261079/2014

Attorney for Petitioner

Jason Tenenbaum, Esq.

The Law Office of Jason Tenenbaum, P.C.

595 Stewart Avenue, Suite 400

Garden City, New York 11530

Ralph C. Caio, Esq.

The Law Offices of Sukhbir Singh

95-18 130 Street

South Richmond Hill, New York 11419

The following papers numbered 1 to 3 read on this motion to vacate

NoOn Calendar of April 30, 2015PAPERS NUMBER

Notice of Motion-Order to Show Cause – Exhibits and Affidavits Annexed————————& mdash;____1___

Answering Affidavit and Exhibits———— —————————&mdas h;—————————&md ash;—————————___ 2___

Replying Affidavit and Exhibits————————&m dash;—————————& mdash;————————— ——————-____3___

Affidavit—————————— ;——————————— 51;———————————& #151;—————————______

Pleadings — Exhibit————————&md ash;—————————& mdash;————————— —————————&mdas h;————_______

Memorandum of Law——————————— ——————————— 51;———————————& #151;—————- ______ Stipulation — Referee’s Report —Minutes———————&mdash ;—————————&mda sh;—————————&m dash;—________Filed papers————————— —————————&mdas h;—————————&md ash;—————————& mdash;———-_______________

Upon the foregoing papers and due deliberation thereof, the Decision/Order on this motion is as follows:

Petitioner seeks judgment pursuant to CPLR 7511(b), vacating the master arbitration

award dated November 18, 2014, that granted respondent, Professional Chiropractic Care, P.C.,

(Care), an award of $9,221.79, and reinstating the decision of the no-fault arbitrator who

dismissed the no-fault claims.

As a result of a motor vehicle accident, respondent/assignor, Thomas Yanick, (Yanick),

underwent three days of manipulation under anesthesia. Yanick applied for no-fault

benefits, and failed to appear for scheduled IMEs. The arbitrator, in a decision dated August 16,

2014, denied Care’s claim for no-fault benefits. Care appealed to a master arbitrator, and the

master arbitrator reversed the arbitrator’s award and in its place, awarded Care, $9,221.79, on

the grounds that petitioner did not inform Care with sufficient specificity that the denial of

Care’s claim was the result of Yanick’s failure to appear for IMEs.

The award of an arbitrator shall be vacated pursuant to CPLR 7511(b) under the

following circumstances:

1. The award shall be vacated on the application of a party who either participated in the arbitration or was served with a notice of intention to arbitrate if the court finds that the rights of that party were prejudiced by:

(i) corruption, fraud or misconduct in procuring the award; or

(ii) partiality of an arbitrator appointed as a neutral, except where the award was by confession; or

(iii) an arbitrator, or agency or person making the award exceeded his power or so imperfectly executed it that a final and definite award upon the subject matter submitted was not made; or

(iv) failure to follow the procedure of this article, unless the party applying to vacate the award continued with the arbitration with notice of the defect and without objection.

CPLR 7511(b).

“In addition, article 75 review questions whether the decision was rational or had a

plausible basis. (Caso v Coffey, 41 NY2d 153, 158, supra.).” (Matter of Petrofsky (Allstate Ins.

Co.), 54 NY2d 207, 211 [1981]). In reply papers, petitioner limits the petition to “whether the

master arbitrator’s basis in reversing the findings of the lower arbitrator was irrational.” (reply,

par. 17). Petitioner then cites to Unitrin Advantage Ins. Co. v Bayshore Physical Therapy,

PLLC, 82 AD3d 559, [1st Dept 2011], to support its argument that Unitrin dictates a different

result from the master arbitrator’s award in this case.

In his award the master arbitrator cited to General Acc. Ins. Group v Cirucci, 46 NY2d

862 [1979], for the following: “although an insurer may disclaim coverage for a valid reason

(Insurance Law, § 167, subd 8) the notice of disclaimer must promptly apprise the claimant with

a high degree of specificity of the ground or grounds on which the disclaimer is predicated.” Id.

at 864. There is no dispute and the arbitrator acknowledged that the denial of coverage

referenced an incorrect date for an allegedly missed IME and EUO providing a rational basis for

the master arbitrator’s award.

While petitioner states that the master arbitrator’s award is irrational, petitioner’s

arguments center on the master arbitrator having made an error of law in failing to apply Unitrin

to the facts of this case. “The master arbitrator’s determination of the law need not be correct;

mere errors of law are insufficient to warrant setting aside the master arbitrator’s award, and on

questions of substantive law, the determination should be upheld if there is a rational basis for it

(see Matter of Liberty Mut. Ins. Co. v Spine Americare Med., 294 AD2d 574, 576-577 [2002]).”

(101 Acupuncture, P.C. v Utica Mut. Ins. Co., 16 Misc 3d 132(A), (App. Term 2d Dept 2007]).

Finally, petitioner cites to 11NYCRR 65-4.10 (a) (4) for the proposition that the Codes

Rules and Regulation of the State of New York allow this court to vacate the master arbitrator’s

award as “incorrect as a matter of law.” However, 11 NYCRR 65-4.10 (a) (4) only permits a

master arbitrator to vacate or modify an arbitrator. 11NYCRR 65-4.10 (a). A court may not

vacate or modify a master arbitrator’s or an arbitrator’s award on grounds that the award is

incorrect as a matter of law.

Accordingly, the petition is denied, and judgment is rendered in favor of respondent.

The foregoing shall constitute the decision and order of the Court.

Dated: _____________________________________________KENNETH L. THOMPSON JR. J.S.C.

[*1]

Supreme Court, Appellate Term, Second Department, 2d, 11th and 13th Judicial Districts, June 16, 2015

APPEARANCES OF COUNSEL

The Rybak Firm, PLLC, Brooklyn (Damin J. Toell of counsel), for appellant.

Ordered that the order is modified by providing that defendant’s cross motion for summary judgment dismissing the complaint is denied; as so modified, the order is affirmed, without costs.

Plaintiff Metro Health Products, Inc. commenced this action to recover assigned first-party no-fault benefits for medical “services” (actually supplies) provided to its assignor as a result of injuries sustained in an automobile accident. Thereafter, defendant insurer commenced a declaratory judgment action in Supreme Court, Nassau County, against Metro Health Products, Inc. seeking a declaration that Nationwide Insurance was under no obligation to pay any of the outstanding claims mentioned therein. In an order dated December 5, 2012, the Supreme Court stated the following:

“[Nationwide]’s unopposed motion for a default judgment on this declaratory judgment action pursuant to CPLR § 3215 is granted, there being no opposition.

“Settle judgment on notice.”

Plaintiff subsequently moved, in the instant no-fault action, for summary judgment, and defendant cross-moved for summary judgment dismissing the complaint on the ground that the instant action was barred by virtue of the Supreme Court’s order. The Civil Court denied plaintiff’s motion and granted defendant’s cross motion “in light of [the] order entered [in] Supreme Court.”

Since the Supreme Court’s December 5, 2012 order in the declaratory judgment action did not make a declaration determining the rights of the parties involved (see Hirsch v Lindor Realty Corp., 63 NY2d 878, 881 [1984] [requiring the court in a declaratory judgment action to make a declaration determining the rights of the parties involved in the dispute]; Lanza v Wagner, 11 NY2d 317, 334 [1962]; Suburban Bindery Equip. Corp. v Boston Old Colony Ins. Co., 150 AD2d 767{**48 Misc 3d at 87}[1989]), but rather directed the insurer to settle the judgment on notice (which [*2]defendant did not demonstrate that it had done), the order cannot be considered a conclusive final determination. Therefore, the Supreme Court order has no preclusive effect on the instant no-fault action (cf. Vital Meridian Acupuncture, P.C. v Republic W. Ins. Co., 46 Misc 3d 147[A], 2015 NY Slip Op 50222[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2015]; EBM Med. Health Care, P.C. v Republic W. Ins., 38 Misc 3d 1 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012]). Consequently, defendant’s cross motion for summary judgment dismissing the complaint should have been denied. We note that, in any event, the declaratory judgment action apparently only included one of the four claims at issue in the instant no-fault action. We cannot pass on the issue, raised by plaintiff on appeal, of whether the motion made before the Supreme Court in the declaratory judgment action, or for that matter the action itself, is deemed abandoned pursuant to 22 NYCRR 202.48 (a), (b) (see Skeete v Bell, 292 AD2d 371 [2002]).

Plaintiff failed to demonstrate its prima facie entitlement to summary judgment, as the affidavit submitted in support of its motion failed to establish that the claims at issue had not been timely denied or that defendant had issued timely denial of claims that were conclusory, vague or without merit as a matter of law (see EMC Health Prods., Inc. v Travelers Ins. Co., 47 Misc 3d 133[A], 2015 NY Slip Op 50475[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2015]; Ave T MPC Corp. v Auto One Ins. Co., 32 Misc 3d 128[A], 2011 NY Slip Op 51292[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2011]; see also Westchester Med. Ctr. v Nationwide Mut. Ins. Co., 78 AD3d 1168 [2010]). Consequently, plaintiff’s motion for summary judgment was properly denied.

Accordingly, the order is modified by providing that defendant’s cross motion for summary judgment dismissing the complaint is denied.

Elliot, J.P., Pesce and Solomon, JJ., concur.

[*1]

Supreme Court, Appellate Term, Second Department, 2d, 11th and 13th Judicial Districts, May 6, 2015

APPEARANCES OF COUNSEL

Freiberg, Peck & Kang, LLP, Armonk (Yilo J. Kang of counsel), for appellant.

Ordered that, on the court’s own motion, the notice of appeal from an order of the same court dated November 6, 2013 is deemed a premature notice of appeal from the amended order entered December 12, 2013 (see CPLR 5520 [c]); and it is further ordered that the amended order is reversed, with $30 costs, and defendant’s motion seeking, in effect, summary judgment dismissing the complaint is granted.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff mailed a copy of the summons and complaint to defendant in 2004, pursuant to CPLR 312-a. The record does not contain the signed acknowledgment of receipt required by CPLR 312-a. Nevertheless, in May 2004, defendant served a verified answer, in which it asserted, among other affirmative defenses, lack of personal jurisdiction, as defendant had not been “properly served with process,” and plaintiff’s failure to properly obtain an index number. In 2010, plaintiff purchased an index number and, for the first time, filed with the Civil Court the 2004 summons and complaint along with defendant’s 2004 answer. There is no proof of service upon defendant of the summons and complaint following the 2010 Civil Court filing (see CCA 411). Plaintiff thereafter served a notice of trial and certificate of readiness on defense counsel, and filed it in the Civil Court in 2011.

By notice of motion dated February 21, 2011, defendant moved to dismiss the complaint pursuant to CPLR 3211 (a) (8) on the ground of lack of personal jurisdiction, or, in the alternative, to vacate the notice of trial. In opposition, plaintiff argued that defendant had waived its jurisdictional defense since defendant had failed to move to dismiss the complaint within 60 days of its service of the answer in 2004, in accordance with CPLR 3211 (e). By order dated November 6, 2013, the Civil{**48 Misc 3d at 61} Court denied defendant’s motion to dismiss the complaint, finding that, although plaintiff had not properly served process, defendant had failed to timely challenge the defective service (41 Misc 3d 1226[A], 2013 NY Slip Op 51842[U] [Civ Ct, Richmond County 2013]).

Since defendant’s motion to dismiss the complaint pursuant to CPLR 3211 (a) (8) was made after it had served its responsive pleading, the motion was untimely (see CPLR 3211 [e]). However, the record indicates that the parties charted a summary judgment course (see Mihlovan v Grozavu, 72 NY2d 506 [1988]) and, thus, we apply the standard applicable to motions for summary judgment (see Fuentes v Aluskewicz, 25 AD3d 727 [2006]).

Furthermore, we note that the facts of this case, with respect to the issue of whether jurisdiction was acquired over defendant, are similar to the facts in New York Med. Rehab., P.C. v Travelers Ins. Co. (40 Misc 3d 76 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2013]), and our holding herein is in accordance with the decision therein.

“CPLR 312-a, as an alternative to the other methods of personal service authorized by CPLR 307, 308, 310, 311 or 312, permits personal service to be made by first class mail, by mailing a copy of the summons and complaint, together with two copies of a statement of service by mail and acknowledgment of receipt, with a return envelope, postage prepaid, addressed to the plaintiff (CPLR 312-a [a]). The defendant must complete the acknowledgment of receipt and mail or deliver it within 30 days from the date of receipt. Under CPLR 312-a, service is complete on the date the signed acknowledgment of receipt is mailed or delivered to the plaintiff (but cf. CCA former 410 [b]). The signed acknowledgment of receipt constitutes proof of service (CPLR 312-a [b] [1]; 306 [d])” (New York Med. Rehab., P.C., 40 Misc 3d at 79).

In 2004, when plaintiff sought to serve defendant pursuant to CPLR 312-a,

“an action in the Civil Court was commenced by service of the summons (CCA former 400). Service of the summons was complete upon filing proof of service (CCA former 410 [b]), or, in the case of service pursuant to CPLR 312-a, by filing the acknowledgment of receipt, which constitutes proof of service{**48 Misc 3d at 62} (CPLR 312-a [b] [1]; 306 [d])” (New York Med. Rehab., P.C., 40 Misc 3d at 79).

The record in the present case reveals that an acknowledgment of receipt was never signed by defendant and returned to plaintiff. Consequently, plaintiff was required to effect personal service in another manner (see CPLR 312-a [e]; Dominguez v Stimpson Mfg. Corp., 207 AD2d 375 [1994]). Since plaintiff did not attempt another manner of service, the purported service pursuant to CPLR 312-a failed to acquire personal jurisdiction over defendant (see Klein v Educational Loan Servicing, LLC, 71 AD3d 957 [2010]; Dominguez, 207 AD2d at 375; Gateway Med., P.C. v Progressive Ins. Co., 30 Misc 3d 144[A], 2011 NY Slip Op 50336[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2011]), and, thus, the action was never commenced in 2004 (see CCA former 400).

“Although no action had been commenced and, thus, defendant’s time to answer had not yet commenced, [in May] 2004, defendant nevertheless served plaintiff with an answer, in which it asserted, as an affirmative defense, lack of personal jurisdiction. Thus, having preserved its jurisdictional defense, the answer could not be deemed the ‘equivalent to personal service of the summons upon’ defendant (CPLR 320 [b])” (New York Med. Rehab., P.C., 40 Misc 3d at 80).

Contrary to plaintiff’s contention, “as there was no viable pending action, defendant cannot be deemed to have waived its defense of lack of personal jurisdiction by failing to make a motion to dismiss this ‘action’ ” (id.) within 60 days of the service of its answer, in accordance with CPLR 3211 (e).

In 2010, after the commencement-by-filing system had gone into effect in the New York City Civil Court, plaintiff purchased an index number and filed the 2004 summons and complaint, as well as defendant’s 2004 answer. The record supports defendant’s contention that it was never served with pleadings bearing the 2010 index number (see CCA 410), and, thus, that personal jurisdiction was not acquired over it under the current system (see CCA 400 [2]; New York Med. Rehab., P.C., 40 Misc 3d at 80).

As the Civil Court lacks jurisdiction over defendant, the amended order is reversed and defendant’s motion seeking, in effect, summary judgment dismissing the complaint is granted.

In view of some of the remarks contained in the amended order, we take this opportunity to remind the Judge that, as one commentator has noted:{**48 Misc 3d at 63}

“Judges may face a dilemma in trying to write opinions that are [*2]figurative, quotable, humorous, or unique. While they may want to forsake the wooden form of judicial opinion writing (issue, facts, law, application, conclusion), they must, in some way, maintain the dignity and integrity that, at least in part, gives the judiciary its legitimacy” (Adalberto Jordan, Imagery, Humor, and the Judicial Opinion, 41 U Miami L Rev 693, 695 n 11 [1987]).

Pesce, P.J., Solomon and Elliot, JJ., concur.

[*1]

Supreme Court, Appellate Term, Second Department, 2d, 11th and 13th Judicial Districts, March 2, 2015

APPEARANCES OF COUNSEL

Fuld & Karp, P.C., Brooklyn (Cheryl Scher of counsel), for appellant.

Rivkin Radler LLP, Uniondale (Evan H. Krinick, Cheryl F. Korman and Stuart M. Bodoff of counsel), for respondent.

Ordered that the order is affirmed, with $25 costs.

In this action by a provider to recover assigned first-party no-fault benefits, the Civil Court granted defendant’s motion for summary judgment dismissing the complaint and denied plaintiff’s cross motion for summary judgment, finding that defendant demonstrated that plaintiff had failed to appear for duly scheduled examinations under oath (EUOs).

It is undisputed that plaintiff’s patient, the assignor herein, initially granted plaintiff the right to bill defendant and receive direct no-fault payments from defendant by executing an “authorization to pay” on a prescribed NF-3 form, and that he executed a prescribed assignment of benefits in favor of plaintiff at a later date. Plaintiff’s main argument on appeal is that, because plaintiff was not the eligible injured person’s (EIP’s){**47 Misc 3d at 74} assignee at the time plaintiff submitted the NF-3 forms to defendant, the language in the mandatory personal injury protection (PIP) endorsement (11 NYCRR 65-1.1 [d] [Section I, Conditions, Proof of Claim]), which requires “the eligible injured person or that person’s assignee or representative” to “submit to examinations under oath,” did not require plaintiff to submit to an EUO, and, thus, defendant’s proffered defense, that plaintiff failed to appear for duly scheduled EUOs, lacks merit. In our view, the Civil Court properly rejected this argument, as we find that, pursuant to the regulations, both the recipient of an assignment of benefits and the recipient of an authorization to pay are required to submit to a duly scheduled EUO.

11 NYCRR 65-3.11 (a) states that an insurer shall pay benefits to an EIP “or, upon assignment by the applicant [or the applicant’s parent or legal guardian or any person legally responsible for necessities], shall pay benefits directly to providers of health care services.” 11 NYCRR 65-3.11 (b) provides two ways in which a health care provider can receive direct payment from the insurer—by submitting an “authorization to pay benefits as contained on NYS form NF-3, NF-4 or NF-5” (hereinafter prescribed authorization), or by submitting an assignment of benefits on an NF-3, NF-4, NF-5 or form NF-AOB (hereinafter prescribed assignment) (11 NYCRR 65-3.11 [b] [1], [2]). The prescribed authorization specifically states that the EIP retains “all rights, privileges and remedies” under the No-Fault Law; in contrast, the prescribed assignment states that such “rights, privileges and remedies” are assigned to the health care provider (which allows the provider to commence an action against the insurer to recover no-fault benefits). While the regulations clearly specify that a prescribed authorization and a prescribed assignment are different with respect to whether there is a transfer of rights, there is nothing in the prescribed assignment or prescribed authorization, both of which require the signatures of the EIP and the provider in order to be properly executed, differentiating between the two with respect to the EIP’s obligations (such as the requirement to submit to an EUO). Furthermore, in the provision dealing with direct payments to a health care provider, the regulations seem to conflate the prescribed assignment and the prescribed authorization. While an insurer is required to pay benefits directly to a provider “upon assignment by the applicant” pursuant to 11 NYCRR 65-3.11 (a), the word “assignment” in this context is not limited to a prescribed{**47 Misc 3d at 75} assignment, and indeed includes a prescribed authorization, since, pursuant to 11 NYCRR 65-3.11 (b), a provider demonstrates such “assignment” by submitting either a properly executed prescribed authorization or a properly executed prescribed assignment. Inasmuch as an “assignee” clearly must submit to an EUO, the regulations should be read to impose this obligation upon the recipient of both a properly executed prescribed authorization and a properly executed prescribed assignment.

Even if we did not find that a prescribed authorization falls within the umbrella of the word “assignment” as used in 11 NYCRR 65-3.11 (a), we would still hold that the recipient of an authorization to pay is obligated to submit to an EUO. This is because, in addition to requiring the EIP or that person’s assignee to submit to an EUO, the PIP endorsement also obligates the EIP’s representative to submit to an EUO. Written proof of claim may be submitted to an insurer by the EIP’s representative (see 11 NYCRR 65-1.1), and the recipient of a properly executed prescribed authorization who submits proof of claim is clearly acting as the EIP’s representative under those circumstances since the EIP retains “all rights, privileges and remedies.” Accordingly, plaintiff, as the entity which submitted the claim forms to defendant, was obligated to submit to an EUO whether such entity be viewed as its patient’s assignee or as his representative.

Plaintiff’s remaining argument is improperly raised for the first time on appeal. It is, in any event, without merit (see St. Barnabas Hosp. v Penrac, Inc., 79 AD3d 733, 734 [2010]).

Accordingly, the order is affirmed.

Pesce, P.J., Weston and Aliotta, JJ., concur.

[*1]

Supreme Court, Appellate Term, Second Department, 2d, 11th and 13th Judicial Districts, February 24, 2015

APPEARANCES OF COUNSEL

Rhonda H. Barry, Jericho, and Thomas Torto, New York City, for appellant.

Zara Javakov, Esq., P.C., Brooklyn Zara Javakov of counsel), for respondent.

Ordered that the order entered January 10, 2013 is reversed, without costs, and the branch of defendant’s motion seeking to resettle the order entered September 15, 2010 so as to delete the notation on that order stating that it was made on “consent” and is “not appealable” is granted; and it is further ordered that, on the court’s own motion, the decision and order on motion of this court dated May 1, 2012 (see 2012 NY Slip Op 72730[U] [2012]), which dismissed the appeal from the order of the Civil Court entered September 15, 2010, is recalled and vacated, and that appeal is reinstated under appeal No. 2011-192 K C; and it is further ordered that appeal No. 2011-192 K C shall be perfected within 30 days of the date of this decision and order; and it is further ordered that in the event that appeal is not perfected within 30 days of the date of this decision and order, the court, on its own motion, may dismiss the appeal, or respondent may move to dismiss the appeal on three days’ notice, and may serve such application in person; and it is further ordered that respondent, if it be so advised, may serve and file a respondent’s brief within 21 days of the date that the appellant’s brief is due to be filed pursuant to this decision and order, and appellant, if it be so advised, may serve and file a reply brief within 14 days of the date that the respondent’s brief is due to be filed pursuant to this decision and order.

In this action by a provider to recover assigned first-party no-fault benefits, defendant appeals from an order of the Civil Court, entered January 10, 2013, denying defendant’s motion to resettle so much of a prior order of the same court, entered September 15, 2010, which had decided a motion and cross motion{**52 Misc 3d at 14} for summary judgment, so as to delete a notation on that order stating that the order was made on “consent” and is “not appealable,” or for alternative relief.

At the outset, we note that, contrary to plaintiff’s argument on appeal, so much of the January 10, 2013 order as denied resettlement is appealable, as defendant did not seek to change the substantive or decretal portions of the September 15, 2010 order, but rather to, in essence, correct a factual recitation of that order (see Matter of Lewin v New York City Conciliation & Appeals Bd., 88 AD2d 516 [1982]; Bergin v Anderson, 216 App Div 844 [1926]; see also 4 NY Jur 2d, Appellate Review § 57; 10 Carmody-Wait 2d § 70:31).

In support of its motion, defendant submitted an affirmation from the attorney for defendant who had appeared on the return date of the motion and cross motion in question. That attorney attested that both he and plaintiff’s attorney had “vigorously argued” the motion and cross motion that day, and explicitly denied that the order had been made on consent. Defendant also submitted a copy of the September 15, 2010 order, apparently handed to the parties on September 15, 2010, the return date, which does not contain the “consent/not appealable” notation. Defendant further noted that all copies of the September 15, 2010 order state that it was made after oral argument. Plaintiff submitted no opposition to defendant’s motion, and, on appeal, does not dispute defendant’s factual assertions.

As defendant’s affirmed claim—that the September 15, 2010 order was not made on consent—was made on personal knowledge and was not contradicted, we find that the court should have granted the branch of defendant’s motion seeking to resettle the order so as to delete the “consent” and “not appealable” notation.

Accordingly, the order entered January 10, 2013 is reversed and the branch of defendant’s motion seeking to resettle the prior order entered September 15, 2010 so as to delete the notation on that order stating that it was made on “consent” and is “not appealable” is granted. In view of the foregoing, the decision and order on motion of this court dated May 1, 2012, which dismissed defendant’s appeal from the Civil Court’s September 15, 2010 order on the ground that no appeal lies from an order entered on consent, is recalled and vacated, and that appeal is reinstated.

Pesce, P.J., Weston and Aliotta, JJ., concur.

[*1]

Supreme Court, Appellate Term, Second Department, 2d, 11th and 13th Judicial Districts, August 11, 2014

APPEARANCES OF COUNSEL

Freiberg, Peck & Kang, LLP, Armonk (Yilo J. Kang of counsel), for appellant.

Ordered that the judgment is reversed, with $30 costs, the order dated February 28, 2012 is vacated, plaintiff’s motion for summary judgment is denied, and defendant’s cross motion for summary judgment dismissing the complaint is granted.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff moved for summary judgment and defendant cross-moved for summary judgment dismissing the complaint. Defendant argued that a conflict-of-law analysis required the application of Pennsylvania law, pursuant to which there was a lack of coverage due to a rescission of the automobile insurance policy in question. Defendant appeals from an order of the Civil Court dated February 28, 2012, which granted plaintiff’s motion for summary judgment and denied defendant’s cross motion. A judgment was subsequently entered, from which the appeal is deemed to have been taken (see CPLR 5501 [c]).

[1] Defendant issued the automobile insurance policy in Pennsylvania to the insured, who purportedly resided in Pennsylvania, for a vehicle which was purportedly garaged in Pennsylvania. The only connection between the policy and New York State is that plaintiff’s assignor was injured while riding in the insured’s vehicle in New York. Consequently, we find that{**46 Misc 3d at 29} Pennsylvania law is controlling under New York’s conflict-of-law rules (see Matter of Government Empls. Ins. Co. v Nichols, 8 AD3d 564 [2004]; Matter of Eagle Ins. Co. v Singletary, 279 AD2d 56, 58 [2000]).

[2] Although Pennsylvania law provides for a common-law right by the insurer to rescind a policy of insurance, in Erie Ins. Exch. v Lake (543 Pa 363, 375, 671 A2d 681, 687 [1996]), the Pennsylvania Supreme Court held that an automobile insurance policy cannot be retroactively rescinded with respect to third parties who were harmed through no fault of their own. In the case at bar, during his examination before trial, plaintiff’s assignor testified that his mother, the insured, had never resided in Allentown, Pennsylvania, and that he had driven his mother to Pennsylvania for the sole purpose of renewing her automobile insurance because the insurance [*2]was cheaper in Pennsylvania than in New York. Inasmuch as the aforementioned acts of the assignor make him complicit in the fraud perpetrated by his mother, he is not an innocent third party and, therefore, rescission of the subject insurance policy is effective with respect to him. Accordingly, the judgment is reversed, the order dated February 28, 2012 is vacated, plaintiff’s motion for summary judgment is denied, and defendant’s cross motion for summary judgment dismissing the complaint on the ground of lack of coverage due to the rescission of the insurance policy is granted.

The decision and order of this court dated December 9, 2013 are hereby recalled and vacated (see 2014 NY Slip Op 80108[U] [motion decided simultaneously herewith]).

Pesce, P.J., and Weston, J., concur; Rios, J., taking no part.

[*1]

Supreme Court, Appellate Term, Second Department, 2d, 11th and 13th Judicial Districts, May 22, 2014

APPEARANCES OF COUNSEL

Nightingale Law, P.C., Glen Cove (Michael S. Nightingale of counsel), for appellant.

The Rybak Firm, PLLC, Brooklyn (Damin J. Toell of counsel), for respondent.

Ordered that the order is affirmed, with $25 costs.

In this action by a provider to recover assigned first-party no-fault benefits, defendant moved for summary judgment dismissing the complaint, arguing that the action is premature since plaintiff had not responded to its verification requests. The Civil Court denied defendant’s motion, finding that a triable issue of fact existed as to whether the requests had been received by plaintiff.

As a preliminary matter, we note that, contrary to the apparent positions of both parties on appeal, the order appealed from does not limit the issues for trial pursuant to CPLR 3212 (g) (see generally A.B. Med. Servs., PLLC v Utica Mut. Ins. Co., 32 Misc 3d 63 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2011]).

Since a claim need not be paid or denied until all demanded verification is provided (see Westchester County Med. Ctr. v New York Cent. Mut. Fire Ins. Co., 262 AD2d 553, 554 [1999]), any action to recover payment is premature when the provider has failed to respond to a request for verification (see Central Suffolk Hosp. v New York Cent. Mut. Fire Ins. Co., 24 AD3d 492, 493 [2005]). Here, in support of its motion, defendant made a prima facie showing that it had timely mailed three initial and three follow-up requests for verification to plaintiff, with carbon copies mailed to plaintiff’s attorney, in accordance with its standard mailing practices and procedures (see Insurance Department Regulations [11 NYCRR] §§ 65-3.5 [b]; 65-3.6 [b]; St. Vincent’s Hosp. of Richmond v Government Empls. Ins. Co., 50 AD3d 1123 [2008]). This gave rise to a rebuttable presumption that the requests had been received by both plaintiff and its attorney{**44 Misc 3d at 61} (see Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679 [2001]).

It is undisputed that plaintiff did not respond to the requests. However, in opposition to [*2]defendant’s motion, plaintiff submitted an affidavit executed by its owner in which he described plaintiff’s practices and procedures that result in all mail being recorded in plaintiff’s computer system on the date of receipt, as well as being physically filed in the appropriate “patient” file. Plaintiff’s owner stated that he had reviewed the computer file and the physical file for the “patient” at issue, and that plaintiff has no record of having received verification requests for the claims at issue.

For the purpose of determining whether a no-fault insurer’s time to pay or deny a claim has been tolled (see Insurance Department Regulations [11 NYCRR] § 65-3.8 [a] [1]), a request for written verification that the insurer communicates to the applicant by mail is complete upon its delivery to the United States Postal Service (cf. CPLR 2103 [b] [2]). Thus, contrary to the finding of the Civil Court, the operative question in this case is not whether the requests were received by plaintiff, but whether defendant mailed them. Here, by rebutting the presumption of receipt, plaintiff raised a triable issue of fact as to whether the verification requests had been properly mailed to plaintiff in the first place.

Defendant correctly asserts that plaintiff did not make a prima facie showing that its attorney had not received the carbon copies of the verification requests that allegedly had been sent to counsel’s office. However, contrary to defendant’s argument, receipt of such letters did not give rise to a duty on the part of plaintiff’s counsel to forward these requests to plaintiff since, on their face, they purport to duplicate letters simultaneously sent to plaintiff (but cf. New York Hosp. Med. Ctr. of Queens v State Farm Mut. Auto. Ins. Co., 293 AD2d 588, 590-591 [2002]; Great Wall Acupuncture, P.C. v New York Cent. Mut. Fire Ins. Co., 22 Misc 3d 136[A], 2009 NY Slip Op 50294[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2009]).

Accordingly, the order is affirmed.

Weston, J.P., Aliotta and Solomon, JJ., concur.

13-12430

DANIEL WILLIAM DeLUCA, ESQ.

Attorney for Petitioner

3555 Veterans Memorial Hwy

Ronkonkoma, New York 11779

D’AMATO & LYNCH, LLP

Attorney for Respondent

Two World Financial Center

New York, New York 10281

In this Article 75 proceeding, the petitioner Allstate Insurance Company, by its agent Second Look, Inc. (Allstate), seeks a judgment confirming an arbitration award dated October 19, 2012, in the amount of $14,966.02 for a loss transfer claim arising out of a motor vehicle accident that occurred on April 19, 2008. The respondent Fiduciary Insurance Company of America (Fiduciary) has filed a cross petition which seeks a judgment vacating said arbitration award.

The subject accident allegedly occurred when a vehicle owned by Fiduciary’s insured came into contact with a vehicle owned and operated by Allstate’s insured, in which Noshaba Arooj (Arooj) was a passenger. After paying no-fault benefits to Arooj, Allstate filed demands for arbitration seeking to recoup the amount paid for medical treatments for injuries allegedly sustained as a result of the accident. Under the circumstances herein, the rights and obligations of insurers are subject to mandatory arbitration (Insurance Law §§ 5105 and 5221 [b]). It is undisputed that, as a result of Allstate’s initial filing, a prior arbitration award dated March 22, 2010 (Prior Decision) found Allstate’s driver and Fiduciary’s driver each 50% liable for the accident.

Thereafter, Allstate filed a demand for arbitration regarding additional no-fault benefits paid to Arooj. In a decision dated October 19, 2012 the arbitrator awarded Allstate 50% of the amount paid out on Arooj’s behalf based, at least in part, on the finding of liability in the Prior Decision. Allstate indicates that Fiduciary failed to pay the initial arbitration award until a prior petition to confirm was granted, and that this is the second petition against Fiduciary arising out of the same accident.

In its petition, Allstate alleges that the vehicle owned and operated by Fiduciary’s insured was a vehicle for hire which enables Allstate to make a qualified claim for loss transfer, that, pursuant to the rules of Arbitration Forum Inc. (AFI) and the relevant regulations, Fiduciary was required to pay the instant arbitration award within 30 days, and that Fiduciary has failed to pay said award. Allstate further alleges that Fiduciary failed to move to vacate the arbitration award within 90 days pursuant to CPLR 7511, that it is entitled to recover its legal fees on the grounds that Fiduciary has no valid defense or reason for non-payment of the arbitration award, that Fiduciary’s actions are frivolous, and that it is entitled to interest from the date of the arbitration award as well as court costs.

In support of its petition to confirm the subject arbitration award, Allstate submits the decision dated October 19, 2012, a number of prior orders of the court in unrelated proceedings, two pages from the E-Courts website, and an affirmation from its attorney regarding its claim for legal fees. In addition, Allstate submits a copy of a letter, dated April 1, 2011 on Allstate letterhead, which states that Second Look, Inc. “is the duly appointed agent for Allstate Insurance Company to process and collect subrogation claims . . . [and] is authorized to take any administrative/legal actions needed to pursue” such claims.

In her decision dated October 19, 2012, the arbitrator notes that there has been a prior [*2]arbitration award, and “[Allstate] has filed for supplemental amounts. [Fiduciary] in their contentions has challenged liability … [and] contends that they have evidence where [Allstate] has admitted their insured was at fault in the loss … [Fiduciary]’s representative … was advised that the [Prior Decision] is final and binding and … liability … is no longer an issue.” Thus, the arbitrator found that Allstate “proved 50% liability against [Fiduciary]. In the paragraph labeled “Damages Decision,” the arbitrator sets forth the following:

[Allstate] submitted proof of damages as required by [AFI] rules and regulations. [Fiduciary] claims that they did not receive paperwork from [Allstate] to substantiate the amounts claimed, [Fiduciary] made several arguments in regards to the injuries claimed by the injured party but was unable to prove that the payments made were unrelated or excessive. Since [Fiduciary] claims they never received the proof of payment from [Allstate] there is no way they can prove the treatment rendered was unrelated or excessive.

In opposition, Fiduciary submits its cross petition which seeks judgment vacating and setting aside the arbitration award on the ground that the decision was irrational, arbitrary and capricious, and exceeded the arbitrator’s power in that she failed to consider new evidence which proved that Allstate’s driver was 100% liable for the accident, to consider Fiduciary’s evidence as to damages, and to allow a court reporter to record the arbitration hearing in violation of Fiduciary’s due process rights. The Court will address Fiduciary’s cross petition before it reviews Allstate’s petition as it directly opposes the relief sought in the petition, and this may well determine the issues before the Court.

CPLR 7511 (b) (1) sets forth the exclusive grounds for vacating an award where, as here, the aggrieved party participated in the arbitration including, but not limited to, corruption, fraud or misconduct in procuring the award, partiality of an arbitrator appointed as a neutral, or the arbitrator making the award exceeded her power. However, compulsory arbitration awards are subject to closer judicial review than awards resulting from consensual arbitration, “as claimants are denied access to the courts in the first instance” (Rose v Travelers Ins. Co., 96 AD2d 551, 551, 465 NYS2d 64 [2d Dept 1983]; see Matter of Motor Vehicle Acc. Indem. Corp. v Aetna Cas. & Sur. Co., 89 NY2d 214, 652 NYS2d 584 [1996]; Matter of Progressive Cas. Ins. Co. v New York State Ins. Fund, 47 AD3d 633, 850 NYS2d 478 [2d Dept 2008]). Here, it undisputed that the controversy between the parties is subject to compulsory arbitration, and that the arbitration process remains Allstate’s sole remedy to recover herein (CPLR 5105 [b]).

It is well settled that an arbitration award in a compulsory arbitration proceeding must be in accord with due process and supported by adequate evidence in the record (see City School Dist. of the City of NY v McGraham, 17 NY3d 917, 934 NYS2d 768 [2011]; Matter of Motor Veh. Acc. Indem. Corp. v Aetna Cas. & Sur. Co., supra; Motor Veh. Mfrs. Assn. of U.S. v State of New York, 75 NY2d 175, 551 NYS2d 470 [1990]; Matter of Petrofsky [Allstate Ins. [*3]Co.], 54 NY2d 207, 445 NYS2d 77 [1981]; Matter of Mangano v United States Fire Ins. Co., 55 AD3d 916, 866 NYS2d 348 [2d Dept 2008]). The award also must be rational and satisfy the arbitrary and capricious standard of CPLR Article 78 (Motor Veh. Mfrs. Assn. of U.S. v State of New York, supra; Caso v Coffey, 41 NY2d 153, 391 NYS2d 88 [1976]; Lackow v Department of Educ. (or “Board”) of City of NY, 51 AD3d 563, 859 NYS2d 52 [1st Dept 2008]). An arbitration award may be found to be rational if any basis for the determination is apparent to the court upon reading the evidentiary record before the arbitrator (see Caso v Coffey, supra; Matter of Travelers Indem. Co. v United Diagnostic Imaging, 70 AD3d 1043, 893 NYS2d 899 [2d Dept 2010]; Matter of State Farm Mut. Auto. Ins. Co. v City of Yonkers, 21 AD3d 1110, 801 NYS2d 624 [2d Dept 2005]; see generally Matter of Pell v Board of Educ. of Union Free School Dist. No. 1 of Towns of Scarsdale & Mamaroneck, Westchester County, 34 NY2d 222, 356 NYS2d 833 [1974]). In addition, the burden of establishing the invalidity of an arbitration award is on the party challenging it (Caso v Coffey, supra; Lackow v Department of Educ. (or “Board”) of City of NY, supra).Here, Fiduciary contends that the subject decision is irrational because the arbitrator “improperly applied the liability finding in the Prior Decision,” and failed to consider newly discovered evidence that Allstate’s driver was 100% liable for the accident. Fiduciary further contends that, in its investigation in connection with the subject filing for arbitration, it obtained a copy of an ISO Report in which Allstate noted “Insured. Was Speeding Doing 80 MPH. Went Through R,” and that said report is “conclusive proof” that Allstate knew that its insured driver was 100% liable for this accident. Fiduciary alleges that ISO is a “shared comprehensive database where insurers report, among other things, the results of their claims and fraud investigations,” and that said report was not entered into ISO until well after the Prior Decision.

A review of the record reveals that Fiduciary has failed to submit a copy of the police accident report regarding the subject accident in support of its cross petition, that the arbitrators in the Prior Decision and the subject decision considered the police report, and that the arbitrator in the Prior Decision noted that Allstate was “able to prove through the police report that Fiduciary is half at fault for this loss.” Under the heading “What evidence caused you to render this decision and why?” the arbitrator in the Prior Decision stated “based on the police report, [Fiduciary’s driver] was cited for traffic control disregarded.” Under these circumstances, there was a rational basis for the arbitrator’s determination in the second arbitration that the Fiduciary vehicle was 50% liable for the accident (see Matter of Mangano v United States Fire Ins. Co., supra).

Fiduciary’s allegation that the arbitrator did not consider the ISO report, even if true, does not change the result. On review, an award may be found to be rational if any basis for such a conclusion is apparent to the court based upon a reading of the record (see Matter of Travelers Indem. Co. v United Diagnostic Imaging, supra; Matter of State Farm Mut. Auto Ins. Co v City of Yonkers, supra). In any event, Allstate contends that the ISO report is not its final conclusion in its claim and fraud investigation, and that the notation therein is merely the memorialization of the initial statement made by Fiduciary’s driver to Allstate’s examiner. Here, [*4]it is determined that there is sufficient basis for the arbitrator to consider the Prior Decision, which is based on the subject police report, to be convincing evidence regarding the relative culpability of the parties. This is especially true where the record reveals that both parties submitted said police report to the arbitrator in the hearing which is the subject of this proceeding, and Fiduciary does not challenge its probative value.

Fiduciary further contends that the arbitrator “did not hold Allstate to its burden of proof, but inappropriately shifted the burden to Fiduciary to disprove the damages.” As noted above, the arbitrator held that, because Fiduciary claimed that it never received proof of payment from Allstate it could not prove that the treatment rendered to Arooj was unrelated or excessive. It is undisputed that the only evidence submitted by Allstate regarding its damages, and the only evidence considered by the arbitrator in rendering her decision, was Allstate’s payment ledger. Under the heading “What evidence caused you to render this decision and why?” the arbitrator stated “Decision based on … proof of payment submitted,” and the record indicates that the sole item in support of Allstate’s claim for damages was its “payment history.”

Fiduciary asserts that pursuant to AFI’s rules, where a respondent disputes a damages claim, a payment ledger is insufficient to establish damages. In support of this assertion, Fiduciary submits a copy of the “Summary of May 11, 2011 Loss Transfer Advisory Committee Meeting”^[FN1] wherein it is stated that

Per the rules, a payment ledger is sufficient as “minimal” proof of damages should the Respondent not dispute damages. If the Respondent does dispute damages, then additional evidence may be needed to support the amount claimed/sought. In addition, if specific damages are disputed and the arbitrator believes the Respondent’s argument is valid, the arbitrator may adjourn the hearing to require the Applicant to provide the Respondent with a copy of their proofs, specific to the damages disputed.

In addition, Fiduciary contends that AFI arbitrators “are required to look to additional proofs of damages where damages have been disputed by a Respondent as to the reasonableness and necessity of the damages sought by the Applicant.” In support of this contention, Fiduciary submits a copy of AFI’s “Guide For Arbitrators,”^[FN2] wherein it is stated that

If a responding company raises a damages argument in the Disputed Damages section that could be valid, you should review the filing company’s proofs for damages to respond to the challenge. The responding company must provide a valid reason for its challenge — causation, pre-existing damages, reasonable and necessary, ACV versus RCV, etc., and not simply indicate “we challenge all damages.” However, if it provides a valid rationale for the challenge, it should be considered even if the responding company isn’t given the opportunity to itemize it.

It is undisputed that Fiduciary submitted documents which raise the question whether Arooj was truthful regarding her injuries and the need for treatment. More importantly, the arbitrator herself indicates that Fiduciary claimed that it had not received the “paperwork from [Allstate] to substantiate the amounts claimed.” AFI’s “Guide For Arbitrators” addresses this issue as follows: “It must be noted that the responding company is at the mercy of the filing company when it is challenging damages. If the filing company has not provided the responding company with full documentation of the damages it is claiming for recovery, it will be difficult, if not impossible, to itemize exceptions to what it has never seen.”

Here, upon reading the evidentiary record before the arbitrator, it is not apparent to the Court that there is any rational basis for the determination that Fiduciary bore the burden for the alleged failure of Allstate to provide full documentation to Fiduciary regarding its damages, or that an adjournment of the hearing was not warranted. Therefore, that portion of the award was irrational as well as arbitrary and capricious (see Caso v Coffey, supra; Matter of Travelers Indemnity Co. v United Diagnostic Imaging, supra; Matter of State Farm Mut. Auto. Ins. Co. v City of Yonkers, supra). Under these circumstances, the matter is remitted to the arbitrator for a new determination as to the amount of damages recoverable by Allstate herein (see CPLR 7511 [d]).

Finally, Fiduciary contends that its due process rights were violated when the arbitrator refused its request to allow a court reporter to record the subject hearing. Fiduciary fails to cite any authority for its position, and relies instead on conclusory statements in its verified cross petition and an affidavit submitted in support thereof that, because this is a mandatory arbitration process, it was a denial of due process to refuse its request. The only regulation touching on the subject appears in 11 NYCRR § 65-4.5, entitled “No-fault arbitration forum procedure,” which provides in pertinent part in sub-paragraph (l): “Record of proceedings. A stenographic record of the arbitration proceedings shall not be required. However, a party requesting such a record shall inform the other party or parties of such intent, make the necessary arrangements, and pay the cost thereof directly to the person or agency making such record.”

It is undisputed that AFI’s rules do not permit a party to require that a court reporter be present at a hearing. Generally, courts avoid interfering in the arbitral process, and they afford arbitrators wide discretion in procedural matters, which will not be limited absent a compelling [*5]reason (see Matter of Glen Rauch Sec. v Weinraub, 2 AD3d 301, 768 NYS2d 611 [1st Dept 2003]; Matter of Travelers Ins. Co. v Job, 239 AD2d 289, 658 NYS2d 585 [1st Dept 1997]; Avon Prods. v Solow, 150 AD2d 236, 541 NYS2d 406 [1st Dept 1989]). The sworn statement of Fiduciary’s affiant that court reporters have been permitted in other hearings, does not establish that the arbitrator’s denial of the request herein was irrational or violative of Fiduciary’s due process rights. Here, Fiduciary has not established that it informed Allstate of its intent to schedule a court reporter, and made the necessary arrangements pursuant to the subject regulation. More importantly, Fiduciary has not established that arbitration hearings in general, and the subject hearing in particular, cannot be conducted in a fair and rational manner without the aid of a court reporter. In light of the subject regulation, and the absence of an AFI rule permitting a party to require the presence of a court reporter, the determination whether a court reporter is needed generally rests with the arbitrator.

A review of the entire record does not alter the determinations herein. In its petition, Allstate alleges that Fiduciary failed to move to vacate the arbitration award within 90 days pursuant to CPLR 7511, that it is entitled to recover its legal fees on the ground that Fiduciary has no valid defense or reason for non-payment of the arbitration award, and that it is entitled to interest from the date of the arbitration award as well as court costs. Allstate’s first allegation, in which it implies that Fiduciary is not permitted to contest the petition, is without merit. A party may oppose an arbitration award either by motion pursuant to CPLR 7511 (a) to vacate or modify the award within 90 days after delivery of the award or, as here, by objecting to the award on the grounds set forth in CPLR 7511 (b) upon an application to confirm the award notwithstanding the expiration of the 90-day period (see Matter of Brentnall v Nationwide Mut. Ins. Co., 194 AD2d 537, 598 NYS2d 315 [2d Dept 1993]; Karlan Constr. Co. v Burdick Assoc. Owners Corp., 166 AD2d 416, 560 NYS2d 480 [2d Dept 1990]; State Farm Mut. Auto. Ins. Co. v Fireman’s Fund Ins. Co., 121 AD2d 529, 504 NYS2d 24 [2d Dept 1986]). That branch of Allstate’s petition which seeks to recover its attorney’s fees on the ground that Fiduciary’s failure to pay the arbitration award amounts to frivolous conduct is denied. The Court finds that Fiduciary’s failure to pay the subject arbitration award, and its cross petition, are based, in part, upon a potentially valid legal argument, and considering that the cross petition has been granted in part, clearly did not rise to the level of “frivolous conduct” as contemplated by court rules (see CPLR 8303-a; Uniform Rules for Trial Cts [22 NYCRR] § 130-1.1 [a]; S & B Petroleum, Inc. v Gizem Realty Corp., 8 AD3d 550, 778 NYS2d 696 [2d Dept 2004]; Agostini v Sobol, 304 AD2d 395, 757 NYS2d 555 [1st Dept 2003]; Juron & Minzner v State Farm Ins. Co.,303 AD2d 463, 756 NYS2d 428 [2d Dept 2003]; Matter of Christopher, 280 AD2d 546, 720 NYS2d 391 [2d Dept 2001]). Lastly, it is determined that Allstate’s request for interest and court courts must be held in abeyance until a decision is rendered in accordance with this decision.

If an application to vacate an award is denied, the Court must confirm the award (CPLR 7511 [e]). Accordingly, the petition is granted to the extent that the determination of liability in the subject award is confirmed and is otherwise denied. Concomitantly, that branch of the cross motion which seeks judgment vacating the award of damages in the subject arbitration award is granted, and the matter is remitted to the arbitrator, or a substitute, for a determination of [*6]damages in accordance with this decision.

Settle judgment.

__________________________________

Andrew G. Tarantino, Jr.

A.J.S.C.

Footnotes

Footnote 1:Pursuant to 11 NYCRR § 65-4.11(f) governing mandatory arbitration for insurers, a loss transfer advisory committee is charged with regularly reviewing the rules and all other relevant matters involving settlements between insurers and reporting its findings and recommendations to the superintendent of insurance.

Footnote 2:The document submitted includes the notation “Updated: June 27, 2013,” which is subsequent to the subject decision dated October 19, 2012. However, there is no indication in the document that the quoted material has been updated, and Allstate does not contend that the content is inapplicable herein.

[*1]

Supreme Court, Appellate Term, Second Department, 2d, 11th and 13th Judicial Districts, March 21, 2014

APPEARANCES OF COUNSEL

Skenderis & Cornacchia, P.C., Long Island City (Anupama Karumanchi of counsel), for appellant.

Law Offices of Melissa Betancourt, P.C., Brooklyn (Melissa Bentancourt of counsel), for respondent.

Ordered that the order, insofar as appealed from, is reversed, without costs, and plaintiffs’ cross motion for summary judgment is denied.

In this action by a provider to recover assigned first-party no-fault benefits, defendant moved for summary judgment dismissing the complaint and plaintiffs cross-moved for summary judgment. The Civil Court denied defendant’s motion on the ground that it was not made within 120 days of the filing of the notice of trial (see CPLR 3212 [a]), but granted plaintiffs’ cross motion, which was made several months later. Defendant appeals, as limited by its brief, from so much of the order as granted plaintiffs’ cross motion for summary judgment.

It was improper for the Civil Court to consider plaintiffs’ untimely cross motion for summary judgment in the absence of a showing by plaintiffs of good cause for not serving the motion within 120 days of the filing of the notice of trial, the Civil Court equivalent of a note of issue (see Chimbay v Palma, 14 Misc 3d 130[A], 2007 NY Slip Op 50019[U]; [App Term, 2d Dept, 2d & 11th Jud Dists 2007]), as required by CPLR 3212 (a) (see Miceli v State Farm Mut. Auto. Ins. Co., 3 NY3d 725 [2004]; Brill v City of New York, 2 NY3d 648 [2004]). Indeed, the deadline imposed by CPLR 3212 (a) is strictly enforced, and without a showing of good cause, the court has no discretion to entertain the motion, regardless of its merit or lack of prejudice to the opposing party (see Miceli v State Farm Mut. Auto. Ins. Co., 3 NY3d at 726; Brill v City of New York, 2 NY3d at 652-653; Richman v Obiakor Obstetrics & Gynecology, P.C., 32 Misc 3d 135[A], 2011 NY Slip Op 51461[U]; [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2011]).

To the extent plaintiffs contend that defendant never objected to their cross motion as untimely, we conclude that the absence of an objection does not constitute good cause to consider an otherwise untimely motion. As noted, the 120-day time limit specified in CPLR 3212 (a) is strict and serves to eliminate the “sloppy practice” of late summary judgment motions and promote “a habit of compliance with the statutory deadlines” for such motions (Brill v City of New York, 2 NY3d at 653-654).{**43 Misc 3d at 77} Thus, plaintiffs, having successfully opposed defendant’s summary judgment motion as untimely, cannot escape the consequences of their own untimely cross motion, which was made four months later. In these circumstances, the Civil Court should have denied plaintiffs’ cross motion, as it did defendant’s, as untimely.

Accordingly, the order, insofar as appealed from, is reversed, and plaintiffs’ cross motion for summary judgment is denied.

Aliotta, J.P., Pesce and Weston, JJ., concur.

[*2]

[*1]

Supreme Court, Appellate Term, Second Department, 2d, 11th and 13th Judicial Districts, March 5, 2014

APPEARANCES OF COUNSEL

Law Office of Jeff Henle, P.C., New York City (Jeff Henley of counsel), for appellant.

Jaffe & Koumourdas, LLP, New York City (Jean H. Kang of counsel), for respondent.

Ordered that, on the court’s own motion, the notice of appeal from the amended decision dated September 15, 2010 is deemed a premature notice of appeal from so much of the judgment entered January 26, 2012 as awarded statutory prejudgment interest from August 7, 2008 (see CPLR 5520 [c]); and it is further ordered that the judgment, insofar as appealed from, is affirmed, without costs.

Plaintiff commenced this action to recover assigned first-party no-fault benefits in 2001, based upon an accident that had occurred in 1998. It is undisputed that for the next seven years, no action was taken by either party. On August 7, 2008, plaintiff filed a notice of trial. A nonjury trial was subsequently held, after which the Civil Court found in favor of plaintiff. However,{**43 Misc 3d at 89} based on plaintiff’s delay of the case, the Civil Court held that statutory prejudgment interest would accumulate from the date plaintiff filed his notice of trial, on August 7, 2008. Plaintiff filed a notice of appeal from that decision, limited to the Civil Court’s decision to award interest from August 7, 2008. A judgment was subsequently entered, including interest commencing as of August 7, 2008 at a simple, not compound, rate. We deem the appeal to have been taken from so much of the judgment as awarded interest from August 7, 2008.

[1] First, contrary to plaintiff’s argument on appeal, defendant did prove the timely mailing of the denial. Where, as here, a provider does not commence the action within 30 days of receipt of the denial, the Insurance Department Regulations provide that statutory prejudgment interest (see Insurance Law § 5106 [a]) begins to accumulate when the action is commenced (see Insurance Department Regulations [11 NYCRR] § 65-3.9 [c]), “unless the applicant unreasonably delays the . . . court proceeding” (Insurance Department Regulations [11 NYCRR] § 65-3.9 [d] [emphasis added]). In this case, plaintiff took no action for seven years. Plaintiff’s argument that defendant should be required to pay interest for that period because defendant could have attempted to move the case forward lacks merit. It is plaintiff who brought this action and plaintiff should not be rewarded for his years of inaction by receiving a windfall of interest (see Arzu v NYC Tr. Auth., 35 Misc 3d 210 [Civ Ct, Kings County 2012]; compare Igor Shtarkman Neurologist, P.C. v Allstate Ins. Co., 191 Misc 2d 76 [Nassau Dist Ct 2002]). Thus, in our opinion, the Civil Court properly held that the interest in this case should be awarded from August 7, 2008.

[2] On appeal, plaintiff also contends that interest should have been calculated at a compound, not simple, rate. However, the decision from which plaintiff appealed did not specify whether the interest awarded should be simple or compound, and the award of simple, rather than compound, interest is found only in the judgment, which was entered subsequent to the filing of the notice of appeal. Moreover, the notice of appeal limited the appeal to the court’s determination regarding the date on which interest would begin to accumulate. Therefore, the issue of whether the interest should be calculated at a simple or compound rate is not reviewable on this appeal. As this issue was not litigated below and as there has been no prior judicial determination of this question, plaintiff, if he be so advised, may move, pursuant to CPLR 5019 (a), to seek a correction of{**43 Misc 3d at 90} the interest in the judgment (see Kiker v Nassau County, 85 NY2d 879, 881 [1995]; see also former Insurance Department Regulations [11 NYCRR] § 65.15 [h] [1]; Belt Parkway Imaging, P.C. v State Wide Ins. Co., 30 Misc 3d 127[A], 2010 NY Slip Op 52229[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2010]; Ops Gen Counsel NY Ins Dept No. 02-10-22 [Oct. 2002]).

Accordingly, the judgment, insofar as appealed from, is affirmed.

Weston, J.P., Aliotta and Solomon, JJ., concur.