SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd and 11th JUDICIAL DISTRICTS

Appeal by plaintiffs, as limited by their brief, from so much of an order of the Civil Court, Kings County (E. Prus, J.), entered April 27, 2004, as denied their motion for partial summary judgment without prejudice to renew upon submission of proper papers.

Order unanimously affirmed without costs.

In an action to recover first-party no-fault benefits for medical services rendered to an assignor, the plaintiff establishes a prima facie entitlement to summary judgment by offering proof that it submitted claims which set forth the fact and the amount of the loss sustained, and that payment of no-fault benefits was overdue (see Insurance Law § 5106 [a]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2004]; Amaze Med. Supply v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U] [App Term, 2d & 11th Jud Dists]). By failing to append the necessary claim forms to their motion papers, plaintiffs did not establish their prima facie case, and the court below appropriately denied their motion for partial summary judgment with leave to renew upon submission of proper papers.
Decision Date: March 31, 2005

[*1]

Supreme Court, Appellate Term, Second Department, March 22, 2005

APPEARANCES OF COUNSEL

Laleh Hawa, Great Neck, for appellant. Amos Weinberg, Great Neck, for respondents.

{**7 Misc 3d at 87} OPINION OF THE COURT

Memorandum.

Order unanimously affirmed without costs.

Plaintiffs commenced the instant action seeking to recover first-party no-fault benefits for medical services rendered to their assignors, Thomas Nelson, the operator of a motor vehicle rented from defendant’s insured, NYRAC, Inc., doing business as Budget-Rent-A-Car, and Patrice Nelson, a passenger in the same vehicle, both of whom were allegedly injured in an automobile accident on April 11, 2002. Plaintiffs thereafter moved for summary judgment. In support of their motion, plaintiffs submitted an affidavit in which Janet Safir stated that she was the “practice and billing manager” of “plaintiff,” even though there were three distinct plaintiffs in this matter. The affidavit did not indicate for which “plaintiff” Safir was the billing manager and this court cannot assume that she was acting on behalf of one particular plaintiff or on behalf of all plaintiffs. Consequently, the affidavit is insufficient to establish that plaintiffs provided defendant with properly completed forms (see A.B. Med. Servs. PLLC v State Farm Mut. Auto. Ins. Co., 4 Misc 3d 83 [App Term, 9th & 10th Jud Dists 2004]; A.B. Med. Servs. PLLC v Travelers Prop. Cas. Corp., 4 Misc 3d 135[A], 2004 NY Slip Op 50779[U] [App Term, 2d & 11th Jud Dists 2004]). Accordingly, plaintiffs failed to make a prima facie showing of entitlement to judgment as a matter law. Thus, we find that their motion was properly denied, albeit on grounds other than those relied upon by the court below.{**7 Misc 3d at 88}

Contrary to defendant’s contention, denial of its cross motion for summary judgment dismissing the complaint was proper. In its supporting papers, defendant alleged that the examination under oath of plaintiffs’ assignor, Thomas Nelson, indicated that the rental vehicle was used as a “temporary substitute” vehicle due to faulty brakes in his own vehicle which was insured by First Beacon Insurance at the time of the accident. Defendant argued that First Beacon Insurance was thereby the primary insurer for the rental vehicle, and that plaintiffs were not entitled to recover no-fault benefits under the Personal Injury Protection Endorsement in the automobile liability policy issued by defendant to NYRAC, Inc., doing business as Budget-Rent-A-Car. The court below denied defendant’s cross motion on the ground that the parties did not provide the insurance policy issued by First Beacon Insurance to plaintiffs’ assignor, Thomas Nelson, in the absence of which it could not be determined whether the policy included a “temporary substitute” clause, “thereby rendering the defendant not responsible for said claim.” We affirm the order insofar as it denied defendant’s cross motion, although not for the reasons set forth by the court below.

Insurance Law § 5105 (b) provides that the mandatory arbitration procedures promulgated or approved by the Superintendent of Insurance for claims arising from section 5105 (a) “shall also be utilized to resolve all disputes arising between insurers concerning their responsibility for the payment of first party benefits” (Matter of Pacific Ins. Co. v State Farm Mut. Auto. Ins. Co., 150 AD2d 455, 456 [1989]). The applicable insurance regulations provide in pertinent part that “an applicant who is an operator or occupant of an insured motor vehicle . . . who sustains a personal injury arising out of the use or operation in New York State of such motor vehicle, shall institute the claim against the insurer of such motor vehicle” (11 NYCRR {**7 Misc 3d at 89}65-3.12 [a] [1]). The regulations further provide:

“If a dispute regarding priority of payment arises among insurers who otherwise are liable for the payment of first-party benefits, then the first insurer to whom notice of claim is given pursuant to section 65-3.3 or 65-3.4 (a) of this Subpart, by or on behalf of an eligible injured person, shall be [*2]responsible for payment to such person. Any such dispute shall be resolved in accordance with the arbitration procedures established pursuant to section 5105 of the Insurance Law and section 65-4.11 of this Part” (11 NYCRR 65-3.12 [b]).

The mandatory arbitration provisions of the insurance regulations expressly set forth that “any controversy between insurers involving the responsibility or the obligation to pay first-party benefits (i.e., priority or payment or sources of payment as provided in section 65-3.12 of this Part) is not considered a coverage question and must be submitted to mandatory arbitration under this section” (11 NYCRR 65-4.11 [a] [6]).

Pursuant to the foregoing authority, it is clear that plaintiffs were entitled to seek recovery of no-fault benefits from defendant under the Personal Injury Protection Endorsement of the defendant’s insurance policy issued to its insured (11 NYCRR 65-3.12 [a] [1]), and that as the first insurer to whom notice of claim was given, defendant was responsible for payment of no-fault benefits (11 NYCRR 65-3.12 [b]). Defendant’s argument that First Beacon Insurance is the primary insurer is no defense to this action and, in any event, raises the disputed issue of priority of payments as between insurers which must be submitted for resolution by mandatory arbitration (see Matter of Pacific Ins. Co., 150 AD2d at 456; Insurance Law § 5105 [b]; 11 NYCRR 65-4.11 [a] [6]). The court below was accordingly without jurisdiction to adjudicate the question of “priority of payments” raised by defendant (see New York Cent. Mut. Fire Ins. Co. v Amica Mut. Ins. Co., 162 AD2d 1009 [1990]; State Farm Mut. Auto. Ins. Co. v Nationwide Mut. Ins. Co., 150 AD2d 976 [1989]; Matter of Pacific Ins. Co. v State Farm Mut. Auto. Ins. Co., 150 AD2d 455 [1989], supra; contra Damadian MRI in Garden City v Progressive Cas. Ins. Co., 196 Misc 2d 245 [Civ Ct, Queens County 2003]). In view of the foregoing, we do not adjudicate the issue of priority of payments between defendant and First Beacon Insurance. We note, however, in passing, that as between a no-fault insurer of a rental vehicle and a no-fault insurer of the nonowner renter, the primary source of coverage for no-fault benefits is the no-fault insurer of the rental vehicle (see Matter of Avis Rent-A-Car Sys., Inc. v GE Auto & Home Assur., 7 AD3d 704 [2004]; Matter of Sea Ins. Co. [Northbrook Prop. & Cas. Ins. Co.], 166 AD2d 327 [1990]; see also Lancer Ins. Co. v Republic Franklin Ins. Co., 304 AD2d 794 [2003]).

McCabe, P.J., Angiolillo and Covello, JJ., concur.

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In an action to recover no-fault insurance medical payments, the defendant appeals from an order of the Supreme Court, Nassau County (Martin, J.), dated December 19, 2003, which granted the plaintiff’s motion for summary judgment and denied its cross motion for summary judgment dismissing the complaint.

Ordered that the order is affirmed, with costs.

The plaintiff made a prima facie showing of entitlement to judgment as a matter of law by submitting evidentiary proof that the prescribed statutory billing forms were mailed and received, and that payment of no-fault benefits was overdue (see Insurance Law § 5106 [a]; 11 NYCRR 65.15 [g] [3]; Alvarez v Prospect Hosp., 68 NY2d 320, 325 [1986]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2004]). In opposition, the defendant failed to raise a triable issue of fact (see Zuckerman v City of New York, 49 NY2d 557, 562 [1980]).

The defendant failed to submit a proper affidavit of service to establish that the denial of claim form was in fact mailed to the plaintiff (see Hospital for Joint Diseases v Nationwide Mut. Ins. Co., 284 AD2d 374, 375 [2001]; cf. St. Clare’s Hosp. v Allcity Ins. Co., 201 AD2d 718, 719 [1994]). Moreover, even if the defendant timely issued the denial of claim form within 30 days of its receipt of the plaintiff’s medical records, “[a] timely denial alone does not avoid preclusion where said denial is factually insufficient, conclusory, vague or otherwise involves a defense which has no merit as a matter of law” (Amaze Med. Supply v Allstate Ins. Co., 3 Misc 3d 43, 44 [2004]; see Nyack Hosp. v [*2]State Farm Mut. Auto. Ins. Co., 11 AD3d 664, 665 [2004]). A proper denial of claim must include the information called for in the prescribed denial of claim form (see 11 NYCRR 65-3.4 [c] [11]; Nyack Hosp. v State Farm Mut. Auto. Ins. Co., supra at 664). The denial of claim form issued by the defendant in the case at bar, even if timely, was fatally defective in that it omitted numerous items of requested information, and thus was incomplete (see 11 NYCRR 65-3.4 [c] [11]; Nyack Hosp. v State Farm Mut. Auto. Ins. Co., supra at 665; Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 226 AD2d 613, 614 [1996]). Moreover, the denial of claim form incorrectly listed the injured party, John Watson, as the provider of the health services.

The defendant’s failure to object to the adequacy of the plaintiff’s claim forms within 10 days of receipt constituted a waiver of any defenses based thereon, including the alleged lack of a valid assignment of benefits (see 11 NYCRR 65.15 [d]; New York Hosp. Med. Ctr. of Queens v AIU Ins. Co., 8 AD3d 456, 457 [2004]; New York & Presbyt. Hosp. v American Tr. Ins. Co., 287 AD2d 699, 701 [2001]; Mount Sinai Hosp. v Triboro Coach, 263 AD2d 11, 17 [1999]; Presbyterian Hosp. in City of N.Y. v Aetna Cas. & Sur. Co., 233 AD2d 433 [1996]).

The defendant’s remaining contentions either are unpreserved for appellate review or without merit. Schmidt, J.P., Krausman, Crane and Fisher, JJ., concur.

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Motion by the Superintendent of the New York State Insurance Department for leave to reargue an appeal from an order of the Supreme Court, Kings County, dated October 17, 2002, which was determined by decision and order of this Court dated February 2, 2004, and in effect, for clarification of the decision and order of this Court dated February 2, 2004 [4 AD3d 355].

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

Ordered that the branch of the motion which is, in effect, for clarification of the decision and order of this Court dated February 2, 2004, is granted, the motion is otherwise denied, the decision and order of this Court dated February 2, 2004, in the above-entitled case is recalled and vacated, and the following decision and order is substituted therefor:

In a proceeding pursuant to CPLR article 75 to permanently stay arbitration of a claim for uninsured motorist benefits, the petitioner appeals from an order of the Supreme Court, Kings County (Schneier, J.), dated October 17, 2002, which denied the petition and dismissed the proceeding.

Ordered that the order is reversed, on the law, without costs or disbursements, and the matter is remitted to the Supreme Court, Kings County, for further proceedings consistent [*2]herewith; and it is further,

Ordered that the petitioner shall serve a supplemental notice of petition (see CPLR 305 [a]) and amended petition (see CPLR 3025 [b]) upon the Superintendent of the New York State Insurance Department, in his capacity as Administrator of the New York Public Motor Vehicle Liability Security Fund, joining him as an additional respondent to the proceeding within 30 days after service upon him of a copy of this decision and order.

In July 1998 the respondent, Neville Hamilton, allegedly was injured in a motor vehicle accident involving the proposed additional respondent Jean R. Lazard. At the time, Hamilton was insured by the petitioner, Eagle Insurance Company (hereinafter Eagle). Hamilton’s policy with Eagle provided compulsory uninsured motorist coverage (hereinafter UM coverage) (see Insurance Law § 3420 [f] [1]). However, Hamilton did not purchase supplemental uninsured motorist coverage (hereinafter SUM coverage) from Eagle (see Insurance Law § 3420 [f] [2]; 11 NYCRR 60-2.3). Lazard was insured by the proposed additional respondent Reliance National Indemnity Company (hereinafter Reliance), a Pennsylvania company authorized to sell insurance in New York. After commencing an action against Lazard, Hamilton learned that Lazard’s insurer, Reliance, had been declared insolvent, and its New York assets were in receivership and were being liquidated by the Superintendent of the New York State Insurance Department (hereinafter the Superintendent) pursuant to Insurance Law article 74. Accordingly, Hamilton sent a letter to Reliance via the Superintendent requesting that it appear in the action on behalf of Lazard. In response, Hamilton was sent a copy of a letter sent to Lazard by the Superintendent stating that, although Hamilton’s claim against Lazard was “covered by the New York Public Motor Vehicle Liability Security Fund [hereinafter the PMV Fund] . . . [a]t this time, the PMV Fund is unable to provide either a defense to or indemnification of this claim insofar as the PMV Fund is financially strained.” Thereafter, Hamilton made a demand upon his own insurance company, Eagle, to arbitrate a claim for uninsured motorist benefits pursuant to his policy with Eagle.

Eagle commenced this proceeding for a permanent stay of arbitration, arguing that the record revealed that Lazard’s vehicle was not uninsured at the time of the accident, but rather, was insured by Reliance. In opposition, Hamilton argued that Reliance’s insolvency triggered UM benefits, relying on Insurance Law § 3420 (f) (2) and Regulation 35-D, specifically 11 NYCRR 60-2.3 (f). In reply, Eagle argued that Insurance Law § 3420 (f) (2) and Regulation 35-D were not applicable, as they applied to SUM coverage only, which Hamilton did not purchase. Rather, Eagle asserted, the UM coverage provided to Hamilton was governed by Insurance Law § 3420 (f) (1), which was triggered, inter alia, when “the insurer disclaims liability or denies coverage.” Here, Eagle argued, Reliance neither disclaimed liability nor denied coverage, but rather was insolvent, which did not trigger UM coverage. The Supreme Court, finding that the Lazard vehicle qualified as an uninsured vehicle for purposes of Insurance Law § 3420 (f) (1), denied a stay of arbitration. We reverse and remit the matter for further proceedings.

The issues raised on this appeal implicate the interplay among various statutes, regulations, and case law related to UM coverage. Insurance Law § 3420 (f) (1) mandates that all policies issued or delivered in this state insuring against loss for bodily injury or death arising from a motor vehicle accident must contain a provision providing for UM coverage. Such compulsory UM coverage is triggered, inter alia, where an insured is entitled to recover damages from an insured motor vehicle but “the insurer disclaims liability or denies coverage.” Insurance Law § 3420 (f) (2) requires an insurer to provide, at the option of the insured, the right to purchase supplementary SUM [*3]coverage. The regulations promulgated by the Superintendent concerning SUM coverage, generally referred to as Regulation 35-D, provide that such coverage is triggered, inter alia, by the “insolvency” of the alleged tortfeasor’s insurer (see 11 NYCRR 60.23 [f] [c] [3] [iii]). Since 1958 the Legislature has also provided for a fund, currently known as the PMV Fund, pursuant to article 76 of the Insurance Law. The PMV Fund provides coverage for, inter alia, allowed claims of injured parties that remain unpaid, in whole or in part, due to the insolvency of an insurer (see Insurance Law § 7604). A claim to the fund is made with the Superintendent pursuant to article 74 of the Insurance Law (see Insurance Law art 74; see also Insurance Law §§ 7607, 7608).

In 1977, before the promulgation of Regulation 35-D (which concerns SUM coverage), the Court of Appeals decided State-Wide Ins. Co. v Curry (43 NY2d 298 [1977]). In State-Wide, the appellant Virginia Curry was injured in a motor vehicle accident. After the accident, the insurer of the alleged tortfeasor’s vehicle was declared insolvent and placed in liquidation. Curry proceeded against her own insurer, State-Wide Insurance Co. (hereinafter State-Wide), seeking UM coverage. State-Wide argued that Curry’s remedy was against the PMV Fund. Curry argued that the insolvency of the tortfeasor’s insurer provided her with option of pursuing either the PMV Fund or State-Wide. The Court of Appeals held that, on the facts presented, the insolvency of the alleged tortfeasor’s insurer did not provide Curry with such an option. Rather, the Court held, the statutory coverage mandated by then Insurance Law § 167 (2-a) (currently Insurance Law § 3420 [f] [1]—i.e., UM coverage) “presupposes that no other liability coverage exists to compensate innocent victims of motor vehicle accidents” (id. at 302). In the case before it, the Court noted, there was such other coverage, i.e., the PMV Fund. Thus, the Court held, “there [was] no need to protect such injured person under the Indemnification Endorsement [UM coverage], since compensation is otherwise available” (id.; see also Matter of Union Indem. Ins. Co. of N.Y., 92 NY2d 107, 113 [1998]). Furthermore, the State-Wide Court noted, the language of then-subdivision 2-a of Insurance Law § 167 [currently Insurance Law § 3420 (f) (1)] was triggered “where the insurer disclaims liability or denies coverage” (State Wide Ins. v Curry, supra at 303). The Court held that the insolvent insurer fit “neither of these categories” (id. at 303). Rather, while that insurer had become insolvent after the accident, “the insurance policy itself survived, and the obligations owed its insured were assumed by the [PMV Fund]” (id. at 303). Thus, the Court concluded, the alleged tortfeasor’s vehicle “was neither ‘an uninsured motor vehicle’ nor ‘an insured vehicle where the insurer disclaim[ed] liability or denie[d] coverage’ within the meaning of subdivision 2-a of section 167 of the Insurance Law [currently Insurance Law § 3420 (f) (1)]” (id. at 303).

The Court of Appeals found its conclusion bolstered by the legislative history of Insurance Law § 167, the purpose of which was to ” ‘close the gaps . . . with respect to assuring payment of compensation to innocent victims of motor vehicle accidents’ ” (id. at 303, quoting NY Legis Ann, 1958, p 299). The Court stated that “surely the Legislature did not intend to provide another remedy for those insured by insolvent domestic insurers, where, due to [the PMV Fund], no gap had existed as to assuring compensation to such victims for many years” (id.). Finally, the State-Wide Court noted, the Appellate Divisions, First and Third Departments, when confronted with similar issues, had arrived at a different interpretation of Insurance Law § 167. In Matter of Taub (Motor Veh. Acc. Indem. Corp.) (31 AD2d 378, 381 [1969]), the Appellate Division, First Department, held that the insolvency of the alleged tortfeasor’s insurer after the underlying accident “was tantamount to a disclaimer of liability, or denial of coverage.” In Matter of Travis (General Acc. Group) (31 AD2d 20 [1968]), the Appellate Division, Third Department, reached a “like result” when the alleged tortfeasor’s insurer was declared insolvent before the accident. The State-Wide Court held that while both cases “expressed an overly broad interpretation of subdivision 2-a of section 167,” both were correctly decided on [*4]their facts because in each case the alleged tortfeasor’s insurer had not been licensed to do business in New York and, therefore, had not contributed to the PMV Fund (State Wide Ins. v Curry, supra at 304). Thus, payment from the PMV Fund was not available.

The distinction to be drawn between UM coverage and SUM coverage, in light of the language of the various statutes and regulations, and implied by the decision in State-Wide, was made manifest in a decision of this Court after the enactment of Regulation 35-D, dealing with SUM coverage. In American Mfrs. Mut. Ins. Co. v Morgan (296 AD2d 491 [2002]), the alleged tortfeasor’s insurer had been declared insolvent after an underlying motor vehicle accident and was in liquidation. The insured, Karen Morgan, who had purchased SUM coverage from her own insurer, the petitioner American Manufacturers Mutual Insurance Company (hereinafter American Manufacturers), filed a claim for such coverage and demanded arbitration. American Manufacturers sought a permanent stay, arguing that because the alleged tortfeasor’s insurer had paid into the PMV Fund, Morgan’s recourse was against the fund. This Court held that, given the express language of Regulation 35-D (which expressly references insolvency), and the “greater breadth of SUM coverage,” Morgan was entitled to seek SUM coverage from American Manufacturers based on the insolvency of the alleged tortfeasor’s insurer, and need not pursue the PMV Fund (American Mfrs. Mut. Ins. Co. v Morgan, supra at 494; see Matter of Eagle Ins. Co. v St. Julian, 297 AD2d 737 [2002]).

Here, because Hamilton purchased UM coverage only from his insurer (Eagle), and the alleged tortfeasor’s now insolvent insurer (Reliance) paid into the PMV Fund, Hamilton’s recourse is not against Eagle for UM coverage, but against the PMV Fund (see State-Wide Ins. Co. v Curry, supra; Eagle Ins. Co. v St. Julian, supra; American Mfrs. Mut. Ins. Co. v Morgan, supra). However, this is not to say that under no circumstances will Hamilton be entitled to UM coverage from Eagle. Rather, resolution of this issue turns on a question not expressly answered by the analysis, supra, to wit: What is to occur if the Superintendent, as administrator of the PMV Fund, denies Hamilton recovery from the fund. That is, whether this would be a denial of coverage within the meaning of Insurance Law § 3420 (f) (1), thereby triggering Hamilton’s right to UM coverage from Eagle. Resolution of this question implicates the statutory scheme concerning the PMV Fund and its place in the highly regulated area of no-fault benefits. Whether this question need be reached turns on the threshold factual issue of whether coverage from the PMV Fund is being denied. The only evidence in the record concerning this issue—the letter from the Superintendent, carbon copied to Hamilton, stating that coverage from the PMV Fund was being denied “at this time” due to “financial strain,” is wholly insufficient. Given this threshold factual issue, and the potentially broad significance of resolution of the question of whether the denial of recovery from the PMV Fund is a denial of coverage within the meaning of Insurance Law § 3420 (f) (1), these matters are best determined in the first instance by the Supreme Court, on a more fully developed record and after joinder of the Superintendent. Ritter, J.P., Florio, S. Miller and Luciano, JJ., concur.

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In an action to recover no-fault benefits, the plaintiff appeals from an order of the Supreme Court, Suffolk County (Molia, J.), dated February 10, 2004, which granted the defendant’s motion to dismiss the complaint pursuant to CPLR 3211 (a) (5) and Insurance Law § 5106 (c).

Ordered that the order is affirmed, with costs.

The plaintiff contends that he was entitled to a trial de novo of his no-fault claim pursuant to Insurance Law § 5106 (c) because the amount in controversy was greater than $5,000. We disagree. The statute permits an insurer or a claimant to institute a court action to adjudicate the dispute de novo where the master arbitrator’s award is $5,000 or greater. Here, the master arbitrator made no monetary award and the statutory predicate for a de novo court adjudication was not satisfied (see General Acc. Fire & Life Ins. Co. v Avlonitis, 156 AD2d 424 [1989]; Harley v United Servs. Automobile Assn., 191 AD2d 768, 769 [1993]; see also Matter of Greenberg [Ryder Truck Rental], 70 NY2d 573 [1987]).

The plaintiff contends, in the alternative, that the statute is unconstitutional because the $5,000 threshold limits the ability of claimants to obtain de novo court adjudication while allowing insurance companies readier access to the judicial forum. We disagree. Insurance Law § 5106 (c) does not violate due process and equal protection because the classification it creates between claimants and insurance carriers is reasonably related to a legitimate state interest and has a rational basis (see Booth v Hartford Ins. Group, 531 F Supp 481 [1982]; Country-Wide Ins. Co. v Harnett, [*2]426 F Supp 1030 [1977]; see also City of New Orleans v Dukes, 427 US 297 [1976]). Krausman, J.P., Mastro, Rivera and Skelos, JJ., concur.

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd and 11th JUDICIAL DISTRICTS

Appeal by plaintiffs from so much of an order of the Civil Court, Kings County (R. Garson, J.), entered March 30, 2004, as denied their motion for summary judgment.

Order unanimously modified by providing that plaintiffs’ motion for summary judgment is granted to the extent of awarding plaintiff A. B. Medical Services PLLC partial summary judgment in the sum of $14,602.46 on 29 claims, plaintiff D.A.V. Chiropractic P.C. partial summary judgment in the sum of $2,232.58 on 14 claims, and plaintiff Lvov Acupuncture P.C. partial summary judgment in the sum of $6,016.12 on 12 claims, and matter remanded to the court below for a calculation of statutory interest and an assessment of attorney’s fees thereon, and for all further proceedings on the remaining three claims; as so modified, affirmed without costs.

Plaintiff health care providers commenced this action to recover first-party no-fault benefits for medical services rendered to their assignors for injuries allegedly sustained in a motor vehicle accident, and thereafter moved for summary judgment in the sum of $23,214, which was comprised of $14,727.90 in claims (consisting of 30 bills) for A.B. Medical Services PLLC, $2,299 in claims (consisting of 15 bills) for D.A.V. Chiropractic P.C., and $6,186.12 in [*2]claims (consisting of 13 bills) for Lvov Acupuncture P.C. Upon a review of the record, we find that with the exception of three of the 58 claims, plaintiffs established a prima facie entitlement to summary judgment by showing that they submitted claims setting forth the fact and the amount of the loss sustained, and that payment of no-fault benefits was overdue (see Insurance Law § 5106 [a]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2004]; Amaze Med. Supply v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U] [App Term, 2d & 11th Jud Dists]). Inasmuch as defendant failed to pay or properly deny 55 of the claims within the 30-day prescribed period (11 NYCRR 65-3.8 [c]), it was precluded from raising most defenses (see Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 282 [1997]). Although the 30-day period may be extended by a timely request for verification, a letter which merely informs a claimant that a decision on the claim is delayed pending an investigation, and which does not specify a particular form of verification and the person or entity from whom the verification is sought, may not be relied upon to toll the 30-day claim determination period (see Melbourne Med. P.C. v Utica Mut. Ins. Co., 4 Misc 3d 92 [App Term, 2d & 11th Jud Dists 2004]; see also Ocean Diagnostic Imaging P.C. v Nationwide Mut. Ins. Co., 4 Misc 3d 142[A], 2004 NY Slip Op 51041[U] [App Term, 2d & 11th Jud Dists]). Inasmuch as the letters sent by defendant in the instant case were not requests for verification, they did not operate to toll the 30-day period.

Insofar as the claim denials were based upon “multiple fraud indicators,” defendant neither interposed a defense of fraud in its answer, nor provided in its papers in opposition to plaintiff’s summary judgment motion any support for its allegations of fraud. Moreover, to the extent that some of the claim denials which were timely were based upon lack of medical necessity, they were not supported by a sufficiently detailed factual basis and medical rationale (see Amaze Med. Supply v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U] [App Term, 2d & 11th Jud Dists]). In the absence of any such support, said defense was waived. Accordingly, with the exception of the three claims set forth below, plaintiffs were entitled to summary judgment.

With respect to the A.B. Medical Services PLLC claim form dated March 4, 2003 for $125.44 for services rendered on February 3, 2003 and February 27, 2003, the D.A.V. Chiropractic P.C. claim form dated March 3, 2003 for $67.40 for services rendered on February 3, 2003 and February 27, 2003, and the Lvov Acupuncture P.C. claim form dated March 5, 2003 for $170 for services rendered on February 3, 2003 and February 27, 2003, summary judgment was properly denied. Plaintiffs did not allege the date that defendant received those claim forms, and failed to submit proof that defendant’s requests for verification and follow-up requests for the “applicant’s completed NF-2” and a “complete narrative report” were complied with. Assuming the verification requests by defendant insurer were timely submitted, it had no obligation to act on the claims until it received the requested verification (New York Hosp. Med. Ctr. of Queens v Country-Wide Ins. Co., 295 AD2d 583 [2002]). Absent proof of compliance with the verification requests, plaintiffs cannot be said to have made out a prima facie case upon the instant motion with respect to those three claims (see Abraham v Country-Wide Ins. Co., 3 Misc 3d 130[A], 2004 NY Slip Op 50388[U] [App Term, 2d & 11th Jud Dists]).

Accordingly, the matter is remanded to the court below for a calculation of the statutory interest and an assessment of attorney’s fees due on the aggregate sum of $22,851.16, that portion [*3]of the claims for which summary judgment is granted, pursuant to Insurance Law § 5106 (a) and the regulations promulgated thereunder, and for all further proceedings on the remaining three claims.
Decision Date: March 02, 2005

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd and 11th JUDICIAL DISTRICTS

Appeal by defendant from an order of the Civil Court, Kings County (A. Schack, J.), entered November 24, 2003, which granted plaintiff’s motion for summary judgment and denied defendant’s cross motion to dismiss, deemed an appeal from the judgment of the same court entered pursuant thereto on February 10, 2004, awarding plaintiff the principal sum of $3,268.85, plus statutory interest and attorney’s fees (see Neuman v Otto, 114 AD2d 791 [1985]).

Judgment unanimously affirmed without costs.

Plaintiff commenced this action to recover first-party no-fault benefits for medical services rendered to its assignors. Thereafter, it moved for summary judgment on the ground that defendant had failed to pay or deny its claims within 30 days of their receipt, in violation of Insurance Law § 5106 (a) and 11 NYCRR 65.15 (g) (3) (now 11 NYCRR 65-3.8 [c]). Plaintiff further alleged that defendant had failed to extend the statutory time period by issuing a timely verification request on the prescribed forms. A review of the record indicates that plaintiff established its prima facie entitlement to summary judgment by proof that it submitted the statutory claim forms, setting forth the fact and the amount of the loss sustained, and that payment of no-fault benefits was overdue (see Insurance Law § 5106 [a]; see also Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2004]; Amaze Med. Supply v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U] [App Term, 2d & 11th Jud Dists]). The burden then shifted to defendant to show the existence of a triable issue of fact (see [*2]Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]). Defendant opposed plaintiff’s motion and cross-moved for summary judgment on the ground that it had sent timely letter requests for verification, which tolled the commencement of the 30-day period within which it was obligated to pay or deny the claim. The motion court found in favor of plaintiff, finding that defendant’s verification requests were not made on the prescribed forms, and therefore did not operate to toll the 30-day period.

We disagree with the lower court’s determination that a request for additional verification may not be made by letter and must be made on a prescribed form (see Hospital for Joint Diseases v State Farm Mut. Auto. Ins. Co., 8 AD3d 533 [2004]; St. Vincent’s Hosp. of Richmond v American Tr. Ins. Co., 299 AD2d 338 [2002]; Nyack Hosp. v Progressive Cas. Ins. Co., 296 AD2d 482 [2002]; see also S&M Supply Inc. v Lancer Ins. Co., 4 Misc 3d 131[A], 2004 NY Slip Op 50695[U] [App Term, 9th & 10th Jud Dists]). However, we affirm the order, albeit for reasons other than those stated by the court below, on constraint of Hospital for Joint Diseases v Nationwide Mut. Ins. Co. (284 AD2d 374 [2001]). The record on appeal in that case establishes that defendant insurer’s employee averred in his affidavit in opposition to plaintiff’s motion for summary judgment that “in the regular course of business at Nationwide, denial letters that are sent to the provider . . . are sent by regular mail on the day that the letter is dated.” Noting that the employee had no personal knowledge that the denial of claim form had been mailed on the date it was issued, the Appellate Division, Second Department, also found that the allegation regarding defendant’s office practices was conclusory and
insufficient to establish that the office followed practices which were geared to ensure the likelihood that denial of claim forms were always properly addressed and mailed on the date issued. Similarly, in the case at bar, the assertion of defendant’s no-fault claims examiner that it was “the usual and customary course of business at GEICO that all documents are mailed on the same day they are generated” was conclusory and failed to specify either that it was the duty of the claims examiner to ensure compliance with said office procedures or that the claims examiner had actual knowledge that said procedures were complied with. Since defendant’s opposition papers did not contain an affidavit of someone with personal knowledge that its verification requests were actually mailed, or describing the standard office practice or procedures it used to ensure that such requests were properly addressed and mailed (see Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679 [2001]), defendant failed to establish by competent evidence that it timely mailed its verification requests, and the
30-day period within which it was required to pay or deny the claim was therefore not tolled (see S&M Supply Inc. v Lancer Ins. Co., 4 Misc 3d 131[A], 2004 NY Slip Op 50695[U], supra). [*3]Accordingly, plaintiff was entitled to summary judgment.
Decision Date: March 02, 2005

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd and 11th JUDICIAL DISTRICTS

Appeal by plaintiffs, as limited by their brief, from so much of an order of the Civil Court, Kings County (S. Krauss, J.), entered on October 29, 2003, as denied the motion for summary judgment by plaintiff A.B. Medical Services PLLC, seeking the sum of $8,182.88.

Order, insofar as appealed from by A.B. Medical Services PLLC, unanimously modified by providing that, upon searching the record, summary judgment is awarded
to defendant dismissing the complaint as to plaintiff A.B. Medical Services PLLC; as so modified, affirmed without costs.

Appeal by plaintiff Royalton Chiropractic P.C. unanimously dismissed.

Plaintiffs A.B. Medical Services PLLC (A.B. Medical) and Royalton Chiropractic P.C. commenced the instant action seeking to recover first-party no-fault benefits for medical services rendered to their assignors in the sum of $10,394.42. In their brief on appeal, plaintiffs have withdrawn the claims of Royalton Chiropractic P.C. and have limited the appeal to the claims of A.B. Medical for the sum of $8,182.88.

In support of its motion for summary judgment, A.B. Medical annexed the NF-3 claim forms which identified it as the “provider.” The item calling for information where the “treating provider is different than [the] billing provider,” indicated that the licensed “treating provider” was Desh D. Sachdev, M.D., and that the “business relation” was that of “independent contractor.” In opposition to the motion, defendant argued that it properly denied A.B. Medical’s claims on the ground that the medical provider of services was an independent contractor, and that A.B. Medical was not entitled to recover no-fault benefits as a licensed billing provider of those services.

The applicable insurance regulations governing “direct payments” of no-fault benefits by the insurer provide that “an insurer shall pay benefits . . . directly to the applicant or . . . upon assignment by the applicant . . . [to] the providers of services” (11 NYCRR 65.15 [j] [1], now 11 NYCRR 65-3.11 [a]). Pursuant to 11 NYCRR 65.15 (j) (1), a provider’s entitlement to seek [*2]recovery of no-fault benefits directly from the insurer is contingent upon an assignment of such benefits, and the assignment must be made to the “providers of services.” The section further circumscribes the assignability of no-fault benefits to an assignment made “by the applicant” to the providers of services. There is no authorization under this section, or elsewhere in the insurance regulations, entitling the assignment of no-fault benefits by a provider.

In the instant action, it is uncontroverted that both A.B. Medical and Dr. Sachdev are licensed providers of health care services, and as such, both may be independently entitled to recover no-fault benefits for medical services they rendered. A.B. Medical, as the billing provider seeking recovery of assigned no-fault benefits for medical services which were not performed by it or its employees, but by an independent contractor identified as the “treating provider” on NF-3 claim forms, is not a “provider” of the instant services within the meaning of section 65.15 (j) (1) (now 11 NYCRR 65-3.11 [a]), and is hence not entitled to recover “direct payment” of assigned no-fault benefits from the defendant insurer.

Our decision is consistent with the Insurance Department’s interpretation of the insurance regulations (see informal opinions dated February 21, 2001, February 5, 2002, March 11, 2002, and October 21, 2003; see also Rockaway Blvd. Med. P.C. v Progressive Ins., 4 Misc 3d 444 [Civ Ct, Queens County 2004]) which is entitled to great deference (see Matter of Medical Malpractice Ins. Assn. v Superintendent of Ins. of State of N.Y., 72 NY2d 753 [1988], cert denied 490 US 1080 [1989]).

Accordingly, the order of the court is hereby modified by providing that, upon searching the record, summary judgment is awarded defendant dismissing the complaint as to plaintiff A.B. Medical.

Inasmuch as no issue is raised by the remaining appellant, the appeal with respect to it is dismissed (see Praeger v Praeger, 162 AD2d 671 [1990]).
Decision Date: March 01, 2005

[*1]

Supreme Court, Appellate Term, Second Department, March 1, 2005

APPEARANCES OF COUNSEL

Amos Weinberg, Great Neck, for appellant. Bruno Gerbino & Macchia LLP, Melville, and Rivkin Radler LLP, Uniondale (Evan H. Krinick, Stuart M. Bodoff and Rosemarie Bruno of counsel), for respondent.

{**9 Misc 3d at 74} OPINION OF THE COURT

Memorandum.

On the court’s own motion, the decision and order of this court entered December 8, 2004 in the above-entitled matter is recalled and vacated and the following decision and order is substituted therefor.

Order insofar as appealed from affirmed without costs.

In this action to recover first-party no-fault benefits for medical treatment provided its assignor, plaintiff established its prima facie case for summary judgment “by submitting evidentiary proof that the prescribed statutory billing forms had been . . . received, and that payment of the no-fault benefits was overdue” (Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742, 742-743 [2004]; see Amaze Med. Supply v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U] [App Term, 2d & 11th Jud Dists 2003]). Defendant’s opposition to the motion failed to rebut plaintiff’s proof of an untimely claim denial, an event that precludes most defenses (see Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 201 [1997]). However, defendant was not precluded from asserting the defense that the collision was in furtherance of an insurance fraud scheme, despite the untimely denial of plaintiff’s claim (see Matter of Metro Med. Diagnostics v Eagle Ins. Co., 293 AD2d 751 [2002]). The affidavit submitted by defendant’s special investigator was sufficient to demonstrate that defendant’s denial was based upon a[*2]“founded belief that the alleged injur[ies] do[ ] not arise out of an insured incident” (Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d at 199). Accordingly, since defendant demonstrated the existence of a triable issue of fact as to whether there was a lack of coverage (see id.; Zuckerman v City of New York, 49 NY2d 557 [1980]), plaintiff’s motion for summary judgment was properly denied.{**9 Misc 3d at 75}

We note that to the extent that defendant’s opposition to plaintiff’s motion for summary judgment was based on the assignor’s failure to attend examinations under oath (EUOs), it is without merit. Plaintiff submitted its claim on April 3, 2002, two days prior to the effective date of Insurance Regulation 68 which for the first time provided in the mandatory personal injury protection endorsement that an eligible injured person shall submit to EUOs as may reasonably be required (11 NYCRR 65-1.1 [d]). Consequently, under the applicable prior regulations (11 NYCRR 65.12 [e]), defendant had no right to request an EUO (see Kings Med. Supply Inc. v GEICO Ins., 4 Misc 3d 138[A], 2004 NY Slip Op 50904[U] [App Term, 2d & 11th Jud Dists 2004]) and, thus, such request did not toll the 30-day period in which an insurer must act upon a claim or be precluded. Even if the claim had been submitted subsequent to the effective date of the new regulations, “[c]onsistent with the Insurance Department’s interpretation of the new regulation, which is entitled to great deference . . . the insurer must include the revised prescribed endorsement with new or renewal policies issued on or after April 5, 2002, and the claim rules are to be governed by the policy endorsement in effect (see Circular Letter No. 9 [2002])” (S&M Supply v State Farm Mut. Auto. Ins. Co., 4 Misc 3d 130[A], 2004 NY Slip Op 50693[U], *2 [App Term, 9th & 10th Jud Dists 2004]). Thus, an insurer may not, in any event, invoke the new regulations as a basis to defend the claim upon an assignor’s failure to comply with its EUO requests where its opposition papers fail to prove that it had issued an endorsement, effective April 5, 2002, that contained the new regulation (see S&M Supply v Lancer Ins. Co., 4 Misc 3d 131[A], 2004 NY Slip Op 50695[U] [App Term, 9th & 10th Jud Dists 2004]).

Patterson and Golia, JJ., concur; Aronin, J.P., taking no part.

—[*1]

In an action, inter alia, to recover unpaid no-fault benefits, the defendant appeals from an order of the Supreme Court, Nassau County (Alpert, J.), dated October 26, 2004, which denied its motion to vacate a judgment entered upon its default in appearing or answering.

Ordered that the order is reversed, on the law and as a matter of discretion, with costs, the motion is granted, the judgment is vacated, the matter is remitted to the Supreme Court, Nassau County, for further proceedings consistent herewith, and the defendant’s time to answer the complaint is extended until 20 days after service upon it of a copy of this decision and order.

The denial of the defendant’s motion to vacate the judgment entered upon its default in appearing or answering was an improvident exercise of discretion. The defendant insurer’s default was not attributable to the insurer’s mere delay in forwarding the complaint to counsel (cf. Campbell v Ghafoor, 8 AD3d 316 [2004]; O’Shea v Bittrolff, 302 AD2d 439 [2003]; Miles v Blue Label Trucking, 232 AD2d 382 [1996]), but was occasioned by an inexperienced claims adjuster’s reasonable belief that advising opposing counsel, both telephonically and in writing, that no-fault benefits had been exhausted, would suffice to end the matter. The claims adjuster’s letter included a copy of the denial of claim form issued to the plaintiff New York University Hospital Tisch Institute, as assignee of Ira Kalfus (hereinafter the plaintiff), and requested that the plaintiff’s counsel “withdraw your summonses regarding this matter and advise our office upon doing so.” [*2]

Under these circumstances, we find that the defendant demonstrated a reasonable excuse for the default (see Barajas v Toll Bros., 247 AD2d 242 [1998]). When coupled with the meritorious defense of exhaustion of benefits, the brief delay involved, and the complete lack of prejudice to the plaintiff, vacatur of the judgment entered upon the defendant’s default was warranted. This is consistent with the strong public policy favoring the determination of controversies on their merits (see Heskel’s W. 38th St. Corp. v Gotham Constr. Co. LLC, 14 AD3d 306 [2005]; Ray Realty Fulton, Inc. v Lee, 7 AD3d 772 [2004]). Santucci, J.P., Krausman, Mastro and Skelos, JJ., concur.