SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd, 11th and 13th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Kings County (Lisa S. Ottley, J.), dated June 23, 2009. The order denied defendant’s motion for summary judgment dismissing the complaint and granted plaintiffs’ cross motion for summary judgment.

ORDERED that the order is modified by providing that plaintiffs’ cross motion for summary judgment is denied; as so modified, the order is affirmed, without costs.

In this action by a provider to recover assigned first-party no-fault benefits, defendant moved for summary judgment dismissing the complaint based upon the
failure of plaintiffs’ assignor to attend independent medical examinations (IMEs) which were scheduled by Crossland Medical Services, P.C. (Crossland). Plaintiffs cross-moved for summary judgment. The Civil Court denied defendant’s motion and granted plaintiffs’ cross motion, finding that defendant had failed to establish the mailing of the IME scheduling letters. The instant appeal by defendant ensued.

The affidavits submitted by defendant in support of its motion failed to establish that the IME scheduling letters had been mailed in accordance with Crossland’s standard office practices and procedures or that the affiants had personally mailed the scheduling letters (see St. Vincent’s [*2]Hosp. of Richmond v Government Empls. Ins. Co., 50 AD3d 1123 [2008]; Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679 [2001]; Delta Diagnostic Radiology, P.C. v Chubb Group of Ins., 17 Misc 3d 16 [App Term, 2d & 11th Jud Dists 2007]). Accordingly, the Civil Court properly denied defendant’s motion for summary judgment.

However, plaintiffs were not entitled to summary judgment upon their cross motion because the affidavit submitted by plaintiffs’ supervisor of medical billing pertained to the claims at issue in another action, rather than the claims at issue in this action (see Art of Healing Medicine, P.C. v Travelers Home & Mar. Ins. Co., 55 AD3d 644 [2008]; Dan Med., P.C. v New York Cent. Mut. Fire Ins. Co., 14 Misc 3d 44 [App Term, 2d & 11th Jud Dists 2006]). As a result, plaintiffs did not establish their prima facie case (see Zuckerman v City of New York, 49 NY2d 557 [1980]).

Steinhardt, J.P., Pesce and Weston, JJ., concur.
Decision Date: February 14, 2011

[*1]

Supreme Court, Appellate Term, Second Department, February 8, 2011

APPEARANCES OF COUNSEL

Gary Tsirelman, P.C., Brooklyn (Max Velerio of counsel), for appellant. Jaffe & Koumourdas, LLP, New York City (Jean H. Kang of counsel), for respondent.

{**31 Misc 3d at 22} OPINION OF THE COURT

Memorandum.

Ordered that the order is affirmed, without costs.

In this action by a provider to recover assigned first-party no-fault benefits, the Civil Court denied plaintiff’s motion for summary judgment, finding that plaintiff had failed to establish its prima facie entitlement to that relief. We agree.

A no-fault provider establishes its prima facie entitlement to summary judgment by proof of the submission to the defendant of a statutory claim form, setting forth the fact and the amount of the loss sustained, and that the defendant had failed to either pay or deny the claim within the requisite 30-day period (see Insurance Law § 5106 [a]; New York & Presbyt. Hosp. v Allstate Ins. Co., 31 AD3d 512 [2006]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2004]; see also Westchester Med. Ctr. v Nationwide Mut. Ins. Co., 78 AD3d 1168 [2010]). In order for the claim forms to constitute prima facie proof of the fact and the amount of the loss sustained, the affidavit submitted by the plaintiff in support of its motion for summary judgment must lay a sufficient foundation to establish that the claim forms annexed thereto are admissible under the business records exception to the hearsay rule, which allows a document to be used as proof of the “act, transaction, occurrence or event” recorded in the document (CPLR 4518 [a]; see Art of Healing Medicine, P.C. v Travelers Home & Mar. Ins. [*2]Co., 55 AD3d 644 [2008]; Dan{**31 Misc 3d at 23} Med., P.C. v New York Cent. Mut. Fire Ins. Co., 14 Misc 3d 44 [App Term, 2d & 11th Jud Dists 2006]).

In the case at bar, plaintiff sought to lay the requisite foundation for the admission of its claim forms by submitting an affidavit executed by the owner of its third-party billing company, who alleged that plaintiff had provided its medical records to his billing company, that his company had used those records to create the claim forms at issue and that his company had then mailed those claim forms to defendant. The affiant further asserted that, pursuant to the business relationship existing between his company and his no-fault provider clients, those clients have a business duty to provide the medical records. He alleged, moreover, that the medical records his company relies on are “created near the time in which the events therein described occurred; they are created in the course of the providers’ business; and it is the providers’ business to create these documents as evidence of the services they have rendered.”

In Matter of Carothers v GEICO Indem. Co. (79 AD3d 864 [2d Dept 2010]), where a third-party billing company merely printed no-fault claim forms, which had been created by the healthcare provider, and mailed them to the insurance company, the Appellate Division held that the testimony of an employee of the billing company failed to provide the requisite foundation to demonstrate that the claim forms should be considered under the business records exception to the{**31 Misc 3d at 24} hearsay rule, since the billing company did not create the records and there was no showing that its employee was familiar with the plaintiff’s record-keeping procedures. In this case, unlike in Matter of Carothers (id.), the billing company demonstrated that it had actually created the claim forms at issue. However, the analysis cannot end there because here the billing company used the information contained in the medical records furnished by plaintiff to create the claim forms. As noted by the Court of Appeals, in order for a document, such as the claim forms that are the subject of this lawsuit, to be considered for the truth of the assertions contained therein, “each participant in the chain producing the record, from the initial declarant to the final entrant, must be acting within the course of regular business conduct or the declaration must meet the test of some other hearsay exception” (Matter of Leon RR, 48 NY2d 117, 122 [1979]).

In the case at bar, plaintiff sought to demonstrate, through an affidavit of the owner of its billing company, that its medical records met the test of the business records exception to the hearsay rule in two different ways. First, the owner of its billing company claimed that plaintiff’s medical records were made in a manner consistent with CPLR 4518 (a). However, his affidavit failed to demonstrate that he has personal knowledge of plaintiff’s practices and procedures and that he is competent to testify about those practices and procedures (see CPLR 4518 [a]; Matter of Carothers v GEICO Indem. Co., 79 AD3d 864 [2010]; see also Reiss v Roadhouse Rest., 70 AD3d 1021, 1024-1025 [2010]).

Plaintiff also sought to demonstrate, through the affidavit, that plaintiff’s medical records were incorporated into its billing company’s records and that its billing company relied upon the medical records in its regular course of business (see Matter of Carothers v GEICO Indem. Co., 79 AD3d 864 [2010]). In People v DiSalvo (284 AD2d 547 [2001]) and Plymouth Rock Fuel Corp. v Leucadia, Inc. (117 AD2d 727 [1986]), the Appellate Division allowed documents into evidence under the business records exception to the hearsay rule, even though the witness laying the foundation for their admission was a recipient of the records and did not have personal knowledge of the maker’s practices and procedures, because there was a showing of meaningful [*3]incorporation and reliance. In each of those cases, an entity sought to admit a third party’s records into evidence, pursuant to the business records exception to the hearsay rule, through the testimony of the entity’s own employee. In the case at bar, however, it was plaintiff that sought to admit its own claim forms, pursuant to the business records exception to the hearsay rule, through the testimony of an employee of its third-party biller. Further, it appears that, in DiSalvo and Plymouth Rock Fuel Corp., the third party had a business duty to report accurate information to the entity seeking to use those records. In this case, although plaintiff’s biller asserted that plaintiff had a contractual duty to provide accurate information to its billing company, plaintiff did not submit any evidence of such a duty (cf. Hochhauser v Electric Ins. Co., 46 AD3d 174 [2007]). Furthermore, in DiSalvo and Plymouth Rock Fuel Corp., the truthfulness of the documents was of paramount importance to the entities claiming to have incorporated them into their own records and to have relied upon them, because those entities relied upon the third party’s documents either to allocate waste-disposal costs or bill their clients for oil deliveries, respectively. Here, there has been no demonstration that the truthfulness or accuracy of plaintiff’s medical records has any relevance to{**31 Misc 3d at 25} whether its billing company is compensated for its services or that the information contained in plaintiff’s medical records was otherwise of paramount importance to its billing company’s business.

As we find that plaintiff failed to make the necessary showing that its billing company incorporated plaintiff’s medical records into its own and relied upon them (see Matter of Carothers v GEICO Indem. Co., 79 AD3d 864 [2010]), plaintiff’s medical records do not meet the test of the business records exception to the hearsay rule. As a result, the claim forms created by plaintiff’s biller from the medical records do not fall within the business records exception to the hearsay rule (see Matter of Leon RR, 48 NY2d 117 [1979]). Consequently, to the extent plaintiff relies on the claim forms to prove the fact and the amount of the loss sustained, plaintiff has failed to demonstrate that they are any more trustworthy than the claim forms in Matter of Carothers v GEICO Indem. Co. (79 AD3d 864 [2010]). We note that, simply because a document has not been shown to be admissible pursuant to the business records exception to the hearsay rule, so that it can be used as proof of the matter asserted therein, this does not mean that the document could not be admissible for another purpose (see Prince, Richardson on Evidence § 4-105 [Farrell 11th ed]).

Plaintiff further argues on appeal that the claim forms are inherently reliable. According to plaintiff, the trustworthiness of the subject claim forms can be established by the fact that plaintiff’s owner’s signature appears on each form. Moreover, plaintiff argues that the claim forms are prescribed by regulation, and, if fraudulently submitted, carry a sanction, making them particularly reliable and trustworthy.

While the statutory NF-3 verification of treatment forms at issue herein contain a statement setting forth the consequences for anyone who “knowingly and with intent to defraud any insurance company” files a claim, the claim forms are not sworn to by one with personal knowledge. (Furthermore, when the owner of plaintiff’s third-party billing company described in his affidavit the procedures his office uses for preparing and mailing claim forms, he did not assert that the claim forms are presented to Dr. Etienne for her signature. This incidentally raises questions about how the instant claim forms ever came to be signed in the first instance.) Finally, the fact that the claim forms are prescribed by regulation does not render them inherently [*4]trustworthy or reliable. As recognized by the Court of Appeals,{**31 Misc 3d at 26} incidents of no-fault fraud are prevalent in New York, including instances where corrupt medical clinics “generate stacks of medical bills for each passenger, detailing treatments and tests that were unnecessary or never performed” (see Matter of Medical Socy. of State of N.Y. v Serio, 100 NY2d 854, 861 [2003]).

Since the Civil Court properly determined that plaintiff failed to demonstrate its prima facie entitlement to summary judgment, the order is affirmed.

Pesce, P.J., Weston and Rios, JJ., concur.

—[*1] Joseph Henig, P.C., Bellmore, N.Y., for appellants. Jaffe & Koumourdas, LLP, New York, N.Y. (Jean H. Kang of counsel), for respondent.

In an action to recover no-fault medical payments under two insurance contracts, the plaintiffs appeal from an order of the Supreme Court, Nassau County (Galasso, J.), entered March 19, 2010, which granted the defendant’s motion pursuant to CPLR 5019 (a) to modify the amount of a judgment entered January 14, 2010, which, upon an order of the same court entered December 28, 2009, among other things, granting that branch of their motion which was for summary judgment on the first cause of action, awarded the plaintiff Mount Sinai Hospital, as assignee of Anthony Benjamin, the sum of $25,327.50.

Ordered that the order entered March 19, 2010, is reversed, on the law, with costs, and the defendant’s motion pursuant to CPLR 5019 (a) to modify the judgment is denied.

The plaintiffs moved, inter alia, for summary judgment on the first cause of action asserted by the plaintiff Mount Sinai Hospital, as assignee of Anthony Benjamin (hereinafter the hospital), to recover no-fault medical payments from the defendant Country Wide Insurance Company (hereinafter the insurer) under an insurance contract. The insurer cross-moved, inter alia, for summary judgment dismissing that cause of action. The Supreme Court, among other things, granted that branch of the plaintiffs’ motion which was for summary judgment on the first cause of action, denied that branch of the insurer’s cross motion which was for summary judgment dismissing the first cause of action, and awarded judgment to the hospital against the insurer in the sum of $14,105.50, plus statutory interest and attorney’s fees pursuant to 11 NYCRR 65-4.6. The hospital then entered judgment against the insurer in satisfaction of that claim in the total sum of $25,327.50. The judgment consisted of benefits due the hospital for services rendered in the sum of $14,105.50, interest in the sum of $9,772, an attorney’s fee in the sum of $850, and costs and disbursements in the sum of $600.

Thereafter, the insurer moved pursuant to CPLR 5019 (a) to modify the amount of the judgment, belatedly asserting that the judgment exceeded the coverage limit of the subject policy due to payments previously made under the policy to other health care providers. The Supreme Court [*2]granted the insurer’s motion, and ordered a hearing to determine the amount remaining on the policy. The plaintiffs appeal.

CPLR 5019 (a) provides a court with the discretion to correct a technical defect or a ministerial error, and may not be employed as a vehicle to alter the substantive rights of a party (see Kiker v Nassau County, 85 NY2d 879, 880-881 [1995]; Herpe v Herpe, 225 NY 323, 327 [1919]; Rotunno v Gruhill Constr. Corp., 29 AD3d 772, 773 [2006]; Haggerty v Market Basket Enters., Inc., 8 AD3d 618, 618-619 [2004]; Novak v Novak, 299 AD2d 924, 925 [2002]; Tait v Lattingtown Harbor Dev. Co., 12 AD2d 966, 967 [1961]; see also Minnesota Laundry Serv., Inc. v Mellon, 263 App Div 889, 890 [1942], affd 289 NY 749 [1942]; Fleming v Sarva, 15 Misc 3d 892, 895 [2007]; Matter of Schlossberg v Schlossberg, 62 Misc 2d 699, 701 [1970]). Here, in seeking to modify the amount of the judgment on the ground that the policy limits were nearly exhausted, the insurer was not seeking to correct a mere clerical error. Rather, it sought to change the judgment with respect to a substantive matter. As such, CPLR 5019 (a) was not the proper procedural mechanism by which to seek such modification. Although the hospital raises this issue for the first time on appeal, we may review the issue because it presents a question of law which could not have been avoided if brought to the Supreme Court’s attention at the proper juncture (see Gutierrez v State of New York, 58 AD3d 805, 807 [2009]; Dugan v Crown Broadway, LLC, 33 AD3d 656, 656 [2006]; Buywise Holding, LLC v Harris, 31 AD3d 681, 682 [2006]).

In view of the foregoing, we need not reach the plaintiffs’ remaining contentions. Mastro, J.P., Dillon, Eng and Sgroi, JJ., concur.

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd, 11th and 13th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Kings County (Noach Dear, J.), entered May 18, 2009. The order, insofar as appealed from, denied plaintiff’s motion for summary judgment.

ORDERED that the order, insofar as appealed from, is affirmed, without costs.

In this action, a provider seeks to recover assigned first-party no-fault benefits for supplies it allegedly delivered to its assignor. Insofar as is relevant to this appeal, the Civil Court denied plaintiff’s motion for summary judgment, on the ground that there was a triable issue of fact.

In response to plaintiff’s appeal, defendant argues, as it did in the Civil Court, that the affidavit submitted by plaintiff’s “sole shareholder, corporate officer and employee” in support of plaintiff’s motion for summary judgment failed to make out a prima facie case. We agree, and affirm the order appealed from on that ground.

The billing records submitted by plaintiff in support of its motion for summary judgment do not assert that the supplies at issue had been delivered to plaintiff’s assignor. Nor did plaintiff’s affiant state that he had delivered the supplies to plaintiff’s assignor. Indeed, he stated that it is his general practice to either (1) deliver his supplies directly to the eligible injured person or to (2) deliver them to the prescribing healthcare providers for subsequent delivery to the eligible injured person. He did not specify in his affidavit which method of delivery was used in this case. Accordingly, plaintiff’s moving papers failed to demonstrate its prima facie entitlement to summary judgment. [*2]

We note that the holding in Fair Price Med. Supply Corp. v Travelers Indem. Co. (10 NY3d 556 [2008]) does not impact our decision in this case because, in that case, the issue of whether the plaintiff had made out a prima facie case was not dealt with by either the Appellate Division (42 AD3d 277 [2007]) or the Court of Appeals (10 NY3d 556). The Court of Appeals held that a defense that the billed-for services or supplies were never provided is precluded if the insurer fails to timely deny the claim, and both courts limited their discussions to the preclusion issue. Here, we are asked to consider whether plaintiff’s moving papers made out a prima facie case in the first instance so as to even shift the burden to defendant to raise a non-precluded defense (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]), and we conclude that they did not.

Accordingly, plaintiff’s motion for summary judgment was properly denied, albeit on a different ground than that relied upon by the Civil Court.

Rios, J.P., Pesce and Golia, JJ., concur.
Decision Date: January 28, 2011

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd, 11th and 13th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Queens County (Diane A. Lebedeff, J.), entered July 17, 2009, deemed from a judgment of the same court entered August 18, 2009 (see CPLR 5501 [c]). The judgment, entered pursuant to the July 17, 2009 order granting defendant’s motion for summary judgment, dismissed the complaint.

ORDERED that the judgment is affirmed, without costs.

In this action by a provider to recover assigned first-party no-fault benefits, defendant moved for summary judgment dismissing the complaint on the ground that it had properly reimbursed plaintiff for services rendered by its licensed acupuncturist to plaintiff’s assignor. Plaintiff opposed the motion. The Civil Court granted defendant’s motion and dismissed the complaint. This appeal by plaintiff ensued. A judgment was subsequently entered, from which the appeal is deemed to be taken (see CPLR 5501 [c]).

It was proper for defendant to use the workers’ compensation fee schedule for acupuncture services performed by chiropractors to determine the amount which plaintiff was entitled to receive for services rendered by a licensed acupuncturist (see AVA Acupuncture, P.C. v GEICO Gen. Ins. Co., 17 Misc 3d 41 [App Term, 2d & 11th Jud Dists 2007]; Great Wall Acupuncture v GEICO Gen. Ins. Co., 16 Misc 3d 23 [App Term, 2d & 11th Jud Dists 2007]). As defendant’s motion for summary judgment dismissing the complaint was properly granted, the judgment is affirmed.

Steinhardt, J.P., Pesce and Weston, JJ., concur.
Decision Date: January 26, 2011

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 9th and 10th JUDICIAL DISTRICTS

Appeal from an order of the District Court of Nassau County, Third District (Michael A. Ciaffa, J.), dated September 21, 2009. The order denied plaintiffs’ motion to strike defendant’s demand for a trial de novo.

ORDERED that the order is affirmed, without costs.

In this action by providers to recover assigned first-party no-fault benefits, the parties stipulated, among other matters, to plaintiffs’ prima facie case and defendant’s timely denial of the claim. The parties participated in mandatory arbitration (see Rules of the Chief Judge [22 NYCRR] part 28), which resulted in a ruling in plaintiffs’ favor, whereupon defendant served and filed a demand for a trial de novo (Rules of the Chief Judge [22 NYCRR] § 28.12 [a]). Plaintiffs moved to strike the demand, arguing that defendant’s limited participation in the arbitration, which consisted of defendant’s attorney’s appearance and his offer of various documents which were excluded upon plaintiffs’ hearsay objection, amounted to a default, barring defendant from demanding a trial de novo. Defendant opposed, and the District Court denied the motion, finding that, on the facts, defendant had not defaulted. Plaintiffs appeal and we affirm.

The Rules of the Chief Judge provide that a demand for a trial de novo “may be made by any party not in default” (Rules of the Chief Judge [22 NYCRR] § 28.12 [a]). A party’s failure to appear for an arbitration hearing constitutes a default (Rules of the Chief Judge [22 NYCRR] § 28.7 [a]), as does a party’s appearance by counsel who otherwise “refus[es] to participate in the hearing” (Bitzko v Gamache, 168 AD2d 888 [1990]; see also Finamore v Huntington [*2]Rehabilitation Assn., 150 AD2d 426 [1989]). However, where, as here, a party’s attorney appears at the arbitration, participates in the hearing and submits evidence which, if admissible, would have tended to rebut the plaintiff’s case, there is no default within the contemplation of the Rules of the Chief Judge merely because the arbitrator ruled the proof inadmissible (see Tripp v Reitman Blacktop, 188 Misc 2d 317 [App Term, 9th & 10th Jud Dists 2001]; San-Dar Assoc. v Adams, 167 Misc 2d 727 [App Term, 1st Dept 1996]).

Accordingly, the District Court properly denied plaintiffs’ motion to strike defendant’s demand for a trial de novo.

Nicolai, P.J., Tanenbaum and LaCava, JJ., concur.
Decision Date: January 18, 2011

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 9th and 10th JUDICIAL DISTRICTS

Appeal from an order of the District Court of Nassau County, Third District (Michael A. Ciaffa, J.), dated September 8, 2009. The order denied plaintiffs’ motion to strike defendant’s demand for a trial de novo.

ORDERED that the order is affirmed, without costs.

In this action by providers to recover assigned first-party no-fault benefits, the parties stipulated, among other matters, to plaintiffs’ prima facie case and defendant’s timely denial of the claim. The parties participated in mandatory arbitration (see Rules of the Chief Judge [22 NYCRR] part 28), which resulted in a ruling in plaintiffs’ favor, whereupon defendant served and filed a demand for a trial de novo (Rules of the Chief Judge [22 NYCRR] § 28.12 [a]). Plaintiffs moved to strike the demand, arguing that defendant’s limited participation in the arbitration, which consisted of defendant’s attorney’s appearance and the offer of peer review reports, to which the arbitrator sustained plaintiffs’ objection on hearsay grounds, amounted to a default, barring defendant from demanding a trial de novo. Defendant opposed, and the District Court denied the motion, finding that, on the facts, defendant had not defaulted. Plaintiffs appeal and we affirm.

The Rules of the Chief Judge provide that a demand for a trial de novo “may be made by any party not in default” (Rules of the Chief Judge [22 NYCRR] § 28.12 [a]). A party’s failure to appear for an arbitration hearing constitutes a default (Rules of the Chief Judge [22 NYCRR] § 28.7 [a]), as does a party’s appearance by counsel who otherwise “refus[es] to participate in the hearing” (Bitzko v Gamache, 168 AD2d 888 [1990]; see also Finamore v Huntington Rehabilitation Assn., 150 AD2d 426 [1989]). However, where, as here, a party’s attorney [*2]appears at the arbitration, participates in the hearing and submits evidence which, if admissible, would have tended to rebut the plaintiff’s case, there is no default within the contemplation of the Rules of the Chief Judge merely because the arbitrator ruled the proof inadmissible (see Tripp v Reitman Blacktop, 188 Misc 2d 317 [App Term, 9th & 10th Jud Dists 2001]; San-Dar Assoc. v Adams, 167 Misc 2d 727 [App Term, 1st Dept 1996]).

Accordingly, the District Court properly denied plaintiffs’ motion to strike defendant’s demand for a trial de novo.

Nicolai, P.J., Tanenbaum and LaCava, JJ., concur.
Decision Date: January 18, 2011

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 9th and 10th JUDICIAL DISTRICTS

Appeal from an order of the District Court of Nassau County, Third District (Fred J. Hirsh, J.), dated September 8, 2009. The order denied plaintiff’s motion to strike defendant’s demand for a trial de novo.

ORDERED that the order is affirmed, without costs.

In this action by a provider to recover assigned first-party no-fault benefits, the parties stipulated, among other matters, to plaintiff’s prima facie case, defendant’s timely denial of the claim, the physician-peer reviewer’s medical qualifications, and the admissibility of the documents on which the reviewer relied. The parties participated in mandatory arbitration (see Rules of the Chief Judge [22 NYCRR] part 28), which resulted in a ruling in plaintiff’s favor, whereupon defendant served and filed a demand for a trial de novo (Rules of the Chief Judge [22 NYCRR] § 28.12 [a]). Plaintiff moved to strike the demand, arguing that defendant’s limited participation in the arbitration, which consisted of defendant’s attorney’s appearance and his offer of various documents, which were excluded upon plaintiff’s hearsay objection, amounted to a default, barring defendant from demanding a trial de novo. Defendant opposed, and the District Court denied the motion, finding that, on the facts, defendant had not defaulted. Plaintiff appeals and we affirm.

The Rules of the Chief Judge provide that a demand for a trial de novo “may be made by any party not in default” (Rules of the Chief Judge [22 NYCRR] § 28.12 [a]). A party’s failure to appear for an arbitration hearing constitutes a default (Rules of the Chief Judge [22 NYCRR] § 28.7 [a]), as does a party’s appearance by counsel who otherwise “refus[es] to participate in the hearing” (Bitzko v Gamache, 168 AD2d 888 [1990]; see also Finamore v Huntington [*2]Rehabilitation Assn., 150 AD2d 426 [1989]). However, where, as here, a party’s attorney appears at the arbitration, participates in the hearing and submits evidence which, if admissible, would have tended to rebut the plaintiff’s case, there is no default within the contemplation of the Rules of the Chief Judge merely because the arbitrator ruled the proof inadmissible (see Tripp v Reitman Blacktop, 188 Misc 2d 317 [App Term, 9th & 10th Jud Dists 2001]; San-Dar Assoc. v Adams, 167 Misc 2d 727 [App Term, 1st Dept 1996]).

Accordingly, the District Court properly denied plaintiff’s motion to strike defendant’s demand for a trial de novo.

Nicolai, P.J., Tanenbaum and LaCava, JJ., concur.
Decision Date: January 18, 2011

—[*1] McDonnell & Adels, PLLC, Garden City, N.Y. (James J. Cleary, Jr., and Jannine Gordineer of counsel), for appellant.

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

In an action to recover no-fault medical payments under certain contracts of insurance, the defendant appeals from an order of the Supreme Court, Nassau County (Lally, J.), entered December 21, 2009, which denied its motion to vacate a judgment of the same court entered March 12, 2009, which, upon its failure to appear or answer the complaint, was in favor of the plaintiff and against it in the principal sum of $29,103.60, and to compel the plaintiff to accept a late answer pursuant to CPLR 3012 (d), and held in abeyance and referred for a hearing the plaintiff’s motion to hold it in contempt for failure to comply with an information subpoena dated March 30, 2009, and its cross motion to quash the information subpoena.

Ordered that the appeal from so much of the order entered December 21, 2009, as held in abeyance and referred for a hearing the plaintiff’s motion to hold the defendant in contempt for failure to comply with an information subpoena dated March 30, 2009, and the defendant’s cross motion to quash the information subpoena is dismissed; and it is further,

Ordered that the order entered December 21, 2009, is reversed insofar as reviewed, on the facts and in the exercise of discretion, the defendant’s motion to vacate the judgment entered March 12, 2009, and to compel the plaintiff to accept a late answer pursuant to CPLR 3012 (d) is granted, the judgment entered March 12, 2009, is vacated, and the answer annexed to the motion papers is deemed timely served upon the plaintiff; and it is further,

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

The order entered December 21, 2009, did not decide the plaintiff’s motion to hold the defendant in contempt for failure to comply with an information subpoena dated March 30, 2009, or the defendant’s cross motion to quash the information subpoena, but instead, held that motion and cross motion in abeyance and referred them for a hearing. Accordingly, no appeal lies as of right from that portion of the order (see CPLR 5701 [a] [2] [v]; Evan S. v Joseph R., 70 AD3d 668 [2010]; Quigley v Coco’s Water CafÉ, Inc., 43 AD3d 1132 [2007]), and we decline to grant leave.

A defendant seeking to vacate a judgment entered on default must demonstrate a [*2]reasonable excuse for its delay in appearing or answering the complaint and a potentially meritorious defense to the action (see CPLR 5015 [a] [1]; Eugene Di Lorenzo, Inc. v A.C. Dutton Lbr. Co., 67 NY2d 138, 141 [1986]; Taddeo-Amendola v 970 Assets, LLC, 72 AD3d 677 [2010]). The defendant established through an employee’s affidavit, which attested to a clerical oversight regarding the delay in forwarding the summons and complaint to its attorney, a reasonable excuse for the short period of time following service of the complaint in which it failed either to appear or answer the complaint (see Perez v Travco Ins. Co., 44 AD3d 738 [2007]; Sound Shore Med. Ctr. v Lumbermens Mut. Cas. Co., 31 AD3d 743 [2006]). Furthermore, the defendant demonstrated that it has a potentially meritorious defense to the action. Accordingly, the Supreme Court improvidently exercised its discretion in denying the defendant’s motion to vacate its default and to compel acceptance of its answer in light of the strong public policy that actions be resolved on their merits, the brief delay involved, the defendant’s lack of willfulness, and the absence of prejudice to the plaintiff (see Perez v Travco Ins. Co., 44 AD3d 738 [2007]; New York & Presbyt. Hosp. v American Home Assur. Co., 28 AD3d 442 [2006]). Dillon, J.P., Balkin, Leventhal and Chambers, JJ., concur.

Motion by the respondent on an appeal from an order of the Supreme Court, Nassau County, entered December 21, 2009, to dismiss so much of the appeal as held in abeyance and referred for a hearing the respondent’s motion to hold the appellant in contempt for failure to comply with an information subpoena dated March 30, 2009, and the appellant’s cross motion to quash the information subpoena, on the ground that said portion of the order is not appealable as of right. By decision and order on motion of this Court dated September 1, 2010, inter alia, the motion was referred to the panel of Justices hearing the appeal for determination upon the argument or submission thereof.

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

Ordered that the motion is denied as academic in light of our determination on the appeal. Dillon, J.P., Balkin, Leventhal and Chambers, JJ., concur.

—[*1] Freiberg & Peck, LLP, New York, N.Y. (Rachel N. Clark and Yilo K. Kang of counsel), for appellants.

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

In an action to recover assigned first-party no-fault benefits for medical services rendered, the defendants appeal from an order of the Supreme Court, Nassau County (Palmieri, J.), entered October 15, 2009, which granted the motion of the plaintiff New York and Presbyterian Hospital for summary judgment on its second cause of action, and denied the defendants’ cross motion for summary judgment dismissing the second cause of action.

Ordered that the order is affirmed, with costs.

The plaintiff New York and Presbyterian Hospital (hereinafter the plaintiff) established, prima facie, its entitlement to judgment as a matter of law with respect to the second cause of action by demonstrating that the necessary billing documents were mailed to and received by the defendant and that payment of no-fault benefits was overdue (see Insurance Law § 5106 [a]; 11 NYCRR 65-3.8 [a] [1]; Westchester Med. Ctr. v Progressive Cas. Ins. Co., 51 AD3d 1014, 1017 [2008]; New York & Presbyt. Hosp. v Countrywide Ins. Co., 44 AD3d 729 [2007]; Westchester Med. Ctr. v Liberty Mut. Ins. Co., 40 AD3d 981, 981-982 [2007]).

In opposition to that prima facie showing, the defendants failed to raise a triable issue of fact as to whether they timely denied the claim. The evidence submitted by the plaintiff showed that the no-fault billing claim form was received by the defendants on May 15, 2009. The defendants submitted, inter alia, copies of letters that they sent to their insured dated April 27, 2009, and May 28, 2009, respectively, as well as copies of letters that they sent to the plaintiff on May 14, 2009, and June 15, 2009, respectively, seeking additional verification. However, the April 27, 2009, and May 14, 2009, letters were sent prior to the defendants’ receipt of the no-fault billing form, and the remaining letters were sent more than 10 days after the defendants’ receipt of that form. Consequently, those letters failed to toll the period in which the defendants were required to pay or deny the claim (see 11 NYCRR 65-3.5). In this regard, although the defendants stated, in their motion for summary judgment, that they first received the no-fault bill on May 7, 2009, or on May 9, 2009, the defendant did not establish that fact by submitting a copy of the bill [*2]received on one of those dates. Therefore, the defendants failed to submit evidence raising a triable issue of fact as to whether they timely denied the claim after issuing timely requests for additional verification (see 11 NYCRR 65-3.5; Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co., 9 NY3d 312, 317 [2007]).

Moreover, although the defendants contend that they submitted evidence showing that the plaintiff’s assignor misrepresented his state of residence in connection with the issuance of the subject insurance policy, the defendants are precluded from asserting that defense, as a result of their untimely denial of the claim (see Fair Price Med. Supply Corp. v Travelers Indem. Co., 10 NY3d 556, 564 [2008]; Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co., 9 NY3d at 319; Westchester Med. Ctr. v Lincoln Gen. Ins. Co., 60 AD3d 1045, 1046-1047 [2009]).

Although the defendants contend, on appeal, that North Carolina law should apply to this action, and that New York law does not preclude them from denying coverage, they did not raise that specific argument before the Supreme Court. Consequently, that contention is not properly before this Court (see Boudreau-Grillo v Ramirez, 74 AD3d 1265, 1268 [2010]; Matter of Panetta v Carroll, 62 AD3d 1010 [2009]). Dickerson, J.P., Hall, Austin and Cohen, JJ., concur.