Urban Radiology, P.C. v American Tr. Ins. Co., 2009 NY Slip Op 51734(U) (App. Term, 2nd, 2009)

It is well settled that in order to vacate a default judgment, the defendant must demonstrate both a reasonable excuse for its delay in appearing and answering the complaint as well as a meritorious defense to the action (see CLR 5015 [a] [1]; Eugene Di Lorenzo, Inc. v A.C. Dutton Lbr. Co., 67 NY2d 138, 141 [1986]; Sound Shore Med. Ctr. v Lumbermens Mut. Cas. Co., 31 AD3d 743 [2006]). In the case at bar, defendant’s no-fault supervisor, who was also the claims representative who handled the instant claims, submitted an affidavit in which he stated that defendant had lost the file containing the summons and complaint and had not found out about the default until June 25, 2007. The record also indicates that defendant’s attorney initiated the instant motion to vacate the default judgment promptly in July 2007. On these facts, defendant’s failure to answer the complaint was excusable (see e.g. Perez v Travco Ins. Co., 44 AD3d 738 [2007]; Sound Shore Med. Ctr. v Lumbermens Mut. Cas. Co., 31 AD3d at 743; Dodge v Commander, 18 AD3d 943, 946 [2005]; Triangle Transp. Inc. v Markel Ins. Co., 18 [*2]AD3d 229 [2005]; Allstate Ins. Co. v Progressive Cas. Ins. Co., 20 Misc 3d 139[A], 2008 NY Slip Op 51567[U] [App Term, 2d & 11th Jud Dists 2008]).

A review of the record indicates that defendant demonstrated a potentially meritorious defense to plaintiff’s $2,322.73 claim for the services it rendered to assignor Patrick Seraphin. The affidavits of defendant’s claims representative and mail room supervisor show that defendant timely denied said claim within the 30-day statutory time period as required by Insurance Department Regulations (11 NYCRR) § 65-3.8 (c) (see also Insurance Law § 5106 [a]), based upon, inter alia, a peer review report concluding that there was no medical necessity for the services rendered to Seraphin. In regard to the claims for the services plaintiff rendered to assignor Guy Louis, defendant argued that it did not have to pay or deny these claims because plaintiff had failed to respond to its verification requests and, thus, the 30-day statutory time period within which it had to respond to the claims had been tolled. However, defendant failed to demonstrate merit to said defense since the affidavits did not show that defendant’s requests for additional verification were timely (see Insurance Department Regulations [11 NYCRR] § 65-3.5 [b]) and, consequently, the action with respect to said claims was not premature.

In view of the fact that defendant has shown a reasonable excuse for its default and a meritorious defense as to the claim for services rendered to assignor Patrick Seraphin, we find that the Civil Court improvidently exercised its discretion in denying that part of defendant’s motion which sought to vacate the default judgment and compel plaintiff to accept a late answer with respect to plaintiff’s $2,322.73 claim (see New York Univ. Hosp. Rusk Inst. v Illinois Natl. Ins. Co., 31 AD3d 511, 512 [2006]).

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Great Wall Acupuncture, P.C. v Auto One Ins. Co., 2009 NY Slip Op 51733(U) (App. Term, 2nd, 2009)

However, plaintiff correctly argues that the Civil Court erred when it ordered plaintiff to respond to specified items set forth in defendant’s supplemental demand for discovery and inspection. By cross-moving to compel responses to its supplemental demand for discovery and inspection on the same day as it served said supplemental demand, defendant failed to give plaintiff an opportunity to respond to the supplemental demand or to object thereto. Indeed, defendant cross-moved before plaintiff even received the supplemental demand. As a result, defendant’s cross motion should have been denied as premature (see Sagiv v Gamache, 26 AD3d 368 [2006]).

W & Z Acupuncture, P.C. v Amex Assur. Co., 2009 NY Slip Op 51732(U) (App. Term, 2nd, 2009)

In opposition to plaintiff’s motion and in support of its cross motion for summary judgment, defendant submitted the affirmation of a partner in the law firm retained by defendant to conduct plaintiff’s EUO. Counsel alleged facts sufficient to establish that plaintiff’s owner had failed to appear at counsel’s law office for duly scheduled EUOs (see Stephen Fogel [*2]Psychological, P.C. v Progressive Cas. Ins. Co., 35 AD3d 720 [2006]). The appearance of the eligible injured person’s assignee at an EUO is a condition precedent to the insurer’s liability on the policy (see Insurance Department Regulations [11 NYCRR] § 65-1.1; Stephen Fogel Psychological, P.C., 35 AD3d at 722). Accordingly, the court should have denied plaintiff’s motion for summary judgment and granted defendant’s cross motion for summary judgment dismissing the complaint.

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

Rios, J., dissents in a separate memorandum.

Rios, J., dissents and votes to affirm the judgment in the following memorandum.

In support of its cross motion for summary judgment and in opposition to plaintiff’s motion for summary judgment, defendant alleged that plaintiff’s owner failed to appear at scheduled examinations under oath (EUOs). Although a partner of the law firm at which the EUOs were scheduled to be held submitted an affirmation asserting plaintiff’s owner’s nonappearance, nowhere in the affirmation did the affirmant state that he had personal knowledge of such nonappearance (see Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 35 AD3d 720 [2006]) or even that he was to be personally involved in conducting the EUOs. Unlike the majority, I do not believe that such personal knowledge can be inferred solely from the fact that the affirmant was a partner of the law firm. Accordingly, I would hold that defendant’s cross motion for summary judgment was properly denied and plaintiff’s motion for summary judgment was properly granted, and would affirm the judgment.

Astoria Advanced Med., P.C. v Allstate Ins. Co., 2009 NY Slip Op 51729(U) (App. Term, 2nd, 2009)

WJJ Acupuncture, P.C. v Utica Mut. Ins. Co., 2009 NY Slip Op 51731(U) (App. Term, 2nd, 2009)

Plaintiff commenced the instant action to recover first-party no-fault benefits assigned to it by Natasha Wright, Junior Ford and Steven Stryr. By order dated April 19, 2007, the Civil Court granted plaintiff’s motion for summary judgment, and this appeal ensued. The appeal is deemed to be from the judgment that was subsequently entered pursuant to the April 19, 2007 order (see CPLR 5501 [c]).

Contrary to plaintiff’s contention, the subject order was not entered upon defendant’s default inasmuch as the CPLR 2219 (a) recitation states that the court considered defendant’s opposing papers (see CPLR 2219 [a]; Mitchell v Sebrew, 17 Misc 3d 137[A], 2007 NY Slip Op 52301[U] [App Term, 2d & 11th Jud Dists 2007]; A.B. Med. Servs PLLC v New York Cent. Mut. Fire Ins. Co., 6 Misc 3d 133[A], 2005 NY Slip Op 50115[U] [App Term, 2d & 11th Jud Dists 2005]).

Defendant contends on appeal, as it did before the Civil Court, that plaintiff’s motion for [*2]summary judgment was made in violation of a previously ordered stay issued by the Supreme Court, Nassau County (Brennan, J.). Upon a review of the order issued by Justice Brennan, which was appended to defendant’s opposition papers, we find that the order barred plaintiff from moving for summary judgment upon plaintiff’s claims pertaining to assignors Natasha Wright and Junior Ford (see A.T. Med., P.C. v State Farm Ins. Co., 19 Misc 3d 138[A], 2008 NY Slip Op 50875[U] [App Term, 2d & 11th Jud Dists 2008]). Consequently, plaintiff’s motion for summary judgment is denied without prejudice with respect to these claims.

However, inasmuch as the stay is inapplicable to claims pertaining to assignor Steven Stryr, the stay did not bar the branch of plaintiff’s motion which sought summary judgment upon the $428.56 claim to recover assigned first-party no-fault benefits for services rendered to Stryr. As the sole argument raised on appeal by defendant concerns the stay issued by Justice Brennan, defendant failed to establish that plaintiff was not entitled to summary judgment upon the $428.56 claim pertaining to Stryr.

Accordingly, the judgment is reversed, so much of the order entered April 19, 2007 as granted plaintiff’s motion for summary judgment upon its claims pertaining to assignors Natasha Wright and Junior Ford is vacated, said branches of plaintiff’s motion for summary judgment are denied without prejudice, and the matter is remitted to the Civil Court for the calculation of statutory interest and an assessment of attorney’s fees due on plaintiff’s claim for $428.56, pertaining to assignor Steven Stryr, pursuant to Insurance Law § 5106 (a) and the regulations promulgated thereunder.

Alexander Alperovich, M.D., P.C. v Auto One Ins. Co., 2009 NY Slip Op 51721(U) (App. Term, 2nd, 2009).

In this action by a provider to recover assigned first-party no-fault benefits, the Civil Court denied plaintiff’s motion for summary judgment, holding that there are questions of fact as to whether plaintiff’s assignor is an innocent third party or was involved in, or had knowledge of, the identity theft which resulted in defendant’s issuance of the automobile insurance policy. The instant appeal by plaintiff ensued.

While defendant contends that plaintiff is not entitled to summary judgment because the insurance policy was obtained fraudulently as a result of identity theft, the record is bereft of any evidence that plaintiff’s assignor participated in or was aware of such a fraudulent scheme (cf. A.B. Med. Servs. PLLC v Commercial Mut. Ins. Co., 12 Misc 3d 8 [App Term, 2d & 11th Jud Dists 2006]). Since defendant did not cancel the insurance policy prior to the accident (see Vehicle and Traffic Law § 313), defendant failed to demonstrate the existence of an issue of fact so as to defeat plaintiff’s motion for summary judgment (see Matter of Metlife Auto & Home v Agudelo, 8 AD3d 571 [2004]; D.A.V. Chiropractic, P.C. v GEICO Indem. Co., 21 Misc 3d 138[A], 2008 NY Slip Op 52304[U] [App Term, 9th & 10th Jud Dists 2008]; cf. A.B. Med. Servs. PLLC, 12 Misc 3d 8). Accordingly, the order is reversed, plaintiff’s motion for summary judgment is granted, and the matter is remitted to the Civil Court for the calculation of statutory [*2]interest and an assessment of attorney’s fees pursuant to Insurance Law § 5106 (a) and the regulations promulgated thereunder.

RLI Ins. Co. v Steely, 2009 NY Slip Op 06130 (App. Div., 2nd, 2009)

NY Mutual moved, inter alia, pursuant to CPLR 3211 to dismiss the complaint for lack of standing insofar as asserted against it. NY Mutual argued, among other things, that the plaintiff lacked standing to challenge its disclaimer of coverage to its insured. The Supreme Court, inter alia, granted that branch of NY Mutual’s motion which was to dismiss the complaint insofar as asserted against it. We reverse the order insofar as appealed from.

We find that the plaintiff has standing to challenge NY Mutual’s disclaimer of coverage to its insured. “A plaintiff need not be privy to an insurance contract to commence a declaratory judgment action to determine the rights and obligations of the respective parties, so long as the plaintiff stands to benefit from the policy” (Mortillaro v Public Serv. Mut. Ins. Co., 285 AD2d 586, 587). Here, the plaintiff clearly stands to benefit from NY Mutual’s policy.

Jason Tenenbaum, Esq., the the managing no-fault attorney at Picciano & Scahill, P.C. and Francis J. Scahill, Esq., the managing partner at Picciano & Scahill, P.C, authored an article in the New York Law Journal titled: What Constitutes a ‘Prima Facie’ Case In No-Fault Practice? The article will be in tomorrow’s New York Law Journal. You can view it online today.

I’ll post more tomorrow. It’s late and it’s been a long day.

As promised, here are the usual snipped. And, as usual, you will have to pick up the paper or go online to get the full article.

In examining the decisions from the courts since 1997, the date the Court of Appeals decided the groundbreaking matter of Presbyterian Hosp. in the City of New York v. Maryland Cas. Co.,¹ the appellate courts during various points in the last 10 years have suggested five distinct yet somewhat interrelated models as to what satisfies a prima facie case. The following represents the models that courts at one point or another have found constitutes a prima facie case for the recovery of no-fault benefits.

• Model 1—A plaintiff must show that a completely filled out claim form is overdue.

• Model 2—A plaintiff must demonstrate that a bill is overdue, period.

• Model 3—A plaintiff must prove that a bill is overdue and the rendered service is medically necessary

• Model 4—A plaintiff must prove that a bill is overdue and that the bill constitutes a business record of the provider of services.

• Model 5—A plaintiff must satisfy any of the above models AND demonstrate standing.

While a prima facie case under the majority approach in no-fault litigation nationwide combines “Model 3,” “Model 5″ and requires a plaintiff to prove a causal relation between the motor vehicle accident and the injuries,² the current viewpoint in New York is that a prima facie case is satisfied through either “Model 2″ or “Model 4.” A discussion of the various models ensues.

…

Model 3—A plaintiff must prove that a bill is overdue and the rendered service is medically necessary. Prior to the no-fault explosion that began in 2003, two courts held that the medical necessity of a service was part of a plaintiff’s prima facie case.¹²

From 2003 onward, the courts have universally shunned this model and have embraced either “Model 2″ or “Model 3,” wherein the burden to demonstrate a service’s lack of reasonableness falls squarely, in the first instance, on the insurance carrier. Many trial decisions affirmed on appeal have reiterated this point of law.¹³

It follows that as of now, “Model 3″ does not represent the law in this state, making New York a minority jurisdiction regarding this issue.¹⁴

Model 4—A plaintiff must show that a bill is overdue and that the bill constitutes a business record of the provider of services. There is a split, the size of a crater, between every Appellate Court and the Appellate Term, Second Department, as to the necessity of a medical provider placing the claim form into evidence in order to satisfy a prima facie case.

The Appellate Term, Second Department, began formally adding this requirement to a provider’s prima facie case in Dan Medical, P.C. v. New York Cent. Mut. Fire Ins. Co.,¹⁵ and Fortune Med., P.C. v. Allstate Ins. Co.¹⁶ This requirement, although not applied in earnest as is the case now, predated the Dan Medical and Fortune Medical line of cases.¹⁷

Following Dan Medical, there have been over 100 reported cases where a prima facie case has not been established due to the failure to place the statutory claim documents into evidentiary admissible form.¹⁸

Most notably, the Appellate Division, Second Department, in the matter of Art of Healing Medicine, P.C. v. Travelers Home & Mar. Ins. Co., upheld the rationale of the Dan Medical line of cases, when the Appellate Division observed the following:

The plaintiffs failed to establish their prima facie entitlement to judgment as a matter of law. The plaintiffs’ medical service providers failed to demonstrate the admissibility of their billing records under the business records exception to the hearsay rule.¹⁹

Against this model, the Appellate Term, First Department, in Fair Price Medical Supply Inc. v. St. Paul Travelers Ins. Co.,²⁰ held that a literal interpretation of the Mary Immaculate rule was in all respects proper.

Furthermore, the Appellate Term, First Department has been unwavering in its commitment to following Fair Price Medical Supply and in rejecting competing Appellate Term, Second Department precedent. The Appellate Term, Second Department, has likewise rejected competing Appellate Term, First Department precedent.²¹

As seen above, the Appellate Division First Department and Appellate Division, Third Department, have likewise rejected Appellate Term, Second Department precedent.²²

While the Appellate term, Second Department has continued to predicate its allegiance to Dan Medical based upon the Appellate Division, Second Department’s holding and affirmance of its decision in Art of Healing,²³ the legal moorings behind the Appellate Division, Second Department’s holding in Art of Healing appear to be waning. For instance, the Appellate Division, Second Department in an opinion and order authored by Justice Mark C. Dillon in the matter of Kingsbrook Jewish Medical Center v. Allstate Ins. Co.,²⁴ held that a strict reading of Mary Immaculate would be sufficient for a provider to satisfy its prima facie case.

Significantly, Kingsbrook appears to represent a clear break with the Appellate Division, Second Department’s holding in Art of Healing, which was decided approximately three months prior to Kingsbrook.

Besides Kingsbrook, the rationale behind the holding that a medical provider must lay a business record foundation for the entry into evidence of claim forms has been implicitly rejected in numerous cases subsequent to Art of Healing.²⁵

It would thus appear that the Appellate Division, Second Department has abandoned its own position in Art of Healing and has consciously decided to follow its former precedent set forth in the Mary Immaculate line of cases. In this regard, the Appellate Division, Second Department’s jurisprudence is in accord with Appellate Division First Department case law, Appellate Division Third Department case law and Appellate Term, First Department case law.²⁶

With the moorings that support Dan Medical abandoned, the Appellate Term, Second Department’s allegiance to this model is probably inappropriate. It is only a matter of time before the Appellate Term, Second Department is forced to abandon its allegiance to the Dan Medical line of cases.

What is somewhat ironic is that Model 4, quantitatively, is the most widely followed Model since the Appellate Term, Second Department has direct appellate authority over the jurisdictions where a majority of the no-fault filings take place.

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