Hollander Legal Group , P.C. (Allan S. Hollander of counsel), for appellant.

Kopelevich & Feldsherova, P.C. (David Landfair of counsel), for respondent.

Appeal from an order of the Civil Court of the City of New York, Kings County (Sharon Bourne-Clarke, J.), dated July 22, 2022. The order, insofar as appealed from, denied the branches of defendant’s motion seeking summary judgment dismissing so much of the complaint as sought to recover upon claims for services rendered April 10, 2018 through May 23, 2018.

ORDERED that the order, insofar as appealed from, is affirmed, with $25 costs.

In this action by a provider to recover assigned first-party no-fault benefits, defendant moved for summary judgment dismissing the complaint on the ground that plaintiff failed to appear for duly scheduled examinations under oath (EUOs). In an order entered July 22, 2022, insofar as appealed from, the Civil Court denied the branches of defendant’s motion seeking summary judgment dismissing so much of the complaint as sought to recover upon claims for services rendered April 10, 2018 through May 23, 2018.

The Civil Court also found, in effect pursuant to CPLR 3212 (g), that defendant had established the proper mailing of the EUO scheduling letters and denial of claim forms, as well as plaintiff’s failure to appear for EUOs scheduled on June 8, 2018 and September 14, 2018. The Civil Court further found that there was an issue of fact as to whether an EUO scheduled to be [*2]held between those dates, on July 13, 2018, was mutually rescheduled, and therefore whether defendant’s September 17, 2018 denials of the claims for services rendered April 10, 2018 through May 23, 2018 were timely. In other words, defendant’s entitlement to summary judgment is dependent upon whether plaintiff’s second nonappearance at a scheduled EUO, triggering the requirement to pay or deny the claims within 30 days thereof (see Ezra Supply, Inc. v Nationwide Affinity Ins. Co. of Am., 77 Misc 3d 15 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2022]; FJL Med. Servs., P.C. v Nationwide Ins., 77 Misc 3d 129[A], 2022 NY Slip Op 51213[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2022]; Quality Health Supply Corp. v Nationwide Ins., 69 Misc 3d 133[A], 2020 NY Slip Op 51226[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2020]), occurred on July 13, 2018 or September 14, 2018.

“A mutual rescheduling, which occurs prior to the date of the scheduled EUO, does not constitute a failure to appear” (Five Boro Psychological Servs., P.C. v Utica Mut. Ins. Co., 41 Misc 3d 140[A], 2013 NY Slip Op 52005[U], *1 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2013]; see Clear Water Psychological Servs., P.C. v Mid-Century Ins. Co., 75 Misc 3d 143[A], 2022 NY Slip Op 50621[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2022]; DVS Chiropractic, P.C. v Interboro Ins. Co., 36 Misc 3d 138[A], 2012 NY Slip Op 51443[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012]). In their appellate briefs, each party contended that the July 13, 2018 EUO was not mutually rescheduled, and the record reflects that, while plaintiff’s counsel requested that it be rescheduled for September 14, 2018, defendant’s counsel, instead of agreeing to such a request, proceeded with the scheduled July 13, 2018 EUO and placed a statement on the record documenting the nonappearance. Defendant’s denial of claim forms were based, in part, on the failure of plaintiff to appear for the July 13, 2018 EUO. Thus, as the parties argue, the record establishes that the July 13, 2018 EUO was not mutually rescheduled.

Defendant contends that although its September 17, 2018 denials were issued well after 30 days had passed from plaintiff’s second nonappearance on July 13, 2018 (see Quality Health Supply Corp. v Nationwide Ins., 2020 NY Slip Op 51226[U]), its denials were nonetheless timely. Defendant notes in its brief that, under the no-fault regulations, insurers are not to treat their insureds in an adversarial fashion (see 11 NYCRR 65-3.2 [b]), and argues that it was abiding by that principle because it accommodated plaintiff’s request to schedule an EUO to be conducted on September 14, 2018. Thus, defendant contends, the facts herein are distinguishable from Quality Health Supply Corp. (2020 NY Slip Op 51226[U]). Defendant’s argument has previously been considered by this court and rejected (see Ezra Supply, Inc. v Nationwide Affinity Ins. Co. of Am., 77 Misc 3d 15; FJL Med. Servs., P.C. v Nationwide Ins., 2022 NY Slip Op 51213[U]).

As defendant has not demonstrated that its September 17, 2018 denials were timely, it has not established that it is not precluded from raising plaintiff’s nonappearance at duly scheduled EUOs as a defense (see Westchester Med. Ctr. v Lincoln Gen. Ins. Co., 60 AD3d 1045 [2009]). Thus, the branch of defendant’s motion seeking summary judgment dismissing so much of the complaint as sought to recover upon claims for services rendered April 10, 2018 through May 23, [*3]2018 was properly denied.

Accordingly, the order, insofar as appealed from, is affirmed.

BUGGS, J.P., and OTTLEY, J., concur.

VENTURA, J., taking no part.

ENTER:
Paul Kenny
Chief Clerk
Decision Date: March 24, 2023

[*1]

MT Physical Therapy v Lancer Ins.

2023 NY Slip Op 50297(U) [78 Misc 3d 130(A)]

Decided on March 24, 2023

Appellate Term, Second Department

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on March 24, 2023

SUPREME COURT, APPELLATE TERM, SECOND DEPARTMENT, 2d, 11th and 13th JUDICIAL DISTRICTS

PRESENT: : WAVNY TOUSSAINT, P.J., MARINA CORA MUNDY, LISA S. OTTLEY, JJ
2022-272 K C

MT Physical Therapy, as Assignee of Yuri Ghazaryan, Appellant,

against

Lancer Insurance, Respondent.

Law Office of Zara Javakov, Esq., P.C. (Victoria Tarasova of counsel), for appellant. Hollander Legal Group, P.C. (Allan S. Hollander and Brian Kaufman of counsel), for respondent.

Appeal from an order of the Civil Court of the City of New York, Kings County (Heela D. Capell, J.), dated March 3, 2022. The order granted defendant’s motion for summary judgment dismissing the complaint.

ORDERED that the order is affirmed, with $25 costs.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff appeals from an order of the Civil Court granting defendant’s motion for summary judgment dismissing the complaint.

Contrary to plaintiff’s sole contention, defendant made a prima facie showing that plaintiff’s assignor’s failure to appear for a duly scheduled examination under oath (EUO) on February 6, 2019 constitutes a failure to appear under the no-fault regulations (11 NYCRR 65-3.5). We note that defendant also established that the assignor failed to appear for a second scheduled EUO on March 7, 2019.

Accordingly, the order is affirmed.

TOUSSAINT, P.J., MUNDY and OTTLEY, JJ., concur.

ENTER:
Paul Kenny
Chief Clerk
Decision Date: March 24, 2023

The Rybak Firm, PLLC (Damin J. Toell and Richard Rozhik of counsel), for appellant.

Rivkin Radler, LLP (Stuart M. Bodoff of counsel), for respondent.

Appeal from an order of the Civil Court of the City of New York, Kings County (Patria Frias-Colón, J.), dated April 12, 2021. The order granted defendant’s motion for summary judgment dismissing the complaint and denied plaintiff’s cross motion for summary judgment.

ORDERED that the order is affirmed, with $25 costs.

In January 2018, plaintiff Horizon P.T. Care, P.C. (Horizon) commenced this action against defendant State Farm Mutual Automobile Ins. Co. (State Farm) to recover assigned first-party no-fault benefits for services Horizon rendered to its assignor for injuries the assignor allegedly sustained in a motor vehicle accident on March 9, 2015. Defendant moved for summary judgment dismissing the complaint on the ground that the Civil Court action was barred by a declaratory judgment issued by the Supreme Court, Nassau County, in a December 2015 declaratory judgment action commenced by State Farm against Horizon in regard to the same March 2015 accident. Following Horizon’s default in appearing in the Supreme Court action, a judgment was entered in July 2016, which declared that “Horizon . . . has no right to receive payment for the bills submitted to STATE FARM and listed in Exhibit ‘1’ of the . . . summons and verified complaint.” Plaintiff opposed the motion in the Civil Court and cross-m[*2]oved for summary judgment. The Civil Court, by order dated April 12, 2021, granted defendant’s motion and denied the cross motion.

“Under the doctrine of res judicata, a final adjudication of a claim on the merits precludes relitigation of that claim and all claims arising out of the same transaction or series of transactions by a party or those in privity with a party” (Ciraldo v JP Morgan Chase Bank, N.A., 140 AD3d 912, 913 [2016]; see Matter of Hunter, 4 NY3d 260, 269 [2005]; Schuylkill Fuel Corp. v Nieberg Realty Corp., 250 NY 304, 306-307 [1929]). ” ‘A judgment by default that has not been vacated is conclusive for res judicata purposes and encompasses the issues that were raised . . . in the prior action’ ” (Tracey v Deutsche Bank Natl. Trust Co., 187 AD3d 815, 817 [2020], quoting Eaddy v US Bank N.A.,180 AD3d 756, 758 [2020]; see North Val. Med., P.C. v Permanent Gen. Assur. Corp., 74 Misc 3d 127[A], 2022 NY Slip Op 50048[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2022]).

Defendant demonstrated that the assignor, date of loss, and dates of service in the Supreme Court action were identical to those listed in the complaint in this action. Moreover, the affidavit of defendant’s claims specialist adequately explained that the monetary amounts for certain claims differed between the complaints in the two actions due to mathematical errors in plaintiff’s claim forms and demonstrated that the charges were actually the same. Thus, contrary to plaintiff’s argument, defendant established that the claims at issue in this action are the same as those referenced in the Supreme Court declaratory judgment, which rendered a final adjudication of those claims (see Ciraldo, 140 AD3d at 913). Consequently, this action was barred under the doctrine of res judicata and the Civil Court properly granted defendant’s motion for summary judgment dismissing the complaint (see ZG Chiropractic Care, P.C. v 21st Century Ins. Co., 70 Misc 3d 138[A], 2021 NY Slip Op 50079[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2021]; Valdan Acupuncture, P.C. v Nationwide Mut. Fire Ins. Co., 64 Misc 3d 134[A], 2019 NY Slip Op 51098[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2019]; EBM Med. Health Care, P.C. v Republic W. Ins., 38 Misc 3d 1 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012]), since any judgment in favor of plaintiff in this action would destroy or impair rights or interests established by the declaratory judgment action (see Schuylkill Fuel Corp., 250 NY at 306-307; North Val. Med., P.C., 2022 NY Slip Op 50048[U]; ZG Chiropractic Care, P.C., 2021 NY Slip Op 50079[U]; Valdan Acupuncture, P.C., 2019 NY Slip Op 51098[U]; EBM Med. Health Care, P.C., 38 Misc 3d at 2).

Accordingly, the order is affirmed.

TOUSSAINT, P.J., BUGGS and MUNDY, JJ., concur.

ENTER:
Paul Kenny
Chief Clerk
Decision Date: March 24, 2023

Integrated Pain Management, PLLC, as assignee of Mikwam Murphy, Plaintiff, against Empire Fire & Marine Insurance Company, Defendant.

Index No. CV-712234-21/BX

Law Offices of Gabriel & Moroff, P.C., by Joseph Padrucco, Esq., for Plaintiff

McDonnell Adels & Klestzick, PLLC, by Christopher Stevens, Esq., for Defendant

Ashlee Crawford, J.

Recitation as Required by CPLR §2219(a), the following papers were read on this motion:

Papers Numbered
Defendant’s Notice of Motion, Affirmation, and Exhibits in Support 1

Plaintiff Integrated Pain Management, PLLC, seeks $366.64 in no-fault insurance benefits for medical services it rendered to assignor Mikwam Murphy on August 16, 2018. The services consisted of treatment for injuries Murphy allegedly sustained in an automobile accident on July 22, 2018. Defendant Empire Fire & Marine Insurance Company moves pursuant to CPLR § 3212 for summary judgment dismissing the complaint, contending that plaintiff is barred by the doctrines of res judicata, collateral estoppel, and law of the case from relitigating the issue of coverage for this claim (Stevens Affirm. ¶ 18). Plaintiff does not oppose the motion.

Prior Action

In 2019, Empire Fire commenced a declaratory judgment action in Kings County Supreme Court against Integrated Pain Management and Murphy, among others (see Empire Fire & Marine Ins. Co. v. Adams, Index No. 512686/19 [Sup. Ct., Kings Co.] [the “Brooklyn Action”]). In that case, Empire Fire alleged that Integrated Pain Management and Murphy participated in an insurance fraud scheme in which rented vehicles would intentionally get into “accidents” with unsuspecting third-party drivers (id. at NYSCEF No. 1). The drivers and passengers in the rented vehicles would receive payments of up to $1,500, and in exchange for those payments would seek medical treatment from certain designated medical providers, who would seek reimbursement under Empire Fire’s no-fault insurance policy (id.).

Empire Fire sought a declaration that it was not obligated to pay for the medical treatments provided by Integrated Pain Management to Murphy arising out of a July 22, 2018 automobile accident, the same accident at issue in the instant case. Neither Integrated Pain Management nor Murphy appeared in the Brooklyn Action.

By decision and order dated April 8, 2021, Supreme Court granted default judgment for [*2]Empire Fire, ruling in relevant part that Empire Fire was not contractually obligated to reimburse Integrated Pain Management for the services it rendered to Murphy arising from the July 22, 2018 accident, because the alleged losses were not the result of an “accident” as contemplated by the insurance policy (id. at NYSCEF 129).

Discussion

In support of summary judgment in this action, defendant argues that plaintiff’s claim is barred as a matter of law under the doctrines of res judicata, collateral estoppel, and law of the case, given Supreme Court’s ruling that contractually there is no no-fault coverage for the July 22, 2018 “accident.” It emphasizes that plaintiff Integrated Pain Management and Murphy were both parties to the Brooklyn Action and the claim here arises out of the very same accident at issue in that case.

A party seeking summary judgment “must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to eliminate any material issues of fact from the case” (Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]). Once this showing is made, the burden shifts to the opposing party to produce evidentiary proof in admissible form sufficient to establish the existence of triable issues of fact (Zuckerman v City of New York, 49 NY2d 557, 562 [1980]). “[M]ere conclusions, expressions of hope or unsubstantiated allegations or assertions are insufficient” to defeat summary judgment (id.). Summary judgment is a drastic remedy and must be denied if there is any doubt as to the existence of a triable issue of material fact (Rotuba Extruders, Inc. v Ceppos, 46 NY2d 223, 231 [1978]). The evidence must be viewed in the light most favorable to the party opposing summary judgment (Branham v Loews Orpheum Cinemas, Inc., 8 NY3d 931, 932 [2007]).

“Under res judicata, or claim preclusion, a valid final judgment bars future actions between the same parties on the same cause of action” (Parker v Blauvelt Volunteer Fire Co., 93 NY2d 343, 347 [1999]). “As a general rule, once a claim is brought to a final conclusion, all other claims arising out of the same transaction or series of transactions are barred, even if based upon different theories or if seeking a different remedy” (id. [internal quotation marks and citation omitted]). “Collateral estoppel, or issue preclusion, precludes a party from relitigating in a subsequent action or proceeding an issue clearly raised in a prior action or proceeding and decided against that party , whether or not the tribunals or causes of action are the same” (id. at 349 [internal quotation marks and citation omitted]). “The doctrine applies if the issue in the second action is identical to an issue which was raised, necessarily decided and material in the first action, and the plaintiff had a full and fair opportunity to litigate the issue in the earlier action” (id.; see also Rojas v Romanoff, 186 AD3d 103, 107-09 [1st Dept 2020][comparing claim preclusion and issue preclusion]).

The Court finds that defendant has met its prima facie burden on summary judgment under the doctrine of collateral estoppel. Plaintiff seeks in this action to relitigate the identical issue raised and decided against it in the Brooklyn Action; that is, plaintiff’s right to payment under defendant’s no-fault insurance policy for medical services it rendered to Murphy related to the July 22, 2018 “accident.” Both parties had a full and fair opportunity to litigate this question in the Brooklyn Action, and Supreme Court clearly decided it against plaintiff. Plaintiff has failed to raise an issue of fact sufficient to defeat summary judgment.

Accordingly, it is hereby

ORDERED that Defendant’s motion for summary judgment seeking dismissal of the complaint is GRANTED and the case is dismissed with prejudice.

This constitutes the decision and order of the Court.

_________________________________
HON. ASHLEE CRAWFORD, J.C.C.
Dated: Bronx, New York
March 22, 2023

Country-Wide Ins. Co. v Alicea

2023 NY Slip Op 01474 [214 AD3d 530]

March 21, 2023

Appellate Division, First Department

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

As corrected through Wednesday, May 3, 2023

[*1]

Country-Wide Insurance Company, Respondent, v Richard Alicea et al., Defendants, and SP Orthotic Surgical & Medical Supply, Inc., et al., Appellants.

The Rybak Firm, PLLC, Brooklyn (Maksim Leyvi of counsel), for appellants.

Thomas Torto, New York, for respondent.

Order, Supreme Court, New York County (Melissa A. Crane, J.), entered August 27, 2021, which granted plaintiff Country-Wide Insurance Company’s motion for summary judgment declaring that plaintiff has no duty to defendants-appellants to pay no-fault claims based on the injured party’s failure to appear for examinations under oath (EUO), and permanently stayed any further action involving the injured party, unanimously reversed, on the law, without costs, the motion denied and the declaration and stay vacated.

Although plaintiff timely requested an EUO and subsequently issued a timely denial (see Unitrin Advantage Ins. Co. v Bayshore Physical Therapy, PLLC, 82 AD3d 559, 560 [1st Dept 2011]), the motion court erred in granting summary judgment. 11 NYCRR 65-3.5 (e) requires an EUO request be based on application of objective standards, and that the insurer must have a specific objective justification. Summary judgment is premature under CPLR 3212 where an insurer fails to provide a medical provider with its objective justification for requesting the EUO (Country-Wide Ins. Co. v Delacruz, 205 AD3d 473, 473 [1st Dept 2022]). This Court has explained that the insurer’s reason for the EUO is essential for medical providers to oppose an insurer’s summary judgment motion, and that information is in the exclusive knowledge and control of the insurer (American Tr. Ins. Co. v Jaga Med. Servs., P.C., 128 AD3d 441, 441 [1st Dept 2015]).

Plaintiff’s argument that the opposing defendants waived any objection to the reasonableness of EUO request is unavailing (Country-Wide, 205 AD3d at 474). Concur—Kapnick, J.P., Kern, Gesmer, Moulton, Higgitt, JJ.

Sergey Kalitenko MD, AAO NORMAN BARAHONA, Plaintiff, against Integon National Ins. Co., Defendant.

Index No. CV-713066-22/RI

Kopelevich & Feldsherova PC for Plaintiff

Rossillo & Licata, PC for Defendant

Robert J. Helbock Jr., J.

Recitation, as required by CPLR 2219 (a), of the papers considered in the review of this application:

Papers Numbered
Notice of Motion and Affirmation/Affidavit annexed 1-2
Plaintiff’s Affirmation in Opposition 3

Upon the foregoing cited papers, the decision on Defendant’s motion is as follows:

Plaintiff, SERGEY KALITENKO MD (hereinafter, “Plaintiff”), as assignee of NORMAN BARAHONA (hereinafter, “Assignor”), commenced this action against the defendant, INTEGON NATIONAL INS. CO. (hereinafter, “Defendant”), to recover assigned first-party No-Fault benefits for medical treatment provided to Assignor.

Currently before the Court is Defendant’s motion for summary judgment pursuant to CPLR 3212 for an order dismissing the instant matter due to the Assignor’s failure to appear for duly noticed independent medical examinations and examinations under oath. Defendant submitted opposition to the motion; and the motion was argued before the undersigned on March 2, 2023.

DISCUSSION

The procedural history of this matter warrants an explanation before the Defendant’s instant motion may be discussed. The summons and complaint in this matter were filed by the Plaintiff on July 15, 2022. An affidavit of service was filed in this matter on August 26, 2022, demonstrating that service was made outside the City of New York, in Saddle Brook, New Jersey, on July 27, 2022. According to section 402(b) of the Civil Court Act, “If the summons is served by any means other than personal delivery to the defendant within the city of New York, it shall provide that the defendant must appear and answer within thirty days after proof of service is filed with the clerk.” In this matter, service was made outside the City of New York. Therefore, the Defendant had thirty days to file its answer from when the affidavit of service was filed with the Court (August 26, 2022). The Defendant filed its answer on October 4, 2022, more than the 30-day statutory period. Plaintiff filed a rejection of Defendant’s answer two days later on October 6, 2022. The Defendant filed the instant motion on December 1, 2022. Notably, Defendant did not move to compel the Plaintiff to accept its late answer.

Since Defendant’s answer was rejected, issue has not been joined, and Defendant’s motion for summary judgment was improper. The joinder of issue is a prerequisite that is “strictly adhered to” (City of Rochester v Chiarella, 65 NY2d 92, 101 [1985]).

Under CPLR 3012(d), a court may “extend the time to appear or plead, or compel the acceptance of an untimely pleading, ‘upon such terms as may be just and upon a showing of reasonable excuse for delay or default'” (Bank of New York Mellon v Adago, 155 AD3d 594, 595 [2d Dept 2017]). This Court cannot sua sponte compel the Plaintiff to accept the Defendant’s untimely answer as no reasonable excuse for the default has been proffered by the Defendant. Therefore, before the Defendant’s motion for summary judgment can be decided, issue must be joined, by the acceptance of the Defendant’s untimely answer.

Accordingly, it is hereby

ORDERED that Defendant’s motion is DENIED without prejudice.

The foregoing constitutes the Decision and Order of the Court.

Date: March 20, 2023
Staten Island, New York
Hon. Robert J. Helbock, Jr.
Judge, Civil Court

American Transit Insurance Company, Petitioner, against North Shore Family Chiropractic PC, A/A/O ALBERTO CARPINTEYRO, Respondent.

Index No. 535468/2022

Larkin Farrell LLC (David Fair of counsel), for petitioner.

Aaron D. Maslow, J.

The following numbered papers were read on this petition and cross-petition:

Petition (NYSCEF Doc No. 1)
Notice of Petition (NYSCEF Doc No. 2)
Exhibit A – Arbitration Award (NYSCEF Doc No. 3)
Exhibit B – Master Arbitration Award (NYSCEF Doc No. 4)
Exhibit C – Respondent North Shore Family Chiropractic PC’s Arbitration Request Form and Arbitration Submission (NYSCEF Doc No. 5)
Exhibit D – Petitioner American Transit Insurance Company’s Arbitration Submission and Master Arbitration Brief (NYSCEF Doc No. 6)
Statement of Authorization for Electronic Filing (NYSCEF Doc No. 7)
Request for Judicial Intervention (NYSCEF Doc No. 8)
Affidavit of Service (NYSCEF Doc No. 9)
Statement of Authorization for Electronic Filing Affidavit of Service (NYSCEF Doc No. 10)
Affidavit of Service (NYSCEF Doc No. 11)
Answer (NYSCEF Doc No. 12)
Notice of Cross-Petition (NYSCEF Doc No. 13)
Affirmation in Opposition to Motion and in Support of Cross-Petition (NYSCEF Doc No. 14)
Exhibit A – Affirmation as to Attorney’s Fees (NYSCEF Doc No. 15)
Affirmation in Opposition to Cross-Petition and in Further Support of Petition (NYSCEF Doc No. 16)

Issue Presented

Case law holds that where a health service provider’s bills for treating an injured for-hire vehicle driver are submitted to the No-Fault insurer and the latter denies payment on the asserted ground that the driver was injured in the course of employment, adjudication of that defense in court or arbitration must be held in abeyance pending its resolution by the Workers’ Compensation Board. Considering this, is it arbitrary and capricious, without rational basis, and incorrect as matter of law for a No-Fault insurance arbitrator to reject the course-of-employment defense — and not defer resolution of it to the Workers’ Compensation Board — where the No-Fault insurer’s only evidence is a police report establishing that the driver was operating a vehicle which bore “TC” plates and lacked passengers?

Background

Petitioner American Transit Insurance Company (“ATIC”) commenced this CPLR Article 75 proceeding by notice of petition, seeking an order and judgment vacating a No-Fault Insurance master arbitration award of Robyn D. Weisman, Esq. (dated September 29, 2022), which affirmed the arbitration award of Mitchell Lustig, Esq. (dated July 10, 2022) granting Respondent North Shore Family Chiropractic PC’s (“North Shore”) claim for No-Fault insurance compensation for health service expenses.^[FN1] ,^[FN2] Arbitrator Lustig awarded $2,104.48 to North Shore as compensation for treating Alberto Carpinteyro, its assignor ^[FN3] (“Assignor”), who claimed [*2]to have been injured in a motor vehicle accident on July 29, 2019.

Respondent North Shore has opposed ATIC’s petition to vacate the master arbitration award, and it cross-petitioned for a judgment confirming the master arbitration award and awarding $2,173.14 as principal, statutory interest, the $40.00 arbitration filing fee, attorney’s fees, and costs and disbursements. ATIC opposed North Shore’s cross-petition and filed a reply in support of its petition.

The petition and cross-petition came before the undersigned for oral argument on March 8, 2023. At that time, ATIC appeared by counsel. North Shore did not appear.

The underlying arbitration which is the subject of this proceeding was organized by the American Arbitration Association (“AAA”), which assigned Case No. 17-21-1223-5155 ^[FN4] to it. The AAA has been designated by the New York State Department of Financial Services to coordinate the mandatory arbitration provisions of Insurance Law § 5106 [b], which provides:

Every insurer shall provide a claimant with the option of submitting any dispute involving the insurer’s liability to pay first party [“No-Fault insurance”] benefits, or additional first party benefits, the amount thereof or any other matter which may arise pursuant to subsection (a) of this section to arbitration pursuant to simplified procedures to be promulgated or approved by the superintendent.

Insurance Law article 51 provides for the payment of basic economic loss incurred by persons injured in motor vehicle accidents. Included within basic economic loss are first-party benefits for medical and other professional health services.^[FN5] First-party benefits are more commonly known as “No-Fault benefits.”^[FN6] Notably, and relevant in the instant case, is that first-party benefits are reduced by, among other things, Workers’ Compensation benefits where an injured person in a motor vehicle accident was acting in the course of employment (Insurance Law § 5102 [b] [2]).

In furtherance of the statutory scheme, a comprehensive set of No-Fault Regulations were promulgated by the Superintendent of Insurance (presently Financial Services). They are contained at 11 NYCRR part 65. Said part is subdivided into five subparts which encompass the [*3]following topics: prescribed insurance policy endorsements, rights and liabilities of self-insurers, claims for benefits, arbitration, and unauthorized providers of health services. Part 65 is also known as Insurance Regulation 83.

Generally, the claims process for health service bills ^[FN7] for No-Fault compensation begins with the submission by a health service provider of a claim form (usually, but not always, a Form NF-3 verification of treatment by attending physician or other provider of health service).^[FN8] Besides providing information regarding the injured person, diagnoses, projected treatment, etc., the claim form includes a bill for services performed. The claim form can be submitted directly by the injured person to the No-Fault insurer but over many decades a practice developed by which the health service providers submit the claim forms. As noted in footnote 3, they possess standing to do so by virtue of having received signed assignments of benefits from the injured persons.^[FN9] ,^[FN10] The insurer must either pay or deny the bill within 30 days, or seek additional verification within 15 business days. If it denies payment, it must issue a Form NF-10 denial of claim ^[FN11] identifying why the bill was not paid. (See Insurance Law § 5106 [a]; Viviane Etienne Medical Care, P.C. v Country-Wide Ins. Co., 25 NY3d 498, 505 [2015].)

The record evidence submitted in this Article 75 proceeding revealed that the underlying arbitration involved seven Form NF-3 claim forms (bills) submitted by North Shore to ATIC for payment. This was in accordance with the procedure outlined in the previous paragraph for the submission of claims for No-Fault compensation. For each of North Shore’s claim forms there was an appurtenant Form NF-10 denial form issued by ATIC. Pertinent details are as follows:

• Dates of service October 2, 2020 – October 23, 2020 ($343.30):

Bill received November 18, 2020, and timely denied on December 16, 2020. Grounds of denial: (1) Assignor was in the course of employment and therefore eligible for Workers’ Compensation, so the bill must be submitted to the Workers’ Compensation insurer [*4](“course-of-employment defense”), (2) excessive fees ^[FN12], and (3) untimely submission of proof of claim (45-day rule)^[FN13].

• Dates of service November 6, 2020 – November 30, 2020 ($411.96):

Bill received December 18, 2020, and timely denied on January 14, 2021. Grounds of denial: (1) course-of-employment defense, (2) excessive fees.

• Dates of service December 7, 2020 – December 28, 2020 ($217.15):

Bill received January 19, 2021, and timely denied on December 16, 2021. Grounds of denial: (1) course-of-employment defense, (2) excessive fees.

• Dates of service January 3, 2021 – January 25, 2021 ($354.47):

Bill received February 16, 2021, and timely denied on March 12, 2021. Grounds of denial: (1) course-of-employment defense, (2) excessive fees, (3) no further treatment needed effective January 4, 2021 per Dr. Dennis Mann’s Dec. 10, 2020 independent medical examination (“IME defense”).

• Dates of service February 9, 2021 – February 26, 2021 ($285.81):

Bill received March 15, 2021, and timely denied on April 13, 2021. Grounds of denial: (1) course-of-employment defense, (2) excessive fees, (3) IME defense.

• Dates of service March 1, 2021 – March 29, 2021 ($343.30):

Bill received April 19, 2021, and timely denied on May 18, 2021. Grounds of denial: (1) course-of-employment defense, (2) excessive fees, (3) IME defense.

• Dates of service April 18, 2021 – April 30, 2021 ($217.15):

Bill received May 20, 2021, and timely denied on June 18, 2021. Grounds of denial: (1) course-of-employment defense, (2) excessive fees, (3) IME defense.

The record evidence reveals further that on July 6, 2002, Arbitrator Lustig conducted a hearing at which Alex Beyenson, Esq., from The Beynenson Law Firm, P.C., appeared for North Shore, and Helen Cohen, Esq., appeared for ATIC.

Arbitrator Mitchell Lustig’s Award

In his award, Arbitrator Lustig stated that his findings and conclusions were based upon the documents submitted by the parties in the AAA’s ADR Center ^[FN14] and the parties’ arguments at the hearing. He first found that North Shore established its prima facie case of entitlement to compensation “by submitting evidentiary proof that the prescribed statutory billing forms had been mailed and received and that payment of No-Fault benefits were overdue.” The arbitrator [*5]cited to Westchester Med. Ctr. v Lincoln Gen. Ins. Co. (60 AD3d 1045 [2d Dept 2009]) and Mary Immaculate Hosp. v Allstate Ins. Co. (5 AD3d 742 [2d Dept 2004]). (NYSCEF Doc No. 3, arbitration award, at numbered p 2.)

The arbitrator then reviewed the defenses asserted by ATIC in its Form NF-10 denials of claim. The first defense reviewed was the one concerning the timeliness of submission of the bill for dates of service October 2, 2020 – October 23, 2020. Given that this defense to payment of the bill was not raised in this Article 75 proceeding, it suffices to say that the arbitrator sustained it with respect to a date of service which was more than 45 days earlier than the bill was received by ATIC; other dates of service were within the 45-day period so the defense was denied as to them. (Id. at numbered pp 2-4.)

The arbitrator then reviewed ATIC’s IME defense. He found that North Shore’s contemporaneous and post-IME cutoff re-examination reports outweighed Dr. Mann’s IME report; that Assignor had documented complaints of pain in his neck and lower back and restrictions in motion in those locations. He found that North Shore had refuted Dr. Mann’s determination that further chiropractic treatment was not necessary. (Id. at numbered pp 4-5.) Arbitrator Lustig’s determination of this issue is not challenged in the within Article 75 proceeding.

That part of Arbitrator Lustig’s award which is at issue herein — the course-of-employment defense — will be assessed in more detail. As noted above, ATIC asserted in each of its Form NF-10 denials of claim that Assignor was in the course of employment and therefore eligible for Workers’ Compensation, so the bills had to be submitted to the Workers’ Compensation insurer. The arbitrator cited to Arvatz v Empire Mutual Ins. Co. (171 AD2d 262 [1st Dept 1991]), for the point of law that “[t]he Workers’ Compensation Board is the exclusive forum to determine whether an individual was in the course of his employment at the time of a motor vehicle accident” (NYSCEF Doc No. 3, arbitration award, at numbered p 5). Citing to a master arbitration award reported in 2000, the arbitrator continued by stating that “As long as there is ‘at least minimal proof of the indicia of employment from which an inference could be drawn to support the defense’ that the assignor is covered by the Workers’ Compensation Law . . . the claim must be denied without prejudice, pending the determination of the issue of employment by the Board.” The third statement of law by the arbitrator was a citation to A.B. Med. Servs. PLLC v American Transit Ins. Co. (8 Misc 3d 127[A], 2005 NY Slip Op. 50959[U] [App Term 2d & 11th Dists 2005]), for the proposition that “If, however, the insurer’s contention that the Assignor acted in the course of his or her employment at the time of the accident is ‘mere speculation’ that fails to establish the defense’s ‘potential merit’ so as to warrant the Board’s review of the facts, the issue need not be resolved by the Board” (NYSCEF Doc No. 3, arbitration award, at numbered p 5).

This was followed by Arbitrator Lustig’s review of the evidence submitted by ATIC concerning its course-of-employment defense: “In support of its Workers’ Compensation defense, [ATIC] submitted a copy of the Police Accident Report indicating that at the time of the accident the Assignor was operating a 2015 Nissan license plate number T751729C.^[FN15] [¶] However, notably absent from the Respondent’s submission is any proof that the Assignor was acting in the course of his employment, such as an Affidavit from its underwriting manager [*6]indicating that the Respondent issued a livery or taxi policy to the Assignor for a ‘for hire vehicle.’ ” (Id.)

Arbitrator Lustig concluded his analysis of the course-of-employment defense as follows: “After careful consideration of the evidence, I find, as a matter of fact, that the Respondent has not submitted sufficient proof that the Assignor was acting in the course of his employment at the time of the accident. Accordingly, the Respondent’s denials premised upon Workers’ Compensation being primary are vacated.” (Id. at numbered p 6.) (emphasis added)

As a result of his analysis, Arbitrator Lustig awarded compensation to North Shore for all amounts billed except for the date of service concerning which the 45-day rule defense was sustained. A total of $2,104.48 was awarded to North Shore. (Id. at numbered pp 6-7.) Interest, an attorney’s fee, and return of the $40.00 arbitration filing fee were also awarded.

Master Arbitrator Robyn D. Weisman’s Award

ATIC filed for master arbitration to appeal Arbitrator Lustig’s award. ATIC did not challenge Arbitrator Lustig’s determinations regarding the defenses of untimely proof of claim (45-day rule) and lack of necessity past an IME cutoff, which pertained to certain bills. The only issue raised in master arbitration was Arbitrator Lustig’s not having deferred to the Workers’ Compensation Board on ATIC’s course-of-employment defense — that he determined it himself. (NYSCEF Doc No. 6, ATIC’s arbitration submissions, at 60-72.)

In her award, Master Arbitrator Weisman set forth the issue in dispute as follows: “Whether [the] lower arbitrator acted in an arbitrary and capricious manner or in violation of a law in ruling that [North Shore] was entitled to reimbursement regardless of [ATIC]’s claim of Worker’s Compensation benefits” (NYSCEF Doc No. 4, master arbitration award, at numbered p 1).

Master Arbitrator Weisman cited to Arvatz (171 AD2d 262), as did Arbitrator Lustig. She also cited to Liss v Trans Auto Systems, Inc. (68 NY2d 15 [1986] [determination that worker did not sustain injuries in course of employment not binding in liability suit on those not parties to compensation proceeding], to the effect that the question of whether one was injured in the course of employment must be resolved by the Workers’ Compensation Board. (Id. at numbered p 2.)

Acknowledging that in arbitration there are many instances in which the possible existence of Workers’ Compensation coverage should be determined by the Workers’ Compensation Board, Master Arbitrator Weisman wrote that here the issue “came down to a question of fact. The issue of whether the accident occurred during the course of employment was a factual one.” (Id.) With respect to this issue of fact, the standard of review was whether the hearing arbitrator’s award was supported by the evidence, had a reasonable and plausible basis, and was rational, Master Arbitrator Weisman citing principally to Matter of Petrofsky v Allstate Ins. Co., 54 NY2d 207 [1981]. She found that Arbitrator Lustig’s decision “was based on the evidence submitted” (id. at numbered p 3). As for any issue of law, “The grounds of review also included wither the decision was incorrect as a matter of law, as provided for in 11 NYCRR 65-4.10 [a] [4]. I do not see a misapplication of law” (id.).

Arbitrator Lustig’s award was affirmed in its entirety by Master Arbitrator Weisman.

ATIC’s Petition to Vacate

ATIC’s petition to vacate asserted that “The arbitration decision was arbitrary and capricious, irrational and without a plausible basis” (NYSCEF Doc No. 1, petition, ¶ 35), in that “Arbitrator Lustig failed to follow well settled law” (id., ¶ 41). The petition proceeded to argue that ATIC had reason to believe that Assignor may have been in the course of his employment at the time of the motor vehicle accident, rendering Workers’ Compensation benefits primary to No-Fault (id., ¶ 42), and it was improper for Arbitrator Lustig to express an opinion whether Workers’ Compensation coverage existed (id., ¶ 54). The petition cited to case law concerning the Workers’ Compensation Board’s jurisdiction over the issue of whether one was in the course of employment when injured. That issue is the only one ATIC advanced in this Article 75 proceeding.

The petition concluded by asserting that Arbitrator Lustig’s decision was “arbitrary and capricious, without rational basis and incorrect as a matter of law because the arbitrator ignored [ATIC]’s evidence and/or well settled legal precedent in order to justify a determination in favor of [North Shore]” (id., ¶ 56). “As a result, [ATIC]’s rights were prejudiced by the partiality of the arbitrator and the arbitrator exceeded his/her power and failed to make a final and definite award and the decision must be vacated” (id., ¶ 57). ATIC was “entitled to a declaration that the arbitration decisions of Mitchell Lustig, Esq. and Robyn D. Weisman, Esq. in the matter designated AAA number 99-21-1223-5155 have no force or effect” (id., ¶ 58).

North Shore’s Cross-Petition to Confirm

North Shore argued in its cross-petition most significantly that the arbitration awards had to be confirmed if there was a colorable justification and a plausible basis for them, citing to Rose Castle Redevelopment II LLC v Franklin Realty Corp. (184 AD3d 230 [1st Dept 2020], and if they were neither arbitrary nor capricious, citing to Matter of Petrofsky v Allstate Ins. Co. (54 NY2d 207) ((NYSCEF Doc No. 14, cross-petition, ¶¶ 3, 6). North Shore pointed out that Arbitrator Lustig found that ATIC did not submit sufficient evidence to support its defense that Assignor was in the course of his employment and that Master Arbitrator Weisman found the finding to be neither arbitrary, capricious, nor contrary to law (id., ¶¶ 14, 15). There was no basis to vacate the awards, it insisted (id., ¶ 3).

North Shore added that it was entitled to an attorney’s fee of $1,650.00 in connection with the Article 75 proceeding as well as costs and disbursements (id. ¶ 23). The original principal amount of $2,173.14, as well as interest, attorney’s fees, and a return of the arbitration filing fee should likewise be awarded (id. at numbered pp 7-8).

No-Fault Insurance Arbitration

When the No-Fault Law was first enacted by the Legislature in Chapter 13 of the Laws of 1973 to take effect February 1, 1974, § 675 of the Insurance Law was added. In subdivision 2 thereof, insurers were required to provide claimants with an arbitration option for disputes involving liability for first-party benefits. This provision was amended in Chapter 892 of the [*7]Laws of 1977, when several changes were made to the 1973 version.^[FN16] The provision regarding arbitration in § 675 was amended to add the following language:

An award by an arbitrator may be vacated or modified by a master arbitrator in accordance with simplified procedures to be promulgated or approved by the superintendent [of insurance]. The grounds for vacating or modifying an arbitrator’s decision by a master arbitrator shall not be limited to those grounds for review set forth in article seventy-five of the civil practice law and rules. The decision of a master arbitrator shall be binding except for the grounds for review set forth in article seventy-five of the civil practice law and rules, and provided further that where the amount of such master arbitrator’s award is five thousand dollars or greater, exclusive of interest and attorney’s fees, the insurer or the claimant may institute an action in a court of competent jurisdiction to adjudicate the dispute de novo.^[FN17]

The provisions regarding No-Fault insurance arbitration remained in the recodification of the Insurance Law enacted in Chapters 367 and 805 of the Laws of 1984. The arbitration provisions were set forth in § 5106, and subdivisions (b) and (c) now read as follows:

(b) Every insurer shall provide a claimant with the option of submitting any dispute involving the insurer’s liability to pay first party benefits, or additional first party benefits, the amount thereof or any other matter which may arise pursuant to subsection (a) of this section to arbitration pursuant to simplified procedures to be promulgated or approved by the superintendent. Such simplified procedures shall include an expedited eligibility hearing option, when required, to designate the insurer for first party benefits pursuant to subsection (d) of this section. The expedited eligibility hearing option shall be a forum for eligibility disputes only, and shall not include the submission of any particular bill, payment or claim for any specific benefit for adjudication, nor shall it consider any other defense to payment.

(c) An award by an arbitrator shall be binding except where vacated or modified by a master arbitrator in accordance with simplified procedures to be promulgated or approved by the superintendent. The grounds for vacating or modifying an arbitrator’s award by a master arbitrator shall not be limited to those grounds for review set forth in article seventy-five of the civil practice law and rules. The award of a master arbitrator shall be binding except for the grounds for review set forth in article seventy-five of the civil practice law and rules, and provided further that where the amount of such master arbitrator’s award is five thousand dollars or greater, exclusive of interest and attorney’s [*8]fees, the insurer or the claimant may institute a court action to adjudicate the dispute de novo.

Insofar as is here relevant, the No-Fault Insurance Regulations promulgated by the Superintendent of Insurance provided that a master arbitrator may vacate or modify a hearing arbitrator’s award where it “was incorrect as a matter of law (procedural or factual errors committed in the arbitration below are not encompassed within this ground)” (11 NYCRR 65.18 [a] [4]). This regulatory language was carried over into the revised Regulations promulgated in 2002, in 11 NYCRR 65-4.10 (a) (4).^[FN18] A master arbitrator may also vacate or modify a hearing arbitrator’s award under certain other grounds also (see 11 NYCRR 65-4.10 [a]).^[FN19]

Discussion

The provision that a hearing arbitrator may vacate or modify a hearing arbitrator’s award due to an error of law is one of several grounds but is the main gravamen of ATIC’s objection to the arbitration outcome here. As noted above, ATIC has maintained that Arbitrator Lustig erred in not complying with “well settled legal precedent” concerning how to deal with a No-Fault insurer’s defense asserting that an injured person was in the course of employment when the motor vehicle accident occurred (NYSCEF Doc No. 1, petition, ¶ 41). ATIC has insisted that the Workers’ Compensation Board had to decide whether Assignor was injured in the course of employment — that Arbitrator Lustig should have never ventured into any sort of consideration of it.

The issue of the availability of Workers’ Compensation benefits as a first line source before No-Fault compensation is available derives from Insurance Law § 5102 [b] [2], where the No-Fault Law defines first-party benefits:

payments to reimburse a person for basic economic loss on account of personal injury arising out of the use or operation of a motor vehicle, less: . . .

(2) Amounts recovered or recoverable on account of such injury under state or federal laws providing social security disability benefits, or workers’ compensation benefits, or disability benefits under article nine of the workers’ compensation law, or medicare benefits, other than lifetime reserve days and provided further that the medicare benefits utilized herein do not result in a reduction of such person’s medicare benefits for a subsequent illness or injury. (emphasis added)

The No-Fault Regulations implement this at 11 NYCRR 65-3.16 (a) (9): “Pursuant to section 5102(b)(2) of the Insurance Law, when the applicant is entitled to workers’ compensation benefits due to the same accident, the workers’ compensation carrier shall be the sole source of reimbursement for medical expenses.”

Probably the first appellate decision on the issue of how to treat a No-Fault insurer’s defense that a court lacked jurisdiction to determine if motor vehicle accident injuries occurred while in the course of employment was Arvatz v Empire Mut Ins. Co., 171 AD2d 262 (1st Dept 1991], to which both arbitrators cited. This was a declaratory judgment action commenced by an injured driver against his vehicle’s No-Fault insurer. The latter had contended that the plaintiff operated his vehicle while being employed by a car service. The plaintiff maintained that the No-Fault insurer was required to make the mandated No-Fault payments to which he was entitled. The Supreme Court found at a framed issue hearing that the plaintiff was an independent contractor and not an employee. This was in error, held the Appellate Division, “since the matter should have been remanded to the Workers’ Compensation Board to determine the threshold issue of whether plaintiff is an employee or independent contractor” (id. at 267). This was a mixed question of law and fact, noted the court, and the Board has primary jurisdiction to resolve the question of coverage. The court cited to O’Rourke v Long (41 NY2d 219 [1976] and Liss v Trans Auto Systems, Inc. (68 NY2d 15 [1986]). The judgment of Supreme Court was reversed and a declaration was made that the Workers’ Compensation Board had to make the initial determination as to whether the alleged injuries were within the purview of the Workers’ Compensation Law.

Arvatz was a First Department decision. The Appellate Division, Second Department, in LMK Psychological Services, P.C. v American Transit Ins. Co. (64 AD3d 752 [2d Dept 2009]), [*9]held that it was improper for the Supreme Court to sustain a No-Fault insurer’s defense that the injured person was injured in the course of employment. Rather the determination had to be made by the Workers’ Compensation Board. Although the decision did not mention Arvatz, it placed the Second Department in conformity with the First Department.

Consistent with LMK Psychological Services, P.C. and citing to Arvatz, the Second Department wrote in Dunn v American Transit Ins. Co. (71 AD3d 629, 630 [2010]): “[I]t is therefore inappropriate for the courts to express views with respect thereto pending determination by the board. . . . In this case, the defendant’s motion presented factual questions as to the plaintiff’s ‘status as either an independent contractor, as he claims he is, or as an employee of’ a car service dispatch base, as the defendant claims. . . . Resolution of these questions ‘is best suited for determination by the [Workers’ Compensation] Board, given its expertise in the area’. . . . Accordingly, prior to rendering a determination on the motion, the Supreme Court should have referred the matter to the Workers’ Compensation Board for a hearing and determination as to whether the plaintiff is relegated to benefits under the Workers’ Compensation Law. . . .”

The first reported court decision to apply Arvatz in the context of No-Fault arbitration was JSI Expert Services Inc. v Fireman’s Fund Ins. Co. (10 Misc 3d 1060[A], 2005 NY Slip Op 52058[U] [Civ Ct, Kings County 2005]). At the arbitration, the No-Fault insurer raised the question as to whether the assignor was working at the time of the accident. The arbitrator determined that there was at least minimal proof of the indicia of employment and, therefore, the Workers’ Compensation Board — and not arbitration — was the proper forum for making the ultimate determination on the course-of-employment defense. The master arbitrator affirmed. The court held that the master arbitrator’s award was neither arbitrary, capricious, irrational, nor without a substantial or plausible basis.

In JSI Expert Services Inc. the course-of-employment defense was not asserted in a timely Form NF-10 denial of claim, yet the court sustained the arbitrator’s finding that there was an indicia of employment, warranting deferring a determination of the issue to the Workers’ Compensation Board. Subsequently, the Appellate Division, Second Department held that an insurer’s course-of-employment defense in a No-Fault insurance compensation case had to be timely asserted, i.e., within the statutory 30-day deadline for issuing denials (see Westchester Med. Ctr. v Lincoln Gen. Ins. Co., 60 AD3d 1045 [2d Dept 2009]).^[FN20] Notwithstanding this, JSI Expert Services Inc. is still good law for the principle that just as a court must defer to the Workers’ Compensation Board if a course-of-employment defense is raised by the No-Fault insurer (albeit timely), so too should an arbitrator.

Strict compliance with Arvatz in No-Fault insurance compensation actions took a turn in A.B. Med. Servs. PLLC v American Transit Ins. Co. (8 Misc 3d 127[A], 2005 NY Slip Op. 50959[U] [App Term 2d & 11th Dists 2005]). The defendant No-Fault insurer timely rejected the claims on the sole ground that at the time of the accident the assignor was acting in the course of his employment, and ergo the plaintiff health service providers had to pursue their claims before the Workers’ Compensation Board. The Civil Court denied the motions of all parties for summary judgment. The Appellate Term modified the Civil Court’s order by granting the plaintiff health service providers’ motion for summary judgment. “In our view, the insurer [*10]failed to establish the defense’s ‘potential merit’ so as to warrant Board review of the facts” (id. at *1). The Appellate Term noted that the No-Fault insurer’s evidence on the issue consisted of a claim adjuster’s assertion that the claimant was eligible for Workers’ Compensation, and this determination was based solely on an employer’s unsworn statement dated 18 months before the accident and a police accident report. The police accident report was offered in evidence in support of the insurer’s motion for the first time in reply papers. In contrast, the health service providers submitted sworn statements by the assignor and his purported employer that the assignor was not working when the accident occurred. The court described the insurer’s claim that the assignor acted in the course of employment as “mere speculation,” and found that the insurer failed to establish any issues of fact that had to be resolved by the Workers’ Compensation Board. This case stands as a precedent for the principle that although the routine course would be to defer to the Workers’ Compensation Board, the No-Fault insurer must submit enough evidence of potential merit so as to create an issue of fact; it may not rely on mere speculation. Arbitrator Lustig relied on this Appellate Term decision.

In another Appellate Term decision it was found that the “defendant’s proof, including the police accident report, was sufficient to raise a question of fact as to whether [the injured person] was acting as an employee at the time of the accident, which issue must be resolved by the Workers’ Compensation Board” (Response Equipment, Inc. v American Transit Ins. Co., 15 Misc 3d 145[A], 2007 NY Slip Op. 51176[U] [App Term 2d & 11th Dists 2007]). The court did not elucidate on what evidence besides the police accident report was submitted.

There are various instances where court decisions have found the No-Fault insurer’s evidence sufficient to trigger deference to a determination by the Workers’ Compensation Board:

• A certified EUO transcript was submitted (see Active Care Med. Supply Corp. v Global Liberty Ins., 71 Misc 3d 129[A], 2021 NY Slip Op. 50257[U] [App Term 2d, 11th & 13th Dists. 2021] [error for trial court to deny admission of EUO transcript during trial]).

• The injured person’s statement was submitted (see AEE Med. Diagnostic, P.C. v Travelers Prop. Cas. Co. of America, 57 Misc 3d 131[A], 2017 NY Slip Op. 51209[U] (App Term 1st Dept 2017]).

• The injured person checked off on the Form NF-2 application for No-Fault benefits that he was employed at the time of the accident and the police report stated that the vehicle operated by him was a taxi (see Compas Med., P.C. v American Transit Ins. Co. (49 Misc 3d 146[A], 2015 NY Slip Op 51675[U] [App Term 2d, 11th & 13th Dists 2015]); Lenox Hill Radiology, P.C. v American Transit Ins. Co., 18 Misc 3d 1136[A], 2008 NY Slip Op. 50330[U] [Civ Ct, NY County 2008]).

• The police report indicated that the vehicle had a taxi license plate and two passengers were inside (see Clear Water Psychological Servs. PC v American Transit Ins. Co., 54 Misc 3d 915 [Civ Ct, Kings County 2016]).

• A cab company owned the vehicle involved in the accident and was named as the insured on the automobile policy (Chiropractic Testing Servs. of New York, P.C. v American Transit Ins. Co. (59 Misc 3d 250 [Civ Ct, Richmond County 2018]).

• The injured person drove a vehicle with TC plates which was owned by a livery company and insured under a livery policy (see RX Warehouse Pharm., Inc. v American Transit Ins. Co., Civ Ct, Kings County, Nov. 13, 2015, Montelione, J., index No. 51265/13).

Numerous decisions have held that the No-Fault insurer’s evidence was sufficient to raise a question of fact triggering the necessity for a Workers’ Compensation Board determination but did not describe the evidence (e.g. Madison Products of USA, Inc. v American Transit Ins. Co., 67 Misc 3d 144[A], 2020 NY Slip Op 50749[U] [App Term 2d, 11th & 13th Dists 2020]; A.B. Med. Servs., PLLC v American Transit Ins. Co., 34 Misc 3d 141[A], 2012 NY Slip Op 50076[U] [App Term 9th & 10th Dists 2012]; Jamaica Med. Supply, Inc. v American Transit Ins. Co., 34 Misc 3d 133[A], 2011 NY Slip Op 52371[U] [App Term 2d, 11th & 13th Dists 2011]; Devonshire Surgical Facility, L.L.C. v Hereford Ins. Co., 30 Misc 3d 129[A], 2010 NY Slip Op 52297[U] [App Term 1st Dept 2010]); AR Med. Rehabilitation, P.C. v American Transit Ins. Co., 27 Misc 3d 133[A], 2010 NY Slip Op 50708[U] [App Term 2d, 11th & 13th Dists 2010]; A.B. Med. Servs., PLLC v American Transit Ins. Co., 24 Misc 3d 75 [App Term 9th & 10th Dists 2009]).

On the other hand, there are holdings in a few decisions where the No-Fault insurer’s evidence was insufficient to create an issue of fact in support of a course-of-employment defense: The assignor, driving a livery car, had been issued his license from the Taxi and Limousine Commission (“TLC”) that day and the insurer submitted no evidence that the assignor was on duty or carrying a paying passenger at the time of the accident; the Supreme Court properly denied the No-Fault insurer’s petition to vacate the arbitration award granting compensation to the health service provider (by coincidence the provider herein) (see Matter of Global Liberty Ins. Co. of New York v North Shore Family Chiropractic, P.C., 178 AD3d 525 [1st Dept 2019]). A third-party claims administrator’s affidavit alleged in a conclusory manner that the assignor was injured in the course of employment without substantiating the assertion with any evidence (see Central Radiology Servs., P.C. v First America Ins., 40 Misc 3d 126[A], 2013 NY Slip Op 51031[U] [App Term 2d, 11th & 13th Dists 2013]). The police report listed TC plates for the vehicle, Katt Corporation as the registered owner, and an insurance policy number, and indicated that a report must be sent to the TLC, and the NF-3 claim form had “No” checked for whether the patient’s condition was due to an injury arising from employment (see Jing Huo Lac v American Transit Ins. Co., 19 Misc 3d 1146[A], 2008 NY Slip Op 51177[U] [Civ Ct, Richmond County 2008]).

Synthesizing all of the above decisions — both those involving actions commenced in court and those reviewing No-Fault arbitrations — the settled law on the subject issue is as follows: Generally, where a health service provider’s bills for treating an injured for-hire vehicle driver are submitted to the No-Fault insurer and the latter denies payment on the asserted ground that the driver was injured in the course of employment, adjudication of that defense in court or arbitration must be held in abeyance pending its resolution by the Workers’ Compensation Board.

However, the No-Fault insurer’s evidence must demonstrate potential merit sufficient to create an issue of fact in support of its defense; mere speculation does not suffice. Evidentiary indicia of potential merit include the injured person’s statement in one form or another that he was working; the vehicle had taxi plates and passengers; a cab company owned the vehicle and was named as the insured on the automobile policy; the injured person drove a vehicle which was owned by a livery company, had TC plates, and was insured under a livery policy; or there was a police accident report plus other supporting evidence. There is no potential merit to the course-of-employment defense where the insured person had been issued his TLC license that day and there were no paying passengers; the claims administrator’s affidavit was conclusory; [*11]the police report listed TC plates but the vehicle was owned by an ambiguously named company and the claim forms indicated the injured person’s injuries did not arise from employment; or the claim adjuster’s information was based on an unsworn employer’s statement predating the accident and a police report which was not properly in evidence.

Determination

In the instant case, ATIC’s sole evidence at the arbitration in support of its course-of-employment defense was the police report. Assignor was indicated to be driving a TC-plated vehicle owned by Edge Limo Inc. No insurance company code was listed. Nobody else besides Assignor was in the vehicle. No insurance policy for the vehicle was submitted so it is unknown whether the insurance policy was specific to liveries. The NF-3 claim forms had “No” checked off for whether Assignor’s injuries arose from employment. None of the decisions cited above dealt with this combination of evidence. However, Jing Huo Lac v American Transit Ins. Co. (19 Misc 3d 1146[A], 2008 NY Slip Op 51177[U]) comes closest. There, the police report listed TC plates for the vehicle, Katt Corporation as the registered owner, and an insurance policy number, and indicated that a report must be sent to the TLC, and the NF-3 claim form had “No” checked for whether the patient’s condition was due to an injury arising from employment. In fact, although the registered owner had the word “Limo” in it, the quantum of evidence in the instant case was less than that in Jing Huo Lac. Significantly there was no policy submitted by ATIC. The Jing Huo Lac court held that the insurer failed to show potential merit to its course-of-employment defense (id. *6). In fact, Arbitrator Lustig noted that absent from ATIC’s submission was evidence that it had issued a livery or taxi policy to Assignor for a for-hire vehicle (NYSCEF Doc No. 3, arbitration award, at numbered p 5).

The provision in 11 NYCRR 65-4.10 [a] [4] that a No-Fault insurance arbitration award may be vacated where it was incorrect as a matter of law refers to substantive issues — not issues of fact (see American Transit Ins. Co. v Right Choice Supply, Inc., — Misc 3d —, 2023 NY Slip Op 23039, *11 [Sup Ct, Kings County 2023]).

Arbitrator Lustig correctly applied the substantive law when he cited to Arvatz for the principle that “[t]he Workers’ Compensation Board is the exclusive forum to determine whether an individual was in the course of his employment at the time of a motor vehicle accident” (NYSCEF Doc No. 3, arbitration award, at numbered p 5). He correctly applied the law when he cited to A.B. Med. Servs. PLLC v American Transit Ins. Co. (8 Misc 3d 127[A], 2005 NY Slip Op. 50959[U]), for the proposition that “If, however, the insurer’s contention that the Assignor acted in the course of his or her employment at the time of the accident is ‘mere speculation’ that fails to establish the defense’s ‘potential merit’ so as to warrant the Board’s review of the facts, the issue need not be resolved by the Board” (id.).

At oral argument on the within Article 75 petition, ATIC’s counsel argued that the law was to the effect that a No-Fault insurer’s submission of a police report indicating that the vehicle operated by the injured person bore TC plates, without any other evidence — even without a claim examiner’s affidavit and even without a copy of the insurance policy — required the arbitrator to rule that a course-of-employment defense had to be determined by the Workers’ Compensation Board. This Court rejects said argument as it is not in accord with the settled law discussed above. Arbitrator Lustig’s award was not incorrect as a matter of law within the purview of 11 NYCRR 65-4.10 (a) (4).

This Court must next determine whether to sustain Master Arbitrator Weisman’s review of Arbitrator’s Lustig award for an error of law. The standard for such Article 75 court scrutiny is whether the master arbitration award was so irrational as to require vacatur (see Matter of Smith v Firemen’s Ins. Co., 55 NY2d 224, 232 [1982]; Matter of Acuhealth Acupuncture, PC v Country-Wide Ins. Co., 170 AD3d 1168 [2d Dept 2019]; Matter of Acuhealth Acupuncture, P.C. v New York City Transit Authority, 167 AD3d 314 [2d Dept 2018]; Matter of Acuhealth Acupuncture, P.C. v Country-Wide Ins. Co., 149 AD3d 828 [2d Dept 2017]). A master arbitrator’s review of a hearing arbitrator’s award where an error of a rule of substantive law is alleged must be upheld unless it is irrational (see Golden Earth Chiropractic & Acupuncture, PLLC v Global Liberty Ins. Co. of New York, 54 Misc 3d 31 [App Term, 2d Dept, 2d, 11th & 13th Dists 2016]).

Master Arbitrator Weisman held, “The grounds of review also include that the decision was incorrect as a matter of law. 11 NYCRR 65-4.10(a)(4). I do not see a misapplication of law.” (NYSCEF Doc No. 4, master arbitration award, at numbered p 3). In the case at bar, Master Arbitrator Weisman’s review of the legal issue presented by ATIC was not irrational. Hence, in terms of the legal issue, Master Arbitrator Weisman’s award was actually correct, let alone not irrational.

11 NYCRR 65-4.10 (a) (4) provides that “procedural or factual errors committed in the arbitration below are not encompassed within this ground,” i.e., the review by a master arbitrator for an error of law. It is an issue of fact as to whether submitted evidence rises to potential merit to support a course-of-employment defense and is not mere speculation. Did Arbitrator Lustig err as a matter of fact in finding that “the Respondent has not submitted sufficient proof that the Assignor was acting in the course of his employment at the time of the accident” (NYSCEF Doc No. 3, arbitration award, at numbered p 6)?

This Court takes into account the general proposition that the admissibility of evidence and the determination of issues of fact are left to the arbitrator’s discretion (see Wien & Malkin LLP v Helmsley-Spear, Inc., 6 NY3d 471, 483 [2006] [“Manifest disregard of the facts is not a permissible ground for vacatur of an award. . . .”]; Cent. Square Teachers Assn. v Board of Educ. of Cent. Sq. Cent. Sch. Dist., 52 NY2d 918, 919 [1981] [“The path of analysis, proof and persuasion by which the arbitrator reached this conclusion is beyond judicial scrutiny.”]; Matter of Lipson v Herman, 189 AD3d 440, 441 [1st Dept 2020] [“error of fact . . . will not result in the vacatur of an arbitrator’s award”]; Matter of Bernstein v On-Line Software Intl., Inc., 232 AD2d 336, 338 [1st Dept 1996] [“It is well established, however, that arbitrators are not bound by the rules of evidence and may admit or deny exhibits on an equitable basis.”]).

Considering that in no reported case did a court find that the mere submission of a police report listing TC plates ipso facto warranted referral to the Workers’ Compensation Board for a determination on a course-of-employment defense, this Court finds reasonable Arbitrator Lustig’s factual determination that there was insufficient proof submitted to support such defense. This Court notes that the police report reflected no passengers being in Assignor’s vehicle.

With respect to the factual issues reviewed by Master Arbitrator Weisman, the proper standard of her review was whether Arbitrator Lustig reached his decision in a rational manner, i.e., whether it was arbitrary and capricious, irrational, or without a plausible basis; the master arbitrator may not engage in an extensive factual review, which includes weighing the evidence, assessing the credibility of various medical reports, and making independent findings of fact [*12](Matter of Petrofsky v Allstate Ins. Co., 54 NY2d 207 [1981]). Here, Master Arbitrator Weisman correctly held that “The issue of whether the accident occurred during the course of employment was a factual one” (NYSCEF Doc No. 4, master arbitration award, at numbered p 3). She noted that Arbitrator Lustig “did discuss the findings in detail” and “the decision was based on the evidence submitted” (id.)

Judicial review of a master arbitrator’s authority to vacate a hearing arbitrator’s award derives from § 675 (presently § 5106 [c]) of the Insurance Law and involves the question of whether the master arbitrator exceeded his power (Matter of Smith v Firemen’s Ins. Co., 55 NY2d 224, 231 [1982]). Master Arbitrator Weisman did not exceed her power when she reviewed the factual findings of Arbitrator Lustig. She applied the correct standard of review, mentioning that it involved whether the award was supported by the evidence, arbitrary and capricious, irrational, or without plausible basis. She noted that she could not conduct a de novo review. Master Arbitrator Weisman was correct when she found that Arbitrator Lustig discussed his findings in detail and his decision was based on the evidence submitted. This Court finds that Master Arbitrator Weisman’s review of Arbitrator Lustig’s factual determination that the evidence was insufficient to sustain a course-of-employment defense was neither arbitrary, capricious, irrational, nor without a plausible basis (see Matter of Petrofsky v Allstate Ins. Co.).

ATIC’s petition in this Article 75 proceeding cited the four applicable grounds delineated in CPLR 7511 for vacating an arbitration award where a party participated in the arbitration:

if the court finds that the rights of that party were prejudiced by:

(i) corruption, fraud or misconduct in procuring the award; or

(ii) partiality of an arbitrator appointed as a neutral, except where the award was by confession; or

(iii) an arbitrator, or agency or person making the award exceeded his power or so imperfectly executed it that a final and definite award upon the subject matter submitted was not made; or

(iv) failure to follow the procedure of this article, unless the party applying to vacate the award continued with the arbitration with notice of the defect and without objection.

(NYSCEF Doc No. 1, petition, ¶ 33)

This Court finds that ATIC failed to establish that there was corruption, fraud, or misconduct in procuring the award; that there was partiality on the part of either arbitrator; that either arbitrator exceeded his or her power or so imperfectly executed it that a final and definite award upon the subject matter submitted was not made; or that there was a failure to follow the procedure of Article 75.

Cross-Petition;

Interest, Attorney’s Fees, Return of Arbitration Filing Fee, Costs, and Disbursements

As mentioned above, North Shore sought in its cross-petition to confirm Master Arbitrator Weisman’s award. Having found that no grounds exist to vacate it, it must be confirmed. North Shore’s cross-petition sought $2,173.14, whereas the amount awarded by Arbitrator Lustig was $2,104.48. The difference results from Arbitrator Lustig denying [*13]compensation for one date of service because of untimely submission of proof of claim (the 45-day rule). The cross-petition did not challenge this component of Arbitrator Lustig’s award so any challenge to it is deemed abandoned by North Shore. North Shore is entitled to No-Fault compensation for health services in the principal amount of $2,104.48.

North Shore also sought additional payments in the nature of interest, attorney’s fees, return of the arbitration filing fee, costs, and disbursements.

Interest:

Where a claim is timely denied, interest at two per cent per month shall begin to accrue as of the date arbitration was requested by the claimant, i.e., the date the AAA received the applicant’s arbitration request, unless arbitration was commenced within 30 days after receipt of the denial, in which event interest shall begin to accrues as of the 30th day after proof of claim was received by the insurer (see Insurance Law § 5106 [a]; 11 NYCRR 65-4.5 [(s] [3], 65-3.9 [c]; Canarsie Med. Health, P.C. v National Grange Mut. Ins. Co., 21 Misc 3d 791, 797 [Sup Ct, NY County 2008] [“The regulation provides that where the insurer timely denies, then the applicant is to seek redress within 30 days, after which interest will accrue.”]). The plaintiff health care provider in Canarsie Med. Health, P.C. argued that where a timely issued denial is later found to have been improper, the interest should not be stayed merely because the provider did not seek arbitration within 30 days after having received the denial. The court rejected this argument, finding that the regulation concerning interest was properly promulgated; this includes the provision staying interest until arbitration is commenced, where the claimant does not promptly take such action. North Shore presumptively received ATIC’s last-issued denial a few days after June 18, 2021, when it was issued. Applicant’s arbitration request was received by the AAA on October 19, 2021, which was certainly more than 30 days later. Thus, interest on all of the claims herein accrued from that date, not from the 30th day after proof of claim was received by ATIC. The end date for the calculation of the period of interest shall be the date of payment of the claims. In calculating interest, the date of accrual is excluded from the calculation (see General Construction Law § 20 [“The day from which any specified period of time is reckoned shall be excluded in making the reckoning.”]). Where a motor vehicle accident occurred after April 5, 2002, interest as calculated at the rate of two percent per month, simple, on a pro rata basis using a 30-day month (see 11 NYCRR 65-3.9 [a]; Gokey v Blue Ridge Ins. Co., 22 Misc 3d 1129[A], 2009 NY Slip Op 50361[U] [Sup Ct, Ulster County 2009]). CPLR 5004’s nine percent per annum is superseded by Insurance Law § 5106 [a]’s two percent per month (see Pro-Med Med., P.C. v MVAIC (74 Misc 3d 130[A], 2022 NY Slip Op 50135[U] [App Term 2d, 11th & 13th Dists 2022]).

Attorney’s Fees:

After calculating the sum total of the first-party benefits awarded in this arbitration plus interest thereon, ATIC shall pay North Shore an attorney’s fee equal to 20 percent of that sum total subject to a maximum fee of $1,360.00, as provided for in 11 NYCRR 65-4.6 [d].

Additionally, this Court sustains the $65.00 attorney’s fee for preparatory services in connection with the master arbitration. This is in accordance with 11 NYCRR 65-4.10 [j] [2] [*14][i].^[FN21]

Moreover, pursuant to 11 NYCRR 65-4.10 [j] [4], having successfully prevailed in this Article 75 proceeding, North Shore is entitled to an additional attorney’s fee (see Global Liberty Ins. Co. of New York v North Shore Family Chiropractic, 178 AD3d 525 [1st Dept 2019]; GEICO Ins. Co. v AAAMG Leasing Corp., 148 AD3d 703 [2d Dept 2017]).

Alek Beynenson, Esq., submitted an affirmation in support of an attorney’s fee with regard to this Article 75 proceeding (NYSCEF Doc No. 15). In pertinent part, he wrote:

1. As the principal attorney at The Beynenson Law Firm, P.C., attorneys for Respondent, I provided valuable and necessary services on behalf of NORTH SHORE FAMILY CHIROPRACTIC PC, A/A/O ALBERTO CARPINTEYRO for which I am requesting compensation pursuant to 11 NYCRR 65—4.10(j)(4). . . .

3. I request the usual hour billing rate for my services which is $550.00 per hour. This figure takes into account over a decade of experience specializing primarily in no-fault litigation and arbitration.

4. The total time required to provide these legal services to the client was 3.0 hours including case review, research, drafting, exhibit preparation, and e-filing.

5. Based upon the above calculations, Respondent NORTH SHORE FAMILY CHIROPRACTIC PC, A/A/O ALBERTO CARPINTEYRO seeks an attorney’s fee of $1,650.00 ($550.00 x 3.0 hours) for the necessary time expended in this matter.

This Court notes that Attorney Beynenson did not attest to he himself having performed the work in connection with opposing the petition and preparing the cross-petition. He did not indicate whether a different attorney or perhaps a paralegal performed it. The affirmation in support of the cross-petition contains mostly boilerplate statements which could apply to most Article 75 proceedings to confirm No-Fault arbitration awards, with a few insertions specific to this particular claim. The amount of $550.00 per hour is excessive, especially considering that the attorney’s fee for policy issues litigated in arbitration or at the trial court level in court is $70.00 per hour (see 11 NYCRR 65-4.6 [c]). It is also excessive considering that North Shore’s papers for this case consisted of a two-page answer (NYSCEF Doc No. 12), a one-page notice of cross-petition (NYSCEF Doc No. 13), an eight-page affirmation in opposition to the petition and in support of the cross-petition (NYSCEF Doc No. 14), and a two-page affirmation in support of an attorney’s fee (NYSCEF Doc No. 15).^[FN22] Mr. Beynenson did not even attend oral argument when the proceeding appeared on this Court’s calendar. Neither did Mr. Beynenson submit a timesheet as to when the work was performed and how much time was spent on each document.

In a Kings County No-Fault insurance case involving an appeal to the Court of Appeals, the court awarded $250.00 per hour but this was in connection with the litigation of a novel or unique issue (see Viviane Etienne Med. Care PC v Country-Wide Ins. Co., 59 Misc 3d 579 [Sup Ct, Kings County 2018]). The issue in the case at bar was neither novel nor unique, especially since there was already a plethora of case law on it.

Consdering the factors delineated herein, this Court awards $210.00 for work performed by North Shore’s counsel on this Article 75 proceeding. This Court applied the $70.00 per hour fee for policy issues litigated in arbitration or at the trial level.

Return of Arbitration Filing Fee:

ATIC shall also pay North Shore $40.00 as reimbursement for the fee paid to the AAA [see 11 NYCRR 65-4.5 [s] [1]).

Costs and Disbursements:

As the prevailing party, North Shore shall recover its costs and disbursements, to be taxed by the Clerk.

Other Requested Relief

Any requested relief not expressly addressed herein has nonetheless been considered and is hereby expressly rejected.

Notice to Superintendent of Financial Services and the AAA

The Superintendent of Financial Services (formerly the Superintendent of Insurance) bears the statutory duty to promulgate procedures governing the No-Fault arbitration system (see Insurance Law § 5106 [b], [c], [d]). The AAA has been charged by the Superintendent with administering the No-Fault insurance arbitration program in New York, and “The superintendent shall oversee the operation procedures of the designated organization” (11 NYCRR 65-4.2 [a] [5]). The proper application of case law to No-Fault arbitration is in the public interest. Inasmuch as the underlying arbitration called for application of case law to the No-Fault insurance dispute between the parties, this Court finds that the Superintendent of Financial Services and the AAA be notified of the outcome of this judicial review of the arbitration.

Conclusion

Accordingly, it is hereby ORDERED, ADJUDGED, and DECREED that:

(1) ATIC’s petition to vacate the master arbitration award of Robyn D. Weisman in AAA Case No. 99-21-1223-5155 is dismissed.

(2) North Shore’s cross-petition to confirm said master arbitration award is granted.

(3) Said master arbitration award is confirmed in its entirety.

(4) North Shore is awarded the principal amount of $2,104.48 as No-Fault insurance health service benefits, along with simple interest thereon (i.e., not compounded) at two per cent [*15]per month on a pro rate basis using a 30-day month, computed from October 19, 2021 to the date of payment of the principal amount of $2,104.48, but excluding October 19, 2021 from being counted within the period of interest.

(5) After calculating the sum total of the principal amount of $2,104.48 plus the interest thereon, ATIC shall pay North Shore an attorney’s fee equal to 20 percent of that sum total, subject to a maximum fee of $1,360.00.

(6) ATIC shall pay North Shore an attorney’s fee of $65.00 for preparatory services in connection with the master arbitration.

(7) ATIC shall pay North Shore an attorney’s fee of $210.00 for work performed by counsel on this Article 75 proceeding.

(8) North Shore shall recover from ATIC costs and disbursements as allowed by law to be taxed by the Clerk.

E N T E R
Dated: Brooklyn, New York, March 20, 2023

______________________________
HON. AARON D. MASLOW
Justice of the Supreme Court of the
State of New York

Footnotes

Footnote 1: The notice of petition seeks vacatur of “the arbitration award issued by Arbitrator Mitchell Lustig, Esq. and/or Master Arbitrator Robyn D. Weisman, Esq.” (NYSCEF Doc No. 2, notice of petition), but it must be deemed to seek vacatur of just the master arbitration award inasmuch as the latter is the final determination of the arbitration process. The No-Fault Regulations provide that “court review pursuant to an article 75 proceeding” is from the “decision of a master arbitrator” (11 NYCRR 65-4.10 [h] [1] [i]). In fact, a party may not appeal from an arbitration award without first seeking master arbitration (see Matter of Staten Island Hospital v USAA, 103 AD2d 744 [2d Dept 1984]). Naturally, if the hearing arbitrator’s award is imperfect, this can impact judicial review of a master arbitration award affirming it.

Footnote 2:Rather than denote the parties here as “Petitioner” and “Respondent” in discussion, the parties’ names are used. This is to facilitate the reader’s understanding of the facts, arguments, analysis, and determination. This also minimizes confusion because the respondent in the underlying arbitration (ATIC) is not the respondent herein but rather is the petitioner herein. The respondent herein, North Shore, was not the respondent in the arbitration, but was the applicant.

Footnote 3:Health service providers obtain standing to pursue No-Fault insurance compensation in arbitration by virtue of having received an assignment of benefits from the respective person claiming to have been injured in a covered motor vehicle accident; such person is often denoted as an “assignor.”

Footnote 4:Paragraph 28 of the petition describes the AAA Case No. as 99-21-1223-5155, which was assigned to the master arbitration appeal. The original arbitration was assigned AAA Case No. 17-21-1223-5155.

Footnote 5:This statutory scheme was developed by New York’s legislature in 1973, as part of a tradeoff whereby lawsuits for pain and suffering sustained from personal injuries in such accidents were limited to instances of serious injury. (See generally Insurance Law art 51; L 1973, ch 13, as amended L 1977, ch 892; John R. Dunne, New York’s No-Fault Automobile Insurance Law—A Glimpse of the Past and a Glance at the Future, 50 NY St BJ 284 [June 1978]; J. Benedict, New York Adopts No-Fault: A Summary and Analysis, 37 Albany L Rev 662 [1973]).

Footnote 6:Although Insurance Law article 51 does not mention the term “No-Fault,” shortly after the post-motor vehicle accident economic loss compensation system was enacted in 1973, the appellation “No-Fault” was adopted in common parlance to describe it.

Footnote 7:This Court uses the term “health service bills” instead of “medical bills” because the No-Fault Law provides for reimbursement of “(i) medical, hospital . . . , surgical, nursing, dental, ambulance, x-ray, prescription drug and prosthetic services; (ii) psychiatric, physical therapy . . . and occupational therapy and rehabilitation . . . and (iv) any other professional heath services” (Insurance Law § 5102 [b] [1]). Hence, the No-Fault insurance system encompasses not just “medical” services. In the instant case, the services were chiropractic treatments.

Footnote 8:The prescribed claim forms are included within 11 NYCRR Part 65 (Regulation 68) Appendix 13. Besides Form NF-3 (verification of treatment by attending physician or other provider of health service), Appendix 13 contains Form NF-4 (verification of hospital treatment) and Form NF-5 (hospital facility form).

Footnote 9:There is a prescribed assignment of benefits form (Form NF-AOB) in 11 NYCRR Part 65 (Regulation 68) Appendix 13.

Footnote 10:The process of submitting a No-Fault claim to the insurer is governed by 11 NYCRR subpart 65-3, which contains §§ 65-3.1 et seq.

Footnote 11:Form NF-10 is also included within 11 NYCRR Part 65 (Regulation 68) Appendix 13.

Footnote 12:The defense of excessive fees asserted in each denial of claim appears to have been abandoned by ATIC, as Arbitrator Lustig did not refer to it.

Footnote 13:The 45-day rule is set forth within the No-Fault Regulations at 11 NYCRR 65-1.1 (d) (“Conditions”).

Footnote 14:This is the AAA’s electronic case management and filing platform maintained on the Internet; it is known as “Modria,” which was the name of the company which developed it for the AAA (see Liveblogging #ODR2014: The Developing Field of Online Dispute Resolution, https://civic.mit.edu/index.html%3Fp=1452.html [last accessed Mar. 19, 2023]; Welcome to the Modria Resolution Center for the American Arbitration Association, https://aaa-nynf.modria.com/ [last accessed Mar. 19, 2023]).

Footnote 15:TC license plates are indicative that the vehicle was registered for use as a for-hire vehicle.

Footnote 16:Among the more substantial changes in the 1977 legislation were the adoption of fee schedules to limit health service expenses and modifying the threshold categories to be able to sue for pain and suffering.

Footnote 17:Nothing in the Governor’s Bill Jacket for Chapter 13 of the Laws of 1977 or other contemporary records comments on the provision adopting master arbitration review of hearing arbitrators’ decisions, so it is not known why the master arbitration process was created.

Footnote 18:Most non-No-Fault insurance arbitration awards cannot be vacated due to an error of law (see Matter of Sprinzen v Nomberg, 46 NY2d 623, 629-630 [1979]). No-Fault insurance arbitrations are different; an error of law can be the basis for reversal — by a master arbitrator. In that sense, the master arbitrator’s review is broader than that of a court, since a court will not vacate an arbitration award due to an error of law (see Matter of Petrofsky v Allstate Ins. Co., 54 NY2d 207, 211-212 [1981]; Acuhealth Acupuncture, P.C. v Country-Wide Ins. Co., 176 AD3d 800, 802 [2d Dept 2019]).

Footnote 19:11 NYCRR 65-4.10 (a) provides as follows:

Grounds for review. An award by an arbitrator rendered pursuant to section 5106(b) of the Insurance Law and section 65-4.4 or 65-4.5 of this Subpart may be vacated or modified solely by appeal to a master arbitrator, and only upon one or more of the following grounds:

(1) any ground for vacating or modifying an award enumerated in article 75 of the Civil Practice Law and Rules (an article 75 proceeding), except the ground enumerated in CPLR subparagraph 7511(b)(1)(iv) (failure to follow article 75 procedure);

(2) that the award required the insurer to pay amounts in excess of the policy limitations for any element of first-party benefits; provided that, as a condition precedent to review by a master arbitrator, the insurer shall pay all other amounts set forth in the award which will not be the subject of an appeal, as provided for in section 65-4.4 or 65-4.5 of this Subpart;

(3) that the award required the insurer to pay amounts in excess of the policy limitations for any element of additional first-party benefits (when the parties had agreed to arbitrate the dispute under the additional personal injury protection endorsement for an accident which occurred prior to January 1, 1982); provided that, as a condition precedent to review by a master arbitrator, the insurer shall pay all other amounts set forth in the award which will not be the subject of the appeal, as provided for in section 65-4.4 or 65-4.5 of this Subpart;

(4) that an award rendered in an arbitration under section 65-4.4 or 65-4.5 of this Subpart, was incorrect as a matter of law (procedural or factual errors committed in the arbitration below are not encompassed within this ground);

(5) that the attorney’s fee awarded by an arbitrator below was not rendered in accordance with the limitations prescribed in section 65-4.6 of this Subpart; provided that, as a condition precedent to review by a master arbitrator, the insurer shall pay all other amounts set forth in the award which will not be the subject of the appeal, as provided for in section 65-4.4 or 65-4.5 of this Subpart.

Footnote 20:There is no issue of timeliness of ATIC’s denial of claim forms in the case at bar.

Footnote 21:Master Arbitrator Weisman misstated the regulation under which an attorney’s fee is awarded for successfully prevailing at master arbitration. She cited to 11 NYCRR 65-4.6 [d], which is applicable to the hearing arbitration or a trial court adjudication.

Footnote 22:No compensation can be awarded for preparing the affirmation in support of an attorney’s fee (see Hempstead General Hospital v Allstate Ins. Co., 106 AD2d 429 [2d Dept 1984], aff’d 64 NY2d 958 [1985] [attorney’s fee for time spent in substantiating counsel fees is not authorized]).

American Transit Insurance Company, Petitioner, against Marta Medical Supply, Corp, A/A/O SANDRA GOMES, Respondent

Index No. 533882/2022

Attorney for Petitioner
William Robert Larkin, Esq.
Larkin Farrell, LLC
1250 Broadway, 36th Fl.
New York City, NY 10001

Respondent Marta Medical Supply, Corp, A/A/O Sandra Gomes did not appear.

Francois A. Rivera, J.

Recitation in accordance with CPLR 2219 (a) of the papers considered on the notice of petition and petition filed on November 18, 2022, by American Transit Insurance Company (hereinafter ATIC or petitioner) pursuant to CPLR Article 75, seeking to vacate an award of a master arbitrator which affirmed, in its entirety, an award of a lower arbitrator in the amount of $4,423.99 in favor of the respondent Marta Medical Supply, Corp, A/A/O Sandra Gomes.

-Notice of Petition
-Petition
-Exhibits A to D
-Affirmation of Service

BACKGROUND

On November 18, 2022, ATIC commenced the instant special proceeding pursuant to CPLR Article 75 to vacate an award of a master arbitrator in favor of the respondent Marta Medical Supply, Corp, A/A/O Sandra Gomes (hereinafter respondent). The respondent has not appeared or interposed an answer.

The petition alleges the following salient facts. The petitioner issued a New York insurance policy to Hugo Gomes which included a no-fault endorsement. The no-fault [*2]endorsement provided coverage to any eligible injured person for all necessary medical expenses, lost wages and other expenses resulting from a motor vehicle accident up to the minimum statutory amount of $50,000.00.

On June 23, 2020, while the policy was in effect, Sandra Gomes (hereinafter Sandra G.) was injured in a motor vehicle accident (hereinafter the subject accident). Sandra G. put the petitioner on notice of the subject accident and the injuries that it caused. Sandra G. sought medical treatment for those injuries and the respondent was one of the medical providers that allegedly rendered treatment to Sandra G. She assigned the right to collect no-fault benefits to the respondent in exchange for the medical treatment she allegedly received.

The respondent submitted no-fault claims to the petitioner seeking reimbursement for medical services rendered to Sandra G. from July 21 through August 4, 2020, in the total amount of $4,423.99. The petitioner did not pay and denied the claim contending that the alleged injuries were not causally related to the motor vehicle accident based, in part, on the opinion of biomechanical expert Omid Komari.

The respondent initiated an arbitration claiming entitlement to $4,423.99. The arbitration matter was decided by Arbitrator Deepak Sohi, Esq. (hereinafter the no-fault arbitrator) who awarded the respondent the full amount claimed of $4,423.99. Thereafter, the petitioner filed for Master Arbitration. Master Arbitrator Burt Feilich, Esq. (hereinafter the master arbitrator) upheld the lower arbitration award in its entirety.

The petitioner contends that the arbitration award was arbitrary and capricious, irrational and without a plausible basis. The petitioner contends that the claim was properly and timely denied for lack of medical necessity and, also, because the petitioner had a founded belief that the alleged injuries were not causally related to the subject accident.

The respondent has not appeared or filed an answer.

LAW AND APPLICATION

A court reviewing the award of a master arbitrator is limited to the grounds set forth in CPLR Article 75, which include, in this compulsory arbitration, the question of whether the determination had evidentiary support, was rational, or had a plausible basis (see Matter of Petrofsky [Allstate Ins. Co.], 54 NY2d 207, 212 [1981]). Notably, the master arbitrator’s review power is broader than that of the courts’ because it includes the power to review for errors of law (see id. at 211—212; 11 NYCRR 65—4.10[a][4]). In contrast, the courts generally will not vacate an arbitrator’s award where the error claimed is the incorrect application of a rule of substantive law, unless it is so irrational as to require vacatur (Matter of Smith [Firemen’s Ins. Co.], 55 NY2d 224, 232 [1982]; see also Matter of Liberty Mut. Ins. Co. v Spine Americare Med., 294 AD2d 574, 576 [2d Dept 2002]).

The petitioner’s evidentiary submissions include the no-fault arbitrator’s award and the master arbitrator’s award. The no-fault arbitrator set forth the following in the award letter. The no-fault arbitrator found that on June 23, 2020, Sandra Gomes was involved in a motor vehicle accident as a passenger. She was injured and sought treatment. Part of the treatment included durable equipment, specifically a lumbar-sacral orthosis, knee orthosis, and shoulder orthosis.

The no fault arbitrator noted that Marta Medical Supply, Corp. was seeking reimbursement for the durable medical equipment provided to Sandra G. on dates of service during July 21, 2020, and August 4, 2020. ATIC denied reimbursement for the durable medical equipment based upon its belief the alleged injuries did not arise out of an insured event and/or were not causally related to a covered incident. ATIC based that claim on Sandra G.’s [*3]examination under oath dated December 4, 2020, and the report of biomechanical engineering consultant, Mr. Omid Komari, PhD, dated December 24, 2020.

The no fault arbitrator found that the opinion of Omid Komari was too vague to provide a definitive analysis of the subject accident. It was also too vague to conclude that Sandra G.’s injuries and subsequent medical treatment were not causally related to the subject accident.

The no fault arbitrator found that ATIC’s evidentiary submission failed to establish that Sandra G.’s injury was not caused by the subject accident and its contention that the medical devices were not medically necessary. The no-fault arbitrator determined that the petitioner failed to meet the burden of proof in support of its lack of medical necessity defense and, accordingly, issued an award in favor of the respondent in the amount of $4,423.99.

The standard for Article 75 court scrutiny of a master arbitrator’s review of a hearing arbitrator’s award in terms of whether there was an error of law is whether it is so irrational as to require vacatur (Am. Transit Ins. Co. v Right Choice Supply, Inc., 2023 NY Slip Op 23039 [Sup Ct Feb. 9, 2023], citing Matter of Smith v Firemen’s Ins. Co., 55 NY2d 224, 232 [1982]).

Here, the master arbitrator reviewed the record and award of the no-fault arbitrator and stated the following findings. The award by the no-fault arbitrator did not violate the regulations. It was within the province of the no-fault arbitrator to determine what evidence to accept or reject and what inferences should be drawn based on the evidence. Upon reviewing the record and evidence submitted, the master arbitrator did not find the no-fault arbitrator’s interpretation of the evidence and applicable law pertaining to this dispute to be arbitrary, capricious, or contrary to law. Consequently, the master arbitrator upheld the award to the respondent in the amount of $4,423.99.

The instant petition is a special proceeding. The procedure for special proceedings contemplates that the petition will be accompanied by affidavits demonstrating the evidentiary grounds for the relief requested (see CPLR 403[a]). It is settled that a special proceeding is subject to the same standards and rules of decision as apply on a motion for summary judgment, requiring the court to decide the matter upon the pleadings, papers, and admissions to the extent that no triable issues of fact are raised (CPLR 409 [b]; Saadia Safdi Realty, LLC v Melvin Press, 207 AD3d 633, 635 [2d Dept 2022], citing Matter of Arben Corp. v Durastone, LLC, 186 AD3d 599 at 600 [2d Dept 2020]).

The evidentiary submissions and legal reasoning proffered by the petitioner did not make a prima facie showing that the no-fault arbitrator’s award or the master arbitrator’s award was either arbitrary or capricious. To the contrary, the petitioner’s evidentiary submissions established that the no-fault arbitrator’s award and the master arbitrator’s affirmance of the award was based on sound and well-reasoned analysis of the evidence submitted and upon the proper application of the pertinent laws and regulations.

CONCLUSION

The petition by petitioner American Transit Insurance Company for an order pursuant to Article 75 of the CPLR vacating an Arbitration Award and a Master Arbitration is denied and the petition is dismissed.

The foregoing constitutes the decision and order of this Court.

ENTER:

_____________________________
J.S.C

Country-Wide Insurance Company, Plaintiff, against Hackensack Surgery Center, LLC a/a/o JESSICA BAE, Defendant.

Index No. CV-710117-21/NY

Roman Kravchenko, Melville, for defendant.

Jaffe & Velazquez, LLP, New York City, (David J. Slaney, of counsel), for plaintiff.

Richard Tsai, J.

In this action, plaintiff Country-Wide Insurance Company seeks de novo adjudication of a dispute involving first-party no-fault benefits, following a master arbitrator’s award in excess of $5,000 in favor of defendant Hackensack Surgery Center, LLC a/a/o Jessica Bae. Defendant now moves for an order compelling plaintiff to comply with defendant’s discovery requests for, among other things, production of the entire claim file and SIU file (Motion Seq. No. 001). Plaintiff opposes the motion.

BACKGROUND

Prior to commencement of this action, defendant Hackensack Surgery Center LLC demanded a no-fault arbitration for services provided to defendant’s assignor, Jessica Bae, for facility fees related to a shoulder surgery performed on February 8, 2019, which plaintiff Country-Wide Insurance Company had denied based upon a peer review report (see NY St Cts Elec Filing [NYSCEF] Doc No. 1, complaint ¶ 7 and Exhibit A to complaint [No Fault Arbitration Award], at 1).

The no-fault arbitrator ruled in defendant’s favor and awarded no-fault benefits in the amount of $21,330.00 (id.). The no-fault arbitrator found that plaintiff had not overcome the presumption of medical necessity, and reasoned that another no-fault arbitrator had rejected the same peer review report (id., at 2).

By a decision dated October 27, 2021, a master arbitrator affirmed the award of the no-fault arbitrator (NYSCEF Doc. No. 2, Master Arbitration Award).

Pursuant to Insurance Law § 5106 (c), plaintiff commenced this action seeking de novo adjudication of the dispute. Issue was joined on or about March 21, 2022 (see NYSCEF Doc. No. 2, answer).

On or about May 5, 2022, defendant served discovery demands upon plaintiff (see NYSCEF Doc. No. 3). On July 6, 2022, plaintiff brought the instant motion to compel defendant to comply with its discovery demands (see NYSCEF Doc. No. 4).

On or about October 5, 2022, plaintiff opposed the motion and served its discovery response (see NYSCEF Doc. No. 8, affidavit of service). In reply, defendant argued that the responses were deficient (see NYSCEF Doc. No. 11, reply affirmation of plaintiff’s counsel ¶ 12).

On November 28, 2022, plaintiff served supplemental discovery responses (NYSCEF Doc Nos. 14-19).

Without any prior court approval, on January 18, 2023, plaintiff served a supplemental affirmation in opposition, with additional exhibits (NYSCEF Doc. Nos. 20-22). Similarly also without prior court approval, on January 18, 2023, defendant served supplemental reply papers (NYSCEF Doc. Nos. 23-24).

On January 20, 2023, defendant’s motion to compel was marked fully submitted and assigned to this court.

On February 8, 2023, this court held oral argument. At oral argument, defendant’s counsel clarified that defendant’s motion to compel was narrowed to items No.2 and #14 of defendant’s demand for discovery and inspection dated May 5, 2022.

DISCUSSION

CPLR 3101 (a) directs that there shall be “full disclosure of all evidence material and necessary in the prosecution or defense of an action” (id.). “The test is one of usefulness and reason” (Allen v. Crowell-Collier Publ. Co., 21 NY2d 403, 407 [1968]). CPLR 3101 “embodies the policy determination that liberal discovery encourages fair and effective resolution of disputes on the merits, minimizing the possibility for ambush and unfair surprise” (Spectrum Sys. Intern. Corp. v Chem. Bank, 78 NY2d 371, 376 [1991]).

“Liberal discovery is favored and pretrial disclosure extends not only to proof that is admissible but also to matters that may lead to the disclosure of admissible proof” (Twenty Four Hour Fuel Oil Corp. v Hunter Ambulance, 226 AD2d 175-176 [1st Dept 1996]). “[T]he acid test [*2]for disclosure of information is not whether the party can make out a prima facie case without the evidence, but whether he or she can make out a more persuasive case with it.” (6 Weinstein-Korn-Miller, NY Civ Prac CPLR ¶ 3101.08). However, “[u]nder our discovery statutes and case law, competing interests must always be balanced; the need for discovery must be weighed against any special burden to be borne by the opposing party” (Kavanagh v Ogden Allied Maintenance Corp., 92 NY2d 952, 954 [1998][quotation marks and citation omitted]).

“A motion court is afforded broad discretion in supervising disclosure and its determinations will not be disturbed unless that discretion has been clearly abused” (Youwanes v Steinbrech, 193 AD3d 492 [1st Dept 2021] [internal quotation marks and citation omitted]).

As a threshold matter, this court accepts the parties’ supplemental submissions (NYSCEF Doc. Nos. 14-25), given the absence of prejudice to either side.

Item 14 of defendant’s demand for discovery and inspection dated May 5, 2022 requests “A full copy of ‘s [sic] claim file(s) and SIU file(s) and reports relating to this matter” (see NYSCEF Doc. No. 3).

In response, Jessica Mena-Sibrian, a No-Fault Litigation/Arbitration Supervisor employed by plaintiff, averred, “there is no SIU file for this matter” (NYSCEF Co. No. 18, aff of Jessica Mena-Sibrian ¶ 4). Mena-Sibrian explained,

“In the ordinary course of business, a SIU file would be created on a claim if an examiner makes a request for it or for a signed statement. The claims file for this matter does not contain any such request and, therefore, no SIU file was created. There is no existing SIU file or reports regarding any type of insurance investigation to provide to Defendant”

(id. ¶ 5). Because defendant’s representative stated under oath that no SIU file exists, so much of plaintiff’s motion which seeks to compel production of the SIU file is denied.

As to the full copy of plaintiff’s claim file, plaintiff stated in its supplemental responses to defendant’s demands for discovery and inspection,

“ANSWER: As to 1-17, the Plaintiff objects to this interrogatory to the extent that it seeks information that is irrelevant, overly broad, privileged and unrelated to the issue in this case. Copies of any document relevant to this claim is hereto annexed, if any”

(NYSCEF Doc. No. 22).

First, as defendant points out, plaintiff’s initial response to defendant’s discovery demands were untimely served on or about October 5, 2022, well after 20 days of service of those demands on May 5, 2022 (see CPLR 3122). “Accordingly, plaintiff waived objection[s] based on any ground other than privilege or palpable impropriety” (Khatskevich v Victor, 184 AD3d 504, 505 [1st Dept 2020]; see also Accent Collections, Inc. v Cappelli Enter., 84 AD3d 1283, 1284 [2d Dept 2011]; Duhe v Midence, 1 AD3d 279, 280 [1st Dept 2003]).

Here, in opposition to defendant’s motion, plaintiff does not assert any specific privilege against production of the claim file. As defendant points out,

“The payment or rejection of claims is a part of the regular business of an insurance [*3]company. Consequently, reports which aid it in the process of deciding whether to pay or reject a claim are made in the regular course of its business. Reports prepared by insurance investigators, adjusters, or attorneys before the decision is made to pay or reject a claim are not privileged and are discoverable, even when those reports are mixed/multi-purpose reports, motivated in part by the potential for litigation with the insured”

(Advanced Chimney, Inc. v Graziano, 153 AD3d 478, 480 [2d Dept 2017] [internal citations, quotation marks, and emendation omitted]; see also Venture v Preferred Mut. Ins. Co., 153 AD3d 1155, 1159 [1st Dept 2017]). Therefore, plaintiff demonstrated entitlement to production of the entire claim file, which must be provided to defendant within 60 days.

Contrary to plaintiff’s contention, plaintiff’s supplemental response to item 14 did not render defendant’s motion academic.

Plaintiff’s response to item 14 was insufficient. “Whenever a person is required pursuant to such notice or order to produce documents for inspection, that person shall produce them as they are kept in the regular course of business or shall organize and label them to correspond to the categories in the request” (CPLR 3122). Here, plaintiff did not label which items attached to its discovery response were part of the claim file. Thus, it is not possible for the court to determine that plaintiff had, in fact, turn over the entire claim file.

Turning to item 2, defendant demanded,

“If any other action or arbitration has been filed by or on behalf of Defendant or EIP with respect to the accident underlying the within dispute, a copy of the pleadings in such court action(s) or, if arbitration was commenced, a copy of the arbitration request form(s) (AR-1) and of any letter scheduling conciliation filings and deadlines. Also provide copy of any Decision, Order, Stipulation, Arbitration Award, Consent Agreement, and/or any other determination, however named and whether final or non-final, issued in the court action or arbitration proceedings”

(NYSCEF Doc. No. 3).

At oral argument, defendant’s counsel explained that the information was sought for the purpose of discovering a determination on the issue of medical necessity from any actions or arbitrations that could be used as collateral estoppel against plaintiff in this action.

In the court’s view, the demand is overly broad on its face (see Country-Wide Ins. Co. v Long Is. Spine Specialists PC, 2021 NY Slip Op 30115[U], *3 [Sup Ct, NY County 2021]). The scope of the demand covers documents about any actions or arbitrations “with respect to the underlying accident,” which could therefore include the universe of services provided to the assignor that might not implicate the issue of the medical necessity of the shoulder surgery—such as services provided to the assignor which either predated the shoulder surgery, or services that were not ancillary to the shoulder surgery, such as physical therapy or pharmaceuticals provided for pain management. While the demand could be narrowed, “it is not the court’s obligation to prune those pre-litigation devices” (Kimmel v Paul, Weiss, Rifkind, Wharton & Garrison, 214 AD2d 453, 453-454 [1st Dept 1995]).

Additionally, the expense and burden upon plaintiff to produce these documents is [*4]disproportionate to likelihood that the information sought could lead to a determination that could be used as collateral estoppel in this action. Defendant is already aware of another adverse determination of medical necessity from another arbitration, which was referenced in the award of the no-fault arbitrator.

Having weighed the need for discovery against the burden to plaintiff (Kavanagh, 92 NY2d at 954), an order compelling plaintiff to comply with item 2 of defendant’s demand for discovery and inspection dated May 5, 2022 is denied.

CONCLUSION

Upon the foregoing cited papers, it is hereby ORDERED that defendant’s motion to compel (Motion Seq. No. 001) is GRANTED TO THE EXTENT that plaintiff is directed to produce the entire claim file to defendant within 60 days, and plaintiff’s motion is otherwise denied.

This constitutes the decision and order of the court.

Dated: March 8, 2023
New York, New York
ENTER:

________________________________
RICHARD TSAI, J.
Judge of the Civil Court

Supreme Court, Saratoga County