Matter of Boro Chiropractic P.C. v State Farm Fire & Cas. Co.
Annotate this CaseDecided on May 17, 2013
Civil Court of the City of New York, Kings County
In the Matter of the Application of Boro Chiropractic, P.C. a/a/o OSVALDO FERRERAS, Petitioner,
against
State Farm Fire and Casualty Co., Respondent.
26634/12
Ursulova Law Offices, P.C.
Attorneys for Petitioner
178 Brighton 11th Street
2nd Floor
Brooklyn, NY 11530
718-368-1704
Bruno, Gerbino & Soriano, LLP
Attorneys for Respondent
445 Broad Hollow Road
Suite 220
Melville, NY 11747
Reginald A. Boddie, J.
Recitation, as required by CPLR §2219(a), of the papers considered in the review of this motion:
PapersNumbered
Notice of Petition & Annexed Affirmation/Affidavits1
Affirmation in Opposition to Petition [*2] 2
After oral argument, and on the foregoing cited papers, the decision/order on petitioner's motion pursuant to CPLR 7511 to vacate the award of the master arbitrator dated May 11, 2012, is as follows:
At issue here, petitioner, Boro Chiropractic, P.C., as assignee of Osvaldo Ferreras, disputes payment of two claims for no-fault insurance benefits for chiropractic treatment, totaling $1,941.93, which were denied on the ground that petitioner failed to appear at duly scheduled examinations under oath (EUOs). The relevant dates of service are November 17, 2008 to February 26, 2009 and April 1, 2009 to April 23, 2009.
The claims were submitted to compulsory arbitration, along with several other claims which are not contested here. On February 14, 2012, the arbitrator, Elyse G. Blazer, awarded petitioner $1,941.93, finding respondent, insurer State Farm, failed to meet the burden of proving its EUO no-show defense. Specifically, the arbitrator found that the letter/briefs respondent proffered did not contain facts sufficient to establish petitioner's failure to appear for the EUOs.
Respondent appealed this initial determination to a master arbitrator. In a decision dated May 11, 2012, the master arbitrator, Victor J. D'Ammora, vacated the award. The master arbitrator reasoned that petitioner offered no proof that the EUO was ever conducted and disagreed that it was respondent's burden to produce an affidavit indicating petitioner's failure to appear. The master arbitrator also found there was clear evidence that petitioner did not attend the EUO, no need for an affidavit, and concluded that the arbitrator's award was incorrect as a matter of law, lacked a rational basis, and was arbitrary and capricious.
Thereafter, on notice of petition, dated August 14, 2012, petitioner sought judicial review in this court seeking to vacate the decision, pursuant to CPLR 7511, on the grounds that the master arbitrator's decision was arbitrary and capricious, imperfectly executed, and exceeded the master arbitrator's power of review.
Under Insurance Law § 5106, no-fault arbitration is considered to be compulsory (Shand v Aetna Ins. Co., 74 AD2d 442 [2d Dept 1980]). CPLR 7511 and the case law set forth the standard for review in such cases. CPLR 7511 (b) (1) (iii) allows for vacating such an award on the ground that the "arbitrator . . . making the award exceeded his power or so imperfectly executed it that a final and definite award upon the subject matter submitted was not made."
In authorizing judicial review of whether the arbitrator exceeded his power, in cases of compulsory arbitration, CPLR 7511 has also been construed to include review of whether the award was arbitrary and capricious and unsupported by the evidence in the record (Mount St. Mary's Hosp. of Niagara Falls v Catherwood, 26 NY2d 493, 508 [1970]; Matter of State Farm Mut. Auto. Ins. Co. v City of Yonkers, 21 AD3d 1110, 1111 [App Div 2d Dept 2005]). Simply [*3]stated, the court must uphold a compulsory arbitration award if the award was supported by " any reasonable hypothesis' and was not contrary to what could be fairly described as settled law" (Matter of State Farm Mut. Auto. Ins. Co. v Lumbermens Mut. Cas. Co., 18 AD3d 762, 763 [App Div 2d Dept 2005] [citations omitted]).
Further, the court may not set aside a master arbitrator's determination that the arbitrator incorrectly applied substantive law, unless it is irrational (Liberty Mut. Ins. Co. v Spine Americare Medical, P.C., 294 AD2d 574, 576 [App Div 2d Dept 2002] citing see Matter of Smith v Fireman's Ins. Co., 55 NY2d 224, 232 [1982]). However, an arbitrator's determination is considered irrational if it is contrary to settled law (Metropolitan Radiological Imaging, P.C. v Country-Wide Ins. Co., 19 Misc 3d 130[A], 2008 NY Slip Op 50539[U] [2d & 11th Jud Dists 2008] [citations omitted]).
The master arbitrator's decision here is contrary to settled law. It is well settled that the appearance of the insured or the insured's assignor for duly scheduled EUOs is a condition precedent to the insurer's liability on an insurance policy (W & Z Acupuncture, P.C. v AMEX Assurance Co, 2009 NY Slip Op 51732 [U] [App Term 2d, 11th & 13th Jud Dist 2009], citing see 11 NYCRR 65-1.1; Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 35 AD3d 720, 722 [App Div 2d Dept 2006]); and that the burden of establishing such a defense is on the defendant insurer (e.g. Stephen Fogel Psychological, P.C., 35 AD3dat 721 [citations omitted]). Consequently, an insurer may deny claims to the date of loss for a claimant's failure to attend IMEs (in this case EUOs) "when, and as often as, the [insurer] may reasonably require" (id. at 722, citing 11 NYCRR 65-1.1), and the defendant bears the burden of proof in establishing its defense that the insured or insured's assignor failed to appear for duly scheduled EUO's (id. at 721 [citations omitted]).
Significantly, here the master arbitrator improperly shifted the burden of proof to petitioner to establish attendance at the EUOs by reasoning that petitioner offered no proof that the EUO was ever conducted and denying it was respondent's burden to produce evidence establishing the EUO no-show. Accordingly, this court finds that the master arbitrator's ground for vacating the arbitration award is contrary to settled law (Matter of State Farm Mut. Auto. Ins. Co. v Lumbermens Mut. Cas. Co., 18 AD3d at 763). As such, the master arbitrator exceeded his power of review. Therefore, the master arbitrator's award, dated May 11, 2012, is reversed, and the arbitrator's award, dated February 14, 2012, is reinstated.
This constitutes the decision and order of the court.
Dated: May 17, 2013
________________________
REGINALD A. BODDIE
JUDGE, CIVIL COURT
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