Matter of Pomona Pain Mgt., P.C. v Praetorian Ins. Co.
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Matter of Pomona Pain Mgt., P.C. v Praetorian Ins. Co. 2012 NY Slip Op 30525(U) January 31, 2012 Sup Ct, Nassau County Docket Number: 012976/11 Judge: F. Dana Winslow Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. --------------------- -- ------ -- ------------- ------------- ------ ------- ------------------------------------------------------ [* 1] SHORT FORM ORDER SUPREME COURT - STATE OF NEW YORK Present: HON. F. DANA WINSLOW, Justice TRIAL/IS, PART 3 NASSAU COUNTY In the matter of the Application of Pomona Pain Management, P. C., Assignee of Kevin Branch, RETURN DATE: 10/21/11 Respondent, SEQUENCE NO. : 001 - against - INDEX NO. : 012976/11 PRAETORIAN INSURANCE COMPANY, Petitioner. The following papers read on this petition (numbered 1) Notice of Petition..................................... 1 PRATORIAN INSURNCE COMPANY ("PRAETORIAN" ) brings this 7511 to vacate the award of the master arbitrator and the lower arbitrator in connection with a No Fault arbitration conducted by the American Arbitration Association. The Court notes, at the outset , that the above caption, taken from Article 75 the Petition itself, incorrectly represents this proceeding. The instant POMONA PAIN proceeding is not an application by Pomona Pain Management, P. C. (" (The above caption was MANAGEMENT" ) but rather an application by PRATORIAN. ) The apparently drafted to reflect the position of the paries in the underlying arbitration. caption should read as follows: proceeding pursuant to CPLR SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NASSAU In the matter of the application of PRATORIAN INSURANCE COMPANY Petitioner -againstPOMONA PAIN MANAGEMENT, P. , Assignee of Kevin Branch Respondent. -----------------)C Inde)C No. 012976/11 [* 2] The Cour also notes that no opposition to this motion was received by the Court. Pursuant to this Par' s Rules , namely Rule I(B), the Court automatically adjourns all motions that are submitted without opposition for one month, to determine whether or not made there was either an administrative delay or excusable neglect. Such adjournent is without prejudice to the moving par to have the merits of such an adjournent considered in the event that there is a subsequent submission. The essential facts are not in dispute. The matter arises out of an automobile accident that occurred on March 30 , 2010, in which POMONA PAI MANAGEMENT'S assignor , Kevin Branch ("Branch" ), was injured. On or about May 12 2010 POMONA PAIN MANAGEMENT submitted a No Fault claim to PRATORIAN in the requested amount of$3, 273. 74 for medical services provided to Branch. PRATORIAN verification of the claim pursuant to the applicable automobile insurance policy and ~65~65~65- 1.1), as reflected in the following time- line: Insurance Department Regulations (see 11 NYCRR 5; 11 NYCRR 6; NYCRR May 18, 2010 May 19 2010 May 26 2010 Letter to Branch requesting that Branch submit to a Medical Examination (" ME" ) on June 7 , 2010. Letter to Branch requesting that Branch appear for an Examination Under Oath ("EUO" ) on June 1 2010. Additional Verification Request to POMONA PAIN MANAGEMENT stating that the claim was pending an ME and EUO of Branch. Branch did not appear for the June 7, 2010 ME or the June 1 2010 EUa. June 8 , 2010 June 8 2010 Letter to Branch rescheduling the ME for June 21 2010. Letter to Branch rescheduling the EUO for June 21 2010. Branch did not appear for the June 21 , 2010 ME or the June 21 2010 EUO. June 21 2010 June 24 2010 July 2 2010 Letters to Branch and Branch' s counsel rescheduling the EUO for June 30 , 2010. Letter to Branch rescheduling the ME for July 7 , 2010. Additional Verification Request to POMONA PAIN MANAGEMENT stating that the claim was pending an ME and EUO of Branch. [* 3] On July 21 , 2010 , PRATORIAN denied POMONA PAIN MANAGEMENT's claim on the ground that Branch had failed to appear for an EUO or ME, as required by the applicable insurance policy and regulations. The claim was submitted to arbitration before the American Arbitration Association (AA Case # 412010050972). After two hearings, at which both sides were represented by counsel , the matter was closed on Februar 7 , 2011. On or about Februar 2012 , Arbitrator Joseph Bianchino (the "Lower Arbitrator ) rendered an award in favor of Respondent POMONA PAIN MAAGEMENT in the amount of$3, 273. 74 (the Award" ). The Lower Arbitrator held that the claim was improperly denied. With respect to the denial based upon failure to attend an EUO, the Lower Arbitrator found that PRATORIAN had failed to properly notify POMONA PAIN MANAGEMENT on June of the Section 652010 that the claim was pending the EUO 6(b) , as required by Insurance Deparment Regulations (11 NYCRR). With respect to the denial based upon failure to appear for an ME, the Lower Arbitrator held that PRAETORIAN improperly delayed payment of the claim pending the which provides: Section 65ME. The Lower Arbitrator cited 8(b)(I), An insurer may not interrpt the payment of benefits for any element of basic or extended economic loss pending the administering of a medical examination , unless the applicant or the applicants attorney is responsible for the delay or inabilty to schedule the examination... 11 NYCRR )(1) ~658(b Based upon this provision , the Lower Arbitrator found that PRATORIAN was not entitled to delay payment of the claim from the time of its receipt (5/12/10) until the time Branch first failed to appear for the ME (6/7/10). Accordingly, the Lower Arbitrator deducted that amount of time (26 days) from the 30 day period within which an insurer must payor deny a No Fault claim , and found that PRATORIAN had only four days ~65- 8(a)(I). from July 7, The Lower Arbitrator held that PRATORIAN' s denial on July 21 2010 was untimely, and therefore , its defense based upon Branch' s failure to appear for an ME was precluded. 2010 within which to payor deny the claim. See 11 NYCRR The matter was appealed before Master Arbitrator Peter J. Merani (the " Master Arbitrator ). In his decision dated June 17, 2011 (the "Master Award" ), the Master Arbitrator affirmed the Award in its entirety. [* 4] PRATORIAN now seeks to vacate the Master Award and the Award pursuant to CPLR ~7511 on the ground that the Award was " arbitrar and capricious , irrational and PRATORIAN does not challenge the Award as it pertains to the EUO requests. Rather, PRATORIAN argues: that the timeliness of PRATORIAN' s denial is immaterial; that PRATORIAN incorrect as a matter oflaw , and against public policy. " (Petition 12. ) is not precluded from asserting a defense based upon the failure to appear for the ME because the failure to appear for an ME is a breach of a condition precedent to coverage; and that the preclusion rule may not be applied to create coverage where it does not exist. Fair Price Medical Supply Corp. v. Travelers Indemnity Co., 42 AD3d 277. See PRATORIAN relies on the recent decision (March 17 2011) of the Appellate Division , First Deparment in Unitrin Advantage Ins. Co v. Bayshore Physical 17 NY3d 705), which held: Therapy, PLLC, (82 AD3d 559 Iv denied The failure to appear for IMEs requested by the insurer ' when , and as often , (it) may reasonably require ' (Insurance Department Regulations (11 65- 1) is a breach of a condition precedent to coverage under the no- fault policy, and therefore fits squarely within the exception to the NYCRR) preclusion doctrine , as set forth in Central Gen. Hosp. Chubb Group of (90 NY2d 195 (1997)). Accordingly, when defendants ' assignors failed to appear for the requested IMEs, plaintiff had the right to deny all claims retroactively to the date of loss , regardless of whether the denials Insurance Deparment Regulations (11 NYCRR) Stephen Fogel Psychological 35 AD3d at 721- 722). 65- Ins. Coso were timely issued (see 8(c); Although the Award and the Master Award were contrary to the holding in Unitrin , the Court finds that this is insufficient to vacate the Awards pursuant to CPLR ~7511. Judicial review of arbitration pursuant to CPLR ~7511 is limited in scope. Consistent with the public policy in favor of arbitration, the grounds for vacating an arbitration award are " few in number and narowly applied. " Chin v. State Farm Ins. Co., 73 AD3d 918; Mercury Cas. Co. v. Healthmakers Medical Group, P. C., 67 AD3d 1017. PRATORIAN relies upon the ground that the arbitrator exceeded his CPLR ~7511(b)(I)(ii). powers in making the Award. See An arbitrator exceeds his power within the meaning of the statute only if the resulting award: (i) is clearly violative of a strong public policy, (ii) is totally or completely irrational; or (iii) manifestly exceeds a specific , enumerated limitation on the arbitrator s power. Kowaleski v. New York State Dept. Of Correctional Services, [* 5] NY3d 85; Falzone v. New York Central Mut. Fire Ins. Co., 15 NY3d 530; Chin, 73 AD3d at 918. An arbitrator s error oflaw is not a basis for judicial vacatur. Id. Even if the arbitrator misapplies substantive law , the resulting award wil not be disturbed unless it is "patently irrational" or " so egregious as to violate public policy. " Falzone, 15 NY3d at 535. That being said , an error oflaw may rise to the level of irrationality when the Matter of State resulting award is contrary to " settled law " or " Farm Mut. Auto. Ins. Co. v. Lumbermens Mut. Cas. Co., 18 AD3d 762 (dicta); Matter of State Ins. Fund (County-Wide Ins. Co. ), 276 AD2d 432 (vacating award). clear precedent." See In the proceeding at bar, the Court' s determination turs on whether or not the Award, and the Master Award which affirmed it , were contrar to " settled law " or " clear precedent" so as to render them irrational or arbitrar. Does the holding in Unitrin reflect well-established , settled precedent governing the question of whether a nonappearance at an ME is defense that may be precluded? The Court believes that the answer is " no. " Unitrin held that the failure to appear for an ME is a breach of a condition precedent to coverage , and that a disclaimer based on such breach , even if untimely, could be sustained under the exception to the preclusion rule ariculated in Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195. The Court notes, however , that Chubb does not fully support the holding in Unitrin. Chubb , the Court of Appeals held only that an insurer was not precluded from asserting a defense on the ground that the injuries for which the patient was treated did not arise from the subject accident. Chubb reiterated the distinction, first articulated in Zappone v. Home Ins. Co. (55 NY2d breach of a policy condition which are precluded if not timely made , and disclaimers premised upon a lack of coverage in the first instance (e. g., where there is no contractual relationship or where the injuries did not arise out of an insured incident), which may be asserted at any time. 131), between disclaimers based upon a policy exclusion The Second Deparment , citing Chubb and Zappone , applied this distinction in Westchester Medical Center v. Lincoln General Ins. Co., 60 AD3d 1045 (2d Dept. 2009): Where, as here , the defendant's denial of liabilty also was based upon an alleged breach of a policy condition , to wit , the failure of the plaintiff s assignor to appear at an examination under oath , such an alleged breach does not serve to vitiate the medical provider s right to recover no fault benefits or to toll the 30- day statutory period. . . Rather, such denial was subject to the preclusion remedy. Westchester Medical Center, 60 AD3d at 1046- 1047 (internal citation omitted). [* 6] The Court need not decide whether the Arbitrator or Master Arbitrator erred , as a matter of law, in precluding the failure-of-condition defense, or whether the apparently disparate holdings in Unitrin and the earlier Westchester Medical Center reflect a trend in the law, a split in the Deparments , or a distinction based upon whether the requested verification was an EUO or an ME. The Cour must only decide whether or not the Arbitrator or the Master Arbitrator could have rationally rendered the A ward or the Master Award - Le. , whether or not Unitrin so settled the matter that any decision to the contrar would be irrational or arbitrar. This Court finds that , even if there was an error of law (which the Court does not decide here), there is sufficient conflicting authority to preclude a finding that the error rose to the level of irrationality. The Court notes that PRAETORIAN' s counsel did not make the Unitrin arguent before the Master Arbitrator, notwithstanding the fact that Unitrin was decided (March Appellant' 2011) prior to the submission of counsel' Brief for Master Arbitration , Petition, Exh. 1). Unlike the Cour, the Master Arbitrator had the power to vacate the Award on the ground that it was incorrect as a matter of law. 11 NYCRR ~65- 10(a)(4). It can hardly be argued that the Master Arbitrator was irrational in disregarding legal authority, when such authority was not brought to his attention. PRATORIAN' s brief to the Master Arbitrator argued, in sum and substance, that the Lower Arbitrator s decision was not rationally based on the evidence presented. (Appellant' s Brief, ~10. ) The Master Arbitrator held that " (t)he findings by the arbitrator s brief (April 5, 2011). (See See below were based on a careful review of the evidence presented by the paries. " (See Master Award , Petition Exh. 2. ) The Court canot find that the Master Arbitrator failed to consider or address the issues before him. Based upon the foregoing, the Cour finds insufficient grounds to distub the Award or the Master Award. Accordingly, it is ORDERED, that the petition pursuant to CPLR ~7511 is denied; and it is furer ORDERED , that the Master Award is confirmed pursuant to CPLR ~~ 7510 and 7511(e). Dated: Januar 31 2012 ENTERED FEB 27 2012 NAAU COUNTY COUNTY CLERK' S O" tCf
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