Renelique v Foremost Signature Ins. Co. (2023 NY Slip Op 51226(U))

Index No. CV-710546-12/QU

Plaintiff’s counsel:
The Rybak Firm, PLLC
1506 Kings Highway, 2nd Floor
Brooklyn, NY 11229

Defendant’s counsel:
Law Offices of Rothenberg & Burns
PO Box 258829
Oklahoma City, OK 73125

I. Papers

The following papers were read on Defendant’s motion to dismiss and Plaintiff’s cross-motion for it’s claims against Defendant:

Defendant’s Notice of Motion to Dismiss and Affirmation in Support, dated March 30, 2022 and electronically filed on March 31, 2022 (“Motion”), together with all supporting exhibits. 1

Plaintiff’s Notice of Cross-Motion and Affirmation in Support of Cross-Motion for Summary Judgement and in Opposition to Motion, undated but electronically filed on May 27, 2022 (“Cross-Motion“), together with all supporting exhibits. 2

Defendant Affirmation in Opposition and in Reply (“Opp and Reply“) dated May 26, 2022 and electronically filed on May 31, 2022, together with all supporting exhibits. 3

II. Background

In a summons and complaint filed with the court on April 3, 2012, Plaintiff sued Defendant insurance company to recover unpaid No-Fault benefits for medical services provided to Plaintiff’s assignor Forbes, plus attorneys’ fees and statutory interest. This “action [arose] out of an automobile ‘accident,’ which allegedly occurred on December 3, 2011. . .[and] claim number 1020274500-1-5 was assigned to this” claim by Defendant insurance company (Motion, Tsirkas aff, paragraph 3). Issue was joined when Defendant filed its an Answer on April 27, 2012. After motion practice (i.e., motion seq. #1 and seq. #2), Plaintiff filed the Notice of Trial on July 24, 2014. This matter was placed on the Part 15N trial calendar on November 7, 2014 and was adjourned to October 17, 2019, which was further adjourned to March 4, 2020. This matter was referred to the inquest clerk after Defendant insurance company failed to appear for trial scheduled on March 4, 2020. By Order to Show Cause (“OSC“) (motion Seq. #3), Defendant moved to vacate its default (CPLR 5015[a][1]) and moved for summary judgment dismissing Plaintiff’s complaint (CPLR 3212[b]). The OSC was scheduled to be heard in Part 40 Calendar on October 1, 2020, but was adjourned to November 4, 2020 before other courts, at which time, other court took the OSC on submission. The OSC was subsequently assigned to this Court for a determination pursuant to the then motion assignment policy under which all motions were submitted to a pool for re-distribution. This Court granted Defendant’ motion to vacate the inquest marking and denied Defendant’s motion for summary judgment dismissing Plaintiff’s complaint.

In January 2022, Queens Civil Court new Supervising Judge (“New SJ“) effectuated a new policy via email pursuant to which “judges assigned to the part [was] responsible for the fully submitted motions.” On March 31, 2022, Defendant filed the instant Motion (i.e., motion seq. #4) seeking an order granting Defendant summary judgement and dismissing Plaintiff’s complaint with prejudice. In May 2022, the New SJ issued another motion assignment policy via email pursuant to which a “judge assigned for the term [was] responsible for all submitted motions, including those that were submitted while the judge was away on vacation that was approved prior to the term assignments.” On May 27, 2022, Plaintiff filed the instant Cross-Motion (i.e., motion seq. #5) seeking an order “pursuant to CPLR . . . 3211(c) and 3212(a), granting summary judgement in favor of Plaintiff, denying Defendant’s motion to dismiss and for summary judgement; limiting the issues of fact for trial pursuant to CPLR 3212(g) that the prescribed statutory billing forms were mailed to and received by the insurance carrier, and that payment of no-fault benefits were overdue; and dismissal of Defendant’s Affirmative Defense pursuant to CPLR 3211(b). . . ” (Cross-Motion at 1). The Motion and Cross-Motion were before other courts on Part 41 calendar on May 16, 2022 and was adjourned to July 18, 2022. Other court took the Motion and the Cross-Motion on submission and subsequently referred the motions to this Court for a determination. This referred matter was one of the approximately one hundred eleven (111) motions referred to this Court as of August 2022, while this Court did not preside over those calendar parts when motions were submitted, pursuant to the New SJ’s everchanging motion policy.

III. Discussion

A. Standard for Summary Judgement

“A [party] moving for summary judgment has the initial burden of coming forward with admissible evidence, such as affidavits by persons having knowledge of the facts, reciting the material facts and showing that the cause of action has no merit” (GTF Mktg. v Colonial Aluminum Sales, 66 NY2d 965, 967 [1985]; Anghel v Ruskin Moscou Faltischek, P.C., 190 AD3d 906, 907 [2d Dept 2021], see Jacobsen v New York City Health & Hosps. Corp., 22 NY3d 824, 833 [2014]). CPLR 3212 provides that “a motion for summary judgment shall be supported by affidavit, by a copy of the pleadings and by other available proof, such as depositions and written admissions…” (CPLR 3212 [b]). “Mere conclusions, expressions of hope or unsubstantiated allegations or assertions are insufficient” (Zuckerman v City of New York, 49 NY2d 557, 562 [1980]). A motion for summary judgment “shall be granted if, upon all the papers and proof submitted, the cause of action or defense shall be established sufficiently to warrant the court as a matter of law in directing judgment in favor of any party” (CPLR 3212[b]; Zuckerman v City of New York, at 562, see GTF Mktg. v Colonial Aluminum Sales, 66 NY2d at 968).

In its Motion, Defendant presented a copy of New York County Supreme Court Justice Lucy Billings’ order (“Billings Order“) of August 22, 2019 granting Defendant’s motion for default judgment pursuant to which Hon. Billings declared that Defendant, among other entities, a) was “not obligated to provide any coverage, reimbursements, or pay any monies, sums, or funds to. . . [the Plaintiff]. . .for any and all No-Fault related services for which claims/bills have been, or may in the future be, submitted by [Plaintiff, among other parties,] to [Defendant]; b). . .[Plaintiff and other named entities] lack[ed] standing seeking No-Fault reimbursements; c) [Plaintiff and other named entities] were fraudulently incorporated within the meaning of 11 NYCRR 65-3.16(a)(12) and State Farm v. Mallela, 4 NY3d 313 (NY 2005), in violation of the applicable law; and d) [Plaintiff and other named entities] participated in a scheme to defraud [Defendant, among other entities,] by submitting claims for No-Fault services allegedly rendered by [Plaintiff and other named entities], which they knew were fraudulently incorporated within the meaning of State Farm v. Mallela, 4 NY3d 313 (NY 2005), and 11NYCRR 65-3.16(a)(12).” (Motion, Ex B.) Defendant further argued that “Plaintiff herein [was] barred. . .pursuant to the doctrine of res judicata” and “under the doctrine of collateral estoppel” (Motion, Tsirkas Aff). This Court notes that Billings Order was rendered on default and such order was signed based on a proposed order submitted by the moving parties. This Court also notes that the cover page of the decision indicated that Billings Order was not a final disposition by checking the box of “Non-Final Disposition” (Motion, Ex B).

In its Cross-Motion, Plaintiff cross-moved for summary judgement for its claim and opposed to Defendant’s motion to dismiss. Plaintiff argued that 1) the underlying action (“Prior Declaratory Judgement Action“) in Billings Order “involve[d] ‘additional [parties]’, and thus there [was] ‘no identity of parties'”; 2) “the causes of action [were] not the same”; 3) the relief sough in the instant action was different from the ones in the Prior Declaratory Judgement [*2]Action; 4) Plaintiff’s motion to dismiss was untimely; 5) the prior Declaratory Judgement Action “fail[ed] to state a relation to the instant case as it fail[ed] to state the date of accident, the assignor, and any claim number”; 6) Billings Order was issued on default; 7) “there [was] no identity of the issues. . .[because] here Plaintiff [brought] an action for unpaid no-fault claims based on a breach of contract theory; [while] in the declaratory judgement action, Defendant commenced an action for breach of the insurance policy terms and conditions and asked the court to give it an advisory opinion as to whether Defendant [was] obligated to pay under the policy if some of the individuals breached the policy terms and conditions;” 8) “Plaintiff in this action [was] still within the CPLR time limits for moving to vacate a default judgment.” (Cross-Motion, Rybak Aff.) Plaintiff further argued that Defendant’s motion to dismiss must be denied because (1) Defendant failed to establish collateral estoppel or res judicata; and (2) Defendant’s motion to dismiss was untimely.

In its Opp and Reply, Defendant counter argued that i) Queens Civil Court had issued orders based on Billings Order; ii) Defendant was one of the plaintiff parties in the Prior Declaratory Judgement Action, iii) Plaintiff’s argument of Defendant having untimely filed its motion to dismiss was without merit.

Contrary to Defendant’s arguments, Plaintiff correctly contended, however, that Defendant’s second request for summary judgment dismissing Plaintiff’s complaint based on the Billings Order issued on August 22, 2019, is untimely given that Plaintiff filed the Notice of Trial on July 24, 2014 (CPLR 3212[a]; Michael Palmeri, M.D., PLLC v Allstate Ins. Co., 48 Misc 3d 136[A], 2015 NY Slip Op 51130[U] *1 [App Term 2d Dept 2015]; Exceptional Med. Care, P.C. v Fiduciary Ins. Co., 43 Misc 3d 75, 76 [App Term 2d Dept 2014] ; Tong Li v Citywide Auto Leasing, Inc., 43 Misc 3d 128[A], 2014 NY Slip Op 50481[U] *1 [App Term 2d Dept 2014]). While a party may file an untimely summary judgment motion upon good cause shown (CPLR 3212[a]; Miceli v. State Farm Mut. Auto Ins. Co., 3 NY3d 725, 727 [2004]; Brill v. City of New York, 2 NY3d 648, 652 [2004]), here, Defendant failed to explain the reason its first summary judgment motion filed in September of 2020 (“Defendant’s First Motion to Dismiss” or the OSC), was made more than six (6) years after Plaintiff filed the Notice of Trial, and more than a year after the Billings Order. This Court denied, in March 2021, Defendant’s First Motion to Dismiss. Defendant now filed the instant Motion asking the court to dismiss Plaintiff’s complaint for the second time in March 2022. Here, Defendant once again failed to explain the reason its second summary judgment motion filed in March 2022, was made almost seven (7) years after Plaintiff filed the Notice of Trial, almost two (2) years after the Billings Order, and one (1) year after this Court’s denial of Defendant’s First Motion to Dismiss. This Court must deny Defendant’s untimely summary judgment motion seeking an order dismiss the action (Simpson v Tommy Hilfiger U.S.A., Inc., 48 AD3d at 392; Michael Palmeri, M.D., PLLC v Allstate Ins. Co., 2015 NY Slip Op 51130[U] *1; Exceptional Med. Care, P.C. v Fiduciary Ins. Co., 43 Misc 3d at 77; Tong Li v Citywide Auto Leasing, Inc., 2014 NY Slip Op 50481[U] *1).

Defendant’s Motion seeking an order dismissing Plaintiff’s complaint is denied as [*3]untimely. Alternatively, this Court finds that neither collateral estoppel nor res judicata bars this action.

It is well established that “collateral estoppel precludes a party from relitigating an issue previously resolved against that party in a prior proceeding in which that party had a full and fair opportunity to contest the decision now said to be controlling. The party seeking to apply collateral estoppel bears the initial burden of proving that the identical issue was necessarily decided in the prior proceeding, and is decisive of the present action.” (Kuznitz v Funk, 187 AD3d 1006 [App Division 2d Dept 2020].) Court in Parisien v. Kemper Ins. Co. also stated that “while an issue is not actually litigated if, for example, there has been a default, collateral estoppel may be properly applied to default judgments where the party against whom preclusion is sought appears in the prior action, yet willfully and deliberately refuses to participate in those litigation proceedings, or abandons them, despite a full and fair opportunity to do so. The party seeking to rely on collateral estoppel has the burden of establishing that the issue actually litigated and determined in the prior action is identical to the issue on which preclusion is sought. The party attempting to defeat the application of collateral estoppel has the burden of establishing the absence of a full and fair opportunity to litigate.” (Parisien v. Kemper Ins. Co., 76 Misc 3d 18 [App Term 2d Dept 2022].)

Here, in our instant matter, the Billings Order was issued on default. However, Defendant failed to establish that Plaintiff “willfully and deliberately refuse[d] to participate” in the Prior Declaratory Judgement Action or “abandon[ed]” such action (Parisien v. Kemper Ins. Co., 76 Misc 3d 18 [App Term 2d Dept 2022]). In addition, Defendant failed to establish that Billings Order had addressed the alleged car accident at hand supported by insurance company claim number. Equally, Plaintiff failed to explain why it did not participate in the Prior Declaratory Judgement Action, although, it did argue that “Plaintiff in this action [was] still within the CPLR time limits for moving to vacate a default judgment” (Cross-Motion, Rybak Aff). However, Plaintiff failed to explain whether it has taken necessary steps in seeking a vacatur of the Billings Order. Here factual issues exist. This Courts also notes that the cover page of the Justice Billings’ decision indicated that Billings Order was not a final disposition by checking the box of “Non-Final Disposition” (Motion, Ex B). Accordingly, this Court is not convinced that Billings Order, which was issued on default, is a final and “decisive” disposition of the issues between the parties and this Court declines to entertain Defendant’s argument based on collateral estoppel based on submission (Kuznitz v Funk, 187 AD3d 1006 [App Division 2d Dept 2020]).

The Court of Appeals in Simmons v. Trans Express Inc. explained that “under res judicata, or claim preclusion, a valid final judgment bars future actions between the same parties on the same cause of action. One linchpin of res judicata is an identity of parties actually litigating successive actions against each other: the doctrine applies only when a claim between the parties has been previously brought to a final conclusion. Importantly, the claim preclusion rule extends beyond attempts to relitigate identical claims. Courts have consistently applied a transactional analysis approach in determining whether an earlier judgment has claim preclusive effect, such that once a claim is brought to a conclusion, all other claims arising out of the same [*4]transaction or series of transactions are barred, even if based upon different theories or if seeking a different remedy.” (Simmons v. Trans Express Inc., 37 NY3d 107 [Court of Appeals, 2021].) Here, similar to the analysis of the doctrine of collateral estoppel above, it appears that Justice Billings’ default decision was not a “final conclusion” of the Prior Declaratory Judgement Action (id.), although based on submission, it is unclear to this Court why Plaintiff was defaulted in the Prior Declaratory Judgement Action and whether Plaintiff has taken necessary steps seeking an order vacating Billings Order which was issued on default. Those factual issues must be resolved during trial. Here, this Courts denies Plaintiff’s Motion based on the doctrine of res judicata.

In its Opp and Reply, Defendant presented copies of two decisions rendered by judges in Queens Civil Court (Opp and Reply, Ex A), arguing that Queens Civil Court had “multiple orders based on” the Billings Order (Opp and Reply, Tsirkas Aff). Defendant’s above arguments were improperly raised for the first time in its Opp and Reply (Grocery Leasing Corp. v P & C Merrick Realty Co., LLC, 197 AD3d 628, 2021 NY Slip Op 04701*2 [2d Dept Aug. 18, 2021]; Deutsche Bank Natl. Trust Co. v March, 191 AD3d 762, 763 [2d Dept 2021]). In any event, decisions rendered by Queens Civil Court do not have binding effect on this Court. One of the sample decisions provided by Defendant in its Opp and Reply was this Court’s decision on Renelique vs 21 Century Insurance Company with index number CV-738509-12QU issued on March 25, 2021 pursuant to which this Court granted defendant’s motion for summary judgement dismissing plaintiff’s complaint without opposition. It is noted that matter CV-738509-12QU was dismissed without prejudice, based on a proposed order on consent. This Court did not disturb parties’ agreement then and declines to reverse litigants’ dealing now.

Plaintiff sought an order 1) granting summary judgement in favor of Plaintiff, denying Defendant’s motion to dismiss and for summary judgement; 2) limiting the issues of fact for trial pursuant to CPLR 3212(g) that the prescribed statutory billing forms were mailed to and received by the insurance carrier, and that payment of no-fault benefits were overdue; and 3) dismissal of Defendant’s Affirmative Defense pursuant to CPLR 3211(b).

As to Plaintiff’s prayer for summary judgement for its claims, Plaintiff bore the burden to show it submitted the statutory claim forms indicating the fact and amount of the loss sustained and that payment of no-fault benefits was overdue (NYU-Hospital for Joint Diseases v Esurance Ins. Co., 84 AD3d 1190, 1191 [2d Dept 2011]; Fair Price Med. Supply Corp. v ELRAC Inc., 12 Misc 3d 119, 120 [App Term 2d Dept 2006]).

In support of its Cross-Motion for its claims, Plaintiff presented an affidavit of Renelique sworn to on May 23, 2022 (“Renelique Affidavit“) stating that he had “requisite first-hand detailed knowledge of the facts pertaining to this action”; that he “or persons acting under [his] personal direction, supervision and control, provided the necessary medical services in the amount of $4,504.07 to [the assignor] for injuries sustained”; that statutory billing forms were mailed to the Defendant; and that payment of no-fault benefits were overdue (Cross Motion, Ex 3). Here, Plaintiff provided copies of the bills to support its claims, while Defendant did not address nor deny receipt of the Plaintiff’s statutory billing forms in its Motion or in its Opp and [*5]Reply. Accordingly, Plaintiff has established the fact that the prescribed statutory billing forms were mailed to and received by the insurance carrier, and that payment of no-fault benefits were overdue pursuant to CPLR 3212(g).

It is well established that insurers must pay or deny No-Fault benefit claims “within thirty (30) calendar days after receipt of the proof of the claim” (Viviane Etienne Med. Care, P.C. v Country-Wide Ins. Co., 25 NY3d 498, 501 [2015]; Fair Price Med. Supply Corp. v Travelers Indem. Co., 10 NY3d 556, 563 [2008]; Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co., 9 NY3d 312, 317 [2007]; see Insurance Law § 5106[a]; 11 NYCRR § 65-3.8[c]; Presbyterian Hosp. in City of NY v Maryland Cas. Co., 90 NY2d 274, 278 [1997]). “New York Law prohibits unlicensed individuals from organizing a professional service corporation for profit or exercising control over such entities” (Andrew Carothers, M.D., P.C. v Progressive Ins. Co., 33 NY3d 389, 404 [2019], see Business Corporation Law §§ 1507; 1508; Nationwide Affinity Ins. Co. of Am. v Acuhealth Acupuncture, P.C., 155 AD3d 885, 886 [2d Dept 2017]; Liberty Mut. Ins. Co. v Raia Med. Health, P.C., 140 AD3d 1029, 1031 [2d Dept 2016]; One Beacon Ins. Group, LLC v Midland Med. Care, P.C., 54 AD3d 738, 740 [2d Dept 2008]). “A provider of health care services is not eligible for reimbursement under section 5102(a)(1) of the Insurance Law if the provider fails to meet any applicable New York State or local licensing requirement necessary to perform such service in New York . . .” (11 NYCRR § 65-3.16[a][12]; Nationwide Affinity Ins. Co. of Am. v Acuhealth Acupuncture, P.C., 155 AD3d at 886; Liberty Mut. Ins. Co. v Raia Med. Health, P.C., 140 AD3d at 1031; One Beacon Ins. Group, LLC v Midland Med. Care, P.C., 54 AD3d at 740). In the No Fault context, corporate practices evincing a willful, material noncompliance with licensing and incorporation statutes may establish a medical provider’s ineligibility to receive reimbursement (Andrew Carothers, M.D., P.C. v Progressive Ins. Co., 33 NY3d at 405, see State Farm v Mallela, 4 NY3d 313, 321 [2005]; Radiology Today, P.C. v GEICO Gen. Ins. Co., 32 Misc 3d 4, 7 [App Term 2d Dept 2011]). The elements of common law fraud need not be shown (Andrew Carothers, M.D., P.C. v Progressive Ins. Co., 33 NY3d at 405) if noncompliance with the above-described licensing requirement is established through admissible evidence.

Failure to establish timely payment or denial of the claim precludes the insurer from offering evidence of its defense to non-payment (Viviane Etienne Med. Care, P.C. v Country-Wide Ins. Co., 25 NY3d at 506; Fair Price Med. Supply Corp. v. Travelers Indem. Co., 10 NY3d at 563; Hospital for Joint Diseases v Travelers Prop. Cas. Ins. Co., 9 NY3d at 318; Presbyterian Hosp. in City of NY v Maryland Cas. Co., 90 NY2d at 281-86). However, the defense that a health care provider is ineligible to receive No Fault insurance benefit payments is not subject to preclusion (All Boro Psychological Servs., P.C. v Auto One Ins. Co., 35 Misc 3d 136[A], 2012 NY Slip Op 50777[U] *2 [App Term 2d Dept 2012]; Radiology Today, P.C. v GEICO Gen. Ins. Co., 32 Misc 3d at 6; Midborough Acupuncture P.C. v State Farm Ins. Co., 13 Misc 3d 58, 59 [App Term 2d Dept 2006]; A.B. Med. Servs. PLLC v Utica Mut. Ins. Co., 11 Misc 3d 71 [App Term 2006]).

In our instant matter, Billings Order, which was issued on default, addressed Plaintiff’s alleged fraudulent incorporation and participation “in a scheme to defraud” Defendant “within the meaning of State Farm v. Mallela, 4 NY3d 313 (NY 2005), and 11NYCRR 65-3.16(a)(12)” (Motion, Ex B). Here, although Plaintiff has established the fact that the prescribed statutory billing forms were mailed to and received by the insurance carrier, and that payment of no-fault benefits were overdue pursuant to CPLR 3212(g), an ineligibility of receiving No Fault [*6]insurance benefit due to non-compliance with licensing statutes defeats such prima facie showing. Plaintiff’s motion for summary judgment for its claims is denied.

As discussed above, factual issues exist in the instant action. Plaintiff’s prayer for a summary judgment order dismissing Defendant’s affirmative defense pursuant to CPLR 3211(b) is denied without prejudice pending trial.

IV. Order

Accordingly, it is

ORDERED that Defendant’s Motion for summary judgment seeking an order dismissing Plaintiff’s complaint (Motion Seq. #4) is denied in its entirety, and it is further

ORDERED that Plaintiff’s Cross-Motion for summary judgement for its claims (Motion Seq. #5) is denied, and it is further

ORDERED that Plaintiff has established the fact that the prescribed statutory billing forms were mailed to and received by the insurance carrier, and that payment of no-fault benefits were overdue pursuant to CPLR 3212(g), and it is further

ORDERED that Plaintiff’s prayer for a summary judgment order dismissing Defendant’s affirmative defense pursuant to CPLR 3211(b) is denied without prejudice pending trial, and it is further

ORDERED that this matter is scheduled for an immediate trial at Part 15N on Monday April 8, 2024 at 10:00am at Queens Civil Court, and the part clerk is directed to notify both parties and to mark the calendar accordingly.

Plaintiff is on notice that if it fails to take concrete steps to vacate the Billings Order “within the CPLR time limits for moving to vacate a default judgment” (Cross-Motion, Rybak Aff) as Plaintiff argued, Billings Order will become a final disposition and conclusion of the Prior Declaratory Judgement Action.

This constitutes the DECISION and ORDER of the Court.

_____________________________________
Honorable Wendy Changyong Li, J.C.C.