Decided on March 3, 2023

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

Decided on February 24, 2023

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

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

Thomas Torto, for respondent.

Appeal from an order of the Civil Court of the City of New York, Kings County (Odessa Kennedy, J.), entered January 15, 2019. The order granted defendant’s motion to vacate a judgment entered January 26, 2019 pursuant to a default under a stipulation of settlement.

ORDERED that the order is reversed, with $30 costs, the default judgment is reinstated and the matter is remitted to the Civil Court for a new determination, following a hearing, of defendant’s motion to vacate the default judgment.

In this action by a provider to recover assigned first-party no-fault benefits, the parties entered into a stipulation of settlement which provided that defendant would pay plaintiff the total sum of $2,523.02. Plaintiff accepted from defendant three checks dated 45 days after the stipulation of settlement. Thereafter, plaintiff applied for a default judgment, alleging that defendant had failed to timely make the payment. Plaintiff provided a signed copy of the purported stipulation of settlement which set forth that defendant was to make the payment within 21 days. A judgment was entered against defendant. Defendant moved to vacate the judgment, asserting that its payment was timely. Defendant provided a signed copy of the purported stipulation of settlement which contained a handwritten notation setting forth that [*2]defendant was to make the payment within 45 days. After oral argument, but without holding a hearing, the Civil Court granted defendant’s motion.

In light of the apparent factual dispute regarding the terms of the stipulation of settlement and defendant’s compliance with them, it was error for the Civil Court to grant defendant’s motion without holding a hearing to determine the disputed issues of fact (see Midland Funding, LLC v Dort, 39 Misc 3d 151[A], 2013 NY Slip Op 50975[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2013]; see also U.S. Equities Corp. v Ridwan, 71 Misc 3d 138[A], 2021 NY Slip Op 50449[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2021]).

Accordingly, the order is reversed, the default judgment is reinstated and the matter is remitted to the Civil Court for a new determination, following a hearing, of defendant’s motion to vacate the default judgment.

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

Glinkenhouse Queen, Esqs. (Alan Queen of counsel), for appellant.

Thomas Torto, for respondent.

Appeal from an order of the Civil Court of the City of New York, Queens County (John C.V. Katsanos, J.), dated March 27, 2020. The order denied, as moot, plaintiff’s motion to recalculate, from a simple rate to a compound rate, an award of statutory no-fault interest in a judgment entered March 23, 2017.

ORDERED that the order is reversed, with $30 costs, and plaintiff’s motion to recalculate, from a simple rate to a compound rate, an award of statutory no-fault interest in a judgment entered March 23, 2017 is granted.

Plaintiff commenced this action in 2000 to recover first-party no-fault benefits for supplies it furnished to its assignor as a result of a motor vehicle accident that occurred on June 11, 1998. Defendant appeared and answered. On June 27, 2001, the State of New York dissolved plaintiff by proclamation. On or about July 15, 2003, the parties entered into a settlement agreement. It is uncontroverted that defendant did not pay the amount set forth in the settlement. On March 23, 2017, plaintiff had a judgment entered, ex parte, in the total sum of $4,781.27, including $2,972.06 in interest. In December of 2018, plaintiff moved to recalculate, from a simple rate to a compound rate, the award of statutory no-fault interest in the March 23, [*2]2017 judgment pursuant to the pre-2002 regulations, which required no-fault interest to be calculated at a compound rate (see former 11 NYCRR 65.15 [h] [1]). Defendant opposed the motion and the motion was marked fully submitted on October 21, 2019.

In November of 2019, defendant moved to, in effect, vacate the March 23, 2017 judgment and, upon such vacatur, to “dismiss[ ] the complaint on the ground that plaintiff lacks standing to maintain this action and collect on the judgment . . . since the Secretary of State dissolved plaintiff and annulled its authority on June 27, 2001, and plaintiff has failed to wind up its affairs within a reasonable time as a matter of law” or, in the alternative, “upon the ground that plaintiff failed to comply with CPLR 5003-a.” By order entered March 26, 2020, the Civil Court granted defendant’s motion, vacated the judgment and, upon such vacatur, dismissed the complaint.

On appeal, this court, by order dated April 1, 2022, reversed the March 26, 2020 order, denied defendant’s motion to vacate the judgment and stated that the matter was being remitted to the Civil Court to determine plaintiff’s pending December 2018 motion (Medtech Med. Supply, Inc. v Country-Wide Ins. Co., 74 Misc 3d 137[A], 2022 NY Slip Op 50304[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2022]). At that time, this court was unaware of the fact that the Civil Court, by order dated March 27, 2020, had denied, as moot, plaintiff’s pending motion to recalculate the interest awarded in the March 23, 2017 judgment. Plaintiff now appeals from the March 27, 2020 order.

As this court has reversed the March 26, 2020 order granting defendant’s motion to vacate the March 23, 2017 judgment, and that judgment has been reinstated, plaintiff’s motion is no longer moot.

Rather than remitting the matter to the Civil Court for a determination of the merits of plaintiff’s motion to recalculate the interest awarded in the March 23, 2017 judgment, in the interest of judicial economy, we address the merits and find that the claim is governed by the former regulations providing for compound interest (see Biotech Surgical Supply v Country Wide Ins. Co., 75 Misc 3d 128[A], 2022 NY Slip Op 50376[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2022]; G.N.S. Med. Supplies, Inc. v Country Wide Ins. Co., 66 Misc 3d 127[A], 2019 NY Slip Op 52035[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2019]; Seaside Rehabilitation v Allstate Ins. Co., 63 Misc 3d 162[A], 2019 NY Slip Op 50918[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2019]; see also Matter of B.Z. Chiropractic, P.C. v Allstate Ins. Co., 197 AD3d 144 [2021]) and that defendant’s argument that plaintiff’s motion should be denied because of a delay in entering the judgment after the settlement is without merit (see Biotech Surgical Supply, 2022 NY Slip Op 50376[U]; Seaside Rehabilitation, 2019 NY Slip Op 50918[U]).

Accordingly, the order is reversed and plaintiff’s motion to recalculate, from a simple rate to a compound rate, the award of statutory no-fault interest in the judgment entered March 23, 2017 is granted.

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

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 (Jill R. Epstein, J.), dated September 2, 2020. The order, insofar as appealed from, granted defendant’s motion for summary judgment dismissing causes of action (1), (2), (3), (4) and (6), and denied the branches of plaintiff’s cross motion seeking summary judgment on those five causes of action.

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

In October of 2017, plaintiff Ahmed Medical Care, P.C. (Ahmed) commenced this action against defendant State Farm Mutual Automobile Ins. Co. (State Farm) to recover $892.14 in assigned first-party no-fault benefits for services Ahmed rendered to its assignor, Sigmund October, for injuries the assignor allegedly sustained in a motor vehicle accident on March 9, 2015. The services were rendered on six dates between June 23, 2015 and November 18, 2015.

State Farm moved for summary judgment dismissing causes of action (1), (2), (3), (4) and (6) on the ground that they were barred by the doctrine of res judicata and/or collateral estoppel by virtue of a declaratory judgment issued by the Supreme Court, Nassau County, in a [*2]declaratory judgment action commenced by State Farm against Ahmed. In a support of the motion, State Farm’s counsel stated that, following Ahmed’s default in appearing in the Supreme Court action, a judgment was entered on April 1, 2016 (Antonio I. Brandveen, J.) which declared that Ahmed had no right to receive payment from State Farm for any claims set forth in the chart attached to the Supreme Court complaint because the assignor had failed to appear for examinations under oath. State Farm attached to its Civil Court motion a copy of the chart containing the precluded claims. State Farm’s counsel further stated that Ahmed’s motion to vacate its default in appearing in the Supreme Court action was denied in an order entered September 2, 2016. Ahmed cross-moved in the Civil Court for summary judgment on all six causes of action. Ahmed’s counsel argued, as is relevant here, that the declaratory judgment action has no preclusive effect on this action since it was granted on default.

In an order dated September 2, 2020, the Civil Court granted State Farm’s motion for summary judgment dismissing causes of action (1), (2), (3), (4) and (6), and granted Ahmed’s cross motion for summary judgment only with respect to the fifth cause of action. Ahmed appeals.

Initially, Ahmed’s contention that the copy of the chart of the claims barred by the declaratory judgment attached to State Farm’s motion was illegible and should not have been considered is without merit (see Bronx Med. Diagnostic, P.C. v Hereford Ins. Co., 65 Misc 3d 146[A], 2019 NY Slip Op 51793[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2019]).

“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, 913-914 [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, 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]).

As defendant’s moving papers sufficiently established that the assignor, claims, date of loss and dates of service relevant to causes of action (1), (2), (3), (4) and (6) in the case at bar are the same as those referenced in the Supreme Court declaratory judgment which rendered a final adjudication of those claims on the merits (see Ciraldo, 140 AD3d at 913), causes of action (1), (2), (3), (4) and (6) in the instant Civil Court action were barred under the doctrine of res judicata. Consequently, the Civil Court properly granted State Farm’s motion for summary judgment dismissing those causes of action (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 [*3]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, insofar as appealed from, is affirmed.

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

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 (Jill R. Epstein, J.), dated September 2, 2020. The order, insofar as appealed from, granted defendant’s motion for summary judgment dismissing causes of action (1), (2), (4) and (6), and denied the branches of plaintiff’s cross motion seeking summary judgment on those four causes of action.

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

In October of 2017, plaintiff Ahmed Medical Care, P.C. (Ahmed) commenced this action against defendant State Farm Mutual Automobile Ins. Co. (State Farm) to recover $892.14 in assigned first-party no-fault benefits for services Ahmed rendered to its assignor, Celeste October, for injuries the assignor allegedly sustained in a motor vehicle accident on March 9, 2015. The services were rendered on six dates between June 23, 2015 and November 18, 2015.

State Farm moved for summary judgment dismissing causes of action (1), (2), (4) and (6) on the ground that they were barred by the doctrine of res judicata and/or collateral estoppel by virtue of the declaratory judgment issued by the Supreme Court, Nassau County, in a declaratory judgment action commenced by State Farm against Ahmed. In support of the motion, State [*2]Farm’s counsel stated that, following Ahmed’s default in appearing in the Supreme Court action, a judgment was entered on April 1, 2016 (Antonio I. Brandveen, J.) which declared that Ahmed had no right to receive payment from State Farm for any claims set forth in the chart attached to the Supreme Court complaint because the assignor had failed to appear for examinations under oath. State Farm attached to its Civil Court motion a copy of the chart containing the precluded claims. State Farm’s counsel further stated that Ahmed’s motion to vacate its default in appearing in the Supreme Court action was denied in an order entered September 2, 2016. Ahmed cross-moved in the Civil Court for summary judgment on all six causes of action. Ahmed’s counsel argued, as is relevant here, that the declaratory judgment action has no preclusive effect on this action since it was granted on default.

In an order dated September 2, 2020, the Civil Court granted State Farm’s motion for summary judgment dismissing causes of action (1), (2), (4) and (6), and granted Ahmed’s cross motion for summary judgment only with respect to causes of action (3) and (5). Ahmed appeals.

For the reasons stated in Ahmed Med. Care, P.C., as assignee of October, Sigmund v State Farm Mut. Auto. Ins. Co. (— Misc 3d —, 2023 NY Slip Op — [appeal No. 2021-659 K C], decided herewith), the order, insofar as appealed from, is affirmed.

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

[*1]

Supreme Court, Kings County, February 9, 2023

APPEARANCES OF COUNSEL

Larkin Farrell LLC (David Fair of counsel) for petitioner.[*2]

Issue Presented

The no-fault insurance regulations provide that a master arbitrator may vacate a hearing arbitrator’s^[FN1] award where it is “incorrect as a matter of law (procedural or factual errors committed in the arbitration below are not encompassed within this ground)” (11 NYCRR 65-4.10 [a] [4]). Considering this, does it constitute an error of law where the hearing arbitrator{**78 Misc 3d at 892} makes a finding of medical necessity without adhering to Pan Chiropractic, P.C. v Mercury Ins. Co. (24 Misc 3d 136[A], 2009 NY Slip Op 51495[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2009]) and its progeny case law which hold that in the context of a summary judgment motion by an insurer asserting lack of medical necessity for a health service, the health service provider must submit expert medical opinion evidence which specifically refers to and either discusses or rebuts the insurer’s expert medical opinion evidence?

Background

This is a special proceeding—pursuant to CPLR article 75—commenced by American Transit Insurance Company (ATIC) seeking an order and judgment vacating a no-fault insurance master arbitration award of Victor D’Ammora, Esq. (dated Aug. 24, 2022), which affirmed the arbitration award of Lester Hill, Esq. (dated May 14, 2022), granting respondent Right Choice Supply, Inc.’s (Right Choice) claim for no-fault insurance compensation for health service expenses.^[FN2] Arbitrator Hill awarded the $4,737.90 sought by respondent Right Choice for providing supplies to its assignor^[FN3] (Assignor), who claimed to have been injured in a motor vehicle accident on January 30, 2020.

The arbitration was organized by the American Arbitration Association (AAA), which 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: [*3]

“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’] {**78 Misc 3d at 893}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.”

The arbitration was assigned case No. 17-21-1226-7577^[FN4] by the AAA. At oral argument before this court on January 25, 2022, petitioner ATIC appeared and argued that the above-referenced arbitration awards should be vacated. Respondent Right Choice has neither submitted opposition nor appeared in this special proceeding.

The record evidence submitted in this article 75 proceeding reveals that Arbitrator Hill conducted a hearing on May 13, 2022, at which Walter Pisary, Esq., appeared for Right Choice and Helen Cohen, Esq., appeared for ATIC. At issue were four bills from Right Choice submitted to ATIC for payment pursuant to the no-fault insurance system set forth in Insurance Law article 51 and the Department of Financial Services’ no-fault regulations set forth at 11 NYCRR part 65. Pertinent details of the four bills are as follows: date of service May 21, 2020, $548.08, provision of cane and hinged knee brace; dates of service May 25, 2020-June 21, 2020, $1,839.78, rental of knee CPM (continuous passive motion) device and provision of synthetic sheepskin pad; dates of service May 25, 2020-June 14, 2020, $1,365.00, rental of Game Ready compression unit; and dates of service May 25, 2020-June 7, 2020, $985.04, rental of DVT (deep vein thrombosis) prevention device.

Only one Form NF-10 denial of claim was included in the record—denying payment of the $548.08 bill for the cane and hinged knee brace on the grounds of lack of causation and fees not being in accordance with the fees schedule. Apparently, with respect to the other three bills, ATIC relied on a defense that additional verification it had sought was never provided.

Arbitrator Lester Hill’s Award

In that part of Arbitrator Hill’s award containing his findings, conclusions, and basis, he wrote: “The basis of the respondent’s timely denial based upon a lack of medical necessity is{**78 Misc 3d at 894} the peer report by Dr. Matthew Skolnick.”^[FN5] This was followed by citations to case law concerning a prima facie showing of entitlement to no-fault benefits: the prescribed statutory billing forms had been mailed and received and the payment of no-fault benefits were overdue. He found that respondent’s submission of its “NF-10 denial of claim form established that the insurer received the claim referenced therein as having been submitted by the provider and that the insure[r] did not pay the claim.” (NYSCEF Doc No. 3, arbitration award at numbered page 2.)

There then ensued a discussion of law concerning denials of claim and a defense of lack [*4]of medical necessity. Arbitrator Hill discussed the medical evidence before him. Noteworthy was the fact that Assignor underwent left knee surgery on May 21, 2020. As a result, the latter was provided with supplies, as noted above. “The claim for the knee brace was denied based upon the peer report by Dr. Slotnick.^[FN6] With respect to the claim for the continuous passive motion device [and synthetic sheepskin pad], [Game Ready] compression unit, and DVT device, the respondent asserts that the claims are not verified.” (Id. at numbered page 3.)

Arbitrator Hill noted that in a prior arbitration award of his—in AAA case No. 17-21-1190-2706—ATIC had relied on the same peer review from Dr. Skolnick which was submitted in the arbitration at issue. In this other case, Arbitrator Hill found the left knee surgery to be medically necessary.

Continuing with his analysis, Arbitrator Hill mentioned that Dr. Skolnick had relied in part on a review of intraoperative photos by Dr. Howard Levin. Arbitrator Hill discussed competing medical evidence, including a report by Dr. Anjani Sinha, which was submitted in support of medical necessity. (Id. at numbered pages 3-4.)

Arbitrator Hill found as follows regarding the bill for the cane^[FN7] and hinged knee brace:{**78 Misc 3d at 895}

“I find that the respondent has not demonstrated by sufficient factual basis and medical rationale that the knee brace prescribed to the EIP post surgery was medically unnecessary. With respect to the surgery itself I find that the best source of information is the surgeon, who noted in his postsurgical diagnosis of tears of the medial and lateral menisci. This is particularly the case with this EIP where the EIP presented a positive McMurray’s sign, the test for meniscal injury and an MRI that noted a tear of the medial meniscus. Putting these facts together it would appear that the most reasonable conclusion is that the EIP did suffer from a meniscal injury from the motor vehicle accident as there was no history nor any medical records to indicate that the EIP had a prior history of injury to the left knee. The peer report provides no factual basis to conclude that the surgery was not causally related to the motor vehicle accident other than the conclusion in the report of Dr. Levin that there were no meniscal tears. Therefore, based upon the evidence submitted, I find that the applicant has demonstrated that the surgery was medically necessary and causally related to the motor vehicle accident. I find that the respondent has not demonstrated that the knee brace following the surgery was medically unnecessary.” (Id. at numbered page 4.)[*5]

As for the other three bills, Arbitrator Hill found as follows:

“With respect to the claims for the continuous passive motion device, compression unit, and DVT device, the respondent, upon receipt of the claims requested verification, specifically, a letter of medical necessity and the pertinent medical records and stated that the claim was delayed pending the examination under oath of the EIP.

“On October 21, 2020, the applicant provided the documentary verification, specifically, a letter of medical necessity and the pertinent medical reports. The applicant further inquired [as to] the status of the examination under oath of the EIP.

“There is no evidence submitted by either party that an examination under oath of the EIP was scheduled or attempted to be scheduled.{**78 Misc 3d at 896}

“Without evidence that there was an examination under oath [which] was timely scheduled, the respondent’s position that the claims are not verified is without merit.” (Id.)

Right Choice’s arbitration claim was granted in its entirety by Arbitrator Hill, who awarded $4,737.90 in medical expenses plus interest and an attorney’s fee (id. at numbered pages 5-6).

Master Arbitrator Victor D’Ammora’s Award

Master Arbitrator D’Ammora set forth the issues in dispute as follows:

“The issues before the lower arbitrator were whether the Respondent properly denied the claim for various devices and durable medical equipment based upon (1) the lack of medical necessity and/or causation; and (2) unverified claims. The lower arbitrator allowed the claim. The Respondent seeks to overturn the award of the lower arbitrator.

“The issue before me is whether Arbitrator Hill’s decision to allow the claim was arbitrary, capricious or incorrect as a matter of law.” (NYSCEF Doc No. 4, master arbitration award at numbered page 1.)

Master Arbitrator D’Ammora set forth case law to the effect that the standard of his review was limited to whether the hearing (“lower”) arbitrator’s review was supported by evidence or another reasonable basis or was arbitrary or capricious, irrational, and without a plausible basis. He noted that a master arbitrator’s review did include whether the hearing arbitrator’s award was incorrect as a matter of law, but he was constrained in reviewing the facts adduced by the evidence. (Id. at numbered page 2.)

As for the cane and hinged knee brace ($548.08 bill),

“Arbitrator Hill conducted a hearing and reviewed all of the evidence including the medical documentation. Arbitrator [Hill] considered the peer review of Dr. Skolnick, the intraoperative photo review of Dr. Levin and the rebuttal of Dr. Sinha. Based upon the medical evidence Arbitrator Hill determined that the devices and equipment were medically necess[ar]y and causally related. And as such [he] allowed the claim” (id.).[*6]

As for the unprovided verification defense (regarding the other three bills), “Arbitrator Hill further determined that the {**78 Misc 3d at 897}Respondent had failed to show that an EUO of the EIP was scheduled or attempted to be scheduled. And as such there is no merit to . . . the position that the claims were not verified.” (Id.)

Master Arbitrator D’Ammora stated that Arbitrator Hill’s conclusions and findings were within his discretion and based on his interpretation of the evidence. It did not constitute reversible error. “This Master Arbitrator cannot conduct a de novo review and substitute my interpretation and view of the evidence for that of Arbitrator Hill. In particular, as here, Arbitrator Hill’s determination is rational and supported by the record.” He concluded, “I cannot conclude on the basis of the record before me that Arbitrator Hill’s decision was incorrect as a matter of law or arbitrary and capricious. Therefore, I must affirm the award.” (Id.)

ATIC’s Petition to Vacate

ATIC’s petition to vacate asserted that “[t]he arbitration decision was arbitrary and capricious, irrational and without a plausible basis” (NYSCEF Doc No. 1, petition ¶ 35), in that “Arbitrator . . . Hill . . . failed to follow well settled law” (id. ¶ 37). The petition went on to argue that Dr. Howard Levin’s review of the intraoperative photos concluded that there was no tear resulting from the subject motor vehicle accident; any change was degenerative and not traumatically induced (id. ¶ 39).^[FN8] ATIC’s evidence submitted to the hearing arbitrator “clearly satisfied its burden” (id. ¶ 41). Ultimately the medical provider—Right Choice in this instance—had to prove by a preponderance of the evidence that its services were medically necessary, claimed ATIC; the petition to vacate cited to Dayan v Allstate Ins. Co. (49 Misc 3d 151[A], 2015 NY Slip Op 51751[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2015]), and Park Slope Med. & Surgical Supply, Inc. v Travelers Ins. Co. (37 Misc 3d 19, 22 n [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012]) (id. ¶ 42). “In order for an applicant to prove that the services were medically necessary, it must meaningfully refer to, or rebut, the conclusions set forth in the peer{**78 Misc 3d at 898} review,” maintained the petition, which cited to Pan Chiropractic, P.C. v Mercury Ins. Co. (24 Misc 3d 136[A], 2009 NY Slip Op 51495[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2009]) (id. ¶ 43). Right Choice failed to offer any rebuttal at all, and certainly did not meaningfully refer to Dr. Skolnick’s peer review, as was required by Pan Chiropractic, P.C. and the more than 100 published decisions citing to it, insisted ATIC (id. ¶ 45).

ATIC reiterated in several paragraphs of its petition that a health service provider seeking no-fault medical expense compensation must meaningfully refer to and rebut an insurer’s peer reviewer’s conclusions (id. ¶¶ 51-54). “This proposition is widely accepted as ‘well settled’ law in the industry” (id. ¶ 55).

“In this case the arbitrator also ruled for Respondent [Right Choice] despite the fact that Respondent failed to offer a rebuttal. In doing so the arbitrator failed to [*7]follow well settled law. As such, this Court should vacate the arbitration award for the same reasons the Appellate Term reversed the trial courts in Pan Chiropractic, Eastern Star Acupuncture, Jaga Med. Servs., P.C. and High Quality Medical.” (Id. ¶ 58.)

The petition concluded by asserting that Arbitrator Hill ignored ATIC’s “evidence and/or well settled legal precedent in order to justify a determination in favor of Applicant [Right Choice]” (id. ¶ 62). Therefore, ATIC’s rights were prejudiced by the arbitrator’s partiality “and the arbitrator exceeded his/her power and failed to make a final and definite award and the decision must be vacated” (id. ¶ 63). The relief sought was vacatur of the awards of both Arbitrator Hill and Master Arbitrator D’Ammora—that they “have no force or effect” (id. ¶ 64).

ATIC has not addressed that part of Arbitrator Hill’s findings with respect to the three bills concerning which ATIC asserted that verification was unprovided. As such, I deem ATIC to have abandoned any effort to vacate that part of Master Arbitrator D’Ammora’s award which affirmed Arbitrator Hill regarding the bills in the amounts of $1,839.78, $1,365.00, and $985.04. Therefore, the discussion which follows relates to the $548.08 bill for the cane and knee brace dispensed on May 21, 2020, to Assignor—whether to vacate Master Arbitrator D’Ammora’s award insofar as that bill is concerned.{**78 Misc 3d at 899}

As noted above, respondent Right Choice has not appeared in this special proceeding, either with written opposition or oral argument. Nonetheless this petition must be adjudicated—in this instance solely on the papers and record submitted by petitioner ATIC.

No-Fault Insurance Arbitration

In order to determine this petition to vacate an arbitration award, some discussion of the nature of no-fault insurance arbitration is necessary. 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, section 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 (no-fault) benefits. This provision was amended in chapter 892 of the Laws of 1977, when several changes were made to the 1973 version of the No-Fault Law.^[FN9] The provision regarding arbitration in section 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 an arbitrator shall be binding except where vacated or modified by a master arbitrator. 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 [*8]jurisdiction to adjudicate the dispute de novo.” (L 1977, ch 892, § 13.)

Nothing in the Governor’s Bill Jacket for chapter 892 of the Laws of 1977 comments on the provision adopting master arbitration review of hearing arbitrators’ decisions.{**78 Misc 3d at 900}

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 section 5106, and subsections (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 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] {**78 Misc 3d at 901}[4] [filed June 8, 1988, eff July 1, 1988]). This regulatory language was carried over into the revised regulations promulgated in 2002, in 11 NYCRR 65-4.10 (a) (4). A master arbitrator may also vacate or modify a hearing arbitrator’s award under certain other grounds too (see 11 NYCRR 65-4.10 [a]).^[FN10][*9]

Discussion

The provision that a master 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 petition. ATIC argued that in finding medical necessity for the supplies dispensed by Right Choice on May 21, 2020, Arbitrator Hill{**78 Misc 3d at 902} failed to follow well-settled law that a health service provider opposing an insurer’s prima facie case of lack of medical necessity must submit a rebuttal meaningfully referring to and rebutting the insurer’s peer reviewer’s conclusions. As such, affirmance by Master Arbitrator D’Ammora was improper and both awards should be vacated pursuant to CPLR 7511 (b) (1) (iii). ATIC also argued that Arbitrator Hill’s award “was arbitrary and capricious, without rational basis and incorrect as a matter of law” (NYSCEF Doc No. 1, petition ¶ 61). ATIC argued further, among other things, that the weight of the evidence clearly favored its position that the subject supplies were not medically necessary (id. ¶ 60).

While Arbitrator Hill referred to a “rebuttal” of Dr. Anjani Sinha in his award (NYSCEF Doc No. 3, arbitration award at numbered page 3), by definition it was not a rebuttal. Dr. Matthew Skolnick’s peer review was dated October 20, 2020 (NYSCEF Doc No. 6, ATIC’s arbitration submission at 26), and Dr. Sinha’s report was dated March 4, 2020 (id. at 86). Therefore, the latter report could not be deemed a rebuttal meaningfully referring to and rebutting the peer reviewer’s conclusions on a later date. Dr. Sinha’s report is certainly not labeled a “rebuttal.” Applicant did have other supporting evidence in the record, none of which would be considered a formal rebuttal.^[FN11] Based on the record evidence submitted by ATIC in [*10]support of its petition, I agree that no rebuttal was submitted to Arbitrator Hill to formally rebut Dr. Skolnick’s conclusions. But did Right Choice’s failure to submit a formal rebuttal mandate vacatur by Master Arbitrator D’Ammora or by this court? Did it constitute an error of law pursuant to 11 NYCRR 65-4.10 (a) (4), as claimed by ATIC?

One of the difficulties in assessing ATIC’s claim is that the no-fault regulation enabling a master arbitrator to vacate a hearing arbitrator’s award due to an error of law is unclear exactly as to what is meant by “incorrect as a matter of law” (11 NYCRR 65-4.10 [a] [4]). We know that procedural or factual errors are not encompassed: “(procedural or factual errors committed in the arbitration below are not encompassed within{**78 Misc 3d at 903} this ground)” (id.). However, what does constitute an error of law? Does it mean that the hearing arbitrator failed to comply with a statute or a regulation? Or does this encompass case law also? If it encompasses case law, does that mean any deviation from a conclusion of law of any court warrants vacatur of the hearing arbitrator’s award? From a trial court? From just appellate courts? Does a conclusion of law in one case suffice to establish the “law” referred to in 11 NYCRR 65-4.10 (a) (4) or must there be a series of cases formulating “well settled law,” the phrase utilized in paragraph 37 of the petition?^[FN12] Clearly this regulatory provision could benefit from clarification from the New York State Department of Financial Services (successor to the Department of Insurance) in the form of an amendment to 11 NYCRR 65-4.10 (a) (4).^[FN13]

ATIC’s claim that the necessity for a rebuttal meaningfully referring to the peer reviewer’s conclusions derives from a long line of decisions of the Appellate Term, Second Department, 2d, 11th and 13th Judicial Districts (at one time just the 2d and 11th Districts) over a period of years. One of the earlier decisions in this regard was in A. Khodadadi Radiology, P.C. v N.Y. Cent. Mut. Fire Ins. Co. (16 Misc 3d 131[A], 2007 NY Slip Op 51342[U] [App Term, 2d Dept, 2d & 11th Jud Dists 2007]). The decision held that the insurer may rebut the inference of medical necessity through a peer review and, if the peer review is not rebutted, the insurer is entitled to denial of the claim. This was within the context of the defendant insurer’s cross-motion for summary judgment against the plaintiff medical provider. Shortly afterwards, Delta Diagnostic Radiology, P.C. v American Tr. Ins. Co. (18 Misc 3d 128[A], 2007 NY Slip Op 52455[U] [App Term, 2d Dept, 2d & 11th Jud Dists 2007]) cited to A. {**78 Misc 3d at 904}Khodadadi Radiology, P.C.‘s requirement that a peer review establishing a prima facie case of lack of medical necessity necessitated a rebuttal from the medical provider in order to avoid summary judgment being granted against it.

This concept of a rebuttal being required from a health service provider to avoid summary judgment where the medical provider’s peer review made out a prima facie case of lack of medical necessity was enhanced in Pan Chiropractic, P.C. v Mercury Ins. Co. (24 Misc 3d 136[A], 2009 NY Slip Op 51495[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2009]), the case chiefly relied upon by ATIC. In Pan Chiropractic, P.C., the said Appellate Term established the requirement that on a motion by the insurer for summary judgment against the medical provider, if the peer review sets forth a factual basis and medical rationale for the conclusion of lack of medical necessity, the medical provider must rebut it with an affidavit which “meaningfully refer[s] to, or discuss[es], the determination of defendant’s doctor” (Pan Chiropractic, P.C., 2009 NY Slip Op 51495[U], *2); without the provider submitting such an affidavit, the insurer is entitled to summary judgment dismissing the complaint.

Since Pan Chiropractic, P.C. was decided on July 9, 2009, by the Appellate Term for the 2d, 11th and 13th Judicial Districts, that court has cited it at least 100 times when reviewing trial court orders on summary judgment motions, according to Westlaw. The Appellate Term for the 9th and 10th Judicial Districts has also cited it (e.g. B.Y., M.D., P.C. v Progressive Cas. Ins. Co., 26 Misc 3d 135[A], 2010 NY Slip Op 50144[U] [App Term, 2d Dept, 9th & 10th Jud Dists 2010]). Therefore, this principle of law exists throughout the Second Department and is binding, at least on all trial courts within it. The requirement of a rebuttal from a health service provider which meaningfully refers to or discusses the determination of the no-fault insurer’s peer review doctor has basically been repeated in practically the same or similar language, per this court’s review of all cases citing to Pan Chiropractic, P.C., although in some instances the Appellate Term merely referred to rebutting the peer review without the words “meaningfully refers to, or discusses” (e.g. BLR Chiropractic, P.C. v American Tr. Ins. Co., 35 Misc 3d 141[A], 2012 NY Slip Op 50882[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012]; Crotona Hgts. Med., P.C. v New York Cent. Mut. Fire Ins. Co., 34 Misc 3d 155[A], 2012 NY Slip Op 50401[U] [App Term, 2d Dept, 2d, 11th &{**78 Misc 3d at 905} 13th Jud Dists 2012]). In Neomy Med., P.C. v American Tr. Ins. Co. (35 Misc 3d 135[A], 2012 NY Slip Op 50769[U], *1 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012]), the court found that the plaintiff’s supervising physician’s affidavit “failed to justify with specificity the additional studies” and therefore “did not rebut the conclusions set forth in the peer review report”; the words “meaningfully refers to, or discusses” were not used. The term “meaningfully rebut” was used in New Life Med., P.C. v GEICO Ins. Co. (35 Misc 3d 146[A], 2012 NY Slip Op 51061[U], *1-2 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012]). In Yklik, Inc. v Electric Ins. Co. (36 Misc 3d 131[A], 2012 NY Slip Op 51287[U], *1-2 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012]), the term used was “failed to meaningfully refer to, let alone rebut,” without the word “discuss.”

The Pan Chiropractic, P.C. holding regarding the need for a rebuttal which meaningfully referred to, or discussed, the determination of the no-fault insurer’s peer review doctor was extended in connection with independent medical examination (IME) reports submitted by an insurer to establish lack of medical necessity, in High Quality Med., P.C. v Mercury Ins. Co. (29 Misc 3d 132[A], 2010 NY Slip Op 51900[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2010]) and MIA Acupuncture, P.C. v GEICO Ins. Co. (29 Misc 3d 132[A], 2010 NY Slip Op 51899[U] [App Term, 2d Dept, 2d, 11th[*11]& 13th Jud Dists 2010]). Subsequent decisions of that court continued to hold likewise regarding an insurer’s IME report.

It is noteworthy that in one case, Pan Chiropractic, P.C. was cited for the principle of law that an insurer made out a prima facie case of entitlement to summary judgment dismissing the complaint on the ground of lack of medical necessity through submission of a sworn peer review. The court held that the burden shifted to the health service provider to raise a triable issue of fact, but it continued by stating that a sworn letter of medical necessity by a health service provider was “sufficient to raise a triable issue of fact as to the medical necessity of the services rendered” (Quality Psychological Servs., P.C. v Mercury Ins. Group, 27 Misc 3d 129[A], 2010 NY Slip Op 50601[U], *2 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2010]). This constituted a departure from the case law that a health service provider had to submit a rebuttal which meaningfully referred to or discussed the determination of the no-fault insurer’s peer review doctor. However, in a subsequent case, Gentle Care{**78 Misc 3d at 906} Acupuncture, P.C. v GEICO Ins. Co. (30 Misc 3d 126[A], 2010 NY Slip Op 52226[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2010]), the court acknowledged that the health service provider submitted an affidavit of medical necessity for the purpose of rebutting the insurer’s IME reports but it rejected it because it did not meaningfully refer to, let alone rebut, the IME reports’ conclusions (see also Gentle Care Acupuncture, P.C. v GEICO Ins. Co., 36 Misc 3d 131[A], 2012 NY Slip Op 51290[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012]). A “letter of medical necessity” did not “meaningfully refer to, let alone rebut” the insurer’s psychologist’s conclusions in All Boro Psychological Servs., P.C. v Progressive Northeastern Ins. Co. (38 Misc 3d 142[A], 2013 NY Slip Op 50252[U], *1-2 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2013]).

The plaintiff’s doctor’s affidavit in Neomy Med., P.C. v GEICO Ins. Co. (34 Misc 3d 144[A], 2012 NY Slip Op 50145[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012]) sufficiently demonstrated the existence of a question of fact as to medical necessity but the court did not indicate whether it meaningfully referred to or discussed the insurer’s peer review (see also Bay Plaza Chiropractic, P.C. v Praetorian Ins. Co., 38 Misc 3d 126[A], 2012 NY Slip Op 52315[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012]).

Not only must a health service provider’s affidavit refer to the insurer’s IME report, but the rebuttal component must not be conclusory (Flushing Traditional Acupuncture, P.C. v GEICO Ins. Co., 36 Misc 3d 156[A], 2012 NY Slip Op 51772[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012]); from this one can infer that the rebutting evidence must also discuss the IME report’s conclusions.

It is clear that whatever medical evidence is submitted in response to the peer review, it must “rebut” the latter’s conclusions and meaningfully refer to it (see Promed Durable Equip., Inc. v GEICO Ins., 41 Misc 3d 19, 21 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2013]; Jamaica Med. Supply, Inc. v GEICO Gen. Ins. Co., 39 Misc 3d 141[A], 2013 NY Slip Op 50760[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2013]; Park Slope Med. v Praetorian Ins. Co., 39 Misc 3d 141[A], 2013 NY Slip Op 50761[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2013]).

This court’s review of the cases citing to Pan Chiropractic, P.C. revealed that in more recent years, the word “discuss” was replaced by “rebut” in the decisions of the Appellate Term, {**78 Misc 3d at 907}Second Department, 2d, 11th and 13th Judicial Districts. Either way, the health service provider still must “meaningfully refer” to the peer review or the IME report. As for discussing it, a lower court decision still required it in 2021 (see Heavenly Points Acupuncture v Integon Natl. Ins. Co., 73 Misc 3d [*12]1201[A], 2021 NY Slip Op 50895[U], *2 [Civ Ct, Queens County 2021]).

The case law discussed extensively above was from the Appellate Term in the Second Department when reviewing appeals from orders on summary judgment motions. By comparison, the Appellate Term in the First Department has not used the phraseology of “meaningfully referring” and either “discuss” or “rebut” in all of its relevant decisions. In Darlington Med. Diagnostics, P.C. v Praetorian Ins. Co. (34 Misc 3d 148[A], 2012 NY Slip Op 50226[U] [App Term, 1st Dept 2012]), the court held that if a chiropractor’s peer review setting forth a factual basis and medical rationale for his conclusion that diagnostic testing lacked medical necessity established a prima facie showing of entitlement to judgment for an insurer, the plaintiff medical provider failed to raise a triable issue of fact where its submitted affidavit by a physician—whose field of practice was unspecified—contained no indication that its generic conclusions were based upon either a medical examination of the injured person or a review of the injured person’s medical records. An operative report of the claimant’s principal was insufficient to rebut the peer review where it consisted of conclusory, fill-in-the-blanks findings (see Synergy Med. v Praetorian Ins. Co., 40 Misc 3d 127[A], 2013 NY Slip Op 51047[U] [App Term, 1st Dept 2013]). A medical affidavit detailing the assignor’s complaints of pain and restricted range of motion, and opining that an MRI was necessary to rule out disc herniations, was sufficient to raise a triable issue of fact as to medical necessity (see AP Diagnostic Med., PC v Chubb Indem. Ins. Co., 41 Misc 3d 126[A], 2013 NY Slip Op 51647[U] [App Term, 1st Dept 2013]).

Further, where an insurer made a prima facie showing of entitlement to judgment through the submission of an IME report of its examining acupuncturist who set forth a factual basis and medical rationale for the conclusion that the assignor’s injuries were resolved and that no further acupuncture treatment was needed, the acupuncture provider failed to raise a triable issue concerning medical necessity where its principal, who while broadly describing his approach to the practice of{**78 Misc 3d at 908} traditional Chinese medicine, failed to set forth any allegations as to the assignor’s claimed injuries or the medical necessity of the acupuncture treatments at issue (see Utica Acupuncture, P.C. v Interboro Ins. Co., 39 Misc 3d 139[A], 2013 NY Slip Op 50643[U] [App Term, 1st Dept 2013]).

However, the Appellate Term, First Department, did at one point begin to use phraseology holding that a health service provider had to meaningfully respond to prima facie evidence from the insurer. In Premier Health Choice Chiropractic, P.C. v Praetorian Ins. Co. (41 Misc 3d 133[A], 2013 NY Slip Op 51802[U], *1 [App Term, 1st Dept 2013]), the court held that a doctor’s report “did not meaningfully refer to, let alone rebut, the contrary findings made by defendant’s peer reviewer” (emphasis added). Further, the same court held in Rummel G. Mendoza, D.C., P.C. v Chubb Indem. Ins. Co. (47 Misc 3d 156[A], 2015 NY Slip Op 50900[U] [App Term, 1st Dept 2015]) that if the insurer’s examining doctor’s IME report and follow-up report set forth a factual basis and medical rationale for her conclusion that the assignor’s injuries were resolved and that there was no need for further physical therapy treatment, an affidavit of the health service provider’s treating physical therapist which failed to meaningfully address the contrary findings made by the defendant’s examining doctor, including the normal results of the range of motion testing of the assignor’s cervical and lumbar spine, was insufficient to raise a triable issue of fact. The words “meaningfully rebut” were used in Mingmen Acupuncture Servs., PC v Global Liberty Ins. Co. of N.Y. (61 Misc 3d 128[A], 2018 NY Slip Op 51358[U], *1 [App Term, 1st Dept 2018]) and Forest Drugs v Global Liberty Ins. Co. of N.Y. (61 Misc 3d 147[A], 2018 NY Slip Op [*13]51708[U], *1 [App Term, 1st Dept 2018]).

Interestingly, no Appellate Term, First Department decision has cited to the Appellate Term, Second Department’s Pan Chiropractic, P.C. decision.

The foregoing review of Appellate Term decisions was performed to determine what constitutes settled law governing a motion for summary judgment in the context of a health service provider’s having to refute a prima facie case of lack of medical necessity established through an insurer’s submission of a sufficient peer review or IME report. Therefore, this court now holds that in such context, well-settled case law holds that the health service provider must submit expert opinion evidence, whether it is a “rebuttal,” affidavit, affirmation, or letter {**78 Misc 3d at 909}of medical necessity, which meaningfully refers to and either discusses or rebuts the conclusions of the insurer’s expert witness. Nothing submitted by Right Choice to Arbitrator Hill, according to the record, referred to Dr. Skolnick’s peer review. Had the dispute at bar been a motion for summary judgment, ATIC would have prevailed. Dr. Skolnick’s peer review made out a prima facie case of lack of medical necessity, and Right Choice did not submit expert medical evidence which referred to it; neither did Right Choice’s evidence discuss it or specifically rebut it.

The instant dispute, however, does not concern a motion for summary judgment. It concerns an arbitration. And that triggers an inquiry into whether Arbitrator Hill’s determination to accord probative value to Right Choice’s evidence lacking a formal rebuttal referencing the peer review was incorrect as a matter of law (11 NYCRR 65-4.10 [a] [4]), and whether in turn, Master Arbitrator D’Ammora’s affirmance must be vacated.

Most non-no-fault insurance arbitration awards cannot be vacated due to an error of law (see Matter of Sprinzen [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. This is because, as discussed above, 11 NYCRR 65-4.10 (a) (4), in the no-fault insurance regulations promulgated by the Superintendent of Financial Services (previously Superintendent of Insurance), lists “incorrect as a matter of law” as a ground for vacating or modifying a hearing arbitrator’s award. 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 [Allstate Ins. Co.], 54 NY2d 207, 211-212 [1981]; Matter of Acuhealth Acupuncture, P.C. v Country-Wide Ins. Co., 176 AD3d 800, 802 [2d Dept 2019]).

Determination

[1] With regard to case law, this court now holds that the phrase “incorrect as a matter of law” in 11 NYCRR 65-4.10 (a) (4) is to be construed to refer to settled or established court decisions on issues which do not relate to the admissibility, probative value, credibility, or evaluation of evidence when analyzing issues of fact. “[I]ncorrect as a matter of law” (11 NYCRR 65-4.10 [a] [4]) refers to substantive issues.

In part, this court’s present determination is based on the additional provision in 11 NYCRR 65-4.10 (a) (4) which{**78 Misc 3d at 910} provides that “procedural or factual errors committed in the arbitration below are not encompassed within this ground.” The reference to “factual errors” conveys impliedly that when it comes to assessing evidence for the purpose of fact-finding, an arbitrator has wider latitude and should not be required to comply with settled or established law concerning what specific evidence suffices to refute the opposing party’s evidence. This court also takes into account the general proposition that the admissibility of evidence and the [*14]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”]; Central Sq. Teachers Assn. v Board of Educ. of Cent. Sq. Cent. School 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., 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”]). In light of this case law with respect to the admissibility of evidence and the determination of issues of fact in arbitration, 11 NYCRR 65-4.10 (a) (4)’s “matter of law” should be limited in its breadth.

That “incorrect as a matter of law” (11 NYCRR 65-4.10 [a] [4]) refers to substantive issues—not evidentiary ones—is supported by case law. “If, however, the master arbitrator vacates the arbitrator’s award based upon an alleged error of a rule of substantive law, the determination of the master arbitrator must be upheld unless it is irrational” (Golden Earth Chiropractic & Acupuncture, PLLC v Global Liberty Ins. Co. of N.Y., 54 Misc 3d 31, 33-34 [App Term, 2d Dept, 9th & 10th Jud Dists 2016] [emphasis added and citations omitted]).

In Matter of Global Liberty Ins. Co. v McMahon (172 AD3d 500 [1st Dept 2019]), the Court held that it was incorrect as a matter of law for the hearing arbitrator to not consider the American Medical Association’s CPT Assistant newsletter, which is incorporated by reference in the New York Workers’ Compensation Medical Fee Schedule, in determining whether the no-fault insurer paid the proper fee to the medical provider. Issues regarding application of fee schedules in no-fault arbitration clearly are substantive ones. Similarly, an arbitrator’s{**78 Misc 3d at 911} failure to apply well-settled case law regarding fees for a licensed acupuncturist involved a substantive issue, which is a matter of law pursuant to 11 NYCRR 65-4.10 (a) (4) (Allstate Ins. Co. v Natural Healing Acupuncture, P.C., 39 Misc 3d 1217[A], 2013 NY Slip Op 50645[U] [Civ Ct, Kings County 2013]). Whether an insurer’s defense of fraudulent incorporation is precluded by a late denial of claim form involves an issue of law, based on case law (see Matter of Acuhealth Acupuncture, P.C. v Country-Wide Ins. Co., 149 AD3d 828 [2d Dept 2017]); it is obviously a matter of substantive no-fault insurance law. A hearing arbitrator’s assessment of medical necessity in the absence of a denial of claim asserting lack of medical necessity is incorrect as a matter of law (see Matter of Liberty Mut. Ins. Co. v Spine Americare Med., 294 AD2d 574 [2d Dept 2002]), and this too would be a substantive issue.

In contrast, an arbitrator’s task of determining whether a service is medically necessary entails making a finding of fact—not a conclusion of law. A substantive issue is not involved. Case law regarding the analysis of evidence, such as Pan Chiropractic, P.C. v Mercury Ins. Co. and its progeny, would not be controlling.

Finally, this court notes that the well-settled case law holding that the health service provider must submit expert opinion evidence which meaningfully refers to and either discusses or rebuts the conclusions of the insurer’s expert witness was rendered in the context of summary judgment motions. A court’s assessment of reviewing these motions entails scrutinizing the evidence to determine whether there is a lack of a material issue of fact. No-fault arbitrations are not summary judgment motions. They entail making final determinations, akin to a bench trial where the trial court hears the evidence and makes its own findings of fact. Decisions on [*15]summary judgment motions concerning evidence—as opposed to substantive issues—do not repose within the ambit of a “matter of law” (11 NYCRR 65-4.10 [a] [4]).

Having held that in the circumstance of case law, the phrase “incorrect as a matter of law” (id.) applies to issues of substantive law—not to the admissibility, probative value, credibility, or evaluation of evidence when analyzing issues of fact—this court further holds that when determining an issue of medical necessity, a no-fault hearing arbitrator is not required to apply the well-settled case law holding that the health service provider must submit expert opinion evidence which meaningfully{**78 Misc 3d at 912} refers to and either discusses or rebuts the conclusions of the insurer’s expert witness.^[FN14]

Accordingly, in this article 75 proceeding, Arbitrator Hill’s award, which clearly did not apply the well-settled case law Pan Chiropractic, P.C. v Mercury Ins. Co. and its progeny, was not incorrect as a matter of law within the purview of 11 NYCRR 65-4.10 (a) (4). Master Arbitrator D’Ammora’s award approved Arbitrator Hill’s review of the evidence. Master Arbitrator D’Ammora noted that his review of Arbitrator Hill’s award had to consider whether it was incorrect as a matter of law, citing to 11 NYCRR 65-4.10 (a) (4) (NYSCEF Doc No. 4, master arbitration award at numbered page 2). By affirming Arbitrator Hill’s award, Master Arbitrator D’Ammora conveyed that he did not find that it was incorrect as a matter of law.

[2] This court must next determine whether to sustain Master Arbitrator D’Ammora’s award. 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 (see Matter of Smith [Firemen’s Ins. Co.], 55 NY2d 224, 232 [1982]; Acuhealth Acupuncture, P.C. v Country-Wide Ins. Co., 170 AD3d 1168 [2d Dept 2019]; Matter of Acuhealth Acupuncture, P.C. v New York City Tr. Auth., 167 AD3d 869 [2d Dept 2018]; Matter of Acuhealth Acupuncture, P.C. v Country-Wide Ins. Co., 149 AD3d 828 [2d Dept 2017]). In the case at bar, Master Arbitrator D’Ammora’s review of the legal issue presented by ATIC was not irrational. As this court found, the Pan Chiropractic, P.C. line of cases need not be followed by no-fault hearing arbitrators. Hence, in terms of the legal issue, Master Arbitrator D’Ammora’s award was actually correct, let alone not irrational.

With respect to the factual issues reviewed by Master Arbitrator D’Ammora, the proper standard of his review was whether Arbitrator Hill 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 (Matter of Petrofsky [All{**78 Misc 3d at 913}state Ins. Co.], 54 NY2d 207 [1981]). Here, with respect to the $548.08 bill, Master Arbitrator D’Ammora noted that the hearing arbitrator considered Dr. Skolnick’s peer review, Dr. Levin’s intraoperative photo review, and a report of Dr. Sinha. The supplies were found medically necessary and causally related, and the hearing arbitrator allowed the claim.

“Arbitrator Hill’s conclusions and findings regarding the lack of medical[ ] necessity and the verification defense were in his discretion and interpretation of the evidence. It cannot be [*16]regarded as reversible error within this Master Arbitrator’s purview. This Master Arbitrator cannot conduct a de novo review and substitute my interpretation and view of the evidence for that of Arbitrator Hill. In particular, as here, Arbitrator Hill’s determination is rational and supported by the record.” (NYSCEF Doc No. 4, master arbitration award at numbered page 2.)

Judicial review of a master arbitrator’s authority to vacate a hearing arbitrator’s award derives from section 675 (presently section 5106) of the Insurance Law and involves the question of whether the master arbitrator exceeded his power (Matter of Smith [Firemen’s Ins. Co.], 55 NY2d 224, 231 [1982]). Master Arbitrator D’Ammora did not exceed his power when he reviewed the factual findings of Arbitrator Hill. He applied the correct standard of review when he wrote, “I cannot conclude on the basis of the record before me that Arbitrator Hill’s decision was incorrect as a matter of law or arbitrary and capricious” (NYSCEF Doc No. 4, master arbitration award at numbered page 2). Indeed, Arbitrator Hill’s factual finding that the supplies at issue—the cane and knee brace—were medically necessary was neither arbitrary nor capricious. As indicated above, he found that the best source of information was the surgeon, who noted in his postoperative report that there were tears of the medial and lateral menisci. The MRI noted a tear of the medial meniscus. With no evidence of prior injury to the knee, the most reasonable conclusion was that Assignor did suffer from a meniscal injury from the motor vehicle accident. The surgery was necessary and so too were the supplies. (NYSCEF Doc No. 3, arbitration award at numbered page 4.) Master Arbitrator D’Ammora was correct when he found that Arbitrator Hill’s factual determination was rational and supported by the record (NYSCEF Doc No. 4, master arbitration award at numbered page 2). This court finds that{**78 Misc 3d at 914} Master Arbitrator D’Ammora’s review of that factual determination was neither arbitrary and capricious, irrational, or without a plausible basis (see Matter of Petrofsky [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 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.

Any requested relief not expressly addressed herein has nonetheless been considered and is hereby expressly rejected. [*17]

Conclusion

Accordingly, it is hereby ordered, adjudged, and decreed that ATIC’s petition is denied and the master arbitration award of Victor D’Ammora, Esq., which affirmed the arbitration award of Lester Hill, Esq., is confirmed in its entirety.

Footnotes

Footnote 1: The term “hearing arbitrator” is used herein instead of “arbitrator” to avoid confusion with the term “master arbitrator.”

Footnote 2: The notice of petition seeks vacatur of “the arbitration award issued by Arbitrator Lester Hill, Esq. and/or Master Arbitrator Vic D’Ammora, Esq.” (NY St Cts Elec Filing [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 (Matter of Staten Is. Hosp., 103 AD2d 744 [2d Dept 1984]). Naturally, if the hearing arbitrator’s award is imperfect, a master arbitration award affirming it would likewise be imperfect and subject to vacatur.

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 an “assignor.”

Footnote 4: Paragraph 28 of the petition describes the AAA case No. as 99-21-1226-7577, which was assigned to the master arbitration appeal. The original arbitration was assigned AAA case No. 17-21-1226-7577.

Footnote 5: The peer review of Dr. Skolnick, referenced in the Form NF-10 denial of claim and attached to it, opined lack of medical necessity in addition to lack of causation from the accident of record (NYSCEF Doc No. 6, ATIC’s arbitration submission at 4, 29).

Footnote 6: The reference to Dr. Slotnick is obviously a typographical error; the arbitrator meant Dr. Skolnick.

Footnote 7: Although Arbitrator Hill did not mention the cane in his award, he did award compensation for it, as per Part A in the conclusion of his award: he awarded $548.08 for the bill for date of service May 21, 2020, which bill was for the cane and the knee brace. It is clear that his findings concerning the knee brace applied likewise to the cane (NYSCEF Doc No. 3, arbitration award at numbered page 5).

Footnote 8: To the extent that ATIC’s petition argued that the intraoperative photo review by Dr. Howard Levin had to be rebutted by Right Choice, it is rejected. ATIC’s denial of the $548.08 bill referred only to the “attached peer review by Dr. Matthew D. Skolnick, M.D.” (NYSCEF Doc No. 6, ATIC’s arbitration submission at 4). An insurer must stand or fall upon the defense upon which it based its refusal to pay and cannot create new grounds (Matter of State Farm Ins. Co. v Domotor, 266 AD2d 219, 220-221 [2d Dept 1999]).

Footnote 9: Among the more substantial changes in the 1977 legislation were the adoption of fee schedules to limit medical expenses and modifying the threshold categories to be able to sue for pain and suffering.

Footnote 10: 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 12: As it turns out, there is no issue of whether the hearing arbitrator incorrectly applied law embodied in a statute or regulation, but if he had it would obviously constitute an error of law. The case law sought to be applied by ATIC in the subject article 75 petition was embodied in a long series of court decisions of the Appellate Term, so any issue of applying case law from just one decision or from a trial court is academic in this instance.

Footnote 13: In fact, since this decision involves interpretation of the Department of Financial Services’ no-fault regulations, a copy of it will be transmitted by this court to the Superintendent of Financial Services. This court encourages other justices who determine article 75 petitions seeking review of no-fault arbitration awards to likewise transmit copies of their decisions to said Superintendent and, perhaps, a process for their transmission by New York’s court system to the Superintendent could be implemented. For sure, this would assist the Superintendent to fulfill her responsibilities to promulgate procedures governing the no-fault arbitration system (see Insurance Law § 5106 [b], [c], [d]).

Footnote 14: This is not to say that a hearing arbitrator is prohibited from applying the well-settled case law which began with Pan Chiropractic, P.C. Since it is not deemed a “matter of law,” as the term is used in 11 NYCRR 65-4.10 (a) (4), an arbitrator is free to apply it or not.

[*1]

Jaffe & Asher LLP, White Plains (Marshall T. Potashner of counsel), for appellants.

Eppinger, Reingold & Korder, Larchmont (Mitchell L. Korder of counsel), for respondents.

Order, Supreme Court, New York County (Nancy M. Bannon, J.), entered September 21, 2022, which denied plaintiffs’ motion pursuant to CPLR 602 (b) to consolidate eight Civil Court actions with this action, unanimously reversed, on the law, without costs, and plaintiffs’ motion granted.

This action arises out of insurance claims based on an accident on December 30, 2020 in which defendant Melito Bonilla, while a passenger in a parked car, was injured when the car was struck by another vehicle. Each of the claims is under an insurance policy issued by plaintiffs that required Bonilla to appear for an examination under oath (EUO). Plaintiffs Liberty Mutual Insurance Company and LM General Insurance Company commenced this action on December 28, 2021, seeking a declaratory judgment, alleging that they do not owe no-fault coverage for medical fees in connection to Bonilla’s injuries because he failed to appear for an EUO.

After the action was commenced, two of Bonilla’s medical providers, Bay Ridge Chiropractic PC and Hudson Valley Chiro & Rehab PC, both of which are defendants in this action, brought eight actions, all in Richmond County Civil Court, seeking payment from Liberty for treatment of Bonilla’s alleged injuries. Liberty asserts that the same defense applies in each case, namely that it is not required to cover the injuries because Bonilla failed to appear for scheduled EUOs.

It was an improvident exercise of discretion to have denied plaintiffs’ motion to consolidate (see Amcan Holdings, Inc. v Torys LLP, 32 AD3d 337, 340 [1st Dept 2006]). The issue of whether Bonilla failed to submit to the EUO, and whether such failure entitles Liberty to disclaim coverage for his alleged injuries and treatment, would affect the outcome of each of the cases, and Liberty would risk inconsistent verdicts and multiple trials if the Civil Court actions are not consolidated with this one (see Phoenix Garden Rest. v Chu, 202 AD2d 180, 180-181 [1st Dept 1994]). Moreover, in opposing plaintiffs’ motion, defendants have not argued that they would be prejudiced. Concur—Webber, J.P., González, Scarpulla, Rodriguez, JJ.

[*1]

Gary Tsirelman, P.C., Brooklyn (Gary Tsirelman of counsel), for appellant.

Jaffe & Velazquez, LLP, New York (Thomas Torto of counsel), for respondent.

Order, Supreme Court, New York County (Lyle E. Frank, J.), entered on or about February 3, 2022, which granted petitioner Country-Wide Insurance Company’s (Country-Wide) petition to vacate a master arbitrator’s award, dated September 20, 2021, which affirmed a lower arbitrator’s award, dated May 31, 2021, in favor of respondent Refill Rx Pharmacy, Inc, as assignee of Kimberly Rosas (Refill) and against Country-Wide, in the amount of $2,715.48, and denied respondent’s cross motion for attorneys’ fees, unanimously affirmed, without costs.

Vacatur of the award was warranted under CPLR 7511 (b) (1) (iii) as the lower arbitrator exceeded his power by issuing an award exceeding the contractual limit for the subject no-fault coverage policy of $50,000, and the master arbitrator erred in affirming. Once a no-fault insurer “has paid the full monetary limits set forth in the policy, its duties under the contract of insurance cease” (Countrywide Ins. Co. v Sawh, 272 AD2d 245, 245 [1st Dept 2000]). An arbitrator’s award directing payment beyond the monetary limit of a no-fault insurance policy exceeds the arbitrator’s power and constitutes grounds for vacatur of the award (see Matter of Brijmohan v State Farm Ins. Co., 92 NY2d 821, 823 [1998]; see also Matter of Ameriprise Ins. Co. v Kensington Radiology Group, P.C., 179 AD3d 563 [1st Dept 2020]). Country-Wide was not precluded from raising the issue of policy exhaustion before the court, even if it was not before the arbitrators in the underlying arbitration (Matter of Ameriprise Ins. Co. at 564).

Country-Wide submitted an affidavit from its No-Fault Litigation/Arbitration supervisor, attesting that the instant claims file of Refill’s assignor, Ms. Rosas, reflects that the policy has been exhausted beyond its $50,000 limit. The affidavit also contains a ledger reflecting the dates that claims by various medical providers were paid, which exhausted Ms. Rosas’ policy. Thus, Country-Wide’s submissions showed that the policy was properly exhausted prior to the underlying arbitration (see 11 NYCRR 65-3.15).

In view of the foregoing, Refill is not entitled to the attorneys’ fees it requested (see 11 NYCRR 65-4.10 [j] [4]).

We have considered Refill’s remaining arguments and find them unavailing. Concur—Kapnick, J.P., Friedman, Kennedy, Mendez, Shulman, JJ.

Decided on January 6, 2023

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