Index No. CV-716670-16/KI

Attorney for Plaintiff:
Oleg Rybak, Esq.
The Rybak Firm, PLLC
1810 Voorhies Avenue, 3rd Floor, Suite 7
Brooklyn, New York 11235

This action seeks to recover first-party no-fault benefits, assigned by Souleyman Diallo, for services rendered. Plaintiff moves to amend to add a new party, Knightbrook Insurance Company, to the action pursuant to CPLR 305(c), CPLR 2001, and CPLR 3025(b), and to remove Grange Mutual Casualty Ins. Co. as a defendant under claim number 14982012. Plaintiff claims that in reviewing the Summons and Complaint it noticed there was a clerical error, in that the name of the defendant was not properly printed. Plaintiff thus seeks leave to re-serve the Amended Summons and Complaint upon Knightbrook Ins. Co. No opposition papers to this motion were submitted by the defendant, Grange Mutual Casualty Ins. Co.

After oral argument, the Decision/Order on plaintiff’s Motion to Amend is as follows:

The accident giving rise to this case occurred on May 5, 2012. Claims were allegedly submitted [*2]to the carrier on December 20, 2013. According to the court files and the plaintiff’s motion, no answer was filed in response to the Summons and Complaint dated May 6, 2016, and filed May 9, 2016. The six-year statute of limitations applies to first-party no-fault claims which begins to run from the date the cause of action accrues, not from the date of the insurer’s belated denial of claim form (DJS Med. Supplies, Inc. v. Clarendon Natl Ins. Co., 32 Misc 3d 129(a) (App Term 2d, 11th & 13th Judicial Dists, 2011)). An amendment to add a party at this juncture falls clearly outside of the statute of limitations.

Plaintiff’s counsel argues Knightbrook Ins. Co. will not suffer any prejudice should the court grant leave to amend. It will merely be called to defend against current claim amounts that remain unpaid and are overdue (Plaintiff Affirmation, Paragraph 10). Plaintiff’s counsel maintains that failure to permit an amendment of the Summons and Complaint would result in additional time, effort, and costs, to all parties, as well as unnecessary waste of judicial resources, as plaintiff would be forced to discontinue the instant action and commence a second lawsuit (id.). Plaintiff’s counsel further asserts, in the discontinuance of this action, there would be no prejudice to Grange Mutual Ins. Co., because no orders have been issued by the Court nor have the parties engaged in substantial litigation (Plaintiff Affirmation, Paragraphs 11, 16). Finally, plaintiff claims this application is not an attempt to circumvent an adverse ruling or otherwise derive underhanded advantage through discontinuing the action against Grange (Plaintiff Affirmation, Paragraph 16).

Relief pursuant to CPLR 305 (c) may be granted only where there is evidence that the correct defendant was served, albeit misnamed, in the original process, and that the correct defendant would not be prejudiced by the granting of the amendment (Nossov v. Hunter Mountain, 185 AD3d 948-949 (2nd Dept, 2020). Though “CPLR 305 (c) may be used to cure a misnomer in the description of a party defendant, it cannot be used after the expiration of the statute of limitations as a device to add or substitute an entirely new defendant who was not properly served” (Tokhmakhova v. H.S. Bros. II Corp., 132 AD3d 662, 662 (2nd Dept. 2015); Smith v. Garo Enters., Inc., 60 AD3d 751,752 (2d Dept. 2009); see also Nossov v Hunter Mountain, 185 AD3d 948, 949 (2nd Dept. 2020). Under CPLR 305 (c), “an amendment to correct a misnomer will be permitted ‘if the court has acquired jurisdiction over the intended but misnamed defendant provided that … the intended but misnamed defendant was fairly apprised that [it] was the party the action was intended to affect … [and] would not be prejudiced’ by allowing the amendment” (Honeyman v. Curiosity Works, Inc., 120 A.D3d 1302, (2d Dept. 2014) [internal citations omitted]).

CPLR 2001 allows a party to correct mistakes, omissions, defects, or irregularities, at any stage of an action. Courts freely grant leave to amend a pleading under CPLR 3025 (b), unless the opposing party can show that the delay causes prejudice or surprise (O’Halloran v. Metropolitan Transp. Auth., 154 AD3d 83, 86 (1st Dept 2017)). If the statute of limitations has expired, a plaintiff may add a claim if it relates back to the incident alleged in the complaint (id.). However, “allowing the relation back of amendments adding new defendants implicates more seriously due process policy concerns than simply the relation back of new causes of action since, in the latter situation, the defendant is already before the court” (Buran v. Coupal, 87 NY2d 173, 178 [1995]).

Here, there is no indication Grange was served with the original summons and complaint or that Knightbrook Ins. Co. was served with the current motion or any other documents related to this incident. To bring a claim for no-fault benefits, statutory prerequisites must be met. The [*3]plaintiff must show claim forms were timely and properly sent to the carrier and that those claims were not paid or properly denied within the statutory period. In the proposed amended pleading, plaintiff merely switches the names of the party and retains the same claim number with the same allegations of timely mailing, albeit to a different address. Plaintiff fails to demonstrate notice to, nor that the statutory prerequisites have been met with the new party. By now moving to add a new party, the plaintiff is requesting this court extend the statute of limitations and resurrect a claim that is otherwise time barred.

According to CPLR 203 (f), “[a] claim asserted in an amended pleading is deemed to have been interposed at the time the claims in the original pleading were interposed, unless the original pleading does not give notice of the transactions, occurrences, or series of transactions or occurrences, to be proved pursuant to the amended pleading.” The relation-back doctrine “enables a plaintiff to correct a pleading error—by adding either a new claim or a new party—after the statutory limitations period has expired,” and gives courts the “sound judicial discretion to identify cases that justify relaxation of limitations strictures … to facilitate decisions on the merits if the correction will not cause undue prejudice to the plaintiff’s adversary” (Buran v. Coupal, 87 NY2d 173, 177-178, [citation and internal quotation marks omitted]; see O’Halloran v. Metropolitan Transp. Auth., 154 AD3d 83, 86); Catnap, LLC v. Cammeby’s Mgmt. Co., LLC, 170 AD3d 1103, 1106 (2019)).

A court could entertain the amendment of the pleading if plaintiff shows that (1) the claims arise out of the same occurrence, (2) the proposed new defendant is “united in interest” with the original defendant and, due to this relationship, the proposed new party is chargeable with notice of the of the action such that there is no prejudice, and (3) the proposed new defendant, Knightbrook Ins. Co., “knew or should have known that, but for an excusable mistake by plaintiff as to the identity of the proper parties, the action would have been brought against him as well.” (id. [internal quotation marks and citation omitted]; see CPLR 203 [c]).

In arguing there would be no prejudice to Grange Mutual, the plaintiff misdirects the focus of the prejudice analysis. The dictates of due process require the court to consider prejudice to the new defendant, Knightbrook, where a belated amendment is requested. Additionally, where, as here, the statute of limitations has expired, plaintiff has the burden of showing that the relation-back doctrine applies (Garcia v. New York-Presbyt. Hosp., 114 AD3d 615, 615 [1st Dept 2014]). Plaintiff has not offered any arguments to satisfy this three-part test for the application of the relation-back doctrine. Finally, “[t]he moving party … has the added burden of establishing that diligent efforts were made to ascertain the unknown party’s identity prior to the expiration of the statute of limitations” (Bumpus v. New York City Tr. Auth., 66 AD3d 26, 35 [2d Dept 2009]). In this case, plaintiff has not provided the court with a factual basis to engage in an analysis and has failed to meet its burden. Given these failures, the court does not reach the question of prejudice to the new party.

Accordingly, the Motion to Amend is denied. This constitutes the decision and order of the court.

CV-723175-16/KI

Plaintiff’s Firm
Richard Rozhik
The Rybak Firm, PLLC
1810 Voorhies Avenue, Suite 7
Brooklyn, New York 11235
Telephone: (718) 975 – 2035
Facsimile: (718) 975 – 2037
rrozhik@rybakfirm.com

Defendant’s Firm:
Christin M. Brown
Attorney at Law
Wilson Elser Moskowitz Edelman & Dicker LLP
1133 Westchester Avenue
White Plains, NY 10604 914.872.7158 (Direct)
914.323.7000 (Main)
914.323.7001 (Fax)
christin.brown@wilsonelser.com

Recitation, as required by Civil Procedure Law and Rules (CPLR) §2219(a), of the papers considered on the review of these Motions for Summary Judgment and Cross-Motions for Summary Judgment.

Papers submitted for each above listed case and corresponding Index number: Numbered: ^[FN1]

1. CV-723175-16/KI

Plaintiff NYS Acupuncture, P.C., a/a/o Patrick Howard Notice of Motion, Affirmation and Annexed Exhibits BCYXMB

Defendant’s Cross-Motion and Annexed Exhibits 3ETAHL

2. CV-723178-16/KI

Plaintiff NYS Acupuncture, P.C., a/a/o Miguel Quinn Notice of Motion, Affirmation and Annexed Exhibits VEZUPK

Defendant’s Cross-Motion and Annexed Exhibits 9L2X9X

3. CV-723183-16/KI

Plaintiff Elmont Rehab, P.T., P.C., a/a/o Karen Cutler Notice of Motion, Affirmation and Annexed Exhibits SMQGV7

Defendant’s Cross-Motion and Annexed Exhibits X9J24W

4. CV-723185-16/KI

Plaintiff NYS Acupuncture, P.C., a/a/o Karen Cutler Notice of Motion, Affirmation and Annexed Exhibits HLHQKX

Defendant’s Cross-Motion and Annexed Exhibits HLCISL

5. CV-723177-16/KI

Plaintiff Elmont Rehab, P.T., P.C., a/a/o Miguel Quinn Notice of Motion, Affirmation and Annexed Exhibits EG9PNE

Defendant’s Cross-Motion and Annexed Exhibits JMEEDJ

6. CV-723180-16/KI

Plaintiff Uzma Nasir Physician, P.C., a/a/o Miguel Quinn Notice of Motion, Affirmation and Annexed Exhibits S9SATO

Defendant’s Cross-Motion and Annexed Exhibits 4MT2ST

7. CV-707439-17/KI

Plaintiff Solution Bridge, Inc., a/a/o Jennifer Schaum Notice of Motion, Affirmation and Annexed Exhibits L1TAWA

Defendant’s Cross-Motion and Annexed Exhibits 3C3RI6

8. CV-704429-18/KI

Plaintiff Metro Pain Specialist, P.C., a/a/o Eileen Kilbane Notice of Motion, Affirmation and Annexed Exhibits SV5FHT

Defendant’s Cross-Motion and Annexed Exhibits GCMFWC

9. CV-706460-19/KI

Plaintiff Gentlecare Ambulatory Anesthesia Services; Lyonel F. Paul, M.D., a/a/o Maglorie Bueno Notice of Motion, Affirmation and Annexed Exhibits P59UM6

Defendant’s Cross-Motion and Annexed Exhibits FSJMGT

10. CV-707274-19/KI

Plaintiff Right Aid Medical Supply Corp., a/a/o Enrique Alexander Notice of Motion, Affirmation and Annexed Exhibits TB0A9I

Defendant’s Cross-Motion and Annexed Exhibits LQADFZ

Upon the foregoing cited papers, the Decision and Order on these motions is as follows:

The New York State Insurance Fund (NYSIF/the Fund/Defendant), appearing by its attorney in these breach of contract no-fault proceedings, moves this Court pursuant to CPLR §§2221 and 5015(a) for an Order (a) vacating each default judgment entered against the Defendant in each of the above referenced matters; (b) dismissing each Complaint because this Court lacks subject matter jurisdiction; (c) dismissing each Complaint because Plaintiffs failed to state a claim upon which relief can be granted; (d) imposing sanctions against Plaintiffs’ counsel pursuant to CPLR §8303 and 22 NYCRR §130-1.1(c) for commencing frivolous actions; and (e) for any further relief that seems just, proper and equitable to the Court. Plaintiffs, appearing by their attorney, oppose Defendant’s motions to dismiss the complaints, claiming that this Court does have subject matter jurisdiction over Defendant. Plaintiffs also oppose vacatur of the default judgements on the grounds that Defendant failed to raise a reasonable excuse for defaulting, and they further oppose Defendant’s motions on the grounds that they are fatally defective pursuant to CPLR §2214(c) because Defendant failed to serve the motion with exhibits referenced in the attorney’s affirmations. Finally, Plaintiffs assert that their filings of the summons, complaints and motions for summary judgment were made in good faith and that this Court should not impose sanctions.

For the reasons discussed below, Defendant’s Motions to Vacate the Default Judgment and to Dismiss each of the above-captioned ten (10) actions are GRANTED WITHOUT PREJUDICE in case any of the Plaintiffs decide to seek relief in the Court of Claims. Defendant’s application for sanctions against Plaintiffs’ counsel is DENIED. Finally, Plaintiffs’ [*2]and their counsel are enjoined from commencing any future similar actions or proceedings seeking relief from this Defendant in Kings County Civil Court without a determination from the Appellate Term, that it is appropriate for Plaintiffs to do so.^[FN2]

Procedural History for Index Nos. CV-723175-16/KI; CV-723178-16/KI; CV-723183-16/KI; CV-723185-16/KI

#1 — Plaintiff NYS Acupuncture, P.C., (CV-723175-16/KI)

Plaintiff claims that Assignor Patrick Howard was allegedly involved in a motor vehicle accident on or about February 1, 2011, that Defendant was timely notified of Assignor Howard’s accident and injuries and was subsequently assigned a claim number by Defendant.^[FN3] On or about June 27, 2016, Plaintiff filed a Summons and Complaint with the Kings County Civil Court seeking judgment against Defendant for breach of contract based on its alleged failure to either timely pay or deny payment for services rendered to Assignor Howard, as well as statutory interest and attorney’s fees, and served it on Defendant on or about July 6, 2016.^[FN4] On or about October 3, 2016, Defendant served and filed its answer which listed affirmative defenses, including but not limited to that the Civil Court “lacked subject matter jurisdiction to the extent that plaintiff is seeking monetary relief against the STATE INSURANCE FUND, a New York State agency [and that] [r]elief must be sought in the Court of Claims.”^[FN5] On or about October 11, 2016, Kings County Chief Clerk entered a default judgment against Defendant.^[FN6]

#2 — Plaintiff NYS Acupuncture, P.C., (CV-723178-16/KI)

Plaintiff claims that Assignor Miguel Quinn was allegedly in a motor vehicle accident occurring on or about February 12, 2012, that Defendant was timely notified of Quinn’s accident and injuries and was subsequently assigned a claim number by Defendant.^[FN7] On or about June 27, 2016, Plaintiff filed a Summons and Complaint with the Kings County Civil Court seeking judgment against Defendant for breach of contract based on its alleged failure to either timely pay or deny payment for services rendered to Assignor Quinn, as well as statutory interest and attorney’s fees, and served it on Defendant on or about July 6, 2016.^[FN8] On or about October 3, 2016, Defendant served and filed its answer which listed affirmative defenses, including but not limited to that Plaintiff failed to properly serve Defendant, and the Civil Court lacked subject matter jurisdiction as the relief sought against NYSIF, a state agency, must be sought in the Court of Claims.^[FN9] On or about October 11, 2016 a default judgment was entered against the Defendant.^[FN10]

#3 — Plaintiff Elmont Rehab, P.T., P.C. (CV-723183-16/KI)

Plaintiff claims that Assignor Karen Cutler was allegedly in a motor vehicle accident occurring on or about January 26, 2011, that Defendant was timely notified of Cutler’s accident and injuries and was subsequently assigned a claim number by Defendant.^[FN11] On or about June 27, 2016, Plaintiff filed a Summons and Complaint with the Kings County Civil Court seeking judgment against Defendant for breach of contract based on its alleged failure to either timely pay or deny payment for services rendered to Assignor Cutler, as well as statutory interest and attorney’s fees, and served it on Defendant on or about July 6, 2016.^[FN12] In its Answer, Defendant listed affirmative defenses, including but not limited to that Plaintiff failed to properly serve the Defendant and that the Civil Court lacked subject matter jurisdiction as the relief sought against NYSIF, a state agency, must be sought in the Court of Claims.^[FN13] On or about October 11, 2016 a default judgment was entered against the Defendant.^[FN14]

[*3]#4 — Plaintiff NYS Acupuncture, P.C., (CV-723185-16/KI)

Plaintiff claims that Assignor Karen Cutler was allegedly in a motor vehicle accident occurring on or about January 26, 2011, that Defendant was timely notified of Cutler’s accident and injuries and was subsequently assigned a claim number by Defendant.^[FN15] On or about June 27, 2016, Plaintiff filed a Summons and Complaint with the Kings County Civil Court seeking judgment against Defendant for breach of contract based on its alleged failure to either timely pay or deny payment for services rendered to Assignor Cutler, as well as statutory interest and attorney’s fees, and served it on Defendant on or about July 6, 2016.^[FN16] On or about October 3, 2016, Defendant served and filed its answer which listed affirmative defenses, including but not limited to improper service of the summons and complaint in violation of CPLR § 307, and that the Civil Court lacked subject matter jurisdiction because Defendant was a state agency and, as such, monetary relief had to be pursued in the Court of Claims.^[FN17] On or about October 11, 2016, a default judgment was entered against the Defendant.^[FN18]

On or about March 15, 2019, the Plaintiffs on the four cases summarized above filed and served motions seeking summary judgment pursuant to CPLR §§3211(c) or 3212(a) and dismissal of Defendant’s affirmative defenses pursuant to CPLR §3211(b). Defendant subsequently filed notices of cross-motion in each case for summary judgment seeking an order granting its cross-motions for summary judgment and dismissing the cases on multiple grounds, including but not limited to that the Civil Court lacked subject matter jurisdiction. Defendant also sought sanctions on Plaintiffs’ counsel, pursuant to CPLR §8303 and 22 NYCRR §130-1.1(c) for commencing frivolous actions.

After a series of adjournments, on January 5, 2021, these four cases (index numbers CV-723175-16, CV-723178-16, CV-723183-16 and CV-723185-16) were called and argued from the Parts 40 and 41 Special 1 calendars in Kings County Civil Court. The same counsel represented Plaintiffs NYS Acupuncture, P.C. and Elmont Rehab, P.T., P.C. and Defendant had the same counsel in all four cases. This Court denied Plaintiffs’ motions for summary judgment. This Court further stated that it was inclined to grant Defendant’s cross-motion to dismiss the actions on the grounds that the Court lacked subject matter jurisdiction, and that it would be drafting its Decision and Order on the summary judgment and sanctions issues.

On or about January 25, 2021, via email to chambers, Plaintiffs’ counsel suggested instead that one of the four cases be decided on the merits instead of being dismissed for lack of subject matter jurisdiction, and the remaining three cases be stayed pending an appeal to and a decision from the Appellate Term. Defendant’s counsel objected to that, reiterating that the cases had to be dismissed because this Court did not have jurisdiction. Further, Defendant again [*4]urged that the Court impose sanctions against Plaintiffs’ counsel for continuing to commence actions against Defendant in the Civil Court despite Plaintiffs’ counsel’s knowledge of prior decisions holding consistently that only the Court of Claims had jurisdiction of the type of cases being litigated before this Court.

While drafting its Decision and Order, this Court found that the New York State Unified Court System Universal Case Management System (UCMS) listed all four cases as having had default judgments entered in favor of the Plaintiffs on October 11, 2016. As a result, on April 6, 2021, during a status conference on the four cases, this Court informed counsel that in the course of its review of UCMS and the Unified Court System public online case-tracking e-Courts information service, it not only found that the four instant cases had default judgments filed, but this Court had found additional no-fault insurance cases filed against Defendant by Plaintiffs’ counsel.

This Court further informed counsel that it was still drafting a Decision and Order dismissing the four cases for lack of subject matter jurisdiction. In addition, this Court directed Defendant’s counsel to review its records to identify any other no-fault insurance cases filed by Plaintiffs’ counsel in Kings County Civil Court that resulted in default judgments issued against it. The Court established a motion and conference schedule for both sides to file the appropriate motions. In addition, this Court urged counsel to review all their cases that had been filed in Kings County Civil Court involving this Defendant where default judgments had not been filed and to seek possible resolutions on those cases for review and approval by this Court.

On April 19, 2021, Defendant’s counsel, after apparently identifying six additional no-fault cases in which default judgments had been issued against it stemming from filings in Kings County Civil by Plaintiffs’ counsel, filed Motions to Dismiss in the ten (10) instant captioned matters pursuant to the motion schedule maintaining that the Civil Court does not have jurisdiction to hear said matters and moved this Court to vacate the default judgments, dismiss the summons and complaint and to impose sanctions on Plaintiffs’ Counsel. On or about April 22, 2021, Plaintiffs’ Counsel opposed said Motions to Dismiss asserting that Defendant’s motions were defective and its defects prejudicial to Plaintiffs given Defendant’s failure to annex all the exhibits it referenced in its motion, which Plaintiffs assert is a fatal defect warranting denial of Defendant’s motion. Plaintiffs also assert that Defendant lacks a reasonable excuse to support vacating the default judgements entered against it and the Court should not vacate the same. Plaintiffs’ counsel did not seek to revive the Motions for Summary Judgment in these submissions for the first four cases heard by this Court, Index Numbers CV-723175-16, CV-723178-16, CV-723183-16 and CV-723185-16.

The six additional cases identified by Defendant’s counsel and subsequently the subject of the moving and opposing papers filed by the parties on or about April 19, 2021 and April 22, 2021, respectively, and addressed in this Decision and Order, along with the first four captioned in this Decision and Order,^[FN19] are summarized procedurally below:

[*5]Procedural History regarding Index Nos. CV-723177-16/KI; CV-723180-16/KI; CV-707439-17/KI; CV-704429-18/KI; CV-706460-19/KI; CV-707274-19/KI

#5 — Plaintiff Elmont Rehab, P.T., P.C. (CV-723177-16/KI)

Plaintiff claims that Assignor Miguel Quinn was allegedly in a motor vehicle accident occurring on or about February 12, 2011, that Defendant was timely notified of Quinn’s accident and injuries and was subsequently assigned a claim number by Defendant.^[FN20] On or about June 27, 2016, Plaintiff filed a Summons and Complaint with the Kings County Civil Court seeking judgment against Defendant for breach of contract based on its alleged failure to either timely pay or deny payment for services rendered to Assignor Quinn, as well as statutory interest and attorney’s fees.^[FN21] Defendant answered the complaint posing affirmative defenses,^[FN22] but on October 11, 2016 a default judgment was entered against the Defendant.^[FN23]

#6 — Plaintiff Uzma Nasir Physician, P.C. (CV-723180-16/KI)

Plaintiff claims that Assignor Miguel Quinn was allegedly in a motor vehicle accident occurring on or about February 1, 2011, that Defendant was timely notified of Quinn’s accident [*6]and injuries and was subsequently assigned a claim number by Defendant.^[FN24] As a result of Defendant’s alleged failure to either timely pay or deny payment for services rendered to Assignor Quinn, Plaintiff filed a Summons and Complaint in Kings Civil Court on or about July 6, 2016,^[FN25] seeking payment, statutory interest and attorney’s fees from Defendant.^[FN26] On October 11, 2016 a default judgement was entered against Defendant.^[FN27]

#7 — Plaintiff Solution Bridge, Inc. (CV-707439-17/KI)

Plaintiff claims that Assignor Jennifer Schaum was allegedly in a motor vehicle accident occurring on or about January 7, 2012, that Defendant was timely notified of Schaum’s accident and injuries and was subsequently assigned a claim number by Defendant.^[FN28] On or about March 8, 2017, Plaintiff filed a Summons and Complaint with the Kings County Civil Court seeking judgment against Defendant for breach of contract based on its alleged failure to either timely pay or deny payment for services rendered to Assignor Schaum, as well as statutory interest and attorney’s fees.^[FN29] In its Answer, Defendant listed affirmative defenses.^[FN30] On or about September 8, 2017, Plaintiff rejected Defendant’s Answer as untimely.^[FN31] On or about September 8, 2017 a default judgement was entered against Defendant.^[FN32] The April 19, 2021 Affidavit of Rosanne [*7]Nichols, an Associate Attorney for the Defendant, listed affirmative defenses, including that Plaintiff failed to properly serve the Defendant and filed its action in the wrong court, service against the Defendant was improper, and that since Defendant is a state agency, relief could only be sought in the New York State Court of Claims and thus the Civil Court lacked subject matter jurisdiction.^[FN33]

#8 — Plaintiff Metro Pain Specialist, P.C. (CV-704429-18/KI)

Plaintiff claims that Assignor Eileen Kilbane was allegedly in a motor vehicle accident occurring on or about July 7, 2016, that Defendant was timely notified of Kilbane’s accident and injuries and was subsequently assigned a claim number by Defendant.^[FN34] On or about January 30, 2018, Plaintiff filed a Summons and Complaint with the Kings County Civil Court seeking judgment against Defendant for breach of contract based on its alleged failure to either timely pay or deny payment for services rendered to Assignor Kilbane, as well as statutory interest and attorney’s fees.^[FN35] On or about November 14, 2018 a default judgment was entered against Defendant.^[FN36] The April 19, 2021 Affidavit of Rosanne Nichols, an Associate Attorney for the Defendant, listed affirmative defenses, including that Plaintiff failed to properly serve the Defendant, and that since Defendant is a state agency, relief could only be sought in the New York State Court of Claims and thus the Civil Court lacked subject matter jurisdiction.^[FN37]

#9 — Plaintiff Gentlecare Ambulatory Anesthesia Services; Lyonel F. Paul, MD (CV-706460-19/KI)

Plaintiff claims that Assignor Maglorie Bueno was allegedly in a motor vehicle accident occurring on or about September 11, 2012, that Defendant was timely notified of Bueno’s accident and injuries and was subsequently assigned a claim number by Defendant.^[FN38] On or about February 13, 2019, Plaintiff filed a Summons and Complaint in the Kings County Civil Court seeking judgment against Defendant for breach of contract based on its alleged failure to either timely pay or deny payment for services rendered to Assignor Bueno, as well as statutory [*8]interest and attorney’s fees.^[FN39] On or about April 13, 2019, Defendant listed affirmative defenses, including but not limited to that Plaintiff filed its action in the wrong court since Defendant, a state agency, could only be sued in the New York State Court of Claims and thus the Civil Court lacked subject matter jurisdiction.^[FN40] On or about May 29, 2019 Plaintiff rejected Defendant’s Answer as untimely.^[FN41] On or about June 26, 2019 a default judgment was entered against Defendant.^[FN42]

#10 — Plaintiff Right Aid Medical Supply Corp. (CV-707274-19/KI)

Plaintiff claims that Assignor Enrique Alexander was allegedly in a motor vehicle accident occurring on or about January 19, 2016, that Defendant was timely notified of Alexander’s accident and injuries and was subsequently assigned a claim number by Defendant.^[FN43] On or about February 20, 2019, Plaintiff filed a Summons and Complaint in the Kings County Civil Court seeking judgment against Defendant for breach of contract based on its alleged failure to either timely pay or deny payment for services rendered to Assignor Alexander, as well as statutory interest and attorney’s fees.^[FN44] In its Answer, Defendant listed affirmative defenses, including that service against the Defendant was improper and Plaintiff filed its action in the wrong court, i.e., since Defendant is a state agency, relief could only be sought in the New York State Court of Claims and thus the Civil Court lacked subject matter jurisdiction.^[FN45] On or about June 26, 2019 a default judgment was entered against Defendant.

Issues Presented:

The threshold and dispositive issue is whether this Court has subject matter jurisdiction to entertain the Plaintiffs’ actions against this Defendant. A secondary issue is whether Defendant’s request for sanctions against the Plaintiffs and/or their counsel should be granted.

Positions of the Parties:

The Defendant moves this Court to vacate the default judgements entered against it and [*9]to dismiss the attendant breach of contract matters against the Defendant because the Civil Court did not have subject matter jurisdiction to render the judgments. The Defendant points to Nash v. Port Authority of NY and N.J., 22 NY3d 220, 229 (2013) to support the axiom that “a judgment rendered without subject matter jurisdiction is void, and that the defect may be raised at any time and may not be waived.”^[FN46] Defendant cites additional cases supporting its argument that a court cannot assert jurisdiction over a matter in which it does not have subject matter jurisdiction. See, e.g., Defendant’s Affirmation under Index number CV-723175-16, paragraphs 19, 21 (citing, e.g., Gager v. White, 53 NY2d 475, 488 [1981] [“Unlike subject matter jurisdiction, which limits the power of a particular court rather than the judicial jurisdiction of the State en gros, a defect in basis jurisdiction is waivable.”]; Morrison v. Budget Rent a Car Sys., 230 AD3d 253, 258, 260 [2d Dept 1997] [“If, however, a court lacks subject matter jurisdiction, the parties may not confer it on the court…and it may not be conferred by laches or estoppel…. More importantly in the case before us, we recognize that that when a court lacks subject matter jurisdiction it may not acquire it by waiver.”]).

Defendant claims that it is a state agency ^[FN47] and that, as such, Article VI, Section 9 of the [*10]New York State Constitution, Court of Claims Act Section 9 proscribes that the Court of Claims has exclusive jurisdiction to hear and determine actions for money damages against it and accordingly the Civil Court does not have subject matter jurisdiction over the instant matters. See, e.g., Defendant’s Affirmation dated April 19, 2021, Index number CV-723175-16, at paragraphs 21, 25 (citing, e.g., D’Angelo v. State Ins. Fund, 48 AD3d 400 [2nd Dept 2008]; Comm’rs of the State Ins. Fund v. Photocircuits Corp., [20 AD3d at 176]).^[FN48]

Plaintiffs’ counter with CPLR §2214(c) to stress to this Court that Defendant’s motions are fatally defective and should not be considered. Plaintiffs’ counsel confirms that Defendant failed to serve all of the exhibits referenced in Defendant’s affidavits and said failure was prohibitive and prejudicial to the Plaintiffs’ ability to properly defend the motions.

Plaintiffs further cite numerous sections of the CPLR, the NYCRR, the No-Fault Insurance Law and Regulations as well as cases to support their proposition that a Defendant’s failure to raise a reasonable excuse for defaulting is reason enough to deny vacatur of the same. Plaintiffs point to Defendant’s untimely filing of its answers to support their position that the Court deny Defendant’s motion.^[FN49] Finally, Plaintiffs assert that Defendant’s failure to raise improper service as a defense ^[FN50] is a waiver of its defense of personal jurisdiction ^[FN51] and vacatur of [*11]the default judgment must be denied.^[FN52]

Plaintiffs also urge the Court to deny vacatur of the default judgments because Defendant’s assertion that it is a state agency is an inadequate defense to Plaintiffs’ position that Defendant is still fully subject to the jurisdiction of this Court.^[FN53] In support of its argument, Plaintiffs’ cite Commissioners of State Insurance Fund v. Low, 3 NY2d 590 (1958), Carney v. Newburgh Park, 84 AD2d 599 (3d Dept 1981), State Ins. Fund v. State, 212 AD2d 98 (4th Dept 1995), Royal Ins. Co. of Am. v. Comm’rs of State Ins. Fund, 289 AD2d 807 (3rd Dept 2001); Matter of Central NY Workers’ Compensation Bar Assn v. State of NY Workers’ Compensation Bd., 16 AD3d 1066 (3d Dept 2005), Matter of Progressive Cas. Ins. Co. v. New York State Ins. Fund, 47 AD3d 633 (2d Dept 2008) and Merchants Mut. Ins. Co. v. New York State Ins. Fund, 85 AD3d 1686 (4th Dept 2011).^[FN54]

Defendant seeks sanctions against Plaintiffs and their counsel as well as costs and reasonable attorneys’ fees, alleging that Plaintiffs, by their counsel, have engaged in frivolous conduct by continuing to file actions against it that are completely without merit in the law and which cannot be supported by a reasonable argument for an extension, modification or reversal of existing law, and that doing so is a “continued and deliberate waste of judicial resources.”^[FN55] Defendant cited three cases to support its motion for sanctions and/or the awarding of costs and legal fees.^[FN56]

Plaintiffs’ counsel maintains that he acted in good faith and that the Court must consider such good-faith to modify existing case law through “common law jurisprudence.”^[FN57] Plaintiffs rely on cases holding that unpersuasive legal arguments do not rise to the level of frivolity to [*12]require the imposition of sanctions.^[FN58]

Discussion:

The Issues of Subject Matter Jurisdiction and Vacatur of the Default Judgments

The New York State Constitution Article VI, Section 9, Court of Claims Act Section 9 states in relevant part, “The Court [of Claims] shall have jurisdiction:… 2. To hear and determine a claim of any person, corporation…against the state for the appropriation of any real or personal property…, for the breach of contract, express or implied….” While it is uncontroverted that New York State statutory and case law prove that Defendant NYSIF is a State agency within the Department of Labor,^[FN59] the federal courts have likewise reached that conclusion. See Lipofsky v. The State Insurance Fund, 86 F.3d 15 (2nd Cir.), cert. denied, 519 U.S. 971 (1996). In Lipofsky, the plaintiff claimant unsuccessfully challenged the federal district court’s finding that NYSIF was a state agency and thus was entitled to immunity from suit in federal court under the U.S. Const. amend. XI.^[FN60]

The status of NYSIF as a state agency is only being mentioned briefly as it is the predicate to the dispositive question of subject matter jurisdiction, the answer to which is that New York courts have consistently held that claims for money damages against NYSIF, whether based on an alleged breach of contract or couched as an action for a declaratory judgment, if the remedy sought is financial recovery, must be litigated in the Court of Claims. See, e.g., GuideOne Specialty Mut. Ins. Co. v. State Ins. Fund, 94 AD3d at 700-01 (claim denominated as one for a declaratory judgment was really for money damages and thus belonged in the Court of Claims); Twin City Fire Ins. Co. v. State Ins. Fund, 65 AD3d 945, 946 (1st Dept 2009) (claim disguised as one for declaratory relief was actually for money damages and thus belonged in the Court of Claims); D’Angelo v. State Ins. Fund, 48 AD3d at 402 (Supreme Court erred in granting Plaintiffs’ cross-motion to add breach of contract claim to recover damages as such a claim must be litigated against the Fund in the Court of Claims); Commissioners of State Ins. Fund v. M. [*13]Mathews & Sons Co., 131 AD2d 301 (counter-claim for actual and punitive damages for wrongful policy cancellation could only be heard in the Court of Claims); Miraglia v. State Ins. Fund, 32 Misc 2d at 473-474 (Article 78 proceeding to compel payment could only be heard in the Court of Claims); Ultimate Care Chiropractic, P.C. v. State Ins. Fund, Civ. Ct., Kings County, Index No. 716668/2016 (Dec. 10, 2018, Gerstein, J.) (Civil Court lacked jurisdiction over State Insurance Fund in no-fault benefit action).^[FN61]

Attempts to recover money damages from the Fund in courts other than the Court of Claims have resulted in dismissals. See, e.g., GuideOne Specialty Mut. Ins. Co. v. State Ins. Fund, 94 AD3d at 700 (claim for money damages against State Insurance Fund in State Supreme Court rather than Court of Claims mandated dismissal). Accordingly, since this Court does not have subject matter jurisdiction over the claims at issue, the Court does not have the power to impose the money judgment relief sought by Plaintiffs. Further, while a claimant may subsequently seek to file the action in the Court of Claims,^[FN62] that is not an automatic fallback option.^[FN63]

Plaintiffs also urge the Court to deny vacatur of the default judgment citing to Defendant’s failure to establish a meritorious defense that this Court lacks subject matter jurisdiction over these matters.^[FN64] To support its argument, Plaintiffs’ attorney relies on Commissioners of State Insurance Fund v. Low, 3 NY2d 590 (1958); Carney v. Newburgh Park, 84 AD2d 599 (3d Dept 1981); State Ins. Fund v. State, 212 AD2d 98; Royal Ins. Co. of Am. v. Comm’rs of State Ins. Fund, 289 AD2d 807; Matter of Central NY Workers’ Compensation Bar Assn v. State of NY Workers’ Compensation Bd., 16 AD3d 1066; Matter of Progressive Cas. Ins. Co. v. New York State Ins. Fund, 47 AD3d 633 (2d Dept 2008) and Merchants Mut. Ins. Co. v. New York State Ins. Fund, 85 AD3d 1686). The Plaintiffs’ reliance on these cases to support their suing this Defendant in this court for money damages is misplaced, factually and/or legally.

The primary issue in Commissioners of State Insurance Fund v. Low, 3 NY2d 590 (1958) was a question of collateral estoppel and res judicata. Low involved a state trooper who died after the state car he was riding in collided with a private passenger car and whose widow received Workers’ Compensation benefits via a policy issued to the State by the State Insurance Fund. Id. at 593. After Mr. Low, the operator of the other car, successfully sued New York [*14]State, not the State Insurance Fund, in the Court of Claims, alleging negligence by the operator of the state car, the Fund, which had not been a party in Low’s suit but was the statutory assignee of the deceased trooper for Workers’ Compensation purposes, subsequently sued Low for negligence in State Supreme Court. Id. at 593-594. The Supreme Court agreed with Low that the matter was res judicata and that the Fund was collaterally estopped from pursuing its action, but the Court of Appeals affirmed the Appellate Division’s reversal of the Supreme Court’s decision, noting that while the Fund was a state agency, for purposes of litigation, it was a separate entity and as it was not a party in Mr. Low’s prior suit and thus had no opportunity to litigate the matter, neither res judicata nor collateral estoppel applied. Id. at 595-96. Accordingly, this case does not support Plaintiffs’ position that their cases can, in fact, be adjudicated in Civil Court. While Low does say that for purposes of applying res judicata and collateral estoppel in litigation, the Fund can be treated as a separate entity from the State, it does not say that the Court of Claims Act does not apply to the Fund. At most, the Low case shows that the legislature may enact a specific statute, e.g., the Workers’ Compensation Law Section 81, to allow the Fund to sue or be sued in courts other than the Court of Claims. Id. at 594.

A subsequent Court of Appeals case to Low not cited by Plaintiffs’ counsel provides further clarification about circumstances upon which a particular court may have jurisdiction is Koerner v. State, 62 NY3d 442 (1984). Koerner concerned whether a Plaintiff must, when seeking monetary damages pursuant to New York’s Human Rights Law, pursue the action only in the Court of Claims. Id. at 444. In Koerner, an employee terminated from Pilgrim State Psychiatric Hospital Plaintiff filed suit in Supreme Court. Id. at 444-45. The Defendants, including among others, Pilgrim State Psychiatric as well as the State itself, moved successfully to dismiss the complaint on multiple grounds, including that the court was without subject matter jurisdiction. See 62 NY2d at 445, 448. The Court of Appeals reversed, opining that while “[f]or the most part, the State’s waiver of immunity as to actions for money damages is limited to actions commenced in the Court of Claims”, the Legislature, in statutory language permitting the State Division of Human Rights to award damages administratively without recourse to the Court of Claims, “must be deemed to have waived both the State’s immunity to suit and the requirement that it be sued in the Court of Claims.” See 62 NY2d at 448-49. Koerner confirms that, barring specific legislation to the contrary, e.g. Workers’ Compensation Law §81 or the Human Rights Law, money-damage actions against New York State and its agencies lay in the Court of Claims.

Low is also referenced in Commissioners of State Ins. Fund v. M. Mathews & Sons Co., 131 AD2d 301 (1st Dept 1987), where the Fund instituted an action in Supreme Court pursuant to Workers’ Compensation Law §93 to recover unpaid premiums on a cancelled insurance policy and respondent had counter-claimed for actual and punitive damages. Id. at 301. When the Fund moved to dismiss the counterclaim on the grounds that the Supreme Court lacked subject matter jurisdiction, that Court rejected the argument, citing Commissioners of State Insurance Fund v. Low. Id. The Appellate Division reversed and dismissed the counter-claim on the grounds that as the Fund was a State agency, it was cloaked with sovereign immunities, one of which was that it could not be sued for money damages in courts other than the Court of Claims. Id. (also citing Methodist Hosp. of Brooklyn v. State Ins. Fund, 64 NY2d 365, 375 [1985] [holding that a counterclaim against the Fund for actual and punitive damages for wrongful policy cancellation can be heard only in the Court of Claims). Akin to Koerner, the Appellate Division in Mathews interpreted Low as allowing the Fund to consider itself a separate entity [*15]from the State itself for the purposes of instituting litigation (and thus unbound from the doctrines of collateral estoppel and res judicata by judgments rendered only against the State), but that status did not strip the Fund of its immunity as a State agency, including the requirement that it be sued for money damages in the Court of Claims absent any statute to the contrary. See 131 AD2d at 301-02.

Plaintiffs also rely on Carney v. Newburgh Park, 84 AD2d 599 to support their claim that Civil Court has jurisdiction over their cases. However, the Court’s reading of M. Mathews and Carney proves that in the absence of legislation to the contrary, claims against the Fund for money damages must be heard in the Court of Claims. Carney involved an arbitration hearing before the Workers’ Compensation Board which the Fund lost. The Fund then appealed the arbitration decision to the Appellate Division. Id. at 600. Plaintiffs argue that the Fund is deemed like any other litigant and is not afforded special treatment that an instrumentality of the state would enjoy to divest the Court of Claims of jurisdiction over this issue.^[FN65] Carney is another reminder that Workers’ Compensation proceedings are statutorily bound to arbitration, unlike automotive insurance claims. Because Carney involved the Fund as the actual insurer for these Workers’ Compensation policies (as well as many others in New York, where the Fund actually competes on the market for business), the Fund occupies a different position than it does in auto insurance No-Fault proceedings.

Plaintiffs also rely on State Ins. Fund v. State, 212 AD2d 98, as a basis for his filings in this Court. But, like Carney, the facts and applicable law in State Ins. Fund v. State were different from the Plaintiffs’ no-fault auto insurance cases, and do not establish grounds for this Court to have jurisdiction herein. State Ins. Fund v. State involved a trucking company employee who was injured by a garbage truck owned and operated by New York State. Id. at 99. As the insurance carrier for the company’s Workers’ Compensation policy, the Fund paid benefits on the employee’s behalf. Id. The Fund then sought reimbursement from New York State, which had self-insured its garbage truck. Id. at 99-100. When the State’s authorized no-fault adjuster, Continental Loss Adjusting Services Inc., denied the Fund the full amount sought, the Fund filed for mandatory arbitration against the State under Workers’ Compensation Law §29 and Insurance Law §5105. Id. at 100. After the arbitrator held the Fund failed to show that the State was the proper party to the arbitration, the Fund filed a petition in State Supreme Court pursuant to CPLR §7511 seeking to vacate the arbitrator’s decision. Id. at 100. The Supreme Court dismissed the petition, agreeing with the State that the latter could only be sued in the Court of Claims. Id. The Fourth Department reversed the Supreme Court, holding that Insurance Law §5105 stated that the sole remedy to recover on this type of claim was to submit it to mandatory arbitration. Id. at 100-101. The Appellate Court noted that as the State had chosen to self-insure its own vehicles, for the purpose of auto accident claims involving the State, it stood in the same position as any other insurer under the No-Fault Law, making it [*16]subject to mandatory arbitration. Id. at 101-102. Thus, State Ins. Fund v. State does not mean that any or all no-fault insurance cases can be litigated against the Fund or the State outside the Court of Claims, but is permissible under certain facts and applicable laws such as when a no-fault claim arises from an accident with a state-owned, operated and self-insured vehicle. Id. at 100-102.

Plaintiffs’ reliance on Royal Ins. Co. of Am. v. Comm’rs of State Ins. Fund, 289 AD2d 807 is similarly misplaced. This Court finds that this case does not support the proposition that filings against the NYSIF for money judgments can lie in the Civil Court. The Royal case involved an appeal from an underlying Court of Claims decision and the issue of Court of Claims jurisdiction was not addressed by the Third Department in its decision here. Id. at 807.

Plaintiffs’ reliance on Matter of Central NY Workers’ Compensation Bar Assn v. State of NY Workers’ Compensation Bd., 16 AD3d 1066 in support of their position that this Court has jurisdiction on Plaintiffs’ claims against the Fund is likewise unavailing. In Matter of Central NY Workers’ Compensation Bar Assn, the Fund was not a party to the action. Rather, the Defendant in this Article 78 filing, which pursuant to CPLR §7804, is required to be brought in the State Supreme Court, was the Workers’ Compensation Board (“WCB”), which was accused of showing favoritism toward Fund attorneys by allowing them to have wireless internet access during WCB proceedings. Id. at 1066-67. Aside from the statutory requirement that an Article 78 proceeding must be filed in Supreme Court, thus implicitly undercutting the relevance of this case to the issue of this Court’s jurisdiction, no issue of Court of Claims was explicitly raised in Matter of Central NY Workers’ Compensation Bar Assn. The Third Department noted that in the context of its dealings with the WCB, the Fund “is merely one of the insurers appearing in proceedings” and to provide one litigant, the Fund, with internet access while denying it to the Fund’s adversaries was arbitrary and capricious and could not stand. Id. Further, it was implicit that the relief sought was equitable, not monetary, further distinguishing this case from counsel’s list of cases. Id. at 1067.

Plaintiffs’ reliance on Merchants Mut. Ins. Co. v. New York State Ins. Fund, 85 AD3d 1686 does not address this Court’s ability to exercise of jurisdiction over these cases. Merchants Mut. Ins. Co. centered on whether the Fund was required to pay-out on a Workers’ Compensation insurance policy issued by the Fund in its capacity as a competitive, private insurer (see 85 AD3d at 1686-1687). That Merchants Mut. applied Workers’ Compensation Law to a case in which the Fund had contracted to provide insurance distinguished the case from the instant Plaintiffs’ No-Fault actions. See M. Mathews, 131 AD2d at 301-302; Carney, 84 AD2d at 600. Accordingly, the issue of whether the Supreme Court had subject matter jurisdiction was not raised here.

Matter of Progressive Cas. Ins. Co. v. New York State Ins. Fund, 47 AD3d 633 (2d Dept 2008), also relied on by Plaintiffs, involved Insurance Law §5105. In this case, the Fund, after paying Workers’ Compensation to and on behalf of an individual who was injured while employed by a company insured by the Fund, won an arbitration hearing pursuant to the statute, and then the Plaintiff moved, via an Article 75 proceeding, to vacate the award. See 47 AD3d at 633. This case further supports that the statute controls the venue since arbitration was required by statute, the Fund was the claimant as opposed to the Defendant, and the case involved Workers’ Compensation. CPLR §7502 permits the Supreme Court to hear Plaintiff’s Article 75 to vacate the award since it was not a monetary award. Progressive cannot be stretched to permit a basis for this Court’s jurisdiction in Plaintiffs’ current cases.

Further, the court’s lack of subject matter jurisdiction is not waivable and can be raised at any time,^[FN66] which this Defendant has done repeatedly. This Court finds that Kings County Civil Court does not have subject matter jurisdiction over Plaintiffs’ claims seeking money judgment against the Fund. Accordingly, as a judgment or order issued without subject matter jurisdiction is void, and that defect may be raised be raised at any time and may not be waived, this Court is vacating all of the default judgments issued in favor of Plaintiffs in the cases captioned in this Decision and Order. See, e.g., Editorial Photocopier Archives v. Granger Collection, 61 NY2d 517, 523 (1984). As the Civil Court did not have subject matter jurisdiction over the above-captioned ten (10) actions, this Court is compelled to dismiss the actions, but without prejudice in case any of the Plaintiffs decide to seek relief in the Court of Claims.

The Issue of Sanctions

With respect to Defendant’s request for sanctions, the Court observes patterns in Plaintiffs’ counsel’s conduct that are troubling. First, in Compass Med., P.C. v. New York State Ins. Fund, 2020 NY Misc. LEXIS 7010 (Civ. Ct., Kings County, Sept. 30, 2020), Judge Roper noted that Plaintiff’s counsel, namely Oleg Rybak of the Rybak firm, received a decision in December 2018 wherein another Civil Court judge had held that the Civil Court lacked jurisdiction over the State Insurance Fund.^[FN67] In Compass Med., P.C. v. State Ins. Fund, 2020 NY Misc. LEXIS 7010, the Plaintiff commenced an action against Defendant State Insurance Fund, alleging Defendant’s failure to pay first party No-Fault benefits for medical services Plaintiff rendered to its assigned eligible injured party. There, the Summons and Complaint were filed in 2015 and answered more than four months later. In 2018, the Plaintiff then filed for summary judgment pursuant to CPLR §3211(c) or §3212(a) and dismissal of Defendant’s affirmative defenses pursuant to CPLR §3211(b). Defendant then filed its cross-motion for summary judgment on the grounds that the Civil Court did not have jurisdiction to hear the case against a state agency and that jurisdiction rested in the Court of Claims. During oral argument held in 2019, Defendant argued, inter alia, that the jurisdictional argument had previously been decided in Defendant’s favor in Ultimate Care Chiropractic, P.C. v. State Ins. Fund, Civ. Ct., Kings County Index No. CV-716668-16, December 10, 2018 by Hon. Michael Gerstein, a case also brought by Plaintiff’s counsel. The Defendant also brought to Judge Roper’s attention twenty other first party No-fault actions that Plaintiff’s counsel filed in 2019, after the decision in Ultimate Care Chiropractic, P.C. v. State Ins. Fund. In Compass Med., P.C. v. State Ins. Fund, the Court noted that Plaintiff’s counsel, “with full knowledge and admittedly conced[ed] that [the] Court of Claims is the court of competent jurisdiction…”, counsel continued to seek relief in Civil Court. While Judge Roper did not find that Plaintiff was collaterally estopped from bringing the action since the Plaintiff and the specific facts of said case were different from Ultimate Care, the Court agreed that jurisdiction lay in the Court of Claims.^[FN68] That Court [*17]rejected Plaintiff’s claim that the Civil Court should retain jurisdiction because the matter would be time-barred if brought in the Court of Claims. Judge Roper reasoned that “[t]his Court’s jurisdiction is not a fail-safe, not a fallback and not a court of contingent jurisdiction.”^[FN69]

This Court’s review of UCMS on April 6, 2021 indicates that the Rybak Firm is listed as counsel for Plaintiffs on at least 118 matters in the Kings Civil Court against this Defendant, reflecting filings between the beginning of 2008 and the end of 2020. Even if Plaintiffs attempted to argue that Compass Med and Ultimate Care cases are distinguishable from the instant cases because there are different facts and different Plaintiffs, such assertions are without merit since it is irrefutable that the Defendant is a state agency and as a state agency, the Court of Claims is the proper court to hear their claims.

When actions are brought where there is incontrovertible proof that undercut their filing in the first place,^[FN70] much less cases where there existed conclusive defenses to the asserted claims,^[FN71] courts have the discretion, on their own initiative or upon a party’s motion, to impose sanctions on a party for commencing a frivolous proceeding. See 22 NYCRR §130-1.1;^[FN72] see also Ram v. Torto, 111 AD3d 814 (2nd Dept 2013), lv. dismissed, 22 NY3d 860 (2014) (court upheld Defendant’s motions for attorney’s fees as well as injunctive relief prohibiting self-represented Plaintiff from filing further actions related to the case without court approval and also imposed, on its own initiative, a fine for frivolous conduct); Flushing Expo, Inc. v. New World Mall, LLC, 116 AD3d 826 (2d Dept 2014) (defendant’s motions for sanctions and attorney’s fees granted); cf. CPLR §8303(a) (where a personal injury action is commenced or continued and is found by the court to be, at any point in the proceedings, frivolous, the court [*18]shall award costs and reasonable attorney’s fees up to $10,000).

In Ram, the Appellate Division noted that the self-represented Plaintiff commenced various proceedings relating to the same matter, all of which had been dismissed by lower courts, which were subsequently affirmed by the Appellate Division.^[FN73] The Ram Defendants moved to dismiss the complaint pursuant to CPLR §3211(a)(7) because the Plaintiff failed to state a cause of action, for injunctive relief, and for an award of costs pursuant to 22 NYCRR §130-1.1.^[FN74] The Appellate Division upheld the lower court’s dismissal of the complaint and further found that the lower court “acted providently in enjoining the Plaintiff ‘from commencing any action or proceeding seeking relief from [Defendants] or from anyone else, in any form or fashion, related to or arising from the [underlying money judgment] without prior permission from this court or from the Appellate Division, Second Department.'”^[FN75] The Appellate Division also upheld the lower court’s award of costs pursuant to 22 NYCRR §130-1.1.^[FN76] in the amount of $6,000 for attorney’s fees, payable by the Plaintiff.^[FN77] The Appellate Division in Ram also held that the Plaintiff’s appeal was frivolous as it had no legal merit and was not supported by any reasonable argument, and ordered him to pay $2,500 to the court clerk to be forwarded in turn to the State Department of Taxation and Finance.^[FN78] See also Greene v. Rachlin, 154 AD3d 818 (2d Dept 2017) (attorney’s fees awarded as sanction against Plaintiff for its frivolous conduct in commencing action that was without merit in law and could not be supported by a reasonable argument for extension or modification of existing law); Mosab Constr. Corp. v. Prospect Park Yeshiva, Inc., 124 AD3d at 733 (attorney’s fees of $500 awarded as sanction against Plaintiff for its frivolous conduct in commencing time-barred lawsuit); Flushing Expo, Inc. v. New World Mall, LLC, 116 AD3d at 827-28 (sanction and attorney’s fee warranted where Plaintiff and counsel filed new action after Plaintiff’s previous action, with same counsel, had been dismissed, and new action had no merit in law nor any reasonable argument). Similarly, sanctions may be considered where a party continues to file actions despite knowing that it has no basis for doing so.^[FN79]

When the Plaintiffs appealed in all of the Omni cases listed in footnote 79, which included not only the 34 cases decided on December 21, 2018, but a few more decided the same day, the Appellate Term affirmed each dismissal and, on the Appellate Term’s own motion, directed the parties to show cause as to whether the Court should impose sanctions and costs against Plaintiffs’ counsel. See, e.g., Natural Therapy Acupuncture, P.C. v. Omni Indem. Co., 2018 NY Misc. LEXIS 6469, 62 Misc 3d 136(A); see also Mosab Constr. Corp. v. Prospect Park Yeshiva, Inc., 124 AD3d at 733 (sanctions and attorney’s fees against Plaintiff warranted where Defendant not only showed debt claims were time-barred by a wide margin and Plaintiff, when asked for proof of debt, failed to provide it but rather discussed Defendant’s defenses). In the Appellate Term’s Omni Indemnity decisions, all of which were issued on December 21, 2018, the Court held that sanctions could be considered because Plaintiffs’ counsel’s conduct appeared not only to meet the definition of frivolous conduct as stated in 22 NYCRR §130-1.1, but that “[s]ince 2013, Plaintiff and/or other providers represented by Plaintiffs’ counsel have been before this court more than 20 times in similar actions wherein these providers, while represented by Plaintiffs’ counsel, have made the same or essentially the same arguments which Plaintiff raises in the instant appeal.” See, e.g., Natural Therapy Acupuncture, P.C. v. Omni Indem. Co., 2018 NY Misc. LEXIS 6469, 62 Misc 3d 136(A) (citations omitted); see also Greene v. Rachlin, 154 AD3d at 819) (Plaintiffs’ continued pursuit on appeal of the same claims that were previously found meritless and barren of any reasonable argument as well as the advancing of other meritless arguments warranted an additional consideration as to whether the appeal was frivolous and could result in additional sanctions); Flushing Expo, Inc. v. New World Mall, LLC, 116 AD3d at 827-28 (judicial record of a prior case involving the Plaintiff and a related party constituted documentary evidence that warranted summary dismissal as well as sanctions and attorney’s fees). The Appellate Term further stated that “Plaintiff’s counsel continues to advance [*19]essentially the same arguments notwithstanding the fact that Defendant’s appellate brief expressly notes that this court has previously considered and rejected the arguments put forth by Plaintiff’s counsel…”. See, e.g., Natural Therapy Acupuncture, P.C. v. Omni Indem. Co., 2018 NY Misc. LEXIS 6469, 62 Misc 3d 136(A) (citations omitted).

The Court is also troubled by Plaintiffs’ counsel’s insistence that it has proceeded in “good faith and with the support of binding authority on the matter as discussed above”^[FN80] , i.e., whether the Civil Court has subject matter jurisdiction. Rather, it appears to this Court that Plaintiffs’ citations to cases in support of jurisdiction are replete with either misunderstood and/or incomplete recitations of pertinent facts (e.g., Carney v. Newburgh Park [specific workers compensation legislation requires NYSIF to appear at arbitration hearings in matters in which NYSIF is actually providing the policy and acting as a competitor in the market]; Royal Ins. Co. of Am. v. Comm’rs of State Ins. Fund [underlying case actually was litigated in the Court of Claims]. Accordingly, this Court is stressed to give the Plaintiffs and their counsel the benefit of the doubt that they have cited “binding authority” in favor of subject matter jurisdiction over the Defendant in the instant cases. Last, this Court has been further tested about Plaintiffs’ counsel’s “good faith” due to the latter’s interpretation of the last series of communications with this Court that it would not be issuing this Decision and Order as stipulations of discontinuances on all of the cases would render the issues resolved (for now, or until the cycle repeated with more no-fault filings against Defendant in Civil Court). It is a close call whether this Court should impose monetary sanctions and/or costs and attorneys’ fees upon Plaintiffs’ counsel.

Conclusion:

Defendant established that the New York Constitution’s Court of Claims Act requires this Court to summarily dismiss the Plaintiffs’ complaints against this Defendant state agency.^[FN81] The [*20]Court is unpersuaded by Plaintiffs’ arguments, including the cases it cited that are immaterial to the issue presented and seek to unjustifiably expand this Court’s jurisdiction to adjudicate actions seeking money judgments against the Fund. This Court lacks subject matter jurisdiction over the ten (10) captioned matters above, wherein jurisdiction lies only with the Court of Claims, as the Plaintiffs are attempting to collect money damages from a State agency. The Defendant’s motions to dismiss are therefore granted in part and denied in part. Granted to the extent that all actions are dismissed and denied to the extent that neither monetary sanctions nor costs and attorney fees will not be issued against Plaintiffs or their counsel although this Court has the discretion to so issue given the facts and circumstances herein. However, Plaintiffs’ counsel, namely the Rybak Firm as well as Oleg Rybak, Esq. and the Plaintiffs are enjoined from commencing any action or proceeding seeking relief in the form of a money judgment from this Defendant, in any Civil Court, without prior approval from this Court or the Appellate Term. To do so otherwise, could warrant monetary sanctions, as well as costs and attorney fees.

This constitutes the Decision and Order of the Court.

Dated: June 24, 2021
Brooklyn, New York
Hon. Patria Frias-Colón
Civil Court, Kings County

Footnotes

Footnote 1: The “Numbered” column represents the electronic filing via the “Electronic Document Delivery System” (EDDS), which at the time of this decision was the method afforded New York State attorneys and other authorized persons to file legal papers by electronic means. This method of E-filing via EDDS is authorized for these proceedings in Kings County Civil Court. These identifying numbers represent the confirmation provided to each counsel upon uploading their respective legal documents under each Index number.

Footnote 2: The Motions for these ten cases involve the same attorneys and the same dispositive issues of law. For the sake of judicial economy, the Decision and Order for each matter will be combined into this single decision. To further minimize confusion for the reader in identifying the cases, Plaintiff NYS Acupuncture Inc. is on three of the cases (Number 1 [a/a/o Patrick Howard], Number 2 [a/a/o Miguel Quinn] and Number 4 [a/a/o Karen Cutler] in the captioned Decision and Order above; Plaintiff Elmont Rehab, P.T., P.C. is on two of the cases (Number 3 [a/a/o Karen Cutler] and Number 5 [a/a/o Miguel Quinn]) in the captioned order above, Plaintiff Uzma Nasir Physician, P.C. is on one case (Number 6 [a/a/o Miguel Quinn]), Plaintiff Solution Bridge, Inc. is on one case (Number 7 [a/a/o Jennifer Schaum]); Plaintiff Metro Pain Specialist, P.C. is on one case (Number 8 [a/a/o Eileen Kilbane]), Plaintiff Gentlecare Ambulatory Anesthesia Services is on one case (Number 9 [a/a/o Maglorie Bueno]), and Plaintiff Right-Aid Medical Supply Corp. is on one case (Number 10 [a/a/o Enrique Alexander]).

Footnote 3: See Exhibit B of Defendant’s motion under Index number CV-723175-16/KI — Defendant’s Answer.

Footnote 4: See Exhibit A of Defendant’s motion under Index number CV-723175-16/KI — Summons and Complaint for Plaintiff.

Footnote 5: See Exhibit B of Defendant’s motion under Index number CV-723175-16/KI — Defendant’s Answer.

Footnote 6: See Exhibit C of Defendant’s motion under Index number CV-723175-16/KI — Kings County Civil Court Judgment dated October 11, 2016.

Footnote 7: See Exhibit A of Defendant’s motion under Index number CV-723178-16/KI — Summons and Complaint.

Footnote 8: Id.

Footnote 9: See Exhibit B of Defendant’s motion under Index number CV-723178-16/KI — Answer.

Footnote 10: See Exhibit C of Defendant’s motion under Index number CV-723178-16/KI — Kings County Civil Court Judgment dated October 11, 2016.

Footnote 11: See Exhibit A of Defendant’s motion under Index number CV-723183-16/KI — Summons and Complaint.

Footnote 12: Id.

Footnote 13: See Exhibit B of Defendant’s motion under Index number CV-723183-16/KI — Defendant’s Answer.

Footnote 14: See Exhibit C of Defendant’s motion under Index number CV-723183-16/KI — Kings County Civil Court Judgment dated October 11, 2016.

Footnote 15: See Exhibit A of motion under Index number Defendant’s CV-723185-16/KI — Summons and Complaint Plaintiff.

Footnote 16: Id.

Footnote 17: See Exhibit B of Defendant’s motion under Index number CV-723185-16/KI — Answer for Plaintiff.

Footnote 18: See Exhibit C of Defendant’s motion under Index number CV-723185-16/KI — Kings County Civil Court Judgment dated October 11, 2016.

Footnote 19: Subsequent to the conference held on April 6, 2021, Stipulations of Discontinuances were submitted to this Court for 98 no-fault insurance cases filed in Kings County Civil Court against Defendant NYSIF in which Plaintiffs were all represented by the Rybak Firm, who is also representing the instant Plaintiffs. To this Court’s dismay, it found that of the 98 stipulations, 97 of which were dated May 13, 2021 and one which was dated May 19, 2021, ten of the stipulations were for the ten cases captioned above that this Court had previously emphasized to both sides that it intended to render a Decision and Order. In an email dated June 9, 2021, Plaintiffs’ counsel told this Court that it disagreed with this Court’s recollection of the multiple “discussions” held and that “your Honor made it abundantly clear that you intended to vacate years old defaults and permit the NYSIF to dismiss the 10 cases. Based on these prior discussions, it is Plaintiffs and their counsel’s position that they would like to dismiss all cases between the Providers represented by The Rybak Firm, PLLC and the NYSIF. Based of [sic] that, if possible, since there is no need to issue any orders and the cases can be dismissed on the previously submitted and executed stipulations.” Defendant’s counsel objected to Plaintiffs’ email. This Court rejects Plaintiffs’ counsel misinterpretation and accordingly, 88 of the 98 stipulations of discontinuances will be filed in Kings County Civil Court. For the reasons set forth, this Court renders this decision on the ten instant cases herein. This Court is troubled by the lack of discernible order the 98 stipulations were sent; there was no chronological or alphabetical order. This may be because either the ten stipulations for the instant cases were mixed-in deliberately with the other 88 in an attempt to preempt this Court from issuing its intended Decision and Order and any possible subsequent consequence to counsel, or the random insertion of these ten cases was an inadvertent error or a misinterpreted and innocent attempt to clear the Civil Court of all the cases between these parties.

Footnote 20: See Exhibit A of Defendant’s motion under Index number CV-723177-16/KI — Summons and Complaint for Plaintiff.

Footnote 21: Id.

Footnote 22: See Exhibit B of Defendant’s motion under Index number CV-723177-16/KI — Defendant’s Answer.

Footnote 23: See Exhibit C of Defendant’s motion under Index number CV-723177-16/KI — Kings County Civil Court Judgment dated October 11, 2016 for Plaintiff.

Footnote 24: See Plaintiff’s Affidavit at paragraph 9 and Exhibit 1 under Index number CV-723180-16/KI — Affidavit of Service dated July 6, 2016.

Footnote 25: See Exhibit 1 of Plaintiff’s Affidavit of Service of Summons and Complaint under Index number CV-723180-16/KI. The Summons and Complaint are missing from this Exhibit and not included elsewhere in Plaintiff’s Opposition; see also Affidavit of Roseanne Nichols, Esq., Defendant’s Exhibit K, dated April 19, 2021 (claiming, inter alia, no affidavit of service of the summons and complaint was filed with the Court, and there was improper service of the summons and complaint and entry of default judgment upon Defendant.no notice of leave to enter the default judgment was motion for default was served, and that the Civil Court did not have subject matter jurisdiction).

Footnote 26: See UCMS records regarding the Summons and Complaint for Plaintiff under Index number CV-723180-16/KI.

Footnote 27: See Exhibit A of Defendant’s motion under Index number CV-723180-16/KI — Kings County Civil Court Judgment dated October 11, 2016.

Footnote 28: See Exhibit A of Defendant’s motion under Index number CV-707439-17/KI — Plaintiff’s Summons and Complaint.

Footnote 29: Id.

Footnote 30: See Exhibit 2 of Plaintiff’s motion under Index number CV-707439-17/KI — Defendant’s Answer.

Footnote 31: See Exhibit 3 of Plaintiff’s motion under Index number CV-707439-17/KI — Plaintiff’s Rejection of Defendant’s Answer.

Footnote 32: See Exhibit B of Defendant’s motion under Index number CV-707439-17/KI — Kings County Civil Court Judgment dated October 11, 2016 for Plaintiff.

Footnote 33: See Exhibit C of Defendant’s motion under Index number CV-707439-17/KI.

Footnote 34: See Exhibit A of Defendant’s motion under Index number CV-704429-18/KI — Plaintiff’s Summons and Complaint.

Footnote 35: Id.

Footnote 36: See Exhibit C of Defendant’s motion, Index number CV-704429-18/KI.

Footnote 37: See Exhibit B of Defendant’s motion, Index number CV-704429-18/KI.

Footnote 38: See Exhibit A of Defendant’s motion, Index number CV-706460-19/KI — Summons and Complaint.

Footnote 39: Id.

Footnote 40: See Exhibit B of Defendant’s motion under Index number CV-706460-19/KI.

Footnote 41: See Exhibit C of Defendant’s motion under Index number CV-706460-19/KI.

Footnote 42: See Exhibit D of Defendant’s motion under Index number CV-706460-19/KI.

Footnote 43: See Exhibit A of Defendant’s motion under Index number CV-707274-19/KI — Plaintiff’s Summons and Complaint.

Footnote 44: Id.

Footnote 45: See Exhibit 4 of Plaintiff’s motion under Index number CV-707274-19/KI.

Footnote 46: See, e.g., Defendant’s Affirmation under Index number CV-723175-16, paragraphs 18-20. Defendant’s citation to Nash is from an opinion that dissented in part, on other grounds, from the majority decision which did not touch on subject matter jurisdiction. The Nash case involved the Court of Appeals review of the Port Authority’s successful motion in Supreme Court to vacate a tortious liability judgment against it after it had previously failed to appeal from an order of the Appellate Division affirming the judgment, contending that there had been a post-judgment change in the law immunizing the Port Authority. See 22 NY3d at 223. The Court of Appeals reversed the lower’s court vacatur of the judgment, finding that the lower court was wrong when it found that it had no discretion other than to vacate the judgment. See 22 NY3d at 225-226. The Nash case turned on the interplay between CPLR §5015(a)(5) (vacating a judgment because of reversal, modification or vacatur of a prior judgment) and whether the underlying court had the discretion to consider whether the Port Authority had waited too long to make its motion, rather than the question as to whether the underlying court even had jurisdiction to hear the case (see CPLR §5015[a][(4]), which is the issue before this Court. See 22 NY3d at 225-226, 229. The dissenting opinion, while agreeing with the majority on the vacatur of the judgment, emphasized that “unlike subject matter jurisdiction—an issue that is nonwaivable and can be raised by any party at any time in any forum—the Port Authority sought vacatur of the Nash judgment based on an issue that was waivable.” See 22 NY3d at 225-226, 229. Defendant subsequently cited to support its argument that the instant default judgments must be vacated because subject matter jurisdiction cannot be waived with case more on point than Nash. See 22 NY3d 220 (order vacating judgment reversed and remitted to Supreme Court for further proceedings), on remitter 131 AD3d 164, 165 (1st Dept 2015) (the motion court, which upon remand from the Court of Appeals, again vacated the judgment, which the Appellate Division reversed as an improvident exercise of discretion).

Footnote 47: See, e.g., Defendant’s Affirmation, Index number CV-723175-16, paragraph 20 (citing, e.g., Workers’ Compensation Law § 76; Comm’rs of the State Ins. Fund v. Photocircuits Corp., 20 AD3d 173, 176 [1st Dept 2005].

Footnote 48: Defendant asserts additional arguments, e.g., that Defendant was not made aware of the prior default judgments, that the default judgments were entered in error, that some Plaintiffs should have first filed their claims with the Worker’s Compensation Board before any further resolution could occur in the Court of Claims. See, e.g., Defendant’s Affirmation, Index number CV-723175-16 at paragraphs 16, 17, 27, 54, 58. Defendant cites several persuasive cases supporting the position that this Court would be providently exercising its discretion in vacating the judgments. See, e.g., Defendant’s Affirmation, Index number CV-723175-16 (citing Bunch v. Dollar Budget, Inc., 12 AD3d 391 [2d Dept 2004] [defendant’s delay in answering was brief, the default was not willful, and there was no evidence that the plaintiff was prejudiced]); Anamdi v. Anugo, 229 AD2d 408 [2d Dept 1996] [court exercised sound discretion in granting vacatur of default judgment where defendant was unaware that the action had commenced and presented an affidavit showing a meritorious defense]). Because this Court’s resolution of the subject matter jurisdiction issue is dispositive in the instant cases, this Court need not reach any of the parties’ arguments other than the jurisdictional one. E.g., c.f., Matter of Regina Metro Co., LLC. v. New York State Div. of Hous. & Community Renewal, 35 NY3d 332, 382 n. 27 (2020) (Court did not reach claim as to whether there was an unconstitutional taking because issue was resolved on other grounds); Matter of Adirondack Wild Friends of the Forest Preserve v. New York State Adirondack Park Agency, 34 NY3d 184, 194 (2019) (for purposes of rendering decision, Court did not need to address whether Department of Conservation plan triggered a provision); Braunstein v. Day, 2021 NY App. Div. LEXIS 3548 (2nd Dept 2021) (As Appellate Division granted the defendant’s motion for summary judgment, it was unnecessary for it to reach the defendant’s remaining contention).

Footnote 49: See, e.g., Plaintiff’s Affirmation, Index number CV-723175-16, at paragraph 6.

Footnote 50: See, e.g., Plaintiff’s Affirmation, Index number CV-723175-16, at paragraph 10.

Footnote 51: See, e.g., Plaintiff’s Affirmation, Index number CV-723175-16, at paragraph 13.

Footnote 52: See, e.g., Plaintiff’s Affirmation, Index number CV-723175-16, at paragraphs 20-23.

Footnote 53: See, e.g., Plaintiff’s Affirmation, Index number CV-723175-16, at paragraph 30.

Footnote 54: See, e.g., Plaintiff’s Affirmation, Index number CV-723175-16, at paragraphs 31-38.

Footnote 55: See, e.g., Defendant’s Affirmation, Index No. 723175/16, at paragraphs 76, 78-79 (citing 22 NYCRR § 130-1.1).

Footnote 56: See, e.g., Defendant’s Affirmation, Index No. 723175/16, at paragraph 77 (citing Transaero, Inc. v. Biri Associates, Corp,. 39 AD3d 738 [2d Dept 2007] [sanctions imposed, on the court’s own motion, against plaintiff and plaintiff’s attorney for filing a lawsuit that attempted to skirt the statute of limitations by falsely claiming that the plaintiff and/or attorney had only recently become aware that they had a cause of action]; Yan v. Klein, 35 AD3d 729, 826 N.Y.S2d 669 [2d Dept 2006] [sanctions warranted where Plaintiff’s attorney repeatedly continued to advance cases that were barred by the doctrines of res judicata and collateral estoppel]); Weinstock v. Weinstock, 253 AD3d 873 [2d Dept 1998] [plaintiff attorney representing self in divorce proceeding ordered to pay $3000 in costs to ex-wife defendant and $10,000 to Lawyers Fund for Client Protection for pursuing an appeal that was meritless in that there was no identifiable relief being sought other than forcing defendant to incur unnecessary counsel fees]); see also CPLR § 8303-a (where a personal injury action is commenced or continued and is found by the court to be, at any point in the proceedings, frivolous, the court shall award costs and reasonable attorney’s fees up to $10,000).

Footnote 57: See, e.g., Plaintiff’s Affirmation, Index No. 723175/16, at paragraphs 40 and 43.

Footnote 58: W.J. Nolan & Co. v. Daly, 170 AD2d 320 (1st Dept 1991) vacated an order imposing sanctions on an attorney because the attorney did know that claims arising from Plaintiff utilizing confidential records of Defendant’s employment was subject to arbitration. Lewis v. Stiles, 158 A.D.2d589 (2d Dept 1992) rejected Defendant’s request to impose sanction in Plaintiff’s nuisance cause of action because counsel’s arguments about the alleged disturbances of children frolicking and dogs barking created by Defendant’s installation of a pool and building a pool house are unpersuasive but do not rise to the level of frivolous.

Footnote 59: See Workers’ Compensation Law §76[1]; Methodist Hosp. of Brooklyn v. State Ins. Fund, 64 NY2d at 375 ; D’Angelo v. State Ins. Fund, 48 AD3d 400, 402 (2d Dept 2008); GuideOne Specialty Mut. Ins. Co. v. State Ins. Fund, 94 AD3d 700 (2nd Dept 2012); Commissioners of State Ins. Fund v. M. Mathews & Sons Co., 131 AD2d 301 (1st Dept 1987); Miraglia v. State Ins. Fund, 32 Misc 2d 471, 473-74 (Sup. Ct. Bx. County 2011).

Footnote 60: See Lipofsky v The State Insurance Fund, 86 F.3d 15.

Footnote 61: This case, also cited as Ultimate Care Chiropractic, P.C. v. State Ins. Fund, Index No. CV-71668-16, was discussed in Compass Med., P.C. v. State Ins. Fund, 2020 NY Misc. LEXIS 7010 (Civ. Ct., Kings County, Sept. 30, 2020), wherein Judge Sandra Roper noted therein that Plaintiffs’ counsel in both cases was the Rybak Firm, who is also counsel in the instant cases.

Footnote 62: See GuideOne Specialty Mut. Ins. Co. v. New York State Ins. Fund, 2015 NY Misc. LEXIS 4345 (NY Ct. Cl., Nov. 12, 2015) where permission was granted to file late claim.

Footnote 63: See Compass Med., P.C. v. State Ins. Fund, 2020 NY Misc. LEXIS 7010 (citing Ultimate Care Chiropractic, P.C. v. State Ins. Fund, Index No. CV-716668-16 [Civil Court improperly granted Plaintiff leave to transfer case to Court of Claims because that court does not accept transfers and the matter was time-barred]).

Footnote 64: See, e.g., Plaintiff’s Affirmation, Index number CV-723175-16, at paragraphs 30-39.

Footnote 65: See, e.g., Plaintiff’s Affidavit, Index No. 723175/16 dated April 22, 2021, paragraph 36. The additional cases that Plaintiffs cite in paragraphs 36—38, are likewise distinguishable from the instant cases because subject matter jurisdiction was not an issue in Plaintiffs’ cited cases where NYSIF was acting like a private insurer in the competitive market collecting premiums and in that context may bring actions in other state courts.

Footnote 66: See GuideOne Specialty Mut. Ins. Co. v. State Ins. Fund, 94 AD3d at 700; D’Angelo v. State Ins. Fund, 48 AD3d at 402.

Footnote 67: Ultimate Care Chiropractic, P.C. v. State Ins. Fund, Index No. CV-716668-16.

Footnote 68: See Compass Med., P.C. v. New York State Ins. Fund, 2020 NY Misc. LEXIS 7010.

Footnote 69: Id.

Footnote 70: See GuideOne Specialty Mut. Ins. Co. v. State Ins. Fund, 94 AD3d 700; D’Angelo v. State Ins. Fund, 48 AD3d 400; Miraglia v. State Ins. Fund, 32 Misc 2d 471.

Footnote 71: See Mosab Constr. Corp. v. Prospect Park Yeshiva, Inc., 124 AD3d 732, 733 (2d Dept 2015) (summary dismissal granted where case was time-barred after being filed eleven years after alleged breach of contract) and Flushing Expo, Inc. v. New World Mall, LLC, 116 AD3d 826, 827 (2d Dept 2014) (summary dismissal granted when Defendant’s evidence conclusively showed no contract existed between the parties).

Footnote 72: 22 NYCRR §130-1.1(a) authorizes a court to award to any party or attorney reasonable expenses incurred and reasonable attorney’s fees, resulting from frivolous conduct and, in addition to or in lieu of awarding costs, to impose financial sanctions upon any party or attorney for said conduct. Pursuant to 22 NYCRR §130-1.1(b), these sanctions can be imposed against the attorney personally or upon a partnership, firm or corporation with whom the attorney is associated and has appeared as attorney of record. In addition, 22 NYCRR §130-1.1(c) states, in part, that “conduct is frivolous if: (1) it is completely without merit in law and cannot be supported by a reasonable argument for an extension, modification or reversal of existing law….Frivolous conduct shall include the making of a frivolous motion….In determining whether the conduct undertaken was frivolous, the court shall consider…the (1) circumstances under which the conduct took place, including the time available for investigating the legal or factual basis of the conduct; and (2) whether or not the conduct was continued when its lack of legal or factual basis was apparent, should have been apparent, or was brought to the attention of counsel or the party.” 22 NYCRR §130-1.1(d) states, in part, “[a]n award of costs or the imposition of sanctions may be made either upon motion in compliance with CPLR §2214 or §2215 or upon the court’s own initiative, after a reasonable opportunity to be heard. The form of the hearing shall depend upon the nature of the conduct and the circumstances of the case.”

Footnote 73: Id. at 815.

Footnote 74: Id.

Footnote 75: Id. at 815-816 (citing Spremo v. Babchik, 216 AD2d 382 [2nd Dept 1995]).

Footnote 76: 22 NYCRR §130-1.2 authorizes a court to award costs, or impose sanctions, or both, up to $10,000 for any single occurrence of frivolous conduct, but the court can only do so “upon a written decision setting forth the conduct on which the award or imposition is based, the reasons why the court found the conduct to be frivolous, and the reasons why the court found the amount awarded or imposed to be appropriate.”

Footnote 77: Id. at 816.

Footnote 78: Id.

Footnote 79: In all the below-cited cases filed against Omni Indemnity Co., which were heard by various Kings County Civil Court judges, several medical providers sought to recover assigned first party no-fault benefits. Each Plaintiff was represented by the Rybak Firm. Except for an award to a Plaintiff by one judge which was subsequently reversed by the Appellate Term (see Charles Deng Acupuncture, P.C., v. Omni Indem. Co., 62 Misc 3d 134[A]), all were summarily dismissed because the Defendant showed that Plaintiff sued the wrong insurance company and the Plaintiff failed to raise an issue of fact in response. See T & S Med. Supply Corp. v. Omni Indem. Co., 2018 NY Misc. LEXIS 6494, 62 Misc 3d 131(A).See, e.g., Charles Deng Acupuncture, P.C., v. Omni Indem. Co., 2018 NY Misc. LEXIS 6482, 62 Misc 3d 134(A) (App. Term 2d Dept 2d, 11th & 13th Jud. Dists. Dec. 21, 2018); Charles Deng Acupuncture, P.C., v. Omni Indem. Co., 2018 NY Misc. LEXIS 6487, 62 Misc 3d 135(A) (App. Term 2d Dept 2d, 11th & 13th Jud. Dists. Dec. 21, 2018); Charles Deng Acupuncture, P.C., v. Omni Indem. Co., 2018 NY Misc. LEXIS 6496, 62 Misc 3d 139(A) (App. Term 2d Dept 2d, 11th & 13th Jud. Dists. Dec. 21, 2018); T & S Med. Supply Corp. v. Omni Indem. Co., 2018 NY Misc. LEXIS 6494, 62 Misc 3d 131(A) (App. Term 2d Dept 2d, 11th & 13th Jud. Dists. Dec. 21, 2018); Maiga Prods. Corp. v. Omni Indem. Co., 2018 NY Misc. LEXIS 6462, 62 Misc 3d 131(A) (App. Term 2d Dept 2d, 11th & 13th Jud. Dists. Dec. 21, 2018); Masigla v. Omni Indem. Co., 2018 NY Misc. LEXIS 6474, 62 Misc 3d 131(A) (App. Term 2d Dept 2d, 11th & 13th Jud. Dists. Dec. 21, 2018); Masigla v. Omni Indem. Co., 2018 NY Misc. LEXIS 6497, 62 Misc 3d 132(A) (App. Term 2d Dept 2d, 11th & 13th Jud. Dists. Dec. 21, 2018); Masigla v. Omni Indem. Co., 2018 NY Misc. LEXIS 6466, 62 Misc 3d 132(A) (App. Term 2d Dept 2d, 11th & 13th Jud. Dists. Dec. 21, 2018); Masigla v. Omni Indem. Co., 2018 NY Misc. LEXIS 6456, 62 Misc 3d 133(A) (App. Term 2d Dept 2d, 11th & 13th Jud. Dists. Dec. 21, 2018); Masigla v. Omni Indem. Co., 2018 NY Misc. LEXIS 6478, 62 Misc 3d 133(A) (App. Term 2d Dept 2d, 11th & 13th Jud. Dists. Dec. 21, 2018); Masigla v. Omni Indem. Co., 2018 NY Misc. LEXIS 6481, 62 Misc 3d 133(A) (App. Term 2d Dept 2d, 11th & 13th Jud. Dists. Dec. 21, 2018); Masigla v. Omni Indem. Co., 2018 NY Misc. LEXIS 6490, 62 Misc 3d 134(A) (App. Term 2d Dept 2d, 11th & 13th Jud. Dists. Dec. 21, 2018); Masigla v. Omni Indem. Co., 2018 NY Misc. LEXIS 6483, 62 Misc 3d 135(A) (App. Term 2d Dept 2d, 11th & 13th Jud. Dists. Dec. 21, 2018); Masigla v. Omni Indem. Co., 2018 NY Misc. LEXIS 6457, 62 Misc 3d 136(A) (App. Term 2d Dept 2d, 11th & 13th Jud. Dists. Dec. 21, 2018); Masigla v. Omni Indem. Co., 2018 NY Misc. LEXIS 6456, 62 Misc 3d 136(A) (App. Term 2d Dept 2d, 11th & 13th Jud. Dists. Dec. 21, 2018); Natural Therapy Acupuncture, P.C. v. Omni Indem. Co., 2018 NY Misc. LEXIS 6475, 62 Misc 3d 132(A) (App. Term 2d Dept 2d, 11th & 13th Jud. Dists. Dec. 21, 2018); Natural Therapy Acupuncture, P.C. v. Omni Indem. Co., 2018 NY Misc. LEXIS 6467, 62 Misc 3d 133(A) (App. Term 2d Dept 2d, 11th & 13th Jud. Dists. Dec. 21, 2018); Natural Therapy Acupuncture, P.C. v. Omni Indem. Co., 2018 NY Misc. LEXIS 6479, 62 Misc 3d 134(A) (App. Term 2d Dept 2d, 11th & 13th Jud. Dists. Dec. 21, 2018); Natural Therapy Acupuncture, P.C. v. Omni Indem. Co., 2018 NY Misc. LEXIS 6452, 62 Misc 3d 135(A) (App. Term 2d Dept 2d, 11th & 13th Jud. Dists. Dec. 21, 2018); Natural Therapy Acupuncture, P.C. v. Omni Indem. Co., 2018 NY Misc. LEXIS 6469, 62 Misc 3d 136(A) (App. Term 2d Dept 2d, 11th & 13th Jud. Dists. Dec. 21, 2018); Compas v. Omni Indem. Co., 2018 NY Misc. LEXIS 6454, 62 Misc 3d 132(A) (App. Term 2d Dept 2d, 11th & 13th Jud. Dists. Dec. 21, 2018); Compas v. Omni Indem. Co., 2018 NY Misc. LEXIS 6465, 62 Misc 3d 132(A) (App. Term 2d Dept 2d, 11th & 13th Jud. Dists. Dec. 21, 2018); Compas v. Omni Indem. Co., 2018 NY Misc. LEXIS 6450, 62 Misc 3d 135(A) (App. Term 2d Dept 2d, 11th & 13th Jud. Dists. Dec. 21, 2018); Compas v. Omni Indem. Co., 2018 NY Misc. LEXIS 6455, 62 Misc 3d 135(A) (App. Term 2d Dept 2d, 11th & 13th Jud. Dists. Dec. 21, 2018); Compas v. Omni Indem. Co., 2018 NY Misc. LEXIS 6486, 62 Misc 3d 135(A) (App. Term 2d Dept 2d, 11th & 13th Jud. Dists. Dec. 21, 2018); Compas Med., P.C. v. Omni Indem. Co., 2018 NY Misc. LEXIS 6451, 62 Misc 3d 131(A) (App. Term 2d Dept 2d, 11th & 13th Jud. Dists. Dec. 21, 2018); Compas Med., P.C. v. Omni Indem. Co., 2018 NY Misc. LEXIS 6492, 62 Misc 3d 131(A) (App. Term 2d Dept 2d, 11th & 13th Jud. Dists. Dec. 21, 2018); Compas Med., P.C. v. Omni Indem. Co., 2018 NY Misc. LEXIS 6472, 62 Misc 3d 131(A) (App. Term 2d Dept 2d, 11th & 13th Jud. Dists. Dec. 21, 2018); Compas Med., P.C. v. Omni Indem. Co., 2018 NY Misc. LEXIS 6471, 62 Misc 3d 132(A) (App. Term 2d Dept 2d, 11th & 13th Jud. Dists. Dec. 21, 2018); Compas Med., P.C. v. Omni Indem. Co., 2018 NY Misc. LEXIS 6491, 62 Misc 3d 133(A) (App. Term 2d Dept 2d, 11th & 13th Jud. Dists. Dec. 21, 2018); Compas Med., P.C. v. Omni Indem. Co., 2018 NY Misc. LEXIS 6461, 62 Misc 3d 134(A) (App. Term 2d Dept 2d, 11th & 13th Jud. Dists. Dec. 21, 2018); Compas Med., P.C. v. Omni Indem. Co., 2018 NY Misc. LEXIS 6495, 62 Misc 3d 134(A) (App. Term 2d Dept 2d, 11th & 13th Jud. Dists. Dec. 21, 2018); Compas Med., P.C. v. Omni Indem. Co., 2018 NY Misc. LEXIS 6915, 62 Misc 3d 134(A) (App. Term 2d Dept 2d, 11th & 13th Jud. Dists. Dec. 21, 2018) Compas Med., P.C. v. Omni Indem. Co., 2018 NY Misc. LEXIS 6470, 62 Misc 3d 136(A) (App. Term 2d Dept 2d, 11th & 13th Jud. Dists. Dec. 21, 2018).

Footnote 80: See, e.g., Plaintiff’s Affirmation, Index No. 723175/16, at paragraph 40 (emphasis supplied). Plaintiffs misplaced reliance on other cited cases to support their position that Defendant failed to move to dismiss the complaint for lack of personal jurisdiction or refute the presumption of valid service of process is unpersuasive. See, e.g., Plaintiff’s Opposition, CV-723175-16 at paragraphs 13 and 15 citing US Consults v. APG, Inc., 82 AD3d 753 (2d Dept 2011]) and paragraph 13. Plaintiffs’ counsel also cited US Consults case in Ultra Ortho Prods., Inc. v. North Carolina Farm Bur. Ins. Group, 2018 18 NY Misc. LEXIS 5076, 61 Misc 3d [Civ Ct, Kings County, Nov. 9, 2018, Kennedy, J]. The Court in Ultra Ortho Prods. found that “the cases cited by plaintiff’s counsel [Oleg Rybak Esq., The Rybak Firm] are distinguished from the facts of the instant action” rejecting the plaintiff’s claim that personal jurisdiction was acquired and dismissed the complaint.

Footnote 81: See, e.g., GuideOne Specialty Mut. Ins. Co. v. State Ins. Fund, 94 AD3d 700; Twin City Fire Ins. Co. v. State Ins. Fund, 65 AD3d 945; D’Angelo v. State Ins. Fund, 48 AD3d 400, 402; Commissioners of State Ins. Fund v. Mathews & Sons Co., 131 AD2d 301; Miraglia v. State Ins. Fund, 32 Misc 2d 471; Compass Med., P.C. v. New York State Ins. Fund, 2020 NY Misc. LEXIS 7010; Ultimate Care Chiropractic, P.C. v. State Ins. Fund, Index No. 716668/2016; see also NY Const. art. VI, § 9; Workers’ Compensation Law § 76[1]; Methodist Hosp. of Brooklyn v. State Ins. Fund, 64 NY2d at 375.

CV-702946-18/KI

Attorney for Plaintiff: Allen Tsirelman, Esq., Gary Tsirelman P.C., 129 Livingston Street Brooklyn, Brooklyn, New York 11201

Attorney for Defendant: Michael Philippou, Esq., Rubin, Fiorella, Friedman & Mercante LLP, 630 Thrid Ave. 3rd Floor, New York, NY 10017

The court’s Decision and Order is based upon consideration of the following papers:

NOTICE OF MOTION & AFFIDAVITS ANNEXED 1

OPPOSITION/CROSS-MOTION 2

REPLY/OPPOSITION TO CROSS-MOTION 3

EXHIBITS

CPLR 2219(a) Recitation

Upon the foregoing cited papers, after oral argument, on June 4, 2021, the Decision and Order on Defendant’s Motion to Dismiss pursuant to CPLR 3211(A)(5) and 3212 on the grounds that it is barred by res judicata and collateral estoppel is as follows:

This action to seeking reimbursement of No-Fault benefits, was commenced on or about January 19, 2018. Issue was joined on or about February 21, 2018 with the service of Defendant’s Answer. The Answer contained numerous affirmative defenses including the defense that the action was barred by res judicata and/or collateral estoppel. On May 2, 2018 Defendant filed a summary judgment motion claiming that the underlying accident was staged and that there was fraud in the procurement of the policy. The motion was denied on April 16, 2019 as the court preserved these claims as questions of fact for trial. Plaintiff filed a Notice of Trial on or about May 7, 2019 that Defendant claims they received on May 20, 2019. The court file indicates that Defendant filed a motion to strike the notice of trial on June 18, 2019 and that after a number of adjournments due to COVID quarantine and/or requests by the parties, the motion will appear on the No-Fault motion calendar for argument on August 22, 2022. Thus, the motion to strike is not before this court.

On or about April 19, 2018, State Farm commenced a declaratory action in New York Supreme Court. On September 11, 2019, the Supreme Court issued an order declaring that State Farm has no obligation to cover No-Fault claims for the plaintiff, date of loss and claim number herein. “‘Under the doctrine of res judicata, a final adjudication of a claim on the merits precludes re-litigation of that claim and all claims arising out of the same transaction or series of transactions by a party or those in privity with a party'” (Milton v. Subraj, et al, 67 Misc 3d 140[A] [App Term, 2d Dept., 11th & 13th Jud. Dists. 2020] quoting Ciraldo v. JP Morgan Chase Bank, N.A.,140 AD3d 912 at 913 [2d Dept. 2016]; see Schuylkill Fuel Corp. v. Nieberg Realty Corp., 250 NY 304 [1929]). Defendant now seeks dismissal of this action based upon that Supreme Court order.

Plaintiff opposes the instant motion claiming that it is procedurally defective. Specifically, Plaintiff claims that Defendant improperly seeks relief under CPLR 3211(a)(5) because such a motion must be made before issue is joined, which was not done here. Additionally, Plaintiff argues that Defendant cannot move pursuant to CPLR 3212 because this motion was filed more than one hundred twenty (120) days after the filing of the Notice of Trial. Notably, Plaintiff does not oppose the motion on substantive grounds.

It is well established that CPLR 3212(a) provides that if no date is set by the court, a motion for summary judgment shall be made no later than one hundred twenty (120) days after the filing of the note of issue, except with leave of court on good cause shown (Brill v. City of New York, 2 NY3d 648 [2004]). Good cause has been defined as “a satisfactory explanation for the untimeliness” (Brill v. City of New York, 2 NY3d 648, 652). In this matter, Plaintiff correctly claims that this motion was filed beyond the one hundred and twenty (120) day period of the filing of the notice of trial. It is also noted that Defendant’s motion to strike the notice of trial has been adjourned well into next year and is not before the court at this time. Consequently, the May 7, 2019 filing of the notice of trial remains and the summary judgment motion is late.

Notwithstanding the above, the circumstances surrounding this case present good cause for the court to entertain a late summary judgment motion. Here summary judgment is sought based upon an order of the Supreme Court order which holds that as between the parties, Defendant bears no obligation to provide no fault coverage to Plaintiff stemming from the subject collision. In Armentano v Broadway Mall Properties, Inc., the Second Department found that the lower court had good cause to entertain a late summary judgment motion because it was based upon an order of the Appellate Department in a prior appeal of the matter which dismissed the case (Armentano v Broadway Mall Properties, Inc., 48 AD3d 493 [2d Dept 2008]). Similarly, in the instant action, the September 11, 2019 Supreme Court order is dispositive as to the merits of this matter and warrants dismissal of the case.

Further, Defendant could not have moved based on those defenses prior to joinder of issue as required by CPLR 3211(a)(5) because the declaratory judgment order did not exist at the time (see generally Renelique v State Wide Ins. Co., 50 Misc 3d 137[A] [App Term, 2d Dept., 11th & 13th Jud. Dists. 2016]; Metro Health Products, Inc. v. Nationwide Ins., 52 Misc 3d 138[A] [App Term, 2d Dept., 11th & 13th Jud. Dists. 2016]; see Atlantic Chiropractic, P.C., 62 Misc 3d 145[A] [App Term, 2d Dept.,11th & 13th Jud. Dists. 2019]; Milton v. Subraj, 67 Misc 3d 140 [A]). Likewise, when the first summary judgment motion was filed, the declaratory judgment order had not been issued; the only grounds for the initial summary judgment motion at that time were Defendant’s claims of fraud and staged accident.

Furthermore, to deny relief based on the untimeliness of the summary judgment motion under these facts would result in a disregard of a Supreme Court order and lead to an unjust result. Any judgment issued in favor of Plaintiff would destroy or impair rights or interests established by the judgment in the declaratory action. (see Active Chiropractic, P.C. v. Allstate Ins., 58 Misc 3d 156[A] [App Term, 2d Dept.,11th & 13th Jud. Dists. 2018]; Metro Health Products, Inc. v. Nationwide Ins., 52 Misc 3d 138 [A] [App Term, 2d Dept.,11th & 13th Jud. Dists. 2016]).

It is further noted that Plaintiff cannot now claim prejudice or surprise. Plaintiff was on notice of these defenses since early 2018, when Defendant raised its res judicata and collateral estoppel affirmative defenses in its Answer.

Although this is Defendant’s second summary judgment motion, the court will entertain the motion as it is based on the new evidence: the subsequently issued order of the Supreme Court which directly affects this action. “Multiple summary judgment motions in the same action should be discouraged in the absence of a showing of newly discovered evidence or other sufficient cause (Burbige v. Siben & Ferber, 152 AD3d 641,642 [2d Dept 2017]; see Valley Natl. Bank v. INI Holding, LLC, 95 AD3d 1108 [2d Dept 2012]).

Lastly, Plaintiff’s assertion that the declaratory judgment has no merit because it was granted on default is erroneous. It is well settled that “res judicata applies ‘to an order or judgment taken by default which has not been vacated, as well as to issues which were or could have been raised in the prior [action]'” (Lazides v. P & G Enters., 58 AD3d 607, 609 [2d Dept 2009] [internal citation omitted]). “[A] Supreme Court’s order is a conclusive final determination, notwithstanding that it was entered on default, and res judicata applies to an order or judgment taken by default” (Ava Acupuncture, P.C. v. NY Central Mut. Fire Ins. Co., 34 Misc 3d 149 [A] [App Term, 2d Dept. 2d, 11th and 13th Jud Dists 2012]; Atlantic Chiropractic, P.C. v. Utica Mutual Ins. Co., 62 Misc 3d 145[A]).

Based on the foregoing, Defendant’s motion is Granted. Defendant established that it properly preserved its res judicata and collateral estoppel defenses; that a declaratory judgment order was issued regarding this claim; and that the order has preclusive effect given the identity of issues and parties. Accordingly, the complaint is dismissed with prejudice.

This constitutes the Decision and Order of the Court.

ENTER.
June 24, 2021
Brooklyn, NY
Hon. Consuelo Mallafre Melendez
Judge, Civil Court

CV-702880-19/QU

Plaintiff’s Counsel:
Gabriel Law Firm, P.C.
100 Merrick Road, 430W
Rockville Centre, NY 11570

Defendant’s Counsel:
Callinan & Smith, LLP
3361 Park Avenue, Suite 104
Wantagh, NY 11793

I. Papers

Papers Numbered

Defendant’s Notice of Motion and Affirmation in Support dated October 24, 2019 (“Motion”) [*2]and file stamped by the court on October 31, 2019. 1

Plaintiff’s Notice of Cross-Motion and Affirmation in Support dated October 1, 2020 (“Cross-Motion”) and electronically filed with the court on the same date. 2

Defendant’s Affirmation in Opposition to Plaintiff’s Cross Motion and in Support of Defendant’s Motion dated October 9, 2020 (“Opposition to Cross-Motion”) and electronically filed with the court on October 12, 2020. 3

Plaintiff’s Reply Affirmation dated November 30, 2020 (“Reply”) and electronically filed with the court on the same date. 4

In a summons and complaint filed February 15, 2019, Plaintiff sued Defendant insurance company to recover a total of $2,330.56 in unpaid first party No-Fault benefits for medical services provided to Plaintiff’s assignor Pierre, plus attorneys’ fees and statutory interest (see Motion, Aff. of Levy, Ex. A).

Defendant moved for summary judgment dismissing Plaintiff’s complaint on the ground that Plaintiff failed to attend scheduled Examinations Under Oath (“EUO“). Plaintiff cross-moved for summary judgment on its claims against Defendant. Both parties orally argued the motions before this Court on April 30 and May 6, 2021 respectively.

III. Discussion and Decision

CPLR 3212 provides that “a motion for summary judgment shall be supported by affidavit, by a copy of the pleadings and by other available proof, such as depositions and written admissions” (CPLR 3212[b]). “Mere conclusions, expressions of hope or unsubstantiated allegations or assertions are insufficient” (Zuckerman v. City of New York, 49 NY2d 557, 562 [1980]). “A defendant moving for summary judgment [seeking an order dismissing plaintiff’s complaint] has the initial burden of coming forward with admissible evidence, such as affidavits by persons having knowledge of the facts, reciting the material facts and showing that the cause of action has no merit” (GTF Mktg. v Colonial Aluminum Sales, 66 NY2d 965, 967 [1985]; Anghel v Ruskin Moscou Faltischek, P.C., 190 AD3d 906, 907 [2d Dept 2021], see Jacobsen v. New York City Health & Hosps. Corp., 22 NY3d 824, 833 [2014]). A motion for summary judgment “shall be granted if, upon all the papers and proof submitted, the cause of action or defense shall be established sufficiently to warrant the court as a matter of law in directing judgment in favor of any party” (CPLR 3212[b]; Zuckerman v. City of New York, at 562, see GTF Mktg. v Colonial Aluminum Sales, 66 NY2d at 968).

Insurers must pay or deny No-Fault benefit claims “within thirty (30) calendar days after receipt of the proof of the claim” (Viviane Etienne Med. Care, P.C. v Country-Wide Ins. Co., 25 NY3d 498, 501 [2015]; Fair Price Med. Supply Corp. v Travelers Indem. Co., 10 NY3d 556, 563 [2008]; Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co., 9 NY3d 312, 317 [2007]; see Insurance Law § 5106[a]; 11 NYCRR § 65-3.8[c]; Presbyterian Hosp. in City of NY v Maryland Cas. Co., 90 NY2d 274, 278 [1997]). Failure to establish timely payment or denial of the claim precludes the insurer from offering evidence of its defense to non-payment (Viviane [*3]Etienne Med. Care, P.C. v Country-Wide Ins. Co., 25 NY3d at 506; Fair Price Med. Supply Corp. v. Travelers Indem. Co., 10 NY3d at 563; Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co., 9 NY3d at 318; Presbyterian Hosp. in City of NY v Maryland Cas. Co., 90 NY2d at 281-86). Noncompliance with an insurance policy provision requiring disclosure through an EUO is a failure of a condition precedent to an insurer’s duty to indemnify (IDS Prop. Cas. Ins. Co. v Stracar Med. Servs., P.C., 116 AD3d 1005, 1007 [2d Dept 2014]; National Med. & Surgical Supply, Inc. v ELRAC, Inc., 54 Misc 3d 131[A], 2017 NY Slip Op 50028[U] *1 [App Term 2d Dept 2017]) and is a material policy breach precluding recovery of proceeds under the insurance policy (Nationwide Affinity Ins. Co. of Am. v George, 183 AD3d 755, 756 [2d Dept 2020]; Interboro Ins. Co. v Clennon, 113 AD3d 596, 597 [2d Dept 2014]).

Here, the undisputed facts as fully addressed hereinafter, are (i) that Plaintiff submitted its claim to Defendant, (ii) that Defendant received Plaintiff’s claims, (iii) that Defendant first requested EUO on the 17th business days after it received Plaintiff’s claims, (iv) that Plaintiff failed to attend any of the scheduled EUOs, and (v) that Defendant denied Plaintiff’s claims on the seventh (7th) day after Plaintiff’s failure to appear for the third scheduled EUO. The legal issues argued by the parties, however, before this Court, are:

First, whether an EUO scheduling letter is a request for additional verification, subject to the fifteen (15) business day requirement (11 NYCRR § 65-3.5[b]).

Second, whether an insurer’s transmission of an EUO request letter within thirty (30) calendar days of receiving a claim for No Fault benefits tolls an insurer’s time to pay or deny such claim.

Third, the effect of an insurer’s late transmission of request for an EUO, if such lateness defense is not precluded.

This Court will address the above issues in the context of Defendant’s Motion for summary judgment and Plaintiff’s opposition. Plaintiff’s Cross-Motion will be analyzed separately.

A. Defendant’s Motion

Legal Issue One: whether an EUO scheduling letter is a request for additional verification, subject to the fifteen (15) business day requirement (11 NYCRR § 65-3.5[b]).

Initially, parties disputed whether an EUO constitutes “additional verification.” Plaintiff contended that an EUO request was additional verification, which required Defendant to request an EUO within fifteen (15) business days of receipt of Plaintiff’s claims (11 NYCRR 65-3.5[b]). Defendant maintained that an EUO was not an additional verification.

Pursuant to Regulation 68-C of the Insurance Department of the State of New York, “(a) [w]ithin 10 business days after receipt of the completed application for motor vehicle no-fault benefits (NYS form NF-2) or other substantially equivalent written notice, the insurer shall forward, to the parties required to complete them, those prescribed verification forms it will require prior to payment of the initial claim. (b) Subsequent to the receipt of one or more of the completed verification forms, any additional verification required by the insurer to establish proof of claim shall be requested within 15 business days of receipt of the prescribed verification [*4]forms (d) [i]f the additional verification required by the insurer is a medical examination, the insurer shall schedule the examination to be held within 30 calendar days from the date of receipt of the prescribed verification forms” (11 NYCRR 65-3.5).

Here, Regulation 68-C requires additional verification request to be sent within fifteen (15) business days of receipts of claims by insurer, except that medical examination shall be scheduled within thirty (30) calendar days of receipts of claims. However, statutes are silent as to whether an EUO constitutes “additional verification” subject to the fifteen (15) business day requirements. Although prior courts have not expressly found that EUO scheduling letters were requests for additional verification, pursuant to case law, EUO scheduling letters have been effectively treated as requests for additional verification (Urban Radiology, P.C. v Clarendon Natl. Ins. Co., 31 Misc 3d 132[A], 2011 NY Slip Op 50601[U] * 1 [App Term 2d Dept 2011]; Infinity Health Prods., Ltd. v Progressive Ins. Co., 28 Misc 3d 133[A], 2010 NY Slip Op 51334[U] *1 [App Term 2d Dept 2010]; Advanced Med., P.C. v Utica Mut. Ins. Co., 23 Misc 3d 141[A], 2009 NY Slip Op 51023[U] * 1-2 [App Term 2d Dept 2009]). Ultimately, determining whether an EUO request is or is not additional verification is irrelevant because courts have traditionally applied the fifteen (15) business day time requirement for additional verification to any request scheduling EUOs (see Great Health Care Chiropractic, P.C. v Travelers Ins. Co., 49 Misc 3d 145[A], 2015 NY Slip Op 51665[U] *1 [App Term 2d Dept 2015]; O & M Med., P.C. v Travelers Indem. Co., 47 Misc 3d 134[A], 2015 NY Slip Op 50476[U] *1 [App Term 2d Dept 2015]; Longevity Med. Supply, Inc. v IDS Prop. & Cas. Ins. Co., 44 Misc 3d 137[A], 2014 NY Slip Op 51244[U] *2 [App Term 2d Dept 2014]). Nevertheless, this Court adopts the tradition of viewing the EUO scheduling letter as an “additional verification” request, therefore subject to the fifteen (15) business day requirement.

Legal Issue Two, whether an insurer’s transmission of an EUO request letter within thirty (30) calendar days of receiving a claim for No Fault benefits tolls an insurer’s time to pay or deny such claim.

It is well established that in order to establish a defense that an insured failed to attend a duly scheduled EUO, an insurer must present evidence of the timely and proper mailing of the EUO scheduling letters (Nationwide Affinity Ins. Co. of Am. v George, 183 AD3d at 757; Progressive Cas. Ins. Co. v Metro Psychological Servs., P.C., 139 AD3d 693, 694 [2d Dept 2016]). This may be established with evidence of the actual mailing or by an affidavit of a person “with personal knowledge of the standard office practice for ensuring that the letters are properly addressed and mailed” (Nationwide Affinity Ins. Co. of Am. v George, 183 AD3d at 757; Progressive Cas. Ins. Co. v Metro Psychological Servs., P.C., 139 AD3d at 694).

At oral argument on April 30, 2021, Plaintiff’s counsel contended that Defendant’s initial EUO scheduling letter was untimely. Defendant’s counsel countered that the untimeliness of the EUO scheduling letter was not fatal to Defendant’s defense of Plaintiff’s nonappearance at scheduled EUOs. This Court invited counsels to submit memoranda regarding their respective positions on the timeliness of the EUO scheduling and the calculation of the times pursuant to relevant statutes.

Here, Defendant’s Explanation of Benefits to Plaintiff dated September 5, 2018 indicated receipt of Plaintiff’s bill on July 24, 2018 (see Motion, Levy Aff. Ex. P). Defendant must request additional verification “within 15 business days of receipt of the prescribed verification forms” (11 NYCRR § 65-3.5[b]; A.C. Med., P.C. v Ameriprise Ins. Co., 54 Misc 3d 127[A], 2016 NY Slip Op 51787[U] *1 [App Term 2d Dept 2016]; Great Health Care Chiropractic, P.C. v Travelers Ins. Co., 2015 NY Slip Op 51665[U] *1; Neptune Med. Care, P.C. v Ameriprise Auto & Home Ins., 48 Misc 3d 139[A], 2015 NY Slip Op 51220[U] *1 [App Term 2d Dept 2015]; O & M Med., P.C. v Travelers Indem. Co., 2015 NY Slip Op 50476[U] *1. As Plaintiff correctly pointed out, Defendant’s first EUO scheduling letter dated August 16, 2018, which set September 18, 2018 as the date for the EUO, was two (2) business days late (see Motion, Levy Aff. Ex. E). It is noted, however, Defendant’s first EUO request was made within thirty (30) calendar days of Defendant’s receipt of Plaintiff’s claims.

Obviously, scheduling an initial EUO in excess of thirty (30) calendar days precludes Defendant from denying a claim for failure to attend an EUO (see A.C. Med., P.C. v Ameriprise Ins. Co., 2016 NY Slip Op 51787[U] *1 [more than 30 days]; Great Health Care Chiropractic, P.C. v Travelers Ins. Co., 2015 NY Slip Op 51665[U] *1 [about 50 days]; Neptune Med. Care, P.C. v Ameriprise Auto & Home Ins., 2015 NY Sip Op 51220[U] *1 [more than 30 days]; O & M Med., P.C. v Travelers Indem. Co., 2015 NY Slip Op 50476[U] *1 [nearly 3 months]; Optimal Well-Being Chiropractic, P.C. v Ameriprise Auto & Home, 40 Misc 3d 129[A], 2013 NY Slip Op 51106[U] *2 [App Term 2d Dept 2013] [more than 70 days]). Here, although Defendant’s initial EUO scheduling letter was untimely for being two (2) business day late, its untimeliness did not exceed the thirty (30) days in which Defendant was required to pay or deny the claim, so was sufficient to toll Defendant’s time to pay or deny the claim (see A.C. Med., P.C. v Ameriprise Ins. Co., 2016 NY Slip Op 51787[U] *1; Optimal Well-Being Chiropractic, P.C. v Ameriprise Auto & Home, 2013 NY Slip Op 51106[U] *2; St. Vincent Med. Care, P.C. v Travelers Ins. Co., 26 Misc 3d 144[A], 2010 NY Slip Op 50446[U] *1 [App Term 2d Dept 2010]). Although letters that do not request verification from a plaintiff are insufficient to delay an insurer’s time to pay or deny such plaintiff’s claim (Mount Sinai Hosp. v Triboro Coach, 263 AD2d 11, 17 [2d Dept 1999]; Parsons Med. Supply Inc. v Progressive Northeastern Ins. Co., 36 Misc 3d 148[A], 2012 NY Slip Op 51649[U] *2 [App Term 2d Dept 2012]; Points of Health Acupuncture, P.C. v Lancer Ins. Co., 28 Misc 3d 133[A], 2010 NY Slip Op 51338[U] *2 [App Term 2d Dept 2010]; Alur Med. Supply, Inc. v Progressive Ins. Co., 21 Misc 3d 134[A], 2008 NY Slip Op 52191[U] *1 [App Term 2d Dept 2008]), in our instant matter, Defendant’s initial EUO scheduling letter, which requested Plaintiff’s EUO, tolled Defendant’s time to pay or deny Plaintiff’s claim (J.C. Healing Touch Rehab, P.C. v Nationwide Ins., 41 Misc 3d 141[U], 2013 NY Slip Op 52011[U] *2 [App Term 2d Dept 2013]).

Legal Issue Three: the effect of an insurer’s late transmission of request for an EUO, if such lateness defense is not precluded.

As discussed above, Defendant sent out its initial EUO scheduling letter two (2) business days late, but within thirty (30) calendar days of its receipt of Plaintiff’s claim. Such delay is not fatal to Defendant’s defense that Plaintiff did not appear for the scheduled EUO, rather, such EUO request tolled Defendant’s time to pay or deny Plaintiff’s claims.

“For the purposes of counting the 30 calendar days after proof of claim, wherein the claim becomes overdue pursuant to section 5106 of the Insurance Law, with the exception of section 65-3.6 of this Subpart, any deviation from the rules set out in this section shall reduce the 30 calendar days allowed” (11 NYCRR § 65-3.8[l]). In the context scheduling an initial EUO, as Defendant’s counsel correctly maintained during the oral argument and in his email memorandum dated May 3, 2021, any lateness of scheduling the initial EUO merely reduces the thirty (30) calendar days within which an insurer must pay or deny a claim. In our instant case, since Defendant’s initial EUO scheduling letter was two (2) business days late, Defendant’s time to pay or deny Plaintiff’s claim was reduced to twenty-eight (28) days (see Longevity Med. Supply, Inc. v IDS Prop. & Cas. Ins. Co., 2014 NY Slip Op 51244[U] *2; Eagle Surgical Supply, Inc. v Allstate Indem. Co., 41 Misc 3d 141[A], 2013 NY Slip Op 52012[U] *2 [App Term 2d Dept 2013]).

After Plaintiff failed to appear for the September 18, 2018 first EUO, Defendant timely mailed a second scheduling letter dated September 24, 2018, which scheduled the EUO for November 8, 2018 (see Motion, Levy Aff. Ex. F) (11 NYCRR § 65-3.6[b]; see Active Care Med. Supply Corp. v Ameriprise Auto & Home, 58 Misc 3d 138[A], 2017 NY Slip Op 51835[U] *2 [App Term 2d Dept 2017]; ARCO Med. NY, P.C. v Lancer Ins. Co., 34 Misc 3d 134[A], 2011 NY Slip Op 52382[U] *2 [App Term 2d Dept 2011]). By letter dated November 12, 2018, Defendant scheduled a third EUO for December 4, 2018 (see Motion, Levy Aff. Ex. G). The transcripts of the EUO proceedings (see Motion, Levy Aff. Ex. I, M and O) and affidavits of counsel assigned to conduct the EUOs appended to the motion established Plaintiff’s nonappearance at the scheduled EUOs (Nationwide Affinity Ins. Co. of Am. v George, 183 AD3d at 757; TAM Med. Supply Corp. v 21st Century Ins. Co., 57 Misc 3d 149[A], 2017 NY Slip Op 51510[U] *1 [App Term 2d Dept 2017]; First Class Med., P.C. v State Farm Mut. Auto. Ins. Co., 55 Misc 3d 141[A], 2017 NY Slip Op 50593[U] *2; National Med. & Surgical Supply, Inc. v ELRAC, Inc., 2017 NY Slip Op 50028[U] *1).

In an affidavit sworn June 11, 2019, which was appended to the Motion, Overly, Defendant’s litigation examiner, established Defendant’s claim processing and standard mailing procedures designed to ensure timely mailing of Defendant’s denial of Plaintiff’s claims after the last EUO at which Plaintiff failed to appear (Nationwide Affinity Ins. Co. of Am. v George, 183 AD3d at 757; TAM Med. Supply Corp. v 21st Century Ins. Co., 2017 NY Slip Op 51510[U] *1; First Class Med., P.C. v State Farm Mut. Auto. Ins. Co., 2017 NY Slip Op 50593[U] *2; National Med. & Surgical Supply, Inc. v ELRAC, Inc., 2017 NY Slip Op 50028[U] *1). Defendant denied Plaintiff’s claim on December 11, 2018, just seven (7) days after Plaintiff’s failure to appear for the third scheduled EUO on December 4, 2018 (see Motion, Levy Aff. Ex. Q).

As Defendant’s counsel correctly stated in its email memorandum dated May 3, 2021, even though Defendant had only twenty-eight (28) days to pay or deny Plaintiff’s claim because the initial EUO request was mailed two (2) days late, Defendant nevertheless timely denied Plaintiff’s claim, seven (7) days after Plaintiff’s non-appearance to the third scheduled EUO (Longevity Med. Supply, Inc. v IDS Prop & Cas. Ins. Co., 2014 NY Slip Op 51244[U] *2; Eagle Surgical Supply, Inc. v Allstate Indem. Co., 2013 NY Slip Op 52012[U] *2, see [*5]Nationwide Affinity Ins. Co. of Am. v George, 183 AD3d at 757).

Here, Defendant’s evidence that it requested Plaintiff’s appearance at EUOs three times, that Plaintiff failed to appear three times and that Defendant denied Plaintiff’s claim on that basis satisfied Defendant’s burden of establishing a material policy breach by Plaintiff (Nationwide Affinity Ins. Co. of Am. v George, 183 AD3d at 757; IDS Prop. Cas. Ins. Co. v Stracar Med. Servs., P.C., 116 AD3d at 1007; Interboro Ins. Co. v Clennon, 113 AD3d at 597).

Plaintiff’s Opposition to Defendant’s Motion

In opposition, Plaintiff contended that factual issues existed precluding Defendant’s motion for summary judgment, that Defendant failed to establish an objective basis for requesting an EUO, and that Defendant did not respond to Plaintiff’s objections to the EUO.

It is well established that the No-Fault regulations do not require “an insurer’s notice of scheduling an EUO to specify the reason[s] why the insurer is requiring the EUOs” (City Chiropractic, P.C. v State Farm Ins., 64 Misc 3d 134[A], 2019 NY Slip Op 51102[U] *1 [App Term 2d Dept 2019]; Bronx Chiropractic Care, P.C. v State Farm Ins., 63 Misc 3d 132[A], 2019 NY Slip Op 50423[U] *1 [App Term 2d Dept 2019]; Flow Chiropractic, P.C. v Travelers Home & Mar. Ins. Co., 44 Misc 3d 132[A], 2014 NY Slip Op 51142[U] *1 [App Term 2d Dept 2014], see Longevity Med. Supply, Inc. v Praetorian Ins. Co., 47 Misc 3d 144[A], 2015 NY Slip Op 50685[U] *1 [App Term 2d Dept 2015]). Contrary to Plaintiff’s position, Defendant responded to Plaintiff’s letters objecting to the EUOs (see Motion, Levy Aff. Ex. K and L) even though no such response is required to establish noncompliance with a scheduled EUO (see Interboro v Clennon, 113 AD3d at 597; 21st Century Pharm., Inc. v Integon Natl. Ins. Co., 69 Misc 3d 142[A], 2020 NY Slip Op 51364[U] *1 [App Term 2d Dept 2020]; Dynamic Balance Acupuncture, P.C. v State Farm Ins., 62 Misc 3d 145[A], 2019 NY Slip Op 50171[U] *1 [App Term 2d Dept 2019]). Also, contrary to Plaintiff’s argument, Defendant was not required to provide “objective reasons for requesting [an] EUO” (21st Century Pharm., Inc. v Integon Natl. Ins. Co., 2020 NY Slip Op 51364[U] *1; Gentlecare Ambulatory Anesthesia Servs. v Geico Ins. Co., 57 Misc 3d 150[A], 2017 NY Slip Op 51518[U] *1 [App Term 2d Dept 2017], see New Way Med. Supply Corp. v State Farm Mut. Auto. Ins. Co., 64 Misc 3d 136[A], 2019 NY Slip Op 51158[U]*2 [App Term 2d Dept 2019]; Dynamic Balance Acupuncture, P.C. v State Farm Ins., 2019 NY Slip Op 50171[U] *2).

Here, Plaintiff failed to raise factual issues regarding Defendant’s defense of Plaintiff’s failure to attend an EUO. This Court finds that Defendant has presented prima facie admissible evidence proving that there is no material issue of fact, that the controversy regarding Plaintiff’s claims can be decided as a matter of law (CPLR 3212 [b]; Jacobsen v New York City Health and Hosps. Corp., 22 NY3d 824 [2014]; Brill v City of New York, 2 NY3d 648 [2004]), that Plaintiff has failed to raise factual issues requiring a trial (Nationwide Affinity Ins. Co. of Am. v George, 183 AD3d at 757; Nova Chiropractic Servs., P.C. v Ameriprise Auto & Home, 58 Misc 3d 142[A], 2017 NY Slip Op 51882[U] *1 [App Term 2d Dept 2017]; K.O. Med., P.C. v IDS Prop. Cas. Ins. Co., 57 Misc 3d 145[A], 2017 NY Slip Op 51454[U] *1 [App Term 2d Dept 2017]), and that Defendant is entitled to a dismissal of Plaintiff’s claims.

B. Plaintiff’s Cross-Motion

Regarding the Cross-Motion, Plaintiff bore the burden to show it submitted the statutory claim forms indicating the fact and amount of the loss sustained and “that payment of no-fault benefits was overdue” (Viviane Etienne Med. Care, P.C. v Country-Wide Ins. Co., 25 NY3d at 501; New York Hosp. Med. Ctr. of Queens v QBE Ins. Corp., 114 AD3d 648, 648 [2d Dept 2014]; NYU-Hospital for Joint Diseases v Esurance Ins. Co., 84 AD3d 1190, 1191 [2d Dept 2011]; Fair Price Med. Supply Corp. v ELRAC Inc., 12 Misc 3d 119, 120 [App Term 2d Dept 2006]). Here, Defendant’s denial of claim forms dated December 11, 2018, acknowledging receipt of Plaintiff’s claims on July 24, 2018 (see Motion, Levy Aff. Ex. Q) constituted prima facie evidence that Defendant received Plaintiff’s claims and that the denial was overdue (see Lopes v Liberty Mut. Ins. Co., 24 Misc 3d 127[A], 2009 NY Slip Op 51279[U] *2 [App Term 2d Dept 2009]). As discussed above, however, Defendant demonstrated that Plaintiff failed to appear for scheduled EUOs which mandates a denial of Plaintiff’s Cross-Motion for summary judgment on its claims against Defendant (Actual Chiropractic, P.C. v Mercury Cas. Co., 53 Misc 3d 135[A], 2016 NY Slip Op 51435[U] *1 [App Term 2d Dept 2016]; Professional Health Imaging, P.C. v State Farm Mut. Auto. Ins. Co., 52 Misc 3d 134[A], 2016 NY Slip Op 51026[U] *1 [App Term 2d Dept 2016]; Arco Med. NY, P.C. v Lancer Ins. Co., 37 Misc 3d 90, 93 [App Term 2d Dept 2012]).

IV. Order

Accordingly, it is

ORDERED that Defendant’s Motion for summary judgment is granted and Plaintiff’s complaint is dismissed, and it is further

ORDERED that the part clerk is directed to update the court system to reflect Plaintiff’s Cross-Motion as motion seq. No.2, and it is further

ORDERED that Plaintiff’s Cross-Motion for summary judgement is denied.

This constitutes the DECISION and ORDER of the Court.

Dated: June 24, 2021
Queens County Civil Court
_____________________________________
Honorable WENDY CHANGYONG LI, J.C.C.

Index No. CV-733608-19
Gina Levy Abadi, J.

Recitation, as required by CPLR § 2219(a), of the papers considered in the review of this motion and cross motion for summary judgment:

Papers/ Numbered

Notice of Motion and Affidavits/Affirmations Annexed 0O9NBM

Cross-Motion and Answering Affidavits E2E86J

Opposition/Reply Affidavits/Affirmations Q486UA

Memoranda of Law________

Other________

Defendant State Farm Mutual Automobile Ins. Co. PIP/BI Claims (hereinafter “State Farm”) moves for an order, pursuant to CPLR § 3212 granting summary judgment and dismissing the complaint. Plaintiff Burke 2 Physical Therapy, P.C. (hereinafter “Burke”), A/A/O Sterneth Sang (hereinafter “Sang”), cross-moves for an order: pursuant to CPLR § 3211(c) and CPLR § 3212(a) granting summary judgment; denying defendant’s motion; pursuant to CPLR § 3212(g) limiting the issues of fact for trial by finding that the prescribed statutory billing forms were mailed to and received by the insurance carrier and that payment of no-fault benefits is overdue; and pursuant to CPLR § 3211(b) to dismiss defendant’s affirmative defenses.

Plaintiff commenced the instant action by filing the summons and complaint on July 2, 2019. Issue was joined on July 31, 2019. Sang allegedly sustained injuries in a motor vehicle accident on September 13, 2018 and defendant was the responsible no-fault insurance carrier. The accident was reported to defendant and a claim number was issued. Sang sought treatment [*2]with Burke on October 3, 2018 and assigned his claims to Burke on October 30, 2018. On September 14, 2018, prior to submission of the claim, an examination under oath (hereinafter “EUO”) of Burke’s owner, John Nasrinpay (hereinafter “Nasrinpay”), was held by defendant regarding claims unrelated to Sang. Nasrinpay’s EUO pre-dated receipt of the bills in dispute in the instant matter. Nevertheless, defendant issued numerous verification requests in this action precipitated by Nasrinpay’s EUO.

At issue in the instant matter are bills for dates of service from October 3, 2018, October 5, 2018, October 30, 2018, October 31, 2018, December 4, 2018, and December 11, 2018. State Farm acknowledged receipt of these claims. State Farm, by letters dated, December 3, 2018, December 17, 2018, January 23, 2019, and January 29, 2019, issued verification requests of the claims seeking production of numerous documents, including tax returns, bank records, and documents related to defendant’s various operating locations. State Farm sent follow-up requests for verification on January 9, 2019, January 23, 2019, February 26, 2019, and March 6, 2019. Plaintiff’s counsel alleges that Burke “replied to every verification request in a timely manner.” Those letters of response to the verification requests and any proof that they were mailed were not attached to the instant motion. State Farm issued denial of claim forms (NF-10s) on April 8, 2019, April 23, 2019, and June 4, 2019.

State Farm contends that it timely requested verifications of the bills at issue in the instant matter, thus tolling their time to pay pursuant to 11 NYCRR § 65-3.5. Moreover, it alleges it properly denied plaintiff’s claims for failure to provide the requested verification within 120 days. Defendant argues that the licensing of a medical provider is a condition precedent to the payment of no-fault benefits, therefore, such verification is relevant to the proof of the claim. Defendant contends that although it “need not demonstrate the ‘good cause’ of its verification requests,” its basis for the requests is substantiated by the affidavit of State Farm’s investigator, Lisa Stockburger. Defendant maintains its verification requests were proper and its denials timely.

In opposition, plaintiff argues that Nasrinpay’s affidavit establishes that plaintiff responded to defendant’s verification requests. Plaintiff alleges that the verification request were “impermissible and improper” as they were discovery requests that do not verify the claim but were “made merely to harass and burden the plaintiff.” In support of its motion and in further opposition to defendant’s motion, plaintiff annexes “Objections to Defendant’s Verification Requests,” undated but served on December 23, 2020, wherein plaintiff’s counsel objected to defendant’s verification and follow-up verification letters during the course of the instant litigation.

An insurer must pay or deny a claim in whole or in part within 30 calendar days after receipt of proof of claim. See 11 NYCRR § 65-3.8(c); Insurance Law § 5106(a). Proof of claim includes “verification of all of the relevant information requested pursuant to section 65-3.5 of this Subpart.” 11 NYCRR § 65-3.8(a); see New York Univ. Hosp. Tisch Inst. v Govt. Employees Ins. Co., 117 AD3d 1012, 1013 (2d Dept 2014). An insurer can extend or toll its time to pay or deny a claim by forwarding verification forms within 15 business days of receipt of the claim. See 11 NYCRR § 65-3.5(b); Mount Sinai Hosp. v New York Cent. Mut. Fire Ins. Co., 120 AD3d 561, 563 (2d Dept 2014); Sound Shore Med. Ctr. v New York Cent. Mut. Fire Ins. Co., 106 AD3d 157, 163 (2d Dept 2013). If any of the requested verifications are not “supplied to the insurer 30 calendar days after the original request, the insurer shall, within 10 calendar days, follow up with the party from whom the verification was requested ” 11 NYCRR § 65-3.6(b); [*3]see Westchester Med. Ctr. v Allstate Ins. Co., 112 AD3d 916, 917 (2d Dept 2013).

Although verification of a claim is permitted pursuant to 11 NYCRR § 65-3.5(c), “the no-fault regulations do not specifically define or limit the information or documentation an insurer may request through verification.” Victory Med. Diagnostics, P.C. v Nationwide Prop. and Cas. Ins. Co., 36 Misc 3d 568, 573 (NY Dist Ct 2012). Litigants sometimes refer to a response to a verification request as an “objection letter,” but “[n]either the no-fault law nor the no-fault regulations establish a mechanism or procedure by which a claimant provider can contest or challenge a request for verification on the grounds it is improper, unduly burdensome, unfounded, unnecessary or harassing.” Id. at 573; cf Westchester County Med. Ctr. v New York Cent. Mut. Fire Ins. Co., 262 AD2d 553, 555 (2d Dept 1999) (holding that “[a]ny confusion on the part of the plaintiff as to what was being sought [in the verification letters] should have been addressed by further communication, not inaction”); Healthy Way Acupuncture, P.C. v NY Cent. Mut. Fire Ins. Co., 58 Misc 3d 137 (App Term 2017). However, a demand for verification of facts can only be made if “there are good reasons to do so.” 11 NYCRR § 65-3.2(c). An insurer “is entitled to receive all items necessary to verify the claim directly from the parties from whom such verification was requested.” 11 NYCRR § 65-3.5(c). The Superintendent’s regulations provide for agency oversight of insurance carriers, and demand that carriers “delay the payment of claims to pursue investigations solely for ‘good cause’ ” State Farm Mut. Auto. Ins. Co. v Robert Mallela, 4 NY3d 313, 322 (2005); see 11 NYCRR § 65-3.2 (c). In the licensing context, “carriers will be unable to show “good cause” unless they can demonstrate behavior tantamount to fraud.” State Farm Mut. Auto. Ins. Co. v Robert Mallela, 4 NY3d at 322.

11 NYCRR § 65—3.5 (o) provides that a verification letter must be responded to by either submitting “all such verification under the applicant’s control or possession or written proof providing reasonable justification for the failure to comply.” If the claimant fails to respond to the verification letters, “an insurer may issue a denial if, more than 120 calendar days after the initial request for verification, the applicant has not submitted all such verification under the applicant’s control or possession or written proof providing reasonable justification for the failure to comply, provided that the verification request so advised the applicant as required in section 65-3.5(o) of this Subpart.” 11 NYCRR § 65-3.5 (b)(3).

In the instant matter, although the EUO of plaintiff occurred prior to receipt of the claim, the request for verification was sent after the claim was received. Therefore, the verification request tolled defendant’s time to deny the claim. See Clear Water Psychological Services, P.C. v Hereford Ins. Co., 68 Misc 3d 127(A) (App Term 2020). The follow-up verifications letters were also timely. Defendant’s verification letters, in compliance with 11 NYCRR § 65-3.5(o), notified plaintiff that it was required to provide all documents requested or provide written proof of a reasonable justification for its failure to comply.

Notably, plaintiff’s statements fluctuate between arguing that they provided the documentation and that State Farm is not entitled to such documentation. While plaintiff attests that it timely responded to the verification requests, it fails to attach such letters in response to the instant motion. Moreover, the affidavit of Nasrinpay states that he “personally responded and mailed on 01/18/2019, 02/06/2019 and 03/26/19 the verification responses in issue in this case to the address designated by defendant on the verification requests, to the extent such response was proper and in my possession.” Cross-Motion, p 160, ¶ 5. Nasrinpay fails to attach his responses to the verification letters to illustrate what was produced or to provide written proof of a reasonable justification for the failure to comply. Additionally, his affidavit fails to [*4]detail what was allegedly mailed to defendant. Defendant denies having received any such correspondence from plaintiff before issuing the NF-10 denials of its claims.

Furthermore, although 11 NYCRR § 65-3.5(o) provides for a response which allows for written proof of reasonable justification for the failure to comply with a verification request, no such response was submitted in support of this motion. Plaintiff’s counsel submits an “objection” to the verification request, which is not a proper response to defendant’s verification requests as it is not timely pursuant to 11 NYCRR § 65-3.5(o). Moreover, the “objection” appears to reference Mallela materials sought during litigation. The Court notes that the instant action was commenced on July 2, 2019 and plaintiff’s “objection” was served over 18 months after commencement of the action and over 2 years after the initial verification request was made. Therefore, plaintiff failed to submit proof that it complied with §11 NYCRR § 65-3.5(o). Finally, the Court finds the remainder of plaintiff’s arguments to be pro forma, without merit, and specious.

Accordingly, defendant’s motion pursuant to CPLR § 3212 for summary judgement dismissing the complaint is granted in its entirety and plaintiff’s cross-motion is denied as moot.

The foregoing constitutes the decision and order of this Court.

Dated: June 8, 2021
Hon. Gina Levy Abadi
Judge, Civil Court

[*1]

Civil Court of the City of New York, New York County, June 1, 2021

APPEARANCES OF COUNSEL

Law Offices of Rubin & Nazarian, New York City (Joseph Kuroly of counsel), for defendant.

Sanders Barshay Grossman, PLLC, New York City (Edward A. Cespedes of counsel), for plaintiff.

In this action seeking to recover assigned first-party no-fault benefits, defendant moves for summary judgment dismissing the complaint on the ground that the action is premature, because plaintiff did not provide MRI films demanded pursuant to a verification request (mot seq No. 001). Plaintiff opposes the motion, arguing that it had responded that it would send the films after it received payment from defendant for the reasonable costs of the films. It is undisputed that no payment for the films was ever sent.

The issue presented is whether the toll upon the insurer’s time to pay or otherwise deny a claim, which was triggered by a verification request for the provider to provide MRI films, ends when the provider responds that the films will be sent only after the insurer reimburses the provider for the reproduction costs of those films.

Background

On October 31, 2017, plaintiff’s assignor, Shahrooz Sabzehroo, was allegedly injured in [*2]an automobile accident (see defendant’s exhibit C in support of mot, police accident rep; see also defendant’s exhibit A in support of mot, complaint ¶ 3).

On December 5, 2017, plaintiff allegedly took MRIs of Sabzehroo’s right knee and left knee, billed separately in the amount of $878.67 for each knee (see defendant’s exhibit E in support of mot, NF-3 forms). On December 6, 2017, plaintiff allegedly took MRIs of Sabzehroo’s cervical and lumbar spine, billed in the amount of $879.73 and $912, respectively (see id., NF-3 forms). Plaintiff allegedly submitted these bills to defendant, and defendant allegedly neither paid nor denied the bills within 30 days of receipt (complaint ¶¶ 16-17, 20, 40-41, 44, 64-65, 68, 88-89, 92).

Verification Requests and Responses

On January 11, 2018, defendant allegedly mailed a verification request to plaintiff to submit, among other things, “copies of the MRI/CD Film for dates of services 12/5/17 & 12/6/17, lumbar, cervical, right knee, and left knee” (see defendant’s exhibit {**72 Misc 3d at 704}E, first request).^[FN1] On February 14, 2018, defendant allegedly mailed a follow-up verification request to plaintiff for those MRI films (see id., second request).

On February 16, 2018, and March 8, 2018, plaintiff’s counsel allegedly mailed to defendant undated letters bearing the heading “VERIFICATION COMPLIANCE” for the MRIs taken of Sabzehroo’s cervical spine and one of Sabzehroo’s knees (see plaintiff’s exhibit 1 in opp to mot).^[FN2] The letters identically stated,

“Please see the attached responses to your request for verification dated 01/11/2018. This comprises full and complete compliance with the demand based on documents and information in control of the Provider. . . .

“Pursuant to Radiology Ground Rule 8, a copy of the MRI Film/CD/or Electronic Media will be provided upon receipt of $5.00, made payable to Lenox Hill Radiology, P.C.” (see plaintiff’s exhibit 1 in opp to mot).

On March 13, 14, and 21, 2018, plaintiff’s counsel allegedly mailed to defendant undated “VERIFICATION COMPLIANCE” letters in response to defendant’s follow-up verification {**72 Misc 3d at 705}request dated February 14, 2018, with respect to all four bills (see id.).

Meanwhile, by a letter dated March 14, 2018, defendant acknowledged receipt of an undated “Verification Compliance” letter, and responded, in relevant part:

“When a carrier or self insured employer requests x-rays, MRI’s or other recorded images and satisfactory reproductions including electronic media are furnished in lieu of the original films, a fee of $5.00 may be charged for the first sheet of duplicating film or electronic media and $3.00 for each additional film or electronic media; payment issued under separate cover

“Your claim remain [sic] in delay for the requested verification. . . .

“In order to properly evaluate your claim, we are still awaiting:

“Submit the MRI film/CD of the right knee, left knee, lumbar spine and cervical spine performed on 12/05/17 and 12/06/17.

“Regulation 68 65-3.5 (c) states the insurer is entitled to receive all items necessary to verify the Claim directly from the parties from which such verification was requested[.]

“Until all verification is received, your claim will remain in delay status” (defendant’s exhibit E in support of mot).

On April 18, 2018, defendant allegedly mailed to plaintiff a similar letter stating,

“Payment for MRI invoice will be paid under separate cover[.]

“Your claim remain [sic] in delay for the requested verification. . . .

“In order to properly evaluate your claim, we are still awaiting:

“Submit the MRI film/CD of the right knee, left knee, lumbar spine and cervical spine performed on 12/05/17 and 12/06/17[.] . . .

“Until all verification is received, your claim will remain in delay status” (defendant’s exhibit E in support of mot).

On May 1, 2018, plaintiff’s counsel allegedly mailed to defendant undated “VERIFICATION COMPLIANCE” letters in {**72 Misc 3d at 706}response to defendant’s follow-up verification request dated March 14, 2018, with respect to all four bills, which were nearly identical to the prior responses which plaintiff sent in February and March 2018 (plaintiff’s exhibit 1 in opp to mot). On May 29, 2018, plaintiff’s counsel allegedly mailed to defendant undated “VERIFICATION COMPLIANCE” letters in response to defendant’s April 18, 2018 follow-up request, and the responses were nearly identical to plaintiff’s prior responses (id.).

Meanwhile, on May 15, 2018, defendant allegedly mailed to plaintiff another follow-up verification request, which was almost identical to the follow-up request which defendant allegedly mailed on April 14, 2018, i.e., that defendant was still awaiting the MRI films and that the claims were in delay status until they were received (see defendant’s exhibit E in support of mot). This follow-up request indicated that the MRI invoice was paid under separate cover (see id.).

The Instant Action

On September 27, 2018, plaintiff commenced this action seeking to recover assigned first-party no-fault benefits, with interest plus attorneys’ fees (defendant’s exhibit A in support of mot, summons and complaint). On October 30, 2018, defendant allegedly [*3]answered the complaint (id., answer and aff of service).

On December 15, 2020, the court held oral argument on defendant’s motion. At argument, the parties agreed that the only items requested for verification which remained outstanding were the MRI films. Additionally, it was undisputed that no payment for the MRI films was ever sent. The court allowed the parties to submit supplemental papers on the issue of whether defendant may be allowed to assert that the verification was outstanding due to MRI films, when defendant had not paid for the cost of those films, after due demand from plaintiff in accordance with New York Workers’ Compensation Medical Fee Schedule radiology ground rule 8. Plaintiff submitted a supplemental affirmation in opposition; defendant apparently did not submit any supplemental papers.

Discussion

“On a motion for summary judgment, the moving party must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of{**72 Misc 3d at 707} any material issues of fact. If the moving party produces the required evidence, the burden shifts to the nonmoving party to establish the existence of material issues of fact which require a trial of the action” (Xiang Fu He v Troon Mgt., Inc., 34 NY3d 167, 175 [2019] [internal quotation marks and citations omitted]).

Defendant argues that the action must be dismissed as premature because defendant’s time to pay or deny the claims is currently tolled, pending receipt of the MRI films from plaintiff (affirmation of defendant’s counsel ¶¶ 10-16). To establish that verification requests and follow-up verification requests were timely mailed, defendant submitted an affidavit from Tony Singh, a no-fault supervisor employed by defendant (see defendant’s exhibit D in support of mot, aff of Tony Singh ¶ 2). According to Singh, defendant received the four bills at issue on December 18, 2017 (Singh aff ¶ 6 [a]). Verification requests were issued and mailed on January 11, 2018, and February 14, 2018 (id.), and defendant submitted copies of proofs of mailing for these requests (see defendant’s exhibit E in support of mot).

According to Singh, defendant received a letter from plaintiff on February 27, 2018, and defendant issued a “Missing/Incomplete Verification” acknowledging receipt on March 14, 2018 (Singh aff ¶ 6 [a]). On March 19, 2018, defendant received another letter from plaintiff, and defendant issued another “Missing/Incomplete Verification” acknowledging receipt on April 18, 2018 (id.). On May 8, 2018, defendant received several letters from plaintiff, and defendant issued another “Missing/Incomplete Verification” acknowledging receipt on May 15, 2018 (id.). According to Singh, defendant has still not received the verification requested (id.).

In opposition, plaintiff argues that defendant’s motion should be denied for issues of fact as to whether plaintiff’s response to the verification requests was sufficient. Alternatively, plaintiff argues that “plaintiff’s claims were fully verified ending the toll on defendant’s time to pay or deny,” because defendant “failed to respond to plaintiff’s response” (affirmation of plaintiff’s counsel at 4). Lastly, plaintiff argues that defendant failed to demonstrate a “good reason” to request a copy of the MRI films in its verification request (id. at 5).

“[A]n insurer must either pay or deny a claim for motor vehicle no-fault benefits, in whole or in part, within 30 days after{**72 Misc 3d at 708} an applicant’s proof of claim is received” (Infinity Health Prods., Ltd. v Eveready Ins. Co., 67 AD3d 862, 864 [2d Dept 2009]).

“Where there is a timely original request for verification, but no response to the request for verification is received within 30 calendar days thereafter, or the response to the original request for verification is incomplete, then the insurer, within 10 calendar days [*4]after the expiration of that 30-day period, must follow up with a second request for verification (see 11 NYCRR 65-3.6 [b]). If there is no response to the second, or follow-up, request for verification, the time in which the insurer must decide whether to pay or deny the claim is indefinitely tolled. . . . Accordingly, any claim for payment by the medical service provider after two timely requests for verification have been sent by the insurer subsequent to its receipt of [a claim] form from the medical service provider is premature, if the provider has not responded to the requests” (Sound Shore Med. Ctr. v New York Cent. Mut. Fire Ins. Co., 106 AD3d 157, 163 [2d Dept 2013] [citations omitted]).

Defendant met its prima facie burden of establishing that the action was premature based on the affidavit of the no-fault supervisor, who averred that defendant has not received any MRI films in response to its initial and follow-up verification requests. Plaintiff’s argument that a triable issue of fact arises as to the sufficiency of plaintiff’s responses to defendant’s verification requests for the MRI films is without merit. Plaintiff does not dispute that the initial and follow-up verification requests were timely mailed. It is also undisputed that plaintiff did not provide any MRI films to defendant. There is no circumstance under which it could be reasonably inferred that plaintiff sent the MRI films. Thus, there are no disputed issues of fact for the trier of fact to determine.

To the extent that plaintiff argues that the action is not premature because: (1) its demand for reimbursement for the MRI films was a response that complied with the verification request, or (2) defendant “failed to act upon receipt of plaintiff’s response to defendant’s verification requests,” i.e., that defendant did not pay plaintiff for the costs of the MRI films when defendant had indicated payment was forthcoming, the analysis is more complex.

On the one hand, it is undisputed that plaintiff never provided the MRI films requested for verification. On the other{**72 Misc 3d at 709} hand, it is equally undisputed that a provider may charge the insurer a fee for the costs for reproduction of MRI films. Although neither party submitted a copy of radiology ground rule 8 of the New York State Workers’ Compensation Medical Fee Schedule, both parties agreed that, pursuant to ground rule 8, when an insurance carrier (or self-insured employer) requests X rays, MRIs, or other recorded images, and the provider furnishes satisfactory reproductions (including electronic media) in lieu of the original films, the provider may charge the insurer, at most, a fee of $5 for the first sheet of duplicating film or electronic media and $3 for each additional sheet of film or electronic media (compare defendant’s exhibit E in support of mot, with supplemental affirmation of plaintiff’s counsel in opp to mot at 3; see also Ops Gen Counsel NY Ins Dept No. 08-04-08 [Apr. 2008], available at https://www.dfs.ny.gov/insurance/ogco2008/rg080408.htm [accessed May 28, 2021]).

The issue presented is how the provider’s right to reimbursement for the reproduction of films fits within the no-fault regulatory scheme. If the provider’s duty to provide the MRI films is contingent upon the insurer’s payment of the reproduction costs, then plaintiff complied with the verification request when plaintiff demanded payment of the reproduction costs. However, if the provider has no right to insist that the insurer reimburse the reproduction costs before sending the MRI films, then plaintiff’s responses to the insurer would not be adequate, and it would be irrelevant whether the insurer had, in fact, paid the reproduction costs—even if the insurer had promised payment.

The no-fault regulations do not expressly require defendant to reimburse plaintiff in advance of receiving the MRI films. The no-fault regulations are silent as to when the provider [*5]must receive payment of these reproduction costs. Thus, the insurer’s duty to pay the reproduction costs appears independent from the insurer’s right to demand verification. Conceivably, plaintiff could have submitted the reproductions to defendant, along with a bill for the reproduction costs. Alternatively, plaintiff could have also decided to submit the original MRI films to defendant for verification in lieu of sending reproductions of the films. In that scenario, the insurer would not incur any fee for reproductions, but it would have to return the original films to the provider within 20 days of receipt (see Ops Gen Counsel NY Ins Dept No. 08-04-08). Thus, the question of whether or not the insurer must pay a reproduction fee at all lies within the control of the provider.{**72 Misc 3d at 710}

As a practical matter, it seems unlikely that providers would send originals to an insurer for verification, given the risk that originals could be lost while in transit to the insurer. This court also understands why a provider would insist that the reproduction costs be paid before the MRI films are sent, because a $5 bill for reproduction costs may go ignored.

However, to accept plaintiff’s approach that a provider may insist upon reimbursement before it must comply with a verification request for films “runs counter to the no-fault regulatory scheme, which is designed to promote prompt payment of legitimate claims” (Nyack Hosp. v General Motors Acceptance Corp., 8 NY3d 294, 300 [2007]). A core and essential objective in the no-fault regulations is “to provide a tightly timed process of claim, disputation and payment” (Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 281 [1997]). In this case, the back-and-forth disagreement over whether defendant was paying the reproduction costs of the films went on for four months, before ending in a stalemate.

Plaintiff’s approach also goes too far. First, plaintiff essentially advocates that a provider would be excused from complying with any verification requests to provide the MRI films until it was reimbursed the reproduction costs. Second, plaintiff appears to argue that, when it responded that defendant must pay the reproduction costs before receiving the MRI films, the toll on the insurer’s time to pay or otherwise deny a claim ended, even though the verification sought was never provided, and plaintiff had not objected to providing the MRI films. Those arguments find no support in either the no-fault regulations themselves, or in the regulatory scheme.^[FN3] As discussed above, the decision to charge a reproduction fee is within the control of the provider.

While plaintiff’s approach would incentivize insurers to pay reproduction fees, the approach is unworkable and would add another layer of complexity and litigation over a host of new issues{**72 Misc 3d at 711} regarding the toll: Does the toll end when the plaintiff responds with a demand for payment? Does the toll restart if defendant sends payment for the reproduction costs? At what point in time would the toll be restarted? What would happen to the toll if the payment were [*6]delayed, or if plaintiff denies that the payment was ever sent? In this case, defendant promised payment, but payment was never sent. The host of issues that would follow from adopting plaintiff’s approach would undermine the objectives of the No-Fault Law of “promoting prompt resolution of injury claims, limiting cost to consumers and alleviating unnecessary burdens on the courts” (Pommells v Perez, 4 NY3d 566, 570-571 [2005]).

Finally, as a policy matter, the downside of plaintiff’s approach is that the sanction against the insurer for failing to pay the reproduction fees would be the entire amount of the claim, which could be significantly disproportionate to reproduction cost, which is very modest. Here, defendant would be liable for $3,549.07 because defendant did not pay $5 in reproduction fees.

Although plaintiff submitted decisions from no-fault arbitrations where the arbitrators ruled that the provider’s responses to demand payment of reproduction costs complied with the insurer’s verification requests (see plaintiff’s supplemental affirmation in opp, arbitration awards), this court declines to follow those arbitration decisions. Those decisions rest on the premise that the toll triggered by the insurer’s verification request ended when the provider demanded payment of the reproduction costs. However, as discussed above, in this court’s view, the insurer’s right to demand and receive verification is not contingent upon the insurer’s payment of the reproduction costs. Thus, the provider is not excused from complying with any verification requests to provide the MRI films until it was reimbursed the reproduction costs. Consequently, the toll did not end either when plaintiff responded that defendant must pay the reproduction costs before receiving the MRI films, or when defendant had promised but failed to pay the reproduction costs. The toll should not end because plaintiff had not objected to providing the MRI films, and the verification sought was never provided.^[FN4]

{**72 Misc 3d at 712}In its supplemental opposition papers, plaintiff argues that defendant failed to “[c]learly inform the applicant of the insurer’s position regarding any disputed matter,” which is one of the principles of claim settlement practices (see 11 NYCRR 65-3.2 [e]), in that defendant promised to send payment but never did (see plaintiff’s supplemental affirmation in opp at 6). As discussed above, because a provider has no right to insist upon payment of reproduction costs before complying with a verification request for MRI films, the insurer’s response to such demands is irrelevant. “[T]o rule otherwise would sanction the parties’ sending countless letters to each other, which would violate the intent of the No-Fault Law which encourages the prompt resolution of no fault claims” (LK Health Care Prods. Inc v GEICO Gen. Ins. Co., 39 Misc 3d 1230[A], 2013 NY Slip Op 50810[U], *3 [Civ Ct, Kings County 2013]).

Because the toll has not ended due to the outstanding MRI films, the action is therefore premature.

Plaintiff’s objection to the reasonableness of the request for the MRI films is unavailing. It is readily apparent that copies of any MRI films (or lack of such films) would substantiate whether the billed MRIs were, in fact, actually performed. Moreover, plaintiff never objected to the request for these films in its verification responses (see Compas Med., P.C. v Travelers Ins. Co., 53 Misc 3d 136[A], 2016 NY Slip Op 51441[U], *1 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2016] [“plaintiff did not allege, much less demonstrate, that it objected to such requests during claims processing”]).

Therefore, defendant’s motion for summary judgment dismissing the complaint is granted, and the complaint is dismissed without prejudice as premature.

Conclusion

Upon the foregoing cited papers, it is hereby ordered defendant’s motion for summary judgment dismissing the complaint is granted, and the complaint is dismissed without prejudice.

Footnotes

Footnote 1:Defendant’s verification request and follow-up requests each combined all four bills into a single letter.

Footnote 2:Plaintiff’s counsel apparently responded to the verification requests with separate letters with respect to each bill. In its exhibits to the court, plaintiff’s counsel arranged all the undated responses to the verification requests and follow-up requests, which were sent on different dates and involved different bills, under a single exhibit tab. For the sake of clarity, the court will refer to documents submitted under that single exhibit tab based on the page number assigned by the document viewer used to access the electronically filed opposition papers.

Pages 7 through 14, and pages 15 through 20, of plaintiff’s opposition papers apparently pertain to the MRIs taken of Sabzehroo’s left and right knees. These pages reference dates of service on December 5, 2017, billed in the amount of $876.67.

Pages 21 through 26 apparently pertain to the MRI taken of Sabzehroo’s lumbar spine, as these pages reference a date of service on December 6, 2017, billed in the amount of $912.

Pages 27 through 34 apparently pertain to the MRI taken of Sabzehroo’s cervical spine, as these pages reference a date of service on December 6, 2017, billed in the amount of $879.73.

Because the MRIs of plaintiff’s knees were taken on the same day, and were billed for the same amount, it cannot be determined from the “Verification Compliance” letter allegedly mailed on February 16, 2018, whether that response was meant for the request of the MRI taken of the left or right knee.

Plaintiff’s approach that the insurer must reimburse costs in advance of the provider’s compliance because it is entitled to be reimbursed under the no-fault regulatory scheme could logically extend to these reimbursements as well.

[*1]

Civil Court of the City of New York, Queens County, May 27, 2021

APPEARANCES OF COUNSEL

Law Offices of Karen L. Lawrence, Garden City, for defendant.

Law Offices of Jonathan B. Seplowe, PC, Malverne, for plaintiff.

I. Background

In a summons and complaint filed on August 29, 2019, plaintiff commenced an action against defendant insurance company to recover a total of $5,119.50 in unpaid first-party no-fault benefits for medical services provided to plaintiff’s assignor Loduca from November to December 2016, plus attorneys’ fees and statutory interest (see mot, aff of Inguanti, exhibit A). Defendant moved for summary judgment dismissing the complaint (CPLR 3212 [b]) on the ground that defendant timely denied plaintiff’s claims based on Loduca’s failure to appear for two independent medical examinations (IME).

II. Discussion and Decision

CPLR 3212 provides that “a motion for summary judgment shall be supported by affidavit, by a copy of the pleadings and by other available proof, such as depositions and written admissions” (CPLR 3212 [b]). “[M]ere conclusions, expressions of hope or unsubstantiated allegations or assertions are insufficient” (Zuckerman v City of New York, 49 NY2d 557, 562 [1980]). “A defendant moving for summary judgment [seeking an order dismissing plaintiff’s complaint] has the initial burden of coming forward with admissible evidence, such as affidavits by persons having knowledge of the facts, reciting the material facts and showing that the cause of action has no merit” (GTF Mktg. v Colonial Aluminum Sales, 66 NY2d 965, 967 [1985]; Anghel v Ruskin Moscou Faltischek, P.C., 190 AD3d 906, 907 [2d Dept 2021]; see Jacobsen v New York City Health & Hosps. Corp., 22 NY3d 824, 833 [2014]). A motion for summary judgment “shall be granted if, upon all the papers and proof submitted, the cause of action or defense shall be established sufficiently to warrant the court as a matter of law in directing{**72 Misc 3d at 673} judgment in favor of any party” (CPLR 3212 [b]; Zuckerman v City of New York at 562; see GTF Mktg. v Colonial Aluminum Sales, 66 NY2d at 968).

Insurers must pay or deny no-fault benefit claims “within 30 calendar days after receipt of the proof of claim” (Viviane Etienne Med. Care, P.C. v Country-Wide Ins. Co., 25 [*2]NY3d 498, 505 [2015]; Fair Price Med. Supply Corp. v Travelers Indem. Co., 10 NY3d 556, 563 [2008]; Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co., 9 NY3d 312, 317 [2007]; see Insurance Law § 5106 [a]; 11 NYCRR 65-3.8 [c]; Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 278 [1997]). Failure to establish timely payment or denial of the claim precludes the insurer from offering evidence of its defense to nonpayment (Viviane Etienne Med. Care, P.C. v Country-Wide Ins. Co., 25 NY3d at 506; Fair Price Med. Supply Corp. v Travelers Indem. Co., 10 NY3d at 563; Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co., 9 NY3d at 318; Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d at 281-286). An assignor’s appearance at an IME “is a condition precedent to the insurer’s liability on the policy” (Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 35 AD3d 720, 722 [2d Dept 2006]; Greenway Med. Supply Corp. v Hartford Ins. Co., 56 Misc 3d 135[A], 2017 NY Slip Op 50960[U], *1 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2017]; Parisien v Citiwide Auto Leasing, 55 Misc 3d 146[A], 2017 NY Slip Op 50684[U], *1 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2017]; Longevity Med. Supply, Inc. v Praetorian Ins. Co., 47 Misc 3d 128[A], 2015 NY Slip Op 50393[U], *1 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2015]).

To sustain its burden, defendant must present evidence that it mailed the IME notices to Loduca and that Loduca failed to appear for the IMEs (Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 35 AD3d at 721). Defendant presented an affidavit sworn December 31, 2019 (see mot, Inguanti aff, exhibit F), in which Donovan, an employee of MES Solutions, the company retained by defendant to schedule IMEs, attested to the ordinary business practices of MES Solutions in mailing IME scheduling letters and recording the status of the IMEs scheduled. Defendant also presented the scheduling letters to establish that defendant timely scheduled the IMEs (Bronx Acupuncture Therapy, P.C. v A. Cent. Ins. Co., 58 Misc 3d 141[A], 2017 NY Slip Op 51870[U], *1 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2017]; Brand Med. Supply, Inc. v {**72 Misc 3d at 674}Praetorian Ins. Co., 56 Misc 3d 133[A], 2017 NY Slip Op 50947[U], *1 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2017]; Broadway Massage Therapy, P.C. v Citiwide Auto Leasing, 55 Misc 3d 132[A], 2017 NY Slip Op 50426[U], *2 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2017]; Longevity Med. Supply, Inc. v Praetorian Ins. Co., 2015 NY Slip Op 50393[U], *1). The affidavits of Perrie, D.C. sworn January 29, 2020, and Bogdan, D.C. sworn January 2, 2020, the two chiropractors who were to perform the IMEs, established that Loduca failed to appear for the IMEs (see mot, Inguanti aff, exhibit H; Brand Med. Supply, Inc. v Praetorian Ins. Co., 2017 NY Slip Op 50947[U], *1; Broadway Massage Therapy, P.C. v Citiwide Auto Leasing, 2017 NY Slip Op 50426[U], *2; Longevity Med. Supply, Inc. v Praetorian Ins. Co., 2015 NY Slip Op 50393[U], *1). The affidavits of defendant’s employees and an officer of the company defendant retained to provide mailing services establishing defendant’s regular mailing procedures adequately demonstrated defendant’s timely denial of plaintiff’s claims based on Loduca’s failure to attend the IMEs (see Bronx Acupuncture Therapy, P.C. v A. Cent. Ins. Co., 2017 NY Slip Op 51870[U], *1; Greenway Med. Supply Corp. v Hartford Ins. Co., 2017 NY Slip Op 50960[U], *1; Brand Med. Supply, Inc. v Praetorian Ins. Co., 2017 NY Slip Op 50947[U], *1; Broadway Massage Therapy, P.C. v Citiwide Auto Leasing, 2017 NY Slip Op 50426[U], *2).

In opposition, plaintiff argued that the affidavits of the examining chiropractors Perrie and Bogdan, which were sworn more than three years after Loduca’s purported nonappearances at the IMEs and failed to state the basis for their recollection, rendered their [*3]assertions as to Loduca’s nonappearances conclusory (Satya Drug Corp. v Global Liberty Ins. Co. of N.Y., 65 Misc 3d 127[A], 2019 NY Slip Op 51505[U], *1 [App Term, 1st Dept 2019]; Utica Acupuncture P.C. v Amica Mut. Ins. Co., 55 Misc 3d 126[A], 2017 NY Slip Op 50331[U], *1 [App Term, 1st Dept 2017]; Five Boro Med. Equip., Inc. v Praetorian Ins. Co., 53 Misc 3d 138[A], 2016 NY Slip Op 51481[U], *1 [App Term, 1st Dept 2016]; Village Med. Supply, Inc. v Travelers Prop. Cas. Co. of Am., 51 Misc 3d 126[A], 2016 NY Slip Op 50339[U], *1 [App Term, 1st Dept 2016]). Conclusory affidavits and affirmations are insufficient to establish an assignor’s nonappearance at an IME (Compas Med., P.C. v Geico Ins. Co., 49 Misc 3d 140[A], 2015 NY Slip Op 51590[U], *1 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2015]). {**72 Misc 3d at 675}However, whether a failure to state a basis of recollection renders an affidavit regarding nonappearance at an IME conclusory has not been previously addressed by the Appellate Term, Second Department or any higher authority binding this court.^[FN*]

Here, this court finds that the affidavits of Perrie and Bogdan are not conclusory even though they did not specify a basis for their recollection of Loduca’s nonappearances as explained below.

Perrie and Bogdan both attested that they had personal knowledge of Loduca’s nonappearances because they were present in their offices on the dates of the scheduled IMEs and Loduca did not appear or contact them to cancel or reschedule the IMEs (see Quality Health Prods. v Hertz Claim Mgt. Corp., 36 Misc 3d 154[A], 2012 NY Slip Op 51722[U], *1-2 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012]). Plaintiff presented no evidence to support its assertions casting doubt on the personal knowledge of Perrie and Bogdan regarding Loduca’s nonappearances (Quality Health Prods. v Hertz Claim Mgt. Corp., 2012 NY Slip Op 51722[U], *2; see MB Advanced Equip., Inc. v New York Cent. Mut. Fire Ins. Co., 51 Misc 3d 151[A], 2016 NY Slip Op 50863[U], *1 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2016]). While a contemporaneously executed affidavit is more probative than an affidavit executed later (Williams v New York City Hous. Auth., 183 AD3d 523, 527 [1st Dept 2020]), plaintiff has not established that the Perrie and Bogdan affidavits were “inherently unworthy of belief” or otherwise “incredible as a matter of law” (Salako v Nassau Inter-County Express, 131 AD3d 687, 688 [2d Dept 2015]). Affidavits executed a significant time after the events to which the witness attested have only been rejected when other infirmities existed in them (see Cruz v Roman Catholic Church of St. Gerard Magella in Borough of Queens in the City of N.Y., 174 AD3d 782, 784 [2d Dept 2019] [conclusory]; Deutsche Bank Natl. Trust Co. v Cunningham, 142 AD3d 634, 635 [2d Dept 2016] [failed to attest plaintiff was note holder at time foreclosure action commenced]; Fredette v Town of Southampton, 95 AD3d 940, 943 [2d Dept 2012] [affidavit tailored to avoid consequences of earlier testimony]; Montanaro v Kandel, 288 AD2d {**72 Misc 3d at 676}275, 275 [2d Dept 2001] [examining physician failed to specify tests used to support conclusions]). In our instant matter, plaintiff has not shown that any of these infirmities existed. Further, Perrie and Bogdan generally confirmed that letters were sent to MES Solutions on the same date as Loduca’s nonappearances. Donovan attested that MES [*4]Solutions received letters from the examiners with whom IMEs were scheduled advising whether the claimant appeared. Defendant appended letters signed by Perrie and Bogdan to its motion (see mot, Inguanti aff, exhibit G). Considering that the Perrie and Bogdan affidavits sufficiently established Loduca’s nonappearance at the IMEs, plaintiff’s contentions that these witnesses’ letters did not indicate their presence in the office at the time of Loduca’s nonappearance were irrelevant and failed to raise factual issues regarding defendant’s defense of nonappearance at scheduled IMEs. As defendant noted in reply, plaintiff presented no evidence that Loduca attended or unsuccessfully attempted to attend the IMEs. This court finds that defendant has presented prima facie admissible evidence proving that there is no material issue of fact and that the controversy can be decided as a matter of law (CPLR 3212 [b]; Jacobsen v New York City Health & Hosps. Corp., 22 NY3d 824 [2014]; Brill v City of New York, 2 NY3d 648 [2004]), and that plaintiff has failed to raise factual issues requiring a trial (Nationwide Affinity Ins. Co. of Am. v George, 183 AD3d 755, 757 [2d Dept 2020]; Nova Chiropractic Servs., P.C. v Ameriprise Auto & Home, 58 Misc 3d 142[A], 2017 NY Slip Op 51882[U], *1 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2017]; K.O. Med., P.C. v IDS Prop. Cas. Ins. Co., 57 Misc 3d 145[A], 2017 NY Slip Op 51454[U], *1 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2017]).

III. Order

Accordingly, it is ordered that defendant’s motion for summary judgment is granted and plaintiff’s complaint is dismissed.

Footnotes

Footnote *:This court recognizes that case law from the Appellate Term, First Department held that examining professionals’ affidavits regarding an assignor’s nonappearance were conclusory for failing to state a basis for their recollection in the affidavits.

CV-703358-19/QU

Plaintiff’s Counsel:

Law Offices of Gabriel & Shapiro, L.L.C.

3361 Park Avenue, Suite 1000

Wantagh, NY 11793

Defendant’s Counsel:

McDonnell Adels Klestzick, P.L.L.C.

401 Franklin Avenue

Garden City, NY 11530

I. Papers

The following papers were read on Defendant’s motion for summary judgment seeking dismissal of Plaintiff’s complaint and Plaintiff’s cross-motion for summary judgment seeking judgment on its claims against Defendant:

Papers Numbered

Defendant’s Notice of Motion and Affirmation in Support dated September 18, 2019 (“Motion“) and file stamped by the court on September 27, 2019. 1

Plaintiff’s Amended Notice of Cross-Motion seeking summary judgment and Amended Affirmation in Support and Opposition dated as of July 29, 2020 (“Cross-Motion”) and electronically filed with the court on November 18, 2020. 2

Defendant’s Affirmation in Opposition to Cross-Motion dated as of August 4, 2020 (“Opposition to Cross-Motion”) and electronically filed with the court on August 5, 2020. 3

II. Background

In a summons and complaint filed February 21, 2019, Plaintiff sued Defendant insurance company to recover a total of $5,477.97 in unpaid first party No-Fault benefits for medical services provided to Plaintiff’s assignor Cortes from July 2, 2018 to July 30, 2018 resulting from an automobile accident on May 23, 2018, plus attorneys’ fees and statutory interest (see Motion, Aff. of Schwarzenberg, Ex. F). The First cause of action was for recovery of a bill for services provided on July 30, 2018 (“First Bill“) in the amount of $10.00. The Third cause of action was for recovery of a $4,796.10 bill for services provided on July 13, 2018 (“Second Bill“). The Fifth cause of action was for recovery of a $513.18 bill for services provided on July 13, 2018 (“Third Bill“). The Seventh cause of action was for recovery of a $148.69 bill for services provided on July 2, 2018 (“Fourth Bill“). The Ninth cause of action was for recovery of a $10.00 bill for services provided on July 16, 2018 (“Fifth Bill“). The Second, Fourth, Sixth, Eighth, and Tenth causes of action sought recovery of attorneys’ fees for each of the separate bills.

Defendant moved for summary judgment dismissing the complaint on the ground that Plaintiff failed to provide additional documentary verification within one-hundred twenty (120) days (11 NYCRR § 65-3.8[b][3]). Plaintiff cross-moved for summary judgment on its claims against Defendant. Both parties orally argued the motions before this Court on April 19, 2021.

III. Discussion and Decision

CPLR 3212 provides that “a motion for summary judgment shall be supported by affidavit, by a copy of the pleadings and by other available proof, such as depositions and written admissions” (CPLR 3212[b]). “Mere conclusions, expressions of hope or unsubstantiated allegations or assertions are insufficient” (Zuckerman v. City of New York, 49 NY2d 557, 562 [1980]). “A defendant moving for summary judgment [seeking an order dismissing plaintiff’s complaint] has the initial burden of coming forward with admissible evidence, such as affidavits by persons having knowledge of the facts, reciting the material facts and showing that the cause of action has no merit” (GTF Mktg. v Colonial Aluminum Sales, 66 NY2d 965, 967 [1985]; Anghel v Ruskin Moscou Faltischek, P.C., 190 AD3d 906, 907 [2d Dept 2021], see Jacobsen v. New York City Health & Hosps. Corp., 22 NY3d 824, 833 [2014]). A motion for summary judgment “shall be granted if, upon all the papers and proof submitted, the cause of action or defense shall be established sufficiently to warrant the court as a matter of law in directing judgment in favor of any party” (CPLR 3212[b]; Zuckerman v. City of New York, at 562, see GTF Mktg. v Colonial Aluminum Sales, 66 NY2d at 968).

Insurers must pay or deny No-Fault benefit claims “within thirty (30) calendar days after [*2]receipt of the proof of the claim” (Viviane Etienne Med. Care, P.C. v Country-Wide Ins. Co., 25 NY3d 498, 501 [2015]; Fair Price Med. Supply Corp. v Travelers Indem. Co., 10 NY3d 556, 563 [2008]; Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co., 9 NY3d 312, 317 [2007]; see Insurance Law § 5106[a]; 11 NYCRR § 65-3.8[c]; Presbyterian Hosp. in City of NY v Maryland Cas. Co., 90 NY2d 274, 278 [1997]). “New York Law prohibits unlicensed individuals from organizing a professional service corporation for profit or exercising control over such entities” (Andrew Carothers, M.D., P.C. v Progressive Ins. Co., 33 NY3d 389, 404 [2019], see Business Corporation Law §§ 1507; 1508; Nationwide Affinity Ins. Co. of Am. v Acuhealth Acupuncture, P.C., 155 AD3d 885, 886 [2d Dept 2017]; Liberty Mut. Ins. Co. v Raia Med. Health, P.C., 140 AD3d 1029, 1031 [2d Dept 2016]; One Beacon Ins. Group, LLC v Midland Med. Care, P.C., 54 AD3d 738, 740 [2d Dept 2008]). “A provider of health care services is not 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 . . .” (11 NYCRR § 65-3.16[a][12]; Nationwide Affinity Ins. Co. of Am. v Acuhealth Acupuncture, P.C., 155 AD3d at 886; Liberty Mut. Ins. Co. v Raia Med. Health, P.C., 140 AD3d at 1031; One Beacon Ins. Group, LLC v Midland Med. Care, P.C., 54 AD3d at 740). In the No Fault context, corporate practices evincing a willful, material noncompliance with licensing and incorporation statutes may establish a medical provider’s ineligibility to receive reimbursement (Andrew Carothers, M.D., P.C. v Progressive Ins. Co., 33 NY3d at 405, see State Farm v Mallela, 4 NY3d 313, 321 [2005]; Radiology Today, P.C. v GEICO Gen. Ins. Co., 32 Misc 3d 4, 7 [App Term 2d Dept 2011]). The elements of common law fraud need not be shown (Andrew Carothers, M.D., P.C. v Progressive Ins. Co., 33 NY3d at 405) if noncompliance with the above described licensing requirement is established through admissible evidence.

Failure to establish timely payment or denial of the claim precludes the insurer from offering evidence of its defense to non-payment (Viviane Etienne Med. Care, P.C. v Country-Wide Ins. Co., 25 NY3d at 506; Fair Price Med. Supply Corp. v. Travelers Indem. Co., 10 NY3d at 563; Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co., 9 NY3d at 318; Presbyterian Hosp. in City of NY v Maryland Cas. Co., 90 NY2d at 281-86). However, the defense that a health care provider is ineligible to receive No Fault insurance benefit payments is not subject to preclusion (All Boro Psychological Servs., P.C. v Auto One Ins. Co., 35 Misc 3d 136[A], 2012 NY Slip Op 50777[U] *2 [App Term 2d Dept 2012]; Radiology Today, P.C. v GEICO Gen. Ins. Co., 32 Misc 3d at 6; Midborough Acupuncture P.C. v State Farm Ins. Co., 13 Misc 3d 58, 59 [App Term 2d Dept 2006]; A.B. Med. Servs. PLLC v Utica Mut. Ins. Co., 11 Misc 3d 71 [App Term 2006]).

In the instant matter, Defendant received Plaintiff’s Second Bill, Third Bill, and Fourth Bill on August 20, 2018, and the Fifth Bill on August 27, 2018, and denied the claims based on these bills on January 16, 2019. (see Motion, Schwarzenberg Aff. Ex. E). Defendant received the First Bill on September 11, 2018 and denied the claim based on this bill on January 28, 2019 (Id.). Defendant denied the claims for Plaintiff’s failure to provide requested verification. While Defendant denied Plaintiff’s claims well after the thirty (30) days required for timely payment or denial, Defendant may delay payment pending an investigation of Plaintiff’s alleged noncompliance with licensing and incorporation statutes, but only upon showing good cause to [*3]pursue the investigation (Andrew Carothers, M.D., P.C. v Progressive Ins. Co., 33 NY3d at 405; State Farm v Mallela, 4 NY3d at 322).

A. Defendant’s Requests for Verification

“An applicant from whom verification is requested shall, within 120 calendar days from the date of the initial request for verification, submit all such verification under the applicant’s control or possession or written proof providing reasonable justification for the failure to comply” (11 NYCRR § 65-3.5[o]).

In the instant matter and in a letter dated September 6, 2018, Defendant acknowledged receiving the Second Bill, Third Bill, Fourth Bill, and Fifth Bill and mailed to Plaintiff a request (“August Verification Request“) for additional verification (see Motion, Schwarzenberg Aff. Ex. A). Here, Plaintiff had one-hundred twenty (120) days to provide Defendant with requested verification under Plaintiff’s control or possession or a written explanation supporting Plaintiff’s failure to comply. In the August Verification Request, Defendant requested leases for twenty-four (24) different “office and practice locations,” an employment contract between Plaintiff and Shamalov PA, contracts for billing agreements covering the dates of service in the claims, account records for Chase Bank checking, savings, debit card, and Visa card from January 1, 2017 to date, Dr. Apazidis’ and Mr. Shamalov’s intake sheets and patient notes for each claim, W-2 forms issued by Plaintiff to Dr. Apazidis and Mr. Shamalov, and Plaintiff’s 2017 corporate tax return (see id.). In a letter dated September 26, 2018, Defendant acknowledged receiving the First Bill and mailed to Plaintiff a request (“September Verification Request“) (collectively with the August Verification Request, the “Verification Request“) for additional verification requesting the same documents as in the August Verification Request (see Motion Schwarzenberg Aff. Ex. C). Plaintiff was required to provide the verification requested in the August Verification Request by January 4, 2019, and the verification requested in the September Verification Request by January 24, 2019. In two (2) letters dated October 11 and November 2, 2018, Defendant made follow up requests for the documents (see Motion, Schwarzenberg Aff. Ex. B and D). The parties did not dispute that Plaintiff subsequently provided all the documents Defendant requested except for Plaintiff’s corporate tax returns for 2017, and account records for Chase Bank checking, savings, debit card, and Visa card.

B. Good Cause for Requested Verification

Defendant argued that Plaintiff’s 2017 corporate tax returns and account records for Chase Bank checking, savings, debit card, and Visa card were necessary to verify the medical necessity of the billed services, and whether the ownership, control, and operation of Plaintiff complied with New York State licensing requirements. Plaintiff countered that Defendant failed to respond to Plaintiff’s objections to the Verification Request, show good cause for the remaining documents requested, or substantiate the necessity of the request. The Court notes that both Plaintiff’s and Defendant’s supporting documents indicate that Plaintiff in the instant matter had various claims resulting from different assignors, including Plaintiff assignor in the matter before this Court, pending with the Defendant.

Contrary to Plaintiff’s contention, tax returns and bank statements were probative on whether a medical service provider complied with licensing laws (see All Boro Psychological Servs., P.C. v Auto One Ins. Co., 2012 NY Slip Op 50777[U] *1-2; Q-B Jewish Med. Rehabilitation, P.C. v Allstate Ins. Co., 33 Misc 3d 64, 66 [App Term 2d Dept 2011], see Dore v Allstate Indem. Co., 264 AD2d 804, 804-05 [2d Dept 1999]). While mere allegations of fraud would be sufficient to sustain a motion to compel discovery of evidence of noncompliance with licensing laws (see Lexington Acupuncture, P.C. v General Assur. Co., 35 Misc 3d 42, 43 [App Term 2d Dept 2012]; Medical Polis, P.C. v Progressive Specialty Ins. Co., 34 Misc 3d 153[A], 2012 NY Slip Op 50342[U] *2 [App Term 2d Dept 2012]), here, Defendant sought summary judgment, which requires admissible evidence (see Nationwide Affinity Ins. Co. of Am. v Acuhealth Acupuncture, P.C., 155 AD3ed at 886; One Beacon Ins. Group, LLC v Midland Med. Care, P.C., 54 AD3d at 740; Vista Surgical Supplies, Inc. v Utica Mut. Ins. Co., 22 Misc 3d 142[A], 2009 NY Slip Op 50493[U] *2 [App Term 2d Dept 2009]; Oleg Barshay, P.C. v State Farm Ins. Co., 14 Misc 3d 74, 78 [App Term 2d Dept 2006]). In our instant matter, Defendant failed to support its good cause with admissible evidence for investigating Plaintiff’s alleged noncompliance with the licensing statutes as explained below.

Defendant presented an affidavit sworn July 24, 2019, in which Huddle, an investigator in Defendant’s Special Investigative Unit, detailed Defendant’s investigation of Plaintiff, as part of an alleged broader scheme of non-compliance with licensing laws, leading to the Verification Request at issue. In her affidavit, Huddle quoted Dr. Apazidis’ testimony at an examination under oath (“EUO“) to demonstrate Dr. Apazidis’ lack of knowledge of Plaintiff’s business operations, non-physician Shamalov’s unusually greater role in those operations, and inconsistencies with the documents Plaintiff provided in response to Defendant’s Verification Request regarding Shamalov’s bonus, the principal location of Plaintiff’s business, and the existence of a written contract between Plaintiff and the company retained to handle medical billing. Since Defendant failed to present the transcript of Dr. Apazidis’ EUO to support its motion, Huddle’s account of Dr. Apazidis’ EUO testimony is hearsay (see Alleviation Med. Servs., P.C. v Allstate Ins. Co., 191 AD3d 934, 935 [2d Dept 2021]; Wells Fargo Bank, N.A. v Sesey, 183 AD3d 780, 783 [2d Dept 2020]; Jamaica Dedicated Med. Care, P.C. v Praetorian Ins. Co., 47 Misc 3d 147[A], 2015 NY Slip Op 50756[U] *1 [App Term 2d Dept 2015]). Huddle also quoted an affirmation of Dr. Apazidis dated April 2, 2019, to illustrate an inconsistency between Dr. Apazidis’ claim that the business of Plaintiff was still growing so he could not pay himself his full salary and his testimony that Shamalov was paid $300,000.00 per year. Again, Defendant did not present Dr. Apazidis’ affirmation, which rendered Huddle’s assertion hearsay (Alleviation Med. Servs., P.C. v Allstate Ins. Co., 191 AD3d at 935, see United Specialty Ins. v Columbia Cas. Co., 186 AD3d 650, 651 [2d Dept 2020]; Wells Fargo Bank, N.A. v Sesey, 183 AD3d at 783).

In Defendant’s Opposition to Cross-Motion, Defendant noted that the EUO transcripts were “unimportant, since the claim which is the subject of the motion for summary judgment was not the subject of the EUO, and plaintiff [did] not dispute any of the statements made in the Huddle affidavit” (Opposition to Cross-Motion, Schwarzenberg Aff. at 12). Here, the fact remains, however, that Defendant relied on the truth of Dr. Apazidis’ EUO testimony and his affirmation to establish good cause for requesting verification from Plaintiff which in the context [*4]of a summary judgment motion requires admissible evidence. Since Defendant failed to demonstrate its prima facie entitlement to a judgment as a matter of law, the court must deny Defendant’s motion for summary judgment (Pullman v Silverman, 28 NY3d 1060, 1063 [2016]; United Specialty Ins. v Columbia Cas. Co., 186 AD3d at 651-52; Matter of Long Is. Power Auth. Hurricane Sandy Litig., 165 AD3d 1138, 1140 [2d Dept 2018]; Nationwide Affinity Ins. Co. of Am. v Acuhealth Acupuncture, P.C., 155 AD3d at 887). That Plaintiff did not dispute any of Huddle’s statements is irrelevant given that it is Defendant’s burden in the first instance to demonstrate its entitlement to a summary judgment.

C. Requirement that Insurer Advise Before Denial

“[A]n insurer may issue a denial if, more than 120 calendar days after the initial request for verification, the applicant has not submitted all such verification under the applicant’s control or possession or written proof providing reasonable justification for the failure to comply, provided that the verification request so advised the applicant as required in section 65-3.5(o) of this Subpart” (11 NYCRR §65-3.8[b][3]) (emphasis added). In pertinent part, 11 NYCRR §65-3.5[o] provides that the “insurer shall advise the applicant in the verification request that the insurer may deny the claim if the applicant does not provide within 120 calendar days from the date of the initial request either all such verification under the applicant’s control or possession or written proof providing reasonable justification for the failure to comply.” Thus Defendant’s denial of Plaintiff’s claims for failing to provide requested verification was contingent upon Defendant advising Plaintiff of the consequences for noncompliance.

Here, Defendant’s Verification Request and Defendant’s follow up request letters dated October 11 and November 2, 2018 all advised that:

pursuant to 11 NYCRR 65-3.5(o), State Farm may deny the claim if NY Chiro and Rehab, P.C. does not provide within 120 calendar days from the date of this initial verification request all of the documents identified above under NY Chiro and Rehab, P.C.’s control or possession or written proof providing reasonable justification for the failure to comply…

(Motion, Schwarzenberg Aff. Ex. A, B, C and D). The Court notes that Plaintiff in the instant matter is Apazidis, M.D., P.C., not NY Chiro and Rehab, P.C.. Since Defendant’s letters advised that Defendant would deny Plaintiff’s claims if “NY Chiro and Rehab, P.C.” failed to comply with the verification request for documents under the control or in possession of “NY Chiro and Rehab, P.C.,” Defendant failed to comply with the requirement in 11 NYCRR § 65-3.5[o] that notices requesting verification advise Plaintiff that failure to provide the requested verification under its control within 120 days would allow Defendant to deny the claims. Given that “NY Chiro and Rehab P.C.” appears in the advisory of all four (4) separate letters, reference to that entity is less likely to be a typographical error (see Galetta v Galetta, 21 NY3d 186, 196 [2013]). Alleged typographical errors in correspondence have been given legal effect (see Iannucci v 70 Washington Partners, LLC, 51 AD3d 869, 870-71 [2d Dept 2008]). It is noted that Plaintiff presented a letter dated October 31, 2018, in which Plaintiff’s counsel advised Defendant that it did not represent NY Chiro and Rehab, to which Defendant referred in its letters (see Cross-Motion, Aff. of Justin Rosenbaum Ex. A). Plaintiff’s counsel, however, did not suggest any [*5]confusion by Plaintiff from Defendant’s reference to NY Chiro and Rehab in Defendant’s verification request letters addressed to Plaintiff. Here, even if Defendant’s letters furnished Plaintiff with constructive notice that Plaintiff’s claims would be denied if Plaintiff failed to provide requested verification within 120 days, which Defendant did not argue, that would have not satisfied the requirement pursuant to 11 NYCRR ｧ65 that Defendant must advise Plaintiff of the consequences.

Defendant’s motion for summary judgment dismissing Plaintiff’s complaint is denied.

D. Plaintiff’s Cross-Motion

Regarding the Cross-Motion, Plaintiff bore the burden to show it submitted the statutory claim forms indicating the fact and amount of the loss sustained and “that payment of no-fault benefits was overdue” (Viviane Etienne Med. Care, P.C. v Country-Wide Ins. Co., 25 NY3d at 501; New York Hosp. Med. Ctr. of Queens v QBE Ins. Corp., 114 AD3d 648, 648 [2d Dept 2014]; NYU-Hospital for Joint Diseases v Esurance Ins. Co., 84 AD3d 1190, 1191 [2d Dept 2011]; Fair Price Med. Supply Corp. v ELRAC Inc., 12 Misc 3d 119, 120 [App Term 2d Dept 2006]). Here, Defendant’s denial of claim forms dated January 16 and 28, 2019, acknowledging receipt of Plaintiff’s claims in August 2018 constituted prima facie evidence that Defendant received Plaintiff’s claims and that the denial was overdue (see Lopes v Liberty Mut. Ins. Co., 24 Misc 3d 127[A], 2009 NY Slip Op 51279[U] *2 [App Term 2d Dept 2009]). However, an ineligibility of receiving No Fault insurance benefit due to non-compliance with licensing statutes defeats such prima facie showing.

Based on foregoing discussion, Defendant had identified the existence of evidence in Plaintiff’s exclusive control which raised the issue of Plaintiff’ ineligibility to receive No Fault benefit payments. Because the remaining requested verification, i.e., Plaintiff’s 2017 corporate tax return and various financial statements, are still outstanding, factual issues exist as to Plaintiff’ eligibility to receive No Fault benefit payments. Since Defendant’s defense of Plaintiff’s ineligibility to receive No Fault benefit payments is not precluded by Defendant’s untimely denial of Plaintiff’s claims and Plaintiff still has not provided the requested verification, this Court also must deny Plaintiff’s Cross-Motion (CPLR 3212[f]; RLC Med., P.C. v Allstate Ins. Co., 29 Misc 3d 134[A], 2010 NY Slip Op 51962[U] *1 [App Term 2d Dept 2010]; Points of Health Acupuncture, P.C. v Lancer Ins. Co., 28 Misc 3d 133[A], 2010 NY Slip Op 51338[U] *3 [App Term 2d Dept 2010]; Five Boro Psychological Servs., P.C. v AutoOne Ins. Co., 27 Misc 3d 89, 90 [App Term 2d Dept 2010]).

IV. Order

Accordingly, it is

ORDERED that Defendant’s Motion for summary judgment is denied, and it is further

ORDERED that Plaintiff’s Cross-Motion for summary judgement is denied.

This constitutes the DECISION and ORDER of the Court.

Dated: May 26, 2021

Queens County Civil Court

_____________________________________

Honorable Wendy Changyong Li, J.C.C.