[*1]

Supreme Court, New York County, January 25, 2006

APPEARANCES OF COUNSEL

Cadwalader, Wickersham & Taft, LLP, New York City (William J. Natbony of counsel), and Stern & Montana, LLP, New York City (Robert A. Stern of counsel), for plaintiffs. Morvillo, Abramowitz, Grand, Iason & Silberberg, P.C., New York City (Richard C. Tarlowe and Edward Spiro of counsel), for Herbert Rabiner, M.D. and others, defendants. Warner & Partners, P.C., New York City (Kenneth E. Warner of counsel), for Jay Katz and others, defendants. Alexander Herman, Brooklyn, for Vladimir Shtrakhman, defendant.

OPINION OF THE COURT

Karla Moskowitz, J.

Plaintiffs move for an order: (1) pursuant to CPLR 3025 (b) and 1003, granting them leave to serve a second amended complaint to add the insurers Government Employees Insurance Company, GEICO General Insurance Company, GEICO Indemnity Company and GEICO Casualty Company (collectively GEICO) as plaintiffs, deeming the second amended complaint served upon defendants and directing defendants to answer the second amended complaint; (2) pursuant to CPLR 2221 (e), granting plaintiffs’ motion to renew the court’s March 15, 2004 decision and order (prior decision I) because of a change in law that affects that ruling; and (3) clarifying the court’s December 22, 2004 decision and order (prior decision II) to confirm the reinstatement of plaintiffs’ seventh cause of action (denominated seventh claim for relief) for unjust enrichment.

Plaintiffs are insurance companies that participate in New York’s no-fault automobile insurance program. Plaintiffs claim they owe nothing to defendants because of defendants’ violation of various statutes pertaining to the organization of medical corporations and because of defendants’ fraudulent billing. Plaintiffs seek to recover from defendants payments that [*2]plaintiffs made to them, pursuant to the no-fault insurance program, for medical services that defendants rendered to persons covered under automobile insurance policies that plaintiffs issued. Plaintiffs also seek a declaratory judgment that they have no obligation to pay defendants for claims defendants have submitted, but plaintiffs have not yet paid.

Among the defendants are the”PC defendants,” each of which purport to be a New York medical professional corporation providing diagnostic testing and other patient services. The certificates of incorporation of the PC defendants each state that the owner is defendant Dr. Herbert Rabiner, a New York State licensed physician, but the real owner and principal shareholder is a layperson—defendant Jay Katz.

Plaintiffs allege that, in violation of section 1507 of the Business Corporation Law, Rabiner has sold or lent the use of his name and medical license to Katz to form medical corporations in Rabiner’s name so that Katz could own or control medical practices, profit from them, bill no-fault insurers for medical services and, in so doing, facilitate fraudulent billing practices. Allegedly, once Rabiner fraudulently formed the PC defendants with Katz, he did not have the type of involvement in those entities that a real owner would.

Plaintiffs also allege that the PC defendants regularly submitted no-fault claims to plaintiffs, falsely representing that the PC defendants were valid medical professional corporations. Plaintiffs allege further that they paid substantial amounts of money to the PC defendants based upon their justifiable reliance that the PC defendants comported with applicable statutes and administrative regulations governing the provision of health services. In addition, defendants’ fraudulent conduct encompassed improper multiple billings and the provision of improper, unwarranted or medically unreliable testing.

In prior decision I, I granted motion sequence number 002 and dismissed the complaint against defendants Parkway Magnetic Resonance Imaging, Inc., Metroscan Resonance Imaging, Inc., Katz and Vladimir Shtrakhman. In that same decision I also granted motion sequence number 003 and dismissed the first, second and seventh causes of action, and dismissed the complaint as against Rabiner. I declined to dismiss the eighth cause of action seeking a declaration that plaintiffs have no obligation to pay pending claims, claims they previously denied or any future no-fault claims.

In prior decision II, I granted leave to amend the complaint regarding the billing fraud component of the first cause of action. As amended, the complaint contained sufficient particularity regarding the allegations of billing fraud, including the performance of unnecessary services, as part of an alleged scheme among the PC defendants and other nonparty entities.

The change in law that is the subject of this motion results from State Farm Mut. Auto. Ins. Co. v Mallela (4 NY3d 313 [2005] [Mallela III]). That action began with State Farm Mut. Auto. Ins. Co. v Mallela (175 F Supp 2d 401 [ED NY 2001, Sifton, J.] [Mallela I]) that involved similar claims to those presented here. In Mallela I, Judge Sifton concluded that the insurer plaintiff could not recover damages for fraud and misrepresentation, because it had no right of action to enforce the relevant provisions of the Business Corporation Law and because the alleged violations did not relieve the insurer of the obligation to reimburse the insureds or the insureds’ assignees. Judge Sifton found that the Business Corporation Law did not explicitly create a private right of action and that plaintiff did not belong to the class of legislatively intended beneficiaries, so that a right of action would be clearly in furtherance of the legislative [*3]purpose (Mallela I, 175 F Supp 2d at 416). Judge Sifton granted plaintiff leave to amend its complaint to state valid claims describing actionable frauds, but subsequently dismissed the amended complaint with prejudice (State Farm Mut. Auto. Ins. Co. v Mallela, 2002 WL 31946762, 2002 US Dist LEXIS 25187 [ED NY, Nov. 21, 2002]). I followed the reasoning of Judge Sifton in Mallela I when I dismissed plaintiffs’ claims for fraud and unjust enrichment in prior decision I.

The insurance carrier appealed Mallela I to the United States Court of Appeals for the Second Circuit that concluded that the action involved important, determinative and unsettled questions of state law that were likely to recur and important public policy implications (State Farm Mut. Auto. Ins. Co. v Mallela, 372 F3d 500 [2d Cir 2004] [Mallela II]). Thus, in Mallela II, the Second Circuit deemed it appropriate to certify the following question to the New York Court of Appeals:

“Is a medical corporation that was fraudulently incorporated under N.Y. Business Corporation Law §§ 1507, 1508, and N.Y. Education Law § 6507 (4) (c) entitled to be reimbursed by insurers, under New York Insurance Law §§ 5101 et seq. and its implementing regulations, for medical services rendered by licensed medical practitioners?” (Id. at 509.)

In answering the certified question, in Mallela III, the Court of Appeals concluded that these medical corporations could not receive reimbursement, reasoning that Insurance Law § 5101 et seq. requires no-fault carriers to reimburse patients (or their medical provider assignees) for “basic economic loss,” but that in promulgating 11 NYCRR 65-3.16 (a) (12)^[FN*] (eff Apr. 4, 2002), the Superintendent of Insurance excluded from the meaning of “basic economic loss” payments made to unlicensed or fraudulently licensed providers. This renders these entities “not eligible” for reimbursement (4 NY3d at 320). Moreover, the Court of Appeals upheld the Superintendent’s interpretation as not irrational or unreasonable in deference to his special competence and expertise regarding the insurance industry and not counter to the clear wording of the statutory provision (id. at 321). The Court of Appeals held that “on the strength of this regulation, carriers may look beyond the face of licensing documents to identify willful and material failure to abide by state and local law” (id.).

The Court of Appeals also held that, as a matter of law, the insurance carriers could not sue for fraud or unjust enrichment (as opposed to a requirement to reimburse) for any payments that the insurance carriers had already made prior to the regulation’s effective date of April 4, 2002. However, because State Farm’s complaint did not clearly indicate when it had paid defendants, the Court declined to determine whether State Farm had alleged sufficient facts to support its causes of action for fraud or unjust enrichment (id. at 322).

With this background, I now turn to the motion at issue.

I am granting the motion to amend the complaint that seeks to add GEICO as a plaintiff [*4]for the reasons set forth on the record at oral argument on the motion held on December 15, 2005.

I grant the motion for renewal upon the intervening clarification of the law (CPLR 2221 [e] [2]; Roundabout Theatre Co. v Tishman Realty & Constr. Co., 302 AD2d 272 [1st Dept 2003]). As a result of Mallela III, I reinstate plaintiffs’ claims for fraud and unjust enrichment to the extent that plaintiffs made the payments to defendants on or after the regulation’s effective date (Apr. 4, 2002).

Plaintiffs suggest that, in either subsequent separate briefing or through summary judgment motions, the parties should address the issue of whether the fraud and unjust enrichment claims based solely on corporate structure apply to payments made prior to April 4, 2002. I do not find additional briefing or summary judgment motions warranted.

Although I did not dismiss the eighth cause of action for declaratory relief, the parties raised the issue during oral argument concerning whether Mallela III meant that plaintiffs need not reimburse defendants for claims that accrued prior to April 4, 2002 that plaintiffs have not yet paid. (See transcript of oral argument, Dec. 15, 2005, at 30-34.) Although defendants have offered repeatedly to brief this issue, the clarity of the decision of the Court of Appeals in Mallela III renders further briefing unnecessary.

As discussed above, in Malella III, the Court of Appeals held that: (1) the insurance companies could withhold payment for medical services that fraudulently incorporated enterprises provided and to which patients have assigned their claims; (2) the insurance companies could bring actions for fraud and unjust enrichment to recover payments made on or after the regulation’s effective date of April 4, 2002, by implication; and (3) no cause of action for fraud or unjust enrichment would lie for any payments that the insurance carriers made prior to the regulation’s effective date of April 4, 2002. Mallela III left open, however, the issue of whether the insurers could withhold payment (as opposed to recover payments already made) for unpaid claims that accrued prior to April 4, 2002).

Several Civil Court decisions have recently addressed this issue. In Metroscan Imaging P.C. v GEICO Ins. Co. (8 Misc 3d 829 [Civ Ct, Queens County 2005, Siegal, J.]), the court held that insurers could withhold payment for unpaid claims accruing prior to April 4, 2002 because the Court of Appeals held that the “Superintendent’s regulation allowing carriers to withhold reimbursement from fraudulently licensed medical corporations governs this case” (id. at 834, quoting Mallela III at 321; accord Multiquest, PLLC v Allstate Ins. Co., 9 Misc 3d 1031 [Civ Ct, Queens County 2005, Butler, J.] [intent of Mallela III is that regulation is to be applied to claims prior to April 4, 2002]; A.T. Med., P.C. v State Farm Mut. Ins. Co., 10 Misc 3d 568 [Civ Ct, Queens County 2005, Culley, J.] [retroactive application is appropriate where regulatory intent is to remedy widespread abuse and fraud]).

However, several other Civil Court decisions have arrived at a contrary conclusion (see Multiquest, PLLC v Allstate Ins. Co., 10 Misc 3d 877 [Civ Ct, Queens County 2005, Esposito, J.]; Multiquest, P.L.L.C. v Allstate Ins. Co., 10 Misc 3d 1061[A], 2005 NY Slip Op 52069[U] [Civ Ct, Queens County 2005, Kerrigan, J.]; Multiquest, P.L.L.C. v Allstate Ins. Co., 10 Misc 3d 1061[A], 2005 NY Slip Op 52071[U] [Civ Ct, Queens County 2005, Markey, J.]; Multiquest PLLC v Allstate Ins. Co., 10 Misc 3d 1069[A], 2005 NY Slip Op 52209[U] [Civ Ct, Queens County 2005, Pineda-Kirwan, J.]).

This second group of cases holds that insurers cannot withhold payment for unpaid claims [*5]accruing prior to April 4, 2002 because the law disfavors retroactivity. These cases also interpret Mallela III as indirectly answering the retroactivity question by holding that the insurers could not assert a cause of action for unjust enrichment and fraud for claims that matured before the effective date of the regulation.

I agree with the former group of decisions. As Judge Siegal noted in Metroscan (8 Misc 3d 829, 834), Mallela I involved claims that had matured prior to the effective date of the regulation. Hence, the Court of Appeals, in Mallella III, necessarily incorporated claims for reimbursement that matured prior to the effective date of the regulation. Also, a retroactive application is appropriate here because the regulation at issue merely clarified existing law. Further, this holding comports with the policy choice the Court of Appeals made in Mallela III of protecting insurers from fraud as outweighing speedy resolution of claims.

In addition, just because the Court of Appeals precluded the insurers from recouping payments they already made for claims that matured prior to the effective date of the regulation does not mean that the Court of Appeals precluded the insurers from denying reimbursement for unpaid claims whenever those claims occurred. This interpretation comports with the language of the regulation that applies to all unpaid claims regardless of the effective date. The regulation does not address the situation where insurers had paid an illegal entity before April 4, 2002.

Finally, the request for an order clarifying prior decision II, to confirm the reinstatement of plaintiffs’ seventh cause of action for unjust enrichment, is granted. Previously, I dismissed the unjust enrichment claim because, as stated in prior decision I, plaintiffs paid compensation for medical services that licensed practitioners rendered to covered persons under the no-fault laws and because there were insufficient allegations that defendants had been unjustly enriched by receiving compensation for medical services rendered without regard to medical necessity and in excess of those dictated by the patients’ conditions. As stated in prior decision II, however, I found that the amended complaint contained sufficient particularity in its allegations of billing fraud, including the performance of unnecessary services, as part of an alleged scheme among the PC defendants and other nonparty entities. Hence, the unjust enrichment claim contained in the seventh cause of action is viable.

Accordingly, it is ordered that the motion is granted as follows: (1) plaintiffs are granted leave to serve a second amended complaint, and the second amended complaint is deemed served upon defendants, and defendants are directed to answer the second amended complaint within 20 days after service of a copy of this order with notice of entry; (2) plaintiffs’ motion to renew the court’s March 15, 2004 decision and order is granted, and, upon renewal, plaintiffs’ claims of fraud and unjust enrichment based upon a lack of standing to obtain no-fault benefits are reinstated to the extent that plaintiffs made payments to defendants on or after April 4, 2002; and (3) the court’s December 22, 2004 decision and order is clarified to confirm the reinstatement of plaintiffs’ seventh cause of action for unjust enrichment.

Footnotes

Footnote *: The pertinent text of 11 NYCRR 65-3.16 (a) (12) reads as follows: “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 . . . .”

[*1]

Supreme Court, New York County, January 17, 2006

APPEARANCES OF COUNSEL

Freiberg & Peck, LLP, New York City (Matthew E. Schaefer of counsel), for petitioner. Werner, Zaroff, Slotnick, Stern & Ashkenazy, Lynbrook (David Forman of counsel), for respondent.

OPINION OF THE COURT

Lottie E. Wilkins, J.

Petitioner moves, pursuant to CPLR 7511 (b) (1) (iii), to vacate the uninsured/underinsured motorist arbitration award rendered against petitioner and in respondent’s favor on February 2, 2005. At issue is whether the arbitral forum had jurisdiction over the petitioner. Respondent opposes and raises several arguments as to why, under these circumstances, both the arbitrator and New York courts have jurisdiction over petitioner.

American Independent Insurance is a Pennsylvania corporation. The company has no offices or bank accounts in New York and does not solicit business in this state. More significantly, petitioner does not write insurance policies for New York vehicles and is not licensed to do so by this State’s Department of Insurance. Nonetheless respondent’s assignor, Cesar Ortega, was apparently injured in an accident that took place in New York and involved a party insured by petitioner. Thereafter, Mr. Ortega received treatment from respondent, Heights Chiropractic Care, P.C., which in turn submitted bills to petitioner for payment. The parties do not seriously dispute that petitioner paid at least some portion of these bills.^[FN*] When petitioner refused to provide further payments on respondent’s bills, respondent commenced an arbitration against petitioner. In an award dated February 2, 2005, arbitrator Ann Lorraine Russo awarded [*2]respondent $235.90 on the remaining disputed bill after a hearing at which petitioner did not appear. Petitioner then commenced this proceeding to vacate the arbitration award.

After reciting its lack of contacts with New York and some cursory factual background, petitioner argues that its amenability to no-fault arbitration in New York is not—and indeed cannot be—greater than the jurisdiction of New York courts over petitioner pursuant to New York’s “long-arm” statute, CPLR 301. Petitioner adverts this court’s attention to a number of decisions where it was determined that the court did not have “long-arm” personal jurisdiction over American Independent Insurance (see e.g., Matter of American Ind. Ins. Co. v McDonald, Sup Ct, Kings County, Nov. 13, 2003, Jackson, J., Index No. 18559/03; Advanced Med. Rehabilitation, PLLC v American Ind. Ins. Co., Civ Ct, Kings County, Apr. 20, 2004, Mendez, J., Index No. 322631/03; Nationwide Ins. Co. v Coler, Sup Ct, Kings County, Jan. 15, 2003, Dabiri, J., Index No. 30044/01; Dillon Med. Supply Corp. v American Ind. Ins. Co., Civ Ct, Kings County, Dec. 17, 2004, Gesmer, J., Index No. 56058/02). There is also at least one Appellate Division decision with a similar holding (see, Matter of Eagle Ins. Co. v Gutierrez-Guzman, 21 AD3d 489 [2d Dept 2005]).

Under New York’s long-arm statute, a foreign corporation “doing business” in New York may be subject to the jurisdiction of the courts. However, the term “doing business” means more than occasional or tangential business activity in the state. For purposes of the long-arm statute, “doing business” means a “continuous and systematic course of conduct” within the state “with a fair measure of permanence and continuity” (Cardone v Jiminy Peak, 245 AD2d 1002, 1003 [3d Dept 1997], quoting Chamberlain v Jiminy Peak, 176 AD2d 1109, 1109 [1991] [internal quotation marks omitted], and Tauza v Susquehanna Coal Co., 220 NY 259, 267 [1917]). The mere solicitation of business in the state will not confer jurisdiction (id.). Similarly, the unilateral act of an out-of-state insured driving into New York, without more, is insufficient to confer personal jurisdiction over the insurer (Matter of Eagle Ins. Co., supra, 21 AD3d at 491). Thus, the fact that petitioner here paid a portion of respondent’s claim does not make petitioner subject to the jurisdiction of the courts because that act, by itself, does not constitute the type of systematic business activity required by law in order to confer jurisdiction on the court.

The weight of legal authority holds that petitioner is not subject to personal jurisdiction under New York’s long-arm statute and, by extension, is not amenable to New York’s no-fault arbitration process. Respondent contends, however, that New York’s long-arm statute is not the only legislative enactment that requires consideration. According to respondent, Insurance Law § 1213 elaborates upon the meaning of “doing business in this state” as that term pertains to out-of-state insurers. Specifically, respondent relies on Insurance Law § 1213 (b) (1) (D), which states that an unauthorized foreign or alien insurer that conducts “any other transaction of business” in this state is subject to the jurisdiction of New York courts.

Insurance Law § 1213 explicitly derogates the common-law definition of “doing business” in order to provide broader jurisdiction over certain out-of-state insurers. However, as the preamble of this section states, the intended beneficiaries of this section are New York residents who “hold policies of insurance issued or delivered in this state by insurers while not authorized to do business in this state, thus presenting to such residents the often insuperable obstacle of resorting to distant forums for the purpose of asserting legal rights under such policies” (Insurance Law § 1213 [a]). It is a well-settled principle of statutory interpretation that statutes in derogation of common law are to be construed narrowly, only to the extent necessary [*3]to accomplish the Legislature’s goals (Sherman v Robinson, 80 NY2d 483 [1992]). Respondents in this proceeding are clearly not in the class of persons who were intended to be the beneficiaries of Insurance Law § 1213. Respondent is not a resident who holds a New York policy issued by an unauthorized foreign insurer. Even as an assignee, respondent does not “stand in the shoes” of such a person. Thus, the expanded jurisdiction afforded by this section of the Insurance Law does not apply under the circumstances.

Respondent’s two remaining arguments in opposition to the petition are largely without merit. Contrary to respondent’s assertion, petitioner was not required to appeal the arbitrator’s decision to a master arbitrator before bringing this proceeding. Petitioner’s challenge to the arbitration is jurisdictional and cannot be waived. There is no requirement that petitioner exhaust all the procedural remedies of a forum that petitioner should not have been in to begin with. Likewise, petitioner’s financial connection to an insurance carrier that is licensed to issue policies in New York does not change petitioner’s status as a foreign corporation under these facts. To hold otherwise would completely ignore basic principles of corporate law.

For the foregoing reasons, the petition should be granted and the arbitration award dated February 2, 2005 against petitioner should be vacated.

Accordingly, it is ordered that the petition is granted and the subject arbitration award against petitioner is hereby vacated.

Footnotes

Footnote *: The parties have provided virtually no factual background as to how or where this accident occurred; however, it appears that another individual, Rolando Acevedo, was also involved and petitioner paid for some of his treatment as well.

Supreme Court, Bronx County

13527/2005

For Petitioner

Matthew E. Schaefer Esq.

Freiberg & Peck, LLP

12 East 41st Street, New York, NY 10017

Lucy Billings, J.

Petitioner seeks to vacate a New York No-Fault Arbitration Panel award dated February 24, 2004, granting respondent’s claim for reimbursement of medical expenses arising from a motor vehicle collision. Petitioner claims the arbitrator lacked jurisdiction over petitioner. C.P.L.R. § 7511(b)(1)(iii). While the court may lack personal jurisdiction over petitioner, based on the uncontradicted attestation that petitioner has not transacted or been licensed to transact business in New York, C.P.L.R. §§ 301 and 302; LaMarca v. Pak-Mor Mfg., 95 NY2d 210, 214 (2000), petitioner still may have been subject to the arbitration forum, so that the arbitrator’s award was within her power. C.P.L.R. § 7511(b)(1)(iii).

I.CONTACTS WITH NEW YORK

It is undisputed that petitioner is a Pennsylvania corporation transacting business in that state. Although not addressed in the petition or supporting affidavits, the arbitration decision concludes, and petitioner does not contradict, that it insured a vehicle involved in the collision from which the claimed medical expenses arose and which occurred in New York. A contract of insurance covering a vehicle travelling in New York does not amount to sufficient contact with the state to confer jurisdiction. C.P.L.R. § 302(a)(1); Chase Manhattan Bank v. AXA Reins., UK, 300 AD2d 16, 19 (1st Dep’t 2002); New York Cent. Mut. Ins. Co. v. Johnson, 260 AD2d 638, 639 (2d Dep’t 1999).

No evidence or even allegations, however, indicate that the insured vehicle was not registered in New York or that the vehicle owner was not a New York resident. These facts may bear on whether the court would have jurisdiction here. Preferred Mut. Ins. Co. v. Fu Guan Chan, 267 AD2d 181, 182 (1st Dep’t 1999); New York Cent. Mut. Ins. Co. v. Johnson, 260 AD2d at 639.

II.THE REQUIREMENT THAT INSURERS SUBMIT TO ARBITRATION

More to the point for purposes of the arbitrator’s power, C.P.L.R. § 7511(b)(1)(iii), the owner and operator of a motor vehicle insured for liability by a Pennsylvania insurer still may be “covered persons” under New York Insurance Law § 5102(j), if the vehicle had in effect the “financial security” required by New York Vehicle and Traffic Law (VTL) § 311. NY Ins. Law § 5102(j); Marshall v. Nationwide Mut. Ins. Co., 166 AD2d 852, 853 (3d Dep’t 1990). Since even [*2]a non-resident owner of a vehicle travelling in New York must comply with New York law, making the owner liable for the vehicle’s negligent operation, VTL § 388(1) and (3), a non-resident owner’s failure to maintain the required financial security subjects the owner to penalties. VTL § 318(4). See Servido v. Superintendent of Ins., 53 NY2d 1041 (1981), aff’g 77 AD2d 70, 85 (1st Dep’t 1980); General Acc. Ins. Co. v. Tran, 246 AD2d 543, 544 (2d Dep’t 1998); Property Cas. Ins. Co. of Hartford v. Clarke, 7 Misc 3d 358, 359 (Sup. Ct. Kings Co. 2005). “Financial security” means “ability to respond in damages for liability arising out of the ownership, maintenance or use of a motor vehicle as evidenced by an owner’s policy of liability insurance.” VTL § 311(3). VTL § 311(4)(a) defines an “owner’s policy of liability insurance” as a liability policy with prescribed minimum limits.

If the vehicle involved here was owned by a New York resident or registered in New York, so that petitioner in fact transacted business here, requiring petitioner’s policy covering the vehicle to meet VTL § 311(4)(a)’s requirements, NY Ins. Law § 5107, or petitioner’s policy otherwise met them, petitioner would be an “insurer” subject to New York’s claims settlement procedures. NY Ins. Law §§ 5102(g), 5106(b). Those procedures in turn require insurers to provide the option of arbitration by the New York No-Fault Arbitration Panel for claimants seeking benefits. Id.; Hospital for Joint Diseases v. Allstate Ins. Co., 5 AD3d 441, 442 (2d Dep’t 2004).

If the vehicle was registered in a state other than New York, then to be an “insurer” subject to New York’s arbitration procedures, NY Ins. Law §§ 5102(g), 5106(b); 11 N.Y.C.R.R. § 65.18(a)(1), petitioner, “an unauthorized insurer” in New York, but “authorized to transact business in another state,” must have filed a consent to service and a declaration that petitioner’s policy be considered in compliance with VTL § 311. VTL § 311(4)(c). See VTL § 344(a); 11 N.Y.C.R.R. § 65-1.8(c); Marshall v. Nationwide Mut. Ins. Co., 166 AD2d at 853; Property Cas. Ins. Co. of Hartford v. Clarke, 7 Misc 3d at 360 & n.1. Such actions by the insurer are akin to an agreement to arbitrate or participation in the arbitration process, subjecting the insurer to the arbitration forum’s jurisdiction. Nardor v. Gondol, 17 AD3d 142, 143 (1st Dep’t 2005).

Medical expenses arising from a collision involving a vehicle registered outside New York and covered by an insurer authorized only in another state may be compensable based not only on the insurer’s conformance with the above statutory provisions. Compensation also may be available based on an insurance policy that itself permits an interpretation extending coverage to meet other states’ financial security requirements, commonly referred to as an “‘Out-of-State Insurance’ clause.” General Acc. Ins. Co. v. Tran, 246 AD2d at 544. See American Home Assur. Co. v. Employers Mut. of Wausau, 54 NY2d 874 (1981), aff’g 77 AD2d 421, 427 n.4, 428 (1st Dep’t 1980); Property Cas. Ins. Co. of Hartford v. Clarke, 7 Misc 3d at 361 & n.2.

III.THE ARBITRATION AWARD

The arbitrator relied on New York Insurance Law § 5107. That statute requires insurers transacting or authorized to transact business in New York to sell, whether in New York or in another state, motor vehicle liability policies that meet New York’s financial security requirements and to reimburse medical expenses arising out of insured vehicles’ use in New York. Midwest Mut. Ins. Co. v. Pisani, 250 AD2d 512, 513 (1st Dep’t 1998); Allstate Ins. Co. v. Ramos, 234 AD2d 41, 42 (1st Dep’t 1996). While petitioner may not have presented the arbitrator with admissible evidence that petitioner neither transacts, nor is authorized to transact business in New York, and therefore is not subject to § 5107, petitioner does attest to those facts here, albeit without specifically addressing where the vehicle owner resides or where the vehicle is registered.

Nonetheless, even though Insurance Law § 5107 may not apply to petitioner, the provisions outlined above, in particular VTL §§ 311(4)(c) and 344(a) and 11 N.Y.C.R.R. § 65-1.8(c) or the “out-of-state insurance clause,” may apply. If they do, they would require petitioner to reimburse medical expenses arising out of its insured vehicles’ use in New York and subject petitioner to New York’s arbitration procedures, NY Ins. Law §§ 5102(g), 5106(b); 11 N.Y.C.R.R. § 65.18(a)(1), regardless whether Insurance Law § 5107 applies. General Acc. Ins. [*3]Co. v. Tran, 246 AD2d at 544; Property Cas. Ins. Co. of Hartford v. Clarke, 7 Misc 3d at 361 & n.2.

IV.THE RELEVANT FACTS

Although petitioner presents facts relevant to the court’s jurisdiction and to Insurance Law § 5107’s application, the record does not reveal, first, where petitioner’s insured vehicle was registered or where the vehicle owner resided. Even if the vehicle was registered outside New York and the owner is a nonresident of this state, the record nowhere discloses petitioner’s vehicle liability policy: whether it complied with New York’s financial security requirements, whether petitioner filed a declaration that the policy be considered in compliance, or whether it contained an out-of-state insurance provision. VTL §§ 311(4)(c), 344(a); 11 N.Y.C.R.R. § 65-1.8(c); General Acc. Ins. Co. v. Tran, 246 AD2d at 543-44; Marshall v. Nationwide Mut. Ins. Co., 166 AD2d at 853; Property Cas. Ins. Co. of Hartford v. Clarke, 7 Misc 3d at 360-61 & ns. 1-2. These facts all bear on whether the policy may in fact provide for payment of first party benefits for a collision in New York and require petitioner to provide claimants the option of arbitration by the New York No-Fault Arbitration Panel. NY Ins. Law §§ 5103, 5106(b); 11 N.Y.C.R.R. §§ 65.18(a)(1), 65-1.8(c).

V.CONCLUSION

In sum, the issue here is not whether the court has jurisdiction over petitioner, but whether the arbitrator did, or, more precisely, whether the arbitrator had the power to award respondent benefits payable by petitioner. C.P.L.R. § 7511(b)(1)(iii). Absent the facts determinative of this issue, the court denies the petition to vacate the arbitration award. This decision constitutes the court’s order and judgment dismissing the proceeding.

DATED: December 31, 2005_______________________

LUCY BILLINGS, J.S.C.

[*1]

Supreme Court, Appellate Term, Second Department, December 15, 2005

APPEARANCES OF COUNSEL

Amos Weinberg, Great Neck, for appellant. Ronald I. Lemberger, Hempstead (Wesley R. Mead of counsel), for respondent.

{**11 Misc 3d at 30} OPINION OF THE COURT

Memorandum.

Order unanimously reversed without costs, plaintiff’s motion for summary judgment granted and matter remanded to the court below for a calculation of statutory interest and an assessment of attorney’s fees.

In this action to recover first-party no-fault benefits for medical supplies furnished to its assignor, plaintiff established a prima facie entitlement to summary judgment by proof that it submitted the claims, setting forth the fact and the amounts of the losses 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]; A.B. Med. Servs. PLLC v Lumbermens Mut. Cas. Co., 4 Misc 3d 86 [App Term, 2d & 11th Jud Dists 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 2003]; Damadian MRI in Elmhurst v Liberty Mut. Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51700[U] [App Term, 9th & 10th Jud Dists 2003]). The record discloses that the defendant submitted a properly completed denial of claim form dated September 25, 2003 covering all the claims involved in the lawsuit. Contrary to the determination of the court below, said September 25, 2003 denial of claim form, which was attached to plaintiff’s moving papers, and is identical to the denial of claim form dated September 25, 2003, included by defendant as part of its papers in opposition to [*2]plaintiff’s motion, adequately established that plaintiff sent, and that defendant received, the claims (see Capio Med., P.C. v Progressive Cas. Ins. Co., 7 Misc 3d 129[A], 2005 NY Slip Op 50526[U] [App Term, 2d & 11th Jud Dists 2005]; A.B. Med. Servs. v New York Cent. Mut. Fire Ins. Co., 3 Misc 3d 136[A], 2004 NY Slip Op 50507[U] [App Term, 2d & 11th Jud Dists 2004]; cf. SZ Med. P.C. v State-Wide Ins. Co., 6 Misc 3d 132[A], 2005 NY Slip Op 50103[U] [App Term, 2d & 11th Jud Dists 2005]).

Defendant’s reliance on SZ Med. P.C. v State-Wide Ins. Co. (6 Misc 3d 132[A], 2005 NY Slip Op 50103[U] [2005], supra) is misplaced. In SZ Med. P.C., plaintiffs’ billing manager stated that she submitted the 15 annexed claim forms without specifying when they were sent, and relied on defendant’s letter which acknowledged receipt of claims but did not specify which of the claims were received. On those facts, this court held:

“In the absence of any evidence as to when plaintiffs{**11 Misc 3d at 31} submitted their claim forms to defendant, and in the absence of any specification in defendant’s letters of February 13, 2002 as to which claims it had received prior thereto, plaintiffs were unable to establish whether payments as to all, or even any, of the claims being sued upon were overdue” (2005 NY Slip Op 50103[U], at *2).

In the instant case, unlike in SZ Med. P.C., defendant submitted the exact same denial of claim form dated September 25, 2003 relied upon by plaintiff, without stating any objection thereto, or denying receipt of said bills, thereby effectively conceding receipt of the same.

Defendant’s September 25, 2003 denial of claim form indicates that defendant’s denial of plaintiff’s claims was not timely made within the 30-day statutory period within which it was required to pay or deny the claims (11 NYCRR 65-3.8 [c]). We note that the record also contains denial of claim forms dated January 27, 2003 and January 28, 2003. However, they are fatally defective and of no import since these forms omitted numerous items of requested information, and were thus incomplete (Nyack Hosp. v Metropolitan Prop. & Cas. Ins. Co., 16 AD3d 564 [2005]; Nyack Hosp. v State Farm Mut. Auto. Ins. Co., 11 AD3d 664 [2004]). Furthermore, defendant’s documentary submissions are insufficient to establish proper mailing either of said denial of claim forms or the independent medical examination notices upon which the denials were based (see Hospital for Joint Diseases v Nationwide Mut. Ins. Co., 284 AD2d 374 [2001]; Contemp. Med. Diag. & Treatment, P.C. v Government Empls. Ins. Co., 6 Misc 3d 137[A], 2005 NY Slip Op 50254[U] [App Term, 2d & 11th Jud Dists 2005]). Accordingly, defendant is precluded from raising most defenses (see Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 282 [1997]), including its defense of excessive or unnecessary treatment (see Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 199 [1997]; Mount Sinai Hosp. v Triboro Coach, 263 AD2d 11 [1999]). Defendant has failed to submit proof in admissible form in support of its defense of fraud and/or misrepresentation (see A.B. Med. Servs. PLLC v State-Wide Ins. Co., 7 Misc 3d 136[A], 2005 NY Slip Op 50785[U] [App Term, 2d & 11th Jud Dists 2005]). In any event, the unsworn investigative reports indicate that defendant’s claim of fraud is, in essence, premised on fraudulent billing or excessive medical treatment, forms of “provider fraud” which are defenses subject to the 30-day preclusion remedy (Fair Price Med. Supply Corp. v Travelers Indem. Co., 9 Misc 3d 76 [App{**11 Misc 3d at 32} Term, 2d & 11th Jud Dists 2005]; see Central Gen. Hosp., 90 NY2d at 199; Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d at 285; Melbourne Med., P.C. v Utica Mut. Ins. Co., 4 [*3]Misc 3d 92 [App Term, 2d & 11th Jud Dists 2004]; cf. State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313 [2005]).

Accordingly, summary judgment is granted in favor of plaintiff and the matter remanded to the court below for the calculation of statutory interest and an assessment of attorney’s fees pursuant to Insurance Law § 5106 (a) and the regulations promulgated thereunder.

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

Supreme Court, Bronx County

20926/2004

Dianne T. Renwick, J.

In this special proceeding, pursuant to CPLR Article 75, petitioner CNA Insurance^[FN1] seeks a permanent stay of arbitration of a claim for supplemental underinsured motorist (SUM) benefits sought by claimant Kim Hampton. The SUM claim stems from an automobile accident involving a van insured by petitioner. At the time of the accident, claimant Hampton had been riding as a passenger in the van. After settling her personal injury action against the tortfeasor,^[FN2] Hampton sought SUM benefits under the endorsement of the policy issued by petitioner CNA Insurance. Petitioner, however, avers that claimant is not entitled to SUM benefits because the subject [*2]automobile accident was not the cause of her femur fracture. (The femur is the thighbone; it extends from the hip to the knee.) This Court now renders a determination based upon the testimonial and documentary evidence presented at the framed issue hearing, which suggests two alternative causes of claimant’s femur fracture, the impact of the car collision and a slip and fall on sidewalk ice.

Framed Issue Hearing

Eyewitnesses’ Description of the Car Accident

At the framed issue hearing, claimant Kim Hampton, who is legally blind, testified that on March 11, 1999, she was riding as a passenger in a van owned by her employer Advocates for the Blind. Hampton was seated, her lap seat belt fastened, in the first row of bench seats, behind the front passenger seat. There was an arm rest in the down position next to Hampton’s right leg. Upon crossing the intersection of 67th Street and 78th Avenue, Queens, the van collided with a another vehicle that had failed to obey a stop sign. As a result, the van sustained a “very heavy” impact to the front passenger side, causing it to swerve, propel forward and strike a building. Hampton reported that the impact from the first collision was “very heavy,” but the seat belt prevented her from falling off her seat. The impact caused Hampton’s glasses to fly off her face, and her upper right leg, from just above the knee, to up around her hip, to hit either the armrest or the door of the van. Hampton believed her upper right leg hit the door or the armrest, but she could not actually see without her glasses. Upon impact, Hampton felt a lot of pain in her right leg. Hampton then felt a second impact when the vehicle struck the building.

Immediately after the second impact, Hampton smelled smoke and got scared. Feeling that the van might explode, she moved to exit the van. She turned her body to the right, toward the rear passenger side door. While remaining seated, Hampton, who was heavy set (weighing close to 240 pounds) placed her left foot on the van’s interior step, in an effort to move her body toward the side door. She then opened the door and moved herself onto the floor of the van by sliding onto her bottom, while her leg remained dangling in a partially straightened position. Hampton grabbed the van door in an attempt to assist herself in standing up, but she could not do it and fell onto the sidewalk, directly in front of the van.

According to the driver of the van, Ruperto Duncan, the impact from the car was “very heavy.” After the van ran into the building and began to “smoke,” he exited the van’s driver’s side and walked around to the passenger’s side. Duncan then observed Hampton lying injured on the ground. Duncan informed the police personnel, who arrived at the scene to assist Hampton, that she had fallen on sidewalk ice upon exiting the van. At the hearing, Duncan, however, conceded that he did not actually witness her fall. In fact, Duncan testified that he did not speak with Hampton about the accident. He had no recollection how he got that information, but assumed that she had fallen on ice.

Conflicting Medical Opinions As to the Cause of the Femur Fracture

At the framed issue hearing, respondent presented a medical expert, Dr. Lynne Richardson, the attending physician at Elmhurst Hospital emergency room on the date of the accident. Dr. Richardson supervised the resident physician, Dr. Stuart Miller, who first saw claimant Hampton in the emergency room. Based upon her examination of the claimant and a review of the pertinent medical record, Dr. Richardson opines, with a reasonable degree of medical certainty, that the femur fracture was caused by the two vehicle impacts on the day of the [*3]accident. Dr. Richardson explains that femur fractures are fairly uncommon as a result of a fall from a standing position because it takes a significant impact to break the femur. In addition, Dr. Richardson considered the fact that, immediately after the collision, the claimant experienced severe pain, which is one of the symptoms of femur fracture. Under the circumstances, Dr. Richardson surmises, the most likely scenario in this case was that the claimant suffered the fracture during the impacts to her lower body within the van, and then fell while attempting to exit the van due to the inability of her injured leg to bear her weight.

Petitioner CNA Insurance’s medical expert, Dr. Andrew Bazos, a neurosurgeon, disagrees with Dr. Richardson’s conclusion. Based upon his review of the pertinent medical record and the witnesses’ statements detailing the accident, Dr. Bazos opines, with a reasonable degree of medical certainty, that the femur fracture resulted from a sidewalk fall on ice, as was reported throughout the medical record, namely the “ambulance triage notes,” the “Rehab Medicine Referral to Psychiatry” and the “resident’s notes.” Dr. Bazos explains that femur fractures are caused by events that involve a lot force; it takes a sudden forceful impact to break the bone. In the doctor’s estimation, the collision could not have created sufficient force to break the femur bone. As support, the doctor relied on the fact that respondent had been wearing her seat belt prior to the accident and that there was no visible deformity in any part of the van near where the injured person had been sitting. In addition, Dr. Bazos explains, had the claimant’s femur been fractured during the car collision, the claimant could not have been able to attempt to get up, as she described, due to the severity of the injury and the claimant’s weight.

Discussion

Courts may stay arbitration where “the particular claim sought to be arbitrated is outside the scope of the agreement to arbitrate.” See County of Rockland v. Primiano Constr. Co., 51 NY2d 1, 7 (1980); CPLR §7503 (b); Sisters of St. John the Baptist, Providence Rest. Convent v. Phillips R. Geraghty Constructor, 67 NY2d 997, 999 (1986). Courts have held that to qualify for no-fault benefits in the form of underinsured/or uninsured motorist coverage, the insured vehicle must be the proximate cause of the claimant’s injuries. See e.g., Walton v. Lumbermens Mut. Cas. Co., 88 NY2d 211, 215 (1996); Farm Family Cas. Ins. Co. v. Trapani, 301 AD2d 740 (3rd Dept. 2003); New York Cent. Mut. Fire Insurance v. Hayden, 209 AD2d 927 (4th Dept. 1994).

The seminal case on this subject is Walton v. Lumbersmen Mut. Cas. Co., 88 NY2d 211, 215 (1996), where the Court of Appeals held that “the vehicle must be the proximate cause of the plaintiff’s injury before the absolute liability imposed by the statute arises.” As the Court explained, “no-fault first party benefits are available only when the motor vehicle is the instrumentality that causes the injury plaintiff claims.” 88 NY2d 211, 213 (1996). Accordingly, “when a plaintiff’s injury is caused by an instrumentality other than the insured vehicle, liability for the losses sustained are more properly addressed outside the area of no-fault motor vehicle insurance.” Id at 214. Such interpretation, the Court held, “reflects the legislature’s intent to draw the line between motor vehicle accidents and all other types of torts and to remove only the former from the domain of common law tort litigation.” Id.

Here, as fully described above, the parties have presented two possible causes of respondent-claimant’s injury (femur fracture). Claimant asserts that her injury was caused by the impact to her body against the van during the collision. In contrast, petitioner claims that Hampton’s injuries had no casual connection to the insured vehicle; that it was caused by a [*4]sidewalk slip and fall on ice. This Court’s determination of which version is more credible would be dispositive of the issue of whether the injury falls within the ambit of no-fault insurance, as having been caused by the insured vehicle. Of course, claimant-respondent’s version falls within the ambit of no-fault insurance since it is based upon the claim that the femur fracture was caused by the impact of her body against the van.

Conversely, petitioner’s version, that claimant’s femur fracture was caused by a sidewalk slip and fall on ice, upon exiting the van, would not support a claim for no-fault insurance, since under such version the insured vehicle would not have been the instrumentality that caused the injury. Contrary to respondent’s allegations, proximate cause is not established merely because injuries occurred while entering or exiting a vehicle. Adopting this approach would be tantamount to equating proximate cause with the term “occupying” a vehicle. However, as noted above, the law is abundantly clear that more than occupancy is required to establish a casual link between a motor vehicle and a claimant’s injuries. Instead, what is required is that the motor vehicle was the actual instrumentality which produced the injuries. See e.g., Walton v. Lumbermens Mut. Cas. Ins. Co, supra; Matter of Farm Family Cas. Ins. Co. v. Trapani, supra; New York Central Mutual Fire Insurance v. Mark Hayden, supra.

Indeed, courts have consistently held that just because an injury occurs in or near a motor vehicle does not mean necessarily that a vehicle was the proximate cause of the claimant’s injuries. For example, in Sochinski v. Bankers & Shippers Ins. Co., 221 AD2d 889 ( 3rd Dept. 1995), the Appellate Division held that the claimant did not qualify for first-party, no-fault benefits even though the injuries occurred while the claimant was in occupancy of the motor vehicle. In Sochinski, the insured was allegedly injured when airborne particles caused by sandblasting at a highway construction site entered the car’s open window and lodged in his eyes. The court held that the claimant did not qualify for first-party, no-fault benefits for his injury to his eye because such injury would have occurred even if he had not been in his motor vehicle. Since the motor vehicle was wholly incidental to the event which produced the injury, it was not the instrumentality, i.e. proximate cause, of the injury. Id.

Likewise, in New York Cent. Mut. Fire Ins. Co. v. Hayden, 209 AD2d 927 (4th Dept. 1994), an injury that occurred immediately upon alighting a motor vehicle did not fall within the ambit of no-fault law because the vehicle itself was not the instrumentality that caused the claimant’s injury. In New York Cent. Mut. Ins. Co. v. Mayden, supra, the personal injuries suffered by the claimant-passenger occurred when he got out of the vehicle and fell through a hole in a railroad trestle after the vehicle’s left wheels became stuck in a gap between the track on the trestle and the road for vehicles. The court found that the injuries were not covered by the passenger’s uninsured motorist (SUM) insurance since the accident did not arise out of the inherent nature of the vehicle. Id.

Conversely, in Farm Family Cas. Ins. Co. v. Trapani, 301 AD2d 740 (3rd Dept. 2003), the claimant’s injuries that occurred while alighting a motor vehicle were deemed to fall within the ambit of no-fault law where the vehicle itself was the instrumentality that caused the claimant’s injuries. In Trapani, supra, the driver lost control of her car and struck a utility pole. The car’s impact moved the pole, causing its power lines to short out and rain sparks and hot pieces of wire down onto the 75-year-old claimant, who was standing in her garden along the roadway near her home. In attempting to run from this hazard, claimant fell and sustained injuries to her head and [*5]left knee. The court found that the vehicle proximately caused the claimant’s injuries since the hazard that caused the fall was triggered by the impact of the car on the pole. Id.

Here, assuming, that claimant Hampton’s injuries are attributed to a slip and fall accident on sidewalk ice, this Court would have to find that such injury does not fall within the ambit of supplemental underinsured motorist coverage, based upon the reasoning of Walton v. Lumbersmen Mutual Casualty Ins. Co., supra, and the aforementioned analogous cases. The hazard that triggered the sidewalk slip and fall —the ice — cannot be attributed, like Farm Family Casualty Ins. Co. v. Trapani, supra, to the use or operation of the automobile. Instead, like in New York Cent. Ins. Co. v. Hayden, supra, and Sochinski v. Bankers and Shippers Insurance Company, supra, the fall would have occurred even if claimant had not been in his motor vehicle. Under the circumstances, the vehicle was the mere situs of the accident, and thus cannot be the proximate cause of the injury. Cf. Lumbermen’s Mut. Cas. Co. v. Logan, 88 AD2d 971(2nd Dept. 1982).

The question that remains is which version does this Court credit as the actual cause of claimant’s femur fracture. In making such determination this Court is guided by several principles applicable in the context of a petition to stay arbitration of a claim for no-fault benefits. The petitioner bears the burden of showing sufficient evidence to justify a stay of the arbitration of respondent’s claim for SUM benefits. See Aetna Casualty & Surety Ins. Co. v. McMichael, 176 AD2d 315 (2nd Dept. 1991); In Re. Nationwide Ins. Co. 170 AD2d 683 (2d Dept. 1991). It is also the general rule that when there is ambiguity as to existence of coverage, doubt must be resolved in favor of the insured and against the insurer. See, Handelsman v. Sea Ins. Co., 85 NY2d 96, 101 (1994). Moreover, where possible, courts will generally opt in favor of ruling for no-fault coverage of an insured under the facts of the particular case, unless such a ruling would not be in cadence with the statutory language and purpose. See e.g., Johnson v. Hartford Insurance Co., 100 Misc 2d 367, 369 (NY Sup.Ct. 1979).

Evaluated under such legal matrix, the proof offered by petitioner is not sufficient to grant a permanent stay of the arbitration of the claim for SUM benefits, when juxtaposed with the proof offered by respondent-claimant. Both medical experts’ conflicting opinions as to the cause of the femur fracture have a legitimate factual foundation, but based on different versions of the accident. Under the circumstances, the determination of the cause of claimant’s injury is dependent, in substantial measure, upon an assessment of the credibility of claimant’s account of her injury, which is more consonant with plaintiff’s expert’s medical opinion. In assessing claimant’s credibility, this Court concludes that Hampton’s testimony was consistent, clear, candid, and, therefore, credible.

This Court, however, is troubled by the fact that the medical evidence is replete with the statement that claimant had fallen on sidewalk ice. Nevertheless, such troubling statement is, in the context of this case, insufficient to counterbalance respondent’s evidence. Significantly, no evidence from any witness was submitted directly attributing the troubling statement to claimant Hampton. Under the circumstance, it is equally likely that the sole source of the statement was the driver who reported it to the police personnel, albeit conceding at the hearing that he had not actually witnessed claimant’s fall; nor could he recollect the source of the statement. Viewed in its totality, the evidence preponderates in favor of a finding that the femur fracture was caused by the impact of the van’s collision with the automobile and building.

[*6]Conclusion

For the foregoing reasons, this petition is denied to the extent of declaring and adjudging that petitioner failed to meet its burden of establishing that claimant’s injuries were not proximately caused by the insured motor vehicle. The Clerk is directed to dismiss the petition forthwith. Accordingly, the parties are directed to proceed to arbitration of the Supplemental Underinsured Motorist (SUM) claim.

This constitutes the Decision, Order, and Judgment of the Court.

Dated: November 29, 2005__________________________

Bronx, New YorkHon. Dianne T. Renwick, JSC

Footnotes

Footnote 1:Transcontinental Insurance Company does business as CNA Insurance Company.

Footnote 2:The van was struck by a motor vehicle driven and owned, respectively, by Margaret and Herbert Adask.

[*1]

Supreme Court, Appellate Term, Second Department, October 21, 2005

APPEARANCES OF COUNSEL

Amos Weinberg, Great Neck, for appellants. Bruno Gerbino & Macchia LLP, Melville (Charles W. Benton of counsel), for respondent.

{**10 Misc 3d at 51} OPINION OF THE COURT

Memorandum.

Order insofar as appealed from modified by granting plaintiff A.B. Medical Services PLLC partial summary judgment in the sum of $6,765.47, plaintiff D.A.V. Chiropractic P.C. partial summary judgment in the sum of $593.94, and plaintiff Lvov Acupuncture P.C. partial summary judgment in the sum of $1,690.56, and as to those sums, the matter is remanded to the court below for a calculation of statutory interest and an assessment of attorney’s fees, and for all further proceedings on said plaintiffs’ remaining claims; as so modified, affirmed without costs.

Appeal insofar as taken by plaintiff Square Synagogue Transportation Inc. unanimously dismissed.

Plaintiffs A.B. Medical Services PLLC, D.A.V. Chiropractic P.C. and Lvov Acupuncture P.C. established their prima facie entitlement to summary judgment by proof that they submitted statutory claim forms, setting forth the fact and amount of the losses 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 2003]). Upon such proof, the burden shifted to defendant to create a triable issue of fact (Alvarez v Prospect Hosp., 68 NY2d 320, 324[*2][1986]). Absent tolling of the statutory time (Hospital for Joint Diseases v ELRAC, Inc., 11 AD3d 432, 434 [2004]; New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 AD3d 568, 570 [2004]), defendant’s conceded failure to deny the claims until December 2, 2002 violated the 30-day claim determination period and precluded it from interposing most defenses (aside from its claim that the incident was staged to defraud) as to all claims mailed on or before November 2, 2002.

As to the fraud defense, which survives the preclusion sanction (Matter of Metro Med. Diagnostics v Eagle Ins. Co., 293{**10 Misc 3d at 52} AD2d 751 [2002]), none of the proof offered to establish that the underlying incident was staged to defraud defendant was submitted in admissible form. None of the investigators’ reports or operators’ statements were sworn, defendant’s counsel alleged no basis to support an inference that any of the facts asserted in his statements were based on personal knowledge, and Tonya Miller, defendant’s claims representative, asserted in her affidavit merely the conclusory statement that “material misrepresentations [were] made in the presentation of the claim” and failed to adopt any of the factual assertions contained in the attached reports and statements. Thus, defendant failed to establish a triable issue of fraud (Ocean Diagnostic Imaging P.C. v Allstate Ins. Co., 6 Misc 3d 134[A], 2005 NY Slip Op 50189[U] [App Term, 9th & 10th Jud Dists 2005]; Ocean Diagnostic Imaging, P.C. v Lancer Ins. Co., 6 Misc 3d 62 [App Term, 2d & 11th Jud Dists 2004]; see e.g. Melbourne Med., P.C. v Utica Mut. Ins. Co., 4 Misc 3d 92 [App Term, 2d & 11th Jud Dists 2004] [attorney’s factual allegations, without personal knowledge of the investigation, mere unsubstantiated hearsay]; Dotzel v Allstate Ins. Co., 2003 NY Slip Op 50853[U] [App Term, 9th & 10th Jud Dists 2003]).

Similarly, defendant did not establish proper verification requests with respect to its letters which, inter alia, indicated that it intended to examine “claimants” under oath. An insurer

“may not rely on a letter, even if denominated a verification request, that merely informs a claimant that a decision on the claim is delayed pending an investigation, and without specifying a particular form of verification and the person or entity from whom the verification is sought, to toll the 30-day claim determination period” (Melbourne Med., P.C. v Utica Mut. Ins. Co., 4 Misc 3d at 94; see also A.B. Med. Servs. PLLC v Country-Wide Ins. Co., 6 Misc 3d 137[A], 2005 NY Slip Op 50255[U] [App Term, 2d & 11th Jud Dists 2005]; 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 2004]).

While the particular form of verification sought is stated, the persons sought to be examined are not identified, nor do the letters specify, inter alia, the time and place the examinations would take place (cf. 11 NYCRR 65-3.5 [d], [e]). As the instant letters do not conform to the requirements of a proper examination under oath verification request in substantial respects, the{**10 Misc 3d at 53} letters are ineffective to toll the 30-day claim determination period.

Therefore, defendant must first demonstrate a tolling via proof that one or more of the notice of physical examination letters of October 2, 2002 and the follow-up letters of October 29, 2002 issued, that assignor failed to appear, and that the timing of said notice(s) and nonappearance(s) established a defense to any or all claims. As the December 2, 2002 denial was timely as to the final four post-November 2, 2002 claims, namely, plaintiff A.B. Medical Services PLLC’s claims for $323.36 and $71.40, plaintiff D.A.V. Chiropractic P.C.’s claim for $168.50, [*3]and plaintiff Lvov Acupuncture P.C.’s claim for $425 defendant need only establish that the denial as to said four claims was based on a meritorious defense (cf. Amaze Med. Supply v Allstate Ins. Co., 3 Misc 3d 43, 44 [App Term, 2d & 11th Jud Dists 2004] [“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 . . .”]). It is initially noted that defendant’s claim denial form, which invoked only the eligible injured person’s failure to attend independent medical examinations (IMEs) on October 25, 2002 and November 8, 2002, is materially defective on its face. “A proper denial of claim must include the information called for in the prescribed denial of claim form” (Nyack Hosp. v Metropolitan Prop. & Cas. Ins. Co., 16 AD3d 564 [2005] [“(A) denial of a claim form issued by (an insurer) . . . even if timely, (is) fatally defective (if) it omit(s) numerous items of requested information and thus (is) incomplete”]; see also 11 NYCRR 65-3.4 [c] [11]; Nyack Hosp. v State Farm Mut. Auto. Ins. Co., 11 AD3d 664, 665 [2004] [the insurer’s “denial of claim, while timely, was nonetheless fatally defective in that it failed to include a number of basic items called for in the prescribed form,” citing Amaze Med. Supply v Allstate Ins. Co., 3 Misc 3d 43, 44 (2004), supra]; Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 226 AD2d 613, 614 [1996] [preclusion sanction imposed where the insurer “fail(ed) to establish that it issued to the (claimant) a properly completed Denial of Claim Form within the (prescribed) 30-day period”]). Here, an accurate determination as to the significance of the IME demands for plaintiffs’ recovery of no-fault benefits depends on when defendant received each claim in the series, information which, in the first instance, is the insurer’s obligation to provide in a properly executed claim denial form. Moreover, as none of the six IME letters scheduled an examination for October 25, 2002, this verification request is unproved.{**10 Misc 3d at 54}

Nevertheless, in support of its motion, plaintiffs submitted a series of defendant’s IME request letters and a letter from counsel for plaintiff’s assignor to defendant wherein he admits that assignor failed to appear for IMEs on October 16, 18, and 19, 2002 and on November 8, 15, and 22, 2002. While defendant submitted no proof of mailing of any of the IME notification letters, plaintiffs’ concessions establish receipt of the November 8, 2002 IME request and assignor’s nonappearance, the only proved basis for the claims’ denial asserted in the claim denial form. The issue is whether defendant exhausted the verification protocols with respect to said IME request, and for that matter, the remaining IME requests which, while not invoked as a basis for the claims’ denial, are established on the instant record.

The insurance regulations permit preclaim IMEs, but without consequence for the running of the 30-day claim determination period (Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 7 Misc 3d 18 [App Term, 2d & 11th Jud Dists 2004]). All postclaim IME verification requests must be made within prescribed time frames, the initial request within 10 days of the claim’s filing (to be scheduled within 30 days of the claim’s receipt) and a “follow-up” request within 10 days of a subject’s nonappearance at the initially-scheduled IME (11 NYCRR 65-3.5 [a], [d]; 65-3.6 [b]; New York Hosp. Med. Ctr. of Queens v Country-Wide Ins. Co., 295 AD2d 583, 584-585 [2002]). “Any attempt by the insurer to deny the claim prior to exhausting the verification protocols is premature and of no effect” (King’s Med. Supply Inc. v Allstate Ins. Co., 7 Misc 3d 128[A], 2005 NY Slip Op 50451[U], *2 [App Term, 9th & 10th Jud Dists 2005]; see New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 AD3d 568, 570[*4][2004]; King’s Med. Supply Inc. v New York Cent. Mut. Fire Ins. Co., 5 Misc 3d 136[A], 2004 NY Slip Op 51550[U] [App Term, 2d & 11th Jud Dists 2004]). The request for the November 8, 2002 IME issued within 10 days only of plaintiff A.B. Medical Services PLLC’s claim for $71.06 and absent a follow-up IME request the claim determination period lapsed as to this claim. Further, said request predated receipt only of plaintiff A.B. Medical Services PLLC’s claims for $323.36 and $71.40, plaintiff Lvov Acupuncture P.C.’s claim for $425, and plaintiff D.A.V. Chiropractic P.C.’s claim for $168.50, and as an unattended preclaim IME, as to those claims, summary judgment was properly denied (cf. Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 7 Misc 3d 18 [2004], supra). In any event, there was no follow-up IME request after the assignor{**10 Misc 3d at 55} failed to appear on November 8, 2002, and the December 2, 2002 claim denial preserved no meritorious defense as to any claim filed prior to the November 8, 2002 IME demand (Amaze Med. Supply v Allstate Ins. Co., 3 Misc 3d at 44).

Plaintiff Square Synagogue Transportation Inc. concedes in appellants’ brief that it is not entitled to the relief sought upon the motion to the court below. Therefore, the appeal as taken by it is dismissed.

Accordingly, plaintiffs’ motion for summary judgment is granted as to plaintiff A.B. Medical Services PLLC’s claims for $182.37, $230.10, $604.24, $751.83, $218.35, $360, $1,972.08, $1,999.12, $376.32, and $71.06, plaintiff D.A.V. Chiropractic, P.C.’s claim for $391.74 and $202.20, and plaintiff Lvov Acupuncture, P.C.’s claims for $1,180.56 and $510, and as to those sums, the matter remanded to the court below for a calculation of statutory interest and an assessment of attorney’s fees pursuant to Insurance Law § 5106 (a) and the regulations promulgated thereunder, and for all further proceedings on said plaintiffs’ remaining claims.

Golia, J., concurs in part and dissents in part, and votes to dismiss the appeal insofar as taken by Square Synagogue Transportation Inc. and to modify the order, insofar as appealed from, by denying the motion of plaintiffs A.B. Medical Services PLLC, D.A.V. Chiropractic P.C. and Lvov Acupuncture P.C. for summary judgment and, upon searching the record, granting defendant’s cross motion for summary judgment dismissing the complaint as to said plaintiffs in the following memorandum: I concur with the majority in their dismissal of the appeal by Square Synagogue Transportation Inc.

However, contrary to the holding of the majority, I find that the papers submitted by the defendant in opposition to the plaintiffs’ motion for summary judgment were sufficient to raise an issue of fact as to whether the defense of fraud was based upon a “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 195, 199 [1997]), i.e., as to whether it was a “staged” accident.

For the reasons stated in my dissent in Ocean Diagnostic Imaging, P.C. v Lancer Ins. Co. (6 Misc 3d 62 [App Term, 2d & 11th Jud Dists 2004]), I find that the unsworn statements, when submitted in opposition to a motion for summary judgment and accompanied by an affidavit which makes reference to such reports, are sufficient for the purpose of raising a triable issue{**10 Misc 3d at 56} of fact (see also Levbarg v City of New York, 282 AD2d 239, 241 [2001]). This court must, when deciding a motion for summary judgment, interpret the evidence in the light most favorable to the nonmovant (see Weiss v Garfield, 21 AD2d 156 [1964]). This is especially true where there [*5]is an allegation of fraud.

I further find that it is uncontroverted that the defendant insurer sent notices to the plaintiff’s assignor to appear for independent medical examinations (IMEs) on October 16, 18 and 19, 2002 and, upon her failure to appear, gave her an additional opportunity to appear on November 8, 15 and 22, 2002. We know this is true because the plaintiff submitted a letter written by the assignor’s attorney dated January 21, 2003 acknowledging receipt of those notices as well as acknowledging the fact that assignor, Ms. Abbott, did not appear. The letter goes on to state that Ms. Abbott is a single mother and requests, through her attorney, to have all her IMEs held in one location and on the same date which must be a Saturday. In support of this demand, Ms. Abbott’s attorney admonished the insurance carrier that “[t]he no-fault regulations clearly state that all medical examinations requested by the insurer shall be held at [a] time and place reasonably convenient to the applicant.”

It is interesting to note that one of the IMEs was scheduled for Saturday, October 19, 2002 and the assignor still failed to appear. It is even more interesting to note that her claimed medical treatments consisted of 12 separate dates including several visits in a single week and only one visit claimed fell on a Saturday, and that was for transportation unconnected to any claimed medical treatment.

It should be observed that the provision of the no-fault regulation addressed by the assignor’s attorney is 11 NYCRR 65-3.5 (e), which is part of the postclaim verification protocols.

As the majority of the appellate court stated in Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co. (7 Misc 3d 18, 20 [App Term, 2d & 11th Jud Dists 2004]):

“The insurance regulations provide, in the mandatory personal injury protection endorsement, which is independent of the verification protocols, that ‘[t]he eligible injured person shall submit to medical examination . . . when, and as often as, the Company may reasonably require‘ (11 NYCRR 65-12 [e], now 11 NYCRR 65-1.1 [d]) . . . and because this provision is included in the mandatory endorsement and not in the verification protocols, there appears{**10 Misc 3d at 57} to be no reason to preclude an insurer” (emphasis added).

To be clear, I filed a dissenting opinion in Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co. (7 Misc 3d 18 [2004], supra) and do not agree with reading the no-fault regulations as a fragmented collection of rules and regulations. It is for this reason that I believe that both requirements should be read together. Therefore, all eligible injured persons must submit to medical examinations when and as often as the company may reasonably require, and the company shall hold such examinations at a place and time reasonably convenient to the eligible injured person. [*6]

In the matter at hand, I find that the “company” fully complied with the regulations. It was the plaintiff’s assignor who clearly and intentionally chose not to submit to any independent medical examinations. The letter from the assignor’s attorney sent only after she failed to appear at any of the first noticed three IMEs (one of which was a Saturday) or any of the second noticed IMEs was merely a “red herring” meant solely to excuse her failures and not to comply with the regulations. Specifically, she had found the time on Wednesday, September 10, 2002, to attend a consultation ($230.10) with Dr. Schwartz and submit to SSEP testing ($604.24) with the same doctor, undergo physical therapy ($751.83) with Dr. Pegarum, and be treated ($391.74) by Dr. Konn, a chiropractor, all on the same day. Then on the following day, Thursday, September 11, 2002, she underwent substantial acupuncture treatment ($1,180.56) and analysis with Dr. Yuen. Indeed, she went for treatment on 11 separate days during the middle of the week.

Clearly, if it was reasonable for the assignor to attend all of her scheduled medical treatments during the work week, it was certainly not unreasonably inconvenient for her to attend the scheduled or rescheduled IMEs.

Accordingly, I would modify the order of the lower court insofar as appealed from and deny the plaintiffs’ motion for summary judgment and, upon searching the record, I would dismiss the complaint for the reasons set forth in my dissent in the case of Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co. (7 Misc 3d 18 [2004], supra).

Pesce, P.J., and Patterson, J., concur; Golia, J., concurs in part and dissents in part in a separate memorandum.

[*1]

Supreme Court, Appellate Term, Second Department, September 20, 2005

APPEARANCES OF COUNSEL

Amos Weinberg, Great Neck, for appellant. Troy & Troy, Lake Ronkonkoma (Hariharan Krishnaraj and Leonard Romano of counsel ), for respondent.

{**9 Misc 3d at 98} OPINION OF THE COURT

Memorandum.

Order, insofar as appealed from, unanimously reversed without costs, plaintiff’s motion for summary judgment granted and matter remanded to the court below for the calculation of statutory interest and an assessment of attorney’s fees.

In this action to recover first-party no-fault benefits for medical services rendered to its assignor, plaintiff established a prima facie entitlement to summary judgment by proof that it submitted the claims, setting forth the fact and the amounts of the losses 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]; A.B. Med. Servs. PLLC v Lumbermens Mut. Cas. Co., 4 Misc 3d 86 [App Term, 2d & 11th Jud Dists 2004]; Damadian MRI in Elmhurst v Liberty Mut. Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51700[U] [App Term, 9th & 10th Jud Dists 2003]). Contrary to the determination of the court below, defendant’s denial of claim form, indicating the dates on which the claims were received, adequately established that plaintiff sent, and that defendant received, the claims (see Capio Med., P.C. v Progressive Cas. Ins. Co., 7 Misc 3d 129[A], 2005 NY Slip{**9 Misc 3d at 99} Op 50526[U] [App Term, 2d & 11th [*2]Jud Dists 2005]; A.B. Med. Servs. v New York Cent. Mut. Fire Ins. Co., 3 Misc 3d 136[A], 2004 NY Slip Op 50507[U] [App Term, 2d & 11th Jud Dists 2004]). Defendant’s denial of claim forms indicate that defendant’s denial of plaintiff’s claims was not timely made within the 30-day statutory period within which it was required to pay or deny the claim (11 NYCRR 65-3.8 [c]). Accordingly, defendant is precluded from raising most defenses (see Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 282 [1997]), including its defenses of nonconformity with the workers’ compensation schedules and excessive billing (see New York Hosp. Med. Ctr. of Queens v Country-Wide Ins. Co., 295 AD2d 583, 586 [2002]; Capio Med., P.C. v Progressive Cas. Ins. Co., 7 Misc 3d 129[A], 2005 NY Slip Op 50526[U] [2005], supra; Triboro Chiropractic & Acupuncture, PLLC v New York Cent. Mut. Fire Ins. Co., 6 Misc 3d 132[A], 2005 NY Slip Op 50110[U] [App Term, 2d & 11th Jud Dists 2005]).

Defendant also denied the claims on the ground that the response submitted by plaintiff’s assignor to defendant’s wage verification request was fraudulent. In support thereof, defendant submitted the affirmation of its attorney and an attached unsworn report of a handwriting expert, who compared the writing in the wage verification form submitted by the plaintiff’s assignor and the wage verification form submitted by another claimant “involved” in the subject accident, and concluded that the forms had been prepared by the same individual, but could not give an opinion regarding the two signatures “because of the lack of similar letters.” Defendant argues that, despite its untimely denial, it is not precluded from asserting its defense of fraud. Defendant’s argument is without merit.

We note at the outset that the documentation submitted by defendant in support of its fraud defense, consisting of the affidavit of its attorney who is without personal knowledge, and the unsworn affidavit of a handwriting expert, does not constitute competent proof in admissible form (see A.B. Med. Servs. PLLC v State-Wide Ins. Co., 7 Misc 3d 136[A], 2005 NY Slip Op 50785[U] [App Term, 2d & 11th Jud Dists 2005]). In any event, defendant has failed to establish that its defense of fraud is not subject to the 30-day preclusion remedy.

In Central Gen. Hosp. v Chubb Group of Ins. Cos. (90 NY2d 195, 199 [1997]), the Court of Appeals held that

“despite . . . [an insurer’s] failure to reject a claim within the 30-day period prescribed by Insurance Law § 5106 (a) and 11 NYCRR 65.15 (g) (3) [now 11 NYCRR 65-3.8 (c)], [it] may assert a lack of coverage defense premised on the fact or founded belief that the alleged injury does not arise out of an insured incident.” (Emphasis supplied.)

The Court specifically distinguished the insurer’s defense that the injuries were unrelated to the accident, a defense implicating “no coverage at all” (id. at 202), and hence exempt from the preclusion remedy, from the insurer’s defense of excessive medical treatment, which involves “excusal from payment of some part of no-fault benefits—a matter of degree at best” (id.), and is subject to the preclusion remedy. The lack of coverage defense also applies to a “collision . . . caused in the furtherance of an{**9 Misc 3d at 100} insurance fraud scheme” (see Matter of Metro Med. Diagnostics v Eagle Ins. Co., 293 AD2d 751, 751-752 [2002]) but does not encompass the defense of provider fraud which is precluded by an insurer’s untimely denial (see Melbourne Med., P.C. v Utica Mut. Ins. Co., 4 Misc 3d 92 [App Term, 2d & 11th Jud Dists 2004]).

In the instant case, the defendant’s submissions in support of its defense of fraud fail to establish a lack of coverage defense that may be deemed exempt from the preclusion remedy. [*3]The expert’s conclusions are insufficient to raise an issue of fact as to whether the medical services rendered “do[ ] not arise out of an insured incident” (Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d at 199), so as to implicate a lack of coverage issue. Moreover, the acts allegedly constituting the fraudulent conduct are inadequate to demonstrate that the accident was in furtherance of an insurance fraud scheme so as to invoke the lack of coverage defense and exemption from the preclusion remedy (see Matter of Metro Med. Diagnostics v Eagle Ins. Co., 293 AD2d 751 [2002], supra).

Accordingly, summary judgment is granted in favor of plaintiff and the matter is remanded to the court below for the calculation of statutory interest and an assessment of attorney’s fees pursuant to Insurance Law § 5106 (a) and the regulations promulgated thereunder.

Rudolph, P.J., Angiolillo and Tanenbaum, JJ., concur.

Supreme Court, Kings County

28371/04

Yvonne Lewis, J.

Mr. Richard Martinez and Geico Insurance Company have moved this court, pursuant to CPLR 3211 (a) (5), for an order to dismiss the within action on the ground that the action is barred by the applicable three year statute of limitations for personal injury and subrogation actions (CPLR 214[5]). The defendants contend that the accident underlying the within action unquestionably occurred on August 17, 2001, and that “[t]he present action [against Mr. Martinez] was commenced on September 8, 2004, well over three years past from the date of the accident on [said] August 17, 2001.” Mr. Martinez received the summons and complaint in the mail on September 25, 2004. Geico was served on October 12, 2004. The defendants also assert that the subrogation action is fatally flawed inasmuch as “[t]he complaint only alleges that the defendant GEICO provided insurance coverage to the defendant Martinez on the date of the accident[;] and New York State Insurance Law section 3420 (b) states that no action can be brought on the liability portion of a policy against an insurer until a judgment has been entered against the covered party.” In this instance, Palisades Insurance Company, not Geico, paid Grigory Belovskiy ($61,500.00) under the uninsured (sic) provisions of his policy. Lastly, the defendants state that the action against Mr. Martinez should additionally be dismissed since he was only served by regular mail, and not as specified for proper service in CPLR 308.

In opposition, the plaintiff (Palisades) notes that prior to settling with its insured (Mr. Belovskiy’s), Mr. Martinez’ insurer, Geico, had offered to settle Mr. Belovskiy’s personal injury claims for twenty-five thousand dollars; however, the “. . .same was not accepted so that PALISADES would preserve its subrogation rights.” With regards to the remaining points raised by the defendants, the plaintiff asserts that 1. “[b]ased.on the tolling provisions of CPLR §204 (b), this action was tolled on November 11, 2002 when Mr. Belovskiy’s attorney, Barry Feldman, filed and served his demand for arbitration. . . .until September 17, 2003 when the underinsured arbitration was held and an award was rendered (citing, Joseph Francese, Inc. v. Enlarged City School District of Troy, 95 NY2d 59, 710 NYS2d 315 [2000])[;] ” 2. Mr. Martinez was served with process pursuant to CPLR §308(4) on September 24, 2004 and January 5, 2005; and,

3. “. . .an insurer’s subrogation rights accrue upon payment of the loss and at that point the insurer who has paid the policy limits possesses derivative and limited rights of the insured and may proceed directly against the negligent third-party to recoup the amount paid.” [*2]

The defendants’ reply to the foregoing points out that CPLR 204(b) is herein inapplicable inasmuch as the parties and claims in the New Jersey arbitration proceeding to which the plaintiff referred were different from those present in the within action. A fortiori, the defendants assert that not only were they not parties to the arbitration, but the “[p]laintiff’s own papers clearly show that there was a judicial determination that there was no jurisdiction over defendant Martinez in

New Jersey.” In other words, since the demand to arbitrate between Gregory Belovskiy (the insured) and Palisades (his insurer) is different from the now subrogated common-law negligence action by Mr. Belovskiy against Mr. Martinez, the tolling provisions of CPLR 204(b) do not apply. Lastly, the defendants argue that Geico’s offer of settlement was of no consequence herein since the Court of Appeals has made it clear that it is “. . .incumbent on a carrier to pay its insured so as to commence any subrogation action before the statute of limitations passes or to be sure that its subrogation rights are protected in any action already brought by its subrogor” (citing, Allstate Ins. Co. v. Stein, 1 NY3d 416, 775 NYS2d 219).

The matter of Allstate Ins. Co. v. Stein, supra, is dispositive of the main issue herein presented, inasmuch as the Court of Appeals’ aptly noted therein that “a subrogatin claim is derivative of the underlying claim and that the subrogee possesses only such rights as the subrogor possessed, with no enlargement or diminution. It is likewise consistent with the principle that a defendant in a subrogation action has against the subrogee all defenses that he would have against the subrogor, including the same statute of limitations defense that could have been asserted against the subrogor.” The court went on to elucidate between traditional equitable subrogation [governed by the three (3) year statute of limitation for personal injury actions pursuant to CPLR 214(5)] in contrast to entitlements established or imposed by statute (eg. No-fault MVIAC benefits) which create new and independent statutory rights and obligations [governed by the three (3) year statute of limitations for an action to recover upon a liability, penalty, or forfeiture created or imposed by statute, pursuant to CPLR 214(2)]. Finally, the court made the following caveat; to wit, that “. . .the subrogee acquires only the rights that the subrogor had, and so any subrogee may

find its claim defeated by a defense based on the subrogor’s action or inaction. In such case, the subrogee’s remedy is against the subrogor, for conduct that has prejudiced the subrogee’s right.

In the matter sub judice, the defendants have clearly established that the plaintiffs are seeking common law subrogation relief, not any statutorily derived benefit. Since it is a matter of general construction that a statute of limitations begins to run the day after a cause of action accrues (Gen. Const. L. §20), and since a cause of action for personal injury that is predicated on negligence accrues when the injury is sustained (Vigilant Ins. Co. of America v. Housing Authority of El Paso, 87 NY2d 36), it irrefutably follows that the plaintiffs’ claims are indeed time barred by the three year statute of limitations which commenced to run as of the date of the underlying accident [CPLR 214(5)].

The assertion by the plaintiffs that the statute of limitations was tolled is also unavailing.

“The purpose of the CPLR 204(b) tolling statute is to preserve a remedy to a litigant who has [*3]mistaken his forum (See D’Angiolillo v. Singh, 2002 WL 31940753 (NY Supp App. Term), 2002 NY Slip Op. 450511, citing Francese, Inc. v. Enlarged City School Dist. Of Troy, supra). Therefore a claimant who makes a demand concerning her contractual rights to uninsured motorist benefits under her insurer’s policy, who thereafter commences a common law negligence action against the defendant tortfeasor and/or his insurer cannot be said to be pursuing an action upon such [initial] claim within the meaning of CPLR 204(b) [See D’Angiolillo v. Singh,, supra, citing Bright v. Pagan, 236 AD2d 350, 653 NYS2d 645]. Lastly, the plaintiffs’ have neither offered nor has this court uncovered any legal or equitable basis to support their contention that an offer of settlement would somehow invoke the tolling provisions of CPLR 204(b).

WHEREFORE, Mr. Richard Martinez and Geico Insurance Company’s motion, pursuant to CPLR 3211 (a) (5), for an order to dismiss the within action on the ground that the action is barred by the applicable three year statute of limitations for personal injury and subrogation actions (CPLR 214[5]) is granted. This constitutes the decision and Order of this Court.

___________________________________

JSC

[*1]

Supreme Court, Appellate Term, Second Department, July 7, 2005

Rockaway Blvd. Med. P.C. v Progressive Ins., 4 Misc 3d 444, reversed.

APPEARANCES OF COUNSEL

Amos Weinberg, Great Neck, for appellants. Freiberg & Peck, LLP, New York City (Yilo J. Kang of counsel), for respondent.

{**9 Misc 3d at 53} OPINION OF THE COURT

Memorandum.

Order unanimously reversed without costs, motion for partial summary judgment by plaintiff Rockaway Boulevard Medical P.C., doing business as Queens Diagnostic Center, granted and matter remanded to the court below for a calculation of statutory interest and attorney’s fees thereon.

Appeal by plaintiff Jamil M. Abraham M.D. P.C., doing business as Park Health Center, unanimously dismissed.

In this action to recover first-party no-fault benefits, plaintiff Rockaway Boulevard Medical P.C., doing business as Queens Diagnostic Center, established a prima facie entitlement to partial summary judgment in the sum of $1,791.73 for medical services rendered to its assignor, by proof that it submitted the 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]; A.B. Med. Servs. PLLC v Lumbermens Mut. Cas. [*2]Co., 4 Misc 3d 86 [App Term, 2d & 11th Jud Dists 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 2003]). In opposition to plaintiff’s motion, defendant challenged the sufficiency of plaintiff’s prima facie showing on the ground that plaintiff’s claim forms were not proper verification claim forms. As the court below noted, while NF-3 claim forms contain an entry calling for the disclosure of the relationship between the billing provider and the treating provider, the generic claim forms submitted by plaintiff, which identified it as the billing provider and the treating physician as Dr. Myung Choi, do not contain such an entry, and do not otherwise indicate the relationship between the billing and treating providers. The court determined that pursuant to 11 NYCRR 65.15 (j) (1), if the treating provider was an employee of the billing provider, then the billing provider would be entitled to recover no-fault benefits, but that if the treating provider was an independent contractor, the billing provider would not be entitled to direct{**9 Misc 3d at 54} payment, since it did not provide the medical services. The court then held that in the absence of information disclosing the relationship between the billing provider and the treating physician, plaintiff did not submit a proper proof of claim, and hence failed to establish a prima facie case of entitlement to payment of no-fault benefits.

We note initially that the court below properly determined that a billing provider may not recover no-fault benefits where the services were rendered by an independent contractor. 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 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.

Accordingly, where a billing provider seeks to recover no-fault benefits for services which were not rendered by it or its employees, but rather by a treating provider who is an independent contractor, it is not a “provider” of the medical services rendered within the meaning of 11 NYCRR 65.15 (j) (1) (now 11 NYCRR 65-3.11 [a]) and is therefore not entitled to recover “direct payment” of assigned no-fault benefits from the defendant insurer (A.B. Med. Servs. PLLC v New York Cent. Mut. Fire Ins. Co., 8 Misc 3d 132[A], 2005 NY Slip Op 51111[U] [App Term, 2d & 11th Jud Dists, Mar. 1, 2005]). A defense that a plaintiff in an assigned first-party no-fault action may not maintain the action because it is not a “provider” within the meaning of the insurance regulations, and hence that no-fault benefits are not assignable to it, is nonwaivable and not subject to the preclusion rule (see Matter of Medical Socy. of State of N.Y. v Serio, 100 NY2d 854 [2003] [transportation charges are no longer assignable under the revised regulations [*3]effective April 5, 2002]).

In the instant case, the plaintiff’s claim forms do not disclose the relationship between the billing provider and treating physician{**9 Misc 3d at 55} (cf. A.B. Med. Servs. PLLC v New York Cent. Mut. Fire Ins. Co., 8 Misc 3d 132[A], 2005 NY Slip Op 51111[U] [2005], supra). However, contrary to the lower court’s determination, said omission does not defeat plaintiff’s prima facie showing. In opposition to plaintiff’s motion, defendant did not assert the nonwaivable defense that the services were provided by an independent contractor, and that plaintiff was therefore not a “provider” under 11 NYCRR 65.15 (j) (1). Rather, defendant’s defense was predicated merely on the insufficiency of the plaintiff’s claim forms without asserting and establishing by proof in admissible form that the status of the treating provider was in fact that of an independent contractor, a fact which could have been ascertained by means of the verification process. In the absence of proof that defendant sought proper verification of the alleged deficiencies in the claim forms and that it timely denied the claims on this ground, it has waived any objections pertaining to the adequacy of the claim forms (see Montefiore Med. Ctr. v New York Cent. Mut. Fire Ins. Co., 9 AD3d 354 [2004]; New York Hosp. Med. Ctr. of Queens v AIU Ins. Co., 8 AD3d 456 [2004]; New York & Presbyt. Hosp. v American Tr. Ins. Co., 287 AD2d 699 [2001]; Mount Sinai Hosp. v Triboro Coach, 263 AD2d 11 [1999]; St. Clare’s Hosp. v Allstate Ins. Co., 215 AD2d 641 [1995]; St. Clare’s Hosp. v Allcity Ins. Co., 201 AD2d 718 [1994]). Accordingly, upon the record before us, we disagree with the determination of the court below that the omitted information in plaintiff’s claim forms warrants a denial of its motion for summary judgment.

Defendant’s remaining argument, namely, that plaintiff failed to produce an authenticated assignment form, is without merit. The lack of authentication of an assignor’s signature, in and of itself, does not constitute a defect in the absence of any statutory and regulatory requirement for the same (A.B. Med. Servs. PLLC v Nationwide Mut. Ins. Co., 6 Misc 3d 70 [App Term, 2d & 11th Jud Dists 2004]). Even assuming arguendo that a lack of authentication constitutes a cognizable defect, defendant’s failure to seek verification of the assignments, or to allege such deficiency in the assignments in its denial of claim forms, constitutes a waiver of any defenses with respect thereto (see id; New York Hosp. Med. Ctr. of Queens v New York Cent. Mut. Fire Ins. Co., 8 AD3d 640 [2004]; Presbyterian Hosp. in City of N.Y. v Aetna Cas. & Sur. Co., 233 AD2d 433 [1996]; Park Health Ctr. v Eveready Ins. Co., 2001 NY Slip Op 40665[U] [App Term, 2d & 11th Jud Dists 2001]).{**9 Misc 3d at 56}

Inasmuch as no issue is raised by the remaining appellant, the appeal with respect to him is dismissed (see Praeger v Praeger, 162 AD2d 671 [1990]).

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

[*1]

Supreme Court, Appellate Term, Second Department, July 7, 2005

APPEARANCES OF COUNSEL

Amos Weinberg, Great Neck, for appellants-respondents. Troy & Troy, Lake Ronkonkoma (Patrick J. Morganelli of counsel), for respondent-appellant.

{**9 Misc 3d at 37} OPINION OF THE COURT

Memorandum.

Order insofar as appealed from unanimously modified by granting the defendant’s cross motion to dismiss the complaint as to plaintiff A.B. Medical Services PLLC; as so modified, affirmed without costs.

Appeal by plaintiffs DAV Chiropractic P.C., Daniel Kim’s Acupuncture P.C. and G.A. Physical Therapy P.C. unanimously dismissed.

In this action to recover assigned first-party no-fault benefits, the NF-3 claim forms attached by plaintiff A.B. Medical Services PLLC in support of its motion for summary judgment provided, under the item calling for information where the “treating provider is different than [the] billing provider,” that the licensed “treating provider” was Dr. Ronald Collins, M.D., and that the “business relationship” was that of “independent contractor.”

The applicable insurance regulations governing “direct payments” of no-fault benefits by the insurer provide that “[a]n insurer shall pay benefits . . . directly to the applicant or . . . upon [*2]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 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.

It is undisputed on the record that both A.B. Medical and Dr. Collins 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{**9 Misc 3d at 38} defendant insurer. Accordingly, the order of the court is hereby modified by providing that defendant’s cross motion for summary judgment dismissing the complaint as to plaintiff A.B. Medical is granted.

Our decision is consistent with the Insurance Department’s interpretation of the insurance regulations (see Informal Ops dated Feb. 21, 2001, Feb. 5, 2002, Mar. 11, 2002, Oct. 21, 2003) which are 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]).

Inasmuch as no issue is raised by the remaining appellants, the appeal with respect to them is dismissed (see Praeger v Praeger, 162 AD2d 671 [1990]).

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