Stracar Med. Servs. v Nationwide Mut. Ins. Co. (2013 NY Slip Op 50633(U))

Civil Court of the City of New York, Kings County

71119/2010

Attorneys for Plaintiff STRACAR MEDICAL SERVICES

Law Offices of Gary Tsirelman

65 Jay Street, 3rd Floor

Brooklyn, NY 11201

Attorneys for Defendant NATIONWIDE MUTUAL INS. CO.

Epstein, Harms, McDonald, Esqs.

One Whitehall Street, 13th Floor

New York, NY 10004

Harriet Thompson, J.

Motion Cal No.90Motion Seq. #

Papers Submitted to Special Term

on5/18/2012,

DECISION/ORDER

Recitation, as required by CPLR §2219 (a), of the papers

considered in the review of this Motion

PapersNumbered

Notice of Motion ………………………………. ..1-2

Order to Show Cause and Affidavits Annexed _____________ [*2]

Answering Affidavits .._____1_____

Replying Affidavits ._____________

Exhibits _____________

Other …………………………………………………._____________

PROCEDURAL HISTORY

Every now and then, a clever legal maneuver can change the course of litigation. In this Civil Court action, the Plaintiff had served, in or about July 29, 2010, a Summons and Verified Complaint to recover first-party No-Fault benefits as a result of alleged injuries arising out of an automobile accident which occurred on June 28, 2008. In or about October 22, 2010, the Defendant interposed a Verified Answer which contained various affirmative defenses and a demand for a Bill of Particulars.

The Defendant moves this Court by Notice of Motion returnable on November 7, 2011 for summary judgment pursuant to CPLR §3212 on the grounds that the Plaintiff failed to submit proper verification of the claim and failed to attend two properly scheduled Examinations Under Oath (hereinafter “EUO”), a condition precedent to insurance coverage and a violation of the Insurance regulations, precluding recovery of the medical claim. More significantly, the Defendant asserts that the medical services must be denied based on the fraudulent procurement of the insurance policy by the assignor.

On the return date, the attorneys, by written agreement, adjourned the motion to May 9, 2012 for the parties to engage in motion practice.

On the adjourned date, the Plaintiff served and filed opposition papers to the Defendant’s motion. The Plaintiff asserts several claims, to wit: the Defendant failed to properly establish its defense of fraudulent procurement of the insurance policy; procedural irregularities such as the insurance policy annexed to the motion is uncertified and the denials are unsigned; and attacks the credibility of the supporting fact affidavit based on a discrepancy in the number of bills received by the Defendant.

The Defendant relies exclusively on Gramatan Home Investors Corp v. Lousi N. Lopez, 46 NY2d 481, 386 NYS2d 308 (1979) for the proposition that a sister state consent decree that terminated the insurance policy ab initio is not binding on the Plaintiff. The Plaintiff’s rationale is that a “judgment in a prior action against the assignor could not be used to estop the assignee from raising certain matters determined there in the subsequent action where the assignment was made prior to the initiation of the action against [the] assignor” (Affirmation of MARINA MORARU at ¶6). In addition, the Plaintiff argues that the facts in this case are akin to the facts in Gramatan, and concludes that “the assignment in this matter was executed prior to the commencement of the action against the assignor and the Defendant is estopped from relitigating the issue. (Affirmation of MARINA MORARU at ¶7).

The court record does not contain a reply to the opposition by the Plaintiff. [*3]

After oral argument, this court reserved decision and submitted this motion sub judice.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

The following facts are uncontroverted. MACKLIN SANTERRIA executed an assignment of benefits before her treatment by the Plaintiff on July 14, 2008. MACKLIN SANTERRIA was treated by the above named Plaintiff for alleged injuries for dates of services from August 13, 2008-September 9, 2008 for the sum of $1,329.23 and for dates of service from September 8, 2008-October 20, 2008 for the sum of $544.68 for a grand total sum of $1,873.91. These bills for the above services were received by the Defendant on September 29, 2008 and October 27, 2008, respectively. The Defendant requested verification on October 6, 2008 and October 27, 2008, respectively. The purported verification stated that the Defendant was conducting an investigation to determine “whether the alleged injuries arose out of the use and operation of our insured vehicle and whether the injured party is an eligible injured party entitled to No-Fault benefits under the above mentioned policy. As a result, we have requested an EUO of the claimant. The EUO is currently scheduled from 10/7/2008.”

The second purported verification provided that the investigation was continuing; the EUO is currently scheduled for 11/7/2008 and requested the production of the following documents from the Plaintiff: office notes and physical therapy notes.

On December 23, 2008, the Defendant notified the assignor that their investigation revealed that the application for the policy of insurance revealed that material misrepresentations were made to the insurer in the procurement of the policy and based on those misrepresentations the company voided the policy back to the date of the insurance application on December 1, 2004.

On December 29, 2008, the medical claims were denied by the Defendant.

In or about February 17, 2009, the Defendant commenced an action in the state of Virginia to void the insurance policy based on fraud by the claimant in the application for the insurance policy.

On August 18, 2009, the assignor, represented by counsel and the Defendant Corporation, also represented by counsel, entered into a Dismissal Order in the state of Virginia which stated, in pertinent part, that “[w]ithout conceding any wrongdoing on her part, Defendant (claimant-assignor) agrees that the policy should be voided ab initio, so that it is ORDERED that the policy described in the Complaint filed herein is voided ab initio”.

The initial substantive issue before this court is whether the affidavits of mailing meet the requirements of the No-Fault law to establish proper proof of mailing of the denials. To that end, and as previously ruled by this court, the common law doctrine of presumption of regularity is still alive in New York State despite arguments to the contrary. (Quality Psychological Services, PC., v. Hartford Insurance Company, 2013 NY Slip Op 50045(U)). Generally speaking, a letter or notice that is properly stamped, addressed and mailed is presumed to be received by the addressee. News Syndicate Co. v. Gatti Paper Stock Corp., 256 NY 211, 176 NE 169 (NY, [*4]1931); New York New Jersey Products Dealers Coop v. Mocker, 59 AD2d 970, 399 NYS2d 280 (NY A.D., 3d Dept., 1977). A simple denial of receipt has been held insufficient to rebut this presumption. Countrywide Home Loans, Inc. v. Brown, 305 AD2d 626, 760 NYS2d 200 (NY AD2d Dept., 2003) .

As Judge Tapia recently stated in Hastava & Aleman Assoc. P.C. v. State Farm Mut. Auto Ins. Co., 24 Misc 3d 1239(A), 899 NYS2d 59 (Civ. Ct., Bx Ct., 2009) “the regulation uses “forward” to describe the manner in which notification is to be effectuated. The only kink is determining what constitutes sufficient “notice” because the regulation does not specify the mailing procedure by which to notify the injured party.” In that case, the court determined that the mailing of a letter by certified mail, return receipt requested is entitled to the same presumption of receipt as regular first-class mail in the absence of the signed returned receipt”. Furthermore, “satisfying No-Fault policy conditions does not have to be compromised at the expense of challenging mailing procedures because proof of mailing of verification letters via regular USPS is enough to create a presumption of receipt. In addition, the use of certified mail does not create a more demanding presumption of mailing and receipt beyond that of a letter that was properly mailed. The regulations make no distinction between sending a letter via regular mail or via certified mail.”

The presumption of receipt may be created by either proof of actual mailing or proof of a standard office practice or procedure designed to ensure that items are properly addressed and mailed. Residential Holding Corp. v. Scottsdale Ins. Co., 286 AD2d 679, 729 NYS2d 776 (2001); Nassau Ins Co. v. Murray, 46 NY2d 828, 414 NYS2d 117 (1978); Matter of Francis v. Wing, 263 AD2d 432, 694 NYS2d 29 (NY A.D. 1st Dept., 1999); Azriliant v. Eagle Chase Assoc., 213 AD2d 573, 575, 624 NYS2d 238 (NY AD2d Dept., 1995); Phoenix Ins. Co v. Tasch, 306 AD2d 288, 762 NYS2d 99 (NY AD2d Dept., 2003); Matter of Colyar, 129 AD2d 946, 947, 515 NYS2d 330 (NY AD3d Dept., 1987). Therefore, affidavits that merely state that the bills were mailed within the statutory time period have been held insufficient to establish proof of actual mailing. Comprehensive Medical v. Lumbermens Mutual Ins. Co., 4 Misc 3d 133(A) (App. Term 9 & 10th Jud. Dists, 2004).

The burden is on the insurer to present an affidavit of an employee who personally mailed the verification and/or denial, or on the other hand, an affidavit of an employee with personal knowledge of the office’s mailing practices and procedures. Such individual must describe those practices or procedures in detail, explicitly denoting the manner in which she/he acquired the knowledge of such procedures or practices, and how a personal review of the file indicates that those procedures or practices were adhered to with respect to the processing of that particular claim (emphasis added).

By demonstrating its routine and reasonable office procedures, the Defendant meets its burden of proof that the notices were mailed to the plaintiff and were received. The burden then shifts to the plaintiff to rebut the presumption of receipt. Abuhamra v. New York Mut. Underwriters, 170 AD2d 1003, 566 NYS2d 156 (NY A.D. 4th Dept., 1991); Residential Holding Corp. v. Scottsdale Ins. Co., supra. Indeed, “[i]n addition to a claim of no receipt, there must be a showing that the routine office practice was not followed or was so careless that it would be unreasonable to assume that the notice was mailed. Nassau Ins Co. v. Murray, 46 NY2d 828, 414 [*5]NYS2d 117 [1978]; See also Badio v. Liberty Mutual Fire Ins. Co., 12 AD23d 229, 785 NYS2d 52 (App. Div., 1st Dept., 2004).

Now, the next significant issue in this case involves the fraudulent procurement of the insurance policy by the assignor.

Both New York common law and the Insurance Law establish that the insurance carrier may rescind and/or void any insurance policy if it can be shown that a material misrepresentation was made at the time of the procurement of the insurance policy. See BW Sportswear , Inc. v. Those Certain Underwriters at Lloyd’s of London, 32 Misc 3d 1245(A), 2011 435767, 2 (NY Sup. Ct., NY County, 2011)(Oing, J.) citing Kiss Construction NY Inc. v. Rutgers Casualty Ins. Co., 61 AD3d 412, 877 NYS2d 253 (1st Dept., 2009); NY Ins. Law §3105. As part of the Motor Vehicle Financial Security Act, the Vehicle and Traffic Law (hereinafter “VTL”) § 313 states in part that: “(1)(a) No contract of insurance for which a certificate of insurance has been filed with the commissioner shall be terminated by cancellation by the insurer until at least twenty days after mailing to the named insured at the address shown on the policy a notice of termination by regular mail, except where the cancellation is for non-payment of premium in which case fifteen days notice of cancellation by the insurer shall be sufficient.” See also Rules of New York Automobile Insurance Plan §18 [2] which provides that VTL §313 also applies to the cancellation of a policy issued under the assigned risk plan. (Aetna Cas. & Sur. Co. v. O’Connor, 8 NY2d 359, 207 NYS2d 679, 170 NE2d 681 (1960)). It has long been recognized that this provision “supplants the insurance carrier’s common law right to cancel a contract of insurance retroactively on the grounds of fraud or misrepresentation, and mandates that the cancellation of a contract pursuant to its provisions may only be effected prospectively” (Teeter v. Allstate Ins. Co., 9 AD2d 176, 192 NYS2d 610, affd, 9 NY2d 655, 212 NYS2d 71, 173 NE2d 47; Aetna Cas. & Sur. Co., v. O’Connor, 8 NY2d 359, 207 NYS2d 679, 170 NE2d 681; Olivio v. GEICO of Washington D.C., 46 AD2d 437, 362 NYS2d 873; Reliance Ins. Co. v. Daly, 38 AD2d 715, 329 NYS2d 504 (AD2d Dept., 1972) ; See also Matter Liberty Mut. Ins. Co. v. McClellan, 127 AD2d 767; DiDonna v. State Farm Mut. Auto. Ins. Co., 259 AD2d 727; A-Drive Corp v. General Acc. Group, 114 AD2d 430; Pilato v. Nassau Ins. Co., 79 AD2d 971.

It has also been held that by allowing only prospective cancellation of an automobile liability insurance contract, the law places on the insurer the burden of discovery of any fraud before issuing a policy or at the earliest possible moment thereafter, and prevents interference with the rights of third parties who may have been injured as a result of the negligence of the insured during the term of the contract. Aetna Cas. & Sur. Co., v. O’Connor, supra; Matter Liberty Mut. Ins. Co. v. McClellan, supra; Olivio v. GEICO of Washington D.C., supra. See also Matter of Insurance Co of North America v. Kaplun, 274 AD2d 293, 713 NYS2d 214 [AD2d Dept., 2000].

The insurance carrier that is precluded from rescinding a policy retroactively due to fraud is not without a remedy. For example, if the insurer is required to pay benefits under the policy to a third party, it may bring an action against its insured to recover such losses (See Reliance Ins. Co. v. Daly, 38 AD2d 715, 329 NYS2d 504 (AD2d Dept., 1972)). In Reliance Ins. Co v. Daly, supra, the Appellate Division refused to allow the insurance carrier to rescind the policy because [*6]of the misrepresentations of its insured, but concluded that “nothing in the applicable law precludes a suit for damages after the insurer’s responsibilities to a third party have been satisfied” (38 AD2d at 716).

In addition, and most significant, when the insured brings an action to recover benefits under a policy, the insurance carrier may assert as an affirmative defense that the insured’s misrepresentation and/or fraud in obtaining the policy precludes any recovery by the insured (See DiDonna v. State Farm Mut. Auto. Ins. Co., supra; Mooney v. Nationwide Mut. Ins. Co., 172 AD2d 144). “Just as the public interest is not disserved by a suit brought by the insurer against its insured who fraudulently procured the policy, neither is it disadvantaged if the insurer is relieved of a claim asserted against it by such an insured. If it is established, as defendant here affirmatively alleges, that plaintiff acquired his policy by fraudulent means, denying plaintiff the right to recover would not impinge in any way upon the protection the policy accords innocent victims, would not subvert the statutory proscription against retroactive cancellation and would comport with elementary fairness” (Mooney v. Nationwide Mut Ins. Com., supra, at 149). Similarly, where the right to coverage is asserted in a declaratory judgment action by the insured, the insurance carrier may defend on the ground that the insured was a participant in the fraudulent issuance of the policy (Taradena v. Nationwide Mut. Ins. Co., 239 AD2d 876; Travelers Indem. Co. v. Avelino, 191 AD2d 229; cf., Eagle Ins. Co. v. Liberty Mut. Ins. Co., 267 AD2d 347).

The only limitation to the above rule was recently brought to the fore front by the Appellate Division in the case of Westchester Med. Centre v. GMAC, 2011 NY Slip Op 00217 [80 AD3d 603] in which the court held that “although the defendants contend that they submitted evidence showing that the plaintiff’s assignor misrepresented his state of residence in connection with the issuance of the subject insurance policy, the defendants are precluded from asserting that defense, as a result of their untimely denial of the claim (See Fair Price Med. Supply Corp. v. Travelers Indem. Co., 10 NY3d 556; 564 [2008]; Hospital for Joint Diseases v. Travelers Prop. Cas. Ins. Co., 98 JNY3d at 319; Westchester Med. Ctr v. Lincoln Gen. Ins. Co., 60 AD3d 1045, 1046-1047- [2009]).

In A.B. Medical Servs. PLLC v. Commercial Mut. Ins. Co., 12 Misc 3d 8, 820 NYS2d 378 At 2d Dept., 2006) the Appellate Term found that the rule that an insurer cannot retroactively cancel a contract of insurance on the grounds of fraud or misrepresentation protects only innocent injured third parties and does not apply to a health care provider who deals with the assignor-insured at its peril in accepting an assignment of the insured No-Fault benefits. Consequently, the defense of fraudulent procurement of an insurance policy, which is nonwaivable, and thus exempt from the 30 day preclusion rule, was available to the Defendant. “We hold that only innocent third parties who are injured are protected (id at 298) and not health care providers who deals with the assignor-insured at its peril in accepting an assignment of the insured’s no-fault benefits. (cf. Matter of Metro Med. Diagnostics v. Eagle Ins. Co., 293 AD2d 751, 75-752 [2002])”.

Based on the above, it appears that there is a conflict in authority between the Appellate Division and the Appellate Term. The former states that the procurement defense is waivable if not preserved in the denials and the latter states that it is a nonwaivable defense. Since this issue [*7]is not before the court, this court is not duty bound to address this issue.

One final issue that has been raised by the Plaintiff. The Plaintiff seeks to convince this court that based on the ruling in Gramatan Home Investors Corp. supra, the Dismissal Order from the Virginia court is not binding on this Plaintiff. The Plaintiff argues that the assignment in this case that was executed prior to the commencement of this action would not estop the Plaintiff from relitigating this case. The facts in Gramatan are worth a brief discussion. A vinyl siding company entered into a contact with a homeowner. The company assigns the rights to the contract to Home Investors Trust who then assigned to Gramatan. Subsequently, the Attorney General prosecuted the vinyl company for fraud and voided the contract between the homeowner and the company. After the conclusion of that case, Gramatan sued the homeowner on the contract. The homeowner moved for summary judgment stating the judgment in the earlier case collaterally estopped the plaintiffs from enforcing the terms of the contract. The court, reversing the Appellate Division, stated that “an assignee is deemed to be in privity with the assignor where the action against the assignor is commenced before there has been an assignment. In that situation the subject matter of the assignment was then embroiled in litigation and was subject to the claims of third parties and the assignee is charged with notice that his rights to the assignment are subject to competing claims. Conversely, an assignee is not privy to a judgment where the succession to the rights affected thereby has taken place prior to the institution of the suit against the assignor [S]ince there is no dispute that the assignment was made well before commencement of the consumer fraud action against the plaintiff’s assignor, plaintiff is not bound by the terms of that judgment”. The Plaintiff reasons that since the assignment in this case was granted before the Virginia Dismissal Order, the Plaintiff is not bound by the terms of that order. This Court disagrees and as provided below, Gramatan is clearly distinguishable from the instant case.

Notwithstanding arguments by Plaintiff and the rule in Gramatan, the primary issue is whether the judgment of dismissal in the Virginia court is entitled to enforcement in the Civil Court in this county. Absolutely.

As a general rule, there are two types of foreign judgments: the judgment of a court of another state-“sister-state judgment”, and the judgment of a court of another nation.

The Uniform Enforcement of Foreign Judgments Act that is embodied in Article 54 of the CPLR prescribes the procedural requirements for enforcement of foreign judgments in New York State. As Professor David A. Siegel observed the title of the statute is a bit misleading. Although it seems to apply to all foreign judgments, in fact, it applies only to the American judgments. See CPLR Practice Commentaries, §C5401:1.

It has been long established by federal and state law that the Full Faith and Credit Clause of the United States Constitution dictate compulsory recognition of sister-state judgments including judgments of federal courts, territorial courts, the District of Columbia as well as judgments of courts of other states. Justice Cooper, in Peng v. Hsieh, 31 Misc 3d 528, 528 NYS2d 285, 2011 NY Slip Op 21061, recently discussed that long standing federal right. He stated that “it is the firm principal of our federalist system of government that full faith and credit must be given to each state to those “public Acts, Records, and judicial proceedings of every other state.” US Cons., Art. IV, §1. This doctrine is premised on the notion that “[t]he judgment [*8]of a state court should have the same credit, validity and effect, in every other court of the United States which it had in the state where it was pronounced Hampton v. McConnel, 16 U.S. (3Wheat) 234, 235, 4 L.Ed. 378 (1818); See also Williams v. North Carolina, 317 U.S. 287, 63 S.Ct. 207, 87 L.Ed. 279 (1942)”. See also Matter of Bennett, 84 AD3d 1365, 1367, 923 NYS2d 715; Madjar v. Rosa, 83 AD3d 1011, 923 NYD2d 561.

The constitutional requirement of full faith and credit precludes any inquiry into the merits of the judgment, the logic or inconsistency of the decision underlying it or the validity of the legal principles on which it is based (Cradle Co. v. Tri-Angle Assoc., 18 AD3d 100, 798 NYS2d 360 (1st Dept., 2005). Based on these underlying principles, out of state judgments inherently possess res judicata effect as to those issues conclusively decided, thereby avoiding relitigation of those previously decided issues in any other state. Said another way, the application of full faith and credit to the judgment of sister-state is the functional equivalent of “interstate res judicata” (DiCaprio v. DeCaprio, 219 AD2d 819, 631 NYS2d 975 appeal dismissed 87 NY2d 967, 642 NYS2d 195, 644 NE2d 1258, lv denied 88 NY2d 802, 645 NYS2d 445, 668 NE2d 416 rearg, denied 89 NY2d 861, 653 NYS2d 283, 675 NE2d 1236).

While the merits of the judgment of a sister-state may not be collaterally attacked, a judgment debtor may challenge the judgment on the basis of a lack of personal jurisdiction (J D Fin. Co v. Patton, 284 AD2d 164, 166, 727 NYS2d 71 (2001). The court’s review of a foreign judgment, is thus, limited to whether the rendering court had jurisdiction, an inquiry which the courts steadily mandate to include due process considerations (Fiore v. Oakwood Plaza Shopping Ctr., 78 NY2d 572, 577, 578 NYS2d 115, 585 NE2d 364 Cert. denied 506 US 823, 113 S.Ct. 75, 121 L.Ed.2d 40; HO v. McCarthy, 90 AD3d 710, 935 NYS2d 310 (AD2d Dept., [2011]); Fleet v. Costelloe, Inc., 19 Misc 3d 29, 856 NYS2d 436 (AT 2d Dept., [2008]; Mortgage Money Unlimited, v. Schaffer, 1 AD2d 773, 774 [2003]). See also States Resources Corp. v. Whittingham, 32 Misc 3d 1210(A), 932 NYS2d 763, 2011 WL 2640864 (NY. Sup.), 2011 NY Slip Op 51241(U).

In addition, see a recent decision by Chief Justice Lippman in the matter of John Galliano S.A. v. Stallion, Inc., 15 NY3d 75, 930 N.E.2d 756, 904 NYS2d 683 (2010) which involved a foreign money judgment and his analysis of CPLR Article 53, namely, CPLR 5304 which sets forth grounds for nonrecognition of a foreign judgment including the lack of personal jurisdiction (CPLR§5304[a][2]) or the failure of the aggrieved party to receive “notice of the proceedings in sufficient time to enable him to defend” (CPLR §5304[b][2]). See also Khallad v. Blanc, 96 AD3d 1574, 947 NYS2d 859 (NY AD 4d Dept., 2012) finding that the Florida Court had personal jurisdiction over a husband and thus, the judgment was entitled to full faith and credit.

A default judgment of a sister-state can also be accorded full faith and credit in New York (HO v. McCarthy, 90 AD3d 710, 935 NYS2d 310 (AD2d Dept., [2011]); Rockland Industries, Inc. v. Horowitz, 50 AD3d 661, 854 NYS2d 232 (2d Dept., 2008); Progressive Intern. Co. v. Varun Continental, Ltd., 16 AD3d 476, 791 NYS2d 181 (2d Dept., 2005); JDC Finance Comp. I LP v. Patton, 284 AD2d 164, 727 NYS2d 71 (AD 1st Dept., 2001); Staton Wholesale v. Barker, 257 AD2d 902, 684 NYS2d 44 (3d Dept., 1999).The public policy of this state in favoring resolution of disputes on the merits does not preclude enforcement of a foreign default judgment. John Galliano S.A. v. Stallion, Inc., supra. [*9]

This court has purposely limited its discussion to sister-state judgments and not foreign states or nations. Those decrees of other nations are accorded recognition only through comity; only recognized in the court’s discretion, guided and controlled, among other things, by the circumstances of that particular case and provided that the foreign court had proper jurisdiction, the judgment was not fraudulently obtained and does not go against our state’s public policy. (Galliano S.A. v. Stallion, Inc., supra; Society of Lloyd’s v. Grace, 278 AD2d 169, 718 NYS2d 327 (1st Dept. 2000).

Having discussed the frame work of the insurance law and regulations to lay the proper foundation for our analysis in the case at bar, the court makes the following findings of facts and conclusions of law.

It is undisputed that the Plaintiff submitted a proper proof of claim in the form of a health care services application (NF-3) for reimbursement for health care services rendered to the assignor, MACKLIN SANTERRIA.

The Plaintiff claims that there is a question of fact as to whether the denials and letters are copies of documents sent to the assignor have no merit. The affidavits of STEVEN KLIMEK, a Claims Specialist at the Defendant Corporation since October 9, 2000, sufficiently informs the court of his handling of No Fault claims including investigations of all claims; making coverage determinations; evaluating the bills; making a determination of verification requests and if an IME or peer review are needed, to determine insurance coverage. He also stated with sufficient detail the Defendant’s mailing procedures used in connection with written requests for EUO’s and/or the production of other documents as well as the mailing of any denial of claim forms based upon his employment duties at Nationwide. He explicitly describes the mailing procedures of the Defendant in paragraphs 9 (a)-(f). Based upon his knowledge of Defendant’s mailing practices and procedures and his review of the file in the instant matter, he informs the court that the Defendant received the medical bills on September 29, 2008 and October 20, 2008 and describes the verification process which is part of his daily responsibilities. He affirms that he personally handled this claim and brings to this court’s attention that the denials annexed as Exhibit E were issued by him and mailed pursuant to standard office practice and procedures. This evidence is not disputed by the Plaintiff, except by inadequate generalities, which can not defeat a motion for summary judgment.

The Defendant also proffers the affidavit of EDWARD MCGUIRE, a No Fault Claims Manager, who completes the practices and procedures of the Defendant insurer’s mailing procedures. He affirms that the denials and EOBs are completed by the Claims Reps, printed by them, and are printed and mailed in duplicate and placed in the mail baskets for pick for delivery to the mail room in the North Syracuse and New York claims office. All of the mail that is picked up on a particular day is delivered to the US Post Office on the same day. The court also finds this affidavit reliable and is ample proof of the completion of the mailing practices and procedure of the Defendant.

By demonstrating its routine and reasonable office procedures, the Defendant meets its burden of proof that the notices were mailed to the Plaintiff and were received. The burden now shifts to the Plaintiff to rebut the presumption of receipt and to raise a triable issue of fact. Abuhamra v. New York Mut. Underwriters, supra; Residential Holding Corp. v. Scottsdale Ins. [*10]Co., supra.

The bills for the above services were received by the Defendant on September 29, 2008 and October 27, 2008, respectively. The Defendant requested verification on October 6, 2008 and October 27, 2008, respectively. The prescribed thirty (30) day time line to pay or deny a claim was tolled until the insurer received proper verification of all relevant information requested of the injured party or provider. 11 NYCRR 65.15 (g), (7); St. Vincent Hospital of Richmond v American Tr. Ins. Co., 299 AD2d 338, 370 750 NYS2d 98 (NY A.D., 2002). The burden does not shift to the insurer to pay or deny the claim until the required party has complied with the verification request.

Instead of making any further verification request, on December 23, 2008, the Defendant voided the policy back to the date of the application of December 1, 2004, and subsequently, the medical bills were denied by the Defendant on December 29, 2008 by written notice in the form of a denial.

The court has reviewed the answer in this case and notes that the Defendant did not specifically allege fraud in the procurement of this insurance policy. However, the denial explicitly preserves the fraud in the procurement of the policy defense and as provided above, the denial was timely.

However, based on the well settled case precedent discussed above, New York law prohibits the termination of the insurance policy retroactively and this court finds that the termination action ab initio by the Defendant is void as a matter of law. Notwithstanding the impropriety of the termination of the insurance policy by the Defendant, the assignor, with the assistance of counsel, agreed in a two attorney stipulation in the Dismissal Order in Virginia, to void the insurance policy ab initio. It is well-settled law in New York that stipulations of settlement are favored by the courts and are not likely cast aside. (Hallock v. State of New York, 64 NY2d 224, 485 N.Y.S.2d 510, 474 N.E.2d 1178 (Ct of Appeals, 1984), citing Matter of Galasso, 35 NY2d 319, 321, 361 N.Y.S.2d 871 [1974]) particularly when made in open court (Hallock, 64 NY2d at 230, 485 N.Y.S. 510, 474 N.E.2d 1178, citing Matter of Dolgin Eldert Corp., 31 NY2d 1, 10, 334 N.Y.S.2d 833 [1974]).

Therefore, a Stipulation “will not be destroyed without a showing of good cause sufficient to invalidate a contract such as fraud, collusion, mistake, accident, or some other ground of the same nature.” (Campbell v. Bussing, 274 A.D. 893, 893, 82 N.Y.S.2d 616 [2nd Dept. 1947]; see also Hallock, 64 NY2d at 230, 485 N.Y.S. 510, 474 N.E.2d 1178; Matter of Frutiger, 29 NY2d 143, 149-150, 324 N.Y.S.2d 36 [1971]; Canino v. Electric Tech Corp., et al., 49 AD3d 1050, 1051, 856 N.Y.S.2d 683 [3d Dept. 2008] [applying the standard for vacating a stipulation in the context of amending a stipulation]. Thus, absent a showing of fraud, collusion or mutual mistake, a party to a stipulation may not avoid the consequences of the agreement. (Romero v. Martinez, 280 AD2d 58, 721 N.Y.S.2d 17 [1st Dept. 2001]).

The facts in this case does not support any finding that the Dismissal Order of Virginia was based on fraud, collusion, mistake, accident, or some other ground of like import. A party may waive their rights, even constitutional rights, in a stipulation and the court will not impose on the rights of the parties to chart their own litigation course. The court can only presume that [*11]the assignor had little alternative than to resolve the case in the state of Virginia since the evidence, if true, was overwhelmingly favorable to the Defendant Corporation. The assignor was probably also highly motivated to resolve the Virginia case to avoid possible prosecution and to enable her to obtain automobile insurance from another carrier.

As important, this sister-state Dismissal Order is entitled to recognition by this court and is the procedural equivalent of “interstate res judicata”. To determine otherwise, would be contrary to the spirit and letter of federal and state law. As provided above, the constitutional requirement of full faith and credit precludes any inquiry into the merits of the judgment, the logic or inconsistency of the decision underlying it or the validity of the legal principles on which it is based (Cradle Co. v. Tri-Angle Assoc., 18 AD3d 100, 798 NYS2d 360 (1st Dept., 2005). There is apparently no issue of the lack of personal jurisdiction since the assignor appeared with counsel and consented to the terms of the Dismissal Order. Therefore, this court will enforce the Virginia Dismissal order according to its terms. The claimant acknowledged and agreed in a sister state’s order that the policy was void from its inception and based on her agreement, there were no rights that she could have assigned to the Plaintiff. Hence, the court finds that there was no policy of insurance in effect for the claimant on the date of the accident and any claims by the Plaintiff against the Defendant are void. However, in the event that any innocent third parties seek claims under this insurance policy, notwithstanding, the Dismissal Order, the Defendant is required to protect and provide coverage to those third parties who may have been injured as a result of the negligence of the insured during the term of the contract. Aetna Cas. & Sur. Co., v. O’Connor, supra; Matter Liberty Mut. Ins. Co. v. McClellan, supra; Olivio v. GEICO of Washington D.C., supra. See also Matter of Insurance Co of North America v. Kaplun, 274 AD2d 293, 713 NYS2d 214 [AD2d Dept., 2000]. To determine otherwise, would be contrary to our state laws and case precedent.

After reviewing the other contentions raised by the Plaintiff, this court finds that they lack merit in fact and law.

For all of the reasons stated above, the Defendant’s motion for summary judgment is granted and the complaint is dismissed with prejudice.

This order and decision is without prejudice to any claims that the Plaintiff may have against the assignor for the payment of medical services provided herein. See Reliance Ins. Co. v. Daly, 38 AD2d 715, 329 NYS2d 504 (A.D., 2nd Dept., 1972).

A courtesy copy of this decision and order shall be mailed by the court to both parties.

The Defendant shall submit a judgment of dismissal to the Clerk of the Court and upon issuance thereof, shall serve a copy of the judgment and this order and decision with notice of entry on the Plaintiff within 30 days thereafter.

This constitutes the decision and order of this court.

_____________________________________________________________ ________ [*12]

DateApril 22, 2013HON. HARRIET THOMPSON

Judge of the Civil Court