650105/2019

Larkin Farrell LLC, New York, NY (William Larkin of counsel), for plaintiff.

Law Offices of Gary Tsirelman P.C., Brooklyn, NY (Jung Pryjma of counsel), for defendant City Wide Health Facility Inc.

The following e-filed documents, listed by NYSCEF document number (Motion 002) 46, 47, 48, 49, 50, 51, 52, 53, 54, 55 were read on this motion to/for SUMMARY JUDGMENT.

This motion concerns the potential obligation to pay no-fault insurance benefits of plaintiff American Transit Insurance Company. Defendant Marsillant Wildex was in a vehicle that was involved in a collision. The vehicle was covered by a no-fault insurance policy issued by American Transit. Wildex assigned the right to collect no-fault benefits under that policy to various treating medical providers, including defendant City Wide Health Facility Inc. City Wide applied for no-fault benefits, which American Transit denied.

American Transit brought this action for a declaratory judgment that it is not required to pay no-fault benefits to Wildex or to the other defendants (all medical-provider assignees of Wildex). City Wide was the only defendant that appeared in the action. American Transit moved for default judgment under CPLR 3215 against Wildex and the other non-appearing defendants.

This court granted the default-judgment motion without opposition. The court issued a declaration that Wildex and the non-appearing providers “are not entitled to no-fault benefits as a result of a motor vehicle accident involving Marsillant Wildex . . . due to Marsillant Wildex’s failure to appear for duly scheduled independent medical examinations.” (NYSCEF No. 39 at 2-3 [capitalization omitted].) The court also severed and continued the action as against City Wide. (See id. at 3.)

American Transit now moves for summary judgment under CPLR 3212 against City Wide. The motion is denied.

DISCUSSION

American Transit argues that because City Wide is Wildex’s assignee, City Wide’s claim for benefits is derivative of Wildex’s rights under the no-fault policy—and thus that the default judgment against Wildex ousted City Wide’s right to claim benefits. This court disagrees. Decades ago, the Appellate Division held that when an assignment of no-fault benefits is made prior to the institution of legal action, a decision on default against the assignor does not bar the [*2]assignee from asserting a claim to no-fault benefits. (See Lakeside Hosp. v Government Empls. Ins. Co., 70 AD2d 658, 658 [2d Dept 1979], citing Gramatan Home Inv. Corp. v Lopez, 46 NY2d 481, 486-487 [1979].)

To be sure, in Lakeland Hospital the court noted that the assignee was not a party to the prior arbitration. Here, as American Transit points out, City Wide is a party defendant. But although City Wide is a party to this action, it was not a party to the prior motion. To the contrary, American Transit’s motion papers expressly stated that “[n]o relief is sought at this time with respect to” City Wide. (NYSCEF No. 27 at 2.) This court’s prior order in this action, although it “awarded a default judgment to [American Transit] against [City Wide’s] assignor . . . did not declare the rights of [American Transit] as against [City Wide].” The default-judgment order thus does not have preclusive effect on the current summary-judgment motion. (Jamaica Wellness Medical, P.C. v Mercury Casualty Co., 2018 NY Slip Op 51128[U], at *2 (App Term 2d Dept 2018]; accord Ultimate Health Prods., Inc. v Ameriprise Auto & Home, 57 Misc 3d 9, 11 [App Term 2d Dept 2017].)

American Transit argues that the grant of default judgment against Wildex had the effect of declaring that the no-fault policy was void, leaving Wildex without any claim to benefits that he could have assigned to City Wide in the first place. But the judgment that American Transit requested from this court, and which this court entered, did not reach so far. As noted above, the default judgment merely declared that Wildex (and the other non-appearing defendants) are not entitled to benefits, without going on to declare that the no-fault policy itself was void. (See NYSCEF No. 39 at 2-3.) In any event, in Lakeland Hospital, the arbitration decision entered on the assignor’s default sustained the insurer’s argument that the assignor had no claim to benefits as a result of her no-fault policy having been canceled outright prior to the occurrence—and thus prior to any assignment—for nonpayment of premiums. (See 70 AD2d at 658.) The Second Department nonetheless held that this prior arbitration decision did not preclude the assignee from claiming a right to benefits. (See id.)

American Transit thus is not entitled to summary judgment against City Wide based merely on this court’s prior default-judgment order against Wildex.

Whether American Transit is Entitled to Summary Judgment on the Merits

Alternatively, American Transit argues that Wildex’s failure to appear for scheduled independent medical examinations (IMEs) defeats coverage under the no-fault policy, and thus forecloses City Wide’s claim to benefits. This court is not persuaded.

A no-fault insurer seeking a declaration of no coverage due to asserted violations of the terms of the policy must first demonstrate that it complied with each of the procedural and timeliness requirements of 11 NYCRR § 65-3.5, governing the handling of no-fault claims. (See American Transit Ins. Co. v Longevity Med. Supply, Inc., 131 AD3d 841, 841 [1st Dept 2015].) One such requirement is that if the insurer requests additional verification of a no-fault claim in the form of an IME, the IME must be scheduled to occur “within 30 calendar days from the date [*3]of receipt of the prescribed verification forms.” (11 NYCRR § 65-3.5 [d].) American Transit has not shown that it satisfied this 30-calendar-day timeframe. To the contrary, the documents submitted by American Transit indicate that the first IME was scheduled to be held 43 days after the date of the scheduling notice itself. (See NYSCEF No. 48 at 20.) Given this failure of proof, American Transit has not satisfied its initial prima facie burden at summary judgment. (See Longevity Medical Supply, 131 AD3d at 841.)^[FN1]

American Transit argues that these deadlines apply only to “medical examinations that are necessary to determine if [a] particular claim should be paid,” as opposed to “being scheduled for a more broad reason, ie to determine, generally, if the claimant needs future treatment.” (NYSCEF No. 54 at 12-13.) Even assuming for the sake of argument that this interpretive argument is correct, it does not avail American Transit here.

The record evidence on this motion reflects only that American Transit received Wildex’s NF-2 benefits application on July 31, 2017 (see NYSCEF No. 48 at 11-14 [mailroom stamp and date/time footer]), and prepared an IME scheduling notice 16 days later, on August 16, 2017 (see id. at 20). That short time period itself suggests a connection between Wildex’s initial benefits claim and the scheduling of an IME. More fundamentally, there is no record evidence indicating any other purpose for holding the IME that could even potentially take that IME out of the scheduling framework of 11 NYCRR § 65-3.5 (b) through (d).

Accordingly, for the foregoing reasons it is hereby

ORDERED that American Transit’s motion under CPLR 3212 for summary judgment in its favor as to defendant City Wide is denied.

Defendants.

8/21/2020

Footnotes

Footnote 1:In arguing that it could deny no-fault coverage due to Wildex’s failure to appear for IMEs even if those IMEs were not timely scheduled (see NYSCEF No. 54 at 5-10), American Transit does not mention the First Department’s decision in Longevity Medical Supply.

Index No. 161280/2018

The Law Office of Daniel J. Tucker, Brooklyn, NY (R. Jacob Lamar of counsel), for plaintiff.

The Rybak Law Firm, PLLC, Brooklyn, NY (Oleg Rybak of counsel), for defendants Acupuncture Now, P.C., Healthway Medical Care, P.C., Jules Francois Parisien, M.D., and SB Chiropractic, P.C.

This motion concerns plaintiff’s potential obligation to pay no-fault insurance benefits. Defendant Elvina Bookman was a passenger in a vehicle that was involved in a collision. The vehicle was covered by a no-fault insurance policy issued by plaintiff American Transit Insurance Company. Bookman applied for no-fault benefits, which American Transit denied.

In this action, American Transit seeks a declaratory judgment that it is not required to pay no-fault benefits to Bookman or to the other defendants (medical providers acting as Bookman’s assignees). American Transit now moves for summary judgment on this claim under CPLR 3212 as against those defendants who have appeared in the action, and moves for default judgment under CPLR 3215 as against the remaining, non-appearing defendants. The motion is denied.

A no-fault insurer seeking a declaration of no coverage due to asserted violations of the terms of the policy must first demonstrate that it complied with each of the procedural and timeliness requirements of 11 NYCRR § 65-3.5, governing the handling of no-fault claims. (See American Transit Ins. Co. v Longevity Med. Supply, Inc., 131 AD3d 841, 841 [1st Dept 2015].) American Transit has not satisfied that requirement here.

Section 65-3.5 provides among other things that once an insurer receives a claim for benefits, the insurer has 10 business days to provide the claimant with the forms that it requires for verification of the claim. (See 11 NYCRR § 65-3.5 [a].) Once the insurer receives the completed verification forms, it then has 15 business days to request further verification, such as an examination under oath. (See id. § 65-3.5 [b].)

Here, the record reflects that American Transit received an NF-2 benefits application form from Bookman on August 2, 2018. And the record reflects that American Transit requested on August 28, 2018, that Bookman appear for an examination under oath. Yet nothing in the record (whether in the form of an affidavit or documentary evidence) might establish when American Transit sent the necessary verification forms to Bookman, or when American Transit received the completed verification forms back from Bookman. Absent that information, American Transit has failed to satisfy all the elements of its claim for declaratory relief.

American Transit thus is not entitled to summary judgment under CPLR 3212 against the answering defendants. Similarly, to obtain a default judgment against the non-appearing defendants American Transit is required to provide proof (such as an affidavit) of all the facts necessary to establish its prima facie entitlement to relief. (See CPLR 3215 [f]; Matter of Dyno v Rose, 260 AD2d 694, 698 [3d Dept 1999].) American Transit has not met that requirement here, and thus is not entitled to default judgment, either.

Accordingly, it is hereby

ORDERED that the branch of American Transit’s motion seeking summary judgment under CPLR 3212 against the answering defendants is denied; and it is further

ORDERED that the branch of American Transit’s motion seeking default judgment under CPLR 3215 against the non-appearing defendants is denied.

Date: 5/27/20

Index No. 156945/2016

Goldberg, Miller & Rubin, P.C., New York, NY (Harlan R. Schreiber and Timothy R. Bishop of counsel), for plaintiff.

Economou & Economou, P.C., Syosset, NY (Ralph C. Caio of counsel), for defendant.

This motion concerns whether plaintiff Unitrin Advantage Insurance Company must pay approximately $12,000 in no-fault insurance benefits to defendant Andrew J. Dowd, M.D. (plus interest and attorney fees), for two surgeries Dr. Dowd performed in 2011.

BACKGROUND

Several individuals (nonparties in this action) allegedly suffered a collision while in a vehicle covered by a no-fault insurance policy issued by Unitrin. One individual, Quente Wright, was treated by Dr. Dowd. In July 2011, Dr. Dowd operated on Wright. Dowd submitted a benefits claim to Unitrin for that surgery (for $5,943.59), which Unitrin received on August 1, [*2]2011. In September 2011, Dowd performed a second surgery on Wright, and submitted a second claim to Unitrin (for $6,106.56), which Unitrin received on October 7, 2011.

Unitrin was skeptical that Wright had been involved in a legitimate, rather than staged, collision. It was similarly skeptical that Wright had sustained any injuries requiring surgery. On September 22, 2011, Unitrin mailed to Dr. Dowd a request that he appear for an examination under oath (EUO) to answer questions about the medical necessity of the first surgery. The EUO was scheduled for October 6, 2011. Dr. Dowd did not appear for the EUO. Unitrin sent him a second letter, on October 11, 2011, requesting that he appear for a rescheduled EUO on October 25. Dowd again did not appear. Unitrin denied Dowd’s benefits claims for both surgeries based on his repeated failure to appear for an EUO.

Dr. Dowd disputed Unitrin’s denial of his claims for benefits. That dispute has a somewhat lengthy and involved procedural history that is not relevant here. What matters now is that in the current action, Unitrin is seeking a declaratory judgment that Dr. Dowd is not entitled to benefits. Dowd moves for summary judgment under CPLR 3212. He argues that he has established as a matter of law that he properly submitted claims for medical services rendered and that Unitrin failed to issue a timely denial of those claims. Unitrin cross-moves for summary judgment under CPLR 3212. According to Unitrin, Dr. Dowd failed to appear for a timely and properly scheduled EUO about the services that he claimed to have provided. Unitrin argues that it therefore properly denied the two claims

As to the benefits claim relating to the first surgery, Dr. Dowd’s motion is granted, and Unitrin’s cross-motion is denied. As to the benefits claim relating to the second surgery, Dr. Dowd’s motion is denied, and Unitrin’s cross-motion is granted.

DISCUSSION

A provider of medical services can establish a prima facie showing of entitlement to summary judgment by submitting admissible proof that the requisite claim forms were mailed and received by the carrier and that the payment is overdue. (See Insurance Law § 5106 [a]; New York & Presbyterian Hosp. v Countrywide Ins. Co., 44 AD3d 729, 843 [2d Dept 2007].) Here, Unitrin does not contest that it received the requisite claim forms from Dr. Dowd or that the claims remain unpaid. Unitrin argues instead that Dowd is not entitled to benefits because he, as Wright’s assignor, violated the terms of the applicable no-fault policy by failing to appear for an EUO upon request.

A no-fault insurer seeking a declaration of no coverage due to asserted violations of the terms of the policy must first demonstrate that it complied with each procedural and timeliness requirement of 11 NYCRR § 65-3.5, governing the handling of no-fault claims. (See American Transit Ins. Co. v Longevity Med. Supply, Inc., 131 AD3d 841, 841 [1st Dept 2015].) Among other things, § 65-3.5 provides that once an insurer receives the verification forms for a pending claim for benefits, the insurer then has 15 business days to seek further verification—for example, through requesting a claimant to appear for an EUO. (See id. § 65-3.5 [b]; Unitrin Advantage Ins. Co. v All of NY, Inc., 158 AD3d 449, 449 [1st Dept 2018].) A claimant’s failure [*3]without reasonable cause to appear for a timely and properly scheduled EUO is grounds to deny coverage.

Here, Unitrin does not seriously contest that its EUO requests were untimely as to the first surgery: The first request was mailed out on September 22, 2011, well beyond the 15-day period following Unitrin’s August 1 receipt of the benefits claim for the first surgery. Unitrin argues, though, that the EUO requests were timely as to the second surgery—and that Dr. Dowd’s failure to appear for an EUO means that Unitrin is entitled to deny benefits for both surgeries. This court disagrees.

To be sure, Unitrin’s starting premise is correct: A no-fault insurer may properly request an individual covered by no-fault insurance to appear for an EUO prior to receiving that individual’s benefits claim; and the insurer may properly deny benefits if the individual does not appear as requested. (See Mapfre Ins. Co. of NY v Manoo, 140 AD3d 468, 469 [1st Dept 2016].) But Unitrin’s conclusion does not follow. Where a claimant (such as a medical provider) submits multiple claims for benefits, and the insurer’s EUO request is timely as to some of those claims and untimely as to others, the insurer is entitled to deny coverage only as to those claims for which it timely requested verification—not as to all claims. (See All of NY, 158 AD3d at 449-450.)

This court is not persuaded by Unitrin’s contrary argument. Unitrin contends that in Hertz Vehicles, LLC v Alluri (171 AD3d 432 [1st Dept 2019]), the insurer had submitted one claim for which there was an untimely EUO request and one claim for which there was a timely request, which (assertedly) led both Supreme Court and the First Department to hold that the insurer could deny all claims retroactive to the date of loss. This contention has two key shortcomings.

First, neither the trial nor appellate decisions in Alluri actually say that where an EUO request is timely only as to one out of two claims (and then not complied with), the insurer can properly deny benefits as to both claims. Instead, each decision refers only to one claim for benefits, for which the insurer’s EUO request had been timely under Manoo. (See Hertz Vehs. v Alluri, 2017 NY Slip Op 32578 [U], at *3-*4 [Sup Ct, NY County Dec. 11, 2017]; Alluri, 171 AD3d at 432.)

Second, if the First Department had held in Alluri that one timely EUO request entitles an insurer to deny benefits even as to claims for which an untimely request had been made, that holding would have been inconsistent with the Court’s ruling the year before in All of NY Yet Alluri does not discuss, or even mention, All of NY Rather, Alluri relies on Manoo (see 171 AD3d at 432); and the holding in Manoo is premised on the Court’s conclusion that the insurer had “establish[ed] that it timely and properly mailed the notices for EUOs” to the covered individual. (140 AD3d at 469.)

Unitrin also points to the First Department’s statement in Unitrin Advantage Ins. Co. v Bayshore Phys. Therapy, LLC that “when defendants’ assignors failed to appear for the requested [medical examinations], plaintiff had the right to deny all claims retroactively to the date of loss.” ((82 AD3d 559, 560 [1st Dept 2011] [emphasis added]). But even Bayshore itself notes [*4]that the insurer there met its burden to “establish[] that it requested [medical examinations] in accordance with the procedures and time-frames set forth in the No—Fault implementing regulations.” (Id.; see also American Transit Ins. Co. v Longevity Med. Supply, Inc., 131 AD3d 841, 842 [1st Dept 2015] [emphasizing this point].) And it would be odd to say, in effect, that an insurer can still deny a benefits claim due to a claimant or assignor’s failure to appear at an EUO despite failing to timely or properly request the EUO after receiving that claim. Regardless, to the extent that a contradiction does exist between the First Department’s holdings in Bayshore and in All of NY, this court must follow the First Department’s most recent holding on the subject. (See Vaughan v Leon, 94 AD3d 646, 649 n 2 [1st Dept 2012].)

Unitrin’s EUO request upon receipt of the first claim was untimely. This court concludes, therefore, that Unitrin may not deny Dr. Dowd’s otherwise-sufficient claim for benefits from the first surgery based on Dowd’s failure to appear for an EUO.

That still leaves the claim for benefits from the second surgery. Under Manoo and Alluri, Unitrin’s EUO request was timely as to the second benefits claim—particularly since a key subject for questions at the EUO, namely the medical necessity of surgery on Quente Wright, would have been the same for both benefits claims. Dr. Dowd asserts, though, that the EUO request was improper: It did not sufficiently identify from whom Unitrin was seeking an EUO. This court disagrees. Unitrin has produced two EUO request letters that plainly request the appearance for an EUO of a principal from Dr. Dowd’s medical practice (i.e., either Dr. Dowd himself or someone with comparable authority), and also specify the subjects to be discussed at the EUO and the EUO’s time and place. Dr. Dowd does not contest that these letters were properly mailed. Nor does he contest that he failed to appear as requested. That is sufficient to establish that Dr. Dowd failed to comply with a requirement of the applicable no-fault insurance policy in this case as to his second claim for benefits.

Accordingly, it is hereby

ORDERED that the branch of Dr. Dowd’s motion under CPLR 3212 seeking summary judgment as to his claim for benefits in the amount of $5,943.59 (received by Unitrin on August 1, 2011) is denied; and it is further

ORDERED that the branch of Unitrin’s cross-motion under CPLR 3212 seeking summary judgment as to Dr. Dowd’s claim for benefits in the amount of $5,943.59 (received by Unitrin on August 1, 2011) is granted; and it is further

ADJUDGED AND DECREED that Unitrin owes no duty to pay Dr. Dowd that claim for benefits; and it is further

ORDERED that the branch of Dr. Dowd’s motion under CPLR 3212 seeking summary judgment as to his claim for benefits in the amount of in the amount of $6,106.56 (received by Unitrin on October 7, 2011) is granted; and it is further

ORDERED that the branch of Unitrin’s cross-motion under CPLR 3212 seeking [*5]summary judgment as to Dr. Dowd’s claim for benefits in the amount of $6,106.56 (received by Unitrin on October 7, 2011) is denied; and it is further

ADJUDGED AND DECREED that Dr. Dowd shall have judgment against Unitrin in the amount of $6,106.56; plus interest on that sum at 2% per month, running from November 6, 2012, until the entry of judgment; plus attorney fees as provided for under Insurance Law § 5106 (a) and 11 NYCRR § 65-4.6; and it is further

ORDERED that Dr. Dowd shall serve a copy of this order with notice of its entry on all parties and on the office of the County Clerk, which shall enter judgment accordingly; and it is further

ORDERED that notice of entry may be served by mail or overnight delivery service, with Dr. Dowd to e-file a copy of notice of entry (and accompanying affidavit(s) of service) on NYSCEF once filing of notices of entry in pending nonessential matters is again permitted by order of Chief Administrative Judge Lawrence Marks.

Date: 5/21/20

Index No. 156465/2018

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

Law Offices of Dino R. Dirienzo, Syosset, NY (Ralph C. Caio of counsel), for defendants MII Supply, LLC,. Dynamic Surgery Center, LLC, Comprehensive Medical Assist, P.C., and Citimed Services, P.A.

The following e-filed documents, listed by NYSCEF document number (Motion 001) 39, 40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 52, 53, 54, 55, 56, 57, 58, 59, 60, 61, 62, 63, 64, 65 were read on this motion for SUMMARY JUDGMENT

In this motion, plaintiff American Transit Insurance Company requests a declaratory judgment that it is not required to pay no-fault benefits to the various medical-provider defendants. American Transit seeks summary judgment under CPLR 3212 against certain answering defendants and default judgment under CPLR 3215 against the remaining defendants. This motion, however, is not properly before this court, because American Transit’s action has already been dismissed. The motion is denied.

This action was dismissed in May 2019 under 22 NYCRR § 202.27 due to American Transit’s failure twice to appear at scheduled preliminary conferences. American Transit never moved to vacate that default dismissal. Indeed, American Transit’s papers on the present motion do not even acknowledge that this action was previously dismissed, much less seek to offer a reasonable excuse for American Transit’s default. This court is disinclined to deem this motion to be somehow an implicit request for vacatur of the dismissal of the action.

This court’s reluctance is only heightened by the fact that American Transit’s motion is not based on admissible evidence. American Transit claims that it has good reason to believe that the underlying automobile collision in this case was staged, and therefore not an insurable [*2]incident. (See Central Gen. Hosp. v Chubb Grp. of Ins. Cos., 90 NY2d 195, 199 [1997].) But the evidence that American Transit identifies as the basis for this conclusion is a summary report that is neither sworn nor notarized, as required for it to qualify as a non-hearsay affidavit. (See NYSCEF No. 50 at 2-7.) As a result, this court could not rely on the report as a basis to vacate the dismissal of the action. (See Harris v Krauss, 87 AD3d 469, 469 [1st Dept 2011] [reversing grant of motion to vacate under CPLR 5015, where moving papers relied on evidence in a putative affidavit that had not been properly notarized].)

Thus, even if this court were to construe the present motion liberally as an application to vacate this court’s prior dismissal of this action on default—and this court declines to do so— American Transit would still fail to establish its entitlement to relief.

Accordingly, it is hereby

ORDERED that American Transit’s motion is denied.

Date: 5/13/20

Index No. 159037/2018

Law Offices of Daniel J. Tucker, Brooklyn NY (Megan Harris of counsel), for plaintiff.

Law Offices of Gabriel & Shapiro LLC, Rockville Centre, NY (Joseph Padrucco of counsel), for defendant Janan S. Syed, DC.

This motion concerns the potential obligation to pay no-fault insurance benefits of plaintiff American Transit Insurance Company. Nonparty Tynise Watson was a passenger in a vehicle that was allegedly involved in a collision. The vehicle was covered by a no-fault insurance policy issued by American Transit. Various medical providers applied for no-fault benefits as assignees of Watson, which American Transit denied.

In this action, American Transit seeks a declaratory judgment that it is not required to pay no-fault benefits to the various medical provider defendants. American Transit now moves for summary judgment under CPLR 3212 against defendant Janan S. Syed, DC, and moves for default judgment under CPLR 3215 against the properly served and non-appearing defendants [*2]who remain in the action.

American Transit’s motion for summary judgment and for default judgment is denied.

DISCUSSION

Both branches of American Transit’s motion rely on the same legal theory and supporting evidence. American Transit contends, in essence, that it has good reason to believe that the collision putatively giving rise to Watson’s need for medical treatment was staged, which is a proper ground for denying coverage.

A no-fault insurer seeking a declaration of no coverage based on a conclusion that the underlying collision was staged must establish as a “fact or founded belief that the alleged injury does not arise out of an insured incident.” (Central Gen. Hosp. v Chubb Grp. of Ins. Cos., 90 NY2d 195, 199 [1997].) Here, American Transit submits an affidavit from a claims investigator familiar with the case to support its conclusion that the collision was not genuine. That affidavit, however, is insufficient to meet American Transit’s burden. The affidavit’s account of the circumstances of the accident—and thus the various “red flag” indicators of a staged collision—it is based largely on inadmissible evidence, namely a police accident report and the unsigned transcript of Watson’s examination under oath (EUO).

A police accident report is admissible as a business record if, when prepared, it was based on the preparing officer’s personal observations at the scene, or if the information in the report came from an eyewitness with a business duty to report to the officer. (See Pena v. Slater, 100 AD3d 488, 489 [1st Dept 2012]; State Farm Mut. Auto Ins. Co. v Langan, 18 AD3d 860, 862 [2d Dept 2005].) Here, however, the police report states expressly that the preparing officer did not witness the underlying collision at issue (see NYSCEF No. 13, at 3); indeed, the report appears to indicate that the officer was not present at the scene at the time she investigated the circumstances of the collision (see id. at 1). Nor does American Transit attempt to establish that the occupants of the vehicle (the presumptive sources of the information in the report) were under a business duty to report to the investigating officer. The police report here is thus inadmissible for the hearsay purpose for which American Transit seeks to use it: establishing as fact the circumstances under which the alleged collision occurred. (See Jupa v Zaidi, 309 AD2d 606, 607 [1st Dept 2003]; accord Langan, 18 AD3d at 862.)

The affidavit of American Transit’s investigator also draws heavily on Watson’s EUO transcript. But that transcript is not signed or notarized. (See NYSCEF No. 14 at 76.) And although the transcript itself suggests that American Transit intended to send a copy of the transcript to Watson to review, sign, notarize, and return (see id.), American Transit has not met its burden to establish that it actually followed through and provided Watson the transcript, as required by CPLR 3116 (a). (See Ramirez v Willow Ridge Country Club, 84 AD3d 452, 453 [1st Dept 2011] [noting that the proponent of a deposition transcript bears the burden to show compliance with CPLR 3116 (a)].) On this record, therefore, the transcript is inadmissible hearsay as well. (See Santos v. Intown Assocs., 17 AD3d 564, 565 [2d Dept 2005].)

As hearsay, neither the police report nor the EUO transcript in this case are competent evidence to support American Transit’s motion for summary judgment. (See Jupa, 309 AD2d at 607; Santos, 17 AD3d at 565.) Nor can American Transit rely upon them to support a motion for default judgment. (See Martinez v Reiner, 104 AD3d 477, 478 [1st Dept 2013]; Zelnik v Bidermann Indus. U.S.A., Inc., 242 AD2d 227, 228 [1st Dept 1997].)

Excluding facts gleaned from the police report and Watson’s EUO transcript, the affidavit of American Transit’s investigator is based on little more than the day, time, and location of the collision. But those facts, standing alone, are not sufficient to establish a founded belief that the collision was staged—either on a prima facie basis for purposes of default judgment, or as a matter of law for purposes of summary judgment.

Accordingly, it is hereby

ORDERED that the branch of American Transit’s motion seeking summary judgment under CPLR 3212 against defendant Janan S. Syed, DC, is denied; and it is further

ORDERED that the branch of American Transit’s motion seeking default judgment under CPLR 3215 against the remaining properly served and non-appearing defendants is denied; and it is further

ORDERED that the parties shall confer and shall prepare a joint request for a preliminary conference with this court, as set forth in the Remote Conference Protocol available on this court’s website, http://ww2.nycourts.gov/courts/1jd/supctmanh/index.shtml.

Date: 5/07/20

654605/2019

Burke, Conway & Stiefeld, White Plains, NY (Michelle Dunleavy of counsel), for plaintiffs.

The Rybak Firm, PLLC, Brooklyn, NY (Oleg Rybak of counsel), for defendants Agyal Physical Therapy PLLC, Alford A. Smith MD, PC, and Metro Pain Specialists, PC.

Kopelevich & Feldsherova, P.C., Brooklyn, NY (David Landfair of counsel), for defendant M & M Supplies Group, Inc.

The following e-filed documents, listed by NYSCEF document number (Motion 001) 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 47, 48, 49, 50, 51, 52, 53, 54 were read on this motion to/for DEFAULT JUDGMENT

This motion concerns the potential obligation to pay no-fault insurance benefits of plaintiffs Liberty Mutual Insurance Company and LM General Insurance Company (Liberty Mutual). Defendants Trevohn Martin, Dwayne Bailey, and Damell Jackson were in a vehicle that was involved in a collision. The vehicle was covered by a no-fault insurance policy issued by Liberty Mutual. Martin, Bailey, and Jackson (and various medical providers acting as their assignees) applied for no-fault benefits, which Liberty Mutual denied.

In this action, Liberty Mutual is seeking a declaratory judgment that it is not required to pay no-fault benefits to Martin, Bailey, Jackson, or the various medical provider defendants. Liberty Mutual now moves for a default judgment under CPLR 3215 (and other related relief) against defendants. Defendants Agyal Physical Therapy PLLC, Alford A. Smith MD, PC, and Metro Pain Specialists, PC, and defendant M & M Supplies Group, Inc., separately cross-move under CPLR 3012 (d) to extend defendants’ time to answer, and to compel acceptance of defendant’s late answer, respectively.

Liberty Mutual’s motion for default judgment is denied; defendants’ cross-motions are [*2]granted.

DISCUSSION

I. Liberty Mutual’s Motion for Default Judgment

To obtain a default judgment, a plaintiff must among other things submit nonhearsay proof of all the facts necessary to establish its prima facie entitlement to relief. (See CPLR 3215 [f]; Joosten v Gale, 129 AD2d 531, 535 [1st Dept 1987]; Matter of Dyno v Rose, 260 AD2d 694, 698 [3d Dept 1999].) This court concludes that Liberty Mutual has not met that burden here.

Liberty Mutual’s request for declaratory relief rests on two different grounds. As to defendant Jackson (and his medical-provider assignees), Liberty Mutual contends that he failed to appear for a properly scheduled examination under oath (EUO), thereby breaching a condition precedent to coverage. As to defendants Martin and Bailey (and their medical-provider assignees), Liberty Mutual contends, in essence, that it has good reason to believe that Martin and Bailey helped stage the collision that putatively gave rise to their need for medical treatment, which is a proper ground for denying coverage.

A. Liberty Mutual’s Denial of Coverage as to Defendant Jackson and His Assignees

A no-fault insurer seeking a declaration of no coverage due to asserted violations of the terms of the policy must first demonstrate that it complied with each of the procedural and timeliness requirements of 11 NYCRR § 65-3.5, governing the handling of no-fault claims. (See American Transit Ins. Co. v Longevity Med. Supply, Inc., 131 AD3d 841, 841 [1st Dept 2015].) Liberty Mutual has not satisfied that requirement here. Among other things, § 65-3.5 provides that once an insurer receives a claim for benefits, the insurer has 10 business days to provide the claimant with the forms necessary to verify the claim. (See 11 NYCRR § 65-3.5 [a].) Once the insurer receives the completed verification forms, it then has 15 business days to seek further verification, for example through requesting a claimant to appear for an EUO. (See id. § 65-3.5 [b].) A claimant’s failure without reasonable cause to appear for a properly scheduled EUO is grounds to deny coverage.

As to Jackson, Liberty Mutual has not submitted evidence establishing when it first received a claim for benefits from him or from one of his treating providers, when it provided the necessary verification forms, or when it first received one of those forms back. Absent this evidence, Liberty Mutual cannot show that it timely complied with the procedural requirements of § 65-3.5. At most, Liberty Mutual submits an affidavit of a claims manager, stating in relevant part that based on her knowledge of Liberty Mutual’s procedures and review of Jackson’s claim file, “[a]ll verification requests and denials were timely mailed.”^[FN1] This brief and conclusory statement is not sufficient.

Additionally, Liberty Mutual fails to show that Jackson was properly notified of the scheduled EUOs. Liberty Mutual submits copies of two scheduling letters together with affidavits of service attesting to their mailing. Neither affidavit, however, is signed or dated; and the notarization blank on each affidavit is not filled in. (See NYSCEF No. 11 at 4, 8.) The [*3]affidavits, therefore, are defective.^[FN2] They cannot establish that the scheduling letters were properly mailed. (See Levine v Health First, 147 AD3d 1193, 1195 [3d Dept 2017].) Nor does Liberty Mutual provide any other evidence (in affidavit form or otherwise) that might remedy this deficiency.

Liberty Mutual thus has failed on this motion to provide facts establish a prima facie case that defendant Jackson failed to appear for timely and properly scheduled EUOs, as required to support Liberty Mutual’s request for a declaration of no coverage. Liberty Mutual’s motion for default judgment against Jackson and his assignees is denied.

B. Liberty Mutual’s Denial of Coverage as to Defendants Martin and Bailey and Their Assignees

A no-fault insurer seeking a declaration of no coverage on default based on a conclusion that the underlying collision was staged must establish prima facie the “fact or founded belief that the alleged injury does not arise out of an insured incident.” (Central Gen. Hosp. v Chubb Grp. of Ins. Cos., 90 NY2d 195, 199 [1997].)

Here, Liberty Mutual submits an affidavit from a claims investigator familiar with the case to support its conclusion that the collision was not genuine. That affidavit, in turn, relies heavily on the transcripts from the EUOs of Martin and Bailey. But Liberty Mutual fails to show that those transcripts are admissible. In particular, the transcripts are not signed; and Liberty Mutual does not attempt to establish that it ever provided them to Martin and Bailey to review and sign, as required by CPLR 3116 (a). (See Ramirez v Willow Ridge Country Club, 84 AD3d 452, 453 [1st Dept 2011] [noting that the proponent of a deposition transcript bears the burden to show compliance with CPLR 3116 (a)].)

At least for purposes of this motion, therefore, key portions of the affidavit of Liberty Mutual’s claims investigator are based only on hearsay, and are thus insufficient to support the entry of a default judgment. (See Martinez v Reiner, 104 AD3d 477, 478 [1st Dept 2013]; Zelnik v Bidermann Indus. U.S.A., Inc., 242 AD2d 227, 228 [1st Dept 1997].) The claim by Liberty Mutual’s claims investigator in her affidavit that “the facts and circumstances surrounding the accident are indicative of no-fault fraud patterns, specifically a staged accident” is merely conclusory. To be sure, the affidavit does state that Martin and Bailey had previously been in similar accidents together before, which might be probative on the question of whether the collision here was fake. But the affidavit neither provides any details to support this statement nor identifies the basis of this statement beyond it having been “revealed” by an “investigation.”

On this record, therefore, Liberty Mutual has not established prima facie a founded belief that Martin and Bailey were engaged in no-fault insurance fraud rather than being genuine victims of a car accident. Liberty Mutual’s motion for default judgment against Martin and Bailey (and their respective assignees) is denied.

II. Defendants’ Cross-Motions Regarding Their Answers

In addition to opposing Liberty Mutual’s default-judgment motion, defendants Agyal Physical Therapy PLLC, Alford A. Smith MD, PC, and Metro Pain Specialists, PC, and defendant M & M Supplies Group, Inc., separately cross-move under CPLR 3012 (d) to, in [*4]effect, permit them to answer Liberty Mutual’s complaint. The cross-motions are granted.

The moving defendants’ cross-motions are based on CPLR 317, which permits a defendant to appear and defend the action if “he did not personally receive notice of the summons in time to defend and has a meritorious defense.” These defendants provide affidavits attesting to their lack of receipt of Liberty Mutual’s summons and complaint. For the reasons described above, the moving defendants have a potentially meritorious defense. And although the question is a close one in the circumstances of this case, this court concludes that moving defendants’ affidavits sufficiently establish that they did not personally receive timely notice of the summons.

Accordingly, it is hereby

ORDERED that Liberty Mutual’s motion for default judgment under CPLR 3215 is denied; and it is further

ORDERED that the cross-motion of defendants Agyal Physical Therapy PLLC, Alford A. Smith MD, PC, and Metro Pain Specialists, PC, under CPLR 3012 (d) to extend their time to answer is granted nunc pro tunc, and the answer dated December 6, 2019 is deemed timely served and filed; and it is further

ORDERED that the cross-motion of defendant M & M Supplies Group, Inc., under CPLR 3012 (d) to compel Liberty Mutual to accept its proposed answer dated January 6, 2020, is granted.

Dated: May 4, 2020

Hon. Gerald Lebovits, J.S.C.

Footnotes

Footnote 1:Liberty Mutual’s reply affirmation also attaches what appears to be an NF-3 verification form from one of Jackson’s treating providers. But the affirmation does not offer any information or representations to authenticate the attached verification form. Nor does the affirmation indicate whether this was the first verification form received back by Liberty Mutual.

Footnote 2:By contrast, the affidavit of additional mailing in support of Liberty Mutual’s motion for default judgment—completed by the same person who prepared the affidavits of service for the the EUO scheduling letters—is properly signed, dated, and notarized. (See NYSCEF No. 8 at 2.)

Index No. 150643/2019

The Law Office of Daniel J. Tucker, Brooklyn, NY (R. Jacob Lamar of counsel), for plaintiff.

Zara Javakov, Esq., P.C., Brooklyn, NY (Victoria Tarasova of counsel), for defendants Dos Manos Chiropractic, P.C., Jules Francois Parisien, M.D., and Medigna Inc.

This motion concerns the potential obligation to pay no-fault insurance benefits of plaintiff American Transit Insurance Company. Defendant Albert Hayes was a passenger in a vehicle that was involved in a collision. The vehicle was covered by a no-fault insurance policy [*2]issued by American Transit. Hayes applied for no-fault benefits, which American Transit denied.

In this action, American Transit seeks a declaratory judgment that it is not required to pay no-fault benefits to Hayes or to the other defendants (medical providers acting as Hayes’s assignees). American Transit now moves for summary judgment on this claim under CPLR 3212 as against those defendants who have appeared in the action, and moves for default judgment under CPLR 3215 as against the remaining, non-appearing defendants. The motion is denied.

A no-fault insurer seeking a declaration of no coverage due to asserted violations of the terms of the policy must first demonstrate that it complied with each of the procedural and timeliness requirements of 11 NYCRR § 65-3.5, governing the handling of no-fault claims. (See American Transit Ins. Co. v Longevity Med. Supply, Inc., 131 AD3d 841, 841 [1st Dept 2015].) American Transit has not satisfied that requirement here. Among other things, § 65-3.5 provides that once an insurer receives a claim for benefits, the insurer has 10 business days to provide the claimant with the forms that it requires for verification of the claim. (See 11 NYCRR § 65-3.5 [a].) Once the insurer receives the completed verification forms, it then has 15 business days to request further verification, such as an independent medical examination. (See id. § 65-3.5 [b].)

Here, the record reflects that American Transit received an NF-2 benefits claim form from Hayes at the end of April 2018. And the record reflects that American Transit requested in late July 2018 that Hayes appear for an independent medical examination. Yet there is nothing in the record (whether in the form of an affidavit or documentary evidence) that might establish when American Transit sent the necessary verification forms to Hayes, or when American Transit received the completed verification forms back from Hayes. Absent that information, American Transit has failed to satisfy all of the elements of its claim for declaratory relief.

American Transit thus is not entitled to summary judgment under CPLR 3212 against the answering defendants. Similarly, to obtain a default judgment against the non-appearing defendants American Transit is required to provide proof (such as an affidavit) of all the facts necessary to establish its prima facie entitlement to relief. (See CPLR 3215 [f]; Matter of Dyno v Rose, 260 AD2d 694, 698 [3d Dept 1999].) American Transit has not met that requirement here, and thus is not entitled to default judgment, either.

Accordingly, it is hereby

ORDERED that the branch of American Transit’s motion seeking summary judgment under CPLR 3212 against the answering defendants is denied; and it is further

ORDERED that the branch of American Transit’s motion seeking default judgment under CPLR 3215 against the non-appearing defendants is denied.

Date: 4/14/20

[*1]

Civil Court of the City of New York, New York County, December 2, 2019

APPEARANCES OF COUNSEL

Rivkin Radler LLP (Angelica M. Barcsansky, Andrea C. Sacks, Garin Scollan and Amy Wiedmann of counsel) for defendant.

Law Offices of Leon Kucherovsky (David Forman of counsel) for plaintiffs in the first and second above-entitled actions.

These actions, addressed together here solely for the purposes of this decision, relate to assigned, unpaid no-fault claims submitted by plaintiffs Taira RX Corp., a pharmacy, and HKP Physical Therapy, P.C. (collectively plaintiffs), a medical clinic, to defendant Government Employees Insurance Company (Geico). In every Taira action, Geico moves pursuant to CPLR 3212 for summary judgment, alleging that plaintiffs filed these actions prematurely because verification requests remain outstanding, and that Geico had no obligation to deny the claims before receiving a complete verification response. In the HKP action, Geico argues that the denials were justified because HKP failed to respond to reasonable verification requests. Plaintiffs oppose each motion, arguing that the requests are inappropriate and/or unjustified, and that plaintiffs have substantially complied. Plaintiffs also ask the court to search the record and grant summary judgment in their favor. For the reasons below: (1) Geico’s motions in the Chen (index No. CV-702201/17), Devito (index No. CV-702185/17), Generoso (index No. CV-700042/18), Nauth (index No. CV-702243/17), Williams (index No. CV-702247/17), Xu (index No. CV-703115/17), and Zahmoul (index No. CV-700208/18) actions are granted and those complaints are dismissed without prejudice as premature; (2) Geico’s motion in the Hyppolite action (index No. CV-702191/16) is granted, and the complaint dismissed with prejudice; (3) Geico’s motion in the Gomez action (index No. CV-701984/17) is granted in part and denied in part; and (4) the Flores (index No. CV-702233/17) and Fores (index No. CV-702213/17) motions are denied and summary judgment is granted in favor of plaintiffs.

Background Facts and Procedural History

I. Taira

A. Facts Common to All Taira Actions

In 2016, prior to any relevant claim submission, the owner of MSB Rx, doing business as Forest Drugs (MSB), Michael Bassanell, sold MSB to Taira, which continued to operate Forest Drugs.^[FN1] According to Geico, its investigation revealed “an alarming increase in the amount of prescription drug products{**67 Misc 3d at 285} prescribed to no-fault patients suffering from minor injuries sustained in fender-bender type automobile accidents” (defendant/Sacks affirmation ¶ 11). Geico alleges that the prescriptions were “medically unnecessary,” prescribed at “no-fault clinics” operating as “medical mills . . . for the sole purpose of submitting inflated, fraudulent billing” (id.).

In furtherance of Geico’s investigation, in addition to document requests including financial and prescription records, Geico sought an examination under oath (EUO) of Bassanell. After Bassanell’s EUO on April 27, 2017, Geico requested additional categories of documentation that it determined to be necessary and reasonable for its investigation (defendant’s reply, exhibit 2):^[FN2]

1. contracts/agreements between MSB Rx Corp./Bassanell and Taira/Mikhail Borukhov relating to the sale, transfer, and ongoing relationship between the two entities;

2. applications, registration forms, and accompanying documents submitted by or on behalf of Taira and/or MSB Rx Corp. to the New York State (NYS) Board of Pharmacy in connection with its request for registration or licensing;

3. documents filed with NYS evidencing the sale, transfer, and/or change in ownership of MSB Rx Corp. from Bassanell to Taira and Mikhail Borukhov;

4. tax forms, payroll tax returns, and employment agreements for all persons who have performed work for or on behalf of Taira as a pharmacist or pharmacy technician;

5. 2016 and 2017 federal, NYS, and NYC quarterly payroll tax returns prepared or filed by Taira and MSB Rx Corp.;

6. purchase invoices, wholesale receipts, or related documentation evidencing the purchase of all pharmaceutical products, including those used in any compounded drugs;

7. information regarding the prescriptions relating to diclofenac gel, diclofenac/lidocaine compound cream, lidocaine patches, and flector patches from June 2016 onward; and

8. the number of prescriptions that Taira dispensed from June 2016 onward pursuant to prescriptions from Mani Ushyarov,{**67 Misc 3d at 286} Solomon Halioua, Oleg Fuzaylov, Terry-Jan Blackett-Bonnett, and Danny Fuzaylov.^[FN3]

B. Specific Taira Actions^[FN4]

1. Gengguan Chen (index No. CV-702201/17)

a. Bills 1-3 ($357.32, $7.07, $13.16 for Mar. 6, 2017 Prescriptions)

On June 22, 2017, Geico received the first bill (Geico exhibit A [Chen action]).^[FN5] Due to the concerns raised in its investigation, including those raised by the Bassanell EUO, Geico sought verification on July 1, 2017, then again on August 11, 2017 (id.). Geico has not yet issued a denial.

b. Bills 4-5 ($56.90, $313.28 for June 14, 2017 Prescriptions)

On July 14, 2017, Geico received the subject bills (Geico exhibit B [Chen action]). Due to the concerns raised in its investigation, including those raised by the Bassanell EUO, Geico sought verification on July 31, 2017, then again on August 31, 2017 (id.). Geico has not yet issued a denial.

2. John Devito (index No. CV-702185/17)

a. Bills 1-2 ($2,364, $232.19 for June 1, 2017 Prescriptions)

On July 6, 2017, Geico received the subject bills (Geico exhibit A [Devito action]). Due to the concerns raised in its investigation, including those raised by the Bassanell EUO, Geico sought verification on July 26, 2017, then again on August 28, 2017 (id.). After a January 3, [*4]2018 exam by Dr. Russ, on January 10, 2018, Geico issued a denial of all future benefits, but this claim remains pending (Taira exhibit G [Devito action]).

3. Angie Flores (index No. CV-702233/17)

a. Bills 1-3 ($399, $2,364, $125.02 for May 15, 2017 Prescriptions)

On June 7 and 8, 2017, Geico received the subject bills (Geico exhibit A [Flores action]). Due to the concerns raised in its investigation, including those raised by the Bassanell EUO, {**67 Misc 3d at 287}Geico sought verification on June 26, 2017, then again on August 10, 2017 (id.).^[FN6] After a January 3, 2018 exam by Dr. Yang, on October 27, 2017, Geico issued a denial of all future benefits, but this claim remains pending (Taira exhibit G [Flores action]).

4. Damarys Fores (index No. CV-702213/17)

a. Bill 1 ($1,432.05 for May 15, 2017 Prescription)

On June 8, 2017, Geico received the subject bill (Geico exhibit A [Fores action]). Due to the concerns raised in its investigation, including those raised by the Bassanell EUO, Geico sought verification on June 26, 2017, then again on August 10, 2017 (id.).^[FN7] After receiving some of the requested items, Geico sent a subsequent letter on October 31, 2017, outlining which items Geico considered to be outstanding (id.). Geico has not yet issued a denial.

5. Michael Generoso (index No. CV-700042/18)

a. Bill 1 ($1,528.80 for June 26, 2017 Prescription)

On August 7, 2017, Geico received the subject bill (Geico exhibit A [Generoso action]). Due to the concerns raised in its investigation, including those raised by the Bassanell EUO, Geico sought verification on August 18, 2017, then again on September 19, 2017 (id.). After receiving some of the requested items, Geico sent a subsequent letter on November 1, 2017, outlining which items Geico considered to be outstanding (id.). After a July 17, 2017 exam by Drs. Silverman and Lyons, Geico issued a denial of all future benefits on October 27, 2017, but this claim remains pending (Taira exhibit G [Flores action]).

6. Jose Gomez (index No. CV-701984/17)

a. Bill 1 ($891.50 for May 3, 2017 Prescription)

On June 21, 2017, Geico received the subject bill (Geico exhibit A [Gomez action]). Due to the concerns raised in its investigation, including those raised by the Bassanell EUO, Geico sought verification on July 10, 2017, then again on August 11, 2017 (id.). Geico has not yet issued a denial.

b. Bill 2 ($703 for May 3, 2017 Prescription)

On June 21, 2017, Geico received the subject bill (Geico exhibit A [Gomez action]). Due to the concerns raised in its investigation, including those raised by the Bassanell EUO, {**67 Misc 3d at 288}Geico sought verification on July 10, 2017, then again on August 11, 2017 (id.). On July 12, 2017, Geico denied the claim for lack of medical necessity based on a November 8, 2016 exam by Dr. Hershon (Geico exhibit B [Gomez action]).

7. Deonarine Nauth (index No. CV-702243/17)

a. Bill 1 ($313.28 for May 16, 2017 Prescriptions)

On June 22, 2017, Geico received the subject bill (Geico exhibit A [Nauth action]). Due to the concerns raised in its investigation, including those raised by the Bassanell EUO, Geico sought verification on July 11, 2017, then again on August 14, 2017 (id.).^[FN8] After receiving some of the requested items, Geico sent a subsequent letter on November 1, 2017, outlining which items Geico considered to be outstanding (id.). After a September 12, 2017 exam by Dr. Krishnan, Geico issued a denial of all future benefits on September 21, 2017, but this claim remains pending (Taira exhibit G [Flores action]).

8. Armmeen Williams (index No. CV-702247/17)

a. Bill 1 ($1,700.11 for May 8, 2017 Prescriptions)

On June 22, 2017, Geico received the subject bill (Geico exhibit A [Williams action]). Due to the concerns raised in its investigation, including those raised by the Bassanell EUO, Geico sought verification on July 12, 2017, then again on August 15, 2017 (id.). After receiving some of the requested items, Geico sent a subsequent letter on November 1, 2017, outlining which items Geico considered to be outstanding (id.). After a July 25, 2017 exam by Dr. Littman, Geico issued a denial of all future benefits on July 31, 2017, but this claim remains pending (Taira exhibit G [Williams action]).

b. Bill 2 ($1,700.11 for May 31, 2017 Prescriptions)

On June 22, 2017, Geico received the subject bill (Geico exhibit A [Williams action]). Due to the concerns raised in its investigation, including those raised by the Bassanell EUO, Geico sought verification on July 26, 2017, then again on August 28, 2017 (id.). After receiving some of the requested items, Geico sent a subsequent letter on November 1, 2017, outlining which [*6]items Geico considered to be outstanding (id.). After a July 25, 2017 exam by Dr. Littman, Geico issued a denial of all future benefits on July 31, 2017, but this claim remains pending (Taira exhibit G [Williams action]).{**67 Misc 3d at 289}

9. Ke Xu (index No. CV-703115/17)

a. Bill 1 ($1,442.61 for July 19, 2017 Prescriptions)

On August 11, 2017, Geico received the subject bill (Geico exhibit A [Xu action]). Due to the concerns raised in its investigation, including those raised by the Bassanell EUO, Geico sought verification on August 23, 2017 (id.). Geico sent a follow-up verification request letter on September 27, 2017 (id.). After Taira responded with some of the documents and objections to the other categories, Geico sent another follow-up letter on November 3, 2017, outlining which items remained outstanding (id.). Geico has not yet issued a denial.

b. Bill 2 ($1,184.50 for Aug. 3, 2017 Prescriptions)

On September 1, 2017, Geico received the subject bill (Geico exhibit B [Xu action]). Due to the concerns raised in its investigation, including those raised by the Bassanell EUO, Geico sought verification on September 12, 2017 (id.). Geico sent a follow-up verification request letter on October 16, 2017 (id.). After Taira responded with some of the documents and objections to the other categories, Geico sent another follow-up letter on November 7, 2017, outlining which items remained outstanding (id.). Geico has not yet issued a denial.

10. Hiba Zahmoul (index No. CV-700208/18)

a. Bills 1-2 ($703 and $1,432.05 for July 14, 2017 Prescriptions)

On September 7, 2017, Geico received the subject bill (Geico exhibit A [Zahmoul action]). Due to the concerns raised in its investigation, including those raised by the Bassanell EUO, Geico sought verification on September 22, 2017, then again on October 24, 2017 (id.). After receiving some of the requested items, Geico sent a subsequent letter on November 1, 2017, outlining which items Geico considered to be outstanding (id.). Geico has not yet issued a denial.

b. Bill 3 ($1,432.05 for July 29, 2017 Prescriptions)

On September 25, 2017, Geico received the subject bill (Geico exhibit A [Zahmoul action]). Due to the concerns raised in its investigation, including those raised by the Bassanell EUO, Geico sought verification on October 3, 2017, then again on November 1 and 6, 2017, one of which explicitly outlined which items Geico considered to be outstanding (id.). Geico has not yet issued a denial.

C. Requests and Responses Common to All Taira Actions

Taira’s responses to the verification requests, as reflected in all of its submissions here, [*7]are identical. Taira’s first response{**67 Misc 3d at 290} dated August 8, 2017, contains a litany of objections including, as relevant here, that no “good faith basis” existed for Geico’s verification requests (Taira exhibit A). On August 28, 2017, Geico objected to Taira’s “voluminous boilerplate objections” and characterized Taira’s response as “minimal” (Geico exhibit C). Geico justified its request by noting that Dr. Ushyarov had been sued multiple times in connection with no-fault fraud, that “New York State has numerous laws and regulations governing the licensing of pharmacies,” and that there were numerous deficiencies in Bassanell’s testimony (id.).

Taira also sent a further “comprehensive reply” on August 17, 2017 (Taira exhibit B). Taira’s August 17 reply again argued that there was no good faith, case-specific basis for the verification request and asserted numerous objections, but provided a limited response (Taira exhibit C). In a response on September 7, 2017, Geico argued that its requests were reasonable by invoking various concerns including the nature and frequency of the pharmaceutical products prescribed and dispensed, arrangements between Taira and physicians and clinic locations, compounding formulations and practices, billing and coding practices, and compliance with licensing laws (Geico/McCarthy aff ¶ 4; Geico exhibit C). Part of the alleged scheme involved a transfer by Michael Bassanell, Pharm.D., of an entity known as MSB Rx, doing business as Forest Drugs, to Taira Rx, owned by Mikhail Borukhov, Bassanell’s former assistant (Geico/McCarthy aff ¶ 6). According to Geico, the investigation ultimately revealed practices, including inaccurate billing, meant to maximize profits rather than meet medical necessity, as well as potential noncompliance with licensing laws (Geico/McCarthy aff ¶¶ 5, 8, 9). The Bassanell EUO raised additional questions, including Bassanell’s continuing role with Taira as a supervising pharmacist and the practice of continuing to pay the salary of all employees—including Taira’s employees—from MSB Rx’s bank account, even after the transfer of MSB Rx to Taira (Geico/McCarthy aff ¶ 10). Similarly, one doctor associated with Taira, Mani Ushyarov, has twice been sued by insurance carriers (Geico/McCarthy aff ¶ 11). According to Geico’s September 7, 2017 letter, “multiple claimants have indicated . . . that they did not actually receive the prescriptions that were purportedly written by Dr. Ushyarov and Dr. Sudberg and then billed to [Geico]” (Geico reply, exhibit 2).

Taira’s subsequent objection on October 17, 2017, summarized its prior compliance, again asserting that Geico had not{**67 Misc 3d at 291} justified its request, and arguing among other things that Geico had not asserted which pharmaceutical laws or regulations had allegedly been violated (Taira exhibit C). Geico replied again on October 17, 2017, this time identifying several specific deficiencies: (1) complete records of the number of Dr. Ushyarov’s prescriptions submitted by Taira to Geico; (2) wholesale invoices which “would have a direct bearing on the fees that [Taira] can charge to . . . Geico”; (3) “documents concerning the number of prescriptions originating from certain high-volume prescribing physicians, and certain federal and state documents” (id.).

Geico’s subsequent replies, dated November 22, 2017, and August 8, 2018, supplemented its responses to Taira’s objections and provided further justification for Geico’s requests, including citation to provisions of New York laws and regulations pertaining to pharmacies and kickbacks (see Geico reply, exhibit 2, citing Education Law §§ 6530 [18], [38]; 6811, 6509-a; 8 NYCRR 29.1 [b] [3]). Taira’s final response is dated July 19, 2018, essentially reiterating its objections (Taira exhibit E).

II. HKP (index No. CV-702191/16)

On February 15, 2016, Geico conducted EUOs of Hitenkumar Patel, P.T. and Chin Yeung Chan, LAc (Geico/Scollan affirmation ¶ 2, exhibit 4). Those depositions, as well as other Geico investigations, raised suspicions that HKP could, among other things, “be engaged in unlawful fee-splitting arrangements and illegal kickback schemes with non-physicians” and billing improperly with “pre-determined treatment protocols” to maximize profits (Geico/Scollan affirmation ¶ 6; Geico/Simmons aff ¶ 4). According to Geico, several factors contributed to this suspicion: (1) one of HKP’s locations in Brooklyn having been implicated in layperson control, unlawful referral relationships, and predetermined treatment protocols; (2) bills regularly exceeding the actual care that patients received; (3) “anonymous calls” advising patients to treat at the Brooklyn location and that they would be represented by the Mandel Law Firm downstairs from HKP’s Lynbrook location; (4) the use of employees or independent contractors essentially conceded in Patel’s EUO (Geico/Simmons aff ¶¶ 6-8, citing exhibit 4). Based on the prior investigation, preliminary investigation here, and EUOs, on March 22, 2016, Geico requested (Geico/Simmons aff ¶ 9, exhibit B):

1. written agreement between Achiever United Inc. (an employment agency) and Patel and/or HKP;{**67 Misc 3d at 292}

2. invoices from and payments to George Davinner’s taxi company to Patel and/or HKP for the past six months;

3. written lease agreement between Patel and/or HKP and Rexco Property, LLC for the location at 225-21 Linden Boulevard, Cambria Heights along with cashed rent checks for the last six months;

4. W-2s of all HKP employees;

5. intake forms for all of the patients subject to the EUO;

6. HKP’s incorporation documents;

7. copies of cashed rent checks (front and back) from Patel and/or HKP to Dr. August at 4009 Church Avenue, Brooklyn for the past six months;

8. invoices from and payments to “Mike” for transportation service to Patel and/or HKP for the past six months; and

9. corporate bank records from Chase Bank to HKP for the past six months.

Geico concedes that it received some of the requested information, but did not receive: (1) copies of cashed checks paid to “Mike” for transportation services from Patel and/or HKP for all six months prior to claim submission, specifically September through December 2015; (2) HKP’s Chase records for six months; or (3) proof of rent payments from subtenants to Patel and/or HKP at the Cambria Heights location (Geico/Scollan affirmation ¶ 11). According to Geico, these records are necessary to determine whether illegal kickback payments were disguised as rent or transportation payments (Geico/Scollan affirmation ¶ 12).

Geico sent second requests for the subject claims on April 25, 2016 (Geico exhibit C; Geico/Lamirande aff [discussing Geico’s mailing procedures]). On July 27, 2016, having failed to receive a response, Geico denied the subject claims for September 19, 2015 treatment totaling $122.53, [*8]September 29 through October 24, 2015 treatment totaling $246.40, and November 5 through November 24, 2015 treatment totaling $369.60 (Geico exhibits D-L). On July 27, 2017, one year after Geico’s denial, HKP responded in writing to Geico, making essentially the same arguments made here: (1) that at the EUO, HKP provided a justification for not responding to the verification requests: they could not produce the subtenant’s checks because they were returned; and (2) the other arguments addressed below; in sum and substance, that the demands were improper (HKP exhibit A, citing Geico exhibit 4 at 86-87).{**67 Misc 3d at 293}

Discussion

I. Threshold Considerations

A. Denial of Future Claims Based on Lack of Medical Necessity (Devito [index No. CV-702185/17], Flores [index No. CV-702233/17], Generoso [index No. CV-700042/18], Nauth [index No. CV-702243/17], Williams [index No. CV-702247/17])

Taira asserts in various actions that Geico’s post-independent medical examination denial of future no-fault benefits obviates Taira’s responsibility to respond to any outstanding verification demands. Indeed, “[a]n insurance carrier may not, after repudiating liability, create grounds for its refusal to pay by demanding compliance with proof of loss provisions of the policy. Rather, the insurance carrier must stand or fall upon the defense upon which it based its refusal to pay” (Matter of State Farm Ins. Co. v Domotor, 266 AD2d 219, 220-221 [2d Dept 1999] [internal quotation marks omitted]). The denials here, however, pertain to “further acupuncture, chiropractic, massage therapy, diagnostic testing, and supplies treatment [sic],” not the pharmaceutical treatment at issue here (see generally Taira exhibit G). Moreover, even if the denial did pertain to pharmaceutical treatment, the denial explicitly limits treatment going forward, not the prior charges at issue here. Accordingly, with the limited exception of the Gomez action discussed below, this branch of Taira’s motion is denied.

B. Estoppel (All Actions)

Plaintiffs also assert that Geico’s arguments should be estopped because more than a dozen arbitrations involving the same or similar parties and issues were decided in Taira’s favor. Geico also cites numerous decisions in its favor. However, because no-fault arbitrations are designed as “expedited, simplified affair[s] meant to work as quickly and efficiently as possible” with “limited or non-existent” discovery, complex fraud claims—like the one asserted here by Geico—”cannot be shoehorned into this system” (21st Century Ins. Co. v Gladstein, 2015 NY Slip Op 30527[U],*6 [Sup Ct, NY County 2015], quoting Allstate Ins. Co. v Mun, 751 F3d 94, 95 [2d Cir 2014] [emphasis omitted]). Accordingly, no-fault arbitration decisions are not afforded preclusive effect and this branch of plaintiffs’ motion is denied.

II. Summary Judgment

“[T]he proponent of a summary judgment motion must make a prima facie showing of entitlement to{**67 Misc 3d at 294} judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact. Failure to make such prima facie showing requires a [*9]denial of the motion, regardless of the sufficiency of the opposing papers. Once this showing has been made, however, the burden shifts to the party opposing the motion for summary judgment to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact which require a trial of the action” (Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986] [citations omitted]; CPLR 3212 [b]).

A. Taira Actions

1. Flores (index No. CV-702233/17) and Fores (index No. CV-702213/17) Actions (Timeliness of Verification Follow-Up)

“Where there is a timely original request for verification, but no response to the request for verification is received within 30 calendar days thereafter, or the response to the original request for verification is incomplete, then the insurer, within 10 calendar days after the expiration of that 30-day period, must follow up with a second request for verification” (see Sound Shore Med. Ctr. v New York Cent. Mut. Fire Ins. Co., 106 AD3d 157, 163 [2d Dept 2013]; 11 NYCRR 65-3.6 [b]).

“At a minimum, if any requested [additional] verifications has not been supplied to the insurer 30 calendar days after the original request, the insurer shall, within 10 calendar days, follow up with the party from whom the verification was requested” (11 NYCRR 65-3.6 [b]).

With the two exceptions noted here and in footnote 5 above, the court finds that both parties have demonstrated through attached affidavits that all mailings, including claims, initial post-EUO verification requests, follow-up letters, subsequent follow-up letters, responses, and denials referenced in the papers and recounted above, were properly and timely sent pursuant to the no-fault regulations. The parties do not dispute receipt of any of the relevant documents.

In the Flores and Fores actions, however, Geico timely sought verification on June 26, 2017, but did not send a follow-up{**67 Misc 3d at 295} until August 10, 2017 (Geico exhibit A [Flores/Fores actions]).^[FN9] Where an insurer does not follow up within the 10-day period, “guided by the principle that the no-fault regulations are in derogation of the common law and must be strictly construed,” an insurer’s time to deny a claim is not tolled (Sea Side Med., P.C. v State Farm Mut. Auto Ins. Co., 12 Misc 3d 1127, 1130-1131 [Civ Ct, Richmond County 2006]). Accordingly, Geico’s motion for summary judgment is denied.

Additionally, in searching the record pursuant to Taira’s request and CPLR 3212 (b), the court also finds that, on these two actions, plaintiff has set forth the fact and amounts of the loss and the fact that payment is overdue, thereby demonstrating entitlement to judgment (Sea Side Med., P.C., 12 Misc 3d at 1131, citing Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742, 742-743 [2d Dept 2004] [“the plaintiff hospitals made a prima facie showing of their entitlement to judgment as a matter of law by submitting evidentiary proof that the prescribed [*10]statutory billing forms had been mailed and received, and that payment of no-fault benefits was overdue”]). Accordingly, the court awards summary judgment to plaintiff in these actions.

2. Gomez Action (index No. CV-701984/17) (Medical Necessity Defense)

In the Gomez action (index No. CV-701984/17), Geico denied the second claim for lack of medical necessity (Geico exhibit B [Gomez action]; see Background Facts and Procedural History [I] [B] [6] [b] at 287-288). Taira correctly argues that a denial of the second Gomez claim would, pursuant to Domotor, absolve Taira of any responsibility to respond to outstanding verification requests (see Discussion [II] [A], supra; Domotor, 266 AD2d at 220-221). The court finds that the affidavit of Michael Tamburo, DO sufficiently rebuts Geico’s prima facie demonstration of a lack of medical necessity (Taira exhibit H [Gomez action]). Accordingly, while the court, for the reasons below, finds the first claim subject to severance and dismissal, summary judgment on the second claim (Taira’s first and second causes of action) is denied based on an issue of fact.

3. All Other Taira Actions (Validity of Verification Requests/Responses)

In all actions involving Taira as plaintiff, Taira argues that corporate verification requests are inappropriate because{**67 Misc 3d at 296} pharmacies, unlike medical providers, are not subject to the same scrutiny, particularly in the context of corporate structure, and in any event that plaintiffs have substantially complied. Geico argues that this action is premature because the demands are justified and remain outstanding. While the court agrees that the considerations applicable to actions involving medical providers and pharmacies are not identical, they are similar enough to justify Geico’s verification requests, and therefore justify dismissal, as premature, of any actions in which Taira has failed to fully respond to timely verification requests.

[1] “The insurer is entitled to receive all items necessary to verify the claim directly from the parties from whom such verification was requested” (11 NYCRR 65-3.5 [c] [emphasis added]). Upon request, an insured individual or their assignee must, among other things, “provide any other pertinent information that may assist the [insurer] in determining the amount due and payable” (11 NYCRR 65-1.1 [d] [sec I] [Proof of Claim. Medical, Work Loss, and Other Necessary Expenses] [d]). “No-Fault benefits are overdue if not paid within 30 calendar days after the insurer receives proof of claim, which shall include verification of all of the relevant information requested pursuant to [11 NYCRR 65-3.5]” (11 NYCRR 65-3.8 [a] [1]).

As Taira argues, however, insurers must not demand verification of facts unless there are good reasons to do so. The lodestar for “good cause” was, until recently, State Farm Mut. Auto. Ins. Co. v Mallela (4 NY3d 313 [2005]). In Mallela, the Second Circuit certified to the Court of Appeals the question whether

“a medical corporation that was fraudulently incorporated under N.Y. Business Corporation Law §§ 1507, 1508, and N.Y. Education Law § 6507(4)(c) [is] entitled to be reimbursed by insurers, under New York Insurance Law §§ 5101 et seq., and its implementing regulations, for medical services rendered by licensed medical practitioners” (Mallela, 4 NY3d at 320, citing State Farm Mut Auto. Ins. Co. v Mallela, 372 F3d 500, 510 [2004]).

The Court of Appeals held that such providers were not eligible for reimbursement, but also that “carriers may look beyond the face of licensing documents to identify willful and material failure to abide by state and local law,” provided that “[t]he regulatory scheme, however, does not permit abuse of the truth-seeking opportunity that 11 NYCRR 65-3.16 (a) (12){**67 Misc 3d at 297} authorizes” (Mallela, 4 NY3d at 321-322). Importantly, the Court of Appeals found that “carriers will be unable to show ‘good cause’ unless they can demonstrate behavior tantamount to fraud. Technical violations will not do” (id. at 322).

The Mallela Court addressed the concern that carriers might “turn this investigatory privilege into a vehicle for delay and recalcitrance” (Mallela, 4 NY3d at 321-322). That is, while “carriers may look beyond the face of licensing documents to identify willful and material failure to abide by state and local law, . . . [t]he regulatory scheme . . . does not permit abuse of the truth-seeking opportunity that 11 NYCRR 65-3.16 (a) (12) authorizes” (Mallela, 4 NY3d at 321-322; see also Pomona Med. Diagnostic P.C. v Adirondack Ins. Co., 36 Misc 3d 127[A], 2012 NY Slip Op 51165[U],*1 [App Term, 1st Dept 2012] [to avoid employing “pretrial discovery as a fishing expedition (without) a reliable factual basis for what amounts to, at best, mere suspicions,” a defendant must set forth “case-specific allegations” to justify pretrial disclosure]; Omega Diagnostic Imaging, P.C. v MVAIC, 29 Misc 3d 129[A], 2010 NY Slip Op 51779[U],*1 [App Term, 1st Dept 2010] [action was not premature for outstanding verification request where there was “no good reason” for defendant to demand that plaintiff and its assignor obtain an “affidavit of no insurance” from the out-of-state driver who struck the assignor]; cf. Brownsville Advance Med., P.C. v Country-Wide Ins. Co., 33 Misc 3d 1236[A], 2011 NY Slip Op 52255[U], *2-3 [Nassau Dist Ct 2011] [no-fault law’s purpose “not served when an insurer repeatedly request the same verification from the same provider, especially in the situation where the material demanded has previously been provided or is readily obtainable from easily accessible public records”]; see also American Chiropractic Care, P.C. v GEICO Ins., 57 Misc 3d 529, 535 [Civ Ct, Kings County 2017] [to balance the need to address no-fault fraud with burden on medical professionals of preparing and appearing for EUOs, insurer could and should have responded to provider’s request for explanation “to demonstrate a good faith basis for the EUO”]).

Where the record reveals “detailed and specific reasons for believing that plaintiff may be ineligible to recover no-fault benefits as a fraudulently incorporated professional service corporation,” special circumstances exist which justify disclosure of documents such as “plaintiff’s certificate of incorporation, management agreements, and the names of plaintiff’s{**67 Misc 3d at 298} shareholders” (Midborough Acupuncture, P.C. v State Farm Ins. Co., 21 Misc 3d 10, 12 [App Term, 2d Dept, 2d & 11th Jud Dists 2008], citing Mallela, 4 NY3d 313; see also Dore v Allstate Indem. Co., 264 AD2d 804, 804-805 [2d Dept 1999] [finding, based on “indicia of fraud,” special circumstances to warrant the disclosure of income tax returns, bank account information, and employment records]).

Numerous post-Mallela cases focused on a similar concern—whether an insurer can deny a medical claim (or pursue more information) when there is good cause to believe that a medical practice is fraudulently incorporated—for example, if the provider was not wholly owned or controlled by physicians (see e.g. Pro-Align Chiropractic, P.C. v Travelers Prop. Cas. Ins. Co., [*12]58 Misc 3d 857, 861 [Suffolk Dist Ct 2017]). Indeed, disclosure aimed at investigating that concern has come to be known as Mallela material (see Victory Med. Diagnostics, P.C. v Nationwide Prop. & Cas. Ins. Co., 36 Misc 3d 568, 574 [Nassau Dist Ct 2012]). The contested issues here, however, are whether Mallela disclosure is available for other regulated disciplines, including—as relevant here—pharmacies, and what type of alleged conduct constitutes “good cause” for the purposes of requesting Mallela-type disclosure. The governing statutes and regulations, together with a recent Court of Appeals decision, Andrew Carothers, M.D., P.C. v Progressive Ins. Co. (33 NY3d 389 [2019]), support Geico’s position.^[FN10]

The Carothers Court revisited Mallela‘s holding that “[i]n the licensing context, carriers will be unable to show ‘good cause’ unless they can demonstrate behavior tantamount to fraud” (33 NY3d at 405). In determining that the trial judge did not err in declining to issue a charge requiring a “tantamount to fraud” finding by the jury, the Carothers Court determined that “[a] corporate practice that shows ‘willful and material failure to abide by’ licensing and incorporation statutes may support a finding that the provider is not an eligible recipient of reimbursement under 11 NYCRR 65-3.16 (a) (12) without meeting the traditional elements of common-law fraud” (33 NY3d at 405-406 [“The no-fault insurance regulations make providers ineligible for reimbursement when their violations of the cited statutes are more than merely technical and ‘rise to the level of’ a grave violation such as fraud”]).

{**67 Misc 3d at 299}Although Carothers, like Mallela, addressed “good cause” in the context of medical licensing, nothing in either case, the Insurance Law, or laws and regulations governing pharmaceutical practice suggest that pharmaceutical practice is not subject to regulation. Generally, Insurance Law § 5102 et seq. requires no-fault carriers to reimburse patients (or their assignees) for “basic economic loss” (State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313, 320 [2005]). “Basic economic loss” includes, as relevant here,

“[a]ll necessary expenses incurred for . . . medical, hospital (including services rendered in compliance with article forty-one of the public health law, whether or not such services are rendered directly by a hospital), surgical, nursing, dental, ambulance, x-ray, prescription drug and prosthetic services; . . . and . . . any other professional health services” (Insurance Law § 5102 [a] [1] [emphasis added]).

Providers are not, however, eligible for reimbursement by a carrier “if the provider fails to meet any applicable New York State or local licensing requirement necessary to perform such service in New York or meet any applicable licensing requirement necessary to perform such service in any other state in which such service is performed” (11 NYCRR 65-3.16 [a] [12] [emphasis added]; Mallela, 4 NY3d at 320).

Of course, “New York State or local licensing requirement[s]” are not limited to medicine and include pharmaceutical practice. Although Geico concedes that pharmacies, unlike medical practices, may be owned by a layperson, Geico identifies—and identified in at least one letter to Taira—additional statutory and regulatory bases for its verification requests. These include Education Law § 6530 (18) and (38), which define, respectively, professional [*13]misconduct as “[d]irectly or indirectly offering, giving, soliciting, or receiving or agreeing to receive, any fee or other consideration to or from a third party for the referral of a patient or in connection with the performance of professional services” and “[e]ntering into an arrangement or agreement with a pharmacy for the compounding and/or dispensing of coded or specially marked prescriptions”; Education Law § 6811 (7), which makes it unlawful for “[a]ny person to enter into an agreement with a physician, dentist, podiatrist or veterinarian for the compounding or dispensing of secret formula (coded) prescriptions”; Education Law § 6509-a, which prohibits regulated professionals, including pharmacists, {**67 Misc 3d at 300}from “directly or indirectly request[ing], receiv[ing] or participat[ing] in the division, transference, assignment, rebate, splitting or refunding of a fee for, or . . . directly request[ing], receiv[ing] or profit[ing] by means of a credit or other valuable consideration as a commission, discount or gratuity in connection with the furnishing of . . . drugs [or] medication” (citing Education Law § 6800 et seq.); and 8 NYCRR 29.1 (b) (3), which prohibits any professional licensee from “directly or indirectly offering, giving, soliciting, or receiving or agreeing to receive, any fee or other consideration to or from a third party for the referral of a patient or client or in connection with the performance of professional services.”

To investigate potential violations of those provisions—thereby rendering Taira ineligible for benefits—Geico justified the requests in its verification letters. Geico noted in those letters, among other things, that “Bassanell was unable to testify as to the medical necessity of the prescriptions at issue,” that Bassanell stayed on as Taira’s supervising pharmacist despite owning two other pharmacies, that “certain doctors repeatedly prescribed the same exorbitantly priced items,” that Bassanell continued to control Taira’s bank account despite selling the business, and that individuals working for Taira are not Taira employees (defendant’s reply, exhibit 2). These requests (and accompanying demonstrations of good cause) would have been sufficient even under Mallela, which required behavior “tantamount to fraud. Technical violations will not do” (Mallela, 4 NY3d at 322). But the requests were certainly appropriate under Carothers, which clarified that Mallela‘s holding was not limited to “behavior tantamount to fraud,” thereby bolstering this court’s finding of “good cause.” The requests are appropriately tailored to the nature of the pharmacy sale, licensing, payroll, pricing, individual prescriptions, and prescriptions by individual doctors.

[2] Moreover, just as an insurer must have “good cause” to demand verification, so too must a provider have a “reasonable justification” for refusal to provide a response. 11 NYCRR 65-3.8 (b) (3) provides, with exceptions not relevant here, that “an insurer shall not issue a denial of claim form . . . prior to its receipt of verification of all of the relevant information requested pursuant to sections 65-3.5 and 65-3.6 . . . (e.g., medical reports, wage verification, etc.).” A 2013 amendment aimed to correct two shortcomings of the prior regulations: that the regulations{**67 Misc 3d at 301}

“(1) impose[d] no deadline for responding to a verification request nor permit[ted] an insurer to deny a claim if it never receives the requested verification, allowing some claims to remain open indefinitely; [and] (2) d[id] not address how a verification request, notice . . . , or denial of claim should be treated when the document contains an immaterial defect or omission, resulting in unnecessary legal actions and arbitrations” (NY St Dept of Fin Servs, Notices of Adoption, 11 NYCRR 65-3.5, 65-3.8, available at 2013 NY Reg Text 292688 ¶ 3 [eff Apr. 1, 2013]).

One of the amendments granted additional discretion to the insurer, providing that “an [*14]insurer may issue a denial if, more than 120 calendar days after the initial request for verification, the applicant has not submitted all such verification under the applicant’s control or possession or written proof providing reasonable justification for the failure to comply” (11 NYCRR 65-3.8 [b] [3] [emphasis added]). The second required that “[a]n applicant from whom verification is requested shall, within 120 calendar days from the date of the initial request for verification, submit all such verification under the applicant’s control or possession or written proof providing reasonable justification for the failure to comply” (11 NYCRR 65-3.5 [o] [emphasis added]).

The amendments, read together in the context of its stated regulatory aims and in the context of the verification process generally, demonstrate clear overlap and an inverse relationship between “good cause” for verification requests and “reasonable justification” for denial; that is, the more “good cause” there is, the less “reasonable” any justification for denial, and vice versa. Because Geico has made a strong showing of good cause, Taira’s justification for withholding any responsive items within its control must be equally compelling. To the extent, however, that Taira’s arguments merely categorize the verification requests as irrelevant (because pharmacies are not regulated in precisely the same manner as medical practices), unduly burdensome, or moot because they have already been substantially complied with, the arguments cannot prevail. Taira’s opposition papers, in ably delineating which requests it believes are reasonable or unreasonable, undermine its own argument that it was unable to identify what materials it had chosen or refused to provide.

Accordingly, Geico’s requests are reasonably tailored toward investigation of Taira’s eligibility for benefits. Because the{**67 Misc 3d at 302} claims at issue here were never affirmatively denied, and because Geico had no obligation to do so, these actions are premature and summary judgment dismissing the complaints is appropriate.

The court is not persuaded by Taira’s citations to several cases standing for the proposition that “an insurer is not entitled to obtain documentary material relating to a potential Mallela or fraudulent corporation defense” (plaintiffs’ affirmation), as none are binding upon this court. Indeed, in one of the few appellate cases on this issue, the Appellate Term, First Department held that “[d]efendant is entitled to discovery pertaining to its defense of fraudulent incorporation” (Statewide Med. Servs., P.C. v Travelers Ins. Co., 16 Misc 3d 127[A], 2007 NY Slip Op 51253[U],*1 [App Term, 1st Dept 2007], revg 9 Misc 3d 1124[A], 2005 NY Slip Op 51773[U],*8 [Civ Ct, Bronx County 2005] [denying depositions because “defendant’s submission in this case lacks a reliable foundation to infer that the medical providers are engaging in behavior that can be described as ‘tantamount to fraud’ ”]).

Accordingly, the court holds that Geico’s post-EUO verification requests were appropriate, and therefore finds Taira’s response deficient. Because certain items, according to Taira’s own responses, are admittedly outstanding, summary judgment dismissing the complaints as premature is therefore appropriate.

4. HKP Action

HKP argues that “once an application appears for an EUO the carrier is not entitled to [*15]further disclosure and must pay or deny the claim within 30 days of the applicant’s appearance at an EUO” (plaintiffs/Forman affirmation ¶ 21 [HKP action]). The court cannot identify any support for the proposition that all post-EUO demands are improper, including in HKP’s own citation in support of that proposition; to the contrary, the no-fault regulations explicitly provide that “[t]he insurer is entitled to receive all items necessary to verify the claim directly from the parties from whom such verification was requested” (11 NYCRR 65-3.5 [c] [emphasis added]). Notably, HKP did not argue that a physical therapy practice would not be subject to inquiries into corporate or employment structure; rather, it repeated the pharmacy arguments made in the Taira action—despite the fact that HKP is not a pharmacy—which the court addressed above (plaintiffs/Forman affirmation ¶ 23 et seq. [HKP action]).

{**67 Misc 3d at 303}HKP also argues that it has substantially complied with the verification requests and cannot produce the remainder of the records. Specifically, HKP focuses on Patel’s EUO testimony that HKP could not produce records of its subtenant’s payments because it did not possess the rent checks (plaintiffs/Forman affirmation ¶¶ 34-38, citing Geico exhibit 4 at 86-87 [HKP action]). Relying on this testimony, HKP argues that responding to Geico’s follow-up demands was unnecessary because Geico “did not respond to [or acknowledge HKP’s] objection at the EUO” (plaintiffs/Forman affirmation ¶ 39 [HKP action]). But Geico did respond; in addition to the subsequent letters, Geico’s counsel followed up Patel’s statements regarding the rent check by asking if HKP could produce rent invoices (Geico exhibit 4, tr at 87, lines 7-24).

In any event, however, other than disputing that the requests were inappropriate, HKP does not argue that it substantially complied with the other verification requests seeking checks to “Mike” for transportation services from Patel and/or HKP from September through December 2015 or Chase records. Based on the court’s holding that such requests were appropriate, the regulations authorized Geico’s denial of HKP’s claims for HKP’s failure to respond to timely verification requests. Accordingly, summary judgment dismissing the HKP action is appropriate.

Conclusion and Order

For the above reasons, it is hereby ordered that in Chen (index No. CV-702201/17), Geico’s motion for summary judgment (seq No. 001) is granted, and the complaint shall be dismissed without prejudice as premature; and it is further ordered that in Devito (index No. CV-702185/17), Geico’s motion for summary judgment (seq No. 001) is granted, and the complaint shall be dismissed without prejudice as premature; and it is further ordered that in Flores (index No. CV-702233/17), Geico’s motion for summary judgment (seq No. 001) is denied, and upon searching the record, it is ordered and adjudged that in Flores (index No. CV-702233/17), the Clerk of Court shall enter judgment for plaintiff on the first and second causes of action in the [*16]amount of $2,364, plus interest at 2% per month from August 7, 2017, pursuant to 11 NYCRR 65-3.9 (a) and attorneys’ fees pursuant to 11 NYCRR 65-4.6; and it is further ordered and adjudged that in Flores (index No. CV-702233/17), the Clerk of Court shall enter judgment for plaintiff on the third and fourth causes of action in the amount of $125.02, plus interest at 2% per month{**67 Misc 3d at 304} from August 7, 2017, pursuant to 11 NYCRR 65-3.9 (a) and attorneys’ fees pursuant to 11 NYCRR 65-4.6; and it is further ordered and adjudged that in Flores (index No. CV-702233/17), the Clerk of Court shall enter judgment for plaintiff on the fifth and sixth causes of action in the amount of $399, plus interest at 2% per month from August 7, 2017, pursuant to 11 NYCRR 65-3.9 (a) and attorneys’ fees pursuant to 11 NYCRR 65-4.6; and it is further ordered that in Fores (index No. CV-702213/17), Geico’s motion for summary judgment (seq No. 001) is denied; and upon searching the record, it is further ordered and adjudged that in Fores (index No. CV-702213/17), the Clerk of Court shall enter judgment for plaintiff on the first and second causes of action in the amount of $1,432.05, plus interest at 2% per month from August 7, 2017, pursuant to 11 NYCRR 65-3.9 (a) and attorneys’ fees pursuant to 11 NYCRR 65-4.6; and it is further ordered that in Generoso (index No. CV-700042/18), Geico’s motion for summary judgment (seq No. 001) is granted, and the complaint shall be dismissed without prejudice as premature; and it is further ordered that in Gomez (index No. CV-701984/17), Geico’s motion for summary judgment (seq No. 001) is granted in part and denied in part to the extent that Taira’s third and fourth causes of action shall be severed and dismissed without prejudice as premature; and it is further ordered that in Nauth (index No. CV-702243/17), Geico’s motion for summary judgment (seq No. 001) is granted, and the complaint shall be dismissed without prejudice as premature; and it is further ordered that in Williams (index No. CV-702247/17), Geico’s motion for summary judgment (seq No. 001) is granted, and the complaint shall be dismissed without prejudice as premature; and it is further ordered that in Xu (index No. CV-703115/17), Geico’s motion for summary judgment (seq No. 001) is granted, and the complaint shall be dismissed without prejudice as premature; and it is further ordered that in Zahmoul (index No. CV-700208/18), Geico’s motion for summary judgment (seq No. 001) is granted, and the complaint shall be dismissed without prejudice as premature; and it is further[*17] ordered that in Hyppolite (index No. CV-702191/16), Geico’s motion for summary judgment (seq No. 001) is granted, and the complaint shall be dismissed with prejudice; and it is further ordered that Geico shall serve a copy of this order with notice of entry for each action under separate cover/index number within 20 days of receipt.

Footnotes

Footnote 1:In early 2019, Geico sued MSB, Bassanell, and several others in the federal Eastern District of New York, alleging a “massive, on-going fraudulent scheme . . . spearheaded by a pharmacist, Michael Slava Bassanell, who has used a series of three pharmacies . . . to submit thousands of fraudulent no-fault insurance charges for medically unnecessary, illusory, ‘pain relieving’ prescription drug products” (defendant’s reply, exhibit 1; ED NY, case No. 1:19-cv-00232-NG-PK).

Footnote 2:Defense counsel submitted numerous, unpaginated letters as one exhibit, and also failed to paginate affirmations (defendant’s reply, exhibit 2). In the future, given the size and detail of such submissions, counsel are encouraged to submit and flag each communication as individual exhibits.

Footnote 3:These individuals were also named in the federal complaint (see n 1).

Footnote 4:While each Geico submission is tailored to its respective claim, it appears that Taira’s responses are all identical. Accordingly, they are addressed together below.

Footnote 5:It appears that Taira did not submit the bills within 45 days after services were rendered. However, 11 NYCRR 65-1.1 permits extension when “the eligible injured person submits written proof providing clear and reasonable justification for the failure to comply with such time limitation” and, in any event, Geico does not dispute that the claim was timely.

Footnote 6:As discussed in detail below, though Geico characterizes this follow-up as timely, it is not.

Footnote 7:Geico attaches letters dated June 26 and June 28, 2017, which appear to be identical.

Footnote 8:As discussed in Background Facts and Procedural History (I) (C) below, in this action and others in which Geico sent a follow-up letter in mid-to-late August, Taira’s first consolidated response is dated August 8, 2017, but likely not received and processed until after Geico’s follow-up letter.

Footnote 9:To the extent a second letter, also attached as exhibit A, bears a June 28, 2017 date, the August 10, 2017 letter is nevertheless untimely.

Footnote 10:Carothers was decided before these motions were argued and fully submitted, and was discussed by counsel at oral argument.

[*1]

Civil Court of the City of New York, New York County, April 9, 2019

APPEARANCES OF COUNSEL

Gary Tsirelman, P.C., Brooklyn (Stefan Belinfanti of counsel), for plaintiff.

Law Offices of Rubin & Nazarian, Long Island City (Tasnim Hassanali of counsel), for defendant.

Background

Plaintiff commenced this action to recover assigned first-party no-fault benefits on behalf of Eric Daniel (assignor) in 2013. In 2018, plaintiff was awarded a judgment for the amount sued for. The action was then assigned to this court for a determination of plaintiff’s claim for attorneys’ fees.

The summons and complaint were filed on February 6, 2013.

On May 6, 2013, defendant appeared, by counsel, and filed an answer asserting 11 affirmative defenses, including that plaintiff’s assignor failed to appear for an independent medical exam (IME) and thus breached a condition precedent for coverage.

On June 25, 2013, defendant moved for summary judgment based on its defense that the assignor failed to appear for an IME. The motion was adjourned to October 4, 2013, April 1, 2014, July 25, 2014, and January 6, 2015. On February 5, 2015, defendant withdrew the motion.

There was a preliminary conference scheduled for October 4, 2013, and further conference dates on April 30, 2014, November 12, 2014, and April 22, 2015.

Plaintiff filed a notice of trial on May 14, 2015.

The action appeared on the trial calendar on May 25, 2016, June 8, 2017, July 5, 2018, September 24, 2018, November 5, 2018, and December 18, 2018. On December 18, 2018, the court (Ramirez, J.) issued a decision which stated in pertinent part:

“Plaintiff has made out a prima facie case. Defendant has failed to establish its defense of IME no show. Thus, judgment for Plaintiff for $944.12, plus statutory interest and filing fees.

“The issue of attorney fees will be severed and heard in Part MP2 on 2/20/19 at 9:30 am (Room 353).”

On February 20, 2019, the action was adjourned to April 1, 2019.

On April 1, 2019, the action was assigned to this court for a hearing to determine plaintiff’s claim for attorneys’ fees. The{**63 Misc 3d at 877} hearing commenced and concluded on that date. The matter was adjourned to April 8, 2019, for the submission of legal memoranda. On April 8, 2019, after the submission of memos by each party via email, the court reserved decision.

The Hearing

Plaintiff presented one witness at the hearing, Jennifer Raheb (JR), an attorney with the law firm representing plaintiff. Plaintiff also submitted a copy of the pleadings, the summary judgment motion papers, a printout from eCourts and the decision entering judgment.

JR testified that she has been admitted to practice law for 15 years, and has worked for Gary Tsirelman, P.C. for approximately five years. JR is familiar with this action and made all the court appearances on the case from at least May 2016 forward. JR testified credibly that each time the action appeared on the trial calendar, she spent approximately one hour preparing the file the night before. For this case, JR testified that the preparation included review of documents related to defendant’s IME no-show defense, including letters requesting an appearance for an IME and proof of mailing. JR testified that she also prepared cross-examination for the two witnesses she expected defendant to produce to establish proof of the assignor’s failure to appear and the scheduling letters.

JR did not do the opposition to the summary judgment motion, nor is there a record of opposition papers having been filed with the court. However, plaintiff did submit a copy of the opposition papers prepared by another attorney at the firm, Douglas Mace, Esq. (exhibit 7).

JR testified that in her experience motions on policy issues are much more complex than motions on medical necessity.

JR is assigned to handle the New York County no-fault cases for her firm and makes daily appearances in New York County Civil Court. JR typically arrives in court at around 9:30 a.m.

JR remembers first appearing on this case in 2015.

While JR had some independent recollection of specific appearances, much of her testimony was based on her general practice and procedures. JR testified that there were six appearances required for defendant’s summary judgment motion and eight appearances required for trial dates.

JR testified that no adjournments were granted without an application before the court on the trial dates, because of the age of the action. JR testified that she called defendant prior to{**63 Misc 3d at 878} each date and on each occasion, defendant stated they were ready to proceed.

JR appeared on May 25, 2016, before Judge Samuels and recalled that the trial was adjourned on defendant’s application.

JR appeared on June 8, 2017, and defendant made an application for an adjournment.

JR appeared on July 5, 2018, before Judge Nock, and defendant made an application to adjourn to secure a witness for the IME no-show defense. Defendant had only one witness available on that date.

JR testified that both parties knew early on that plaintiff would be seeking attorneys’ fees in this litigation, and that the case stood out in her mind for that reason.

On September 24, 2018, both parties appeared in court and conferenced the case with Judge Ramseur and her court attorney. Defendant decided at that time that it was not going to pursue the IME no-show defense and the action was adjourned to discuss a possible resolution including the issue of attorneys’ fees.

On November 5, 2018, defendant made an application for an adjournment and stated it did intend to proceed on the IME no-show defense at trial.

On December 18, 2018, the order entering judgment against defendant was issued. JR testified that plaintiff relied upon a notice to admit to establish its prima facie case. JR estimated that the trial could not have commenced before 11:00 or 11:30 a.m., because the court first went through the calendar calls.

The parties appeared on February 20, 2019, for the attorneys’ fees hearing, but the court had mis-calendered the matter and the hearing was adjourned to April 1, 2019.

On cross-examination, JR acknowledged that she maintained no contemporaneous records of the time she spent working on this case. For example, she did not record on any of the appearance dates the time she left the courthouse.

JR testified that she typically has more than one case on the morning calendar but less than 10 cases. While her office does maintain records of the specific number of cases she was handling on each of the dates in question, JR did not bring those records with her for the purpose of the hearing.{**63 Misc 3d at 879}

Discussion

It is undisputed that in this case defendant designated its IME no-show defense as a policy issue by checking off box 5 on the NF-10 denial of claim form.

11 NYCRR 65-4.6 (c) governs payment by insurers of applicants’ attorneys’ fees for services necessarily performed in the resolution of no-fault disputes and provides in pertinent [*4]part:

“For disputes subject to . . . court proceedings, where one of the issues involves a policy issue as enumerated on the prescribed denial of claim form (NYS form NF-10), subject to this section, the attorney’s fee for the arbitration or litigation of all issues shall be limited to a fee of up to $70 per hour, subject to a maximum fee of $1,400. In addition, an attorney shall be entitled to receive a fee of up to $80 per hour for each personal appearance before the arbitration forum or court.”

While defendant argues that there was no policy issue in this action, the court disagrees. “The failure to appear for IMEs requested by the insurer ‘when, and as often as, [it] may reasonably require’ (Insurance Department Regulations [11 NYCRR] § 65-1.1) is a breach of a condition precedent to coverage under the no-fault policy” (Unitrin Advantage Ins. Co. v Bayshore Physical Therapy, PLLC, 82 AD3d 559, 560 [2011]).

Plaintiff has the burden in establishing the amount of hours reasonably spent on legal work in this action. Plaintiff admitted it was aware that it would be seeking attorneys’ fees in this action, and the best evidence of time spent would have been time records contemporaneously maintained by the attorney doing the work.

JR’s testimony on the hours she spent was essentially an educated guess based on her routine and custom. For example, in confirming that she appeared on the dates in question, JR testified that she relied in part on her records of days absent from work, and when she saw she was not absent she determined she would have been the attorney in court on a particular date.

Less guesswork would have been involved had plaintiff provided evidence of the number of other matters she handled on each date she appeared. This evidence was readily available to plaintiff, as acknowledged by JR in her testimony, but not provided to the court, nor subpoenaed by defendant.{**63 Misc 3d at 880}

The court finds that plaintiff’s attorneys spent at least one-half hour in court on each of the trial dates on May 25, 2016, June 8, 2017, July 5, 2018, September 24, 2018, November 5, 2018, and December 18, 2018. This is reduced from the one hour per appearance requested by plaintiff, based on the failure of counsel to maintain contemporaneous time records for the appearances, and the failure of plaintiff to provide the court with evidence on the number of cases the attorney was handling in court on each of the dates in question.

As JR did not testify with certainty that she appeared on the earlier dates, and no other attorney for plaintiff offered evidence of same, no time is awarded for court appearances prior to the initial trial date.

No award is made for appearances after the trial date, as these appearances were solely on the issue of attorneys’ fees and time spent substantiating counsel fees, also known as fees on fees, and are not permitted by the statute (Matter of GEICO Ins. Co. v AAAMG Leasing Corp., 148 AD3d 703 [2017]; Insurance Law § 5106 [a]).

The court further finds that JR spent one hour each night prior to scheduled trial dates in preparation.

Plaintiff is additionally awarded one-half hour for the preparation of opposition papers to defendant’s summary judgment motion. Again since there was no evidence on the amount of time the attorney who prepared the papers spent on the task, and the papers were never filed with the court, the time is more limited than requested by plaintiff.

Based on the foregoing, the court finds plaintiff is entitled to three hours for court appearances totaling $240 and 6.5 hours for trial preparation and the affirmation in opposition totaling $455. Plaintiff is entitled to a total of $695 for attorneys’ fees in this action.

Footnotes

Footnote *:The file was not available to the court at the time of the hearing. The procedural history is based on the case summary maintained by Civil Court as well as the documents and testimony presented at the attorneys’ fees hearing.

[*1]

Civil Court of the City of New York, New York County, March 8, 2019

APPEARANCES OF COUNSEL

Johnnie Gordon, plaintiff pro se.

After an inquest held on December 1, 2017, upon defendant Geico Insurance Company’s failure to appear for a conference,{**63 Misc 3d at 622} the court dismissed plaintiff Johnnie Gordon’s complaint for failure to meet the burden of proof (22 NYCRR 208.14 [b] [1] [“At any scheduled call of a calendar or at a pretrial conference . . . (i)f the plaintiff appears but the defendant does not, the judge may grant judgment by default or order an inquest”]; 22 NYCRR 208.32).^[FN*] Plaintiff then filed a notice of appeal and sought settlement of the transcript. Because the proposed changes did not accurately transcribe what occurred at the inquest, the court declined to sign the Clerk’s return on appeal (see CIV-GP-44 [2000]).

Plaintiff has now submitted a second errata sheet dated January 10, 2019, again proposing changes to the transcript which would not reflect statements made at inquest and, in some instances, alter the meaning of what was said on the record. For the reasons below, the court memorializes its first denial and denies the second set of proposed amendments.

CPLR 5525 (c) (1) provides that

“[w]ithin fifteen days after receiving the transcript from the court reporter . . . , the appellant shall make any proposed amendments and serve them and a copy of the transcript upon the respondent. Within fifteen days after such service the respondent shall make any proposed amendments or objections to the proposed amendments of the appellant and serve them upon the appellant. At any time thereafter and on at least four days’ notice to the adverse party, the transcript and the proposed amendments and objections thereto shall be submitted for settlement to the judge or referee before whom the proceedings were had if the parties cannot agree on the amendments to the transcript. The original of the transcript shall be corrected by the appellant in accordance with the agreement of the parties or the direction of the court and its correctness shall be certified to thereon by the parties or the judge or referee before whom the proceedings were had. When he [*2]serves his brief upon the respondent the appellant shall also serve a conformed copy of the transcript or deposit it in the office of the clerk of the court of original instance who shall make it available to respondent.”

CPLR 5525 (c) (3) provides that an appellant{**63 Misc 3d at 623}

“shall serve on respondent together with a copy of the transcript and the proposed amendments, a notice of settlement containing a specific reference to subdivision (c) of this rule, and stating that if respondent fails to propose amendments or objections within [15 days of service], the provisions of [CPLR 5525 (c) (2)] shall apply.”

CPLR 5525 (c) (2), in turn, provides that

“[i]f the appellant has timely proposed amendments and served them with a copy of the transcript on respondent, and no amendments or objections are proposed by the respondent within the time limited by paragraph 1, the transcript, certified as correct by the court reporter, together with appellant’s proposed amendments, shall be deemed correct without the necessity of a stipulation by the parties certifying to its correctness or the settlement of the transcript by the judge or referee. The appellant shall affix to such transcript an affirmation, certifying to his compliance with the time limitation, the service of the notice provided by paragraph 3 and the respondent’s failure to propose amendments or objections within the time prescribed.”

With respect to both the first and second errata sheets, the court is unable to discern the reason for defendant having failed to object. It may be because defendant did not receive a copy of the transcript; that is, plaintiff sent a copy of the transcript to defendant; that is, plaintiff’s affiant Robert Wilson, in affidavits dated December 14, 2018, and January 22, 2019, only testifies to actually serving the transcript on the earlier date. Moreover, both list defense counsel’s service address as 2 Huntington Quadrangle, Suite 2N01, Melville, New York 11747, not the address of record, 170 Froehlich Farm Boulevard, Woodbury, New York 11797. Finally, it is unclear what defendant would be able to object to—indeed, the very reason that the inquest went forward was defendant’s absence.

In any event, however, even if plaintiff complied with all of CPLR 5525 (c)’s technical requirements, the court would nevertheless be compelled to deny the proposed amendments. CPLR 5525 (c) invokes, at multiple junctures, the “correctness” of the record—in the context of a stenographic record, the accuracy for the purposes of appellate review (see e.g. Ayton v Bean, 92 AD2d 577, 578 [2d Dept 1983] [“by permitting the affidavit of service and the acknowledgement of service to be included in{**63 Misc 3d at 624} the record, Special Term was not correcting or reforming an old record in order to indicate the true facts appearing before it at the time of its original determination but it was, in fact, making an entirely new record. To allow this type of amendment at this stage of the proceeding ‘would be setting a precedent which would lead to great embarrassment in our practice and injustice to parties’ ”]; Yaretsky v Blum, 629 F2d 817, 822-823 [2d Cir 1980] [“The chief purpose of the state statutory requirement that a complete electronic or stenographic record of the hearing be kept appears to be to allow judicial review in a proceeding under (CPLR article 78)”], revd on other grounds 457 US 991 [1982]; cf. Van Valkenburgh v Bourne, 26 AD2d 727, 727 [3d Dept 1966] [permitting addition of statement made in unrecorded summation to the effect that plaintiff had “flunked his driver’s test” where defendant’s counsel conceded that the summation language was “similar in import to the quoted words”]). The very purpose of appellate review is the correction of any errors based on the record; to that end, CPLR 5525 must ensure that the appellate court is reviewing the record as it actually occurred, not as a party believes it should have.

When plaintiff first proposed amendments on or about December 17, 2018, plaintiff’s “Notice of Settlement of Transcript,” apparently sent to respondent/appellee Geico, was accompanied by a five-page errata sheet listing numerous proposed amendments. Numerous amendments materially changed not only plaintiff’s testimony, but the court’s statements and conclusions on the record. For example:

“Transcript (2:1): You have an order to show cause that was granted on default. You wanted to amend the complaint to include some medical service and alleged days out of work. So, this is an inquest.

“(Plaintiff) Okay.

“(Court) Apparently, this case was on for a conference and now I’m told it’s an inquest. During an inquest you can present your evidence as you would like the court to hear it.

“Proposed change: A Conference is on the calendar. The Defendant is a No show. The court will proceed instead on an Inquest. Later a default judgment is granted in favor of Plaintiff . . .

“Transcript (5:17-23): (Plaintiff) This is based on—initially, I was paid for during the time I was{**63 Misc 3d at 625} injured for medical treatment up until May 4th of 2013. This is being submitted because I continued treatment, it was necessary to have further treatment up until December 29th, I mean, December 29th of 2015.

“Proposed change: (Gordon) I was not paid for Medical Treatments during the time I was injured in an auto accident. My medical treatments were not paid for at all by my No-Fault auto insurer, Geico (not paid from date of accident to the date of last treatments which is 12/01/2012 through 12/29/2015).”

The second errata sheet proposed similar amendments (proposed change underlined):

“Transcript (6:24): (Plaintiff) This document [from the social security administration] shows that they’re demanding income to be reimbursed from Geico for the treatment periods that I was—it does establish the times that I was treated and had loss of income.

“Proposed change: (Plaintiff) This document [from the social security administration] shows that they’re demanding medical costs to be reimbursed from Geico for the treatment periods that I was—it does establish the times that I was treated and had loss of income . . .

“Transcript (6:24): (Court) You can appeal my decision once you get a decision from me based on this inquest.

“Proposed change: (Court) You can appeal my decision once you get a decision from me based on this conference.”

In the case of both the first and second errata sheets, the other proposed amendments are similar. Even if they do not, as in the examples above, profoundly alter the meaning of the statements made on the record, the proposed changes nevertheless fail to accurately reflect what was said. Accordingly it is hereby ordered that amendment of the transcript of the December 1, 2017 court proceedings (Vanessa M. Castillo, Court Reporter) pursuant to plaintiff’s November 24, 2018, and January 10, 2019, errata sheets is hereby denied; and it is further ordered that said transcript shall be settled as currently transcribed.

Footnotes

Footnote *:The court also denied several subsequent orders to show cause to reargue and/or renew.