[*1]

Supreme Court, Appellate Term, Second Department, September 12, 2007

APPEARANCES OF COUNSEL

Bruno, Gerbino & Soriano, LLP, Melville (Charles W. Benton of counsel), for appellant. Belesi & Conroy, P.C., Garden City (Matthew J. Conroy of counsel), for respondent.

{**17 Misc 3d at 38} OPINION OF THE COURT

Memorandum.

Judgment reversed without costs, order entered December 8, 2005 vacated, plaintiff’s motion for summary judgment denied and defendant’s cross motion for summary judgment granted.

In this action by a provider to recover first-party no-fault benefits for an August 17, 1999 psychological evaluation of its assignor, plaintiff moved for summary judgment. Defendant cross-moved for summary judgment arguing, inter alia, that plaintiff was ineligible to receive reimbursement of no-fault benefits because plaintiff was fraudulently incorporated, relying on State Farm Mut. Auto. Ins. Co. v Mallela (4 NY3d 313 [2005]). Finding, inter alia, that the defense of “improper incorporation” was waived because defendant failed to assert the defense in its denial of claim form or in its answer, the court below awarded plaintiff summary judgment.

As defendant raises no issue with respect to plaintiff’s establishment of its prima facie case, we do not pass on the propriety of the implicit determination of the court below with [*2]respect thereto.

A regulation which took effect in 2002, after the services at issue herein were provided, states, “A provider of health care services is not eligible for reimbursement under section{**17 Misc 3d at 39} 5102(a)(1) of the Insurance Law if the provider fails to meet any applicable New York State or local licensing requirement” (11 NYCRR 65-3.16 [a] [12]). This regulation has been held to bar reimbursement of no-fault benefits without regard to when the services were rendered (Allstate Ins. Co. v Belt Parkway Imaging, P.C., 33 AD3d 407 [2006]; see State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313 [2005], supra; see generally Metroscan Imaging, P.C. v GEICO Ins. Co., 13 Misc 3d 35 [App Term, 2d & 11th Jud Dists 2006]). Such a defense is not waived by the failure to assert it in a denial of claim form (Crossbay Acupuncture, P.C. v State Farm Mut. Auto. Ins. Co., 15 Misc 3d 110 [App Term, 2d & 11th Jud Dists 2007]) nor is it precluded as a result of an untimely denial (Midwood Acupuncture, P.C. v State Farm Mut. Auto. Ins. Co., 14 Misc 3d 131[A], 2007 NY Slip Op 50052[U] [App Term, 2d & 11th Jud Dists 2007]). Contrary to the determination of the court below, the defendant’s answer, as amended by order dated September 9, 2005, asserted the defense that plaintiff was “not entitled to receive payment as it was not properly formed in that it failed to meet the applicable New York State and local licensing requirements necessary to perform such services in New York.” We note in passing that even if defendant had failed to interpose the defense in its answer, a court may nevertheless grant a motion for summary judgment based on an unpleaded defense (Rogoff v San Juan Racing Assn., 54 NY2d 883, 885 [1981]) where, as here, plaintiff did not assert any surprise or prejudice thereby (Ingordo v Square Plus Operating Corp., 276 AD2d 528 [2000]) and had “ample opportunity” to contest the defense in its opposition to the motion (Cangialosi v Hallen Constr. Corp., 282 AD2d 565, 566 [2001]; Lynbrook Glass & Architectural Metals Corp. v Elite Assoc., 225 AD2d 525, 527 [1996]).

Although Mallela involved a provider which was a professional service corporation (see Business Corporation Law art 15) and the instant plaintiff is a professional service limited liability company (see Limited Liability Company Law art 12), the requirements of membership, professional licensing, and filing are substantially the same. As a result, 11 NYCRR 65-3.16 (a) (12) clearly applies to professional service limited liability companies. Limited Liability Company Law § 1203 (b) requires that a member of such a company be licensed for any professional services the company is organized to provide. There is no dispute that plaintiff’s articles of organization stated that the company was to provide, inter alia, psychological services and{**17 Misc 3d at 40} listed a licensed psychologist as the provider of those services. However, the named psychologist testified under oath that she was never an owner or member of plaintiff and that she never received a stock certificate or any compensation based on an ownership interest.

Defendant also proved that plaintiff’s ownership has changed since its initial organization, and while certain other health services were variously added and dropped, the same psychologist, and no other, continued to be listed as a member and manager of plaintiff. Not only was the foregoing sufficient to defeat plaintiff’s motion for summary judgment, it also satisfied defendant’s burden of proof on its cross motion for summary judgment by demonstrating that plaintiff performed psychological services in violation of Limited Liability Company Law §§ 1203 and 1207.

Plaintiff did not dispute this proof, but sought to excuse any violation of the statute by proffering a hearsay affidavit of a person who purported to relate the nonfraudulent intentions of [*3]plaintiff’s original owner. Even if the affidavit presented a reasonable excuse for the failure to obtain an affidavit from plaintiff’s original owner (see Zuckerman v City of New York, 49 NY2d 557 [1980]; cf. Oddo v Edo Mar. Air, 34 AD3d 774 [2006]), it failed to excuse the initial fraudulent act of listing the psychologist as a member and manager of plaintiff or plaintiff’s continuing to so list the psychologist through successive changes of ownership including the period when the services herein were provided. Consequently, defendant was entitled to summary judgment upon its cross motion (see 11 NYCRR 65-3.16 [a] [12]; State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313 [2005], supra; Allstate Ins. Co. v Belt Parkway Imaging, P.C., 33 AD3d 407 [2006], supra).

In light of the foregoing, we reach no other issue.

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

Supreme Court, New York County

114851/06

Marylin G. Diamond, J.

Background

On or around March 3, 2006, defendants Francisco Martinez and Miguel Sanchez were involved in an automobile accident while occupants of a vehicle owned by nonparty Rafael Grullon. At the time of the accident, Grullon was insured by plaintiff Unitrin Advantage Insurance Company. Sanchez and Martinez were eligible to claim no-fault benefits under the Grullon policy. On or around March 13, 2006, April 10, 2006 and May 15, 2006, defendant Dr. Jean Miller, an osteopathic specialist, referred Sanchez and Martinez to defendant Andrew Carothers, M.D., P.C. (“Carothers”) for MRI’s. Sanchez and Martinez later appeared at Carothers for an MRI and assigned their claims for no-fault benefits over to Carothers. Carothers subsequently submitted claims for payment for the MRI’s to Unitrin.

Between May 8, 2006 and August 21, 2006, Unitrin informed Carothers, in eight separate articles of correspondence, that a determination on its claims had been delayed because it wished to conduct an examination under oath (“EUO”) of Dr. Carothers in order to determine whether the treatment was medically necessary. However, on June 29, 2006, in the absence of an EUO, Unitrin denied Carothers’ claim for the March 17, 2006 MRI of Sanchez’s knee on the ground that the MRI was not medically necessary. Unitrin did not deny Carothers’ claim for Sanchez’s April 28, 2006 MRI or render any determination regarding the claim for Martinez’s MRI’s.

On July 21, 2006, Unitrin’s counsel sent a demand for an EUO to Carothers regarding both the Sanchez and Martinez claims. On August 9, 2006, Dr. Carothers offered to appear for an EUO, [*2]provided that Unitrin reimburse him for his lost wages and transportation costs. It does not appear that Unitrin ever formally responded to this demand. Rather, it scheduled an EUO on two separate dates. Dr. Carothers failed to appear for either of the EUO’s. On September 12, 2006, Unitrin notified Carothers that it was denying all claims submitted for payment by Carothers for Martinez’s MRI’s on the ground that they were not medically necessary.

On or around August 9, 2006, Carothers and Sanchez commenced an action against Kemper Insurance Company, an affiliate of Unitrin, in the Civil Court, Kings County seeking payment on the same claim for Sanchez’s MRI’s which Unitrin seeks to preclude in this action. Unitrin commenced this action on or around October 11, 2006 against Carothers, Martinez, Sanchez and a number of other medical providers who allegedly treated Sanchez and Martinez and had their no-fault benefits assigned to them. The complaint alleges that the defendant medical providers are not entitled to no-fault benefits because, by not appearing for an EUO, they failed to comply with Unitrin’s request for pertinent information to assist in determining the amount due on the respective claims.

In motion sequence number 001, Carothers moves to dismiss the complaint, pursuant to CPLR 1001, 1003 and 3211(a)(1),(4) ),(7) and (10), on the grounds of (1) documentary evidence, (2) prior pending action, (3) failure to state a cause of action and (4) absence of a necessary party. Plaintiff has cross-moved to amend the complaint. In motion sequence number 002, plaintiff moves for a default judgment against defendants Jean Miller, Five Boro Psychological Services, P.C., JOV Acupuncture, P.C., Espalda Chiropractic, P.C., Parkway Supplies, Inc., Presbyterian Hospital, Physician Services Organization, Inc., Francisco Martinez and Miguel Sanchez.

Discussion

A. Carothers’ Motion to Dismiss – In this action, Unitrin contends that it is not obligated to pay any of the current or future no-fault claims submitted by Carothers for the reimbursement of medical services because Dr. Carothers failed to appear for two scheduled EUO’s. On its motion to dismiss the complaint as against it, Carothers argues that this is an insufficient basis to disclaim coverage. The court agrees.

The relationship between an insurance company, insured and medical providers regarding the submission and payment of claims for no-fault benefits is governed by Insurance Law § 5100 et seq., and the accompanying regulations, see 11 NYCRR § 65 et seq. Pursuant to 11 NYCRR § 65-3.11, insureds or eligible injured persons may assign their rights to no-fault insurance payments to providers of medical and health care services, which may then submit a claim for payment of the medical services directly to the insurance company. The insurer must, within 30 days after proof of a claim is received, either pay or deny the claim, in whole or in part. See 11 NYCRR §65-3.8. However, if an EUO is reasonably required and if the policy so permits, the insurer may demand that the injured person or the injured person’s assignee or representative submit to such an examination in order to establish the claim. See 11 NYCRR §§ 65-1.1[d], 65-3.5.

Carothers does not dispute that recovery under a policy can be precluded upon a willful [*3]failure to submit to an EUO. However, Carothers argues that its failure to appear for two EUO’s cannot by itself constitute a willful failure to submit to an EUO resulting in a material breach of the policy. The court agrees. In order to establish willful failure constituting a material breach of the policy, plaintiff must show that the defendant’s attitude “was one of willful and avowed obstruction,” involving a “pattern of noncooperation for which no reasonable excuse is offered.” Ingarra v. General Acc./PG Ins. Co. Of NY, 273 AD2d 766, 767-68 (3rd Dept. 2003). See also Levy v. Chubb Ins., 240 AD2d 336, 337 (1st Dept.1997); Argento v. Aetna Cas. & Sur. Co., 184 AD2d 487, 488 (2nd Dept. 1992); New York Craniofacial Care v. Lumbermen’s Mut. Cas. Co., 3 Misc 3d 322, 326-27 (Queens Co Civ Ct 2004). The insurer’s burden of proving willfulness is a heavy one. See Levy v. Chubb Ins., 240 AD2d at 337. Here, Unitrin’s complaint is devoid of any allegations which would establish that Dr. Carothers’ failure to appear for the two EUO’s was willful, persistent or demonstrative of a pattern of noncooperation. See New York Craniofacial Care v. Lumbermen’s Mut. Cas. Co., 3 Misc 3d at 327. Indeed, Dr. Carothers did not object to appearing for an EUO, but sought payment for lost wages and transportation expenses, payment to which he was entitled under 11 NYCRR §65-3.5(e). Although Unitrin claims that the amount demanded by Dr. Carothers was unreasonable, there is no indication that it ever attempted to negotiate with Carothers over the request for reimbursement. Instead, it simply commenced this declaratory judgment action. Based on such facts, Unitrin is unable to show that Dr. Carothers willfully failed to appear for the EUO’s.

Plaintiff’s cause of action is also deficient because the complaint fails to allege facts indicating that an EUO was reasonably required. Indeed, the complaint fails to allege that, as required under 11 NYCRR § 65-3.5(e), Unitrin utilized any objective standards in determining that the demanded EUO’s were required to establish proof of the claim. Moreover, the record is devoid of any reasonable justification or explanation for Unitrin’s demands.

Finally, in view of this court’s determination that the complaint should be dismissed as against Carothers, it need not address the defendant’s argument that dismissal is appropriate because of a prior pending action between the parties. The court notes, however, that this action and the Civil Court action arise out of same transactions and/or actionable wrongs and the carrier is not precluded from asserting noncooperation as a defense in the other action.

B. Plaintiff’s Cross-Motion for Leave to Amend – As already noted, Unitrin has cross-moved to amend the complaint so as to add the words “willfully and intentionally” to paragraphs 31, 32, 33 and 34 of the complaint. Presumably, Untrin seeks to add these words in order to allege that Carothers willfully and intentionally failed to appear at the two EUO’s and therefore materially breached the policy. Although leave to amend a complaint shall be freely granted, it is well settled that permission should be denied where the proposed amendment is palpably without merit. See Berger v. Water Commissioners of the Town of Waterford, 296 AD2d 649 (3rd Dept. 2002). Since, as previously discussed, plaintiff cannot establish as a matter of law that Carothers willfully failed to cooperate with its request for an EUO, the cross-motion to amend the complaint must be denied.

C. Plaintiff’s Motion for a Default Judgment – In motion sequence number 002, plaintiff [*4]moves for a default judgment against defendants Jean Miller, Five Boro Psychological Services, P.C., JOV Acupuncture, P.C., Espalda Chiropractic, P.C., Parkway Supplies, Inc., Presbyterian Hospital, Physician Services Organization, Inc., Francisco Martinez and Miguel Sanchez on the ground that they have failed to answer the complaint or otherwise appear. Untrin also seeks a declaratory judgment that it has no present or future obligations to furnish no-fault benefits “under claim number 331AZ403544.” This is the same claim number under which Carothers seeks to obtain payment in the Civil Court Action for its MRI services to Martinez and Sanchez.

The only party opposing the plaintiff’s default motion is Carothers, which argues that the motion should be denied because the relief requested clearly affects the rights of other parties not alleged to be in default. Carothers argues that the relief requested by Unitrin could affect Carothers’ ability to collect on its claim for reimbursement of no-fault benefits. Carothers also argues that plaintiff should not be granted a default judgment in a declaratory judgment action based on the default and on the unverified complaint alone since plaintiff has not established its right to a declaratory judgment.

It is well settled that the decision to grant a declaratory judgment on default is a discretionary one and the court should deny it where the declaratory relief requested clearly affects the rights of other parties not alleged to be in default. See CPLR 3001; Merchants Insurance Company of New Hampshire, Inc. v. Long Island Pet Cemetery, 206 AD2d 827 (4th Dept. 1994). Here, the relief requested by Unitrin could adversely affect both nonparty Grullon, who would be denied insurance coverage for any no-fault claims made by Martinez and Sanchez, and Carothers, who stands in the shoes of Sanchez and Martinez and could be precluded from obtaining benefits under the policy if Sanchez and Martinez were denied no-fault benefits under Grullon’s policy.

Indeed, the court is persuaded that the complaint should be dismissed as against the defaulting parties. On a motion for a default judgment, it is incumbent upon the court to assess the merits of the complaint since a plaintiff who fails to make a prima facie showing of a right to judgment is not entitled to a default judgment even if the motion is unopposed. See Martocci v Bowaskie Ice House, 31 AD3d 1021 (3rd Dept 2006). See also Carnegie Hall Corp. v City Univ. of NY, 286 AD2d 214, 215 (1st Dept 2001); Matter of Dyno v. Rose, 260 AD2d 694 (3rd Dept 1999); Joosten v Gale, 129 AD2d 531 (1st Dept 1987). As the court has already determined, the complaint fails to allege facts indicating that there was a material breach of the policy in that the defendants wilfully failed to submit to a reasonably required EUO. Under the circumstances, it is clear that the complaint fails to state a cause of action against not only Carothers, but against any of the defendants. The complaint as against these other defendants must therefore also be dismissed.

Accordingly, in motion sequence number 001, Carothers’ motion to dismiss is granted, the plaintiff’s cross-motion for leave to amend is denied and the complaint is hereby dismissed as against Carothers. In motion sequence number 002, the plaintiff’s motion for a default judgment is denied and the complaint is hereby dismissed in its entirety as against the remaining defendants.

The Clerk Shall Enter Judgment Herein [*5]

Dated:8-20-07MARYLIN G. DIAMOND, J.S.C.

Check one:[X] FINAL DISPOSITION[] NON-FINAL DISPOSITION

[*1]

Supreme Court, Appellate Term, Second Department, August 20, 2007

APPEARANCES OF COUNSEL

McDonnell & Adels, P.C., Garden City (Zara Friedman of counsel), for appellant. Ilona Finkelshteyn, Brooklyn (Emilia Rutigliano of counsel), for respondent.

{**17 Misc 3d at 17} OPINION OF THE COURT

Memorandum.

Judgment reversed without costs, order granting plaintiff’s cross motion for summary judgment and denying defendant’s motion to strike the complaint, or, in the alternative, to compel discovery, vacated, plaintiff’s cross motion for summary judgment denied and defendant’s motion granted to the extent of compelling plaintiff to serve, within 30 days after the date of the order entered hereon, responses to defendant’s discovery demands, and, within 30 days after service of such responses, to produce a witness for an examination before trial.

In this action by a provider to recover assigned first-party no-fault benefits, defendant moved to strike the complaint due to plaintiff’s failure to comply with defendant’s discovery demands or, in the alternative, for an order, pursuant to CPLR 3124 and 3126 compelling plaintiff to comply with defendant’s discovery demands. Plaintiff cross-moved for summary judgment. The court granted plaintiff’s cross motion and denied defendant’s motion as moot. [*2]This appeal by defendant ensued.

A plaintiff 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 of no-fault benefits is overdue (see e.g. Insurance Law § 5106 [a]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2004]). Defendant contends that plaintiff failed to make a prima facie showing that its claims were overdue in view of the fact that defendant timely denied plaintiff’s claims. Such an argument lacks merit since a claim becomes overdue if no payment is made within the 30-day claim determination period, notwithstanding the fact that defendant timely denied the claim (see Insurance Law § 5106 [a]; Fair Price Med. Supply Corp. v Travelers Indem. Co., 42 AD3d 277 [2d Dept 2007]). However, plaintiff nevertheless was not entitled to summary judgment.

In the instant case, defendant sufficiently demonstrated that it timely mailed the denial of claim forms at issue based upon its standard office practice or procedure designed to ensure that{**17 Misc 3d at 18} items are properly addressed and mailed (see Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679 [2001]). We note that our prior holding in Contemp. Med. Diag. & Treatment, P.C. v Government Empls. Ins. Co. (6 Misc 3d 137[A], 2005 NY Slip Op 50254[U] [App Term, 2d & 11th Jud Dists 2005]) should not be interpreted as requiring that an affidavit of mailing must state either that it was the affiant’s duty to ensure compliance with the insurer’s standard office practice or procedure with regard to mailing or that the affiant possessed personal knowledge of such compliance. Rather, as the Appellate Division has repeatedly noted, it is sufficient for the affiant to set forth that he or she possessed personal knowledge that the mailing occurred or describe the standard office practice or procedure used to ensure that items were properly addressed and mailed (see e.g. New York & Presbyt. Hosp. v Allstate Ins. Co., 29 AD3d 547 [2006]; Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679 [2001], supra; Hospital for Joint Diseases v Nationwide Mut. Ins. Co., 284 AD2d 374 [2001]). The denial of claim forms stated that the claims were denied based upon affirmed peer review reports, thereby preserving the defense of lack of medical necessity, and defendant’s papers submitted in opposition to plaintiff’s cross motion for summary judgment were sufficient to demonstrate the existence of an issue of fact with respect to said defense (see A.B. Med. Servs., PLLC v Liberty Mut. Ins. Co., 39 AD3d 779 [2007]; Long Is. Radiology v Allstate Ins. Co., 36 AD3d 763 [2007]; West Tremont Med. Diagnostic, P.C. v GEICO Ins. Co., 13 Misc 3d 131[A], 2006 NY Slip Op 51871[U] [App Term, 2d & 11th Jud Dists 2006]).

With respect to defendant’s motion to strike plaintiff’s complaint, or, in the alternative, to compel plaintiff to respond to defendant’s discovery demands, plaintiff offered token opposition.

“The failure of a party to challenge the propriety of a notice for discovery and inspection pursuant to CPLR 3120 within the time prescribed by CPLR 3122 forecloses inquiry into the propriety of the information sought except with regard to material that is privileged pursuant to CPLR 3101 or requests that are palpably improper” (Marino v County of Nassau, 16 AD3d 628, 629 [2005] [citations omitted]; see also Fausto v City of New York, 17 AD3d 520, 522 [2005]).

In view of the foregoing, defendant’s motion is granted to the{**17 Misc 3d at 19} extent indicated herein (see North Acupuncture, P.C. v State Farm Ins. Co., 14 Misc 3d 129[A], 2006 NY Slip Op 52512[U] [App [*3]Term, 2d & 11th Jud Dists 2006]).

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

[*1]

Supreme Court, Appellate Term, Second Department, August 16, 2007

APPEARANCES OF COUNSEL

Nwele & Associates, Brooklyn (David B. O’Connor of counsel), for appellant.

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

Memorandum.

Order reversed without costs, plaintiff’s motion for summary judgment granted and matter remanded to the court below for a calculation of statutory interest and an assessment of attorney’s fees.

In an action to recover first-party no-fault benefits, a provider generally establishes its prima facie entitlement to summary judgment by proof that it submitted the claim, setting forth the fact and the amount of the loss sustained, and that payment of no-fault benefits was overdue (see Insurance Law § 5106 [a]; 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{**17 Misc 3d at 12} Dists 2003]). Inasmuch as defendant raised no issue in the court below or on appeal with respect to plaintiff’s establishment of its prima facie case, we do not pass on the propriety of the implicit determination of the court below with respect thereto.

In opposition to plaintiff’s motion for summary judgment, defendant failed to establish that its denial of claim forms were timely mailed. The affidavit submitted by defendant stated that it was the standard office practice and procedure to make a handwritten notation of the date [*2]the denial of claim form was mailed in the upper right corner of the copy of said denial of claim form which is kept in the file, and that based upon the affiant’s review of the copies of the denial of claim forms annexed to defendant’s opposing papers, the usual office practice and procedure concerning mailing was followed. As a result, the affiant was certain that the denial of claim forms were timely mailed. However, since the denial of claim forms annexed to defendant’s opposing papers do not contain a handwritten date in the upper right corner, the documentary proof annexed to defendant’s opposing papers was insufficient to give rise to a presumption that the denial of claim forms were mailed pursuant to a standard office practice or procedure (see New York & Presbyt. Hosp. v Allstate Ins. Co., 29 AD3d 547 [2006]; PDG Psychological, P.C. v Lumbermans Mut. Cas. Co., 16 Misc 3d 131[A], 2007 NY Slip Op 51343[U] [App Term, 2d & 11th Jud Dists 2007]). Since defendant failed to establish that the denial of claim forms were timely mailed to plaintiff, defendant is precluded from raising the proffered defense of lack of medical necessity (see Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 282 [1997]; New York & Presbyt. Hosp. v Allstate Ins. Co., 30 AD3d 492 [2006]; PDG Psychological, P.C. v Lumbermans Mut. Cas. Co., 16 Misc 3d 131[A], 2007 NY Slip Op 51343[U] [App Term, 2d & 11th Jud Dists 2007], supra).

Accordingly, plaintiff’s motion for summary judgment is granted and the matter is remanded to the court below for a calculation of statutory interest and an assessment of attorney’s fees pursuant to Insurance Law § 5106 (a) and the regulations promulgated thereunder.

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

[*1]

Supreme Court, Appellate Term, Second Department, July 13, 2007

APPEARANCES OF COUNSEL

Freiberg & Peck, LLP, New York City (Yilo J. Kang of counsel), for appellant. Dash & Burns, Jericho (Robert E. Dash of counsel), for respondent.

{**17 Misc 3d at 14} OPINION OF THE COURT

Memorandum.

Order, insofar as appealed from, modified by granting plaintiff’s cross motion to the extent of remanding the matter to the court below for entry of an appropriate amended judgment in accordance with the decision herein; as so modified, affirmed without costs.

In this action by a provider to recover assigned first-party no-fault benefits, the court granted plaintiff’s motion for partial summary judgment and plaintiff was directed to settle the judgment. The judgment entered on August 3, 2004 awarded plaintiff the amount sought plus attorney’s fees and costs. The judgment further stated that if plaintiff did not receive the entire amount of the judgment within five days, plaintiff would also be entitled to receive interest from May 4, 2000, the date of the first denial of claim form at issue. More than five days after the judgment was entered, defendant paid plaintiff the entire amount without including any interest. Plaintiff demanded that defendant also pay interest calculated from May 4, 2000, but defendant asserted that the portion of the judgment providing for interest from May 4, 2000 was improper. Defendant moved, inter alia, for an order modifying the judgment to “reflect the appropriate [*2]monetary award to plaintiff” and to mark the judgment, as modified, satisfied. Plaintiff cross-moved, in effect, for an order modifying the judgment to provide for an award of interest, pursuant to Insurance Law § 5106 (a), from May 4, 2000. The court entered an order which, insofar as appealed from, awarded plaintiff interest pursuant to Insurance Law § 5106 (a) commencing on May 4, 2000.

Insurers are required either to pay or deny a claim for no-fault automobile insurance benefits within 30 days of receiving an applicant’s proof of claim (see 11 NYCRR former 65.15 [g] [3], now 11 NYCRR 65-3.8 [c]; Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 278 [1997]). An insurer which fails to timely pay said benefits “is required to pay interest at the rate of two percent per month on the claim for the period commencing 30 days after the claim was presented to the{**17 Misc 3d at 15} defendant for payment until the date the claim was or is paid” (New York & Presbyt. Hosp. v Allstate Ins. Co., 30 AD3d 492, 494 [2006] [citations and internal quotation marks omitted]; see Insurance Law § 5106 [a]). However, pursuant to the Insurance Department regulations, accrual of interest is tolled where the claimant fails to submit the claim to arbitration or commence an action within 30 days after receipt of the denial of claim, and accrual of interest does not resume until either action is taken (see 11 NYCRR former 65.15 [h] [3], now 11 NYCRR 65-3.9 [c]; Massapequa Gen. Hosp. v Travelers Ins. Co., 104 AD2d 638, 640 [1984]; East Acupuncture, P.C. v Allstate Ins. Co., 15 Misc 3d 104 [App Term, 2d & 11th Jud Dists 2007]).

Accordingly, in the present case, because the claims were not paid and the denials were untimely, interest began to accrue 30 days after the dates on which defendant received the claims (Insurance Law § 5106 [a]; East Acupuncture, P.C. v Allstate Ins. Co., 15 Misc 3d 104 [2007], supra). However, since it is undisputed that plaintiff did not commence this action within 30 days after it received the denials issued by defendant with respect to plaintiff’s claims, the accrual of interest was tolled upon plaintiff’s receipt of the denials of claim and interest did not resume accruing until plaintiff commenced the instant action (see 11 NYCRR former 65.15 [h] [3], now 11 NYCRR 65-3.9 [c]; East Acupuncture, P.C. v Allstate Ins. Co., 15 Misc 3d 104 [2007], supra), and it continued to accrue, pursuant to Insurance Law § 5106 (a), until the judgment was entered on August 3, 2004. A review of the record reveals that the unpaid claims of $1,768.41, $420.40 and $407.80, which were the subject of this action, were received by defendant on April 3, 2000, May 19, 2000 and June 12, 2000, respectively, and that the corresponding denial of claim forms were received by plaintiff on May 9, 2000, July 25, 2000 and October 11, 2000.

Plaintiff’s contention, that defendant’s partial payment was an acknowledgment of the validity of the judgment, is without merit. By seeking an order deeming the judgment satisfied, defendant demonstrated that it intended that its payment satisfy the judgment and not be a partial payment.

In light of the foregoing, the matter must be remanded to the court below for entry of an appropriate amended judgment.

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

Supreme Court, Queens County

24107/06

James P. Dollard, J.

In this action for declaratory judgment and to recover damages for fraud and unjust enrichment, plaintiff St. Paul Travelers Insurance Company (Travelers) seeks an order (1) staying all no-fault collection lawsuits presently being prosecuted by defendant Dipak Nandi and co-defendants professional corporations against Travelers, pursuant to CPLR 2201; (2) granting a preliminary injunction enjoining the defendants from commencing future lawsuits against Travelers seeking reimbursement of no-fault benefits for acupuncture services pursuant to Insurance Law § 5101 et. seq. and the regulations promulgated thereunder, pending the determination of this action. Defendants cross-move in opposition and seek an order lifting any previously imposed stays affecting Civil Court lawsuits and dismissing the complaint pursuant to CPLR 3211(a)(4),(5) and (7).

Travelers issues automobile insurance policies and has either compensated, or refused to compensate the professional corporation defendants for acupuncture services rendered to plaintiff’s policyholders, under the state’s No-Fault Insurance laws and regulations.

Travelers alleges in its complaint is that defendants Triborough Medical Diagnostics PC, Sterling Medical Diagnostics PC, Millennium Diagnostics PC and Urban Medical Diagnostics PC are medical professional corporations that were fraudulently incorporated, were never licensed to provide acupuncture services and that all the services that were billed to it were performed by independent contractors. The complaint alleges that defendant Universal Acupuncture Pain Services PC (Universal) is an acupuncture professional corporation that billed Travelers for acupuncture services but was not entitled to payment because it was (a) fraudulently incorporated and (b) all or some of the services that were billed to Travelers were performed by independent contractors. It is alleged that defendants Optimum Medical Services PC and Statewide Medical Services PC are medical professional corporations that billed Travelers for acupuncture services but were not entitled to payment because (a) they were fraudulently incorporated, (b) were never licensed to provide acupuncture services and (c) all or some of the services billed to Travelers were performed by independent contractors.

Travelers alleges that defendants Delta Medical Acupuncture PC, Cosmopolitan Medical Acupuncture Services PC, Rose Medical Acupuncture PC, Continental Medical Acupuncture PC, [*2]Maple Medical Acupuncture PC are medical professional corporations that billed it for acupuncture services but were not entitled to payment because (a) they were never licensed to provide acupuncture services and (b) all or some of the services billed to Travelers were performed by independent contractors.

The complaint alleges that defendants Akita Medical Acupuncture PC, Bonsai Medical Acupuncture PC, Koi Medical Acupuncture PC, Maguro Medical Acupuncture PC and Miso Medical Acupuncture PC are medical professional corporations that billed Travelers for acupuncture services but were not entitled to payment because (a) they were not licensed to provide acupuncture services and (b) all or some of the services that were billed to Travelers were performed by independent contractors.

Travelers alleges that Triborough Healthcare Management Inc. is a management company which was created as a tool for Nandi to exercise control over some of the professional corporations and Universal, and to siphon off insurance proceeds that were paid to the professional corporations.

Defendant Dipak Nandi is a physician licensed to practice medicine in New York, and he was not certified as an acupuncturist until April 24, 2001. It is alleged that Nandi falsely represented to the Department of State and the Department Education that Dr. Robert Mallela, Dr. Swapnadip Lahiri and Dr. William Battaile would be the owners of Triborough; that Drs. Mallela and Lahiri would be the owners of Sterling, Millennium and Urban; that Dongxing Sun a licensed acupuncturist would be the owner of Universal; and that Dr. Hea Rean Lew would be the owner of Stateside; and that in fact all of these PCs were owned and controlled by Nandi. Dr. Mallela, in an affidavit submitted herein, that was provided in connection with a federal court action, admitted the following facts: (1) he had no true ownership interest in or control over Urban Medical, or any of the other three other PCs; (2) he never paid for the shares in Urban Medical or the other PCs he was given, (3) he was paid a fee to allow Nandi to use his name to obtain a certificate of authority from the DOE; (4) he did not manage or supervise the medical practice at Urban Medical or the other PCs, and (5) he never saw or treated patients for Urban Medical or the other PCs. Mr. Sun states in an affidavit submitted herein, which was prepared for another action, that he admittedly did not operate Universal or control the corporation in any way. He states that he “permitted Nandi to handle the affairs of’ Universal and accepted his word for everything,'” and had ” no idea what the business activity’ of Universal was before his dispute erupted with Nandi over ownership and control.”

In the first cause of action for declaratory judgment Travelers seek a declaration that Universal and all of the PCs are not entitled to collect No-Fault benefits for any unpaid charges for acupuncture services that they have submitted to Travelers. In the second cause of action for common law fraud, seeks to recover the sums it paid to the defendants as No-Fault benefits, which totals more than $5 million dollars, as well as punitive damages. In the third cause of action for unjust enrichment, Travelers seeks to recover the sums it paid to the defendants as No-Fault benefits, which totals more than $5 million dollars.

Travelers now seeks an order (1) staying all no-fault collection lawsuits presently being prosecuted by defendant Dipak Nandi and co-defendants professional corporations against Travelers, pursuant to CPLR 2201; and (2) granting a preliminary injunction enjoining the defendants from commencing future lawsuits against Travelers seeking reimbursement of no-fault benefits for acupuncture services pursuant to Insurance Law § 5101 et. seq. and the regulations promulgated thereunder, pending the determination of this action. Defendants cross-move in opposition and seek [*3]an order lifting any previously imposed stays affecting Civil Court lawsuits and dismissing the complaint pursuant to CPLR 3211(a)(4),(5) and (7).

New York permits licensed professionals to incorporate if they are the sole organizers, owners and operators of the corporation. (Business Corporation Law §§ 1503(a),(b), 1508.) To incorporate, the licensed individual(s) must obtain a “certificate … issued by the [DOE] certifying that each of the proposed shareholders, directors and officers is authorized by law to practice a profession which the corporation is being organized to practice.” (Id. at § 1503[b]). The DOE may not issue a certificate of authority to a professional service corporation that does not meet these qualifications. (Education Law § 6507[4][c][i]). Once the PC is formed, shareholders may not transfer their voting power to any person who is not a licensed professional in the field. (See BCL § 1507). New York law prohibits non-physicians from sharing ownership in medical service corporations. (Business Corporation Law §§ 1507, 1508, and Education Law § 6507[4][c].) In order to provide acupuncture services, a professional corporation must be owned, organized and operated by persons who are licensed or certified to practice acupuncture. (See generally New York Business Corporation Law § 1503.) A physician who is licensed to practice medicine in New York need only obtain a certificate in order to practice acupuncture. (See Education Law §§ 8211, 8216[3]; 8 NYCRR § 60.9)

Under New York’s No-Fault system, the insured party is permitted to recover from insurers for “basic economic loss,” including medical expenses, that arise out of the use or operation of an insured vehicle. (Insurance Law § 5102.) The New York State Department of Insurance has stated that medically necessary acupuncture services rendered by a licensed acupuncturist are covered expenses, and are eligible for reimbursement under Insurance Law § 5102 (a)(1). (See Ops Gen Counsel NY Ins Dept 04-01-01.) Insurance Law § 5106(a) and 11 NYCRR § 65-3.8 require insurers to pay or deny a claim within thirty days after the claimant supplies proof of the fact and amount of loss sustained. Under a line of cases commencing with Presbyterian Hospital in the City of New York v Maryland Casualty Company (90 NY2d 274, [1997]) and Cent. Gen. Hosp. v Chubb Group of Ins. Cos. (90 NY2d 195 [1997]), the Court of Appeals has held that the failure of an insurer to comply with the thirty-day rule will result in the insurer being precluded from raising any defense to a claim for payment, other than defenses premised on lack of coverage. Applying Presbyterian Hospital and Central General, the courts have held that claims of fraud based upon fraudulent incorporation or staged accidents are not subject to preclusion. (See Metro Med. Diagnostics, P.C. v Eagle Ins. Co., 293 AD2d 751, [2002]; Midborough Acupuncture P.C. v State Farm Ins. Co., 13 Misc 3d 58, [2006]; A.B. Med. Servs. PLLC v Utica Mut. Ins. Co., 11 Misc 3d 71, 73 [2006]; Montgomery Med. v State Farm Ins., 12 Misc 3d 1169A [2006]; SK Med. Services, P.C. v NY Cent. Mut. Fire Ins. Co., 11 Misc 3d 1086A [2006]).

The regulations governing No-Fault claims presently provide that “[a] provider of health care services is not eligible for reimbursement under section 5102(a)(1) of the Insurance Law if the provider fails to meet any applicable New York State or local licensing requirement necessary to perform such service in New York.” (11 NYCRR § 65-3.16[a][12].) This regulation was initially promulgated to take effect on September 1, 2001, but implementation was stayed by court order until April 4, 2002. Relying on this regulation, the Court of Appeals in State Farm Mut. Auto Ins. Co. v Mallela (4 NY3d 313,[2005]) held that fraudulently incorporated medical corporations were not entitled to reimbursement of no-fault benefits. The Court noted that 11 NYCRR § 65-3.16(a)(12), [*4]specifically “excluded from the meaning of basic economic loss payments made to unlicensed or fraudulently licensed providers, thus rendering them ineligible for reimbursement (Mallela, 4 NY3d at 320). The Court determined that “no cause of action for fraud or unjust enrichment would lie for any payments made by the carriers before … April 4, 2002.” (Id. at 322.) In an action by a medical provider for reimbursement, the defense that a provider is fraudulently licensed is a nonwaivable defense. (See First Help Acupuncture P.C. v State Farm Ins. Co., 12 Misc 3d 129[A] [2006]; see also Allstate Ins. Co. v Belt Parkway Imaging, P.C., 33 AD3d 407 [2006]; see generally Metroscan Imaging P.C. v GEICO Ins. Co., 13 Misc 3d 35 [2006].)

At present there are at least 868 lawsuits pending in the Civil Court of the City of New York, primarily in Bronx and Queens County, in which individual medical providers, named as defendants herein, seek to recover from Travelers assigned first party No-Fault benefits. In addition, Travelers’ has settled some 300 cases involving the named medical providers.

Defendants in their cross motion to dismiss the complaint assert that as there are hundreds of pending actions between the medical providers and Travelers, the within complaint should be dismissed. It is asserted that declaratory judgment is inapplicable and unnecessary, as Travelers has raised the defenses of fraudulent incorporation, failure to comply with licensing requirements and the performance of services by independent contractors in the lower courts, and may continue to do so, and that as any such determination in the lower court would be subject to the doctrine of res judicata and collateral estoppel. Defendants thus assert that these issues should be litigated in the lower court actions.

Travelers, in opposition, asserts that this court is the appropriate forum for the resolution of all common issues of law and fact between itself and the 17 separate professional corporations that are alleged to be owned and controlled by Dipak Nandi. It is asserted if Travelers prevails in this action, then it would have no obligation to pay any of the defendant professional corporations for claims presently pending in the Civil Court or District Court, and that a single determination in this court would resolve hundreds of current actions and foreclose future actions involving these professional corporations. Travelers asserts that declaratory judgment is not available in the lower courts, and that it is in the interest of judicial economy to have the issues determined here, rather than litigating hundreds of claims in the lower courts. In addition it is asserted that a single determination of the matter would avoid the possibility of inconsistent results in the lower courts.

CPLR 3001 provides: “The supreme court may render a declaratory judgment having the effect of a final judgment as to the rights and other legal relations of the parties to a justiciable controversy whether or not further relief is or could be claimed. If the court declines to render such a judgment it shall state its grounds.” An action is justiciable when the controversy presented touches the legal relations of the parties having adverse interests from which harm is presently flowing or could flow in the future in the absence of a court determination of the parties’ rights. The controversy must be capable of disposition and be presented in an adversarial context with a set of concrete facts. (Goodwill Adv. Co. v State Liq. Auth., 14 AD2d 658 [1961].) While a court may dismiss a declaratory judgment action in a proper exercise of discretion, the mere existence of other adequate remedies does not mandate dismissal. (See CPLR 3001; Lehigh Portland Cement Co. v New York State Dept. of Envtl. Conservation, 87 NY2d 136, 140 [1995]; Hudson Valley Oil Heat Council, Inc. v Town of Warwick, 7 AD3d 572, 574 [2004].) In addition, “[t]he fact that the court may be required to determine the rights of the parties upon the happening of a future event does not [*5]mean that the declaratory judgment will be merely advisory. In the typical case where the future event is an act contemplated by one of the parties, it is assumed that the parties will act in accordance with the law and thus the court’s determination will have the immediate and practical effect of influencing their conduct…” (New York Pub. Interest Research Group v Carey, 42 NY2d 527, 530-531 [1977].)

The court finds that a justiciable controversy exists here between the parties. Defendants assertion that a fair determination cannot be had simply because there are 17 PC defendants, the issues are complex and varied, will require extensive discovery and perhaps multiple hearings, is rejected. Furthermore, the fact that the PCs have instituted actions against Travelers in the Civil Courts does not warrant the dismissal of this action. An action for declaratory judgment can only be prosecuted in the Supreme Court and a determination here will obviate the need for future litigation between the parties as to claims for unpaid acupuncture services. Contrary to defendants assertions, a determination of the declaratory judgment action would not result in a return to the Civil Courts for a “trial on the merits.” Once a judgment and declaration is entered in the Supreme Court, whether in favor of the plaintiff or the defendant, there will be no need for the lower courts to conduct trials on the claims of fraudulent incorporation, licensure or the status of the acupuncturist. Furthermore, declaratory judgment will be dispositive of future claims by the defendant PCs for unpaid claims for acupuncture services against Traveler. It is in the interests of judicial economy to resolve the controversy in a single action, rather than require the parties and the lower courts to engage in piecemeal and repetitive litigation.

The court further notes that the issues raised by Travelers regarding fraudulent incorporation, lack of licenses, and the use of independent contractors, are also pertinent to the causes of action for fraud and unjust enrichment.

Defendants’ assertion that the issues raised by Travelers pertaining to Universal’s fraudulent incorporation were previously raised and decided by the Civil Court, Bronx County in an action entitled Universal Acupuncture Pain Services, P.C., a/a/o Jose Alpizar v State Farm Insurance Company (Index No. 58595/2003, [Rodriquez,J.]) is misplaced. The court therein found that State Farm had failed to submit evidence in admissible form to sustain its allegations and thus denied the cross motion to dismiss the complaint, or to compel Dr. Nandi’s deposition. Contrary to defendants’ assertions the court therein made no determination on the merits as to whether Universal was fraudulently incorporated. It is noted that Travelers was not a party to that action. However, in several Civil Court, Bronx County actions in which Travelers is a defendant, it has asserted that the medical provider is not entitled to payment and has been granted the right to conduct discovery, including the deposition of Dipak Nandi, pertaining to its defense of fraudulent incorporation. (See Statewide Medical Services, P.C., a/a/o Luis Rodriguez v Travelers Insurance Company,13 Misc 3d 134A [2006]; Maple Med. Acupuncture Servs., P.C. v Travelers Ins. Co., 13 Misc 3d 134A [2006]; Delta Med. Acupuncture Servs., P.C. v Travelers Ins. Co., 13 Misc 3d 134A, [2006]; Continental Med. Acupuncture Servs., P.C. v Travelers Ins. Co., 14 Misc 3d 131A [2007].)

Accepting the plaintiff’s factual allegations as true and according them the benefit of every favorable inference, as required on a motion to dismiss for failure to state a cause of action (see Leon v Martinez, 84 NY2d 83, 87-88 [1994]), the court finds that plaintiff has stated a cause of action for fraud and unjust enrichment. The essential elements of such a cause of action are “representation [*6]of a material existing fact, falsity, scienter, deception and injury.” (Channel Master Corp. v Aluminium Ltd. Sales Corp., 4 NY2d 403, 406-407 [1954].) Here, plaintiff alleges that, in violation of Section 1507 of the Business Corporation Law , Nandi used or bought the use of the names and medical licenses of others to form medical corporations so that he could own or control medical practices, profit from them, bill no-fault insurers for medical services and, in so doing, facilitate fraudulent billing practices. Plaintiff also alleges that Nandi used the name of a licensed acupuncturist in order to form an acupuncture practice which he owned and controlled at a time when he was not certified to practice acupuncture, and formed other PCs which were not licensed to perform acupuncture, and that acupuncture services were performed by independent contractors, and not employees of the PCs. It is alleged that the PC defendants regularly submitted no-fault claims to plaintiffs, falsely representing that the PC defendants were valid medical professional corporations, and that the services provided were provided by their employees. Plaintiff further alleges that it paid substantial amounts of money to the PC defendants based upon their justifiable reliance that the PC defendants comported with applicable statutes and administrative regulations governing the provision of health services.To prevail on a claim of unjust enrichment, “a party must show that (1) the other party was enriched, (2) at that party’s expense, and (3) that it is against equity and good conscience to permit [the other party] to retain what is sought to be recovered’.” (Citibank, N.A. v Walker, 12 AD3d 480, 481, [2004], quoting Paramount Film Distrib. Corp. v State of New York, 30 NY2d 415, 421 [1972], cert denied 41 US 829 [1973].) “Unjust enrichment, however, does not require the performance of any wrongful act by the one enriched.” (Ptachewich v Ptachewich, 96 AD2d 582, [1983].) “Innocent parties may frequently be unjustly enriched.” (Id.; see Simonds v Simonds, 45 NY2d 233, 242 [1978]; Cruz v McAneney, 31 AD3d 54 [2006].) Contrary to defendants’ assertions, plaintiffs are not required to allege the defendants engaged in fraudulent conduct or justifiably relied upon fraudulent statements in order to state a cause of action for unjust enrichment.

In Mallela the Court of Appeals held that no cause of action for fraud or unjust enrichment would lie for payments made to fraudulently incorporated providers before the revised regulations went into effect. By disallowing such claims for payments made before April 4, 2002, the Mallela Court recognized that the law as it existed prior to that date did not recognize claims to recoup payments from entities because they were fraudulently incorporated.

Under the common law of New York, compensation has been denied to unlicensed providers of services for which a regulatory license is required. (See Metroscan Imaging, P.C. v Geico Ins. Co., 13 Misc 3d 35, 38-39 [2006] [citing Spivak v Sachs, 16 NY2d 163 [1965]; Bendell v De Dominicis, 251 NY 305 [1929]; Mavco Realty Corp. v M. Slayton Real Estate, Inc., 12 AD3d 575, [2004]; Price v Close, 302 AD2d 374 [2003]; Gordon v Adenbaum, 171 AD2d 841 [1991].) However, the courts have distinguished between denying an unlicensed entity compensation and permitting the recovery of a fee after it has been paid. The lack of a license does not permit the recovery of a fee from the unlicensed provider after it has been paid. To the extent that Travelers seeks to recover payments that it made to the defendants on the grounds that the acupuncturists were independent contractors and not employees of the PCs, the court finds that no basis exists for carving out such an exception. Although the question certified to the court in Mallela was limited to fraudulent incorporation, prior to Mallela no private right of action existed which permitted an insurer to seek enforcement of the governing statutory provisions and regulations or to recover [*7]damages based upon the breach of the same. Therefore, Travelers’ causes of action for fraud and unjust enrichment to recover no-fault payments, whether based on the fraudulent incorporation, failure to obtain a license to perform acupuncture, or the use of independent contractors to perform the acupuncture services is limited to payments made after April 2, 2004. Travelers may not seek to recover no-fault payments it made the defendants prior to that date. (See Allstate Ins. Co. v Belt Parkway Imaging P.C., 33 AD3d 407 [2006]; Metroscan Imaging, P.C. v Geico Ins. Co., supra).

Finally, contrary to defendants’ assertions, the statute of limitations for the fraud and unjust enrichment causes of action have not expired. The statute of limitations for fraud is the greater of six years from when the cause of action accrued or two years from the time the plaintiff discovers the fraud. (CPLR 213[8].) The statute of limitations for unjust enrichment is six years. (CPLR 213[1].) Prior April 4, 2002 when the revised regulation became effective, an insurer did not have a right to recoup payments made to fraudulently incorporated or improperly licensed medical providers. Since these claims are limited to payments Travelers made on or after April 4, 2002, the commencement of the within action on November 2, 2006 is timely as to all of the defendants. Defendants’ request to dismiss the claims against Mr. Nandi on the grounds of statute of limitations, therefore, is rejected.

Turning now to plaintiff’s motion, CPLR 2201 provides that “[e]xcept where otherwise prescribed by law, the court in which an action is pending may grant a stay of proceedings in a proper case, upon such terms as may be just.” Thus, while this court may issue a stay of an action pending before it in the Supreme Court, it lacks statutory authority to stay actions pending in the Civil Court or District Court. Plaintiff’s motion for a “stay” of the pending lower court actions is in fact one for a preliminary injunction. (See Siegel, NY Prac § 255 [4th ed].) Plaintiff also seeks a preliminary injunction enjoining the defendants from commencing future lawsuits against it for reimbursement of no-fault benefits for acupuncture services pending the determination of this action. A preliminary injunction may issue only if the moving party can demonstrate (1) the likelihood of success on the merits; (2) irreparable injury if the preliminary injunction is not granted, and (3) a balancing of the equities in its favor. (Doe v Axelrod, 73 NY2d 748 [1988]; Preston Corp. v Fabrication Enters., 68 NY2d 397 [1986]; W.T. Grant Co. v Srogi, 52 NY2d 496 [1981].) “Preliminary injunctive relief is a drastic remedy that will not be granted unless a clear right to it is established under the law … and the burden of showing an undisputed right rests upon the movant.” (Zanghi v State of New York, 204 AD2d 313, 314 [1994].) Here, plaintiff has submitted depositions of Mr. Nandi, and other individuals who were involved in the formation of some of the defendant PCs, which were prepared for actions involving some of the same defendants. It is noted that some of the PCs and Nandi were defendants in the Mallela action. Plaintiff has also submitted affidavits, certificate of incorporation and other documentary evidence which supports its claim that at least some of the PCs were fraudulently incorporated or were not authorized to perform acupuncture at the time the PCs were incorporated. In addition, it is undisputed that Travelers made payments to the defendants after April 4, 2002, and it has also withheld payments to the PCs for acupuncture services. Plaintiff’s evidence is sufficient to establish the likelihood of success on the merits of at least a portion of its claims. In addition, in view of the multiplicity of lawsuits and the possible inconsistent outcomes in the absence of an injunction, plaintiff has established the elements of irreparable injury and the balancing of the equities in its favor.

Accordingly, defendants’ cross motion to dismiss the complaint is granted to the extent that [*8]plaintiff’s causes of action to recover damages for fraud and unjust enrichment is limited to payments it made to the defendant on or after April 4, 2002. The request for punitive damages is dismissed. The remainder of defendant’s cross motion is denied. Plaintiff’s motion for a preliminary injunction enjoining all No-Fault collection actions for acupuncture services presently pending between the parties in the New York City Civil Courts and in the Nassau and Suffolk County District Courts, pending the determination of this action, is granted. That branch of plaintiff’s motion which seeks a preliminary injunction enjoining the defendants from commencing future lawsuits against Travelers seeking reimbursement of no-fault benefits for acupuncture services pursuant to Insurance Law § 5101 et. seq. and the regulations promulgated thereunder, pending the determination of this action, is granted. Plaintiffs are directed to post a bond in an amount to be set forth in the order to be entered hereon. The parties are to submit affidavits to the court as to the amount of the bond, along with the proposed order.

Settle order.

J.S.C.

[*1]

Supreme Court, Appellate Term, First Department, May 4, 2007

APPEARANCES OF COUNSEL

Patrick Colligan, White Plains (Michael J. Palumbo of counsel), for appellant. Edward Shapiro, P.C., Wantagh (Steven F. Palumbo of counsel), for respondent.

{**16 Misc 3d at 114} OPINION OF THE COURT

Per Curiam.

Order, dated January 5, 2006, affirmed, with $10 costs.

In response to plaintiff’s interrogatories, defendant insurer admitted that it received the no-fault claims at issue and made partial payment on the claims. Inasmuch as defendant’s verified answers to the interrogatories constituted admissions of a party, which are admissible as evidence (see Bigelow v Acands, Inc., 196 AD2d 436 [1993]), defendant may not now be heard to argue that plaintiff failed to submit proof that the claims had been mailed and received, and that they were overdue (see Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2004]). To the extent that Empire State Psychological Servs., P.C. v Travelers Ins. Co. (13 Misc 3d 131[A], 2006 NY Slip Op 51869[U] [2006]) supports a contrary conclusion, we decline to follow it.

Defendant waived any objections based on lack of proof of assignment since it did not seek verification of the assignment (see Hospital for Joint Diseases v Allstate Ins. Co., 21 AD3d 348 [2005]; Laufer v Lumberman’s Mut. Cas. Co., 9 Misc 3d 133[A], 2005 NY Slip Op 51632[U] [2005]). Since defendant failed to assert any other defenses, judgment was properly entered in favor of plaintiff.

McKeon, J.P., McCooe and Davis, JJ., concur.

[*1]

Supreme Court, Appellate Term, Second Department, April 25, 2007

APPEARANCES OF COUNSEL

Cambio Votto Cassata & Gullo, Staten Island (Thomas J. Kilbane of counsel), for appellant. Gary Tsirelman, P.C., Brooklyn (Florence Zabokritsky of counsel), for respondent.

{**16 Misc 3d at 5} OPINION OF THE COURT

Memorandum.

Judgment reversed without costs, order entered December 16, 2005 vacated, plaintiff’s cross motion for summary judgment denied, defendant’s motion for summary judgment granted to the extent of awarding it partial summary judgment dismissing plaintiff’s claims in the amounts of $1,280.30 and $1,017, and matter remanded to the court below for all further proceedings.

Plaintiff commenced this action to recover $3,024.05 in first-party no-fault benefits for medical supplies provided to its assignor on the ground that payment of no-fault benefits was overdue. Thereafter, defendant moved for summary judgment. The parties entered into a stipulation of settlement adjourning the return date of defendant’s motion until December 16, 2005. The stipulation also provided that plaintiff was to serve its opposition papers by November 9, 2005 and defendant was to serve its reply papers by December 9, 2005. On December 13, 2005 plaintiff served defendant by mail with opposition papers and a cross motion for summary judgment. While a party may serve a cross motion at least three days prior to the [*2]time at which a motion is noticed to be heard (see CPLR 2215), where, as here, a party serves a cross motion by mail, an additional five days must be added (see CPLR 2103 [b] [2]; D’Aniello v T.E.H. Slopes, 301 AD2d 556 [2003]; Perez v Perez, 131 AD2d 451{**16 Misc 3d at 6} [1987]). A party’s failure to comply with CPLR 2215 may generally be excused in the absence of prejudice (see Walker v Metro-North Commuter R.R., 11 AD3d 339 [2004]). In the case at bar, however, the lower court improvidently considered and granted plaintiff’s cross motion for summary judgment since defendant was not afforded an opportunity to respond thereto (see Flannery v Goldsmith, 268 AD2d 267 [2000]). Likewise, the lower court improvidently exercised its discretion in accepting and considering plaintiff’s untimely opposition papers since the plaintiff failed to provide any excuse for its delay, and defendant was prejudiced by the court’s failure to allow defendant an opportunity to submit reply papers (see Mosheyeva v Distefano, 288 AD2d 448 [2001]; Risucci v Zeal Mgt. Corp., 258 AD2d 512 [1999]).

With regard to the merits of defendant’s motion for summary judgment, the affidavit of defendant’s no-fault examiner sufficiently established that defendant timely denied plaintiff’s claims for the sums of $1,280.30 and $1,017 by setting forth in detail defendant’s office practice and procedure for the mailing of denial of claim forms (see New York & Presbyt. Hosp. v Allstate Ins. Co., 29 AD3d 547 [2006]; Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679 [2001]). The aforementioned bills were denied on the ground that the fees charged were excessive and the supplies provided were not medically necessary based upon the attached affirmed peer review report. In its motion, defendant made out a prima facie case that the supplies provided in the aforementioned claims were not medically necessary. As a result, the burden shifted to plaintiff to establish the existence of a triable issue of fact (see Alvarez v Prospect Hosp., 68 NY2d 320 [1986]). Since, under the circumstances presented, plaintiff’s opposition papers should not have been considered by the court, plaintiff did not establish a triable issue of fact as to the aforementioned claims.

Further, the affidavit of defendant’s no-fault examiner established that defendant received plaintiff’s claim for the sum of $726.75 on July 2, 2004. The no-fault examiner stated that defendant sent plaintiff a timely request for verification and, after receiving the requested verification, timely denied said claim. However, the record did not establish when the verification request pertaining to this claim was mailed (see New York & Presbyt. Hosp. v Allstate Ins. Co., 29 AD3d 547 [2006], supra). Defendant did not prove that its time to pay or deny the claim was tolled as a result of the alleged verification request such{**16 Misc 3d at 7} that the denial of claim ultimately issued by defendant was timely. Consequently, defendant failed to sustain its burden of demonstrating its entitlement to judgment as a matter of law upon this claim. Accordingly, defendant’s motion for summary judgment should have been granted to the extent of awarding it partial summary judgment dismissing plaintiff’s claims for the sums of $1,280.30 and $1,017.

Pesce, P.J., Golia and Belen, JJ., concur.

[*1]

Supreme Court, Appellate Term, Second Department, April 24, 2007

APPEARANCES OF COUNSEL

Teresa M. Spina, Woodbury (Michael Theodorou of counsel), for appellant. Gary Tsirelman, P.C., Brooklyn (Darya Klein of counsel), for respondent.

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

Memorandum.

Judgment reversed without costs, order granting plaintiff’s motion for summary judgment vacated, plaintiff’s motion for summary judgment denied, and, upon searching the record, summary judgment granted in favor of defendant dismissing the action.

In this action to recover assigned first-party no-fault benefits, plaintiff health care provider moved for summary judgment. In an affirmation in support of the motion, plaintiff’s counsel stated that plaintiff billed defendant for 35 sessions of acupuncture with its licensed acupuncturist at a rate of $90 per session, for a total of $3,150. Defendant paid plaintiff for 35 sessions at a reduced rate of $29.30 per session, which, defendant claimed, was the amount paid to licensed chiropractors for similar services, for a total of $1,025.50. Plaintiff sought full reimbursement, or the remaining $2,124.50, contending that the amounts which it had charged were not unreasonable and were within the range of the prevailing fees in the geographic area in which plaintiff operated. Plaintiff’s counsel stated that the prevailing fee for acupuncture services performed by licensed acupuncturists in New York City was between $85 and $100 per session, and added that said amounts were warranted given the extensive training required in order to become a licensed acupuncturist. [*2]

Defendant, in opposition, showed that it timely mailed its claim denial forms, which partially denied plaintiff’s claims on the ground that the fees charged by plaintiff exceeded the maximum allowance under the applicable fee schedules. An employee of its claims division, who was responsible, inter alia, for reviewing fee schedules, noted in her affidavit that, since the workers’ compensation fee schedule did not specifically address acupuncture services performed by a licensed acupuncturist{**16 Misc 3d at 25} who was neither a licensed physician nor a licensed chiropractor, defendant had reviewed the acupuncture fee schedules “already adopted or established by the superintendent” (i.e., for licensed physicians and licensed chiropractors), pursuant to the mandates of 11 NYCRR 68.5 (b), and had concluded that licensed acupuncturists should be reimbursed at a rate consistent with the amount established in the fee schedule for licensed chiropractors in the geographic region, or at $29.30 per session (as opposed to the amount established in the fee schedule for acupuncture services performed by a physician, which would have called for a payment of $42.84 per session for that geographic region). This conclusion was deemed by defendant to be “reasonable and appropriate, given a comparison of the New York State requirements regarding the educational level, experiential requirements and licensing requirements for medical doctors, chiropractors and individuals simply licensed to perform acupuncture.”

The court below granted plaintiff’s motion for summary judgment, and defendant appealed, contending that plaintiff had been properly reimbursed in accordance with the rates set forth in the existing fee schedules. At issue is the appropriate fee to be paid for acupuncture services rendered by a licensed acupuncturist.

Insurance Law § 5102 (a) (1) defines “basic economic loss” as including “[a]ll necessary expenses incurred for . . . professional health services” subject to the limitations of Insurance Law § 5108. The latter statute limits the amounts to be charged by providers of health services, and states that the charges for services specified in Insurance Law § 5102 (a) (1) “shall not exceed the charges permissible under the schedules prepared and established by the chairman of the workers’ compensation board . . . except where the insurer . . . determines that unusual procedures or unique circumstances justify the excess charge” (Insurance Law § 5108 [a]). The statute also authorizes the Superintendent of Insurance to “promulgate rules and regulations implementing and coordinating the provisions of” the No-Fault Law and the Workers’ Compensation Law with respect to charges for the professional health services specified in Insurance Law § 5102 (a) (1), “including the establishment of schedules for all such services for which schedules have not been prepared and established by the chairman of the workers’ compensation board” (Insurance Law § 5108 [b]).

Part 68 (also known as Regulation 83) of the New York Insurance Department Regulations (11 NYCRR) governs the charges{**16 Misc 3d at 26} for professional health services. The regulations provide that the “existing fee schedules prepared and established by the chairman of the Workers’ Compensation Board . . . are hereby adopted by the Superintendent of Insurance with appropriate modification so as to adapt such schedules for use pursuant to the provisions of section 5108 of the Insurance Law” (11 NYCRR 68.1 [a]). The fee schedules for professional health services referred to in Insurance Law § 5102 (a) (1), for which schedules have not been prepared and established by the Workers’ Compensation Board, may be [*3]established by the Superintendent, and are made part of Appendix 17-C of the regulations (11 NYCRR 68.2). Appendix 17-C does not contain a fee schedule for acupuncture services performed by a licensed acupuncturist.

The New York State Department of Insurance has stated that medically necessary acupuncture services rendered by a licensed acupuncturist are covered expenses, and are eligible for reimbursement under Insurance Law § 5102 (a) (1) (see Ops Gen Counsel NY Ins Dept No. 04-01-01). Where, as here, a professional health service has been performed which is reimbursable under Insurance Law § 5102 (a) (1), but such service is performed by a provider which is not included in the fee schedules established by the Workers’ Compensation Board, and if the Superintendent of Insurance has not adopted or established a fee schedule applicable to the particular provider, “then the permissible charge for such service shall be the prevailing fee in the geographic location of the provider subject to review by the insurer for consistency with charges permissible for similar procedures under schedules already adopted or established by the superintendent” (11 NYCRR 68.5 [b]).

The Department of Insurance has also concluded that while a licensed acupuncturist may bill an insurer for services rendered based upon the prevailing rate charged by other licensed acupuncturists in the same geographic area, “such billed fees may be reduced by insurers to those fees established in existing fee schedules for similar procedures reimbursable at fee rates in existing fee schedules, pursuant to section 68.5 (b) in Department Regulation 83” (see Ops Gen Counsel NY Ins Dept No. 04-10-03). The Department has specifically stated that it is:

“reasonable and appropriate, as well as consistent with the intent of Section 68.5 (b), for an insurer to reduce a prevailing regional rate when there is an established fee for similar services. . . . [W]ere a{**16 Misc 3d at 27} No-Fault insurer to review and equate services provided by a licensed acupuncturist as similar to acupuncture services provided by doctors or chiropractors, and such rate is less than the prevailing regional fee rate, it would be consistent with the regulation for an insurer to limit the reimbursable fee for necessary{**16 Misc 3d at 28} services provided by a licensed acupuncturist to the rates established for doctors and chiropractors performing a similar service.” (Ops Gen Counsel NY Ins Dept No. 04-10-03.)

Responsibility for administering the Insurance Law rests with the Superintendent of Insurance (Insurance Law § 301), who has “broad power to interpret, clarify, and implement the legislative policy” (Ostrer v Schenck, 41 NY2d 782, 785 [1977] [internal quotation marks omitted]). It is a well-established principle of law that the Superintendent’s interpretation of its regulations, “if not irrational or unreasonable, will be upheld in deference to his special competence and expertise with respect to the insurance industry, unless it runs counter to the clear wording of a statutory provision” (State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313, 321 [2005], quoting Matter of New York Pub. Interest Research Group v New York State Dept. of Ins., 66 NY2d 444, 448 [1985]; Matter of Medical Socy. of State of N.Y. v Serio, 100 [*4]NY2d 854, 864 [2003]; see also Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 35 AD3d 720 [2006]).

We are in agreement with defendant that the lower court erred in granting plaintiff’s motion for summary judgment. In support of its motion for summary judgment, plaintiff argued, in a conclusory affirmation of counsel, in anticipation of defendant’s position in opposition to the motion, that a licensed acupuncturist should receive a higher rate of reimbursement than the scheduled fee for acupuncture services rendered by a physician or a chiropractor because of the acupuncturist’s extensive training in the area. Significantly, plaintiff did not argue that the services performed by its licensed acupuncturist were dissimilar from acupuncture services listed for a physician or for a chiropractor provider on the established fee schedules, and that it was therefore entitled to a different reimbursement rate.

In opposition to the motion, defendant argued that it was following the guidelines of the Department of Insurance which authorized the insurer “to limit the reimbursable fee for necessary services provided by a licensed acupuncturist to the rates established for doctors and chiropractors performing a similar service” (Ops Gen Counsel NY Ins Dept No. 04-10-03), that it had reviewed the amounts charged by plaintiff “for consistency with charges permissible for similar procedures under schedules already adopted or established by the superintendent,” and that, based upon a comparison of the training and experience of licensed acupuncturists, physicians and chiropractors who perform acupuncture services, it was reducing the fee for the acupuncture services provided by plaintiff to the rates already adopted or established for chiropractors performing a similar service, in accordance with the provisions of 11 NYCRR 68.5 (b). We note that even though the fee schedules for acupuncture services performed by chiropractors are lower than the fee schedules for such services performed by physicians, the Department of Insurance did not give any guidance as to which particular fee schedule should be applied to a licensed acupuncturist in any particular instance, although the Department was aware of this differential (see Ops Gen Counsel NY Ins Dept 04-10-03).

Plaintiff’s sole ground for summary judgment, i.e., that its rate of reimbursement should exceed the amounts prescribed in the fee schedules for both physicians and chiropractors because of the extensive training and experience required to become a licensed acupuncturist, has therefore been rejected by the Department of Insurance, which limited the fee for licensed acupuncturists to either one or the other. In view of the fact that there has been a lack of clarity regarding the appropriate fee schedule to apply for acupuncture services rendered by licensed acupuncturists, and since there has been increasing litigation on the issue, we strongly urge the Superintendent of Insurance to consider adopting a separate fee schedule for health services rendered by licensed acupuncturists. However, in the absence of same, upon the record presented, we apply the chiropractor fee schedule to the instant services. While physicians who practice acupuncture need only obtain certification in order to perform acupuncture (see Education Law § 8216; 8 NYCRR 60.9), chiropractors who practice acupuncture must be licensed to do so (see Education Law § 8214). Thus, licensed acupuncturists and chiropractors who wish to practice acupuncture are subject to similar training and educational requirements.

Under the circumstances presented herein, since it is undisputed that defendant has fully [*5]paid plaintiff the amounts{**16 Misc 3d at 29} to which it is entitled under the fee schedules for acupuncture services performed by chiropractors, it is appropriate for this court to search the record and grant summary judgment to defendant dismissing the action (Merritt Hill Vineyards v Windy Hgts. Vineyard, 61 NY2d 106 [1984]). Accordingly, the judgment is reversed, the order granting plaintiff’s motion for summary judgment is vacated, plaintiff’s motion for summary judgment is denied and, upon searching the record, the action is dismissed.

We note that inasmuch as plaintiff’s constitutional arguments were not raised in the court of first instance, they were not preserved for appellate review, and we therefore decline to reach them (see Giordano v O’Neill, 131 AD2d 722 [1987]).

Rios, J. (concurring in part and dissenting in part in the following memorandum). Although I am in agreement with the majority that the judgment should be reversed, the order granting plaintiff’s motion for summary judgment vacated, and plaintiff’s motion for summary judgment denied, in my opinion, we should not search the record to grant summary judgment in favor of defendant dismissing the action. Rather, the matter should be remanded for a trial on developed facts as to which specific services were provided by plaintiff to its assignor. While it is true that workers’ compensation fee schedules have been established for acupuncture services performed by a chiropractor, the record is silent as to whether the subject billing refers to treatment which is usually rendered by a chiropractor within the scope of his or her chiropractic license (see Education Law § 6551), or whether the billed services are for treatment for which a license as an acupuncturist is needed (see Education Law § 8214), in which event, the procedures performed by plaintiff’s acupuncturist would be sufficiently dissimilar from those rendered by a chiropractor that the fee schedules established for chiropractors should not be invoked.

Weston Patterson, J.P., and Belen, J., concur; Rios, J., concurs in part and dissents in part in a separate memorandum.

Supreme Court, Queens County

13956 2006

Duane A. Hart, J.

Plaintiff allegedly was injured in a motor vehicle accident in New York on March 17, 2006, while a passenger in a vehicle owned and operated by Silvanous Parchment. Defendant issued an insurance policy in Florida to Parchment, who purportedly was a resident of Florida, for that vehicle, which was registered in Florida. [*2]

On April 13, 2006, plaintiff submitted a claim for no-fault benefits to defendant insurer. On June 15, 2006, defendant insurer denied said claim on the ground that the policy was revoked for material misrepresentation.

In this action by plaintiff, among other things, for judgment declaring her rights under the policy, plaintiff moves for summary judgment determining that she is eligible for no-fault benefits and that defendant’s denial of such benefits was untimely. Defendant cross-moves for summary judgment on the ground that plaintiff’s injuries did not arise from a covered accident.

Defendant cancelled the policy on June 7, 2006, after it discovered Parchment made a material misrepresentation on the insurance application. The material misrepresentation was that Parchment resided and garaged his vehicle in Florida. An investigation by defendant after the subject accident revealed that Parchment resided and garaged his vehicle in New York.

Florida law allows for the retroactive cancellation of an insurance policy, where, as in this case, a material misrepresentation is contained within the insurance application. (See Penaranda v Progressive American Insurance Co., 747 So.2d 953 [Fla. 1999].) New York law does not allow retroactive cancellation. (See Vehicle and Traffic Law § 313; see also Matter of Insurance Co. of North America v Kaplun, 274 AD2d 293 [2000]; Olivio v Government Employees Insurance Co. of Washington, D.C., 46 AD2d 437 [1975].) There is no dispute that there is a conflict between the law of New York and the law of Florida. This conflict of law relating to an insurance policy must be resolved by application of the conflict of law rules relevant to contracts. (See Matter of Integon Insurance Co. v Garcia, 281 AD2d 480 [2001].) The courts apply the “center of gravity” or “grouping of contacts” inquiry to determine which State has the most significant contacts to the dispute. (See Matter of Eagle Insurance Co. v Singletary, 279 AD2d 56 [2000].) Significant contacts in a case involving a contract, in addition to the place of contracting, are the place of negotiation and performance, the location of the subject matter of the contract and the domicile or place of business of the contracting parties. (See Zurich Insurance Co. v Shearson Lehman Hutton, Inc., 84 NY2d 309 [1994]; see also Matter of Integon Insurance Co. v Garcia, supra; Matter of Eagle Insurance Co. v Singletary, supra.)

Applying the grouping of contacts inquiry to the facts here, the State of Florida has the most significant contacts with the parties and the contract. Defendant issued its insurance policy to Parchment in Florida, who purportedly was a resident of Florida, [*3]for a vehicle registered in Florida, which terms incorporated Florida law. The only connection between the policy and New York is that Parchment was driving the vehicle in New York at the time of the accident. Thus, Florida law is controlling under New York’s conflict of law rules. Moreover, Florida’s significant contacts with the subject contract and legitimate governmental interest in protecting its honest policyholders from bearing the burden of paying claims incurred by dishonest policyholders outweighs New York’s governmental interest in protecting innocent third parties from being deprived of insurance coverage, especially since New York statutes provide the means to ensure compensation to persons injured due to the fault of uninsured motorists within the state by requiring New York policyholders to purchase uninsured motorist coverage (see Insurance Law § 3420[f]) and establishing and providing insurance through the Motor Vehicle Accident Indemnification Corp. (See Insurance Law § 5201 et seq.)

Applying Florida law, defendant’s retroactive cancellation of the insurance policy due to Parchment’s material misrepresentation in his application for insurance was valid. Since the subject policy was void ab initio, defendant’s denial of plaintiff’s no-fault claim was proper. In addition, the timeliness of defendant’s denial of plaintiff’s no-fault claim is irrelevant as the denial was based upon lack of coverage. (See Central General Hospital v Chubb Group of Insurance Cos., 90 NY2d 195 [1997].)

Accordingly, it is ORDERED AND ADJUDGED that plaintiff’s motion for summary judgment and attorney’s fees is denied and defendant’s cross motion for summary judgment dismissing plaintiff’s complaint is granted; and it is further

ADJUDGED AND DECLARED that defendant is not obligated to provide “no-fault” coverage to plaintiff.

Dated: April 11, 2007J.S.C.