SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd and 11th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Kings County (Bernard J. Graham, J.), entered March 2, 2006. The order granted defendant’s motion to vacate a default judgment.

Order reversed without costs and defendant’s motion to vacate a default judgment denied.

In order to vacate the default judgment entered in this action to recover assigned first-party no-fault benefits, defendant was required to establish, pursuant to CPLR 5015 (a), both a reasonable excuse for the default and a meritorious defense (see
Eugene Di Lorenzo, Inc. v Dutton Lbr. Co., 67 NY2d 138, 141 [1986]). A motion to vacate a default judgment is addressed to the sound discretion of the motion court (see Matter of Gambardella v Ortov Light., 278 AD2d 494 [2000]), and its determination will generally not be disturbed unless it can be shown that the court improvidently exercised its discretion (see Levy Williams Constr. Corp. v United States Fire Ins. Co., 280 AD2d 650 [2001]). Despite the strong public policy in favor of resolution of cases on the merits, upon a review of the record, we are of the opinion that the court below improvidently exercised its discretion in granting defendant’s motion to vacate the default judgment.

Defendant’s conclusory allegations that it possessed a meritorious defense were insufficient to warrant vacatur of the default judgment since defendant failed to show that its [*2]proffered defenses were set forth in timely denial of claim forms such that defendant is not precluded from interposing its defenses (see Insurance Department Regulations [11 NYCRR] § 65-3.5 [b]). The documentary proof annexed to defendant’s opposing papers was insufficient to give rise to a presumption that the denial of claim forms were timely mailed pursuant to a standard office practice or procedure (see Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274 [1997]; New York & Presbyt. Hosp. v Allstate Ins. Co., 29 AD3d 547 [2006]; PDG Psychological, P.C. v Lumbermans Mut. Cas. Co., 16 Misc 3d 131[A], 2007 NY Slip Op 51343[U] [App Term, 2d & 11th Jud Dists 2007]). Moreover, defendant failed to establish that it possessed a reasonable excuse for its failure to timely serve its answer. Defendant’s claims representative merely assumed that defendant’s time to serve its answer was enlarged because she faxed a proposed stipulation to plaintiff granting defendant an enlargement of its time to answer. The claims representative never spoke to plaintiff’s counsel about such an extension, and she never received any indication that plaintiff agreed to extend defendant’s time to answer.

In light of the foregoing, the order is reversed and defendant’s motion to vacate the default judgment is denied.
Weston Patterson, J.P. and Rios, J., concur.
Decision Date: February 06, 2008

APPELLATE TERM OF THE SUPREME COURT, FIRST DEPARTMENT

Defendant appeals from an order of the Civil Court, Bronx County (Francis M. Alessandro, J.), dated February 4, 2005, which granted plaintiff’s pretrial motion to preclude defendant’s denial of claim forms and directed judgment in favor of plaintiff in the principal sum of $8,715.82.

Per Curiam.

Order (Francis M. Alessandro, J.), dated February 4, 2004, reversed, with $10 costs, motion denied and matter remanded for further proceedings.

In this action to recover first party no-fault benefits, plaintiff’s motion to preclude defendant’s NF-10 denial of claim forms should have been denied. Defendant’s NF-10 forms, which stated that each claim was denied based upon an independent consultant’s review, sufficiently apprised plaintiff of the factual basis for the denials (see 11 NYCRR 65-3.8 [b][4]; A.B. Med. Servs., PLLC v GEICO Cas. Ins. Co., 39 AD3d 778 [2007]).

THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT.
Decision Date: January 18, 2008

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd and 11th JUDICIAL DISTRICTS

Appeal from a judgment of the Civil Court of the City of New York, Kings County (Bernard J. Graham, J.), entered January 19, 2006. The judgment denied the petition to vacate a master arbitrator’s award.

Judgment modified by adding thereto a provision confirming the master arbitrator’s award; as so modified, affirmed without costs.

563 Grand Medical, P.C. commenced this proceeding pursuant to CPLR 7511 to vacate a master arbitrator’s award which denied its claims for assigned first-party no-fault benefits. After respondent opposed the petition, the court denied the petition. This appeal by petitioner ensued.

An arbitrator in an arbitration proceeding to recover no-fault benefits may raise any issue which the arbitrator deems relevant (see Insurance Department Regulations [11 NYCRR] § 65-4.4 [e]; § 65-4.5 [o]; see also Matter of Medical Socy. of State of N.Y. v Serio, 100 NY2d 854, 872 [2003]; 563 Grand Med., P.C. v New York State Ins. Dept., 24 AD3d 413 [2005]; cf. Matter of Health & Endurance Med., P.C. v Deerbrook Ins. Co., 44 AD3d 857 [2007]). The master arbitrator determined that, based upon the documents submitted to the arbitrator, the arbitrator had a rational basis for finding that petitioner was not entitled to recover because, among other things, petitioner may have been seeking to recover for work performed by an independent contractor. In our view, the master arbitrator’s determination was not arbitrary, capricious or irrational (see Matter of Petrofsky [Allstate Ins. Co.], 54 NY2d 207 [1981]). Accordingly, the court below properly denied the petition to vacate the master arbitrator’s award. However, upon denying the petition, the court was required, pursuant to CPLR 7511 (e), to confirm the award (see Matter of Exclusive Med. & Diagnostic v Government Empls. Ins. Co., 306 AD2d 476 [*2][2003]).

Weston Patterson, J.P., Golia and Belen, JJ., concur.
Decision Date: January 8, 2008

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd and 11th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Kings County (Dolores L. Waltrous, J.), entered June 22, 2006. The order, insofar as appealed from, denied plaintiff’s motion for summary judgment.

Order, insofar as appealed from, affirmed with $10 costs.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff’s motion for summary judgment was supported by an affirmation from plaintiff’s counsel, an affidavit by an officer of plaintiff, and various documents annexed thereto. The affidavit executed by plaintiff’s officer stated in a conclusory manner that the
documents attached to plaintiff’s motion papers were plaintiff’s business records. The court below denied the motion, finding that defendant provided proof of timely verification requests and of a timely denial based upon a peer review. This appeal by plaintiff ensued.

Since the affidavit submitted by plaintiff’s officer was insufficient to establish that said officer possessed personal knowledge of plaintiff’s practices and procedures so as to lay a foundation for the admission, as business records, of the documents annexed to plaintiff’s moving papers, plaintiff failed to make a prima facie showing of its entitlement to summary judgment (Dan Med., P.C. v New York Cent. Mut. Fire Ins. Co., 14 Misc 3d 44 [App Term, 2d & 11th Jud Dists 2006]). Consequently, the order denying plaintiff’s motion for summary judgment is affirmed, albeit on other grounds.

Weston Patterson, J.P., Golia and Belen, JJ., concur.

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd and 11th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Kings County (Arlene Bluth, J.), entered December 1, 2005. The order denied plaintiff’s motion for summary judgment and granted defendant’s cross motion for summary judgment.

Order affirmed without costs.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff’s motion for summary judgment was supported by an affirmation from plaintiff’s counsel, an affidavit by a corporate officer of plaintiff and various documents annexed thereto. The affidavit executed by plaintiff’s corporate officer stated in a conclusory manner that the documents attached to plaintiff’s motion papers were plaintiff’s business records. Defendant cross-moved for summary judgment on the ground of
lack of medical necessity or, in the alternative, on the ground that the assignor was not injured in a covered accident. The court below denied plaintiff’s motion on the ground that plaintiff failed to make a prima facie case because the affidavit executed by plaintiff’s corporate officer was legally insufficient and granted defendant’s cross motion for summary judgment due to plaintiff’s failure to proffer evidence rebutting the peer review report annexed to defendant’s cross motion. The instant appeal by plaintiff ensued.

Inasmuch as the affidavit submitted by plaintiff’s corporate officer was insufficient to [*2]establish that said officer possessed personal knowledge of plaintiff’s practices and procedures so as to lay a foundation for the admission, as business records, of the documents annexed to plaintiff’s moving papers, plaintiff failed to make a prima facie showing of its entitlement to summary judgment (Alvarez v Prospect Hosp., 68 NY2d 320 [1986]; see Dan Med., P.C. v New York Cent. Mut. Fire Ins. Co., 14 Misc 3d 44 [App Term, 2d & 11th Jud Dists 2006]). Consequently, plaintiff’s motion for summary judgment was properly denied.

Plaintiff’s contention that defendant was not entitled to summary judgment on its cross motion because the NF-10 denial form is fatally defective lacks merit. Inasmuch as defendant’s omissions from the NF-10 denial form in this matter are neither “basic” (cf. Nyack Hosp. v State Farm Mut. Auto. Ins. Co., 11 AD3d 664, 665 [2004]) nor “numerous” (cf. Nyack Hosp. v Metropolitan Prop. & Cas. Ins. Co., 16 AD3d 564, 565 [2005]; Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 226 AD2d 613, 614 [1996]), they do not render the denial form fatally defective.

Further, defendant’s peer review report established prima facie that there was no medical necessity for the MRIs performed by plaintiff, which evidence was unrebutted. As a result, the court properly granted defendant’s cross motion for summary judgment (A. Khodadadi Radiology, P.C. v N.Y. Cent. Mut. Fire Ins. Co., 16 Misc 3d 131[A], 2007 NY Slip Op 51342[U] [App Term, 2d & 11th Jud Dists 2007]; see Amaze Med. Supply v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U] [App Term, 2d & 11th Jud Dists 2003]).

Weston Patterson, J.P., and Belen, J., concur.

Golia, J., concurs in a separate memorandum.
SUPREME COURT OF THE STATE OF NEW YORK,
APPELLATE TERM : 2nd and 11th JUDICIAL DISTRICTS
PRESENT : WESTON PATTERSON, J.P., GOLIA and BELEN, JJ.
DELTA DIAGNOSTIC RADIOLOGY, P.C.
a/a/o FRANCISCA CHANEYFIELD,

Appellant,

-against-
AMERICAN TRANSIT INSURANCE CO., [*3]

Respondent.

Golia, J., concurs with the result only, in the following memorandum:
While I am in total agreement with the ultimate disposition in the decision reached by the majority, I wish to note that I am constrained to agree with certain propositions of law set forth in cases cited therein which are inconsistent with my prior expressed positions and generally contrary to my views. I note an important legal issue which is an integral part of the majority opinion, that is, the concept that the failure of an answering party to respond to the facts presented by the moving party requires the court to accept those facts as proven.
Decision Date: December 27, 2007

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd and 11th JUDICIAL DISTRICTS

Appeal from a decision of the Civil Court of the City of New York, Queens County (Lee A. Mayerson, J.), dated May 16, 2006, deemed an appeal from the judgment entered September 20, 2006 (see CPLR 5520 [c]). The judgment, after a nonjury trial, awarded plaintiff the principal sum of $1,650.

Judgment reversed without costs and matter remanded to the court below for a new trial.

At the commencement of the trial in this action to recover assigned first-party no-fault benefits, the parties stipulated to plaintiff’s prima facie case. They also stipulated that defendant timely mailed the two denial of claim forms at issue which stated that plaintiff’s claims were denied, based upon peer reviews, on the ground of lack of medical necessity. After defendant announced that the doctors who prepared the peer review reports were unavailable, plaintiff moved to preclude testimony by the medical expert proffered by defendant on the grounds that his opinion would be hearsay and that plaintiff would be prejudiced by its inability to cross-examine the doctors who prepared the peer review reports upon which plaintiff’s claims were denied. The court granted plaintiff’s motion to preclude testimony by defendant’s medical expert. After defendant rested without calling any other witnesses, the court found that defendant failed to sustain its burden of demonstrating a lack of medical necessity and awarded plaintiff the principal sum of $1,650. Subsequently, a judgment awarding said sum to plaintiff was entered and this appeal by defendant ensued. [*2]

Defendant, having preserved the defense of lack of medical necessity by timely denying the claims based upon peer reviews (see New York Univ. Hosp. Rusk Inst. v Government Empls. Ins. Co., 39 AD3d 832 [2007]), the issue before the court was whether the rationale for the conclusion in the peer review reports, upon which defendant’s denial of claim forms was based, was correct. Since defendant sought to call a medical expert witness who was available for cross-examination, and his testimony as to the lack of medical necessity of plaintiff’s services would be limited to the basis for the denials as set forth in the original peer review reports, the expert witness should have been permitted to testify (see Spruce Med. & Diagnostic, P.C. v Lumbermen’s Mut. Cas. Co., 15 Misc 3d 143[A], 2007 NY Slip Op 51104[U] [App Term, 1st Dept]; Home Care Ortho. Med. Supply, Inc. v American Mfrs. Mut. Ins. Co., 14 Misc 3d 139[A], 2007 NY Slip Op 50302[U] [App Term, 1st Dept]).

In light of the foregoing, the judgment is reversed and a new trial ordered.

Weston Patterson, J.P., Golia and Belen, JJ., concur.
Decision Date: December 27, 2007

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd and 11th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Kings County (Delores J. Thomas, J.), entered June 15, 2006. The order, insofar as appealed from, denied plaintiff’s motion for summary judgment.

Order modified by providing that plaintiff’s motion for summary judgment is granted to the extent of awarding plaintiff summary judgment upon that portion of its cause of action which sought to recover statutory interest and attorney’s fees on its $879.73 claim, and matter remanded to the court below for the calculation of statutory interest and attorney’s fees thereon, and for all further proceedings on the remaining claims; as so modified, affirmed insofar as appealed from, without costs.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff’s motion for summary judgment was supported by an affirmation from plaintiff’s counsel, an affidavit by a corporate officer of plaintiff and various documents annexed thereto. The affidavit executed by plaintiff’s corporate officer stated in a conclusory manner that the documents attached to plaintiff’s motion papers were plaintiff’s business records. In opposition, defendant argued, inter alia, that plaintiff’s moving papers did not proffer facts in admissible form so as to establish plaintiff’s prima facie entitlement to judgment as a matter of law. The court denied plaintiff’s motion, finding that defendant timely denied plaintiff’s claims and that there was an [*2]issue of fact as to whether the services rendered were medically necessary. The instant appeal by plaintiff ensued.

Since the affidavit submitted by plaintiff’s corporate officer was insufficient to establish that said officer possessed personal knowledge of plaintiff’s practices and procedures so as to lay a foundation for the admission, as business records, of the documents annexed to plaintiff’s moving papers, plaintiff failed to make a prima facie showing of its entitlement to summary judgment (see Dan Med., P.C. v New York Cent. Mut. Fire Ins. Co., 14 Misc 3d 44 [App Term, 2d & 11th Jud Dists 2006]). However, defendant’s litigation representative conceded receipt of plaintiff’s claim for $879.73
and that the denial of this claim was not issued within the 30-day claim determination period (Insurance Department Regulations [11 NYCRR] § 65-3.8 [c]). The litigation representative further stated that, as a result, defendant thereafter paid the claim in its entirety as well as what it believed to be the accrued interest. Plaintiff correctly asserts that it was entitled to summary judgment awarding it statutory interest and attorney’s fees in light of defendant’s admissions and the fact that the payment was made after this action was commenced (see St. Clare’s Hosp. v Allstate Ins. Co., 215 AD2d 641 [1995]; Smithtown Gen. Hosp. v State Farm Mut. Auto. Ins. Co., 207 AD2d 338 [1994]; East Acupuncture, P.C. v Allstate Ins. Co., 15 Misc 3d 104, 105-106 [App Term, 2d & 11th Jud Dists 2007]; see also Insurance Department Regulations [11 NYCRR] § 65-4.6 [e]; 2003 Ops Ins Dept No. 03-02-31 [www.ins.state.ny.us/ogco2003/rg030231.htm]).

Consequently, plaintiff’s motion for summary judgment is granted to the extent of awarding it summary judgment upon that portion of its cause of action seeking statutory interest and attorney’s fees on its claim for $879.73, and the matter is remanded to the court below for the calculation of statutory interest and an assessment of attorney’s
fees due thereon pursuant to Insurance Law § 5106 (a) and the regulations promulgated thereunder, and for all further proceedings on the remaining claims.

Weston Patterson, J.P., Golia and Belen, JJ., concur.
Decision Date: December 27, 2007

[*1]

Supreme Court, Appellate Term, First Department, December 19, 2007

APPEARANCES OF COUNSEL

Short & Billy, P.C., New York City (Ioanna Olivia Zevgaras of counsel), for appellant. Baker, Sanders, Barshay, Grossman, Fass, Muhlstock & Neuwirth, LLP, Mineola (Michael C. Rosenberger of counsel), for respondent.

{**18 Misc 3d at 228} OPINION OF THE COURT

Per Curiam.

Order, dated June 16, 2006, reversed, with $10 costs, defendant’s motion for summary judgment granted, and complaint dismissed. The clerk is directed to enter judgment accordingly.

Defendant demonstrated prima facie entitlement to judgment by submitting competent medical evidence, including a peer reviewer’s affidavit incorporating by reference the findings set forth in his earlier report, that the diagnostic testing giving rise to plaintiff’s claim for first party no-fault benefits lacked medical necessity. In opposition, plaintiff relied upon an attorney’s affirmation accompanied by a single, unsworn and undated doctor’s report, which was not properly before the court and should not have been considered (see Grasso v Angerami, 79 NY2d 813 [1991]; Black v Regalado, 36 AD3d 437 [2007]; Henkin v Fast Times Taxi, 307 AD2d 814 [2003]). While a physician’s affirmation submitted in opposition to summary judgment may be based on an unsworn medical report (see Pommells v Perez, 4 NY3d 566, 577 n 5 [2005]), an attorney’s affirmation augmented only by an unsworn medical report does not constitute admissible opposing evidence. In any event, even if considered, the unsworn report of plaintiff’s doctor was insufficient to defeat summary judgment, since it failed to mention, much less meaningfully address, the negative diagnostic study separately administered during the month preceding the testing here at issue.

McKeon, J.P., McCooe and Davis, JJ., concur.

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd and 11th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Queens County (Arthur F. Engoron J.), entered June 21, 2006. The order denied plaintiff’s motion for summary judgment.

Order affirmed without costs.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff’s motion for summary judgment was supported by an affirmation from plaintiff’s counsel, an affidavit by an employee of plaintiff, and various documents annexed thereto. The affidavit executed by plaintiff’s employee stated in a conclusory manner that the documents attached to plaintiff’s motion papers were plaintiff’s business records. In opposition, defendant argued, inter alia, that the affidavit by plaintiff’s employee did not proffer facts in admissible form so as to establish plaintiff’s prima
facie entitlement to judgment as a matter of law. The court denied plaintiff’s motion on the ground that there were issues of fact as to coverage as well as with respect to the timeliness of defendant’s denial of claim forms. This appeal by plaintiff ensued.

Since the affidavit submitted by plaintiff’s employee was insufficient to establish that said employee possessed personal knowledge of plaintiff’s practices and procedures so as to lay a foundation for the admission, as business records, of the documents annexed to plaintiff’s moving papers, plaintiff failed to make a prima facie showing of its entitlement to summary judgment (Dan Med., P.C. v New York Cent. Mut. Fire Ins. Co., 14 Misc 3d 44 [App Term, 2d & 11th Jud Dists 2006]). Consequently, the order denying plaintiff’s motion for summary judgment is affirmed, albeit on other grounds.

Weston Patterson, J.P., Golia and Belen, JJ., concur.
Decision Date: December 7, 2007

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd and 11th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Queens County (Kevin Kerrigan, J.), entered December 28, 2005, deemed an appeal from a judgment entered April 6, 2006 (see CPLR 5501 [c]). The judgment, entered pursuant to the December 28, 2005 order granting plaintiff’s motion for summary judgment to the extent of awarding plaintiff summary judgment on five of its six claims and denying defendant’s cross motion for summary judgment, awarded plaintiff the principal sum of $6,874.37.

Judgment reversed without costs, so much of the order entered December 28, 2005 as granted plaintiff summary judgment on five of its six claims vacated, plaintiff’s motion for summary judgment denied in its entirety and matter remanded to the court below for all further proceedings.
In this action by a provider to recover assigned first-party no-fault benefits, plaintiff’s motion for summary judgment was granted as to five of its six claims. The sole issue raised on appeal is whether defendant proffered sufficient evidence to demonstrate that there was an issue of fact as to whether the injuries plaintiff’s assignor allegedly sustained arose from an insured incident (see Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 199 [1997]). Upon a review of the record, we find that the affidavit submitted by defendant’s investigator was sufficient to demonstrate a “founded belief that the alleged injur[ies] do[] not arise out of an insured incident” (id. at 199). Accordingly, since defendant demonstrated the existence of a triable issue of fact as to whether there was a lack of coverage (see Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, supra; Zuckerman v City of New York, 49 NY2d 557 [1980]), plaintiff was not entitled to summary judgment. [*2]
Pesce, P.J., and Belen, J., concur.
Rios, J., dissents in a separate memorandum.
Rios, J. dissents and votes to affirm the judgment.
Defendant does not contest the sufficiency of plaintiff’s prima facie case. As a result, absent a timely and valid denial, defendant is precluded from raising most defenses to a cause of action for payment of the claim (Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274 [1997]). Notwithstanding the general rule, an insurer can defeat a plaintiff’s right to summary judgment if it can show the existence of a triable issue of fact as to whether the purported injuries are not related to an accident, by demonstrating that it possessed a “founded belief” that the alleged injuries are not causally related to an automobile accident (see Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195 [1997]; Matter of Metro Med. Diagnostics v Eagle Ins. Co., 293 AD2d 751 [2002]). Such a founded belief must be demonstrated by objective facts from which the insurer’s conclusion can be drawn. In Mount Sinai Hosp. v Triboro Coach (263 AD2d 11, 19 [1999]), the Appellate Division explained that “the defendant has the burden to come forward with proof in admissible form to establish the fact’ or the evidentiary foundation for its belief’ that the patient’s treated condition was unrelated to his or her automobile accident. . . .” Defendant’s submission in the instant case merely consists of the affidavit of its investigator who in conclusory terms maintained “the loss was not caused by (an) accident.” Despite referring to conversations with the policyholder and the driver of the insured vehicle, defendant’s submissions lack copies of their purported statements. Moreover, no explanation is presented for defendant’s failure to submit documentation in admissible form of its otherwise hearsay and speculative assertions. Thus, defendant failed to satisfy its burden of demonstrating the existence of a triable issue of fact (id.).
Accordingly, summary judgment in favor of the plaintiff was properly granted (see A.B. Med. Servs. PLLC v Encompass Ins., 10 Misc 3d 127[A], 2005 NY Slip Op 51892 [App Term, 2d & 11th Jud Dists 2005]).
Decision Date: November 29, 2007