), the language contained in Insurance Law § 3420 (f) (2), which relates to ‘supplementary underinsured motorist coverage,’ contains no provision which conditions recovery upon a ‘serious injury.’ To the extent that State Farm asserts that its policy contains an endorsement which requires plaintiff to have sustained a ‘serious injury’ as a condition of SUM coverage, the court finds that the underlying action brought by plaintiff against the tortfeasor (Roman Seleznev) would not have been settled for the policy limits if not for the existence of a ‘serious injury.’ The court further notes that State Farm apparently consented to the settlement. Accordingly, the cross motion by plaintiff is granted.”

State Farm appeals. We affirm.

II

First, State Farm’s contention that this Court already has decided the issue this case presents—in favor of insurers—is without merit. Rather, the issue does not appear to have been litigated in any of the Appellate Division cases State Farm cites. Murray v Hartford (23 AD3d 629 [2005]) was an action, like this one, in contract, by an insured against her insurance company, seeking underinsurance benefits. The insurer moved for summary judgment on the ground that the insured had not sustained a serious injury within the meaning of Insurance Law § 5102 (d). The Supreme Court denied the motion, and this Court reversed, following a review of the medical reports and deposition testimony. On the merits, this Court concluded that the insurer made a prima facie showing warranting dismissal, which the plaintiff failed to rebut. Brathwaite v New York Cent. Mut. Fire Ins. Co. (13 AD3d 405 [2004]) is another breach of contract action brought by an insured against her insurer for underinsurance benefits; this Court held that the insurer had not made a prima facie showing that the plaintiff did not sustain a serious injury. Both of the foregoing cases seem to assume that the serious injury threshold requirement of the no-fault law applied—because no one argued, as in this case, that it did not.

Finally, Matter of Allstate Ins. Co. v Torre (264 AD2d 477 [1999]) was a proceeding to stay arbitration between the insured and the insurer. There is no discussion in that case of the issue involved here.{**36 AD3d at 98}

On the other hand, the plaintiff has cited unpublished Supreme Court cases that do involve the issue presented here. Those cases favor his position. Their rationale was adopted by the Supreme Court in this case (see Rankine v GEICO Ins. Co., NYLJ, Mar. 22, 2002, at 21, col 6 [Sup Ct, Nassau County, Lally, J.]; Birch v New York Cent. Mut. Ins. Co., Sup Ct, Richmond County, Mar. 29, 2004, Vitaliano, J., Index No. 13317/03).

A

The “serious injury” threshold of New York’s no-fault scheme was added by amendment to the Insurance Law in 1973 (L 1973, ch 13). The purpose of the law is to “compensat[e] victims of automobile accidents without regard to fault” (Montgomery v Daniels, 38 NY2d 41, 46 [1975]). Under the no-fault system, a “covered person” is defined as, inter alia, any operator or occupant of a motor vehicle “which has in effect the financial security required by article six or eight of the vehicle and traffic law or which is referred to in [section 321 (2)] of such law” (Insurance Law § 5102 [j]). A covered person may recover for “[b]asic economic loss” (defined at Insurance Law § 5102 [a], and includes medical and hospital expenses, and loss of earnings, among other things) up to a maximum of $50,000. Compensation for such loss is payable as “[f]irst party benefits,” following the reduction of the gross amount thereof by certain amounts set out in the statute (see Insurance Law[*5]§ 5102 [b]). ” ‘Non-economic loss’ means pain and suffering and similar nonmonetary detriment” (§ 5102 [c]).

The injured party has a “right to first-party benefits . . . regardless of fault or negligence on the part of the covered person” (Montgomery v Daniels, supra at 47).

The no-fault scheme limits tort recoveries for personal injuries, but only applies to actions between “covered persons.” For example, there cannot be a duplicate tort recovery for basic economic loss. In addition, damages for noneconomic loss are not recoverable in tort unless the plaintiff can establish “serious injury” (Insurance Law § 5104 [a]; see Montgomery v Daniels, supra at 47).

In Walton v Lumbermens Mut. Cas. Co. (88 NY2d 211, 214 [1996]), the Court of Appeals described the no-fault scheme as follows:

“New York’s no-fault insurance law, formally known as the ‘Comprehensive Automobile Insurance Reparations{**36 AD3d at 99} Act,’ was enacted in 1973. It was prompted by the significant problems which had arisen in common-law, fault-based litigation of automobile accidents. Its purposes were to remove the vast majority of claims arising from vehicular accidents from the sphere of common-law tort litigation, and to establish a quick, sure and efficient system for obtaining compensation for economic loss suffered as a result of such accidents” (citations omitted).

B

The purpose of the uninsured motorist provision of the Insurance Law is “to provide persons injured by financially irresponsible motorists a fund from which they could seek some compensation for their injuries” (Matter of Lloyd [Motor Veh. Acc. Indem. Corp.], 23 NY2d 478, 481 [1969]). The uninsured motorist provision dates back to 1958, and thus it predates the no-fault law. Writing in 1987, this Court observed that when the uninsured motorist provision legislation was first enacted, “there was no legally significant distinction” between economic and noneconomic losses, and that recovery under the uninsured motorist law as it then existed thus included both those elements of damages (see Fox v Atlantic Mut. Ins. Co., 132 AD2d 17, 21 [1987]). In 1977, just a few years after the no-fault scheme was enacted, the Insurance Law was amended to allow recovery under the uninsured motorist provision for noneconomic loss only in the event of a serious injury (see L 1977, ch 892; Insurance Law § 3420 [f] [1]). In Fox v Atlantic Mut. Ins. Co. (132 AD2d 17, 22 [1987]), this Court commented as follows about the 1977 amendment:

“By engrafting onto the provisions governing mandatory uninsured motorist coverage the requirement that serious injury must be sustained as a precondition to recovery for noneconomic loss, the Legislature effectively eliminated the possibility that an uninsured motorist claimant would receive greater monetary protection than that afforded to a person similarly injured by a properly insured driver.”

The uninsured motorist provision currently is codified at Insurance Law § 3420 (f) (1). Among other things, that subdivision requires that motor vehicle liability insurance policies issued upon motor vehicles principally used or garaged in New York{**36 AD3d at 100} contain a provision committing the insurer to pay to the insured the sums described in the statute which the insured or his legal representative is entitled to recover as damages for personal injury or wrongful death from an owner or operator of an uninsured motor vehicle. In addition to the latter category of owners/operators, the statute also includes the owner or operator of an unidentified motor vehicle that leaves the scene of an accident, [*6]a motor vehicle registered in this state as to which at the time of the accident there was not in effect a policy of liability insurance, a stolen vehicle, a motor vehicle operated without permission from the owner, an insured motor vehicle when the insurer disclaims liability or denies coverage, and an unregistered vehicle (Insurance Law § 3420 [f] [1]). The subdivision continues, stating, “No payment for non-economic loss shall be made under such policy provision to a covered person unless such person has incurred a serious injury, as such terms are defined in [section 5102] of this chapter.” (Emphasis added.) The foregoing coverage is mandatory.

C

On the other hand, underinsured motorist coverage—the type of coverage involved in this case—is not mandatory. It may be purchased at the option of the insured, to supplement other coverages, including those mandated by law. Such coverage is triggered if the limits of liability of other insurance policies of other vehicles liable for damages “are in a lesser amount” than the coverage provided to the insured. Its purpose is as follows:

“Underinsurance coverage is designed to increase the level of protection afforded to policyholders injured by negligent drivers who lack adequate liability insurance. Typically, an underinsurance claim arises when a tortfeasor has insurance that satisfies the minimum legal requirements but is insufficient to provide full compensation to the injured claimant . . .

“Insurance Law § 3420 (f) (2) was enacted to allow policyholders to acquire the same level of protection for themselves and their passengers as they purchased to protect themselves against liability to others” (Matter of Metropolitan Prop.& Cas. Ins. Co. v Mancuso, 93 NY2d 487, 492 [1999] [citations omitted]).

The statute providing for supplementary underinsured coverage did not use that term when it was enacted in 1977. It used{**36 AD3d at 101} the term supplementary uninsured coverage. The statute was amended in 1997 to replace the term “uninsured” with the combined term “uninsured/underinsured” (see L 1997, ch 568, § 1). Prior to that amendment, over time, the two words were used interchangeably. As the Court of Appeals noted in Reichel v Government Empls. Ins. Co. (66 NY2d 1000 [1985]), decided over a decade prior to the 1997 amendment, while the optional coverage afforded by the Insurance Law was commonly referred to as “underinsurance,” it nonetheless is a type of uninsured motorist coverage. The Court of Appeals referred to the statute as it was then written, and observed as follows:

“The statutory allowance for supplementary uninsured motorists insurance coverage expands the ‘uninsured motorist’ category to include one who, while maintaining proof of financial responsibility as required by law, and thus being an ‘insured motorist’, nevertheless may be considered an ‘uninsured motorist’ because he is ‘underinsured’ when compared to the coverage of an insured who has exercised the option to purchase supplementary insurance.” (Id. at 1003.)

In 1991, the Appellate Division, First Department, dealt with a case brought by an insured against his insurance company for underinsured benefits pursuant to his policy. The insured was injured in an accident with an uninsured vehicle. The insurer argued that the arbitrator in that case erred in applying the policy’s underinsurance coverage when the insured was involved in an accident with a car that had no insurance. The insurer further argued that the underinsurance only took effect when the other vehicle had some, but an insufficient amount of, coverage. The First Department rejected that argument, noting that underinsurance is supplementary to uninsured coverage. Insureds may increase uninsured coverage by the payment of extra premiums to obtain underinsurance coverage. As the First Department noted, if the offending vehicle has no insurance at all, then it is underinsured by the full amount rather than just the inadequate amount of the policy (see Hae Sup Kim v General Acc. Fire& Life Ins. Co., 171 AD2d 404 [1991]).

The statutory provision governing uninsured/underinsured coverage—Insurance Law § 3420 (f) (2) (A)—now reads, in relevant part: “Any such policy shall, at the option of the insured, also provide supplementary uninsured/underinsured motorists insurance for bodily injury, in an amount up to the bodily injury{**36 AD3d at 102} liability insurance limits of coverage provided under such policy.” The statute then sets forth the maxima for various scenarios, and contains other provisions, not directly pertinent here. Notably, the provision does not contain the “serious injury” threshold that the uninsured motorist benefit provision does.

D

In 1992 Insurance Department Regulation 35-D (11 NYCRR 60-2.0) was enacted. According to the Appellate Division, Fourth Department, which noted that the terms “underinsured” and “uninsured” had caused confusion in the courts and in the industry, the Superintendent of Insurance promulgated the regulation “whereby both terms are now, for all practical purposes, synonymous” (Matter of Utica Mut. Ins. Co. [Hurd], 221 AD2d 903, 904 [1995]).

The preamble to the regulations states that they are designed to interpret Insurance Law § 3420 (f) (2), which governs the optional coverage, in light of “judicial rulings and experience,” by establishing a standard form for SUM coverage (see 11 NYCRR 60-2.0 [a], [c]).

The purpose of SUM coverage, according to the regulation, is to protect a policyholder when he or she is involved in an accident with another vehicle whose operator was negligent, and who has no insurance, or who is insured, but only for relatively low liability limits, in comparison to the policyholder (see 11 NYCRR 60-2.1 [a]). Thus, the regulations lump underinsured and uninsured situations together under the SUM umbrella.

According to 11 NYCRR 60-2.3, the prescribed SUM endorsement includes the mandatory uninsured motorist coverage required by Insurance Law § 3420 (f) (1). If the policyholder elects not to purchase the additional, optional coverage, then the insurer must issue, rather than the prescribed SUM endorsement, the mandatory uninsured motorists endorsement prescribed by the Motor Vehicle Accident Indemnification Corporation (MVAIC) and approved by the Superintendent of Insurance (see 11 NYCRR 60-2.3 [d], [e]). If the optional coverage is purchased, then the prescribed SUM endorsement set forth in Regulation 35-D must be used (see 11 NYCRR 60-2.3 [f]).

Among other things, the prescribed endorsement must define the term “uninsured motor vehicle” in such a way that it includes, inter alia, a vehicle that has no insurance coverage at{**36 AD3d at 103} all, as well as one that is covered, but in an amount less than the third-party limit of the policyholder’s contract (see 11 NYCRR 60-2.3 [f]).

There are three prescribed exclusions. The third provides that SUM coverage will [*8]not apply “for non-economic loss, resulting from bodily injury to an insured and arising from an accident in New York State, unless the insured has sustained serious injury as defined in Section 5102 (d) of the New York Insurance Law.” (11 NYCRR 60-2.3 [f].)

Thus, Regulation 35-D appears to mandate, as State Farm contends, that an insured sustain a serious injury in order to recover under the optional SUM endorsement.

III

The Supreme Court correctly struck State Farm’s defense of lack of serious injury.

As observed by the trial courts that have addressed this issue, in the Insurance Law, the Legislature made a point of imposing the serious injury threshold requirement in section 3420 (f) (1), which governs mandatory, uninsured motorists coverage, and involves claims against the funds administered by MVAIC. The Legislature omitted that threshold from the ensuing section, section 3420 (f) (2), which governs the optional coverage an insured may, for an additional premium, purchase from his or her insurer. The omission of the serious injury threshold requirement in section 3420 (f) (2) means that State Farm’s defense in this case of lack of serious injury is legally irrelevant.

Having imposed the threshold requirement in the other contexts outlined above, the Legislature surely could have imposed it in situations such as the one presented here. There is no reason to engraft a threshold requirement at bar, not only because that is a legislative prerogative, but also because the policies the threshold requirement reflects in the no-fault and uninsured vehicle situations are not implicated here. The plaintiff paid an additional premium to his insurer for supplementary protection that would be triggered in the event he was injured in an accident with a driver who was insured in compliance with New York law, but allegedly not enough. Following the insurer’s objection to payment once that situation unfortunately arose, the insured now is pursuing a contract claim against his insurer for benefits the insurer allegedly promised to pay in exchange for the additional premium. The no-fault scheme’s concern with filtering a class of tort claims out of the{**36 AD3d at 104} court system is not implicated here. Nor is the mandatory uninsured motorist scheme’s concern with equalizing the respective positions of claimants injured by uninsured and those injured by properly insured motorists.

In many instances, the issue presented in this case probably will not arise because the underlying personal injury matter will involve a serious injury. But that will not always necessarily be the case. Here, for example, Seleznev’s insurer may have tendered his $25,000 policy limit to settle the plaintiff’s claim because the plaintiff sustained a serious injury (although that issue does not appear to have been litigated), or simply because, regardless of the serious injury issue, the insurer simply chose to avoid the cost of litigation. In the latter situation, when the injured party then proceeds against his or her own insurer for underinsurance protection that he or she has opted to bargain and pay for, and he or she has paid for, there is no reason to impose a serious injury requirement.

To the extent Regulation 35-D imposes such a threshold in the underinsurance context, it would appear unauthorized, and this Court need not follow it. As the Court of Appeals noted in Kurcsics v Merchants Mut. Ins. Co. (49 NY2d 451, 459 [1980]):

“Where the interpretation of a statute or its application involves knowledge and understanding of underlying operational practices or entails an evaluation of factual [*9]data and inferences to be drawn therefrom, the courts regularly defer to the governmental agency charged with the responsibility for administration of the statute. If its interpretation is not irrational or unreasonable, it will be upheld . . . Where, however, the question is one of pure statutory reading and analysis, dependent only on accurate apprehension of legislative intent, there is little basis to rely on any special competence or expertise of the administrative agency and its interpretive regulations are therefore to be accorded much less weight. And, of course, if the regulation runs counter to the clear wording of a statutory provision, it should not be accorded any weight” (citations omitted).

Here, the exclusion mandated by 11 NYCRR 60-2.3 (f), concerning compensation for pain and suffering when there is no serious injury, finds no support in Insurance Law § 3420 (f) (2). As noted, the Legislature certainly knew how to add such provision,{**36 AD3d at 105} as it did so in the immediately preceding subdivision (f) (1).

One could then argue that if the regulation is disregarded as not reflective of legislative intent, then the serious injury threshold, while not mandated by law, nevertheless may be imposed by contract. However, Insurance Law § 3420 (a) provides, in relevant part, that “[n]o policy or contract insuring against liability for injury to person . . . shall be issued or delivered in this state, unless it contains in substance the following provisions or provisions which are equally or more favorable to the insured” (emphasis added). Thereafter, the statute lists various “standard” provisions, including, inter alia, the uninsured motorists and SUM provisions described above.

Thus, a contract provision imposing a serious injury threshold requirement in the underinsurance context is less favorable to the insured than section 3420 (f) (2) and should not be given effect. Accordingly, State Farm’s contention that the parties’ contract contained a serious injury threshold applicable here is of no avail.

IV

In conclusion, State Farm’s fifth affirmative defense properly was stricken, as the plaintiff was not required to demonstrate a serious injury, within the meaning of Insurance Law § 5102 (d) in his contract action against his insurer to recover benefits under the optional, underinsurance endorsement of his insurance policy. Accordingly, on the Court’s own motion the notice of appeal from a decision of the Supreme Court, Kings County, dated May 4, 2005, is deemed a premature notice of appeal from the order dated June 30, 2005 (see CPLR 5520 [c]), and the order is affirmed.

Luciano, Lifson and Covello, JJ., concur.

Ordered that on the Court’s own motion, the notice of appeal from a decision of the Supreme Court, Kings County, dated May 4, 2005 is deemed a premature notice of appeal from the order dated June 30, 2005 (see CPLR 5520 [c]); and it is further,

Ordered that the order is affirmed; and it is further,

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

—[*1]

Order, Supreme Court, New York County (Karla Moskowitz, J.), entered January 26, 2006, which permitted plaintiffs to withhold payments for claims that defendants-appellants had made before April 4, 2002 and dismissed plaintiffs’ causes of action for fraud and unjust enrichment regarding payments made before that date insofar as such causes of action were based on defendants’ improper corporate form, and order, same court and Justice, entered March 3, 2006, which denied defendants-appellants’ motion to strike plaintiffs’ affirmative defenses to defendants’ counterclaims insofar as said defenses were based on defendants’ improper corporate form, unanimously affirmed, without costs.

The Insurance Department regulation on claims for personal injury protection benefits (11 NYCRR 65-3.16 [a] [12]) states that “A provider of health care services is not [*2]eligible for reimbursement under section 5102 (a) (1) of the Insurance Law if the provider fails to meet any applicable New York State or local licensing requirement necessary to perform such service in New York.” This regulation was initially promulgated to take effect on September 1, 2001, but implementation was stayed by court order until April 4, 2002. Relying on this regulation, the Court of Appeals has held that “insurance carriers may withhold payment for medical services provided by fraudulently incorporated enterprises to which patients have assigned their claims” (State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313, 319 [2005]), and that “no cause of action for fraud or unjust enrichment would lie for any payments made by the carriers before . . . April 4, 2002” (at 322).

Mallela is dispositive as to plaintiffs’ fraud and unjust enrichment claims. Even if the quoted excerpt was dictum, we would find it highly persuasive. Plaintiffs’ attempt to distinguish Mallela by saying that their claims rest on the common law, not just on section 65-3.16 (a) (12), is unconvincing; in any event, the claims would not be cognizable (see Oxford Health Plans [NY] v BetterCare Health Care Pain Mgt. & Rehab, 305 AD2d 223 [2003]).

With respect to the bills that plaintiffs have not yet paid, the clear import of section 65-3.16 (a) (12) is that as of April 4, 2002, defendants were no longer eligible to be paid, even if they had already performed services. The very word “reimbursement,” used in the regulation, implies that the services had already been provided. Moreover, Mallela involved pre-April 4, 2002 claims, so it would be illogical to read that case as applying only to claims submitted on or after April 4, 2002 (see e.g. Metroscan Imaging P.C. v GEICO Ins. Co., 8 Misc 3d 829, 834 [Civ Ct, Queens County 2005], affd 13 Misc 3d 35 [App Term 2006]).

We do not find this allegedly retroactive application of the regulation problematic. “Ameliorative or remedial legislation . . . should be given retroactive effect in order to effectuate its beneficial purpose” (Matter of Marino S., 100 NY2d 361, 370-371 [2003], cert denied 540 US 1059 [2003]). The purpose of the regulations of which section 65-3.16 (a) (12) is a part was to combat fraud (see Matter of Medical Socy. of State of N.Y. v Serio, 100 NY2d 854, 862 [2003]). Indeed, the notice of adoption stated that “The Insurance Department is taking this action in order to implement a new regulation which will ensure that the public receives the benefits of reduced fraud and abuse provided by the proposed regulation at the earliest possible moment” (NY Reg, May 9, 2001, at 19).

Contrary to defendants’ argument, we do not find that section 65-3.16 (a) (12) impaired vested rights or created a new right. The law prior to Mallela was unclear, so defendants did not have a vested right to reimbursement (see Matter of Versailles Realty Co. v New York State Div. of Hous. & Community Renewal, 76 NY2d 325, 330 [1990]). Because there were decisions going both ways before Mallela, that case did not create a “new” right that had never before existed.

We are not persuaded by defendants-appellants’ claim that the allegedly retroactive application of section 65-3.16 (a) (12) would violate article I, § 10 (1) of the US [*3]Constitution. There was no contract between defendants and plaintiffs; defendants’ right to reimbursement from plaintiffs was purely a creature of regulation, viz., 11 NYCRR 65-3.11. Concur—Buckley, P.J., Mazzarelli, Williams, Gonzalez and Sweeny, JJ. [See 11 Misc 3d 810 (2006).]

—[*1]

Motion by the appellant for leave to reargue an appeal from an order and judgment (one paper) of the Supreme Court, Nassau County (Bucaria, J.), dated February 17, 2004, which was determined by decision and order of this Court dated May 23, 2005 [18 AD3d 756], or, in the alternative, for leave to appeal to the Court of Appeals from the decision and order of this Court.

Upon the papers filed in support of the motion and the papers filed in opposition thereto, it is

Ordered that the branch of the motion which is for leave to reargue is granted; and it is further,

Ordered that the motion is otherwise denied; and it is further,

Ordered that upon reargument, the decision and order of this Court dated May 23, 2005 is recalled and vacated and the following decision and order is substituted therefor:

In a proceeding pursuant to CPLR article 75 to permanently stay arbitration, the [*2]appeal is from an order and judgment (one paper) of the Supreme Court, Nassau County (Bucaria, J.), dated February 17, 2004, which granted the petition.

Ordered that the order and judgment is reversed, on the law, without costs or disbursements, and the matter is remitted to the Supreme Court, Nassau County, for further proceedings in accordance herewith.

On May 13, 1999 the appellant was involved in an automobile accident with nonparty Rajinder Dharamshot. She filed a no-fault claim dated May 14, 1999 with her insurer, the petitioner Nationwide Mutual Insurance Company (hereinafter Nationwide), and initially received no-fault benefits from Nationwide. Those benefits were cancelled in October 1999 after Nationwide conducted an independent medical examination of the appellant.

According to the appellant, while her injuries did not appear to be serious at first, they eventually proved to be serious. As a result, in June 2000 she commenced an action against Dharamshot. The appellant’s counsel subsequently learned, on or about April 25, 2001, that Dharamshot’s policy was limited and less than the appellant’s. Accordingly, by letter of April 26, 2001, he notified Nationwide that the appellant would be making a claim for underinsured coverage under the SUM provisions of her policy (hereinafter the SUM coverage).

By letter dated May 14, 2001, Nationwide asked the appellant to fill out a 25-page questionnaire. Before she could comply, by letter dated May 25, 2001, Nationwide disclaimed coverage based on the appellant’s failure to timely notify it of her SUM (underinsured motorist) claim, and failure to forward the summons and complaint in her personal injury action to it.

In April 2002 after Dharamshot’s carrier tendered its policy, Nationwide indicated that it had no objection to the appellant accepting the full policy and settling with Dharamshot. After Nationwide received the appellant’s demand for arbitration, it commenced this proceeding to stay the arbitration. The Supreme Court agreed and granted the petition without a hearing, finding that the appellant failed to timely comply with the notification provisions of her policy with Nationwide. We reverse.

Under Rekemeyer v State Farm Mut. Auto. Ins. Co. (4 NY3d 468, 475-476 [2005]) where, as here, there was timely notice of the accident and a claim for no-fault benefits, the insurer must show that it was prejudiced before it can rely on the policy provisions requiring timely notice of the SUM claim and/or a claimant’s failure to promptly forward the claimant’s summons and complaint to it, to disclaim a demand for SUM coverage solely based on late notice by the claimant. Therefore, the Supreme Court should have held a hearing on the issue of prejudice to Nationwide prior to making a determination on its petition, and we remit the matter to the Supreme Court, Nassau County, for a hearing on the issue of prejudice to Nationwide and a new determination of the petition thereafter.

In light of this determination, we need not reach the appellant’s remaining contentions. Florio, J.P., Schmidt, Rivera and Lifson, JJ., concur.

—[*1]

In an action for a declaratory judgment, (a) the plaintiff appeals from so much of (1) an order of the Supreme Court, Nassau County (Parga, J.), entered March 23, 2005, as denied that branch of his motion which was for summary judgment declaring that he is not obligated to reimburse the defendant Incorporated Village of Lake Success for the money paid to him pursuant to General Municipal Law § 207-c, and granted the cross motion of the defendant Incorporated Village of Lake Success for summary judgment, in effect, declaring that the plaintiff is obligated to reimburse it for the money paid to him pursuant to General Municipal Law § 207-c, and (2) an order of the same court dated July 22, 2005, as denied his motion, in effect, for leave to reargue that branch of his prior motion which was for summary judgment declaring that the plaintiff is not obligated to reimburse it for the money paid to the plaintiff pursuant to General Municipal Law § 207-c and the prior cross motion, and (b) the defendant American Protection Insurance Company separately appeals from so much of (1) the order entered March 23, 2005, as denied that branch of its motion which was for summary judgment declaring that the defendant Incorporated Village of Lake Success is not entitled to a lien in the amount it paid the plaintiff pursuant to General Municipal Law § 207-c against any underinsured motorist arbitration award that is made to the plaintiff, and granted the cross motion of the Incorporated Village of Lake Success for summary judgment declaring that the [*2]defendant Incorporated Village of Lake Success is entitled to a lien against any award the plaintiff obtains in his arbitration for underinsured motorist benefits in the amount paid to him pursuant to General Municipal Law § 207-c, and (2) the order dated July 22, 2005, as denied its motion which was denominated as one for leave to renew and reargue, but which was, in actuality, for leave to reargue that branch of its prior motion which was for summary judgment declaring that the plaintiff is not obligated to reimburse it for the money paid to the plaintiff pursuant to General Municipal Law § 207-c and the prior cross motion of the defendant Incorporated Village of Lake Success.

Ordered that the appeals from the order dated July 22, 2005 are dismissed, as no appeal lies from an order denying reargument (see Fischer v RWSP Realty, LLC, 19 AD3d 540 [2005]; Matter of Lloida W., 18 AD3d 665, 666 [2005]); and it is further,

Ordered that the order entered March 23, 2005 is reversed insofar as appealed from, on the law, the cross motion is denied, that branch of the plaintiff’s motion which was for summary judgment declaring that he is not obligated to reimburse the defendant Incorporated Village of Lake Success for the money paid to him pursuant to General Municipal Law § 207-c is granted, that branch of the motion of the defendant American Protection Insurance Company which was for summary judgment declaring that the defendant Incorporated Village of Lake Success is not entitled to a lien in the amount it paid the plaintiff pursuant to General Municipal Law § 207-c against any underinsured motorist arbitration award that is made to the plaintiff is granted, and the matter is remitted to the Supreme Court, Nassau County, for the entry of a judgment declaring that the defendant Incorporated Village of Lake Success is not entitled to a lien in the amount it paid the plaintiff pursuant to General Municipal Law § 207-c against any underinsured motorist arbitration award that is made to the plaintiff, and that the plaintiff is not obligated to reimburse the defendant Incorporated Village of Lake Success for the money paid to him pursuant to General Municipal Law § 207-c; and it is further,

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

The plaintiff, a police officer employed by the defendant Incorporated Village of Lake Success (hereinafter the Village), was injured in the line of duty when an underinsured motorist collided with his police vehicle. Pursuant to General Municipal Law § 207-c, the Village paid the plaintiff’s salary and medical expenses during the period of his disability. The plaintiff received a settlement from the underinsured motorist’s liability insurer, and thereafter filed a claim for underinsured motorist benefits (hereinafter the UIM claim) with the defendant American Protection Insurance Company (hereinafter API), the insurer of the police vehicle. When the UIM claim was set down for arbitration, the Village sought to assert a lien against any arbitration award the plaintiff might recover from API, in the amount that the Village had paid to the plaintiff pursuant to General Municipal Law § 207-c. The Supreme Court determined that the Village had a lien against any such award. We reverse.

General Municipal Law § 207-c (1) provides, inter alia, that a village must pay an officer on its police force who is injured in the line of duty the “full amount of his regular salary or wages . . . until his disability arising therefrom has ceased,” in addition to covering the costs of “all medical treatment and hospital care necessitated by reason of such injury.” The Village predicates its entitlement to the lien it seeks on General Municipal Law § 207-c (6), which provides that “a cause of action shall accrue to the municipality for reimbursement in such sum or sums actually paid as salary or wages and or for medical treatment and hospital care as against any third party against whom the policeman shall have a cause of action for the injury sustained or sickness caused [*3]by such third party.” Contrary to the Village’s position, that provision does not provide a basis for the lien it asserts here.

A municipality’s right, pursuant to General Municipal Law § 207-c (6), to the reimbursement of the salary and medical expenses it had previously paid to or on behalf of an officer injured in the line of duty, is subject to the limitations articulated in the no-fault provisions of Insurance Law § 5104 (see Village of Suffern v Baels, 215 AD2d 751 [1995]). Insurance Law § 5104 (a) limits the items of damage that may be recovered in an action commenced by a person injured in a motor vehicle accident against another motor vehicle operator or owner, here the uninsured motorist, to noneconomic loss, i.e., pain and suffering (see Insurance Law § 5102 [c]), plus only that economic loss which exceeds basic economic loss, defined by statute as $50,000 for medical and hospital expenses, lost wages, and incidental expenses, with certain exceptions not applicable here (see Insurance Law § 5102 [a]; see generally Matter of Adams [Government Empls. Ins. Co.], 52 AD2d 118, 120 [1976]). The plaintiff’s UIM claim, by definition, could only seek recovery only for noneconomic loss and economic loss greater than basic economic loss (see Matter of Shutter v Philips Display Components Co., 90 NY2d 703, 710 [1997]). Thus, there can be no Insurance Law § 5104 (b) lien imposed upon any amount he might recover on account of noneconomic loss in the arbitration which will determine that claim (see Matter of Adams [Government Empls. Ins. Co.], supra). Where no Insurance Law § 5104 (b) lien attaches, there can be no recovery under General Municipal Law § 207-c (6) (see Village of Suffern v Baels, supra).

“[A]n insured who has sustained personal injury should not be required to pay for his no-fault benefits out of his recovery for pain and suffering” (Aetna Cas. & Sur. Co. v Jackowe, 96 AD2d 37, 42; see Aetna Life & Cas. Co. v Nelson, 67 NY2d 169, 176 [1986]; Lang v City of New York, 98 AD2d 792, 793 [1983]; see also Dymond v Dunn, 148 AD2d 56, 59 [1989]; Matter of Celona v Royal Globe Ins. Co., 85 AD2d 635, 636 [1981]; Matter of Adams [Government Empls. Ins. Co.], supra at 119). As it pertains to the plaintiff’s arbitration claim for noneconomic loss, the situation presented here is no different.

Moreover, the statutory lien sought to be asserted by a third party on a recovery obtained by a person injured in a motor vehicle accident, on account of the sums paid by the third party to compensate the injured person for lost wages and medical expenses (see Insurance Law § 5104 [b]), extends only to so much of the recovery as also compensated the injured person for lost wages and medical expenses (see Aetna Cas. & Sur. Co. v Jackowe, 96 AD2d 37, 42 [1983]). Here, it is unclear whether the plaintiff, by pursuing arbitration with API, seeks to recover economic loss greater than basic economic loss, and thus, whether part of his claim is for lost wages and medical expenses greater than $50,000. In any event, while the Village has, in fact, compensated the plaintiff for lost wages and medical expenses in excess of basic economic loss, and thus asserts that the plaintiff, if successful, would unfairly recover the identical sum in arbitration, the lien created by Insurance Law § 5104 (b), by its terms, applies only to a recovery obtained by an injured person “in any action.” The recovery sought by the plaintiff from API is not pursuant to an action. The plaintiff, by seeking arbitration pursuant to the SUM endorsement contained in the policy issued by API, is not commencing an “action . . . against a non-covered person,” as required by Insurance Law § 5104 (b), but is instead seeking to enforce a contractual right he has pursuant to statute against API. Hence, the limitations on the assertion of a lien, imposed by Insurance Law § 5104, as applied to General Municipal Law § 207-c (6), preclude the result sought by the Village here.

Finally, General Municipal Law § 207-c (6) permits a municipality to seek reimbursement of wages and medical expenses only from “any third party against whom the policeman shall have a cause of action for the injury sustained . . . caused by such third party.” The plaintiff, from whom the Village seeks reimbursement, and API, upon whose obligation the Village [*4]seeks to impose a lien, are not parties who caused the injury. Hence, the cause of action created by General Municipal Law § 207-c (6) is not available to the Village insofar as it seeks to assert it against either the plaintiff or API. Furthermore, General Municipal Law § 207-c, “includes no . . . provision for an equitable lien. It ‘merely gives the [municipality] a direct remedy against the person liable to the employee in negligence’ ” (Foy v Florczuk, 51 AD2d 534, 535 [1976] quoting City of Buffalo v Maggio, 21 NY2d 1017, 1018 [1968]).

Contrary to the Village’s contention, Matter of City of Newburgh v Travis (228 AD2d 497 [1996]) does not require a contrary result. In that case, the self-insured City of Newburgh, which was required to arbitrate an employee’s underinsured motorist claim, was entitled, pursuant to a specific provision of the subject insurance policy, to offset the payments it already made against the employee’s arbitration award (see Matter of City of Newburgh v Travis, supra at 498-499). Unlike the City of Newburgh, the Village is not self-insured, and it has nothing to offset, as any arbitration award will be paid by the insurer, API. Nor does the API insurance policy contain a specific offset provision. The “non-duplication” provision in the API policy relied upon by the Village does not similarly create a right of offset (see generally Reilly v United States Fid. & Guar. Co., 139 AD2d 796, 797 [1988]).

For all of these reasons, the Village is not entitled to assert a lien pursuant to General Municipal Law § 207-c (6), and the Supreme Court therefore improperly granted the Village’s cross-motion. Rather, it should have granted the relevant branch of the plaintiff’s motion for summary judgment and the relevant branch of API’s motion for summary judgment.

Since this is a declaratory judgment action, we remit the matter to the Supreme Court, Nassau County, for the entry of a judgment declaring that the Village is not entitled to a lien, in the amount of salary and medical expenses it paid to the plaintiff pursuant to General Municipal Law § 207-c, against any award the plaintiff receives in his underinsured motorist arbitration, and that the plaintiff is not obligated to reimburse the Village for the money it paid pursuant to General Municipal Law § 207-c (see Lanza v Wagner, 11 NY2d 317, 334 [1962], appeal dismissed 371 US 74 [1962], cert denied 371 US 901 [1962]). Miller, J.P., Goldstein, Spolzino and Dillon, JJ., concur.

—[*1]

In an action to recover no-fault benefits, the plaintiffs appeal, as limited by their brief, from so much of an order of the Supreme Court, Nassau County (Mahon, J.), dated October 3, 2005, as, upon renewal, adhered to so much of a prior determination in an order of the same court dated July 15, 2004, as denied that branch of their motion which was made on behalf of the plaintiff Montefiore Medical Center for summary judgment on the first cause of action, asserted on behalf of the plaintiff Montefiore Medical Center, and granted the defendant’s cross motion dismissing that cause of action.

Ordered that the appeal by the plaintiffs Hospital for Joint Diseases and Mary Immaculate Hospital is dismissed, without costs or disbursements, as they are not aggrieved by the order; and it is further,

Ordered that the order is affirmed insofar as appealed from, without costs or disbursements.

The Supreme Court correctly determined that the defendant, Liberty Mutual Insurance Company, established a meritorious defense to the first cause of action. The defendant established that it had cancelled the policy of insurance covering the subject vehicle before the date of the accident. It is well settled that no notice of disclaimer is required where the policy does not provide coverage for the claim, nor do principles of waiver or estoppel preclude the insurer from denying coverage in this case (see Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195 [1997]; Zappone v Home Ins. Co., 55 NY2d 131 [1982]; New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 AD3d 568 [2004]; Commissioners of State Ins. Fund v Aetna Cas. & Sur. Co., 283 AD2d 335 [2001]). [*2]

Contrary to the contention of the plaintiff Montefiore Medical Center, the affidavit of the defendant’s claims representative based on records maintained by the insurer in the ordinary course of business was sufficient to establish the defense (see Hospital for Joint Diseases v ELRAC, Inc., 11 AD3d 432, 433 [2004]). Similarly, the documents submitted on the cross motion demonstrate that the insurer effectively canceled the policy (see Hughson v National Grange Mut. Ins. Co., 110 AD2d 1072 [1985]). Schmidt, J.P., Adams, Luciano and Lifson, JJ., concur.

—[*1]

In an action to recover no-fault benefits under an insurance contract brought by motion for summary judgment in lieu of complaint pursuant to CPLR 3213, the plaintiff appeals, as limited by her brief, from so much of an order of the Supreme Court, Nassau County (Brennan, J.), dated August 10, 2005, as denied her motion for summary judgment in lieu of complaint.

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

Because the plaintiff’s action was not based upon an instrument for the payment of money only, it was improperly commenced by motion for summary judgment in lieu of complaint (see CPLR 3213; New York Cent. Mut. Fire Ins. Co. v Danaher, 290 AD2d 783, 784 n 3 [2002]; cf. Hellert v Travelers Ins. Co., 52 AD2d 751 [1976]). Nonetheless, since the issues in dispute were fully submitted by the parties, the Supreme Court properly disposed of the motion on the merits (see Schulz v Barrows, 94 NY2d 624, 628 [2000]; New York Cent. Mut. Fire Ins. Co. v Danaher, supra; see also CPLR 103 [c]; Miller v North Shore Towers Assoc., 119 Misc 2d 644 [1983]).

With respect to the merits, the plaintiff failed to establish her prima facie entitlement to judgment as a matter of law in connection with her cause of action alleging that the defendant insurer is collaterally estopped from rejecting her claim for no-fault benefits. In order to invoke collateral estoppel against the defendant, the plaintiff must demonstrate that a pending issue was [*2]raised, that it was necessarily decided and material in a prior action, and that the party to be estopped had a full and fair opportunity to litigate the issue in the earlier action (see Bansbach v Zinn, 1 NY3d 1, 10 [2003]; Pinnacle Consultants v Leucadia Natl. Corp., 94 NY2d 426, 431-432 [2000]; Matter of Kleiger-Brown v Brown, 306 AD2d 482, 483 [2003]; Airco Alloys Div. v Niagara Mohawk Power Corp., 76 AD2d 68, 81-82 [1980]). Here, the underlying liability action was settled, and the issue of whether the accident in which the plaintiff was injured arose from the use and operation of the insured vehicle was never raised or adjudicated. The defendant is thus not estopped from disclaiming an obligation to pay no-fault benefits to the plaintiff on that ground, particularly where the categories of occurrences covered under the liability provisions of the relevant policy are broader than those covered under the no-fault provisions, and there is no evidence in the record that the defendant, by its conduct, made any actual or implied promises that it would provide no-fault coverage (see Walsh v Prudential Ins. Co. of Am., 101 AD2d 988 [1984], affd 64 NY2d 1053 [1985]).

In addition, the plaintiff failed to sustain her burden of establishing, as a matter of law, that her accident, which occurred when she slipped and fell on an icy sidewalk while attempting to walk around a parked vehicle owned by the defendant’s insured, arose from the use and operation of that vehicle (see Matter of Transcontinental Ins. Co. v Hampton, 10 Misc 3d 1056[A], 2005 NY Slip Op 51988[U] [2004]; Pavone v Aetna Cas. & Sur. Co., 91 Misc 2d 658, 661 [1977]; see generally Walton v Lumbermens Mut. Cas. Co., 88 NY2d 211, 215 [1996]; Matter of New York Cent. Mut. Fire Ins. Co. [Hayden—Allstate Ins. Co.], 209 AD2d 927).

The parties’ remaining contentions are either academic or without merit. Santucci, J.P., Spolzino, Lifson and Covello, JJ., concur.

—[*1]

In an action to recover no-fault medical payments, the plaintiffs appeal from so much of an order of the Supreme Court, Nassau County (McCarty, J.), dated September 30, 2005, as denied that branch of their motion which was for summary judgment on their first cause of action to recover payments for medical services rendered by the plaintiff New York and Presbyterian Hospital, and granted that branch of the defendant’s cross motion which was for summary judgment dismissing the first cause of action.

Ordered that the appeal by the plaintiff Mount Vernon Hospital is dismissed, without costs or disbursements, as that plaintiff is not aggrieved by the order appealed from (see CPLR 5511); and it is further,

Ordered that the order is modified, on the law, by deleting the provision thereof granting that branch of the defendant’s cross motion which was for summary judgment dismissing the first cause of action and substituting therefor a provision denying that branch of the cross motion; as so modified, the order is affirmed insofar as appealed from by the plaintiff New York and Presbyterian Hospital, without costs or disbursements, and the first cause of action is reinstated.

Pursuant to the statutory and regulatory framework governing the payment of no-fault automobile benefits, insurance companies are required to either pay or deny a claim for benefits within 30 days of receipt of the claim (see Insurance Law § 5106 [a]; 11 NYCRR 65-3.8 [c]). [*2]However, the 30-day period may be extended where the insurer makes a request for additional information within 15 business days of its receipt of the claim (see 11 NYCRR 65-3.5 [b]; Nyack Hosp. v General Motors Acceptance Corp., 27 AD3d 96, 100 [2005]; Hospital for Joint Diseases v ELRAC, Inc., 11 AD3d 432, 434 [2004]; New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 AD3d 568, 569-570 [2004]), and an insurer is not obligated to pay or deny a claim until all demanded verification is provided (see Nyack Hosp. v General Motors Acceptance Corp., supra at 100-101; Central Suffolk Hosp. v New York Cent. Mut. Fire Ins. Co., 24 AD3d 492, 493 [2005], lv denied 7 NY3d 704 [2006]).

The plaintiff New York and Presbyterian Hospital (hereinafter the plaintiff) made a prima facie showing that it was entitled to judgment as a matter of law on its first cause of action by submitting evidence that the prescribed statutory billing forms had been mailed and received, and that the defendant had failed to either pay or deny the claim within the requisite 30-day period (see Nyack Hosp. v General Motors Acceptance Corp., supra at 100; New York & Presbyt. Hosp. v AIU Ins. Co., 20 AD3d 515, 516 [2005]; New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., supra at 570). However, in opposition to the motion, the defendant established that it had made a timely request for additional information and that it timely denied the claim within 30 days of receipt of the hospital records it had requested to verify the claim. Accordingly, the Supreme Court properly denied that branch of the plaintiffs’ motion which was for summary judgment on the first cause of action.

However, the Supreme Court should have denied that branch of the defendant’s cross motion which was for summary judgment dismissing the first cause of action. Although the defendant established that its denial of the subject claim was timely, it failed to submit sufficient evidentiary proof, in admissible form, to make a prima facie showing that it properly denied the claim upon the ground that the medical treatment provided was unrelated to the accident (see New York & Presbyt. Hosp. v AIU Ins. Co., supra; Hospital for Joint Diseases v Hertz Corp., 9 AD3d 392 [2004]; Nyack Hosp. v State Farm Mut. Auto. Ins. Co., 8 AD3d 250 [2004]; Mount Sinai Hosp. v Triboro Coach, 263 AD2d 11, 20 [1999]). Crane, J.P., Ritter, Krausman and Skelos, JJ., concur.

—[*1]

In an action to recover no-fault insurance benefits, the defendants appeal from an order of the Supreme Court, Nassau County (Bucaria, J.), dated September 7, 2005, which denied their motion to vacate a clerk’s judgment of the Supreme Court, Nassau County, entered December 8, 2004, upon their failure to appear or answer the complaint, to quash an information subpoena dated March 28, 2005, and to vacate an order of the same court dated May 26, 2005 directing them to comply with the information subpoena.

Ordered that the order is reversed, on the law and as a matter of discretion, with costs, the motion is granted, the clerk’s judgment entered December 8, 2004 is vacated, the information subpoena dated March 28, 2005 is quashed, and the order dated May 26, 2005 is vacated.

“A [defendant] seeking to vacate a default judgment pursuant to CPLR 5015 (a) (1) ‘must demonstrate a reasonable excuse for its delay in appearing and answering the complaint and a meritorious defense to the action’ ” (New York & Presbyt. Hosp. v American Home Assur. Co., 28 AD3d 442 [2006], quoting Eugene Di Lorenzo, Inc. v A.C. Dutton Lbr. Co., 67 NY2d 138, 141 [1986]). The defendants established both a reasonable excuse for their failure to timely appear and answer the complaint and potentially meritorious defenses, namely, the failure of the plaintiff New York University Hospital Rusk Institute to comply with the defendants’ demands for verification of the [*2]claim (see 11 NYCRR 65-3.8 [a] [1]; Mount Sinai Hosp. v Allstate Ins. Co., 25 AD3d 673, 674 [2006]; Nyack Hosp. v General Motors Acceptance Corp., 27 AD3d 96 [2005]) and the alleged exhaustion of the policy limits through payment of prior claims (see Mount Sinai v Allstate Ins. Co., 28 AD3d 727 [2006]; New York & Presbyt. Hosp. v Allstate Ins. Co., 12 AD3d 579 [2004]).

Accordingly, in view of the strong public policy that actions be resolved on their merits, the relatively brief delay involved, the defendants’ lack of wilfulness, and the absence of prejudice to the plaintiff, the Supreme Court improvidently exercised its discretion in denying the defendants’ motion, inter alia, to vacate the December 8, 2004, judgment (see New York & Presbyt. Hosp. v American Home Assur. Co., supra; New York & Presbyt. Hosp. v Auto One Ins. Co., 28 AD3d 441 [2006]; New York & Presbyt. Hosp. v Travelers Prop. Cas. Ins. Co., 27 AD3d 708 [2006]; Hospital for Joint Diseases v Dollar Rent A Car, 25 AD3d 534 [2006]). Miller, J.P., Adams, Goldstein and Covello, JJ., concur.

—[*1]

In a proposed class action by individual insureds or their assignees, inter alia, in effect, to recover payments for acupuncture treatments, the plaintiff appeals from an order of the Supreme Court, Nassau County (Warshawsky, J.), entered January 12, 2005, which, among other things, granted that branch of the defendant’s motion which was to dismiss the complaint pursuant to CPLR 3211 (a) (7).

Ordered that the order is affirmed, with costs.

The Supreme Court properly dismissed the complaint for failure to state a cause of action (see CPLR 3211 [a] [7]). The plaintiff’s claims are based on the erroneous proposition that New York Insurance Department regulation 68 (11 NYCRR part 65) requires the defendant to use only physicians licensed as acupuncturists to conduct independent medical examinations of patients who have received acupuncture treatment. The regulation contains no such requirement (see 11 NYCRR 65-1.1). Furthermore, contrary to the plaintiff’s contentions, no license or certification is required for a physician conducting an independent medical examination of a patient who has received acupuncture treatment, and such a physician is not engaged in the practice of acupuncture (see Education Law §§ 6521, 8211 [1] [a]; Savarese v Allstate Ins. Co., 287 AD2d 492 [2001]). [*2]

In light of this determination, the parties’ remaining contentions need not be reached. Schmidt, J.P., Santucci, Luciano and Rivera, JJ., concur.

—[*1]

In an action, inter alia, to recover no-fault benefits pursuant to a policy of automobile insurance, the plaintiff appeals from an order of the Supreme Court, Queens County (Schulman, J.), dated July 14, 2005, which denied her motion, in effect, for summary judgment, and granted the defendant’s cross motion to dismiss the action pursuant to CPLR 3211 (a) (5).

Ordered that the order is affirmed, without costs or disbursements.

The doctrine of collateral estoppel bars a party from “relitigating in a subsequent action or proceeding an issue clearly raised in a prior action or proceeding and decided against that party” (Ryan v New York Tel. Co., 62 NY2d 494, 500 [1984]). To invoke the doctrine, the identical issue must have been decided in the prior action or proceeding, and be decisive of the present action, and the party to be precluded from relitigating the issue must have had a full and fair opportunity to contest the prior determination (see D’Arata v New York Cent. Mut. Fire Ins. Co., 76 NY2d 659, 664 [1990]; Matter of Robert v O’Meara, 28 AD3d 567 [2006]).

Contrary to the plaintiff’s contention, the Supreme Court properly denied her motion, in effect, for summary judgment and granted the defendant’s cross motion to dismiss the action pursuant to CPLR 3211 (a) (5) on the ground that it was barred by a prior arbitration award. The defendant demonstrated that the issues raised in the prior arbitration proceeding, in which the [*2]plaintiff challenged the denial on August 8, 2000, of her claim for further no-fault benefits, were identical to and decisive of her present cause of action. In opposition to the cross motion, the plaintiff failed to sustain her burden of demonstrating that she did not have a full and fair opportunity to litigate issues relating to the August 8, 2000 denial of benefits at the prior arbitration proceeding. Accordingly, the court properly gave collateral estoppel effect to the arbitrator’s determination (see Clemens v Apple, 65 NY2d 746 [1985]; Lobel v Allstate Ins. Co., 269 AD2d 502 [2000]; Barnett v Ives, 265 AD2d 865 [1999]). Ritter, J.P., Krausman, Lifson and Lunn, JJ., concur.