Allstate Ins. Co. v DHD Med., P.C. (2021 NY Slip Op 50011(U))

656547/2017

Law Offices of Peter C. Merani, New York, NY (Adam Waknine of counsel), for plaintiff.

Gottlieb Ostrager LLP, Hauppauge, NY (Aaron E. Meyer of counsel), for defendant.

The following e-filed documents, listed by NYSCEF document number (Motion 003) 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 46, 47, 48, 49, 50, 51, 60 were read on this motion for SUMMARY JUDGMENT.

The following e-filed documents, listed by NYSCEF document number (Motion 004) 52, 53, 54, 55, 56, 57, 58, 59 were read on this motion to EXTEND TIME.

In this action, plaintiff, Allstate Insurance Company, seeks a de novo adjudication of defendant DHD Medical, P.C.’s entitlement to no-fault insurance benefits, following an arbitration award in DHD Medical’s favor of $5,786.91.

DHD Medical’s assignor, Miraculeuse Alexis, was struck and injured by an automobile insured by Allstate. Alexis subsequently received medical treatment and physical therapy from doctors and staff at DHD Medical. She assigned her right to collect no-fault insurance benefits to DHD Medical. Allstate later denied DHD Medical’s claim for benefits on the ground that the treatment provided was not medically necessary.

DHD Medical challenged the denial of benefits in a no-fault arbitration proceeding under Insurance Law § 5106 (b). In the arbitration proceeding, Allstate relied on the report of a physician who conducted an independent medical examination (IME) of Alexis, and found no need for further treatment, prior to the treatments for which DHD Medical was seeking no-fault benefits. DHD Medical relied on several reports from its treating physicians and physical therapists who had diagnosed and treated Alexis. The first-level arbitrator found DHD Medical’s evidence more persuasive and held that DHD Medical was entitled to $5,786.91 in no-fault [*2]benefits. That decision was affirmed on administrative appeal to a master arbitrator.

Allstate then brought this action under Insurance Law § 5106 (c) seeking a de novo adjudication of whether Allstate is liable to pay any no-fault benefits. DHD Medical initially defaulted, and this court granted Allstate’s motion for default judgment. DHD Medical later moved to vacate its default, which this court granted. The answer that DHD Medical sought leave to serve included a counterclaim for the $5,786.91 in benefits. Allstate did not timely file a reply to the counterclaim.

In motion sequence 003, Allstate moves for summary judgment in its favor on its claim that it has no benefits liability to DHD Medical. DHD Medical cross-moves for summary judgment dismissing Allstate’s claim. Also in motion sequence 003, DHD Medical moves for default judgment under CPLR 3215 on its counterclaim for the $5,786.91. In motion sequence 004, Allstate seeks to compel DHD Medical to accept its late reply to counterclaims under CPLR 3012 (d).

The motions are consolidated here for disposition. Allstate’s motion under CPLR 3012 in motion sequence 004 is granted. The parties’ respective motion and cross-motion for summary judgment in motion sequence 003 are denied. DHD Medical’s cross-motion for default judgment in motion sequence 003 is denied.

DISCUSSION

Where a no-fault insurance arbitrator has issued a benefits award of more that $5,000 (exclusive of interest and attorney fees), either the insurer or the claimant may bring an action in court to adjudicate the benefits dispute de novo. (See Insurance Law § 5106 [c].) Here, each party contends that under CPLR 3212 it is entitled to judgment as a matter of law on Allstate’s de novo claim that it properly denied DHD Medical’s application for benefits. This court disagrees.

Both Allstate and DHD Medical rely essentially on the same medical evidence that they put before the arbitrators—i.e., the IME report of the physician who examined Alexis for Allstate, and the medical records of Alexis’s treatment by DHD Medical physicians and physical therapists (plus an accompanying explanatory physician’s affirmation). This conflicting medical evidence creates an obvious question of fact about whether DHD Medical provided Alexis necessary medical treatment. Summary judgment must therefore be denied.^[FN1] (See Lynch v Security Indemnity Ins. Co., 302 AD2d 295, 295-296 [1st Dept 2003].) The court declines DHD Medical’s invitation to assess at summary judgment whether Allstate’s IME report is credible and entitled to evidentiary weight. (See Wagner v Baird, 208 AD2d 1087, 1089 [3d Dept 1994] [reversing grant of summary judgment in de novo action under Insurance Law § 5106].)

DHD Medical also cross-moves for default judgment on its $5,786.91 counterclaim; and Allstate moves to compel DHD Medical to accept its untimely reply to that counterclaim. DHD Medical’s cross-motion is denied, and Allstate’s motion is granted. The affidavit of Allstate’s counsel establishes that Allstate’s failure to reply timely to the counterclaim was due essentially to law-office failure. This court concludes that in the circumstances of this case—including pandemic-related confusion and dislocation over the last 10 months—that law-office failure [*3]constitutes a reasonable excuse. Allstate also has a potentially meritorious defense based on the IME report (and underlying physician’s examination) discussed above.

Additionally, the central issue on DHD Medical’s counterclaim—whether Allstate properly denied DHD Medical’s no-fault benefits application—is identical to the issue presented by Allstate’s main claim. Granting DHD Medical’s motion for default judgment on its counterclaim would thus effectively terminate the entire action in DHD Medical’s favor. The court concludes that the action should instead be resolved on its merits.

Accordingly, it is hereby

ORDERED that Allstate’s motion for summary judgment under CPLR 3212, seeking judgment in Allstate’s favor on its liability to pay no-fault benefits to DHD Medical (motion sequence 003) is denied; and it is further

ORDERED that the branch of DHD Medical’s cross-motion seeking summary judgment in its favor on Allstate’s liability to pay no-fault benefits (motion sequence 003) is denied; and it is further

ORDERED that the branch of DHD Medical’s cross-motion seeking default judgment under CPLR 3215 on DHD Medical’s counterclaims for the disputed amount in no-fault benefits (motion sequence 003) is denied; and it is further

ORDERED that Allstate’s motion under CPLR 3012 to require DHD Medical to accept Allstate’s untimely reply to DHD Medical’s counterclaims is granted; and it is further

ORDERED that the parties shall inform the court how they intend to proceed with the action going forward at a status conference to be held telephonically on January 21, 2020.

Dated: January 8, 2021
Hon. Gerald Lebovits
J.S.C.

Footnotes

Footnote 1:To the extent that Allstate now seeks to rely on other grounds for denying DHD Medical’s benefits application (such as an asserted failure to prove that supporting medical bills were properly submitted), the court declines to reach that argument because those grounds were neither the proffered basis for the denial nor raised in arbitration.