[*1]

Supreme Court, Nassau County, December 17, 2010

APPEARANCES OF COUNSEL

Joseph Henig, P.C., Bellmore, for plaintiff. Gullo & Associates, LLP, Brooklyn, for defendant.

{**30 Misc 3d at 498} OPINION OF THE COURT

Daniel Palmieri, J.

This motion by the plaintiff for summary judgment is denied, with leave to renew upon the completion of discovery. The cross motion by the defendant for a stay of trial pending the outcome of criminal proceedings against the plaintiff’s assignor and for a [*2]preliminary conference to schedule dates for discovery, or, in the alternative, granting defendant summary judgment on the ground that it made a timely denial, is granted to the limited extent that a preliminary conference shall be had at the date and time indicated herein. Defendant is also granted leave to renew its motion for summary judgment upon the completion of discovery. The cross motion is otherwise denied.

In this action for first-party no-fault benefits, the court finds that the plaintiff has presented prima facie proof that it timely rendered a bill to the defendant insurance company on the proper no-fault form, and that the defendant failed either to pay or issue a denial of the claim within the prescribed 30-day time period. (Insurance Law § 5106 [a]; 11 NYCRR 65-3.8 [a] [1].)

In response, however, the defendant has shown that within 30 days of receipt it issued a request for verification, in this case a request for laboratory tests and/or X-ray results, and for an acceptable assignment form. The request for verification therefore tolled the 30-day period to pay or deny the claim until the records were received. (11 NYCRR 65-3.5 [a], [b]; 65-3.8; see New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 AD3d 568 [2d Dept 2004].)

There is no dispute that the records were provided. The defendant thereafter timely issued a denial on the ground that the plaintiff’s assignor was intoxicated at the time of the accident, which may constitute a ground for denial pursuant to Insurance Law § 5103 (b) (2) or (3) (if a felony), and under defendant’s policy. The plaintiff contends that because there is no proof of intoxication presented, and, relatedly, no proof that the injury-causing accident was the result of such intoxication, the defense{**30 Misc 3d at 499} is without merit. It relies primarily on a recent Appellate Division, Second Department, case, Westchester Med. Ctr. v Government Empls. Ins. Co. (77 AD3d 737 [2d Dept 2010]). However, in the present matter the defendant has asked for a stay of the trial pending discovery on this issue. Plaintiff’s response has been that under summary judgment jurisprudence the motion opponent must lay bare its proof, and proof is absent.

The court finds that there is a basis for applying CPLR 3212 (f). This subdivision provides that if it appears from affidavits submitted in opposition that facts essential to justify opposition may exist but cannot then be stated, a court may deny the motion, order a continuance to permit needed disclosure to be undertaken, or “make such other order as may be just.” (CPLR 3212 [f].)

A party who raises a defense that has not yet been fully developed, but appears to exist, must be able to make some showing that such facts do in fact exist for CPLR 3212 (f) to apply; mere hope that discovery may reveal those facts is insufficient. (Companion Life Ins. Co. of N.Y. v All State Abstract Corp., 35 AD3d 519 [2d Dept 2006].) Nor can mere speculation serve to defeat the motion. (Pluhar v Town of Southampton, 29 AD3d 975 [2d Dept 2006]; Ciccone v Bedford Cent. School Dist., 21 AD3d 437 [2d Dept 2005].) However, denial of the motion on the ground that necessary disclosure is lacking is appropriate if there is some basis in the record for finding that evidence sufficient to defeat the motion may exist, [*3]especially where the facts appear to lie within the knowledge of the opposing party and discovery is in its early stages. (See Adler v City of New York, 52 AD3d 549 [2d Dept 2008]; Baron v Incorporated Vil. of Freeport, 143 AD2d 792 [2d Dept 1988].)

The court finds that this is the case here. There is no direct proof of intoxication submitted, or that such intoxication caused the accident. However, the defendant presents the affidavit of the office manager of defendant’s law firm, Christopher Roselli, who states that the police report revealed that plaintiff’s assignor, Luis Vargas, was arrested at the accident scene on charges of driving while intoxicated. He further states that he spoke to Orange County Assistant District Attorney Steven Goldberg, who informed him that Vargas was indicted on 34 charges, including two counts of driving while intoxicated. A formal request for a copy of the indictment was made, and the results of that request, a copy of the indictment, is annexed to defendant’s reply papers. Among other things, the indictment{**30 Misc 3d at 500} contains not only a charge of driving while intoxicated, but also of vehicular manslaughter in the first degree, as a passenger in Vargas’s vehicle was ejected and killed as a result of his operation of the vehicle while under the influence of alcohol. Other felony counts are based on injuries to other passengers. Thus, in addition to allegedly driving while intoxicated, his operation of the vehicle may have resulted in his having been injured while committing a felony.

While the foregoing clearly is in part hearsay, the indictment does verify the key information referred to by Roselli. For purposes of plaintiff’s motion, it is sufficient for the court to find that evidence sufficient to defeat the motion may exist, and that disclosure should be permitted. (See Westchester Med. Ctr. v Progressive Cas. Ins. Co., 51 AD3d 1014 [2d Dept 2008].) This is especially so where information regarding the alleged intoxication, and its role in causing the injury-producing accident, lies in part within the knowledge of plaintiff’s assignor, and this action is in its early stages. The court understands that Vargas may not be available for a deposition, or may choose to invoke his Fifth Amendment rights, which will of necessity slow discovery here. Further, the criminal case also appears to be in its early stages. However, possible difficulties in moving the present civil case forward is not a reason to prejudice the defendant’s ability to defend itself given the factors described in this decision.

The record here also distinguishes this matter from Westchester Med. Ctr. v Government Empls. Ins. Co. (77 AD3d 737, 738 [2010], supra) as in that case

“the defendant failed to submit any evidence whatsoever from which the circumstances of the accident could be ascertained, the nature of the accident is unknown, and, thus, the defendant’s evidence . . . was insufficient by itself to raise a triable issue of fact as to whether the plaintiff’s assignor was ‘injured as a result of operating a motor vehicle while in an intoxicated condition.’ “

Here, the nature of the accident is known, and there is some evidence that discovery may reveal that plaintiff’s assignor was injured as a result of operating a vehicle while in an intoxicated condition.

Accordingly, the plaintiff’s motion is denied pursuant to CPLR 3212 (f), but may be [*4]renewed upon the completion of discovery. Counsel are directed to appear for a preliminary conference in{**30 Misc 3d at 501} the basement of the courthouse on January 24, 2011, at 9:30 a.m. Failure to appear for such conference or upon an adjourned date may result in the imposition of sanctions pursuant to 22 NYCRR 202.27.

No stay of trial is being issued, as such a request by the defendant is premature. Further, the alternative relief of summary judgment the defendant seeks is also denied. This determination is made based upon the same reason summary judgment is denied to the plaintiff, i.e., the need for disclosure—the absence of which prevents the defendant from establishing a prima facie showing that plaintiff’s assignor was, in fact, intoxicated, and the cause of his injuries. However, defendant is also granted leave to renew its application for summary judgment on the completion of discovery.

Supreme Court, Nassau County

018936/08

For the Plaintiff

Joseph Henig, P.C.

1598 Bellmore Avenue

Bellmore, New York 11710

(516) 785-3116

Randy Sue Marber, J.

The Defendant, by Order to Show Cause, moves for an order 1) vacating the judgment granted on default and entered by the clerk on December 12, 2008; 2) extending the Defendant’s time to answer the Plaintiff’s complaint; and 3) compelling the Plaintiff to accept the Defendant’s answer. The Plaintiff opposes the Order to Show Cause.

The Plaintiff, WESTCHESTER MEDICAL CENTER seeks to recover $345,472.88 for medical services provided to its assignor, Jamel Harris. The complaint in this action alleges that the Defendant insured the Plaintiff’s assignor under an automobile liability policy which contained a New York no-fault endorsement. On or about April 12, 2008, the Plaintiff’s assignor, Jamel Harris, was injured when he hit a tree while driving a 2005 Ford. The Plaintiff alleges that Jamel Harris, as the insured, was a covered person under the automobile policy issued by the Defendant and was entitled to reimbursement from the Defendant for health services rendered by the Plaintiff. The Plaintiff claims that the no-fault benefits for health services provided were duly assigned to the Plaintiff. The Plaintiff claims the Defendant is responsible for the payment of the assignor’s health services rendered to him in the amount of $330,925.85, plus interest.

On or about October 27, 2008, the Plaintiff served the Summons and Complaint in this matter upon the Defendant by serving the New York State Insurance Department in Albany. The Defendant alleges that The Insurance Department then sent the Summons and Complaint to [*2]Allstate’s agent, C.T. Corp., by regular mail, on October 28, 2008 and it was received by C.T. Corp. on November 3, 2008. Subsequently, the Defendant’s counsel alleges, C.T. Corp. sent the Summons and Complaint to Allstate’s offices in Hauppauge, New York, by overnight mail.

In an affidavit sworn to on January 23, 2009, Charles Jaekle, a Front Line Performance Leader employed by the Defendant, alleges that the Summons and Complaint in this action was then misindexed by an employee who “did not realize the time sensitive nature of the documents”. As a result, the Summons and Complaint was not received by the appropriate office to prepare responsive pleadings until January 5, 2009.

The default judgment had already been entered on December 12, 2008. The Defendant claims that the delay in answering the Summons and Complaint was not willful or deliberate nor was it extensive and the Defendant acted quickly to fix the situation once it was discovered.

The Plaintiff’s counsel opposes the motion and argues that the Defendant fails to provide a reasonable excuse for the default. The Plaintiff’s counsel argues that the Defendant has failed to substantiate its allegations and that same are “vague and unsubstantiated” explanations which do not rise to the level of reasonable excuse. The Plaintiff’s counsel cites Stoltz v. Playquest Theater Company, 257 AD2d 758, 683 NYS2d 339 (3d Dept. 1999) to support his argument that the Defendant’s failure to understand the need to respond in a timely fashion to the summons and complaint did not constitute excusable neglect. Such reliance is misguided as the facts in the Stoltz matter are distinguishable from the facts in the instant case. In Stoltz, the defendant sought legal advise upon being served with the summons and chose not to respond. Additionally, the Defendant in Stoltz did not attempt to vacate the default until collection proceedings were undertaken more than a year after entry of the default and the defendant ceased operations and vacated its business premises.

The Plaintiff’s counsel further relies on Harcztark v. Drive Variety, Inc., 21 AD3d 876, 800 NYS2d 613 (2d Dept. 2005), specifically stating in his Affirmation, dated February 17, 2009, that the Court refused to vacate a default of two months based upon “insurance company delay”. He further cites Harcztark quoting the Appellate Court as ruling, “This excuse has been rejected in this court time and again”. The Plaintiff’s counsel has misrepresented the ruling of the majority in the Harcztark matter. The Court in Harcztark rejected the premise that delay by an insurance company may never constitute all or part of a reasonable excuse by and insured for a default. The Court went on to say that determining whether there is a reasonable excuse for a default is a discretionary, sui generis determination to be made by the court based on all relevant factors, including the extent of the delay, whether there has been prejudice to the opposing party, whether there has been willfulness, and the strong public policy in favor of resolving cases on the merits. (id at 877).

In order to vacate a default, the defaulting party must demonstrate that they had a reasonable excuse for the delay, that they have provided a meritorious defense, that the default was not willful, and that the plaintiff will not be prejudiced. Lichtman v. Sears, Roebuck & Co., 236 AD2d 373, 653 NYS2d 25 (2d Dept. 1997). A default by a defendant should be vacated where there is “minimal prejudice caused by the defendant’s short delay in answering, as well as the public policy in favor of resolving the cases on the merits.” Classie v. Stratton Oakmont, Inc., 236 AD2d 505, 653 NYS2d 377 (2d Dep’t 1997). Furthermore, “it is within the sound discretion of the Court to determine whether the proffered excuse and the statement of the merits are sufficient.” Navarro v. A. Trenkman Estate, Inc., 279 AD2d 257 719 NYS2d 34 (1st Dept. 2001) citing Mediavilla v. Gurman, 272 AD2d 146, 707 NYS2d 432 (1st Dept. 2001). The court also has discretion to consider whether the defendant acted promptly in curing the default without delay or prejudice to the [*3]plaintiff. Statewide Ins. Co. v. Bradham, 301 AD2d 606, 753 NYS2d 861, (2d Dept. 2003) citing Matter of Statewide Ins. Co. v. Bradham, 301 AD2d 606, 753 NYS2d 861 (2d Dept. 2003).

The Plaintiff’s counsel argues that the Defendant has failed to submit an affidavit of merit which demonstrates a meritorious defense to the action. Plaintiff’s counsel argues that the Defendant’s attorney does not have personal knowledge of the facts and the submission of her affirmation alone is insufficient to vacate a default judgment. In response to this argument, the Defendant’s counsel points out that an attorney’s affirmation can be submitted in lieu of an affidavit of merit if all the material allegations of the pleading are within the attorney’s personal knowledge. Additionally, the Defendant’s attorney further points out that her affirmation is supported by the affidavit of Charles Jaekle, who has personal knowledge of the facts. The Defendant’s attorney also alleges that she has personal knowledge that the Plaintiff’s assignor is not covered under the subject insurance policy based on the subject insurance policy itself.

In support of the requirement that there be a meritorious defense, the Defendant argues that the Plaintiff’s assignor was not covered by the Defendant’s insurance policy and that there exists no contractual relationship between the Plaintiff and the Defendant and that the Defendant has no obligation to pay the Plaintiff’s claims. The Defendant’s attorney asserts that the vehicle the Plaintiff’s assignor was driving on the date of the accident, a 2005 Ford, was not a covered vehicle under the subject policy. The Defendant’s attorney asserts that the subject policy covers a 1999 Nissan Maxima and a 1997 Acura. Additionally, the Defendant’s attorney asserts that the insurance policy issued to the Plaintiff’s assignor’s grandmother, Esther Harris, lists her address as 36 Peter Way, Kiamesha, New York whereas the police report for the accident involving Jamel Harris lists his address as 1120 Clay Avenue, Apt. 4A, Bronx, New York. As such, the Defendant’s attorney asserts that the Plaintiff’s assignor did not reside in the insured’s household and is not an “eligible injured person” under the policy.

The Plaintiff’s attorney argues that the defense to the action that the Defendant raises is precluded due to Allstate’s failure to have issued a Denial of Claim. In response to this argument, the Defendant’s attorney asserts that the insurer’s failure to timely disclaim coverage does not preclude it from later denying liability on the ground that the insurance agreement itself does not cover the particular automobile or person. In support of this proposition, the Defendant’s counsel cites Zappone v. Home Ins. Co., 55 NY2d 131, 138 (1982). Additionally, the Defendant’s counsel points out that at no time did the Defendant ever admit that it provided coverage for the subject vehicle. The affirmation submitted by the Defendant’s counsel, dated January 26, 2009, in support of the Order to Show Cause specifically states in paragraphs 14 and 15 that the Plaintiff’s assignor drove a 2005 Ford and that the policy insured a 1999 Nissan Maxima and a 1997 Acura. The Defendant’s counsel argues that the Plaintiff has failed to put forth any evidence to show that the Plaintiff’s assignor was an eligible injured person covered under the subject policy.

This Court, in its discretion, accepts the Defendant’s explanation for the delay incurred in answering the Summons and Complaint in this matter as an excusable delay. Additionally, the Defendant has provided a meritorious defense and sufficient evidence that the default was not willful. The delay was short and the Plaintiff will not be prejudiced by allowing the Defendant to interpose an answer.

Accordingly, the Defendant’s motion to vacate the default judgment is GRANTED. The Defendant’s proposed answer is deemed served and the preliminary conference in this matter shall be held on April 21, 2009 at 9:30 a.m. at the courthouse lower level.

This decision constitutes the order of the court. [*4]

DATED:Mineola, New York

March 25, 2009

______________________________

Hon. Randy Sue Marber, J.S.C.

[*1]

Supreme Court, Nassau County, March 23, 2009

APPEARANCES OF COUNSEL

Picciano & Scahill, P.C., Westbury (Jason Tenenbaum of counsel), for Interboro Mutual Indemnity Insurance Company. New York Liquidation Bureau, New York City (James E. d’Auguste, Andrew J. Lorin and Judy H. Kim of counsel), for Superintendent of Insurance of the State of New York. Ariel Aminov, PLLC, Forest Hills, for Grand Central Medical, P.C.

{**24 Misc 3d at 1003} OPINION OF THE COURT

Edward W. McCarty, III, J. [*2]

{**24 Misc 3d at 1004}Motion by order to show cause by Interboro Insurance Company for: (1) an order pursuant to CPLR 2221 (a) (1) and (e) granting leave to renew the order of this court, dated February 1, 2007, and upon renewal, modifying said order by: (a) adding a tenth decretal paragraph decreeing: “No-fault interest shall not apply to claims that were submitted to Interboro Mutual Indemnity Insurance Company and to the New York State Liquidation Bureau as Rehabilitator prior to February 1, 2007, the date Interboro Mutual Indemnity Insurance Company exited rehabilitation”; (b) adding an eleventh decretal paragraph decreeing: “The failure to transmit timely or valid denials, as set forth in Insurance Law [§ ] 5106 (a) and 11 NYCRR 65-3.8 shall not apply to claims received or adjusted between April 4 [sic], 2004 and February 1, 2007″; and (c) adding a twelfth decretal paragraph decreeing: “All actions or arbitrations brought against Interboro Mutual Indemnity Insurance Company during the period of rehabilitation, commencing from April 4 [sic], 2004 and terminating on February 1, 2007 shall be dismissed as violating the stay order that was in effect prior to Interboro Mutual Indemnity Insurance Company’s exiting rehabilitation”; (2) an order compelling Grand Central Medical, P.C. to be named as a necessary party for the limited purpose of contesting the issue raised herein as to whether a no-fault penalty rate interest should be assessed against claims adjusted prior to Interboro Mutual Indemnity Insurance Company’s exiting rehabilitation; and (3) such other and further relief as this court deems just and proper, is granted, to the extent set forth herein.

On April 6, 2004, Interboro Mutual Indemnity Insurance Company was placed in rehabilitation and the New York State Superintendent of Insurance was appointed as rehabilitator, pursuant to article 74 of the Insurance Law. A plan of rehabilitation was adopted and approved by this court in an order dated February 1, 2007 and the rehabilitation terminated with the emergence of Interboro Insurance Company. The plan of rehabilitation approved by this court provided for certain payments to creditors during the claims administration period in full satisfaction of their claims. No provision for the payment of interest to any claimant was included in the plan of rehabilitation.

In 2007, subsequent to Interboro’s emergence from rehabilitation, Grand Central commenced an action in Civil Court, Queens County, against Interboro to recover no-fault medical payments. The payments at issue were due in 1999. Denials were not timely made, and, as a result, Grand Central seeks{**24 Misc 3d at 1005} interest from the time payments were due in 1999, pursuant to Insurance Law § 5106 (a).

Payment of no-fault interest to Grand Central for the period preceding and during the rehabilitation period would be inconsistent with the terms of the plan of rehabilitation, the policies and practice of the Superintendent of Insurance, and the purpose of Insurance Law § 5106 (a) in prohibiting any reward to a dilatory insurance company.

This application was properly brought to modify this court’s February 1, 2007 order, to clarify that interest is not available on claims due before or during the rehabilitation period. [*3]Moreover, Grand Central was properly made a party hereto for the limited purpose of clarifying this issue.

So much of Interboro’s motion as seeks to add a decretal paragraph that no-fault interest shall not apply to claims submitted to Interboro prior to February 1, 2007 is granted.

So much of Interboro’s motion as seeks to add a decretal paragraph that the failure to transmit denials shall not apply to claims received or adjusted during the rehabilitation period is also granted.

It should be noted that Interboro has withdrawn so much of its motion as seeks to dismiss all actions or arbitrations brought against it during the rehabilitation period.

Submit amended order, with notice of settlement.

Supreme Court, Nassau County

15212/08

TO:Joseph Henig, PC

Attorneys for Plaintiffs

1598 Bellmore Avnue

Bellmore, NY 11710

Jaffe & Koumourdas, LLP

Attorneys for Defendant

40 Wall Street, 12th Floor

New York, NY 10005

William R. LaMarca, J.

Relief Requested

Plaintiffs, THE NEW YORK HOSPITAL MEDICAL CENTER OF QUEENS a/a/o TOPAZ CASTRO (hereinafter referred to as “NYU QUEENS”), and ST. VINCENT’S HOSPITAL & MEDICAL CENTER a/a/o RONNY MUNOZ (hereinafter referred to as “ST. VINCENT’S”), move for an order, pursuant to CPLR §3212, granting them summary judgment on the first and second cause of action against defendant, COUNTRYWIDE INSURANCE COMPANY (hereinafter referred to as “COUNTRYWIDE”), on the ground that COUNTRYWIDE has failed to make timely payment on the claims submitted under the subject policy of insurance and that plaintiffs are entitled to interest and attorneys fees because of the delay in payment. COUNTRYWIDE opposes the motion and cross-moves for summary judgment dismissing the complaint on the ground that the claims are premature and that plaintiffs fail to state a cause of action. The motion and cross-motion are determined as follows:

This matter arises out of the alleged failure of COUNTRYWIDE to pay two (2) separate no-fault billings and counsel for plaintiffs states that the actions are joined pursuant to CPLR §1002(a) as the claims arise out of a uniform contract of insurance and involve the interpretation of the same no-fault provisions of the Insurance Law, citing [*2]Hempstead General Hospital v Liberty Mutual Insurance Company, 134 AD2d 569, 521 NYS2d 469 (2nd Dept. 1987).

The Statute

11 NYCRR, Part 65, the regulations implementing the Comprehensive Motor Vehicle Insurance Reparations Act, commonly referred to as the No-Fault Law, provides that “No- Fault Benefits are overdue if not paid within 30 calendar days after the insurer receives proof of Claim…”. (11 NYCRR 65-3.8[a][1]). Within thirty (30) days of receiving a claim, the insurer is required to either pay or deny the claim in whole or in part (see, Insurance Law §5106[a]; 11 NYCRR 65-3.8 [c]). However, this thirty (30) day period may be extended by a timely demand by the insurance company for further verification of a claim (see, 11 NYCRR 65-3.5). Within 10 business days after receipt of the completed application for no fault benefits, the insurer must forward, to the parties required to complete them, the prescribed verification forms it will require prior to payment of the initial claim (see, 11 NYCRR 65-3.5[a]). If the demanded verification is not received within thirty (30) days, the insurance company must follow up within ten (10) calendar days of the claimant’s failure to respond, either by telephone call or mail (see, 11 NYCRR § 65-3.6[b]); New York Hospital Medical Center of Queens v State Farm Mutual Automobile Insurance Company, 293 AD2d 588, 741 NYS2d 86 [2nd Dept. 2002]). As a complete proof of claim is a prerequisite to receiving no-fault benefits, a claim need not be paid or denied until all demanded verification is provided (see, 11 NYCRR 65-3.5[c]; Montefiore Medical Center v New York Central Mutual Fire Insurance Company, 9 AD3d 354, 780 NYS2d 161 (2nd Dept. 2004); New York & Presbyterian Hospital v American Transit Insurance Co., 287 AD2d 699, 733 NYS2d 80 (2nd Dept. 2001); Hospital for Joint Diseases v Elrac, Inc., 11 AD3d 432, 783 NYS2d 612 (2nd Dept. 2004). Statutory interest and attorneys fees may be directed If payment is not timely made on a completed claim. See, Insurance Law § 5106(a), 11 NYCRR §65-3.9 and §3.10.

In viewing motions for summary judgment, it is well settled that summary judgment is a drastic remedy which may only be granted where there is no clear triable issue of fact (see, Andre v Pomeroy, 35 NY2d 361, 362 NYS2d 131, 320 NE2d 853 [C.A. 1974]; Mosheyev v Pilevsky, 283 AD2d 469, 725 NYS2d 206 [2nd Dept. 2001]. Indeed, “[e]ven the color of a triable issue, forecloses the remedy” Rudnitsky v Robbins, 191 AD2d 488, 594 NYS2d 354 [2nd Dept. 1993]). Moreover “[i]t is axiomatic that summary judgment requires issue finding rather than issue-determination and that resolution of issues of credibility is not appropriate” (Greco v Posillico, 290 AD2d 532, 736 NYS2d 418 [2nd Dept. 2002]; Judice v DeAngelo, 272 AD2d 583, 709 NYS2d 817 [2nd Dept. 2000]; see also S.J. Capelin Associates, Inc. v Globe Mfg. Corp., 34 NY2d 338, 357 NYS2d 478, 313 NE2d 776 [C.A.1974]). Further, on a motion for summary judgment, the submissions of the opposing party’s pleadings must be accepted as true (see Glover v City of New York, 298 AD2d 428, 748 NYS2d 393 [2nd Dept. 2002]). As is often stated, the facts must be viewed in a light most favorable to the non-moving party. (See, Mosheyev v Pilevsky, supra ). The burden on the moving party for summary judgment is to demonstrate a prima facie entitlement to judgment as a matter of law by tendering sufficient evidence to demonstrate the absence of any material issue of fact (Ayotte v Gervasio, 81 NY2d 1062, 601 NYS2d 463, 619 NE2d 400 [C.A.1993]; Winegrad v New York University Medical Center, 64 NY2d 851, 487 [*3]NYS2d 316, 476 NE2d 642 [C.A. 1985]; Drago v King, 283 AD2d 603, 725 NYS2d 859 [2nd Dept. 2001]). If the initial burden is met, the burden then shifts to the non-moving party to come forward with evidence to demonstrate the existence of a material issue of fact requiring a trial. (CPLR§ 3212, subd [b]; see also GTF Marketing, Inc. v Colonial Aluminum Sales, Inc., 66 NY2d 965, 498 NYS2d 786, 489 NE2d 755 [C.A. 1985]; Zuckerman v City of New York, 49 NY2d 557, 427 NYS2d 595, 404 NE2d 718 [C.A. 1980]). The non-moving party must lay bare all of the facts at its disposal regarding the issues raised in the motion. (Mgrditchian v Donato, 141 AD2d 513, 529 NYS2d 134 [2nd Dept. 1988]).

First Cause of Action: TOPAZ CASTRO

Plaintiff, NYU QUEENS, is the assignee for health services rendered to TOPAZ CASTRO during the period from March 3, 2008 through March 5, 2008, arising out of an automobile accident that occurred on March 3, 2008. Plaintiff claims that it billed COUNTRYWIDE with a Hospital Facility Form (Form NF-5) and a UB-92 on April 17, 2008, in the sum of $4,188.25, by Certified Mail, Return Receipt requested, which was received by COUNTRYWIDE on April 18, 2008. It is plaintiff’s position that COUNTRYWIDE failed to pay or issue a Denial of Claim Form within a period of thirty (30) days and, therefore, it is entitled to summary judgment together with interest and attorney”s fees as a matter of law.

In support of its motion to dismiss, COUNTRYWIDE, although acknowledging that it received the bill on April 18, 2008, states that the moving papers are insufficient to establish plaintiff’s prima facie right to summary judgment because the affidavits in support are submitted by a billing accounts representative of Hospital Receivables Systems, Inc.,

a person without knowledge of the facts and, therefore, does not satisfy the business records exception to the hearsay rule and, moreover, the action is premature as there are outstanding verification requests which plaintiff has failed to provide. It appears that, on May 15, 2008, COUNTRYWIDE issued verification requests that sought the completed NF-2, question #

20, on the revised form, the NF-5 on the revised form, signed, no stamps, and the assignment of benefits on the revised form, which were requested again on June 14, 2008 A review of the submitted forms reveals that where the patient’s signature is required, the forms say “ON FILE”. It is COUNTRYWIDE’s position that the claim was not overdue when the action was commenced and, thus, it is premature and should be dismissed. In reply, counsel for plaintiff points out that the 2003 NF-5 Form that it utilized was substantially the same as the 2004 NF-5 Form and that 11 NYCRR 65-3.5(f) provides that “[a]n insurer must accept proof of claim submitted on a form other than a prescribed form it contains substantially the same information as the prescribed form”. Additionally counsel for plaintiff states that 11 NYCRR 65-3.5(g) allows the hospital to bill with a “NYS Form NF-5” without qualification. Finally, plaintiff states that a copy of the signed assignment of benefits was faxed to COUNTRYWIDE on May 29, 2008, and this action was commenced on August 18, 2008, when the claim was overdue and unpaid.

After a careful reading of the submissions herein, it is the judgment of the Court that NYU QUEENS established its prima facie entitlement to judgment as a matter of law by submitting an affidavit from the third-party biller who asserted that he billed COUNTRYWIDE for the subject medical treatment, and that defendant either failed to pay [*4]the entire claim or to issue a Denial of Claim Form. New York Presbyterian Hospital v Allstate Insurance Company, 30 AD3d 492, 819 NYS2d 268 (2nd Dept. 2006). The Court credits the statement of the billing account representative for NYU QUEENS that he has personal knowledge of the patient account and personal knowledge of the certified mailing (Freeport Medical P.C. v Utica National Insurance Company, 20 Misc 3d 132A, 867 NYS2d 16 [App. Term, Second Dept. 2008]), and further finds that the 2003 Forms contain substantially the same information as the 2004 Forms. Moreover, the hospital facility forms submitted on behalf of the patient indicated that the signature of the patient/assignor was “on file” and COUNTRYWIDE’s objection to the completeness of the form and request for verification is untimely. Accordingly, defendant has waived said defense. Hospital for Joint Diseases v Allstate Insurance Company, 21 AD3d 348, 800 NYS2d 190 (2nd Dept. 2005). The Court finds that a completed claim was not paid within thirty (30) days of presentation, and is “overdue” within the meaning of the Insurance Law requiring an award of interest and attorney fees on the claim from the date the claim was first presented. Hempstead General Hospital v Insurance Company of North America, 208 AD2d 501, 617 NYS2d 478 (2nd Dept. 1994). Attorney’s fees are limited to 20% of the amount of first party benefits, plus interest thereon, subject to a maximum fee of $850. See, 11 NYCRR §65-4.6(e). Interest shall be assessed at the rate of 2% per month. See, Insurance Law § 5106 (a); Smithtown General Hospital v State Farm Mutual Auto Insurance Co., 207 AD2d 338, 615 NYS2d 426 (2nd Dept. 1994).

Second Cause of Action: RONNY MUNOZ

Plaintiff, ST. VINCENT’S, is the assignee for health services rendered to RONNY MUNOZ, during the period from April 29, 2008 through May 1, 2008, arising out of an automobile accident that occurred on April 29, 2008. Plaintiff claims that it billed COUNTRYWIDE with a Hospital Facility Form (Form NF-5) and a UB-92 on June 12, 2008, in the sum of $10,508.72, by Certified Mail, Return Receipt requested, which was received by COUNTRYWIDE on June 16, 2008. It is plaintiff’s position that COUNTRYWIDE failed to pay or issue a Denial of Claim Form within a period of thirty (30) days and, therefore, it is entitled to summary judgment together with interest and attorney”s fees as a matter of law.

In support of its motion to dismiss, COUNTRYWIDE, although acknowledging that it received the bill on June 16, 2008, states that the moving papers are insufficient to establish plaintiff’s prima facie right to summary judgment because the affidavits in support are submitted by a billing accounts representative of Hospital Receivables Systems, Inc.,

a person without knowledge of the facts and, therefore, does not satisfy the business records exception to the hearsay rule and, moreover, the action is premature as there are outstanding verification requests which plaintiff has failed to provide. COUNTRYWIDE claims that, on July 16, 2008, it sent a verification request for the NF-5 on the revised form, the assignment of benefits on the revised form and the “in linear calculation sheet”. It is claimed that, when the plaintiff failed to respond, on August 15, 2008, is issued a second verification request. A review of the submitted forms reveals that where the patient’s signature is required, the forms say “ON FILE”. It is COUNTRYWIDE’s position that the claim was not overdue when the action was commenced and, thus, is premature and should be dismissed. In reply, counsel for plaintiff points out that the 2003 NF-5 Form [*5]that it utilized was substantially the same as the 2004 NF-5 Form and that 11 NYCRR 65-3.5(f) provides that “[a]n insurer must accept proof of claim submitted on a form other than a prescribed form it contains substantially the same information as the prescribed form”. Additionally counsel for plaintiff states that 11 NYCRR 65-3.5(g) allows the hospital to bill with a “NYS Form NF-5” without qualification. Moreover, counsel for plaintiff argues that COUNTRYWIDE’s verification requests are defective because the verification requests are untimely. Counsel contends that although the bill was received on June 16, 2008, COUNTRYWIDE’s verification requests are dated July 16, 2008 and August 15, 2008, respectively, and are both beyond the statutory deadlines. 11 NYCRR §63-3.5(b), §65-3.6(b).

After a careful reading of the submissions herein, it is the judgment of the Court that ST. VINCENT’S established its prima facie entitlement to judgment as a matter of law by submitting an affidavit from the third-party biller who asserted that he billed COUNTRYWIDE for the subject medical treatment, and that defendant either failed to pay the entire claim or to issue a Denial of Claim Form. New York Presbyterian Hospital v Allstate Insurance Company, 30 AD3d 492, 819 NYS2d 268 (2nd Dept. 2006). The Court credits the statement of the billing account representative for ST. VINCENT’S that he has personal knowledge of the patient account and personal knowledge of the certified mailing (Freeport Medical P.C. v Utica National Insurance Company, 20 Misc 3d 132A, 867 NYS2d 16 [App. Term, Second Dept. 2008]), and further finds that the 2003 Forms contain substantially the same information as the 2004 Forms. Moreover, the hospital facility forms submitted on behalf of the patient indicated that the signature of the patient/assignor was “on file” and COUNTRYWIDE’s objection to the completeness of the form and request for verification is untimely. Accordingly, defendant has waived said defense. Hospital for Joint Diseases v Allstate Insurance Company, 21 AD3d 348, 800 NYS2d 190 (2nd Dept. 2005). The Court finds that a completed claim was not paid within thirty (30) days of presentation, and is “overdue” within the meaning of the Insurance Law requiring an award of interest and attorney fees on the claim from the date the claim was first presented. Hempstead General Hospital v Insurance Company of North America, 208 AD2d 501, 617 NYS2d 478 (2nd Dept. 1994). Attorney’s fees are limited to 20% of the amount of first party benefits, plus interest thereon, subject to a maximum fee of $850. See, 11 NYCRR §65-4.6(e). Interest shall be assessed at the rate of 2% per month. See, Insurance Law § 5106 (a); Smithtown General Hospital v State Farm Mutual Auto Insurance Co., 207 AD2d 338, 615 NYS2d 426 (2nd Dept. 1994).

Conclusion

Based on the foregoing, it is hereby

ORDERED, that plaintiff’s motion for summary judgment on the first and second causes of action is granted; and it is further

ORDERED, that defendant’s cross-motion for summary judgment on the first and second causes of action is denied.

All further requested relief not specifically granted is denied.

This constitutes the decision and order of the Court. Settle Judgment on Notice.

Dated: March 17, 2009 [*6]

_________________________

WILLIAM R. LaMARCA, J.S.C.

nyhospaaocastro,stvincentsaaomunoz,#

1,#

2/sumjudg

[*1]

Supreme Court, Nassau County, February 10, 2009

APPEARANCES OF COUNSEL

Stern & Montana, LLP, New York City (Robert A. Stern, Sandra P. Burgos and James A. McKenney of counsel), for AIU Insurance Company and others, plaintiffs, and Allstate Insurance Company and another, declaratory judgment defendants. Edward K. Blodnick & Associates, P.C., Garden City (Edward K. Blodnick of counsel), for Deajess Medical Imaging, P.C. and others, defendants/declaratory jugment plaintiffs. Rivkin Radler, LLP, Uniondale (Michael P. Versichelli of counsel), for State Farm Insurance Company. Short & Billy, P.C., New York City (Skip Short and Ioanna Zevgaras of counsel), for GEICO Insurance Company and another. Katten Muchin Rosenman LLP, New York City (Jay Shapiro of counsel), for Travelers Indemnity Company. Bruno, Gerbino & Soriano, LLP, Melville (Kevin W. O’Leary of counsel), for MetLife Auto and Home Insurance Company and another. Curtis, Vasile, Devine, Merrick (Roy W. Vasile of counsel), for Lancer Insurance Company. Martyn Toher & Martyn, Mineola (David C. Smith of counsel), for Liberty Mutual Fire Insurance Company and others. DeMartini & Yi, Williston Park (Arthur J. DeMartini of counsel), for Lumbermens Mutual Casualty Ins. Co. and others. Epstein, Rayhill & Frankini, Woodbury (Elsa Rodriguez Preston of counsel), for Nationwide Insurance Company. Law Offices of Cohen & Jaffe, LLP, Lake Success (Villard S. Bastien of counsel), for Citiwide Auto Leasing, Inc. Jaffe & Nohavicka, New York City (Paul Koumourdas and Ian T. Williamson of counsel), for Country Wide Insurance Company and another. Law Offices of Moira A. Doherty, Uniondale, for Clarendon Insurance Company. McDonnell & Adels, P.C., Garden City (Patrick McDonnell and John E. McCormack of counsel), for AutoOne Insurance Company and others. [*2]

{**24 Misc 3d at 164} OPINION OF THE COURT

Stephen A. Bucaria, J.

This motion, by defendant (in the initial action) Dr. Robert Schepp and related parties (as plaintiffs in the declaratory judgment action), for summary judgment is granted in part and denied in part.

This is an action for a declaratory judgment that the defendant health care providers are ineligible for no-fault reimbursement because of failure to comply with state licensing requirements. In addition to declaratory relief, plaintiffs seek to recover previously paid no-fault claims, asserting causes of action for fraud and unjust enrichment.

Dr. Robert Schepp is a radiologist whose practice is devoted primarily to patients injured in automobile accidents. He practices through a group of professional service corporations which have submitted a large number of no-fault claims to the plaintiff insurance companies. The insurers have paid many of these claims but have denied many others on the ground that the professional corporations are ineligible for no-fault reimbursement. The insurers assert that the professional corporations are in violation of state licensing requirements because they are controlled by an individual not licensed to practice medicine. The insurers further argue that the corporations are ineligible for reimbursement because the radiology services were performed by independent contractors. Finally, the insurers argue that the corporations lack standing because they assigned the no-fault claims to finance companies pursuant to accounts [*3]receivable financing agreements.

Prior to this declaratory judgment action, the corporations had commenced a large number of civil court actions and demanded a large number of arbitrations, seeking to recover no-fault claims. Some of the actions and arbitrations have been resolved, but many are still pending. Pursuant to a series of{**24 Misc 3d at 165} orders dated January 19, February 2, and March 27, 2006, the court stayed 344 actions and 44 proceedings to stay arbitration and consolidated them with the present declaratory judgment action.

The Schepp parties move for partial summary judgment, asserting that a professional corporation is ineligible for no-fault reimbursement only if the professional who formed the corporation intended to turn control over to an unlicensed individual. They additionally request partial summary judgment as to their standing and independent contractor defenses. Finally, they request partial summary judgment on the grounds that the insurers are raising a “collateral attack” on judgments and arbitration awards previously rendered in the Schepp parties’ favor. Before proceeding to the merits of the parties’ claims, the court will consider whether declaratory relief is appropriate. While declaratory judgment is discretionary, it is not an extraordinary remedy (Church of St. Paul & St. Andrew v Barwick, 67 NY2d 510, 518 [1986]; Matter of Morgenthau v Erlbaum, 59 NY2d 143, 147 [1983]). Declaratory judgment may be an appropriate vehicle for settling disputes as to contract rights and obligations, where a mandatory mechanism is not provided in the agreement (Kalisch-Jarcho, Inc. v City of New York, 72 NY2d 727, 731-732 [1988]). Although the claimant has the option of submitting a no-fault dispute to arbitration, declaratory judgment may be an appropriate vehicle for settling disputes concerning no-fault benefits (see Bennett v State Farm Ins. Co., 147 AD2d 779 [3d Dept 1989]).

Declaratory judgment is not an exception to the principle of res judicata and does not permit a trial court to review another court’s judgment (Goldstein v Massachusetts Mut. Life Ins. Co., 32 AD3d 821 [2d Dept 2006]). Therefore, the concern that the court will “undo thousands of no fault claims” is misplaced. “[D]eclaratory judgment does not entail coercive relief, but only provides a declaration of rights between parties that, it is hoped, will forestall later litigation” (Morgenthau, 59 NY2d at 148). Thus, declaratory relief by this court will not, of itself, result in the vacating of any other court’s judgment. To the extent that this court’s decision is inconsistent with any previously granted arbitration award, it is not intended to provide grounds for vacatur (see CPLR 7511 [a]). To the extent that the court’s decision is inconsistent with the judgment of any other [*4]court, whether to grant relief from that judgment is within the discretion of that court (see Ruggiero v Long Is. R.R., 161 AD2d 622{**24 Misc 3d at 166} [2d Dept 1990]). The court notes that plaintiffs are not requesting this court to take any action with respect to any judgment or arbitration award. Furthermore, the insurers themselves have requested declaratory relief in one of the consolidated declaratory judgment actions. Because of the large number of actions and arbitrations involving the common question of the Schepp entities’ eligibility for no-fault reimbursement, the court concludes that declaratory relief is appropriate.

Pursuant to Insurance Law § 5103, every automobile insurance policy must provide for payment of so-called “no fault,” or “first party benefits,” to occupants of a covered vehicle who sustain loss through the use or operation of the vehicle. Section 5102 (b) of the Insurance Law defines “[f]irst party benefits” as payment to reimburse the injured person for “basic economic loss,” less certain deductions. Under Insurance Law § 5102 (a), “basic economic loss” means necessary medical expenses and lost earnings up to $50,000. Thus, in accordance with the statutory scheme, expenses for necessary x-rays and MRIs are ordinarily reimbursable no-fault benefits.

However, Insurance Department Regulations (11 NYCRR) § 65-3.16 (a) (12) provides

“A provider of health care services is not eligible for reimbursement under § 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 or . . . any other state in which such service is performed.”

If the health care provider is a professional service corporation, section 1507 of the Business Corporation Law requires that any individual who holds shares in the professional corporation be licensed to practice the profession. Section 1508 of the Business Corporation Law provides that an individual must be licensed to be a director or officer of a professional service corporation. The insurers assert that Dr. Schepp’s professional corporations fail to meet state licensing requirements because they are owned and controlled by management companies, which are controlled by an unlicensed individual. [*5]

In State Farm Mut. Auto. Ins. Co. v Mallela (4 NY3d 313, 319 [2005]), known to the no-fault bar as “Mallela III,” the Court of Appeals held that an insurer may withhold payment for medical services provided by “fraudulently incorporated” enterprises to which patients have assigned their no-fault claims. In Mallela III, unlicensed individuals paid physicians to use their{**24 Misc 3d at 167} names on certificates of incorporation and other documents filed with the Department of State to establish medical service corporations (4 NY3d at 319). Once the medical service corporations were established under the cover of the nominal physician-owners, the nonphysicians actually operated the companies (id.). The nonphysicians caused the corporations to hire management companies owned by the nonphysicians, which billed the medical corporations at inflated rates for routine services (id. at 319-320). Thus, the corporations’ profits did not go to the nominal owners but were channeled to the nonphysicians who owned the management companies. The court held that although the patients received appropriate care from licensed professionals, the insurers could withhold payment for no-fault benefits.

In moving for partial summary judgment, the Schepp parties argue that a professional service corporation is ineligible for no-fault reimbursement only if it was “fraudulently incorporated.” Movants construe this term as meaning that the professional corporation was formed by a licensed professional who intended to turn control of the corporation over to an unlicensed party. They assert that Dr. Schepp’s professional corporations were not fraudulently incorporated because Dr. Schepp intended to retain control when he formed the professional corporations.

In Mallela III, the question of whether an “unlawfully incorporated” medical corporation was eligible for no-fault law reimbursement had been certified to the Court of Appeals by the United States Court of Appeals for the Second Circuit (State Farm Mut. Auto. Ins. Co. v Mallela, 372 F3d 500, 501 [2d Cir 2004]). In certifying this question, the Second Circuit noted our state’s longstanding concern that the “corporate practice of medicine” would create ethical conflicts and undermine the quality of care afforded to patients (372 F3d at 503). Additionally, the court noted that the corporate practice of medicine was associated with more traditional forms of fraud, such as billing for services not provided, billing for services that were medically unnecessary, and billing for services at the wrong rate (id. at 504, 507).

In answering the certified question, our Court of Appeals stated that the fraud was “in the corporate form rather than in the quality of care provided” (Mallela III, 4 NY3d at 320). The Court indicated that mere failure to observe corporate formalities would not render the provider ineligible (id. at 322). However, “willful and material failure to abide [*6]by state and local law,” conduct tantamount to fraud, would render the{**24 Misc 3d at 168} provider ineligible for no-fault reimbursement (id. at 321). The Court further stated that if a medical service corporation is “fraudulently licensed,” it is not entitled to be reimbursed for no-fault benefits (Mallela, 4 NY3d at 321, 322). Thus, the Court of Appeals intimated that a medical service corporation will be ineligible for no-fault reimbursement if it is in violation of licensing requirements, regardless of whether the doctor intended to yield control to unlicensed parties at the time he formed the corporation.

Moreover, 11 NYCRR 65-3.16 (a) (12) renders a health care provider ineligible for reimbursement if it fails to meet “any applicable” licensing requirement. The regulation does not render a provider ineligible only when it fails to meet licensing requirements at the time of its incorporation. In view of the fraudulent practices associated with the corporate practice of medicine, a regulation prohibiting reimbursement to unlicensed providers is eminently reasonable. Thus, if the Schepp entities are under the control of an unlicensed individual, the insurers will be entitled to a declaration that they may deny defendants no-fault reimbursement, regardless of whether defendants were “fraudulently incorporated.” The declaratory judgment plaintiffs’ motion for partial summary judgment on the ground that the professional corporations were not fraudulently incorporated is denied.

In Mallela III, the Court of Appeals stated that “no cause of action for fraud or unjust enrichment [will] lie for any payments made by the carriers before [the] regulation’s effective date of April 4, 2002” (4 NY3d at 322). Thus, insurers may not recover no-fault claims paid prior to April 4, 2002 on the ground that the provider was ineligible for reimbursement at the time the claim was submitted. Nevertheless, Mallela III left open the question of whether insurers may deny claims submitted prior to April 4, 2002 on the ground that the provider subsequently became ineligible for no-fault reimbursement. Movants argue that the insurers may not deny such claims on the ground of current ineligibility and may not predicate a cause of action for fraud on claims submitted prior to March 29, 2005, the date of the Mallela III decision.

Movants stress that, prior to Mallela III, 11 NYCRR 65-3.16 had not been interpreted as entitling insurers to deny no-fault reimbursement to health care providers who were not in compliance with licensing requirements. Indeed, in certifying the question to our Court of Appeals, the Second Circuit noted that New{**24 Misc 3d at 169} York law was unclear and no “controlling precedent” governed the case (372 F3d at 507). [*7]

Subsequently, in Allstate Ins. Co. v Belt Parkway Imaging, P.C. (33 AD3d 407, 408 [1st Dept 2006]), the Appellate Division held that insurers could deny claims for services performed prior to April 4, 2002 because the “clear import” of the regulation was that unlicensed providers were no longer eligible for reimbursement as of the regulation’s effective date. The court reasoned that “[a]meliorative or remedial legislation” should be given retroactive effect to effectuate its “beneficial purpose,” and similar effect should be given to an ameliorative or remedial regulation (id. at 408). The court noted that the purpose of 11 NYCRR 65-3.16 was “to combat fraud,” and the regulation’s notice of adoption urged that the public receive “the benefits of reduced fraud and abuse . . . at the earliest possible moment” (33 AD3d at 409). The court ruled that section 65-3.16 did not “impair[ ] vested rights” and noted that Mallela itself involved “pre-April 4, 2002 claims” (33 AD3d at 409, 408). Thus, the insurers will be entitled to a further declaration that they may deny no-fault claims for services performed prior to April 4, 2002, if they establish that the Schepp entities are currently ineligible for no-fault reimbursement. Defendants’ motion for partial summary judgment is granted as to claims paid prior to April 4, 2002 but denied as to pre-April 4, 2002 claims which are still pending.

Movants argue that a cause of action for fraud, based upon a no-fault claim submitted prior to the date of Mallela III, is legally insufficient. The essential elements of a cause of action for fraud are a representation of a material existing fact, falsity, scienter, deception, and injury (New York Univ. v Continental Ins. Co., 87 NY2d 308 [1995]). The movants argue that their ineligibility for no-fault reimbursement was not an “existing fact” before Mallela III was decided. Thus, they argue that the insurers may not assert a cause of action for fraud based on pre-Mallela III claims.

The eligibility of a professional corporation for no-fault reimbursement is a mixed question of fact and law which “turns on the combined consideration of factual and legal factors” (Matter of Fisher [Levine], 36 NY2d 146, 150 [1975]). Nevertheless, a representation as to the corporation’s eligibility for no-fault reimbursement may provide the basis for a fraud cause of action. The Court of Appeals has stated that it is an “over-simple dichotomy” to distinguish between law and fact for the{**24 Misc 3d at 170} purposes of an action in deceit (National Conversion Corp. v Cedar Bldg. Corp., 23 NY2d 621, 627 [1969]). “[A] statement as to the law, like a statement as to anything else, may be intended and understood either as one of fact or one of opinion only, according to the circumstances of the case” (id. at 628, quoting Prosser, Torts, at 741 [3d ed]). Indeed, a false opinion of the law, if represented as a “sincere opinion,” may, as any other opinion, give rise to a fraud claim if it is reasonably relied upon by the other party (id.). A misrepresentation as to the law is more likely to induce [*8]reasonable reliance where it is made by one possessing superior knowledge as to the subject of the representation (Lukowsky v Shalit, 110 AD2d 563, 567 [1st Dept 1985]). Since a misrepresentation as to the law may give rise to an action for fraud, so may a misrepresentation as to a mixed question of fact and law, such as eligibility for no-fault reimbursement.

Prior to Mallela III, Dr. Schepp may not have known that his professional corporations were ineligible for no-fault reimbursement. However, in submitting no-fault claims, the Schepp entities impliedly represented that they{**24 Misc 3d at 171} were wholly owned by licensed physicians. They clearly had superior knowledge as to the licensing status of the individual in control of the professional corporations. If a representation as to licensing status was false, the insurers suffered damages by paying the claims in reliance upon the representation, even though the legal effect of the falsity had not yet been determined. In Allstate Ins. (supra), the Appellate Division affirmed the dismissal of the insurer’s cause of action for fraud based upon payments made prior to April 4, 2002. The court’s failure to dismiss a fraud claim as to payments made prior to the date of Mallela III confirms the viability of a fraud cause of action. The motion for partial summary judgment is denied as to claims submitted subsequent to April 4, 2002 but prior to the date of the Mallela III decision.

The movants argue that the insurers’ fraud causes of action have not been stated in sufficient detail pursuant to CPLR 3016 (b). The purpose of this pleading requirement is to inform a defendant of the incidents which form the basis of the action (Pludeman v Northern Leasing Sys., Inc., 10 NY3d 486, 491 [2008]). Where it is impossible to state the circumstances constituting the fraud in detail, CPLR 3016 (b) should not be so strictly interpreted as to prevent plaintiff from asserting an otherwise valid cause of action (id.). As noted above, in submitting no-fault claims, the Schepp entities impliedly represented that they were wholly owned by licensed physicians. While the extent to which they relied upon that representation may vary with the circumstances of the individual claim, the insurers have alleged sufficient detail to comply with CPLR 3016 (b)’s pleading requirement.

11 NYCRR 65-3.11 (a) provides, “An insurer shall pay benefits for any element of loss . . . directly to the applicant or . . . upon assignment by the applicant . . . shall pay benefits directly to providers of health care services.” According to the insurers, the Department of Insurance has issued an opinion letter to the effect that a health care provider is not permitted to seek reimbursement for services provided by an independent contractor (see NY Ins Dept op letter, Feb. 21, 2001). The movants do not dispute [*9]the insurers’ interpretation of the opinion letter but claim that, as a matter of law, the radiology technicians who performed the services were employees of the professional corporations.

On a motion for summary judgment, it is the proponent’s burden to make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact (JMD Holding Corp. v Congress Fin. Corp., 4 NY3d 373, 384 [2005]). Failure to make such a prima facie showing requires denial of the motion, regardless of the sufficiency of the opposing papers (id.). However, if this showing is made, the burden shifts to the party opposing the summary judgment motion to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact which require a trial (Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]).

The Schepp entities submit the affidavit of Dr. Schepp which states that all of the MRI technicians worked under his supervision and control. Dr. Schepp further states that while the technicians worked for different corporations, they were paid by Robert Scott Schepp, M.D., P.C., they received W-2 tax forms, and their salary expenses were apportioned among the various corporations. The court concludes that the Schepp entities have established, prima facie, that the MRI technicians were employees, and the burden shifts to the insurers to come forward with evidence showing that the technicians were independent contractors.

In opposition to the motion, the insurers have submitted considerable evidence indicating that Dr. Schepp may have yielded control of the professional corporations to a management{**24 Misc 3d at 172} company. However, they have submitted no evidence that the MRI technicians were not employees of the professional corporations. The court concludes that the Schepp entities are entitled to a declaration that the professional corporations are not ineligible for no-fault reimbursement by reason of utilizing MRI technicians who were not employees. The motion for partial summary judgment is granted as to the independent contractor defense.

The insurers argue that the professional corporations lack standing because they assigned their no-fault claims to finance companies pursuant to accounts receivable financing agreements. The movants respond that they purported to assign only the proceeds because a medical provider is not permitted to assign a no-fault claim. [*10]

An unequivocal and complete assignment extinguishes the assignor’s rights against the obligor and leaves the assignor without standing to sue the obligor upon the assigned claim (Aaron Ferer & Sons Ltd. v Chase Manhattan Bank, N.A., 731 F2d 112, 125 [2d Cir 1984]). However, implicit in any assignment for security is a reservation to the assignor of a right to pursue the claim if the assignee chooses not to do so (Fifty States Mgt. Corp. v Pioneer Auto Parks, 44 AD2d 887 [4th Dept 1974]). Where no-fault claims are factored, it is particularly appropriate for the assignor to retain standing because the assignee is not permitted to seek no-fault arbitration (Insurance Law § 5106 [b]; Insurance Department Regulations [11 NYCRR] § 65-4.2 [b]).

Article 9 of the Uniform Commercial Code, governing secured transactions, ordinarily applies to a sale of accounts intended as a financing arrangement (UCC 9-109 [a] [3]). Pursuant to UCC 9-406 (a), an account debtor may discharge its obligation by paying the assignor, until the account debtor has received notice of the assignment. Thus, a no-fault insurer who pays the health care provider is not exposed to the risk of double-paying a factored claim. The court concludes that the Schepp entities are entitled to a declaration that the professional corporations are not ineligible for no-fault reimbursement by reason of having assigned the claims pursuant to an accounts receivable financing agreement. The motion for partial summary judgment is granted as to insurers’ defense of lack of standing.

The Schepp entities’ motion for summary judgment is granted and denied to the extent indicated above. The court will defer granting a declaratory judgment in accordance with this decision{**24 Misc 3d at 173} pending resolution of whether the professional corporations are controlled by an individual not licensed to practice medicine.

Supreme Court, Nassau County

014141/08

TO:Joseph Henig, P.C.

By: Marc Henig, Esq.

Attorney for Plaintiff

1598 Bellmore Avenue

P.O. Box 1144Bellmore, NY 11710

McDonnell & Adels, P.C.

Attorneys for Defendant

401 Franklin Avenue

Garden City, NY 11530

Daniel R. Palmieri, J.

These are plaintiff’s motion and defendant’s cross motion both for summary judgment pursuant to CPLR §3212. The motions are denied.

Plaintiff provided first-party no-fault benefits to a person covered by a policy of insurance issued by defendant.

Plaintiff treated the insured between September 11, 2007 and October 4, 2007 and billed on November 2, 2007. Defendant did not pay or deny the bill because it claims that it had reasonable cause to believe that the accidents and later treatment by plaintiff were the result of intoxication and thus excluded from coverage. Ins. Law §5103(b)(2), 11 NYCRR 6-3.8(g). The regulation provides that “if an insurer has reason to believe that the applicant was operating a motor vehicle while intoxicated or impaired and such intoxication or impairment was a contributing cause of the automobile accident, the insurer shall be entitled to all available information relating to the applicant’s condition at the time of the accident. The statute provides that an insurer may exclude from coverage a person who is injured as a result of operating a motor vehicle while intoxicated or impaired within the meaning of the VTL §1192.

Summary judgment is the procedural equivalent of a trial. S.J. Capelin Assoc. Inc. v Globe Mfg. Corp., 34 NY2d 338, 341 (1974). The function of the court in deciding a [*2]motion for summary judgment is to determine if triable issues of fact exist. Matter of Suffolk Cty Dept of Social Services v James M., 83 NY2d 178, 182 (1994). The proponent must make a prima facie showing of entitlement to judgment as a matter of law. Guiffrida v Citibank Corp., 100 NY2d 72, 82 (2003); Alvarez v Prospect Hosp., 68 NY2d 320, 324 (1986). Once a prima facie case has been made, the party opposing the motion must come forward with proof in evidentiary form establishing the existence of triable issues of fact or an acceptable excuse for its failure to do so. Zuckerman v City of New York, 49 NY2d 557, 562 (1980).

In an action for no-fault payments the plaintiff makes a prima facie showing of entitlement to judgment by submitting evidentiary proof that the prescribed statutory billing forms had been mailed and received, and that payment of the No-Fault benefits was overdue. Insurance Law 5106(a); Westchester Medical Center v AIG, Inc., 36 AD3d 900 (2nd Dept. 2007). On this motion plaintiff argues that it has presented a prima facie case for payment of no-fault benefits for services rendered. Plaintiff has submitted the requisite billing forms, certified mail receipts, signed return receipt cards, and an affidavit from a billing person stating that she/he personally mailed the claims. There is no dispute that defendant failed to pay or deny the claims within 30 days. On this record the Court finds that plaintiff has presented a prima facie case.

In opposition defendant relies upon its affirmative defense that the incident which caused the injuries were excluded from coverage because the injured party was intoxicated and injured as a result of such condition.

Pursuant to Insurance Law 5106(a), no-fault benefits are overdue if not paid by the insurer within 30 days after submission of proof of loss. See also, 11 NYCRR 65-3.8. The insurer is precluded from asserting any defenses to payment when it fails to deny the claim within the required 30-day period. Presbyterian Hosp. in the City of New York v Maryland Casualty Co., 90 NY2d 274, 278 (1997). A narrow exception to this preclusion rule is recognized for situations where the insurer raises a defense of lack of coverage. Central General Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 198 (1997). However, intoxication has been held to constitute an exclusion from coverage rather than no coverage thus requiring an insurer to deny or pay the claim or make avail of the regulations which address the exclusion and extend the time within which to pay or deny the claim. Presbyterian Hospital in the City of New York v. Maryland Casualty Co., 90 NY2d 274 (1997).

A variation of the requirement that an insurer must either deny or pay a claim exists with respect to persons injured when believed to have been operating their vehicle while intoxicated. If an insurer has reason to believe that alcohol consumption was a contributing factor in causing the accident, the insurer is entitled to all available information relating to the applicant’s condition at the time of the accident 22 NYCRR §65-3.8(g) and proof of claim shall not be completed until information, which has been requested pursuant to subdivision 65-8.5(a) or (b), has been furnished to the insurer by the applicant or the authorized [*3]representative. Regulation §65-3.5(c) provides that an insurer is entitled to receive all items necessary to verify the claim directly from the parties from whom such verification is requested. This latter section does not confine or require the insurer to seek information solely from the provider but rather contemplates that verification information may be sought from any source.

In sum, intoxication may operate as an exclusion from coverage rather than as a non-covered event , thus requiring either timely payment or denial or in lieu thereof, timely requests for verification. A provider establishes a prima facie case for summary judgment by showing proper billing, mailing and lack of payment but an insurer may demonstrate the existence of triable factual issues by showing that it made timely requests for verification regarding alleged intoxication that were not answered. Westchester Med. v. Allstate Ins. Co., 53 AD3d 481 (2d Dept. 2008); Westchester Med. v. State Farm Mut. Auto., 44 AD3d 750 (2d Dept. 2007).

The insurer has raised questions of fact sufficient to deny summary judgment to plaintiff by showing that it had reason to believe that intoxication was a contributing cause of the accident causing injury and made timely requests for verification (including follow-up requests) from plaintiff and the police.

The incident was a one car accident, the driver was charged with driving while intoxicated and the affirmed supporting deposition of the laboratory technician contains information that the blood alcohol level was 0.19%, a level sufficient to fall within the scope of the statute.

A dispute over whether a toxicology report was ever sent has been held to create a question of fact so as to bar summary judgment, Westchester Medical Center v. Allstate Insurance Company, supra; Westchester Medical Center v. progressive Casualty Insurance Co., 51 AD3d 1012 (2d Dept. 2008); cf Nyack Hospital v. State Farm Mut. Ins. Co., 19 AD3d 569 (2d Dept. 2005).

There is no factual dispute here as to plaintiff’s compliance with the request for verification as to the possible intoxication condition of the insured. Plaintiff does not refute defendant’s numerous requests for toxicology results or deny its response that defendant should obtain such results from the police authorities. Thus, there is no issue of fact as to plaintiff’s noncompliance. See, Central Suffolk Hospital v. New York Cent. Mut. Fire Ins. Co., 24 AD3d 492 (2d Dept. 2005).

In Westchester Medical Center v. Progressive Casualty Insurance Company, 43 AD2d 1039 (2d Dept. 2007), and in Central Suffolk Hosp. v. New York Cent. Mut. Fire Ins. Co., supra, the court granted summary judgment in favor of a defendant against a plaintiff because there was no issue of fact as to the hospital’s failure to provide verification as to intoxication.

With respect to defendant’s cross motion, it has not been established as a matter of law that the injured person was intoxicated and that the intoxication contributed to the injury causing accident. Defendant’s evidence is sufficient to raise questions of fact as to whether [*4]the exclusion for intoxication is applicable. Notably absent here are any specifics as to how the acident was caused by plaintiff’s intoxication. See Westchester Medical Center v. Progressive Casualty Insurance Company, 51 AD3d 1014 (2d Dept. 2008); Lynch v. Progressive Ins. Co., 12 AD3d 570 (2d Dept. 2004).

Although plaintiff does not dispute the request for verification and its inability to provide such information, plaintiff contends that the denial of claim is lacking in specificity, there by rendering defendant’s ultimate denial as ineffective. See General Acc. Ins. Group v. Circucci, 46 NY2d 862 ( 1979 ); Todaro v. Geico Gen. Ins. Co., 46 AD3d 1086 (3rd Dept. 2007); Olympic Chiropractic, P.C., v. American Transit Ins. Co., 14 Misc 3d 129(A). (App. Term 2d and 11th Judicial Districts 2007). The denial of claim form dated October 21, 2008 which is not attached, addressed or disputed by plaintiff, specifies by reference to regulation and the insured as to intoxication or impairment and thus provides enough detail as the reason for the denial. Plaintiff’s contention that it had no way of knowing the basis for denial is based solely on a subsequent denial of claim and fails to take into account requests for verification followed by the first denial. See St. Vincent’s Hosp. Of Richmond v. Government Employees Ins. Co., 50 AD3d 1123 (2d Dept. 2008).

Based on the foregoing, questions of fact exist as to whether the insured was intoxicated and whether such condition contributed to causing the injury, necessitating denial of both plaintiff’s motions and defendant’s cross motions for summary judgment.

All parties shall appear at a Preliminary Conference at the Supreme Courthouse, 100 Supreme Court Drive, Mineola, NY, lower level, on December 18, 2008 , at 9:30 a.m. No adjournments of this conference will be permitted absent the permission of or Order of this Court. All parties are forewarned that failure to attend the conference may result in Judgment by Default, the dismissal of pleadings (see 22 NYCRR 202.27) or monetary sanctions (22 NYCRR 130-2.1 et seq.).

Based on the foregoing, summary judgment is denied to both plaintiff and defendant as to the Second and Third Causes of Action.

This shall constitute the Decision and Order of this Court.

E N T E R

DATED: December 1, 2008

_____________________________

HON. DANIEL PALMIERI

Acting Supreme Court Justice

TO:Joseph Henig, P.C.

By: Marc Henig, Esq.

Attorney for Plaintiff

1598 Bellmore Avenue

P.O. Box 1144

Bellmore, NY 11710 [*5]

McDonnell & Adels, P.C.

Attorneys for Defendant

401 Franklin Avenue

Garden City, NY 11530

Supreme Court, Nassau County

12410/2008

COUNSEL FOR PETITIONER

Ruffo, Tabora, Mainello & McKay, P.C.

3000 Marcus Avenue – 1W6

Lake Success, New York 11042

COUNSEL FOR RESPONDENT

Rubin, Fiorella & Friedman, LLP

292 Madison Avenue, 11th Floor

New York, New York 10017

Leonard B. Austin, J.

Petitioner seeks a judgment pursuant to CPLR 7510 confirming the arbitration award of Arbitration Forums, Inc., dated December 30, 2007.

Respondent, Republic Western Insurance Co., moves for an order pursuant to CPLR 304, 403(b) [*2]and 3211(a)(8) dismissing the petition for want of personal jurisdiction.

BACKGROUND

The insured of Petitioner Eagle Insurance Company (“Eagle”), was involved in a motor vehicle accident with a vehicle insured by Respondent, Republic Western Insurance Co. (“Republic Western”), on January 30, 2001. Republic Western’s insured allegedly rear-ended Eagle’s insured, whose vehicle had three passengers.

On or about April 1, 2003, Eagle served Republic Western with a Notice to Arbitrate the four individuals’ claims with Arbitration Forums, Inc. (“AFI”) pursuant to Insurance Law § 5105. After a lengthy investigation, on October 24, 2007, Republic Western denied coverage for Eagle’s claim on the grounds that the accident was staged.

On October 25, 2007, Republic Western submitted its contention to AFI that the loss was staged and was accordingly not covered. Republic Western argued that AFI lacked jurisdiction since coverage was contested and that Eagle’s claim must be dismissed. Republic Western explained that, through its investigation, it had determined that the loss involved individuals who were part of a criminal ring that staged accidents with U-Haul and other vehicles for the purpose of defrauding insurance companies. It maintained that Tara Pizzingrillo, the lessee and driver of the U-Haul vehicle in the

underlying claim, was arrested in connection with staging accidents and that she was indicted for being part of a scheme to defraud numerous insurance carriers by submitting fraudulent claims and intentionally colliding into automobiles.

A no-fault hearing was held on December 18, 2007. Republic Western asserted its objection to jurisdiction again at the hearing. By decision, dated December 30, 2007, the Arbitrator rejected Republic Western’s challenge to jurisdiction and found Republic Western 100% liable for Eagle’s no-fault payments to the injured parties. The Arbitrator denied Republic Western’s affirmative defense of no coverage because “indictments list other accidents, not his loss;” “U-Haul driver was indicted for fraud;” and, Eagle’s insured was “an innocent party.” By letter, dated January 22, 2008, Republic Western’s counsel requested that AFI reconsider whether it had jurisdiction over the matter under 11 NYCRR 65-4.11(a)(6).

On or about December 30, 2007, Republic Western filed a Petition in Supreme Court, New York County seeking to vacate the arbitration award. However, that action was discontinued by stipulation without prejudice on account of a stay of actions against Eagle issued by the Superior Court of New Jersey on January 29, 2007. That stay was given comity by this Court by order dated June 15, 2007. (In the Matter of Eagle Insurance Company in Rehabilitation, Newark Insurance Company in Rehabilitation, GSA Insurance Company in Rehabilitation, and NCIC Insurance Company in

Rehabilitation [Order dated June 15, 2007, Index No. 3202/07 (Supreme Court Nassau County)]).

Eagle commenced this proceeding to confirm the arbitrator’s award on July 7, 2008.

Republic Western maintains that personal jurisdiction has not been obtained; that the award is invalid because it is not signed (CPLR 7507); and that the Arbitrator exceeded his authority in determining that this was a covered event (see, 11 NYCRR 65-4.11[a][6]). [*3]

DISCUSSION

Review of an arbitration award is accomplished by way of a special proceeding. CPLR 7502(a); Scott v. Allstate Ins. Co., 45 AD3d 690 (2nd Dept. 2007). “A special proceeding is commenced by the filing of a petition (CPLR 304).” Star Boxing Inc. v. Daimler Chrysler Motors Corp., 17 AD3d 372 (2nd Dept. 2005). See also, Scott v. Allstate Ins. Co., supra; and Queens Community Medical Centers v. Eveready Ins. Co., 7 Misc 3d 1010(A) (Civ. Ct. Kings Co. 2005). “Thereafter, the petitioner must serve the respondent with a notice of petition, the petition and supporting affidavits (CPLR 403[b]).” Star Boxing, Inc. v. Daimsler Chrysler Motors Corp., supra. See also, Scott v Allstate Ins. Co., supra; Queens Community Medical Centers v. Eveready Ins. Co., supra. “Pursuant to CPLR 403(c), a notice of petition shall be served in the same

manner as a summons in an action.” Star Boxing, Inc. v. Daimsler Chrysler Motors Corp., supra. See also, Scott v. Allstate Ins. Co., supra; Queens Community Medical Center v. Eveready Ins. Co., supra. Neither service on a party’s attorney nor service by regular mail alone is sufficient. CPLR 308, et seq. The petition must be served in accordance with CPLR 308. Application of County Wide Ins. Co., 114 AD2d 754 (1st Dept. 1985). See also, Hehl V. Government Employees Ins. Co., 203 AD2d 572 (2nd Dept. 1994).

Republic Western did not waive its jurisdictional objection by procuring an adjournment of the return date of the Petition. Parrotta v. Wolgin, 245 AD2d 872 (3rd Dept. 1997), citing McLaughlin, Practice Commentaries, McKinney’s Cons. Laws of NY, Book 7B, CPLR C320:2 at 492; CPLR 320(b); Becker v. Lesnick, 96 Misc 2d 819, 821-822 (Sup. Ct. NY Co. 1978). See also, Pendergast v. St. Mary’s Hospital, 156 AD2d 436 (2nd Dept.1985). The petition in this proceeding was served on Republic Western and its attorney by regular mail. Since Eagle Insurance Co. failed to serve the petition properly, this Court lacks jurisdiction and this proceeding must be dismissed. Star Boxing, Inc. v. Daimsler Chrysler Motors Corp., supra; and Queens Community Medical Center v. Eveready Ins. Co., supra.

In view of the foregoing, the parties’ remaining contentions need not be reached.

Accordingly, it is,

ORDERED, that Respondent Republic Western’s motion to dismiss the Petition pursuant to CPLR 3211(a)(8) is granted and the Petition is hereby dismissed.

This constitutes the decision and Order of the Court.

Dated: Mineola, NY_____________________________

October 24, 2008Hon. LEONARD B. AUSTIN, J.S.C.

X X X

Supreme Court, Nassau County

8566/08

Anthony C. Donofrio, PLLC

Attorney for Petitioner

5518 Merrick Road

Massapequa, NY 11758

Short & Billy, PC

Attorneys for Respondent

217 Broadway, Suite 300

New York, NY 10007

William R. LaMarca, J.

Requested Relief

Complainant, JOSEPH MILLS (hereinafter referred to as “Dr. MILLS”), petitions the Court for an order, pursuant to 11 NYCRR §65-4.10(h), granting him a trial, de novo, with respect to a decision of an Arbitrator that upheld the denial of no-fault benefits to MILLS by respondent, GOVERNMENT EMPLOYEES INSURANCE CO. (hereinafter referred to as “GEICO”). GEICO opposes the petition on procedural as well as substantive grounds. The petition is determined as follows:

Background

In the underlying arbitration dispute, MILLS sought arbitration seeking payment of lost earnings under the no-fault provisions of his policy with GEICO which had coverage of $100,000.00 for lost earnings. Following MILLS’ claim, GEICO paid the amount of $13,950.48, but denied him further benefits, and in the arbitration, Dr, MILLS sought payment for the balance of the amount which he had not received.

In his petition, Dr. MILLS, claims that, prior to December 6, 2002, he was a full time treating chiropractor that treated patients at two (2) locations: Chiropractic Low Back Pain in Huntington, New York, and Nassau Chiropractic Pain Management in Valley Stream, New York. He states that, on September 4, 2002, he was involved in a motor vehicle accident on Route 108 in Cold Spring Harbor, New York where he sustained serious injuries to his spine. He contends that, from September 4, 2002 to December 6, 2002, he continued to treat patients at his facilities in a limited capacity until he was no longer [*2]physically able to do so on December 6, 2002, and that he hired part-time chiropractors to treat patients because of his diminished capabilities. On December 7, 2002, the date that Dr. MILLS claimed complete disability, he hired a full time chiropractor to take over his share of the work at the various facilities. He asserts that he has undergone serious spinal surgery, including the fusion of vertebrae in his spine with bone grafted from his hip and is presently receiving Social Security Disability benefits for being totally disabled since December 6, 2002.

Dr. MILLS states that, based upon a medical examination that concluded that no further treatment was necessary, GEICO denied his claim on March 9, 2003 and, thereafter, he underwent further surgery. He states that he submitted proof to GEICO of his additional surgery on September 9, 2003, as well as proof that he was receiving Social Security Disability Benefits, but after another medical examination GEICO again denied his claim, on July 13, 2004. Thereafter, the matter was heard by Arbitrator Laura A. Yantsos, Esq., who concluded in a nine (9) page decision, dated August 9, 2007, that Dr. MILLS had not suffered any loss of earnings and was not entitled to the balance of the policy. Said decision by Arbitrator Yantsos, was appealed by Dr. MILLS and upheld by Master Arbitrator Donald T. DeCarlo, by decision dated January 8, 2008. It is from the Master Arbitrator’s decision that Dr. MILLS seeks a trial de novo under11 NYCRR §65-4.10(h). It is Dr. MILLS position that the decision of Arbitrator Yantsos is completely arbitrary and abusive and that she exceeded her power and abused her discretion. He claims that the Arbitrator demanded documents far in excess of what was necessary or regular and required twenty (26) hours of appearance time and demonstrated that she had no understanding of the no-fault law.

The Arbitration Decision reflects an exhaustive and comprehensive analysis of the facts and documentary evidence presented, that included IRS records, business records, a Social Security claim and other related documents. Dr. MILLS claim was for lost earnings which is defined in Insurance Law §5102(2) as “[l]oss of earnings from work which the person would have performed had he not been injured, and reasonable and necessary expenses incurred by such person in obtaining services in lieu of those that he would have performed for income . . .”. The Arbitrator found that Dr. MILLS was acting, before and after the accident, first and foremost, as a manager and owner of medical corporations and practices and of the buildings in which the practices were located, and that he was not disabled from performing his duties as a manager/owner. As part of the evidence considered was a letter submitted by Dr. MILLS, written to “Scott” and prepared in conjunction with his Social Security Disability hearing, which indicated that he had gone on disability for more that a year in 1995, some seven (7) years prior to the subject accident, when he had injured his back and learned that he could not return to work on a full time basis and started doing medical management, that he ran his own medical management company for the last several years and did almost no treating, that he managed the medical practice of another doctor, and that he could not work as a chiropractor because he could not do repetitive bending. Moreover, the Arbitrator found that the two (2) practices opened by Dr. MILLS just a few months before the accident envisioned his role to be that of a medical manager, that he did not work exclusively as a treating chiropractor, that his tax returns did not accurately reflect legitimate business expenses and his deductions were grossly inflated and untraceable, and that real estate [*3]taxes imposed on the businesses were in fact for expenses of buildings owned by Dr. MILLS in his personal capacity. Indeed, after consideration of the credible evidence presented, the Arbitrator found that Dr. MILLS did not sustain a loss of earnings but, on the contrary, received greater income than he did prior to the accident.

In opposition to the petition, counsel for GEICO points out the following:

1. That the Court lacks personal jurisdiction over the respondent because the notice and petition were not properly served. 22 NYCRR §65-4.10(h) directs, as follows:

(h) Appeal from master arbitrators award:

(1) A decision of a master arbitrator is final and binding, except f for:

(I) court review pursuant to an Article 75 proceeding, or

(Ii) if the award of the master arbitrator is $5,000 or greater, exclusive of interest and attorneys fees, either party may in lieu of an Article 75 proceeding, institute a court action to adjudicate the dispute de novo. (emphasis supplied).

As the award of the master arbitrator was for $0 dollars, the instant action must be commenced as a special proceeding (CPLR §7502), which requires that a party file a petition (CPLR §304) and that the notice must be served in the same manner as a summons (CPLR §403[c]). It is clear that the petition was not served upon the defendant corporation, pursuant to CPLR §311(a) as complainant served the notice and petition, by mail, upon counsel for GEICO, which is insufficient service.

2. That complainant is not entitled to a trial de novo as a pre-requisite for a de novo action is an award of a master arbitrator in the amount of $5,000 or greater. There can be no de novo review if there is no monetary award. Harlev v United Servs. Auto Assn., 191 AD2d 768, 594 NYS2d 405 (3d Dept. 1993), General Accident Fire & Life Insurance Co. v Avlonitis, 156 AD2d 424, 548 NYS2d 543 (2nd Dept. 1989).

3. That the complainant is barred from seeking relief under CPLR Article 75 because CPLR §7511 with respect to vacating or modifying an arbitration award requires the application to be made within ninety (90) days of delivery to him. In the case at bar, the decision of the Master Arbitrator was mailed on January 8, 2008 and the instant application was filed on May 9, 2008. The ninety (90) day period had expired and claimant is not entitled to Article 75 relief.

4. That the decision of Arbitrator Yantsos has a factual and rational basis. As discussed above, the decision reflects an exhaustive and comprehensive analysis of the facts and documentary evidence presented.

5. That the decision of Arbitrator Yantsos is not capricious, arbitrary or irrational. The record demonstrates that Dr. MILLS claim that “working full time as a treating chiropractor was the primary source of his income and how he made his likelihood” was contrary to the record. Rather the record shows that he was a chiropractor/businessman, who worked in medical management for which he was not disabled.

6. That the decision of Master Arbitrator DeCarlo is proper and should be confirmed. Master Arbitrator DeCarlo found that “the Master Arbitrator is not a fact finder, and if the evidence is sufficient to support an Arbitrator’s decision, it is not the role of the Master Arbitrator to vacate or modify”. He concluded that “the decision of the Arbitrator on its face [*4]supports an affirmation of the decision below and I therefore, rule in favor of Respondent in this matter”. Counsel for GEICO cites Matter of Petrofsky v Allstate Insurance Co., 54 NY2d 207, 445 NYS2d 77, 429 NE2d 755 (C.A. 1981).

The Law

The Court of Appeals has outlined the scope of review by a master arbitrator in the Matter of Petrofsky v Allstate Insurance Company, supra , and Smith and Firemen’s Fund Insurance Company, 55 NY2d 224, 448 NYS2d 444, 433 NE2d 509 (C.A. 1982). In Petrofsky, the Court of Appeals vacated a master arbitrator’s determination which set aside the original arbitration award and found that the master arbitrator erred by engaging in an extensive review of the facts. In Smith, the Court of Appeals upheld the master arbitrator because he based his decision on a matter of law and there was no indication that the master arbitrator exceeded his statutory power by weighing the evidence or resolving issues such as the credibility of the witnesses:

An arbitration award may be reviewed for whether it has a rational basis. The rational basis standard was developed by the Court of Appeals in a series of four (4) cases: Garcia v Federal Insurance Company, 46 NY2d 1040, 416 NYS2d 544, 389 NE2d 1066 ( C.A. 1979), Furstenberg v Aetna Casualty & Surety Co., 49 NY2d 757, 426 NYS2d 465, 403 NE2d 170 (C.A. 1980), Cohn v Royal Globe Insurance Company, 49 NY2d 942, 428 NYS2d 88, 406 NE2d 739 (C.A. 1980) and Levine v Zurich American Insurance, 49 NY2d 907, 428 NYS2d 193, 405 NE2d 675 (C.A. 1980).

CPLR § 7511(b) sets forth the four narrow grounds upon which an arbitration award may be vacated. These four grounds are 1) corruption, fraud, or misconduct in procuring the award; 2) partiality of an arbitrator appointed as a neutral; 3) that an arbitrator or agency making the award exceeded his power or so imperfectly executed it that a final definite award was not made; and 4) procedural defects, unless the party failed to notice the defect and failed to object to same. See also, Matra Building Corp v Alan Kucker, et al., 2 AD3d 732, 770 NYS2d 367 (2nd Dept. 2002). An arbitration award cannot be vacated even if the Court concludes that the arbitrators interpretation of an agreement misconstrues or disregards its plain meaning or misapplies substantive law unless the award is violative of a strong public policy, is totally irrational, or exceeds enumerated limitations of the arbitrators powers. Matra Building Corp. v Alan Kucker, et al., supra . The scope of review is extremely limited, as the goal of arbitration is to reach a final and definite resolution of the parties’ dispute without resorting to the judicial process, and the party commencing the action bears a heavy burden of proof. Indeed, an arbitration award will be confirmed if there is even a barely colorable justification for the outcome. Huntington Hospital v Huntington Hospital Nurses Association, 302 F. Supp. 2d 34 (EDNY, 2004).

. . . [I]n order to achieve arbitration’s dual purpose of an equitable result and expediency, the arbitrator’s award should be given great deference. Finality is the key. Accordingly, CPLR 7501 expressly forbids judicial review of the parties’ disputes. Therefore, failure to establish a statutory ground for vacatur under CPLR 7511 requires confirmation of the award (Matter of Granite Worsted Mills[Cowen] 25 NY2d 451, 255 NE2d 168, 306 NYS2d 934). Moreover, in New York there is a strong public policy favoring [*5]arbitration, consequently an award is not subject to vacatur “unless the court concludes that it is totally irrational or violative of a strong public policy” and thus in excess of the arbitrators powers (Hacket v. Milbank, Tweed, Hadley & McCloy, 86 NY2d 146, 630 NYS2d 274, 654 NE2d 95; Maross Constr. V. Central NY Regional Transp. Auth. 66 NY2d 341, 497 NYS2d 321, 488 NE2d 67).

Brown and Williamson Tobacco Corp. v. Chesley, 194 Misc 2d 540, 749 NYS2d 842 (NY County, 2002).

ConclusionAfter a careful reading of the submissions herein, the Court credits the analysis of GEICO’s counsel and finds that service of the petition was improper, that complainant is not entitled to a de novo trial, that a demand for relief under Article 75 is untimely, and that, even if juricdiction had been established and the application was timely, the awards of the Arbitrator and Master Arbitrator have a sound basis in the record and are not irrational, capricious or an abuse of discretion. It is the finding of the Court that the arbitration process afforded the complainant due process and is supported by adequate evidence in the record and is not totally irrational. See, Gulf Stream Coach v DiSanto, 173 Misc 2d 242, 661 NYS2d 498 (Sup. Lawrence Co. 1997); Ianotti v Safari Motor Coaches, 255 AD2d 848, 638 NYS2d 839 (3rd Dept 1996).Based on the totality of the evidence presented, the Court finds that there clearly was a rational basis for the arbitral decision and that the arbitrator acted within her powers.

Therefore, as CPLR § 7511(e) directs that once the Court denies a motion to vacate an award it shall confirm the arbitration award, the Arbitration Award is affirmed. GEICO is directed to settle judgment, on notice.

All further requested relief not specifically granted is denied.

This constitutes the decision and order of the Court.

Dated: October 1, 2008

_________________________

WILLIAM R. LaMARCA, J.S.C.

TO:

mills-geico,#

01/art75

Supreme Court, Nassau County

14882/2007

F. Dana Winslow, J.

Motion by plaintiff for summary judgment is denied. Cross-motion by defendant for summary judgment dismissing the complaint is granted as to Donecker’s claim but denied as to the claim for treatment of Cretara.

This is an action by a health care provider to recover no fault benefits payable under automobile insurance policies issued by defendant. Plaintiff Westchester Medical Center asserts claims for medical treatment provided to Ernest Cretara and Gary Donecker.^[FN1]

Ernest Cretara

On April 21, 2007, Ernest Cretara was involved in an automobile accident. Cretara was transported to Westchester Medical Center, where he suffered a cardiac arrest. Cretara expired in the emergency room about four hours after being admitted to the hospital. An autopsy was performed by the medical examiner. Cretara had an automobile insurance policy issued by Progressive, and the insurer received notification of the accident the following day.

On April 24, 2007, Progressive received a copy of the MV-104A, or police accident report, pertaining to the incident(See defendant’s ex. 2A). Under “accident description,” the officer stated that Cretara was “uncertain how accident occurred.” The MV-104A contains 30 boxes along the sides and lower portion of the form for the officer to enter various “response [*2]codes,” which correspond to information concerning the accident.^[FN2] Box 16 indicates that the other driver was conscious, but Cretara was “semiconscious” following the accident. Box 19 indicates that Cretara’s disregard of a traffic control device was an “apparent contributing factor” which led to the accident.

On the same date which it received the accident report, Progressive sent Westchester Medical a form letter, requesting certified copies of Cretara’s admission history, discharge summary, radiology reports, laboratory test results, pathology reports, consult reports, nurse’s notes, and emergency room records. The letter contained a type-written notation stating, “Specifically, blood alcohol/drugs including any serum toxicology test results.” On April 24, Progressive also sent a letter to Cretara’s estate, requesting “complete” emergency room records, all laboratory test results, and the police report “to determine eligibility for benefits.” On May 1, 2007, Progressive sent Westchester Medical another copy of the April 24 letter, requesting the same documents. On May 1, Progressive also sent another letter to the estate, requesting an authorization to obtain the autopsy report.

On May 10, 2007, Progressive received a UB-92 form from Westchester Medical, itemizing various services and showing an estimated amount due of $17,022. The UB-92 form states that it is supplied as a “courtesy,” for use in determining the treatment and diagnosis “via the ICD-9 codes.” The UB-92 form states that it is not a “no fault bill,” but the NF-5 form is the “authorized no fault bill…with the proper DRG rate.” On that date, Progressive also received an NF-5 hospital facility form, requesting payment in the reduced amount of $3,730.59 for various procedures performed for Cretara. The NF-5 form also contained an assignment of benefits to the health care provider and stated that the patient’s signature was “on file.”

On May 16, 2007, Progressive sent Westchester Medical a verification request form, stating that “all benefits remain delayed pending receipt of complete emergency room records, and/or all laboratory test results, (which we have requested) to determine eligibility for benefits.” On May 23, 2007, Progressive received from Westchester Medical documents purporting to be the “complete medical record” of Ernest Cretara. The EMS report indicates that the patient stated that he had “a lot to drink” and there was an odor of alcoholic beverage on his breath. Based upon a review of the EMS report and emergency room records, Progressive determined that Cretara may have been intoxicated at the time of the accident.

On May 29, 2007, despite having received the “complete record,” Progressive sent Westchester Medical a duplicate copy of its April 24 letter, requesting certified copies of the documents. The letter was stamped, “Second Notice.” On the same date, Progressive also sent Cretara’s estate a duplicate copy of its prior letter, requesting emergency room records, lab tests, and the police report. The letter was similarly stamped “Second Notice.” On June 4, 2007, Progressive sent Westchester Medical a duplicate copy of the May 1 letter, requesting certified copies of the records and marked “Second Notice.” On June 4, Progressive also sent Cretara’s estate a duplicate copy of the May 1 letter, requesting an authorization for the autopsy report.

On June 8, 2007, Progressive sent Westchester Medical a separate verification request, [*3]stating that “all benefits remain delayed” pending receipt of an authorization for the autopsy report. On the same date, Progressive sent Cretara’s estate a letter, stating that the no fault claim was being considered under a “reservation of rights” because the insurer’s investigation indicated that alcohol or drug use may have been a factor contributing to the accident.^[FN3] On July 9, 2007, counsel for the estate wrote to Progressive, promising to forward a copy of the autopsy report “upon receipt.” On July 10, 2007, Progressive sent Westchester Medical a duplicate copy of the June 8 verification request which had requested an authorization for the autopsy report. The verification report was stamped, “Second Notice.” Neither Westchester Medical nor the estate has ever submitted an authorization for the autopsy report. Progressive has never paid or formally denied the claim.^[FN4]

Gary Donecker

Gary Donecker was involved in an automobile accident on July 25, 2006.

Donecker does not appear to have received any medical treatment immediately after the accident. On December 29, 2006, five months after the car accident, Donecker fell down a flight of stairs. Donecker was transported to Westchester Medical after he was found unconscious by EMS. The patient was diagnosed as having suffered a sub-dural hemorrhage and remained in the hospital until he died on January 7, 2007. Donecker had an automobile insurance policy issued by Progressive.

On March 12, 2007, Progressive received a UB-92 form from Westchester Medical, showing an occurrence date of December 29, 2006 and an estimated amount due of $109,555.60. The UB-92 form refers to treatment rendered to Donecker on December 29 and 31, 2006. Nevertheless, Progressive concedes that on March 12, it received notification that Donecker had been treated at Westchester Medical through January 7, 2007.

On March 15, 2007, Progressive sent Westchester Medical a verification request, stating that “all benefits remain delayed pending receipt of complete emergency room records, including all laboratory test results, to determine eligibility for benefits.” Among the ICD9 diagnosis codes listed on the verification request is 303.90, which refers to “unspecified drinking behavior, other and unspecified alcohol dependence.” On April 17, 2007, Progressive sent Westchester Medical a duplicate copy of the verification request, marked “Second Notice.”

On April 27, 2007, Westchester Medical mailed an NF-5 form to Progressive in the reduced amount of $13,357.28. The certified mail receipt indicates that the NF-5 was received by Progressive on April 30, 2007. The NF-5 form referred to an accident date of July 25, 2006 and an admission date of December 29, 2006. The form stated that the charges were for “treatment and observation for injuries due to motor vehicle accident.” The form also contained an assignment of benefits stating that the patient’s signature was “on file.”

Progressive received Donecker’s complete medical record from Westchester Medical on June 28, 2007. The court notes that under “history of present illness,” the discharge summary [*4]states that the patient had a “long history of alcohol abuse” and was a “victim of a fall down stairs.”

After reviewing the medical records, Progressive undertook to have the claim reviewed by an “independent peer reviewer,” Dr. Maria De Jesus, a neurologist. Dr. DeJesus reasoned that if Donecker had sustained a head injury severe enough to cause to a sub-dural hemorrhage, “it would have been addressed” at the time of the automobile accident. On July 23, 2007, Dr. De Jesus submitted a report to Crossland Medical Review Services, which was undertaking review of the claim on behalf of Progressive. Dr. DeJesus concluded that the hospitalization and treatment received from December 29, 2006 to January 7, 2007 was “not in any way causally related to the [motor vehicle] accident.” On July 27, 2007, Progressive denied Westchester Medical’s claim on the ground that Donecker’s treatment was not related to an automobile accident.

This action was commenced on August 22, 2007. Plaintiff seeks to recover the no fault claims as well as statutory attorney’s fees and interest at the rate of 2% per month(See Insurance Law § 5106[a]). Plaintiff is moving for summary judgment on the ground that the claims are overdue because Progressive failed to pay or deny the claims within 30 days of having received the required verification. Defendant cross moves for summary judgment dismissing the complaint, arguing that it has not received sufficient verification as to Cretara’s claim and Donecker’s claim was properly denied.

The no-fault reform law provides for prompt, uncontested first-party insurance benefits in order to partially eliminate common law personal injury suits arising from automobile accidents(Insurance Law § 5103[a]; Presbyterian Hospital v. Maryland Cas. Co., 90 NY2d 274, 285 [1997]). Under the statutory scheme, an insurer may exclude from coverage a person who is injured as a result of operating a motor vehicle while in an intoxicated condition or while his ability to operate the vehicle is impaired by the use of a drug(Insurance Law § 5103[b]).

To further the legislative objective of prompt payment, Insurance Law § 5106(a) provides

Payments of first party benefits and additional first party benefits shall be

made as the loss is incurred. Such benefits are overdue if not paid within

thirty days after the claimant supplies proof of the fact and amount of the loss

sustained. If proof is not supplied as to the entire claim, the amount

which is supported by proof is overdue if not paid within thirty days

after such proof is supplied.

Insurance Department regulations prescribe the method by which the insured is to supply proof as to the fact and amount of loss.

In lieu of a prescribed application for motor vehicle no-fault benefits submitted

by an applicant and a verification of hospital treatment (NYS Form N-F 4), an

insurer shall accept a completed hospital facility form (NYS Form N-F 5) (or

an N-F 5 and Uniform Billing Form (UBF-1) which together supply all the

information requested by the N-F 5) submitted by a provider of health

services with respect to the claim of such provider.

(11 NYCRR § 65-3.5[g]). Thus, a completed NF-5 form is sufficient proof as to the fact and amount of loss in order to submit a no fault claim. [*5]

After a completed NF-5, or other prescribed verification form, is received, an insurer may require additional verification to establish proof of claim. However, “any additional verification…shall be requested within 15 business days of receipt of the prescribed verification forms”(Id § 65-3.5[b]). The insurer is entitled to receive all items necessary to verify the claim “directly from the parties from whom such verification is requested”(Id § 65-3.5[c]). A timely request for additional verification extends the 30-day period in which the insurer must pay or deny the claim(Hospital for Joint Diseases v. Central Mutual Fire Ins. Co., 44 AD3d 903 [2d Dep’t 2007]).

If an insurer has reason to believe that the applicant was operating a motor vehicle while intoxicated or impaired by the use of a drug, and such intoxication or impairment was a contributing cause of the automobile accident, “the insurer shall be entitled to all available information relating to the applicant’s condition at the time of the accident. Proof of claim shall not be complete until the information…has been furnished to the insurer by the applicant or the authorized representative”(11 NYCRR § 65-3.8[g]). If the insurance company neither denies a claim within 30 days after receiving it nor extends the time by requesting verification, the insurer will be precluded from asserting the statutory exclusion defense of intoxication(Presbyterian Hospital v. Maryland Cas. Co., supra, 90 NY2d 283).

Cretara

Progressive sent its initial verification form concerning Cretara’s claim to Westchester Medical on May 16. The verification request was timely because it was sent within 15 business days of receipt of the NF-5 form on May 10, 2007. However, the initial verification form did not request an authorization for the autopsy report. The June 8 verification form did request an authorization for the autopsy report, but this verification request was not sent within 15 business days of receipt of the NF-5 form. Nevertheless, when Progressive received the complete medical record on May 23, 2007, it had reason to believe that Cretara was operating a motor vehicle while intoxicated and his intoxication was a contributing cause of the accident. Thus, the insurer was entitled to “all available information” relating to Cretara’s condition, provided the information had been timely requested from either the insured or the health care provider.

§ 65-3.8(g) provides that proof of claim is not complete until the insurer is furnished with “all available information” relating to the insured’s condition at the time of the accident. However, “available information” includes only information within the control of the health care provider or the insured, or information obtainable by those parties through reasonable effort. Thus, proof of claim is not complete until the insurer has received the records of a health care provider who rendered treatment which preceded that of the plaintiff(Westchester Medical Center v. Progressive Casualty Ins. Co., 46 AD3d 675 [2d Dep’t 2007]). However, analysis of the data bearing upon intoxication by the insurer’s own experts should not extend the time in which the insurer is required to process the claim(LaHendro v. Travelers Ins. Co., 220 AD2d 971 [3d Dep’t 1995]; But see Mirza v. Allstate Ins. Co., 185 AD2d 303 [2d Dep’t 1992]).

The court concludes that the autopsy report was “available information” which Progressive had timely requested from the insured’s estate. Thus, Progressive was entitled to the autopsy report before paying or denying Cretara’s claim. When medical examiners perform autopsies, their function is to impart objective information to “the appropriate authorities for the benefit of the public at large”(Lauer v. New York, 95 NY2d 95, 103 [2000]). While the office of [*6]the medical examiner is an independent agency(People v. Washington, 86 NY2d 189, 192 [1995]), its autopsy reports and other records are open to inspection by the district attorney of the county and may be obtained by other parties(County Law § 677 [3](b) and [4]).^[FN5]

The autopsy is available to the personal representative, spouse, or next of kin of the deceased upon an application to the medical examiner(County Law § 677(3)[b]). Upon proper application of any person who may be affected by the autopsy in a civil or criminal action, or upon application of any person having a substantial interest therein, an order may be made by a justice of supreme court that the autopsy be made available for inspection(Id). A hospital may have a substantial interest in obtaining the autopsy reports of patients who died at the hospital in order to improve the quality of care(Central General Hospital v. Lukash, 140 AD2d 113 [2d Dep’t 1988]).

A hospital which has a no fault claim for treatment of a deceased may have a substantial interest in obtaining the patient’s autopsy report, if no other forensic evidence of blood alcohol content is available. Since the affidavit of Sharon Shafi, a hospital billing clerk, establishes that Westchester Medical did not test Cretara’s blood alcohol content, the hospital had standing to seek an order for inspection of the autopsy report pursuant to County Law § 677.

As the no fault insurer, Progressive also a substantial interest in the autopsy report and is entitled to apply for an order of inspection. Nevertheless, under Insurance regulation § 65-3.5[c], Progressive was entitled to receive the autopsy report directly from the parties from whom it was requested, either Cretara’s estate or Westchester Medical. The court notes that while Cretara’s personal representative could have obtained the autopsy report from the medical examiner, the personal representative may have been reluctant to do so for fear of jeopardizing the no fault claim. Nonetheless, Westchester Medical might have encouraged the personal representative to obtain the autopsy report by seeking reimbursement for medical services from the estate. In any event, the court concludes that because Progressive has not received all available information relating to Cretara’s condition, it is not yet required to pay or deny the claim.

Plaintiff made a prima facie showing of entitlement to judgment as a matter of law with respect to Cretara’s claim by establishing defendant’s receipt of the requisite no fault billing forms and that neither payment nor a timely denial were made(Westchester Medical Center v. Progressive Casualty Ins. Co., supra, 46 AD3d at 675). However, since defendant has shown a triable issue as to whether Westchester Medical’s proof of claim as to Cretara is complete, plaintiff’s motion for summary judgment as to Cretara’s claim is denied.

The court now considers whether defendant has made a prima facie showing that Cretara was operating a motor vehicle while intoxicated and his intoxication was a contributing cause of the accident. An ambulance report may be admissible as a business record, and statements in the report taken as evidence of intoxication(Mercedes v. Amusements of America, 160 AD2d 630 [1st Dep’t 1990]). However, the statements in the ambulance report must be relevant to diagnosis and treatment of the patient’s condition, and the report must indicate that it was the patient who made the statements(Id). The statements in the EMS report about having a lot to drink were relevant to diagnosis and treatment of the injury which Cretara sustained in the accident. Since the [*7]statements were clearly made by Cretara, the EMS report is admissible on the issue of intoxication.

A police accident report describing the circumstances of the accident is also admissible as a business record to the extent that it is based upon the personal observations of the police officer present at the scene who was under a business duty to report accurately(Westchester Medical Center v. Progressive Casualty Ins. Co., supra, 46 AD3d at 675). The statement in the police report concerning Cretara’s state of semiconsciousness after the accident appears to have been based upon the personal observations of the officer. However, the statement that Cretara disregarded a traffic control device was apparently made by the other driver who had no business duty to make it. The statement that Cretara was semiconscious is consistent with the EMS report that Cretara had been drinking. However, because Cretara may have been rendered semiconscious by the collision, the statement does not of itself establish that his intoxication was a substantial factor contributing to the accident. Accordingly, defendant’s motion for summary judgment dismissing plaintiff’s no fault claim as to Cretara is denied. The claim will be held in abeyance pending an application by plaintiff to inspect the autopsy report.

Donecker

Since the verification request for Donecker’s claim was issued even before the NF-5 form was received on April 30, the verification request was clearly timely. When the complete medical record was received on June 28, Progressive had reason to believe that the medical treatment for which reimbursement was sought was related to Donecker’s fall rather than an automobile accident. While Donecker may indeed have been intoxicated when he fell down the stairs, there was no reason to believe that the injury arose out of negligence in the use or operation of a motor vehicle(Insurance Law § 5104[a]). Thus, Progressive was not entitled to “all available information” concerning Donecker’s condition either at the time of the fall or the motor vehicle accident(11 NYCRR § 65-3.8[g]). Although Progressive nonetheless sent the claim for independent peer review, it denied the claim 29 days after the medical records were received. As the 30-day period does not begin to run until the hospital responds to the verification request, the court concludes that the denial of the claim was timely(New York & Presbyterian Hospital v. Progressive Casualty Ins. Co, 5 AD3d 568 [2d Dep’t 2004]). Since plaintiff has not established prima facie entitlement to judgment as a matter of law, plaintiff’s motion for summary judgment as to Donecker’s claim is denied.

Where a person’s injuries are produced by an instrumentality other than an insured motor vehicle, no fault first-first party benefits are not available(Walton v. Lumbermen’s Mutual Casualty Ins. Co., 88 NY2d 211 [1996]). Based on the report of Dr. DeJesus, defendant has established prima facie that Donecker’s injuries were produced by his fall down the stairs. Thus, the burden shifts to plaintiff to establish a triable issue as to whether a motor vehicle was the instrumentality which caused Donecker’s injury(Alvarez v. Prospect Hospital, 68 NY2d 320, 324 [1986]).

In response, plaintiff has submitted a conclusory affidavit from a hospital billing clerk that, “The patient’s treatment was related to injuries sustained in a motor vehicle accident on July 25, 2006.” When taking a medical history from a patient who has sustained head injury, it may be proper medical practice to inquire as to prior instances of trauma. Thus, the doctor who was treating Donecker’s sub-dural hemorrhage may in fact have been aware that he had been in an [*8]automobile accident. Nevertheless, absent evidence as to the circumstances of the prior accident and expert testimony relating it to the patient’s condition, there is no basis for the court to infer that the motor vehicle accident may have been a substantial factor contributing to Donecker’s injury. Defendant’s motion for summary judgment dismissing the no fault claim as to Donecker’s treatment is granted.

This constituted the Order of the Court.

Dated: February 28,2008ENTER:

_________________________________

J.S.C.

Footnotes

Footnote 1:The complaint also contains a no fault claim asserted by Wyckoff Medical Center for treatment of Emin Huremovic and a claim by New York Medical Center of Queens for treatment of Syed Ali. Since the claims of Wyckoff and New York Medical have been paid, those claims have been withdrawn.

Footnote 2:Defendant has not supplied MV-104AC, the form which explains the response codes. However, the form is available at the Dept. of Motor Vehicles website, www.nydmv.state.ny.us.

Footnote 3:The letter stated that, unlike no fault coverage, “medical payments coverage” did not contain an exclusion for alcohol or drug use.

Footnote 4:The “reservation of rights” letter does not constitute a denial of the claim(See Blee v. State Farm Mutual Automobile Ins. Co., 168 AD2d 615 [2d Dep’t 1990]).

Footnote 5:The records of the medical examiner must be delivered to the district attorney, if there is any indication that a crime had been committed(County Law § 677[4]).

Supreme Court, Nassau County

016185/07

TO:Joseph Henig, P.C.

Attorney for Plaintiff

1598 Bellmore AvenueP.O. Box 1144

Bellmore, NY 11710

Law Office of Teresa M. Spina

Attorney for Defendant

170 Froehlich Farm Boulevard

Woodbury, NY 11797

Daniel Palmieri, J.

This is plaintiffs’ motion for summary judgment pursuant to CPLR §3212.

Plaintiffs provided first-party no-fault benefits to persons covered by policies of insurance issued by defendant.

Plaintiff has withdrawn its cause of action on the First Cause of Action on behalf of Antoinette Pisacane.

The Second Cause of Action is for statutory interest and attorney’s fees based on late payment. Defendant does not dispute that the examination under oath of the injured party was on September 17, 2007, meaning that payment was due within 30 days and that payment was sent on October 29, 2007. Hence, summary judgment is appropriate for the statutory interest if any is still due and legal fees demanded by the complaint. 11 NYCRR §65-3.10(a).

The Third Cause of Action is based upon the claim of Latoya Fuller who was treated between February 3 and 8, 2007 and billed on July 2, 2007. Defendant did not pay or deny this bill because it claims that it had reasonable cause to believe that the treatment by plaintiff was the result of an intentional act. In support of this contention, defendant relies on an entry in its computer records which states that GEICO’s insured told defendant that there was an altercation involving the “PH” (no definition is given of PH) and other females. “Someone [*2]opened her door while the vehicle was moving and tried to hit her with something”. “She was in an altercation with a group of females”.

Defendant also relies on an entry in Fuller’s emergency room record which states “pt was standing holding car door – had altercation with driver – reversed, then took off, pt hit by car door fell forward”.

Summary judgment is the procedural equivalent of a trial. S.J. Capelin Assoc. Inc. v Globe Mfg. Corp., 34 NY2d 338, 341 (1974). The function of the court in deciding a motion for summary judgment is to determine if triable issues of face exist. Matter of Suffolk Cty Dept of Social Services v James M., 83 NY2d 178, 182 (1994). The proponent must make a prima facie showing of entitlement to judgment as a matter of law. Guiffrida v Citibank Corp., 100 NY2d 72, 82 (2003); Alvarez v Prospect Hosp., 68 NY2d 320, 324 (1986). Once a prima facie case has been made, the party opposing the motion must come forward with proof in evidentiary form establishing the existence of triable issues of fact or an acceptable excuse for its failure to do so. Zuckerman v City of New York, 49 NY2d 557, 562 (1980).

In an action for no-fault payments the plaintiff makes a prima facie showing of entitlement to judgment by submitting evidentiary proof that the prescribed statutory billing forms had been mailed and received, and that payment of the No-Fault benefits was overdue. Insurance Law 5106(a); Westchester Medical Center v AIG, Inc., 36 AD3d 900 (2nd Dept. 2007). On this motion plaintiffs argue that they have presented a prima facie case for payment of no-fault benefits for services rendered to Fuller. They have submitted the requisite billing forms, certified mail receipts, signed return receipt cards, and an affidavit from a billing person stating that she personally mailed the claims. There is no dispute that Geico failed to pay or deny the claims within 30 days. On this record the Court finds that plaintiffs have presented a prima facie case.

In opposition Geico relies upon its affirmative defense that the incident which caused the injury was not covered by its policy because it was intentional.

Pursuant to Insurance Law 5106(a), no-fault benefits are overdue if not paid by the insurer within 30 days after submission of proof of loss. See also, 11 NYCRR 65-3.8, formerly 11 NYCRR 65.15(g)(3). The insurer is precluded from asserting any defenses to payment when it fails to deny the claim within the required 30-day period. Presbyterian Hosp. in the City of New York v Maryland Casualty Co., 90 NY2d 274, 278 (1997). A narrow exception to this preclusion rule is recognized for situations where the insurer raises a defense of lack of coverage. Central General Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 198 (1997).

A defense premised on lack of coverage has been found not subject to the rigorous 30-day rule because there was, in fact, no “accident.” See, Matter of Allstate Ins. Co v Massre, 14 AD3d 610 (2nd Dept. 2005); State Farm Mutual Automobile Ins. Co. v Laguerre, 305 AD2d 490 (2nd Dept. 2003); Metro Medical Diagnostics, P.C. v Eagle Ins. Co., 293 AD2d 751 (2nd Dept. 2002); see also, VA Acutherapy Acupuncture, P.C. v State Farm Ins. Co., 16 Misc 3d 126(A)(App Term, 2nd & 11th Jud Dists 2007) and Vista Surgical Supplies [*3]Inc v State Farm Ins. Co., 14 Misc 3d 135(A)(App Term, 2nd & 11th Jud Dists 2007).

To avail itself of the benefit of this noncoverage, the insurance carrier must demonstrate that an issue exists as to whether there was any coverage at all.

In this case, even assuming that the defense of lack of coverage is available despite lack of denial of the claim, the defendant is not relieved of its burden of demonstrating the existence of triable issues of fact. This defendant has failed to do.

The two documents relied upon by defendant are not sufficient to raise a question of fact.

The cryptic and virtually unintelligible entry of the defendant’s conversation with the owner of the vehicle is inadmissible hearsay. It is not a business record because the source of the information was under no business duty convey her knowledge CPLR §4518(a) Hochhauser v. Electric Ins. Co., 46 AD3d 174 (2d Dept. 2007), and it does not constitute an admission because the informant is not a party to this action. Prince-Richardson on Evidence §8-201 (11th Edition 1995).

The emergency room record also fails to establish an issue of fact. The entry does not disclose the source of the information and is not relevant to diagnosis or treatment Berrios v. TEG Management Corp., 35 AD3d 775 (2d Dept. 2006); Passino v. DeRosa, 199 AD2d 1017 (4th Dept. 1993), Gunn v. City of New York, 104 AD2d 848 (2d Dept. 1984); Cf People v. White, 306 AD2d 886 (4th Dept. 2003).

Hence although a noncovered event may be proffered as a defense, in this summary judgment motion defendant has failed to come forward with any competent evidence to support its contention and thus the motion is granted.

Based on the foregoing the First Cause of Action is withdrawn, judgment is granted in favor of the plaintiff for legal fees and interest, if any, as to the Second Cause of Action (Wallace) and summary judgment is granted as to the Third Cause of Action (Fuller).

This shall constitute the Decision and Order of this Court.

E N T E R

DATED: February 25, 2008

_____________________________

Hon. Daniel Palmieri

Acting Supreme Court Justice

TO:Joseph Henig, P.C.

Attorney for Plaintiff

1598 Bellmore Avenue

P.O. Box 1144

Bellmore, NY 11710

Law Office of Teresa M. Spina

Attorney for Defendant [*4]

170 Froehlich Farm Boulevard

Woodbury, NY 11797