[*1]

Supreme Court, Appellate Term, Second Department, September 10, 2008

APPEARANCES OF COUNSEL

Amos Weinberg, Great Neck, for appellant. Marshall & Marshall, Jericho (Barbara Carabell of counsel), for respondent.

{**21 Misc 3d at 19} {**21 Misc 3d at 19} OPINION OF THE COURT

Memorandum.

Order affirmed without costs.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff moved for summary judgment. In a supporting affidavit, plaintiff’s billing manager stated that he had mailed letters to defendant requesting copies of the peer review reports upon which the denial of claim forms were based and that defendant had failed to comply with said request. Plaintiff argued that defendant should therefore be precluded from asserting its defense of lack of medical necessity. In opposition, defendant argued that it had timely denied plaintiff’s claims on the ground that the supplies provided were not medically necessary. Defendant attached to its opposition papers copies of the affirmed peer review reports which set forth with specificity the defense of lack of medical necessity. Defendant, however, did not refute the fact that it had not previously provided plaintiff with copies of the reports. The court below denied plaintiff’s motion on the ground that there are triable issues of fact as to medical necessity. The instant appeal by plaintiff ensued.

An insurer’s submission of a denial of claim form which denies a provider’s claim based upon a peer review report is sufficient to raise the defense of lack of medical necessity. The Appellate Division, Second Department, has noted that such a denial of claim form need not set forth with particularity the factual basis and medical rationale upon which the defense was based, because the provider may, if it so desires, request a copy of the written peer review report from the insurer pursuant to Insurance Department Regulations (11 NYCRR) § 65-3.8 (b) (4) (New York Univ. Hosp. Rusk Inst. v Government Empls. Ins. Co., 39 AD3d 832 [2007]; A.B. Med. Servs., PLLC v Liberty Mut. Ins. Co., 39 AD3d 779 [2007]; A.B. Med. Servs., PLLC v GEICO Cas. Ins. Co., 39 AD3d 778 [2007]). The Appellate Division further stated that “[h]ad it been the intent of the Department of Insurance to require the carrier to set forth a medical rationale in the prescribed denial of claim form . . . , it would have so provided” (New York Univ. Hosp. Rusk Inst., 39 AD3d at 833; A.B. Med. Servs., PLLC v Liberty Mut. Ins. Co., 39 AD3d at 780; A.B. Med. Servs., PLLC v GEICO Cas. Ins. Co., 39 AD3d at 779).

The Insurance Department Regulations provide no sanction for an insurer’s failure to provide a peer review report upon the written{**21 Misc 3d at 20}{**21 Misc 3d at 20} request for one by a provider (see e.g. A.B. Med. Servs. PLLC v Clarendon Natl. Ins. Co., 12 Misc 3d 143[A], 2006 NY Slip Op 51415[U] [App Term, 2d & 11th Jud Dists 2006]). While plaintiff urges the court to impose the sanction of preclusion here, we decline to do so because “[h]ad it been the intent of the Department of Insurance” to impose such a sanction, “it would have so provided” (New York Univ. Hosp. Rusk Inst., 39 AD3d at 833; A.B. Med. Servs., PLLC v Liberty Mut. Ins. Co., 39 AD3d at 780; A.B. Med. Servs., PLLC v GEICO Cas. Ins. Co., 39 AD3d at 779). Indeed, the application of a preclusion sanction would necessarily entail the wholesale creation of a regulatory scheme, as the Insurance Department Regulations do not provide a time frame within which the request for the peer review report must be made by the provider or complied with by the insurer. Absent these time frames, there is no way to know when a sanction for noncompliance is warranted, and we decline to read such a scheme into the Insurance Department Regulations.

We note that even in the absence of a sanction imposed by the Insurance Department Regulations, a provider is not without any recourse where an insurer fails to provide a requested peer review report. The prescribed NF-10 denial of claim form provides that a complaint may be made by the provider to the Insurance Department whose “regulations themselves provide for agency oversight of carriers” (State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313, 322 [2005]). In any event, if the matter proceeds to the litigation stage, the provider may seek disclosure of the peer review report.

Accordingly, since defendant’s opposition papers established a triable issue of fact based on a defense of medical necessity, the court below properly denied plaintiff’s motion for summary judgment.

Pesce, P.J., Rios and Steinhardt, JJ., concur.

[*1]

Supreme Court, Appellate Term, Second Department, July 30, 2008

APPEARANCES OF COUNSEL

McDonnell & Adels, P.C., Garden City (Robin Grumet of counsel), for appellant. Gary Tsirelman, P.C., Brooklyn (Darya Klein of counsel), for respondent.

{**21 Misc 3d at 11} OPINION OF THE COURT

Memorandum.

Order, insofar as appealed from, modified by providing that the branches of defendant’s motion seeking to compel plaintiff to respond to the demand for discovery and inspection, the demand for verified written interrogatories and the supplemental demand for verified written interrogatories are granted to the extent of compelling plaintiff to produce its certificate of incorporation for discovery and inspection, and serve responses to numbers 1, 15 and 16 of defendant’s demand for verified written interrogatories and numbers 1, 15, 31, 37-40, and 44-46 of defendant’s supplemental demand for verified written interrogatories within 60 days of the date of the order entered hereon; as so modified, affirmed without costs.

In this action by a provider to recover assigned first-party no-fault benefits, defendant moved to strike plaintiff’s complaint pursuant to CPLR 3126 or, in the alternative, to compel plaintiff to produce its owner, Valentina Anikeyeva, for an examination before trial and to produce the discovery demanded in defendant’s demand for discovery and inspection, demand for verified written interrogatories and supplemental demand for verified written interrogatories. [*2]Plaintiff opposed the motion and cross-moved for a protective order. The court granted defendant’s motion to the extent of requiring plaintiff to provide documentation pertaining to the license of plaintiff’s owner, Anikeyeva, and to plaintiff’s corporate structure, and granted plaintiff’s{**21 Misc 3d at 12} cross motion to the extent of providing that Anikeyeva did not have to produce personal documents. This appeal by defendant ensued.

Plaintiff was required, but failed, to challenge the propriety of defendant’s notice for discovery and inspection pursuant to CPLR 3120 within the time prescribed by CPLR 3122. Likewise, plaintiff failed to object to defendant’s demand for verified written interrogatories and to defendant’s supplemental demand for verified written interrogatories. As a result, plaintiff is obligated to produce the information sought except as to matters which are palpably improper or privileged (see Fausto v City of New York, 17 AD3d 520 [2005]; Marino v County of Nassau, 16 AD3d 628 [2005]; Garcia v Jomber Realty, 264 AD2d 809 [1999]; A.B. Med. Servs. PLLC v Utica Mut. Ins. Co., 11 Misc 3d 71 [App Term, 2d & 11th Jud Dists 2006]).

To the extent the discovery demands concern matters relating to defenses which defendant is precluded from raising, they are palpably improper notwithstanding the fact that plaintiff did not specifically object thereto (see A.B. Med. Servs. PLLC v Utica Mut. Ins. Co., 11 Misc 3d 71 [2006], supra). However, the record reveals that defendant set forth detailed and specific reasons for believing that plaintiff may be ineligible to recover no-fault benefits as a fraudulently incorporated professional service corporation (see State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313 [2005]), a defense which is not precluded. By obtaining discovery of, among other things, plaintiff’s certificate of incorporation, management agreements, and the names of plaintiff’s shareholders, defendant will be able to ascertain whether plaintiff is ineligible for reimbursement of no-fault benefits (see e.g. Preferred Med. Imaging, P.C. v Liberty Mut. Ins. Co., 11 Misc 3d 1069[A], 2006 NY Slip Op 50437[U] [Suffolk Dist Ct 2006]). As a result, in addition to the discovery previously ordered by the Civil Court, which portion of the order we do not review since it is not the subject of this appeal, defendant is also entitled to production of plaintiff’s certificate of incorporation as well as responses to interrogatories numbered 1, 15, and 16 and responses to the supplemental interrogatories numbered 1, 15, 31, 38-40 and 44-46 since said items were not palpably improper or privileged.

We further note that special circumstances exist which warrant the disclosure of plaintiff’s corporate income tax returns (see CPLR 3101 [a]; Statewide Med. Servs., P.C. v Travelers Ins. Co., 13 Misc 3d 134[A], 2006 NY Slip Op 52014[U] [App Term,{**21 Misc 3d at 13} 1st Dept 2006], revg 9 Misc 3d 1124[A], 2005 NY Slip Op 51773[U] [Civ Ct, Bronx County 2005]; Preferred Med. Imaging, P.C. v Liberty Mut. Ins. Co., 11 Misc 3d 1069[A], 2006 NY Slip Op 50437[U] [2006], supra; see also Dore v Allstate Indem. Co., 264 AD2d 804 [1999]; cf. Benfeld v Fleming Props., LLC, 44 AD3d 599, 600 [2007]; Altidor v State-Wide Ins. Co., 22 AD3d 435 [2005]). Accordingly, defendant is also entitled to the information demanded in defendant’s supplemental interrogatory number 37.

Defendant’s contention that the court erred in denying the branch of its motion which sought to compel plaintiff to produce its owner, Valentina Anikeyeva, for an examination before trial is without merit. The notice of examination before trial served by defendant sought to require Anikeyeva to appear for an examination before trial at defendant’s counsel’s office in “Lake Success, New York 11042.” However, as noted by plaintiff, since Anikeyeva is “an [*3]officer, director, member or employee” of plaintiff, defendant improperly noticed the deposition for a location outside New York City (see CPLR 3110). Consequently, the court did not err insofar as it declined to compel plaintiff to produce Anikeyeva for an examination before trial at the location sought (see e.g. Mamunes v Szczepanski, 70 AD2d 684 [1979]).

Defendant’s argument that the court should have denied the branch of plaintiff’s cross motion which resulted in a protective order as to Anikeyeva’s “personal documents” lacks merit. “It is well settled that tax returns are generally not discoverable in the absence of a strong showing that the information is indispensable to the claim and cannot be obtained from other sources” (Altidor, 22 AD3d at 435-436 [citations and internal quotation marks omitted]; see also Benfeld, 44 AD3d at 600). At this juncture, defendant failed to meet its burden of establishing that Anikeyeva’s personal tax returns and personal bank account records are needed, particularly where, as here, defendant is entitled to disclosure of plaintiff’s tax returns and the requested financial information with respect to said corporation. Thus, based upon the record before it, the court did not improvidently exercise its discretion in issuing its protective order.

Pesce, P.J., Weston Patterson and Rios, JJ., concur.

Supreme Court, Suffolk County

06505-07

PLTF’S/PET’S ATTORNEY:

Brody, O’Connor & O’Connor

111 John Street, Suite 900

New York, New York 10038

Bruce S. Rosenberg, Esq.

2631 Merrick Road, Suite 401

Bellmore, New York 11710

Einsnberg & Carton

2631 Merrick Road, Suite 201

Bellmore, New York 11710

Meiselman, Denlea, Packman, Et Al.

1311 Mamaroneck Avenue

White Plains, New York 10605

Neil L. Fuhrer & Associates, LLP

750 Third Avenue

New York, New York 10017

Kenneth B. Schwartz, Esq.

555 Westbury Avenue

Carle Place, New York 11514

Conroy & Associates

350 Old Country Road, Suite 106

Garden City, NY 11530

Wylie M. Stecklow

10 Spring Street, Suite 1

New York, New York 10012

DEFT’S/RESP ATTORNEY:

Bruno, Gerbino & Soriano, LLP

James K. Hogan, Esq.

445 Broad Hollow Road, suite 220

Melville, New York 11714

Peter Fox Cohalan, J.

It is, ORDERED that these motions by plaintiff for injunctive relief (seq. #

001), and by defendants for dismissal (seq. #

002 & 004), and a change of venue (seq.#

003) are hereby decided as follows.

The plaintiff instituted this action against the various named defendants listed as the Halima et al. defendants, the Minick defendants and the Glassman defendants [*2]alleging that all the various defendants and entities have engaged in a systematic scheme to defraud the plaintiff insurance company by submitting bills for reimbursement of no-fault related services allegedly rendered to individuals involved in automobile accidents. The plaintiff contends that the named individual defendants who are physicians sold their names and allowed the use of their medical licenses to form the related professional corporations also named as defendants for the sole basis of obtaining benefits from the plaintiff, among others. The plaintiff contends that the professional medical corporations were actually created and owned by laypersons, chiropractors and a now disbarred attorney. The plaintiff claims that it is currently litigating claims by these defendants in excess of $456,682.11 and points to a New York Court of Appeals decision in State Farm Insurance v. Mallela, 4 NY3d 313, 794 NYS2d 700 (2005) for the proposition that a fraudulently incorporated professional corporation is not entitled to recover benefits under the New York no-fault law where the corporation is not actually owned by the required medically licensed physician. This lawsuit thereafter ensued. The Halima et al., defendants have defaulted except for defendant Mark Slamowitz who has interposed an answer and filed opposition to the plaintiff’s requested relief and has sought by way of motion a change of venue from Suffolk County, New York to Kings County, New York pursuant to CPLR §510.

The plaintiff now moves for injunctive relief (seq. #

001) seeking to stay all current and future no-fault proceedings against the defendants as well as payments pending resolution of the instant litigation and the answering defendants oppose the requested relief. The Minick defendants, Michele Minick and her designated companies, ANN Management Company Inc., ANM Transport Co., CJ Transport Co., and Scott Funding Company, Inc., (seq. #

002) [hereinafter Michelle Minick et al.] and Michael Scott Minick and his designated companies, Montgomery Medical P.C. and Metro Chiro and Rehab, PLLC., (seq. #

004) [hereinafter Michael Minick et al.] move to dismiss the 1st, 2nd, 3rd, 4th, 5th and 6th causes of action (Michael Scott Minick et al., seq. #

004) and the 3rd, 4th and 5th causes of action (Michele Minick et al., seq. #

002) for failure to state a cause of action. The plaintiff opposes this requested relief. The defendant, Mark Slamowitz, also moves for a change of venue of this action from Suffolk County, New York to Kings County, New York pursuant to CPLR 510(1), 511(b) or 510(3) on the grounds that the plaintiff’s choice of forum is improper which relief the plaintiff opposes.

The purpose of a preliminary injunction is to preserve the status quo pending trial. McLaughlin, Piven, Vogel Inc. v. W. J. Nolan & Co., Inc., 114 AD2d 165, 498 NYS2d 146 (2nd Dept. 1987), appeal denied 67 NYS2d 606, 501 NYS2d 1024. In order to prevail on a motion for a preliminary injunction, the moving party has the burden of establishing, (1) a likelihood of ultimate success on the merits, (2) irreparable injury absent a granting of the requested relief and (3) the equities weigh in its favor. Related Properties, Inc., v. Town Bd of Harrison, 22 AD3d 587, 802 NYS2d 221 (2nd Dept. 2005); Upgrade Education Services, Inc. v. Rappaport, 136 AD2d 628, [*3]523 NYS2d 872 (2nd Dept. 1988); Benjamin Kurzban and Son, Inc. v. Board of Education, City of New York, 129 AD2d 756, 514 NYS2d 749 (2nd Dept. 1987). Preliminary Injunctive relief lies with the sound discretion of the Court [Geres v Koch, 62 NY2d 84, 476 NYS2d 73 (1984)] and it is predicated on a clear showing of the afore-mentioned three prong test. Ginsberg v. Ock-A-Bock Community Ass’n, Inc., 34 AD3d 637, 825 NYS2d 119 (2nd Dept. 2006); W. T. Grant Co., v Srogi, 52 NY2d 496, 438 NYS2d 761 (1981); cf. Albini v. Solork Associates, 37 AD2d 835, 326 NYS2d 150 (2nd Dept. 1971).

As a provisional remedy, the chief function of a preliminary injunction is to prevent any conduct before judgment which would impair the ability of the Court to render the appropriate final judgment. Mucchi v. Eli Haddad Corp., 101 AD2d 724, 475 NYS2d 35 (1st Dept. 1984). However, it is also well settled that, absent extraordinary circumstances, a preliminary injunction will not be granted if it provides the ultimate relief that the movant would gain via a final judgment. SHS Baisley, LLC. v Res Land, Inc., 18 AD3d 727, 795 NYS2d 690 (2nd Dept. 2005). Here, in the case at bar, the plaintiff provides an affidavit from a cooperating named defendant, Ahmed Erfan Halima, M.D. (hereinafter “Halima”), setting forth the very fraudulent acts discussed in the complaint wherein physicians were lending their names for a fee to laypersons, chiropractors and an attorney so as to fraudulently incorporate no-fault clinics actually owned and controlled by these non-licensed non medical professionals. The plaintiff has established a likelihood of success, irreparable injury and equities which favor its case. The defendants suggest that the plaintiff is not entitled to injunctive relief because money damages would compensate the plaintiff for any wrongdoing; however, if the fraudulent corporation owned or controlled by a non-licensed medical professional goes out of business or disappears, the plaintiff is indeed irreparably harmed as is the public because monies would have been diverted to those in control of the fraudulent corporation without any recourse by the plaintiff.

The plaintiff has established irreparable harm, likelihood of ultimate success on the merits and that the balancing of the equities lies in their favor. Trimboli v. Irwin, 18 AD3d 866, 796 NYS2d 659 (2nd Dept. 2005). However, because preliminary injunctive relief is an equitable remedy, the award of such relief is not only discretionary with this Court, but may be tailored to protect the interests of all the parties. See, Paddock Construction LTD. v. Automated Swim Pools, Inc., 130 AD2d 894, 515 NYS2d 662 (3rd Dept. 1987); Antinelli v. Toner, 74 AD2d 996, 427 NYS2d 99 (4th Dept. 1980) appeal after remand, 78 AD2d 576, 432 NYS2d 421. Therefore, as to the defaulting defendants named, injunctive relief is granted without opposition; as to those defendants appearing in this action, the injunctive relief sought is granted unless these defendants present and file with the plaintiff, the corporate documents establishing a licensed medical professional is the owner, operator and in principal control of the corporation seeking reimbursement of no-fault benefits provided. A failure to so provide the corporate documents, resolutions and identity of the officers of the corporation seeking benefit payments will continue the injunction as to all defendants failing to [*4]provide such proof. The defendants are directed to provide to the Court copies of all documents identifying the principals in control of the various entities seeking payment for benefits provided under the no-fault provisions. The defendants are granted leave to renew their objections to injunctive relief if they have been unfairly denied reimbursement after having provided the documentation and proof required by this order. See, CPLR §6314. The plaintiff is directed to file an undertaking in the amount of $100,000.00 pursuant to CPLR §6312 (b).

The Minick defendants also move pursuant to CPLR §3211 (a) (7) for dismissal of the causes of action contained within the plaintiff’s complaint ( seq. #

002 & #

004) on the grounds that the causes of action identified in the movant’s papers fail to state a cause of action.

Upon a motion to dismiss a complaint for legal insufficiency, the test to be applied is whether the complaint gives sufficient notice of the transactions, occurrences or series of transactions or occurrences intended to be proven and whether the requisite elements of any cause of action know to our law can be discerned from its averments. Frank v. DaimlerChrysler Corp., 292 AD2d 118, 741 NYS2d 9 (1st Dept. 2002); Gruen v. County of Suffolk, 187 AD2d 560, 590 NYS2d 217 (2nd Dept. 1992); Moore v. Johnson, 147 AD2d 621, 538 NYS2d 28 (2nd Dept. 1989); Conroy v. Cadillac Fairview Shopping Center Properties, 143 AD2d 726, 533 NYS2d 446 (2nd Dept. 1988). Furthermore, the complaint should be liberally construed in plaintiff’s favor and the facts alleged in the complaint should be assumed to be true. P.T. Bank Central Asai v. ABN Amro Bank N.V., 301 AD2d 373, 754 NYS2d 245 (1st Dept. 2003); Palazzolo v. Herrick, Feinstein, LLP, 298 AD2d 372, 751 NYS2d 401 (2nd Dept. 2002); Holly v. Pennysaver Corp., 98 AD2d 570, 471 NYS2d 611 (2nd Dept. 1984). The nature of the inquiry is whether a cause of action exists and not whether it has been properly stated. McGill v. Parker, 179 AD2d 98, 582 NYS2d 91 (1st Dept. 1992); Marini v. D’Atolito, 162 AD2d 391, 557 NYS2d 45 (1st Dept. 1990).

As noted by the Court in Pace v. Perk, 81 AD2d 444, 440 NYS2d 710 (2nd Dept. 1981) with regard to a motion to dismiss pursuant to CPLR 3211

” Upon such a motion to dismiss a complaint for legal insufficiency, the court must assume that the allegations are true (Denihan Enterprises v. O’Dwyer, 302 NY 451, 458, 99 NE2d 235), and must deem the complaint to allege whatever can be imputed from its statements by fair and reasonable intendment, however imperfectly, informally or illogically facts may be stated therein (Condon v. Associated Hosp. Service of New York, 287 NY 411, 40 NE2d 230). In making its analysis, the court is not bound by the constructions and theories of the parties (see, Siegel, Practice Commentaries, McKinney’s Cons. Laws of NY, Book 7B, CPLR 3211:24). The test of the sufficiency of a complaint is whether it gives sufficient notice of the transactions, occurrences, or series of transactions or occurrences intended to be proved and [*5]whether the requisite elements of any cause of action know to our law can be discerned from its averments (CPLR 3013; Foley v. D’Agostino, 21 AD2d 60, 62-65, 248 NYS2d 121; Guggenheimer v. Ginzberg, 43 NY2d 268, 274-275, 401 NYS2d 182, 372 NE2d 17). Where the motion to dismiss for failure to state a cause of action is made under CPLR 3211, the plaintiff may rest upon the matter asserted within the four corners of the complaint and need not make an evidentiary showing by submitting affidavits in support of his complaint (Rovello v. Orofino Realty Co., 40 NY2d 633, 389 NYS2d 314, 357 NE2d 970).”

The rules governing the Court’s review of a motion to dismiss pursuant to CPLR 3211 (a)(7) are both simple and straight forward. The Court must afford the complaint a liberal construction, accept as true the allegations contained therein, afford plaintiff the benefit of every favorable inference and determine only whether the facts alleged fit within any cognizable legal theory. Guggenheimer v. Ginzburg, 43 NY2d 268, 401 NYS2d 182 (1978); One Acre Inc. V. Town of Hempstead, 215 AD2d 359, 626 NYS2d 226 (2nd Dept. 1995). Although, as the Court noted, the plaintiff need not make an evidentiary showing by submitting affidavits or other documentation in support of the complaint, nevertheless, if submitted by the plaintiff, they “may be used freely to preserve inartfully pleaded, but potentially meritorious claims” (Rovello v. Orofino Realty Co., supra , 635, 389 NYS2d 314, 316).

With these general principles in mind, the Court, upon review of the plaintiff’s complaint, submissions, affidavits and the allegations contained in it, finds that for the reasons stated herein the motions by the Minick defendants for dismissal of the plaintiff’s complaint pursuant to CPLR §3211 (a)(7) for failure to state a cause of action (seq. #

002-Michelle Minick and #

004-Michael Scott Minick) are in all respects denied.

The Court when assessing the motion pursuant to CPLR §3211 (a)(7) may freely consider the plaintiff’s affidavit to remedy any defects which may be apparent in the complaint. The criterion is not whether the proponent has pleaded a cause of action but whether, in fact, the proponent has one and affidavits and other evidence may be considered. Fay Estates v. Toys “r” Us, Inc., 22 AD3d 712 (2nd Dept. 2005); Pechko v. Gendelman, 20 AD3d 404 (2nd Dept. 2005).

As the Court in Scott v. Cooper, 215 AD2d 368, 625 NYS2d 661 (2nd Dept. 1995) app. Dis. 86 NY2d 812, 632 NYS2d 497, aptly noted:

” The criterion is whether the plaintiff has a cause of action and not whether he may ultimately be successful on the merits (see, Stukuls v. State of New York, 42 NY2d 272, 275; Detmer v. Acampora, 207 AD2d 475; Greenview Trading Co. V. Hershman & Leicher, 108 AD2d 468, 470).” [*6]

The motions by the defendants for dismissal of the plaintiff’s complaint pursuant to CPLR §3211 (a)(7) is set forth in each of the two (2) individual motions by the defendants.

The motion by defendant, Michelle Minick, et al. (Seq. #

002), seeks to dismiss the third (3rd) cause of action sounding in fraud, the fourth (4th) cause of action seeking punitive damages and the fifth (5th) cause of action sounding in unjust enrichment/restitution. The defendant Michelle Minick et al’s motion is denied as to cause of action three (3rd) sounding in fraud and five (5th) sounding in unjust enrichment. CPLR §3016 requires an action sounding in fraud to be pled with particularity and to set forth sufficient detail to clearly inform the defendant with respect to the incidents complained of. The plaintiff has set forth in detail that the named defendants and the corporations controlled by them are but shell corporations in the name of licensed medical physicians but are actually owned and controlled by non- licensed non-medical individuals, such as Michael Scott Minick, a chiropractor, using the “dummy” corporations to bill the no-fault carrier for services allegedly not performed or performed contrary to law. The plaintiff provides an affidavit from Halima, a defaulting defendant and a cooperating one, as well as an affidavit from Nichole Matthews, an investigator for Autoone Insurance Company, that Halima, among others, sold his name to non-licensed non-medical professionals to incorporate “dummy or shell” corporations owned and controlled by others but carrying a licensed physician’s name to provide no-fault services which were billed to the named plaintiff seeking reimbursement for these no-fault services. While there may be some missing details, the New York Court of Appeals has held that the misconduct of the defendants complained of must be shown in some detail but particularity and/or specific conduct may await further discovery where it is impossible at this stage of the proceedings to detail the fraud. See, Lanzi v. Brooks, 43 NY2d 778, 402 NYS2d 384 (1977); Oxford Health Plans (NY) Inc. V. Bettercare Health Care Pain Management & Rehab P.C., 305 AD2d 223, 762 NYS2d 344 (1st Dept 2003).

Here, the plaintiff presents, through affidavits, and the substance of its allegations in its complaint, that the named defendants, Michael Scott Minick and Michelle Minick, hold and own controlling interests in fraudulent medical service corporations named as defendants which carry a licensed physician as the owner in name only for the sole purpose of seeking reimbursement under no-fault notwithstanding the proscription that only a medical corporation owned and controlled by a licensed physician may seek no fault insurance reimbursement. State Farm Mutual Insurance Co. V. Mallela et al., 4 NY3d 313, 794 NYS2d 700 (2005). In State Farm v. Mallela, supra , the Court also noted that no claims for fraud or unjust enrichment would lie for payments made prior to April 2002, necessarily providing the imprimatur that such claims would lie for such payments under fraud and unjust enrichment causes of action for payments after that date. Oxford Health Plans (NY) Inc. V. Bettercare Health Care Pain Management & Rehab P.C., supra . The plaintiff alleges that Michelle Minick acted in concert with Michael Scott Minick who is [*7]the true owner of the underlying medical corporations which are not owned or controlled by a licensed physician as required by law or by the rules and regulations promulgated by the New York Superintendent of Insurance. See, 11 NYCRR 65-3.16 (a). The motions by both defendants, Michelle Minick et al., and Michael Scott Minick et al., as to the 3rd cause of action sounding in fraud and the 5th cause of action sounding in unjust enrichment, are denied as the causes of action have been pled by the plaintiff with sufficient detail and particularity at this stage of the proceedings to inform the defendants of the nature of their alleged conduct and the claims being made against them.

As to the 4th cause of action sounding in punitive damages, the courts have long recognized that punitive damages are warranted where the conduct of the party being held liable evidences a high degree of moral culpability, where the conduct is so flagrant as to transcend mere recklessness or where the conduct constitutes wilful or wanton negligence or recklessness. Hale v. Odd Fellow & Rebekah Health Care Facility, Inc., 302 AD2d 948, 755 NYS2d 164 (4th Dept.. 2003); see also, Gellman v. Seawane Golf & Country Club, Inc., 24 AD3d 415, 805 NYS2d 411 (2nd Dept. 2005). An award of punitive damages can be premised on conduct particularly egregious in nature directed at both the plaintiff and the general public. National Broadcasting Co. Inc., v Fire Craft Services, Inc., 287 AD2d 408, 731 NYS2d 722 (1st Dept. 2001). It may also lie where the allegations in the complaint have a fraudulent or evil motive. U.S. Trust Corp. v. Newbridge Partners, LLC., 278 AD2d 172, 718 NYS2d 63 (1st Dept. 2000). Since the plaintiff alleges in its complaint the commission of a tort in the nature of a fraud, independent of any contractual claim, the cause of action alleging punitive damages is proper. See, Probst v. Cacoulidis, 295 AD2d 331, 743 NYS2d 509 (2nd Dept. 2002). The motions by both defendants, Michelle Minick et al.(seq.#

002), and Michael Scott Minick et al.(seq. #

004), as to the 4th cause of action seeking punitive damages is denied.

Finally, the defendant, Michael Scott Minick et al., seeks dismissal of the 1st and 2nd causes of action seeking declaratory judgment relief based upon the fraud in the ownership and licensing of the defendant medical professional corporations and the defendants’ failure to cooperate and that aspect of the motion is denied. As previously noted, the rules governing the Court’s review of a motion to dismiss pursuant to CPLR 3211 (a)(7) are both simple and straight forward. The Court must afford the complaint a liberal construction, accept as true the allegations contained therein, afford plaintiff the benefit of every favorable inference and determine only whether the facts alleged fit within any cognizable legal theory. A review of the plaintiff’s complaints and submissions demonstrates sufficient claims and principles well recognized in the New York Court of Appeals’ decision in State Farm v. Mallela, supra , that there is no entitlement to no-fault reimbursement for a fraudulently incorporated medical corporation and the failure of the defendants to cooperate into a full airing of the underlying ownership and control of the various corporate entities by the individual defendants named is subject to the relief requested if established. For those reasons, [*8]the motion to dismiss the 1st and 2nd causes of action seeking declaratory judgment relief is denied.

Finally, the defendant, Mark Slamowitz, moves to change venue (seq. #

003) of this action from Suffolk County, New York to Kings County, New York pursuant to CPLR §503(c) and CPLR §509 for an improper forum or alternatively under CPLR §510 (3) on the grounds that the majority of the defendants reside and do business in Kings County. This motion to change venue is denied. Suffolk County is a proper forum and venue, in that the plaintiff maintains a principal office within it. Furthermore, it has been held that a demand to change venue based on the designation of an improper county must be served with the answer or before the answer is served. When a defendant fails to serve a timely demand to change venue and fails to make the motion for such relief within the statutory 15 day period provided, the motion becomes one addressed to the Court’s exercise of its sound discretion. See, Obas v. Grappell, 43 AD3d 431, 841 NYS2d 595 (2nd Dept. 2007).

On a motion to change venue pursuant to CPLR §510 (3) based upon the convenience of witnesses, the movant must establish the identity of the witnesses of the witnesses who allegedly will be inconvenienced, their willingness to testify and the nature of their anticipated testimony. Walsh v. Mystic Tank Lines Corp., 51 AD3d 908, 859 NYS2d 233 (2nd Dept. 2008); O’Brien v. Vassar Brothers Hospital, 207 AD2d 169, 622 NYS2d 284 (2nd Dept. 1995); Simeti v. Smithtown Fairfield Condominium, Inc., 172 AD2d 513, 567 NYS2d 860 (2nd Dept. 1991). In the absence of such a showing such a change of venue which is addressed to the sound discretion of the Court, should be denied. Countrywide Insurance Company v. Quinn, 268 AD2d 381, 703 NYS2d 2 (1st Dept. 2000). The defendant has failed to make a proper showing and therefore the motion is denied.

The foregoing constitutes the decision of the Court.

Dated: July 15, 2008_______________________________________

J.S.C.

[*1]

Supreme Court, Appellate Term, Second Department, July 10, 2008

APPEARANCES OF COUNSEL

Wollerstein & Futoran, New York City, and Sweetbaum & Sweetbaum, Lake Success (Marshall D. Sweetbaum of counsel), for appellant. Law Office of Ilona Finkelshteyn, P.C., Brooklyn (Ilona Finkelshteyn and Emilia I. Rutigliano of counsel), for respondent.

{**21 Misc 3d at 2} OPINION OF THE COURT

Memorandum.

Order affirmed without costs.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff moved for summary judgment and defendant opposed plaintiff’s motion and cross-moved for summary judgment, arguing, inter alia, that the action was premature due to plaintiff’s failure to provide requested verification. The court held that defendant failed to establish that its time to pay or deny plaintiff’s claims was tolled since defendant’s follow-up verification request was sent to plaintiff prior to the expiration of the 30-day period within which plaintiff was supposed to provide the requested verification (Insurance Department Regulations [11 NYCRR] former § 65.15 [e] [2], now Insurance Department Regulations [11 NYCRR] § 65-3.6 [b]). As a result, the court granted plaintiff’s motion for summary judgment{**21 Misc 3d at 3} and denied defendant’s cross motion for summary judgment. This appeal ensued.

While defendant argues that plaintiff did not establish a prima facie case because plaintiff did not prove its cost of the supplies furnished to plaintiff’s assignor, a provider generally establishes its prima facie entitlement to summary judgment by proof of the submission of a statutory claim form, setting forth the fact and the amount of the loss sustained, and that payment [*2]of no-fault benefits was overdue (see Insurance Law § 5106 [a]; see also Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2004]; Amaze Med. Supply v Eagle Ins. Co., 2 Misc 3d 128[A], 2003 NY Slip Op 51701[U] [App Term, 2d & 11th Jud Dists 2003]). A medical equipment provider is not required to prove its costs to establish its prima facie case for the recovery of no-fault benefits. Whether a provider’s benefits claim exceeded the amount permitted by the fee schedule is a mere defense to an action on a claim, which defense is precluded by an untimely denial (Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274 [1997]).

Inasmuch as defendant raises no other issue with respect to plaintiff’s prima facie case, we do not otherwise pass upon the propriety of the determination by the court below with respect thereto.

In opposition to plaintiff’s motion for summary judgment and in support of defendant’s cross motion, the supervisor of defendant’s no-fault department stated that because plaintiff failed to provide the requested verification, defendant did not pay or deny the subject claims submitted by plaintiff. We agree with the court below that defendant’s failure to adhere to the regulations governing initial and follow-up verification requests rendered ineffective its attempt to toll the 30-day claim determination period. Defendant admits that it mailed a follow-up verification demand 27 days after it mailed its initial demand, and we find the second request premature and without effect (see Insurance Department Regulations [11 NYCRR] former § 65.15 [e] [2], now Insurance Department Regulations [11 NYCRR] § 65-3.6 [b]). Contrary to defendant’s contention, the case of New York & Presbyt. Hosp. v American Tr. Ins. Co. (287 AD2d 699 [2001]) does not permit defendant to disregard the regulation governing the timing of a follow-up request for verification. As a result, defendant is precluded from raising most defenses, including its proffered defense of excessive fees (see Vista Surgical Supplies, Inc. v State Farm Mut. Ins. Co., 14{**21 Misc 3d at 4} Misc 3d 135[A], 2007 NY Slip Op 50163[U] [App Term, 2d & 11th Jud Dists 2007]). Consequently, the court properly granted plaintiff’s motion for summary judgment and denied defendant’s cross motion for summary judgment.

While defendant argues that plaintiff was only entitled to recover the interest that accrued since the commencement of this action, such argument lacks merit (Insurance Department Regulations [11 NYCRR] § 65-3.9 [a], [c]; LMK Psychological Servs., P.C. v State Farm Mut. Auto. Ins. Co., 46 AD3d 1290, 1291 [2007]; see also Brooklyn Chiropractic Assoc., P.C. v Progressive Cas. Ins. Co., 17 Misc 3d 13, 15 [App Term, 2d & 11th Jud Dists 2007]).

Golia, J. (dissenting and voting to reverse the order, deny plaintiff’s motion for summary judgment and grant defendant’s cross motion for summary judgment dismissing the complaint). In the first instance, I do not choose to abrogate my responsibility to “pass upon” the most fundamental and preeminent issue to be determined in any litigation, that being whether or not the plaintiff has established a prima facie case. I find that plaintiff did not do so.

I point to the fact that the claim forms submitted are internally inconsistent. That is, plaintiff’s first claim form states that the subject injury occurred on November 15, 2000 and the services were provided five days earlier on November 10, 2000. The second claim form maintains the “apparent” misstatement that the injury occurred on November 15, 2000, with the service being provided on January 15, 2001. In addition, with regard to the mailing, plaintiff’s affidavit states that the dates of service were November 10, 2000 and (a full year later) [*3]November 15, 2001.

I note that I do not ordinarily believe that a judgment should turn on what appear to be typographical errors. However, the above circumstances to me present sufficient facts, which in addition to others, warrant denial of plaintiff’s motion for summary judgment.

Notwithstanding, I find that the follow-up verification and second request for verification did result in a tolling of the 30-day period. The opposite finding by the majority was not because the second request was sent too late (ordinarily the reason for denying the defendant’s ability to defend) but because it was sent three days too early. The majority simply states that “[c]ontrary to defendant’s contention, the case of New York & Presbyt. Hosp. v American Tr. Ins. Co. (287 AD2d 699 [2001]) does not{**21 Misc 3d at 5} permit defendant to disregard the regulation governing the timing of a follow-up request for verification.” The majority makes this finding even though the cited Appellate Division case deals with a verification request that was dated October 5, 1999 and a follow-up request that was sent and dated November 1, 1999. Certainly, the first day of November is less than 30 days from the fifth day of October.

Plaintiff argues, in substance, that because the Appellate Division did not specifically state that the letter that was dated 27 days later was actually mailed on the date that was noted, the case cannot be read to say that the follow-up was actually mailed 27 days later.

A review of the file that was submitted to the Appellate Division in New York & Presbyt. Hosp. v American Tr. Ins. Co. indicates that there is contained in that file, among other references, the reply affirmation of the plaintiff. It states, “The defendant’s letters of October 5, 1999 and November 1, 1999 were not prescribed verification forms.” There is no indication from this or any other document in that file that the letter dated November 1, 1999 was mailed on any date other than November 1, 1999. Nor, according to my review, was this issue raised.

I do not support the theory that the Appellate Division found that the November 1, 1999 letter was, in fact, dated November 1, 1999 but not mailed before November 5, 1999, nor was it mailed after November 14, 1999.

I, however, do believe that the Appellate Division understood exactly what was presented to it when it found that the follow-up request for verification that was sent within 30 days of the first request, specifically 27 days, was, in fact, timely and in all respects proper.

Pesce, P.J., and Steinhardt, J., concur. Golia, J., dissents in a separate memorandum.

[*1]

Supreme Court, Appellate Term, Second Department, July 8, 2008

APPEARANCES OF COUNSEL

Law Offices of Teresa M. Spina, Woodbury (Emilio A. Cacace of counsel), for appellant. Ilona Finkelshteyn, Brooklyn, for respondent.

{**20 Misc 3d at 71} OPINION OF THE COURT

Memorandum.

Judgment affirmed without costs.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff moved for summary judgment. Defendant opposed the motion, claiming, based upon two peer review reports, that the medical services provided were not medically necessary. In reply, plaintiff asserted that the peer review reports did not constitute evidence in admissible form since they were not properly affirmed, as the doctors’ signatures were affixed by stamp. Insofar as is relevant to the instant appeal, the court below granted plaintiff partial summary judgment on its first cause of action, finding that the peer review report with respect to the claim in question was not in admissible form because the signature was not affixed in accordance with CPLR 2106. This appeal by defendant ensued.

Since defendant does not challenge plaintiff’s establishment of its prima facie case, we do not pass upon the propriety of the determination of the court below with respect thereto.

In opposition to plaintiff’s motion for summary judgment, defendant was required, in order to raise a triable issue of fact as to medical necessity, to proffer proof in admissible form (see A.B. Med. Servs. PLLC v Lumbermens Mut. Cas. Co., 4 Misc 3d 86 [App Term, 2d & 11th Jud Dists 2004]). In its opposing papers, defendant submitted an affirmed peer review report which stated that there was a lack of medical necessity for the medical services provided by plaintiff. In its reply papers, plaintiff asserted that the peer review report upon which [*2]defendant relied was not in admissible form pursuant to CPLR 2106 because it bore a facsimile of the peer reviewer’s signature. Although defendant argues that plaintiff’s contention was improperly raised for the first time in plaintiff’s reply papers, the reply affirmation from plaintiff’s counsel was responsive to defendant’s papers, since defendant first proffered the peer review report in inadmissible form in opposition to plaintiff’s motion and plaintiff was pointing out said defect in form. Inasmuch as defendant concedes that the peer review report bears an electronic stamped facsimile of the doctor’s signature, and there is nothing in the record to indicate that the facsimile signature was placed on the report by the doctor who performed the peer{**20 Misc 3d at 72} review or at his direction, defendant failed to raise a triable issue of fact with respect to the claim at issue (see Vista Surgical Supplies, Inc. v Travelers Ins. Co., 50 AD3d 778 [2008]). Accordingly, the judgment is affirmed.

We note that the affirmation by Dr. Sharahy, annexed to the appellant’s brief, may not be considered by the court as it is dehors the record (see Chimarios v Duhl, 152 AD2d 508 [1989]).

Pesce, P.J., Weston Patterson and Rios, JJ., concur.

Supreme Court, New York County

602584/06

Attorneys for Plaintiff Alcon Builders Group, Inc.

Finger & Finger

158 Grand Street

White Plains, New York 10601

(914) 949-0308

By: Daniel S. Finger, Esq.

Attorneys for Defendant National Union Fire Insurance Company of Pittsburgh, PA

Sedgwick, Detert, Moran & Arnold

125 Broad Street, 39th Floor

New York, New York 10004

(212) 422-0202

By: Lawrence Klein, Esq.

Attorneys for Defendant/Third-Party Plaintiff U.S. Underwriters Insurance Company

Miranda Sokoloff Sambursky Slone Verveniotis LLP

240 Mineola Boulevard

Mineola, New York 11501

(516) 741-7676

By: Steven Verveniotis, Esq. and Todd M. Hellman, Esq.

Attorneys for Third Party Defendant Moklam Enterprises, Inc.

Dwyer & Brennan, Esq.

7 Dey Street, Suite 1401

New York, New York 10007

(212) 571-4067

By: Gerald Dwyer, Esq.

Attorneys for Third Party Defendant Andrzej Konieczny

Perecman & Fanning, PLLC

250 West 57th Street, Suite 401

New York, New York 10107

(212) 977-7033

By: Mariusz Sniarowski, Esq.

Helen E. Freedman, J.

This is an insurance declaratory judgment action arising out of a worker’s accident at a Manhattan construction site. Defendant/third-party plaintiff U.S. Underwriters Insurance Company (“Underwriters”) moves for summary judgment (CPLR 3212) dismissing the complaint and declaring that it does not have a duty to defend or indemnify plaintiff Alcon Builders Group, Inc. (“Alcon”) in connection with a personal injury action entitled Andrzej Konieczny v Moklam Enterprises, Inc., Alcon Building Group, Inc. Rockstar Games, Inc. and Take 2 Interactive, Inc., (New York County Index No. 111640/05)(the “Konieczny Action”).^[FN1] [*2]Alcon cross-moves for summary judgment declaring that Underwriters and defendant National Union Fire Insurance Company of Pittsburgh, PA (“National Union”) must defend and indemnify it in the Konieczny Action. National Union cross-moves to dismiss the complaint.

Facts/Background

The following facts are taken from the pleading, affidavits and documentary evidence submitted with the motion papers, and are undisputed except as otherwise indicated. In the underlying Konieczny Action, Andrzej Konieczny (“Konieczny”) alleges that on March 30, 2004, he was injured while working at a construction site at 622 Broadway, New York, New York, in a building was owned by third-party defendant Moklam. Konieczny was an employee of Michael Schondorf, Inc., (“Schondorf”), an electrical subcontractor retained by Alcon. Alcon was the general contractor at the site, having been retained to build an audio post production suite by non-party Janson Design Group LLC.

Underwriters issued Alcon a commercial general liability policy, CL 305375A (the “Primary Policy”), effective June 17, 2003 to June 17, 2004, with a $1,000,000 per occurrence limit. The main body of the Primary Policy set forth various exclusions, lettered “A” through “O” with subparts. Additional exclusions were contained in the separate endorsement pages supplementing the policy, including one entitled “Exclusion of Injury to Employees, Contractors and Employees of Contractors.” That section provided, in pertinent part, as follows:

This policy does not apply to:

* * *

(ii) “Bodily injury” to any contractor or any

“employee” of any contractor arising out ofor in the course of the rendering orperforming services of any kind or naturewhatsoever by such contractor or “employee”of such contractor for which any insured maybecome liable in any capacity . . . .

Alcon also obtained a commercial umbrella policy, No. EBU 7288966 (the “Umbrella Policy”) from National Union, a subsidiary of American International Group, Inc. (“AIG”). The Umbrella Policy was effective April 3, 2003 to April 3, 2004 and had a $4,000,000 per occurrence limit. The coverage was excess to the “Insured’s Retained Limited,” which was defined as “[t]he total of the applicable limits of the underlying polices listed in the Schedule of Underlying Insurance and the applicable limits of any other underlying insurance providing coverage to the Insured.” The Umbrella Policy also provided that National Union would undertake the duty to defend when “[d]amages are sought for Bodily Injury . . . covered by this policy but not covered by any underlying insurance listed in the Schedule of Underlying Insurance or any other underlying insurance providing coverage to the Insured.”

The Schedule of Underlying Insurance indicated that there was a general liability policy and an employer’s liability policy in effect. However, the schedule did not provide specific information about the policies, other than their dollar liability limits. In the space provided to identify the insurer, policy number and policy period, only dates appeared. The significance of [*3]the dates is not clear. If they were intended to indicate a policy period, it would be a period of zero years — 12/31/99 to 12/31/99.

The main body of the Umbrella Policy set forth a variety of coverage exclusions, lettered “A” through “T” with subparts. The exclusions included Alcon’s obligations under various laws (workers compensation, unemployment and disability benefits, ERISA, no-fault, uninsured and underinsured motorist) and damages to property owned, rented, occupied or used by Alcon. Also excluded was coverage for bodily injury or property damage caused or arising out of specified circumstances, e.g., use of watercraft, pollution, war. However, in at least three instances (injuries caused by fellow employees, watercraft and

intoxication), the relevant exclusion was qualified by the following language:

[I]f insurance for such Bodily Injury or Property Damage is provided by a policy listed in the Schedule of Underlying Insurance:

1. This exclusion shall not apply; and

2. The insurance provided by our policy

will not be broader than the insurance

coverage provided by the policy listed

in the Schedule of Underlying Insurance.

Numerous additional exclusions were set forth in the separate endorsements annexed to the Umbrella Policy. However, neither the body of the Umbrella Policy nor the endorsements contained an exclusion for bodily injury to a contractor’s employee.

The record indicates that the Umbrella Policy was procured through an application completed by a broker with the Brooks Insurance Agency, Inc. (“Brooks”). The application was completed electronically through an “e-Excess broker-interfacing underwriting platform” maintained by AIG Small Business (“AIGSB”), a member company of AIG. The application identified Underwriters as the underlying carrier, and in response to the question whether the Primary Policy was an “ISO Form with no manuscripted endorsements,” the broker responded “yes.” In response to the question whether there were “[a]ny exclusionary Endorsements attached to GL policy,” the broker answered “no.”

The Konieczny Action was commenced on by filing on August 19, 2005. The pleadings were served on the New York Secretary of State on September 6, 2005, which forwarded them to Alcon on September 13, 2005. The pleadings were provided to Underwriters by Alcon’s broker on September 14, 2005, and to National Union on September 15, 2005.

By letter dated September 15, 2005, Underwriters disclaimed coverage on the ground that Konieczny was the employee of a contractor and thus subject to the policy exclusion for such employees. Underwriters also disclaimed on the ground that Alcon failed to give notice of the accident until more than a year after its occurrence. After seeking additional information about the claim, National Union issued a disclaimer letter on March 3, 2006. In it, National Union cited late notice of the claim and asserted that it was also investigating whether it was entitled to rescind the policy based upon Alcon’s alleged misrepresentations regarding the existence of endorsements and exclusions in the Primary Policy. This action followed. [*4]

Discussion

For the following reasons, Underwriters’ motion is granted in its entirety and plaintiff’s motion cross motion as against Underwriters’ is denied. Plaintiff’s and National Union’s cross motions regarding the Umbrella Policy are both denied without prejudice to renewal following discovery on the issues of notice and the existence of other primary coverage.

Underwriters’ Motion for Summary Judgment

Underwriters’ motion for a declaration that it has no duty

to defend or indemnify Alcon under the Primary Policy is granted in its entirety. Although there may be questions of fact regarding whether Underwriters’ received timely notice of the claim (see discussion below in connection with the Umbrella Policy), coverage is defeated by the exclusion for bodily injury to contractors and their employees. The relevant language of Underwriters’ policy has repeatedly been held to be clear, unambiguous and enforceable (see, U.S. Underwriters Ins. Co. v 614 Constr. Corp., 142 F Supp 2d 491, 494-95 [SD NY 2001]; U.S. Underwriters Ins. Co. v Roka LLC, 2000 WL 1473607, at *4 [SD NY 2000]; U.S. Underwriters Ins. Co. v Zabar, 1999 WL 441472, at *3 [ED NY 1999]; U.S. Underwriters Ins. Co. v Beckford, 1998 WL 23754, at *3-4 [ED NY 1998]). Plaintiff’s argument that Konieczny does not fall within the exclusion because he was the employee of a “subcontractor” rather than a “contractor” has also been considered, and rejected, by the courts (see, Beckford, 1998 WL 23754, at 4 [“it is clear that the term contractor’ is a generic one, encompassing both general contractors and subcontractors; U.S. Underwriters Ins. Co. v Congregation Kollel Tisereth, Tzvi, 2004 WL 2191051, at *7 (ED NY 2004)]).

Without reference to this clear line of authority, Alcon attempts to distinguish this case on the ground that the Primary Policy itself gives separate, independent meanings to the terms “contractor” and subcontractor.” However, the only example provided by plaintiff is the policy’s use of the word “subcontractor” in an endorsement, where it appears in the heading of an amendment to an exclusion (“DAMAGE TO WORK PERFORMED BY SUBCONTRACTORS ON YOUR BEHALF”). The example only further weakens plaintiff’s argument, as the effect of the amendment is to remove a paragraph containing a reference to “subcontactors” from the main body of the policy.

Accordingly, Underwriters has no obligation to defend or indemnify Alcon in the Konieczny Action. Pursuant to the parties’ stipulation, the court will also issue a similar declaration regarding Underwriters’ obligations to Moklam.

Alcon’s and National Union’s Cross Motions For Summary Judgment

The cross motions of Alcon and National Union for summary judgment on the Umbrella Policy are both denied without prejudice. Although National Union’s attempt to disclaim on the ground that it was misled as to the nature of the primary coverage must be rejected, the record is not sufficiently developed to support a determination on whether the excess insurer received timely notice of the claim.

With regard to the misrepresentation defense, “[t]o establish materiality as a matter of law, the insurer must present documentation concerning its underwriting practices, such as underwriting manuals, bulletins, or rules pertaining to similar risks, which show that it would not have issued the same policy if the correct information had been disclosed in the application” (Roudneva v Bankers Life Ins. Co. of NY,

35 AD3d 580 [2d Dept 2006]); see, Insurance Law § 3105[c]).In arguing that Alcon [*5]made a material misrepresentation regarding the scope of the Underwriters’ policy, National Union

points out that the e-Excess application incorrectly denied that the Underwriters’ policy was supplemented by manuscripted or exclusionary endorsements. To explain the materiality of this alleged misrepresentation, National Union has submitted an affidavit from an AIGSB assistant vice president, Patricia S. Fargis (“Fargis”), who asserts that it was the practice of AIGSB’s Excess Casualty Division to “match” all exclusions and endorsements in the underlying policies. Thus, Fargis claims that if the application had correctly admitted that the underlying policy contained exclusions and endorsements, it would have been referred to an AIGSB underwriter for review to insure that the Umbrella Policy contained identical ones, including the exclusion for bodily injury to contractors and employees. Fargis states that because no endorsements were indicated, no underwriter review was triggered and the policy was simply issued by an administrative employee, Sara Chazin (“Chazin”).

The Fargis affidavit is problematic in a number of regards. For example, it admits that “AIGSB did not maintain any written guidelines regarding its practice of matching all exclusions and endorsements.” Furthermore, Fargis’ assertion as to whether and how Chazin processed the application is made upon information and belief, and Chazin identified as an “underwriter” rather than an administrative employee on the “Underwriting Checklist” supplied by National Union. There is also some question as to whether the Brooks agency was acting as agent for the insurer or the insured, and thus whether the alleged misrepresentations are chargeable to Alcon at all.

These issues need not be further explored, however, because information gleaned from the policies themselves belie National Union’s claim that the terms of the Primary Policy were material to its decision to insure or that it acted in reliance on any misrepresentations. First, it is undisputed that the Umbrella Policy was issued in April 2003, several months before the Primary Policy was issued. National Union’s policy thus could not have been issued in reliance upon anything contained in or annexed to the later-issued Primary Policy.

Second, the Schedule of Underlying Insurance in the Umbrella Policy does not meaningfully identify any underlying policy. Even if it is assumed that a predecessor policy to the Primary Policy was in effect when the Umbrella Policy was issued in April 2003 (and that the alleged misrepresentations were made in connection with the predecessor policy), that predecessor policy was not identified in the Schedule either. As noted, the Schedule merely refers to a “general liability” policy with a 12/31/99 to 12/31/99 term. Accordingly, the Umbrella Policy confirms that National Union did not issue it in reliance upon the terms of any underlying policy.

Third, Fargis’ claim that National Union’s had a mandatory “matching” policy with respect to exclusions and endorsements is refuted by a comparison of the Primary and Umbrella Policies. The multi-part exclusions set forth in the main body of the Primary Policy are not identical to those in the Umbrella Policy. Moreover, some of the exclusions the Umbrella Policy provided that they would be applicable if underlying policy provided coverage, while other exclusions applied regardless of underlying coverage. The Umbrella Policy was also supplemented by a series of endorsements containing exclusions not found in the Primary Policy.

Finally, the Umbrella Policy specifically anticipated that circumstances might exist where National Union’s coverage obligations would be broader that the underlying insurer. As [*6]noted, National Union obligated itself to defend bodily injury claims which were “covered by this policy but not covered by any underlying insurance.” While excess insurers do often issue policies which “follow form” and adopt only the language of the underlying policy (see, Matter of the Liquidation of Midland Insurance Co., ___ NYS2d ___, 2008 WL 1989667 [Sup Ct NY Co 2008]; Appleman on Insurance 2d § 145.1 at 6 [2003]), the Umbrella Policy at issue is not such a policy. Indeed, no effort was made by National Union to even examine the underlying policy, with or without endorsements.

Notwithstanding that the Umbrella Policy may provide coverage to plaintiff, the timeliness of plaintiff’s notice to National Union must first be resolved. That determination cannot be made on the present record. Although the nearly eighteen-month delay between the accident and notice to National Union would ordinarily defeat coverage (see, Those Certain Underwriters at Lloyds, London v Gray, 49 AD3d 1 [1st Dept 2007]; Deso v London & Lancashire Indem. Co. of Am., 3 NY2d 127 [1957]), such a lapse may be excused where the insured lacked knowledge of the accident (see, White by White v City of NY, 81 NY2d 955, 957 [1993]; Security Mut. Ins. Co. of New York v Acker-Fitzsimons,

31 NY2d 436, 441 [1972]). Here, plaintiff alleges that it was not aware of the accident until it was served with the complaint, an assertion supported by an affidavit from a corporate officer who states that he questioned plaintiff’s employees upon receipt of the pleadings and determined that no one was aware of the incident. Defendant is, of course, entitled to investigate the lack of knowledge claim by deposing plaintiff’s officers, employees and the injured worker, and seeking whatever documentary or other evidence may exist regarding the accident and whether it was reported. Accordingly, the motions of Alcon and National Union for declarations regarding the coverage issue are denied without prejudice pending the completion of such discovery.

Accordingly, it is

ORDERED, that the motion of defendant U.S. Underwriters Insurance Company for summary judgment is granted in its entirety, and it is further

ADJUDGED and DECLARED that defendant U.S. Underwriters Insurance Company is not obligated to defend or indemnity plaintiff Alcon Builders Group, Inc. or third-party defendant Moklam Enterprises, Inc. in the action entitled Andrzej Konieczny v. Moklam Enterprises, Inc., Alcon Building Group, Inc. Rockstar Games, Inc. and Take 2 Interactive, Inc.,(New York County Index No. 111640/05) and it is further

ORDERED, that the cross motions of plaintiff and defendant National Union National Union Fire Insurance Company of Pittsburgh, PA for summary judgment are denied without prejudice to renewal upon completion of discovery on the issue of timely notice of claim to the National Union, and it is further

ORDERED, that the Clerk shall enter judgment accordingly.

Dated: July 1, 2008

ENTER:

Helen E. Freedman, J.S.C.

Appearances

Attorneys for Plaintiff Alcon Builders Group, Inc.

Finger & Finger

158 Grand Street

White Plains, New York 10601

(914) 949-0308

By: Daniel S. Finger, Esq.

Attorneys for Defendant National Union Fire Insurance Company of Pittsburgh, PA

Sedgwick, Detert, Moran & Arnold

125 Broad Street, 39th Floor

New York, New York 10004

(212) 422-0202

By: Lawrence Klein, Esq.

Attorneys for Defendant/Third-Party Plaintiff U.S. Underwriters Insurance Company

Miranda Sokoloff Sambursky Slone Verveniotis LLP

240 Mineola Boulevard

Mineola, New York 11501

(516) 741-7676

By: Steven Verveniotis, Esq. and Todd M. Hellman, Esq.

Attorneys for Third Party Defendant Moklam Enterprises, Inc.

Dwyer & Brennan, Esq.

7 Dey Street, Suite 1401

New York, New York 10007

(212) 571-4067

By: Gerald Dwyer, Esq.

Attorneys for Third Party Defendant Andrzej Konieczny

Perecman & Fanning, PLLC

250 West 57th Street, Suite 401

New York, New York 10107 [*7]

(212) 977-7033

By: Mariusz Sniarowski, Esq.

Footnotes

Footnote 1: That branch of Underwriters’ motion which sought a declaration that it was not obligated to defend or indemnify third party defendant Moklam Enterprises, Inc. in the Konieczny Acton was resolved by stipulation dated October 8, 2007, in which Moklam agreed that it was not covered and stated that it did not oppose the declaration.

[*1]

Supreme Court, Appellate Term, Second Department, April 3, 2008

APPEARANCES OF COUNSEL

Law Office of Alden Banniettis, Brooklyn (Jeff Henle of counsel), for appellant. Gullo & Associates, Brooklyn (Gina M. DiGaudio of counsel), for respondent.

{**20 Misc 3d at 33} OPINION OF THE COURT

Memorandum.

Order reversed without costs and defendant’s motion to amend the judgment denied.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff was awarded partial summary judgment in the sum of $5,855.82. A judgment was subsequently entered in the principal sum of $5,855.82. Defendant moved, inter alia, to amend the judgment by reducing the amount of attorney’s fees awarded to plaintiff, claiming that plaintiff’s recovery of attorney’s fees was limited to 20% of the total amount of first-party no-fault benefits awarded for services provided to the assignor, subject to the statutory maximum of $850 in attorney’s fees for the entire action, regardless of the number of claims in dispute. The court below granted defendant’s motion, relying upon an opinion letter issued by the New York State Department of Insurance on October 8, 2003, which stated that attorney’s fees are to be calculated based upon the aggregate amount of payment resolved in favor of an applicant for benefits in a single action (see Ops Gen Counsel NY Ins Dept No. 03-10-04 [Oct. 2003]), and directed the clerk to enter judgment with a maximum of $850 in attorney’s fees. This instant appeal by plaintiff ensued.

In an action to recover first-party no-fault benefits, if a valid claim or portion thereof is overdue, reasonable attorney’s fees may be recovered “for services necessarily performed in connection with securing payment of the overdue claim, subject to limitations promulgated by the superintendent [of insurance]” (Insurance Law § 5106 [a]). Insurance Department Regulations (11 NYCRR) § 65-4.6 (e) provides that attorney’s fees are limited to “20 percent of the amount of first-party benefits, plus interest thereon, awarded by the . . . court, subject to a maximum fee of $850.” In Smithtown Gen. Hosp. v State Farm Mut. Auto. Ins. Co. (207 AD2d 338, 339 [1994]), the Appellate Division, Second Department, interpreted Insurance Department Regulations (11 NYCRR) § 65.17 (b) (6) (v), the attorney’s fees provision which was the predecessor of Insurance Department Regulations (11 NYCRR) § 65-4.6 (e), as requiring that the $850 limitation be applied to each claim rather than to the entire action.

Subsequent to entry of the order appealed from, the Appellate Division, Third Department, in LMK Psychological Servs., P.C. v{**20 Misc 3d at 34} State Farm Mut. Auto. Ins. Co. (46 AD3d 1290 [2007]), held that counsel fees should be awarded on a “per claim” basis rather than a “per action” basis. In reaching this conclusion, the court noted that the October 8, 2003 opinion letter, which stated that counsel fees should be calculated on a “per action” basis, should not be accorded deference since it was not an appropriate interpretation of the rules regarding attorney’s fees and, in fact, conflicted with the language of the controlling statute. The court further stated that said interpretation “undermines the goal of the no-fault law to fully compensate a claimant for economic loss resulting from the wrongful denial of a claim and wastes judicial assets by encouraging the commencement of multiple actions in order to recover the maximum available counsel fees” (id. at 1292 [citation omitted]).

As this court is bound by principles of stare decisis to follow precedents set by the Appellate Division of another department until the Court of Appeals or the Appellate Division, Second Department, pronounces a contrary rule (see Mountain View Coach Lines v Storms, 102 AD2d 663 [1984]), the decision of the Appellate Division, Third Department, is controlling on this issue. We note that the Appellate Division, Second Department, in Smithtown Gen. Hosp. v State Farm Mut. Auto. Ins. Co. (207 AD2d 338 [1994], supra), in interpreting the predecessor attorney’s fees provision, held that the amount of attorney’s fees should be determined in a similar manner. Therefore, based on the foregoing analysis, attorney’s fees are to be calculated on a “per claim” basis. Accordingly, the order of the court below is reversed and defendant’s motion to revise the amount of attorney’s fees on the judgment is denied.

Golia, J.P. (concurring in the result only, in the following memorandum). I am constrained to agree with the ultimate decision reached by the majority. I wish to note, however, that I do not agree with certain propositions of law set forth in cases cited therein which are inconsistent with my expressed position and generally contrary to my views.

Pesce and Rios, JJ., concur; Golia, J.P., concurs in a separate memorandum.

Supreme Court, Nassau County

14882/2007

F. Dana Winslow, J.

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

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

Ernest Cretara

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

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

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

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

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

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

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

Gary Donecker

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

after such proof is supplied.

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

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

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

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

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

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

services with respect to the claim of such provider.

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

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

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

Cretara

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

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

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

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

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

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

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

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

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

Donecker

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

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

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

This constituted the Order of the Court.

Dated: February 28,2008ENTER:

_________________________________

J.S.C.

Footnotes

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

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

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

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

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

Supreme Court, Nassau County

016185/07

TO:Joseph Henig, P.C.

Attorney for Plaintiff

1598 Bellmore AvenueP.O. Box 1144

Bellmore, NY 11710

Law Office of Teresa M. Spina

Attorney for Defendant

170 Froehlich Farm Boulevard

Woodbury, NY 11797

Daniel Palmieri, J.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

This shall constitute the Decision and Order of this Court.

E N T E R

DATED: February 25, 2008

_____________________________

Hon. Daniel Palmieri

Acting Supreme Court Justice

TO:Joseph Henig, P.C.

Attorney for Plaintiff

1598 Bellmore Avenue

P.O. Box 1144

Bellmore, NY 11710

Law Office of Teresa M. Spina

Attorney for Defendant [*4]

170 Froehlich Farm Boulevard

Woodbury, NY 11797

Supreme Court, Nassau County

8206/04

Antonio I. Brandveen, J.

The plaintiff moves for an order vacating and setting aside any prior disposition of this matter, restoring this matter to active for a determination on the merits, and extending the time for the plaintiff to file a note of issue. The defendant opposes the motion. The underlying action seeks Payment of medical bills under no-fault coverage from an automobile accident Denied, where the infant plaintiff sustained personal injuries on August 10, 1999 when struck by a motor vehicle while riding a bicycle owned and operated by Nathaniel Salvador at or near the intersection of Jerusalem Avenue and Hawthorne Avenue, Uniondale, New York.

The plaintiff’s attorney states, in a supporting affirmation dated August 28, 2007, the mother of the infant plaintiff, as a result of the injuries, commenced a personal injuries claim against Salvador, and the defendant, under its insurance policy number 078074840 covered the Salvador vehicle for liability and no-fault. The plaintiff’s attorney states the liability action was eventually settled for $10,000.00 before now retired Nassau County Supreme Court Justice Bruce D. Alpert resulting in a $5,935.27 net recovery to the client. The plaintiff’s attorney report that sum remains in escrow as there are multiple liens against proceeds totaling $14,451.81, nearly three times the actual net recovered here. The plaintiff’s attorney asserts the liens arose because none of the medical bills incurred by the plaintiff were covered by the defendant under its no-fault insurance coverage. The plaintiff’s attorney avers the defendant contended the no-fault application for benefits was untimely filed within the 90 day period, and subsequently the infant plaintiff brought an action for payment of those medical bills in this action. The [*2]plaintiff’s attorney submits, upon information and belief, all discovery in this action has been completed, including depositions and physical examinations. The plaintiff’s attorney points out a certification order was entered on or about November 29, 2005, in this action which required the plaintiff to file a note of issue within 60 days of the order, but a note of issue was not filed within that time, and, upon information and belief, this matter was dismissed on March 14, 2006, as a pre-note issue matter for failure to file a note of issue. The plaintiff’s attorney alleges, subsequent to the certification conference and continuing to the present, settlement discussions were held between the law offices of the parties, and copies of all itemized bills were obtained and forwarded to the attorneys for the defendant on May 2, 2006, requesting payment for various medical providers. The plaintiff’s attorney reports the defense counsel, in approximately June 2006, responded to the plaintiff’s request for settlement, and advised a problem was encountered since the plaintiff had originally executed assignments to the medical providers. The plaintiff’s attorney maintains counsel for the plaintiff discussed the assignment of benefits problem with the attorney for the defendant resulting in the plaintiff’s agreement to attempt to have the assignment of benefits vacated so the plaintiff could receive the benefits, and pay the outstanding medical bills. The plaintiff’s attorney alleges the law office of the plaintiff, since approximately July 13, 2006, has been attempting to have the previously executed assignments vacated with the agreement the money collected would be applied to the outstanding medical bills, and in the interim, the note of issue was not filed which resulted in the dismissal of this matter. The plaintiff’s attorney contends there has been activity during the one year period since the matter has been dismissed, and such efforts are continuing in an attempt to settle the matter, but if it cannot be settled, it must be determined on the merits. The plaintiff’s attorney affirms, the plaintiff’s motion did testify, during the course of the discovery in this action, she filed a no-fault application within the required 90 day period, however, the plaintiff’s mother did not retain a copy of the no-fault application, and the defendant apparently denied receiving the application.

The defense attorney states, in an opposing affirmation dated October 30, 2007, the plaintiff’s motion must be denied because (1) the plaintiff fails to show a reasonable excuse why this case was not restored within one year; (2) the plaintiff fails to demonstrate a meritorious cause of action; (3) the plaintiff fails to show the absence of prejudice, if the matter is restored; and (4) the plaintiff fails to demonstrate no intent to abandon the action. The defense attorney states action was dismissed on March 14, 2006, due to the plaintiff’s failure to file a note of issue with 60 days of the order, and on August 28, 2007, the plaintiff brought a motion to restore this matter to the trial calendar. The defense attorney asserts the plaintiff’s counsel has failed to offer any reasonable excuse why it took 17 months to bring a motion seeking restoration. The defense attorney avers, by the plaintiff’s own admission in the moving papers, the plaintiff assigned the right to sue to medical providers, and there has not been any release of the assignment of those benefits, so the plaintiff has no standing to sue. The defense attorney insists the plaintiff [*3]is not able to provide proof a no-fault application was mailed within 90 days of the date of accident. The defense attorney points out the plaintiff’s motion is not supported by a person having personal knowledge of facts, to wit the plaintiff fails to include the required sworn statement of merits to support the contention the plaintiff’s bills were timely mailed to the defendant. The defense attorney contends the defendant is prejudiced by the delay, if the action is restored to the trial calendar, since more than eight years have passed since the August 10, 1999 accident, and August 28, 2007, the date of the motion to restore. The defense attorney points out there is a presumption of abandonment when the plaintiff fails to demonstrate no intent to abandon the action under CPLR 3404, and this action was dismissed on March 16, 2006, and the plaintiff seeks to restore it more than a year after the dismissal.

The plaintiff’s attorney counters, in a reply affirmation dated December 10, 2007, the defense contention the motion should be denied since the plaintiff has not complied with the requirements to restore an action pursuant to CPLR 3404 because no note of issue was filed, CPLR 3404 is inapplicable. The plaintiff’s attorney notes the sanctions under 22 NYCRR § 208.14 (c) and requirements of CPLR 3404 as postulated by the plaintiff do not apply to a matter which has been disposed prior to the filing of a note of issue. The plaintiff’s attorney challenges the defense assertion that the motion should be denied because an affidavit has not been submitted by a person with knowledge of the facts. The plaintiff’s attorney points to the reply affidavit dated December 10, 2007, of the plaintiff’s mother, a person with such knowledge, and points out the plaintiff’s mother was deposed on August 23, 2005, and testified she had received, completed, signed, and returned the no-fault application to the defendant within the required 90 day period. The plaintiff’s attorney asserts there is a reasonable excuse for not moving within one year based upon ongoing settlement discussions, and the plaintiff has a meritorious cause of action since the plaintiff’s position, as stated by the plaintiff’s mother in sworn statements and testimony, is the defendant received the no-fault application within the required period. The plaintiff’s attorney avers the prejudice claim of the defense is specious because the issue is whether the defendant received the no-fault application, and the passage of time creates no prejudice to the defendant. The plaintiff’s attorney maintains the plaintiff has continued to pursue this matter, and there is no demonstration of an intent to abandon the action.

“No-fault benefits are intended to reimburse persons for, among other things, medical expenses “incurred” as a result of a motor vehicle accident (Insurance Law § 5102 [a])” (Todaro v. GEICO General Ins. Co., 46 AD3d 1086, 1088, 848 NYS2d 393 [3rd Dept., 2007]).

A defendant seeking to vacate a default pursuant to CPLR 5015(a)(1) must demonstrate both a reasonable excuse for the default and the existence of a meritorious defense (see Eugene Di Lorenzo, Inc. v. Dutton Lbr. Co., 67 NY2d 138, 501 NYS2d 8, 492 NE2d 116; Dominguez v. Carioscia, 1 [*4]AD3d 396, 766 NYS2d 685). Here, the Supreme Court improvidently exercised its discretion in denying the defendant’s motion to vacate its default since the defendant established that the default was not willful, but rather, was due to law office failure on the part of its counsel (see Hospital for Joint Diseases v. ELRAC, Inc., 11 AD3d 432, 783 NYS2d 612; Weekes v. Karayianakis, 304 AD2d 561, 758 NYS2d 117; CPLR 2005). Furthermore, the defendant demonstrated a meritorious defense (see Fentin & Goldman v. Ito, 2 AD3d 397, 767 NYS2d 865). Accordingly, the Supreme Court should have vacated the defendant’s default in appearing and answering the complaint

Friedman v. Crystal Ball Group, Inc., 28 AD3d 514, 514-515, 813 NYS2d 496 [2nd Dept., 2006].

This Court has carefully reviewed and considered all of the parties’ papers submitted on this motion.

In an action to recover no-fault benefits, a plaintiff makes a prima facie showing of entitlement to judgment as a matter of law by submitting evidentiary proof that the prescribed statutory billing forms were mailed and received and that payment of no-fault benefits was overdue (see Presbyterian Hosp. in City of NY v Maryland Cas. Co., 90 NY2d 274 [1997]; Nyack Hosp. v Metropolitan Prop. & Cas. Ins. Co., 16 AD3d 564 [2005]). 11 NYCRR 65-3.8 (a) provides that no-fault benefits are overdue if not paid within 30 days after the insurer receives proof of claims, which shall include verification of all of the relevant information requested pursuant to 11 NYCRR 65-3.5

New York and Presbyterian Hosp. v. Selective Ins. Co. of America, 43 AD3d 1019, 1020, 842 NYS2d 63 [2nd Dept., 2007].

This Court finds the plaintiff has not met the prerequisites for the relief sought here.

Accordingly, the motion is denied in all respects. So ordered.

Dated: February 8, 2008

E N T E R:

______________________________

J. S. C.

FINAL DISPOSITION XXXNON FINAL DISPOSITION