Preview
INDEX NO. 653404/2014
(LED: NEW YORK COUNTY CLERK 01716/2015 07:55 PM
NYSCEF DOC. NO. 18 RECEIVED NYSCEF: 01/16/2015
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
beg cne ence cee eee ene ee eee ee ng cee ene eee emg ee ee ners psec ec eeeceeceseeeees
MAPFRE insurance Company of New York AFFIRMATION IN OPPOSITION
Petitioner
QRAL ARGUMENT REQUESTED
-against-
Eternity Acupuncture, P.C. RETURN DaTE: 01/23/2015
a/a/o Tatyana Sagolovich
INDEX #: 653404/2014
Respondent
wee ee ere ene enetar eee ceserene es annnss nen eeeennnaceneseenes sean nesaneceerees
——————-¥-Viktoriya LITVENKO, Esq., an attorney duly admitted to practice law ia the State of New
York, and an associate with the Law Offices of Gary Tsirelman, P.C., of counsel to Ursulova Law
Offices, P.C., have reviewed the file maintained in the instant action and submit the following
affirmation under the penalties of perjury, in opposition to Petitioner’s Petition to Vacate Arbitration
Award:
THE AWARD OF MASTER ARBITRATOR DECARLO SHOULD BE AFFIRMED
Procedural History
The cause of action underlying these proceedings sought recovery of No-Fault benefits. After not
receiving reimbursement from Petitioner, on March 19, 2013, Respondent, Eternity Acupuncture
PC filed a Request for Arbitration with the American Arbitration Association (“AAA”) pursuant
to 11 NYCRR §65 (“Regulations”), specifically §65-4.1 et seg. Thereafter, Petitioner submitted
its response.
Initially, Arbitrator McNamara denied the claim. Such determination was reversed by Master
Arbitrator D’Ammora and the case was remanded to AAA to be heard before a new arbitrator.
The matter was then heard by Arbitrator Hill who partially awarded the claim. Such
determination was upheld by Master Arbitrator DeCarlo.
The award of the Master Arbitrator should be affirmed. Both Arbitrator Hill and Master
Arbitrators DeCarlo acted within the scope of the powers conferred upon them by §65-4.5(s),
and §65-4.10(c)(5)/§65-4.10(a)(4). For the Court’s convenience, a copy of the material regulation
is annexed hereto as ExhibitA.
Grounds for Review
No-Fault arbitration is “compulsory” because an insurer may not reject a provider’s choice of
forum. Nyack Hospital v. GEICO, 139 AD2d 515 (2™4 Dept 1988). Courts conduct a “broader
review when compulsory arbitration is in issue than when the matter has a consensual origin.”
Shand y. Aetna Ins. Co., 74 AD2d 442 (2™ Dept 1980).
In Petrofsky v, Allstate Ins, Co,., 54 NY2d 207 (1981), the Court of Appeals held that a master
arbitrator should reverse an arbitrator’s award that is incorrect as a matter of law.
The superintendent's regulations, in addition, broaden the master arbitrator's review to include
questions of law which are not normally reviewable under article 75. Petrofsky at 211. (Emphasis
added; internal citation omitted.) _
The Court went further, and read the Regulations as giving a master arbitrator the authority to
“review the determination of the arbitrator to assure that the arbitrator reached his decision in a
rational manner [and] that the decision was not arbitrary and capricious.” Petrofsky at 212.
A master arbitrator’s powers of review “do not authorize him to determine the weight of the
evidence”, which is the exclusive province of the arbitrator. Yet, though appellate review is
limited to matters of law, the Court placed an important qualification on this general proposition.
This is not to say that in making his determinations as to whether the arbitrator's determination is
correct, that the master arbitrator will conduct no review of the facts; rather, it means his review
in this respect is limited to whether or not the evidence is sufficient, as a matter of law, to support
the determination of the arbitrator. 54 NY2d at 212. (Emphasis added).
The arbitrator’s findings as to the comparative credibility and weight of the evidence cannot be
altered by a master arbitrator. The master arbitrator, however, has an obligation to decide whether
the arbitrator’s decision was consistent with applicable statutes and regulations, as these are
interpreted by the courts. The master arbitrator has a duty to determine “whether the [lower
arbitrator’s] award was incorrect as a matter of law.” Matter of Arbitration between Mott and
State Farm, 55 NY2d 224 (1982).
In conclusion, a master arbitrator’s award would violate the Insurance Law, the Regulations and
caselaw thereunder, if it were premised upon an alleged “lack of power” to review the legal
determinations made by a lower arbitrator and/or to ensure that the factual findings of the lower
arbitrator are rationally based on sufficient evidence. See §65-4.10(a)(4).
No-Fault Master Arbitrations
10. Arbitrators must ensure consistency in the application of the Insurance Law and the Regulations.
The constitutionality of the powers that the Regulations confer upon arbitrators hinges on the
ee
review powers entrusted to master arbitrators, “[T]he regulations promulgated by the
Superintendent of Insurance are adequate to mitigate the risk of an erroneous denial of an
applicant’s claim since they allow for administrative and judicial review of an arbitrator’s
determination.” 563 Grand Medical P.C. v. New York State Ins. Dept., 24 AD3d 413 (2™ Dept
2005), (Emphasis added).
11 Arbitrators’ awards that run afoul of these principles will be vacated, For example, in Matter of
Das v. Allstate Ins. Co., 279 AD2d 321 (2™ Dept 2002), the Court vacated a master arbitrator’s
award that had affirmed an arbitrator’s award denying benefits to the provider, even though the
insurer’s denial was late. Similarly, in Matter of Health & Endurance Med, P.C. v Deerbrook
Tas. Co, 44 AD3d 857 (2% Dept 2007), the Court vacated a master arbitrator award that had
affirmed an arbitrator’s award denying benefits to the provider on the basis that services had been
rendered by an independent contractor, even though this defense was not raised in the insurer’s
denials.
12. Unsubstantiated denials are similar to late denials, in that neither can effectively rebut the
presumption of medical necessity attaching to a provider’s claim forms. So, a master arbitrator's
award upholding an insurer’s denials predicated on insufficient evidence will also be vacated.
See e.g. RDK Medical v. General Assurance Co., 8 Misc.3d 1025A (Civ Ct, Kings County 2005
[Battaglia, J.]).
13, Though “[t]here is a strong government interest in according the arbitrator discretion in order to
promptly resolve claims and free the courts for more important tasks” (563 Grand Medical at
414), such discretion is not untrammeled. Arbitrators and Master Arbitrators must apply the
statutes consistently with prevalent caselaw. And when Master Arbitrators fail to exercise their
review powers and uphold arbitrators’ awards that are contrary to well-established No-Fault
principles, these awards must be vacated.
The Instant Dispute
Petitioner’s Attempt to Vacate Master Arbitrator D’Ammora’s Award is Untimely
14, Initially, it should be noted that even though Petitioner raises issues regarding the Award of
Master Arbitrator D’Ammora in its Petition, this Court cannot review the Award of Master
Arbitrator D’ Ammora because Petitioner's time for review had expired.
15. Pursuant to CPLR 7511(a), a proceeding to vacate or modify an arbitration award must be
made within ninety (90) days after delivery of the award.
16, Master Arbitrator D’Ammora’s Award was mailed on May 3, 2014. Therefore, if Petitioner
wanted to commence a proceeding to review the determination of Master Arbitrator
D’Ammora, it should have done so no later than 90 days after the Award was delivered to
Petitioner. The instant action was commenced on November 6, 2014. Therefore, that part of the
Petition, which seeks vacatur of Master Arbitrator D’ Ammora’s Award, is untimely and should
be denied.
Petitioner Failed to Attach a Full Record to its Petition
17. By Petitioner’s own admission, it failed to attach a full record to its Petition. See Petitioner’:
Verified Petition, Pg. 18 (“The complete arbitration record is not material or necessary for the
adjudication of this matter.”)
18 This occurrence alone requires dismissal of this action with prejudice because not only is this
prejudicial to Respondent, but most importantly, the Court cannot conduct a meaningful review
of this proceeding. Instead of producing the full record, Petitioner asserts that it is neither material
nor necessary, With all due respect, without the full record, it is impossible for the Court to
determine which evidence is material and necessary for adjudication.
19. Petitioner, having appealed decision of the Master Arbitrator to the Court, has an obligation to
assemble a proper record and the action should be dismissed based on lack of complete and
proper record. See Civil v Tae Hwa Sim, 2009 NY Slip Op 06499 (App. Div., 2nd, 2009); Keita
v United Parcel Serv., 2009 NY Slip Op 06165 (App. Div., 2nd, 2009).
Petitioner is Impermissibly Submitting New Evidence to this Court
20. The Petition includes two documents, Policy Declaration Page and Affidavit of Stacy Stuck,
which were never submitted to the Arbitrator below. The Affidavit of Stacy Stuck is dated
October 9, 2014, which is over four months after the hearing before Arbitrator Hill. The Policy
Declaration Page is not part of Petitioner’s record, and therefore, even if Petitioner submitted this
document to the Arbitrator, Petitioner’s incomplete record does not support it. Essentially, by
submitting new evidence to the Court, Petitioner is attempting to get a de novo review. However,
because the Award is not in excess of $5,000.00, Petitioner is estopped from seeking a review de
novo. See 11 NYCRR 65-4,10(h).
21 Therefore, this new evidence should not be considered.
Petitioner Failed to Establish the Basis for Vacatur of Master Arbitrator DeCarlo’s Award
22 Petitioner does not establish why Master Arbitrator DeCarlo’s Award should be vacated. There
is no evidence that the Award of Arbitrator Hill was irrational, arbitrary or incorrect as a matter
of law. Furthermore, Petitioner did not make a showing that the Award was in any way
capricious. Therefore, it was proper for Master Arbitrator DeCarlo to affirm the Award.
23 In Petrofsky v. Alistate Ins. Co., supra, the Court of Appeals held that a master arbitrator has the
authority to “review the determination of the arbitrator to assure that the arbitrator reached his
_— decision in a rational manner [and] that the decision was not arbitrary and capricious.” A master.
arbitrator’s powers of review “do not authorize him to determine the weight of the evidence
which is the exclusive province of the arbitrator. Petrofsky, supra.
24 The arbitrator’s findings as to the comparative credibility and weight of the evidence cannot be
altered by a master arbitrator. Matter of Arbitration between Mott and State Farm, 55 NY2d 224
(1982)
25. Petitioner argues that the sole issue on appeal is whether Arbitrator Hill had the power to issue
award in excess of the policy limit. Petitioner, however, cannot limit the issues on appeal because
in order for this Court to find that the Arbitrator exceeded his powers by issuing an award that
was in excess of the policy limit, the Court needs to review all of the applicable evidence. This
is true because Petitioner cannot be expected to establish that this particular Arbitrator exceeded
his powers by issuing award in excess of the policy limits without having the Court determine
________ whether in fact Petitioner's potiey was exhausted-Fherefore, this issue must be fully reviewed:
26. In addition, Petitioner produced no evidence that there was no OBEL coverage available for this
loss. Nor did the PIP Payout Log establish the order of priority due to the fact that no date of
receipt was listed for any of the bills allegedly paid or that the payments were solely for medical
expenses and did not include any applicable interest that might have been paid out on those
claims
PETITIONER IS WRONG ON THE LAW
27 Petitioner would have this Court believe that 1) an insurer may only be required to pay above the
policy limits if the insurer’s denial was untimely and consequently 2) there are no set of
circumstances where an arbitrator may make an award forcing an insurer to pay above the policy
limitations if the denial is timely. Petitioner misstates the law.
28. Petitioner erroneously suggests that Nyack Hospital v. General Motors Acceptance Corp., 8 NY
3d 294 (2007) (the case relied upon by the Respondent) deals with “untimely denial” Petition at
Pg. 8, P 33. That’s not the case.
29 The facts of the case can be discerned from the Appellate Division’s decision issued two years
earlier in Nyack Hospital vy. General Motors Acceptance Corp., 27 A.D.3d 96 (2d Dep’t 2005).
“However, the 30-day period in which to either pay or deny a claim may be extended where the
insurer submits within 15 business days of its receipt of the claim, a request for additional
verification. Here, the defendants presented evidence in opposition to the motion and in support
of their cross motion demonstrating that the request for the complete inpatient hospital records
mailed to the plaintiff on September 12, 2003, resulted in an extension of the 30-day statutory
petiod.... Contrary to the plaintiff's contention, the defendants’ December 8, 2003, payment and
the December 9, 2003, denial of the remainder of the claim were timely, as they occurred within
28! days of the November 24, 2003.” Jd. (Emphasis Added) (Internal citations omitted).
30 Nyack, as Respondent properly pointed out in prior arbitrations, stands for the proposition that
an insurer may be required to pay above the policy limits if it does not follow the priority of
payment rule. See /7 NYCRR 65-3.15. In fact, this is what the Nyack court was asked to decide
and what the court held:
“The issue before us is whether an insurer violates 11 NYCRR 65-3.15, the insurance regulation governing
priority of payments, by paying no-fault claims of other health providers for services rendered following
the assignee's initial treatment where such claims are submitted after the assignee's initial claim and while
verification
of the assignee's initial claim is pending-” fd
31 Consequently Nyack Appellate Division’s holding was very limited. In fact the Court stated that
“under the circumstances presented” the insurer did not violate 11 NYCRR 65-3.15. Certainly
the court could have ruled broadly and held that under no circumstances will the insurer be
required to pay more than the policy limits. But it didn’t, leaving a set of circumstances where
the insurer may be required to pay more than the policy limits when, as here, the insurer violates
the priority of payment rule.
! “Contrary to the plaintiff's contention, the fact that the defendants mailed the request for additional verification two days
beyond the 15-day period did not render the request invalid.” Nyack
32. 11 NYCRR 65-3.15 states: “When claims aggregate to more than $50,000, payments for basic
economic loss shall be made to the applicant ... in the order in which each service was rendered
or each expense was incurred, provided claims therefor were made to the insurer prior to the
exhaustion of the $50,000. If the insurer pays the $50,000 before receiving claims for services
rendered prior in time to those which were paid, the insurer will not be liable to pay such late
claims. If the insurer receives claims of a number of providers of services, at the same time, the
payments shall be made in the order of rendition of services.” (Emphasis added)
33 Petitioner argues that the arbitrators exceeded their powers because “the policy limits were
exceeded prior to the issuance of the award” (Emphasis Added) Petition at Pg. 6 P 26. But that
_
too is either irrelevant or a wrong application of the law. In fact, the operating factor is whether
the policy was exhausted at the time Responded submitted its bills and not at the time the award
was issued?, See 11 NYCRR 65-3.15.
34 Similarly, Mount Sinai Hosp. v Dust Tr., Inc., 104 A.D.3d 823 (2d Dep’t 2013) has nothing to
do with failure “to prove there was outstanding verification requests to toll payment period” as
Petitioner argues at Pg. 8 P 33. The Mount Sinai Court held that, “in any event, the evidence
submitted in support of the motion, i.e., an affidavit of the defendant's claims manager setting
Jorth the policy limits and the amount of benefits allegedly paid to other medical providers, failed
to establish the order in which the medical services were rendered, and the order in which the
claims were received. Thus, on this record, it cannot be determined whether the defendant's
purported payments were made in compliance with 11 NYCRR 65-3.15.” (Emphasis added) Id.
As in the case herein, Petitioner’s impromptu affidavit of Stacy Stuck, submitted for the first time
to any trier of fact, is a thin reed and equally deficient.
35 Pursuant to Nyack Hospital v. General Motors Acceptance Corp., 8 NY 3d 294 (2007), after the
insurer receives a “verified claim” from a medical provider, the insurer should pay it ahead of
other unpaid verified claims for services rendered or expenses incurred, up to its policy limits.
The Nyack Hospital Decision mandates payment of verified claims in the order the claims are
received in.
36. According to Petitioner’s own evidence, there was money available under the policy at the time
the bills were submitted to pay for these services.
2 It should be noted that the evidence submitted by the Respondent does not establish that the policy was exhausted even at
the time the arbitrator issued the award. The PIP Payout Log only lists $49,936.48 in payments.
37 Insurers should not be permitted to deny verified claims upon a ground that is later found to be
meritless just so that they can pay other claims because same would give insurers the power to
choose one provider over another and would violate the Nyack’s “priority of payment” rule and
frustrate the no fault system.
38 Therefore, it was solely within the Arbitrator’s power to determine the matter the way he did.
The Arbitrator correctly determined that because Petitioner’s denial of the disputed services
based on EUO testimony was without basis, Respondent’s verified claim should have been paid.
See Exhibit B.
39 Petitioner’s sole reliance on one court case of State Farm Inc. Co. v. Credle, 228 A.D.2d 191 (1*
a _
Dep’t 1996) is misplaced. Not only was this case ‘issued a decade before the Court Of Appeals
issued the above cited Nyack ruling, it had nothing to do with the interplay of the priority of
payment rule in the no fault claim procedures. Moreover, as the Credle decision made clear, the
“[p]ayments were made on a chronological basis”, contrary to what the Petitioner did here. With
no other support for its proposition Petitioner relies on an unpersuasive arbitration decision of
Matter of Avanguard Medical Group, PLLC and [sic] Allstate, AAA No. 412012011346
(Arbitrator Sawits, 2012), aff'd by Master Arbitrator Ancowitz (2013). In the arbitration forum,
a more persuasive analysis, however, was provided by Master Arbitrator Norman H. Dachs in
Metro Pain Specialists PC v Geico, 17 R 991 62671 14 quoting the Court of Appeals’ Nyack
decision and explaining the interplay between the priority of payment and the policy exhaustion
rules. See Exhibit B.
40. Petitioner argues that pursuant to 11 NYCRR 4-10(a)(2), a master arbitrator may vacate an award
that is in excess of the policy limits. However, the very fact that the word “may” is used in the
Regulation indicates that it is not mandatory for a master arbitrator to vacate an award that is in
excess of the policy limits and it follows, that under certain circumstances, an arbitrator can issue
award that is in excess of the policy limits. Therefore, contrary to Petitioner’s argument, the
Regulation does not expressly prohibit an award in excess of the policy limits.
41 To hold otherwise can only mean that if, based on Petitioner’s own argument, an arbitrator can
never issue award in excess of the policy limits, then the AAA is not the proper forum to hear a
dispute involving an allegation of policy exhaustion and therefore, such disputes should only be
adjudicated by courts. However, based on the fact that a policy exhaustion issue is being routinely
heard by various no-fault arbitrators, Petitioner’s argument is meritless.
42, If the Court decides that a motion to vacate or modify an arbitration award should be denied, the
Court must confirm the award. See CPLR 7511 (e); Matter of Mercury Casualty Company v.
Healthmakers Med. Group, P.C., 67 A.D.3d 1017 (App. Div. 2" Dept. 2009), Respondent
respectfully requests that the Court denies Petitioner's Petition to Vacate Arbitration Award and
upon denying it, confirms Master Arbitrator DeCarlo’s Award.
43, “[A] deficiency of proof in moving papers cannot be cured by submitting evidentiary material in
reply, the function of which is to address arguments made in opposition to the position taken by
the movant and not to permit the movant to introduce new arguments in support of, or new
grounds for the motion.” Henry v. Peguero, 72 A.D.3d 600, 602 (1st Dept 2010) (citations and
-
quotations omitted); Allstate Ins. Co. v. Dawkins, 52 A.D.3d 826, 827 (2d Dept 2008).
* * *
WHEREFORE, it is respectfully requested that Petitioner’s Petition to Vacate Arbitration
Award be denied, with costs; that the Award of the Master Arbitrator be affirmed; that this Court
enters judgment in favor of Respondent in the amount of $860.93, plus statutory interest, attorney’s
fees pursuant to 11 NYCRR 65-4,10(j)(4), $260.00 additional attorney’s fees as awarded by the
Master Arbitrator, costs and disbursements, arbitration filing fees, and prospective Marshall's fees;
and for such other and further relief that this Court deems just and proper.
Dated: 01/16/2015 Gary Tsirelman, P.C.
129 Livingston Street
Brooklyn, NY 11201
(718) 438-1200
Of Counsel to
Ursulova Law Offices, P.C.
Attorneys for Respondent
1225 Franklin Avenue, Suite 325
Garden City, NY 11530)
‘Tsireiman
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK Index #: 653404/2014
MAPFRE Insurance Company of New
York,
Petitioner,
-against-
Eternity Acupuncture, P.C.
alalo
Tatyana Sagolovich,
Respondent
_ OPPOSITION
Gary Tsirelman, PC
129 Livingston Street
Brooklyn, NY 11201
(718) 438-1200
Of Counsel to
Ursulova Law Offices, P.C.
Attorneys for Respondent
Eternity Acupuncture, P.C.
1225 Franklin Avenue, Suite 325
Garden City, NY 11530
Pursuant to 22 NYCRR 130-1.1, the undersigned, an attorney duly admitted to practice in the courts of New York
State, certifies that, upon information and belief and reasonable inquiry, the contentions contained in the annexed
documents are not frivolous.
Dated: 01/16/2015 Signature:
Print Signer’s Name:
TO:
Bruno, Gerbino & Soriano, LLP
445 Broad Hollow Road, Suite 220
Melville, NY 11747
Preview
INDEX NO. 653404/2014 (LED: NEW YORK COUNTY CLERK 01716/2015 07:55 PM NYSCEF DOC. NO. 18 RECEIVED NYSCEF: 01/16/2015 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK beg cne ence cee eee ene ee eee ee ng cee ene eee emg ee ee ners psec ec eeeceeceseeeees MAPFRE insurance Company of New York AFFIRMATION IN OPPOSITION Petitioner QRAL ARGUMENT REQUESTED -against- Eternity Acupuncture, P.C. RETURN DaTE: 01/23/2015 a/a/o Tatyana Sagolovich INDEX #: 653404/2014 Respondent wee ee ere ene enetar eee ceserene es annnss nen eeeennnaceneseenes sean nesaneceerees ——————-¥-Viktoriya LITVENKO, Esq., an attorney duly admitted to practice law ia the State of New York, and an associate with the Law Offices of Gary Tsirelman, P.C., of counsel to Ursulova Law Offices, P.C., have reviewed the file maintained in the instant action and submit the following affirmation under the penalties of perjury, in opposition to Petitioner’s Petition to Vacate Arbitration Award: THE AWARD OF MASTER ARBITRATOR DECARLO SHOULD BE AFFIRMED Procedural History The cause of action underlying these proceedings sought recovery of No-Fault benefits. After not receiving reimbursement from Petitioner, on March 19, 2013, Respondent, Eternity Acupuncture PC filed a Request for Arbitration with the American Arbitration Association (“AAA”) pursuant to 11 NYCRR §65 (“Regulations”), specifically §65-4.1 et seg. Thereafter, Petitioner submitted its response. Initially, Arbitrator McNamara denied the claim. Such determination was reversed by Master Arbitrator D’Ammora and the case was remanded to AAA to be heard before a new arbitrator. The matter was then heard by Arbitrator Hill who partially awarded the claim. Such determination was upheld by Master Arbitrator DeCarlo. The award of the Master Arbitrator should be affirmed. Both Arbitrator Hill and Master Arbitrators DeCarlo acted within the scope of the powers conferred upon them by §65-4.5(s), and §65-4.10(c)(5)/§65-4.10(a)(4). For the Court’s convenience, a copy of the material regulation is annexed hereto as ExhibitA. Grounds for Review No-Fault arbitration is “compulsory” because an insurer may not reject a provider’s choice of forum. Nyack Hospital v. GEICO, 139 AD2d 515 (2™4 Dept 1988). Courts conduct a “broader review when compulsory arbitration is in issue than when the matter has a consensual origin.” Shand y. Aetna Ins. Co., 74 AD2d 442 (2™ Dept 1980). In Petrofsky v, Allstate Ins, Co,., 54 NY2d 207 (1981), the Court of Appeals held that a master arbitrator should reverse an arbitrator’s award that is incorrect as a matter of law. The superintendent's regulations, in addition, broaden the master arbitrator's review to include questions of law which are not normally reviewable under article 75. Petrofsky at 211. (Emphasis added; internal citation omitted.) _ The Court went further, and read the Regulations as giving a master arbitrator the authority to “review the determination of the arbitrator to assure that the arbitrator reached his decision in a rational manner [and] that the decision was not arbitrary and capricious.” Petrofsky at 212. A master arbitrator’s powers of review “do not authorize him to determine the weight of the evidence”, which is the exclusive province of the arbitrator. Yet, though appellate review is limited to matters of law, the Court placed an important qualification on this general proposition. This is not to say that in making his determinations as to whether the arbitrator's determination is correct, that the master arbitrator will conduct no review of the facts; rather, it means his review in this respect is limited to whether or not the evidence is sufficient, as a matter of law, to support the determination of the arbitrator. 54 NY2d at 212. (Emphasis added). The arbitrator’s findings as to the comparative credibility and weight of the evidence cannot be altered by a master arbitrator. The master arbitrator, however, has an obligation to decide whether the arbitrator’s decision was consistent with applicable statutes and regulations, as these are interpreted by the courts. The master arbitrator has a duty to determine “whether the [lower arbitrator’s] award was incorrect as a matter of law.” Matter of Arbitration between Mott and State Farm, 55 NY2d 224 (1982). In conclusion, a master arbitrator’s award would violate the Insurance Law, the Regulations and caselaw thereunder, if it were premised upon an alleged “lack of power” to review the legal determinations made by a lower arbitrator and/or to ensure that the factual findings of the lower arbitrator are rationally based on sufficient evidence. See §65-4.10(a)(4). No-Fault Master Arbitrations 10. Arbitrators must ensure consistency in the application of the Insurance Law and the Regulations. The constitutionality of the powers that the Regulations confer upon arbitrators hinges on the ee review powers entrusted to master arbitrators, “[T]he regulations promulgated by the Superintendent of Insurance are adequate to mitigate the risk of an erroneous denial of an applicant’s claim since they allow for administrative and judicial review of an arbitrator’s determination.” 563 Grand Medical P.C. v. New York State Ins. Dept., 24 AD3d 413 (2™ Dept 2005), (Emphasis added). 11 Arbitrators’ awards that run afoul of these principles will be vacated, For example, in Matter of Das v. Allstate Ins. Co., 279 AD2d 321 (2™ Dept 2002), the Court vacated a master arbitrator’s award that had affirmed an arbitrator’s award denying benefits to the provider, even though the insurer’s denial was late. Similarly, in Matter of Health & Endurance Med, P.C. v Deerbrook Tas. Co, 44 AD3d 857 (2% Dept 2007), the Court vacated a master arbitrator award that had affirmed an arbitrator’s award denying benefits to the provider on the basis that services had been rendered by an independent contractor, even though this defense was not raised in the insurer’s denials. 12. Unsubstantiated denials are similar to late denials, in that neither can effectively rebut the presumption of medical necessity attaching to a provider’s claim forms. So, a master arbitrator's award upholding an insurer’s denials predicated on insufficient evidence will also be vacated. See e.g. RDK Medical v. General Assurance Co., 8 Misc.3d 1025A (Civ Ct, Kings County 2005 [Battaglia, J.]). 13, Though “[t]here is a strong government interest in according the arbitrator discretion in order to promptly resolve claims and free the courts for more important tasks” (563 Grand Medical at 414), such discretion is not untrammeled. Arbitrators and Master Arbitrators must apply the statutes consistently with prevalent caselaw. And when Master Arbitrators fail to exercise their review powers and uphold arbitrators’ awards that are contrary to well-established No-Fault principles, these awards must be vacated. The Instant Dispute Petitioner’s Attempt to Vacate Master Arbitrator D’Ammora’s Award is Untimely 14, Initially, it should be noted that even though Petitioner raises issues regarding the Award of Master Arbitrator D’Ammora in its Petition, this Court cannot review the Award of Master Arbitrator D’ Ammora because Petitioner's time for review had expired. 15. Pursuant to CPLR 7511(a), a proceeding to vacate or modify an arbitration award must be made within ninety (90) days after delivery of the award. 16, Master Arbitrator D’Ammora’s Award was mailed on May 3, 2014. Therefore, if Petitioner wanted to commence a proceeding to review the determination of Master Arbitrator D’Ammora, it should have done so no later than 90 days after the Award was delivered to Petitioner. The instant action was commenced on November 6, 2014. Therefore, that part of the Petition, which seeks vacatur of Master Arbitrator D’ Ammora’s Award, is untimely and should be denied. Petitioner Failed to Attach a Full Record to its Petition 17. By Petitioner’s own admission, it failed to attach a full record to its Petition. See Petitioner’: Verified Petition, Pg. 18 (“The complete arbitration record is not material or necessary for the adjudication of this matter.”) 18 This occurrence alone requires dismissal of this action with prejudice because not only is this prejudicial to Respondent, but most importantly, the Court cannot conduct a meaningful review of this proceeding. Instead of producing the full record, Petitioner asserts that it is neither material nor necessary, With all due respect, without the full record, it is impossible for the Court to determine which evidence is material and necessary for adjudication. 19. Petitioner, having appealed decision of the Master Arbitrator to the Court, has an obligation to assemble a proper record and the action should be dismissed based on lack of complete and proper record. See Civil v Tae Hwa Sim, 2009 NY Slip Op 06499 (App. Div., 2nd, 2009); Keita v United Parcel Serv., 2009 NY Slip Op 06165 (App. Div., 2nd, 2009). Petitioner is Impermissibly Submitting New Evidence to this Court 20. The Petition includes two documents, Policy Declaration Page and Affidavit of Stacy Stuck, which were never submitted to the Arbitrator below. The Affidavit of Stacy Stuck is dated October 9, 2014, which is over four months after the hearing before Arbitrator Hill. The Policy Declaration Page is not part of Petitioner’s record, and therefore, even if Petitioner submitted this document to the Arbitrator, Petitioner’s incomplete record does not support it. Essentially, by submitting new evidence to the Court, Petitioner is attempting to get a de novo review. However, because the Award is not in excess of $5,000.00, Petitioner is estopped from seeking a review de novo. See 11 NYCRR 65-4,10(h). 21 Therefore, this new evidence should not be considered. Petitioner Failed to Establish the Basis for Vacatur of Master Arbitrator DeCarlo’s Award 22 Petitioner does not establish why Master Arbitrator DeCarlo’s Award should be vacated. There is no evidence that the Award of Arbitrator Hill was irrational, arbitrary or incorrect as a matter of law. Furthermore, Petitioner did not make a showing that the Award was in any way capricious. Therefore, it was proper for Master Arbitrator DeCarlo to affirm the Award. 23 In Petrofsky v. Alistate Ins. Co., supra, the Court of Appeals held that a master arbitrator has the authority to “review the determination of the arbitrator to assure that the arbitrator reached his _— decision in a rational manner [and] that the decision was not arbitrary and capricious.” A master. arbitrator’s powers of review “do not authorize him to determine the weight of the evidence which is the exclusive province of the arbitrator. Petrofsky, supra. 24 The arbitrator’s findings as to the comparative credibility and weight of the evidence cannot be altered by a master arbitrator. Matter of Arbitration between Mott and State Farm, 55 NY2d 224 (1982) 25. Petitioner argues that the sole issue on appeal is whether Arbitrator Hill had the power to issue award in excess of the policy limit. Petitioner, however, cannot limit the issues on appeal because in order for this Court to find that the Arbitrator exceeded his powers by issuing an award that was in excess of the policy limit, the Court needs to review all of the applicable evidence. This is true because Petitioner cannot be expected to establish that this particular Arbitrator exceeded his powers by issuing award in excess of the policy limits without having the Court determine ________ whether in fact Petitioner's potiey was exhausted-Fherefore, this issue must be fully reviewed: 26. In addition, Petitioner produced no evidence that there was no OBEL coverage available for this loss. Nor did the PIP Payout Log establish the order of priority due to the fact that no date of receipt was listed for any of the bills allegedly paid or that the payments were solely for medical expenses and did not include any applicable interest that might have been paid out on those claims PETITIONER IS WRONG ON THE LAW 27 Petitioner would have this Court believe that 1) an insurer may only be required to pay above the policy limits if the insurer’s denial was untimely and consequently 2) there are no set of circumstances where an arbitrator may make an award forcing an insurer to pay above the policy limitations if the denial is timely. Petitioner misstates the law. 28. Petitioner erroneously suggests that Nyack Hospital v. General Motors Acceptance Corp., 8 NY 3d 294 (2007) (the case relied upon by the Respondent) deals with “untimely denial” Petition at Pg. 8, P 33. That’s not the case. 29 The facts of the case can be discerned from the Appellate Division’s decision issued two years earlier in Nyack Hospital vy. General Motors Acceptance Corp., 27 A.D.3d 96 (2d Dep’t 2005). “However, the 30-day period in which to either pay or deny a claim may be extended where the insurer submits within 15 business days of its receipt of the claim, a request for additional verification. Here, the defendants presented evidence in opposition to the motion and in support of their cross motion demonstrating that the request for the complete inpatient hospital records mailed to the plaintiff on September 12, 2003, resulted in an extension of the 30-day statutory petiod.... Contrary to the plaintiff's contention, the defendants’ December 8, 2003, payment and the December 9, 2003, denial of the remainder of the claim were timely, as they occurred within 28! days of the November 24, 2003.” Jd. (Emphasis Added) (Internal citations omitted). 30 Nyack, as Respondent properly pointed out in prior arbitrations, stands for the proposition that an insurer may be required to pay above the policy limits if it does not follow the priority of payment rule. See /7 NYCRR 65-3.15. In fact, this is what the Nyack court was asked to decide and what the court held: “The issue before us is whether an insurer violates 11 NYCRR 65-3.15, the insurance regulation governing priority of payments, by paying no-fault claims of other health providers for services rendered following the assignee's initial treatment where such claims are submitted after the assignee's initial claim and while verification of the assignee's initial claim is pending-” fd 31 Consequently Nyack Appellate Division’s holding was very limited. In fact the Court stated that “under the circumstances presented” the insurer did not violate 11 NYCRR 65-3.15. Certainly the court could have ruled broadly and held that under no circumstances will the insurer be required to pay more than the policy limits. But it didn’t, leaving a set of circumstances where the insurer may be required to pay more than the policy limits when, as here, the insurer violates the priority of payment rule. ! “Contrary to the plaintiff's contention, the fact that the defendants mailed the request for additional verification two days beyond the 15-day period did not render the request invalid.” Nyack 32. 11 NYCRR 65-3.15 states: “When claims aggregate to more than $50,000, payments for basic economic loss shall be made to the applicant ... in the order in which each service was rendered or each expense was incurred, provided claims therefor were made to the insurer prior to the exhaustion of the $50,000. If the insurer pays the $50,000 before receiving claims for services rendered prior in time to those which were paid, the insurer will not be liable to pay such late claims. If the insurer receives claims of a number of providers of services, at the same time, the payments shall be made in the order of rendition of services.” (Emphasis added) 33 Petitioner argues that the arbitrators exceeded their powers because “the policy limits were exceeded prior to the issuance of the award” (Emphasis Added) Petition at Pg. 6 P 26. But that _ too is either irrelevant or a wrong application of the law. In fact, the operating factor is whether the policy was exhausted at the time Responded submitted its bills and not at the time the award was issued?, See 11 NYCRR 65-3.15. 34 Similarly, Mount Sinai Hosp. v Dust Tr., Inc., 104 A.D.3d 823 (2d Dep’t 2013) has nothing to do with failure “to prove there was outstanding verification requests to toll payment period” as Petitioner argues at Pg. 8 P 33. The Mount Sinai Court held that, “in any event, the evidence submitted in support of the motion, i.e., an affidavit of the defendant's claims manager setting Jorth the policy limits and the amount of benefits allegedly paid to other medical providers, failed to establish the order in which the medical services were rendered, and the order in which the claims were received. Thus, on this record, it cannot be determined whether the defendant's purported payments were made in compliance with 11 NYCRR 65-3.15.” (Emphasis added) Id. As in the case herein, Petitioner’s impromptu affidavit of Stacy Stuck, submitted for the first time to any trier of fact, is a thin reed and equally deficient. 35 Pursuant to Nyack Hospital v. General Motors Acceptance Corp., 8 NY 3d 294 (2007), after the insurer receives a “verified claim” from a medical provider, the insurer should pay it ahead of other unpaid verified claims for services rendered or expenses incurred, up to its policy limits. The Nyack Hospital Decision mandates payment of verified claims in the order the claims are received in. 36. According to Petitioner’s own evidence, there was money available under the policy at the time the bills were submitted to pay for these services. 2 It should be noted that the evidence submitted by the Respondent does not establish that the policy was exhausted even at the time the arbitrator issued the award. The PIP Payout Log only lists $49,936.48 in payments. 37 Insurers should not be permitted to deny verified claims upon a ground that is later found to be meritless just so that they can pay other claims because same would give insurers the power to choose one provider over another and would violate the Nyack’s “priority of payment” rule and frustrate the no fault system. 38 Therefore, it was solely within the Arbitrator’s power to determine the matter the way he did. The Arbitrator correctly determined that because Petitioner’s denial of the disputed services based on EUO testimony was without basis, Respondent’s verified claim should have been paid. See Exhibit B. 39 Petitioner’s sole reliance on one court case of State Farm Inc. Co. v. Credle, 228 A.D.2d 191 (1* a _ Dep’t 1996) is misplaced. Not only was this case ‘issued a decade before the Court Of Appeals issued the above cited Nyack ruling, it had nothing to do with the interplay of the priority of payment rule in the no fault claim procedures. Moreover, as the Credle decision made clear, the “[p]ayments were made on a chronological basis”, contrary to what the Petitioner did here. With no other support for its proposition Petitioner relies on an unpersuasive arbitration decision of Matter of Avanguard Medical Group, PLLC and [sic] Allstate, AAA No. 412012011346 (Arbitrator Sawits, 2012), aff'd by Master Arbitrator Ancowitz (2013). In the arbitration forum, a more persuasive analysis, however, was provided by Master Arbitrator Norman H. Dachs in Metro Pain Specialists PC v Geico, 17 R 991 62671 14 quoting the Court of Appeals’ Nyack decision and explaining the interplay between the priority of payment and the policy exhaustion rules. See Exhibit B. 40. Petitioner argues that pursuant to 11 NYCRR 4-10(a)(2), a master arbitrator may vacate an award that is in excess of the policy limits. However, the very fact that the word “may” is used in the Regulation indicates that it is not mandatory for a master arbitrator to vacate an award that is in excess of the policy limits and it follows, that under certain circumstances, an arbitrator can issue award that is in excess of the policy limits. Therefore, contrary to Petitioner’s argument, the Regulation does not expressly prohibit an award in excess of the policy limits. 41 To hold otherwise can only mean that if, based on Petitioner’s own argument, an arbitrator can never issue award in excess of the policy limits, then the AAA is not the proper forum to hear a dispute involving an allegation of policy exhaustion and therefore, such disputes should only be adjudicated by courts. However, based on the fact that a policy exhaustion issue is being routinely heard by various no-fault arbitrators, Petitioner’s argument is meritless. 42, If the Court decides that a motion to vacate or modify an arbitration award should be denied, the Court must confirm the award. See CPLR 7511 (e); Matter of Mercury Casualty Company v. Healthmakers Med. Group, P.C., 67 A.D.3d 1017 (App. Div. 2" Dept. 2009), Respondent respectfully requests that the Court denies Petitioner's Petition to Vacate Arbitration Award and upon denying it, confirms Master Arbitrator DeCarlo’s Award. 43, “[A] deficiency of proof in moving papers cannot be cured by submitting evidentiary material in reply, the function of which is to address arguments made in opposition to the position taken by the movant and not to permit the movant to introduce new arguments in support of, or new grounds for the motion.” Henry v. Peguero, 72 A.D.3d 600, 602 (1st Dept 2010) (citations and - quotations omitted); Allstate Ins. Co. v. Dawkins, 52 A.D.3d 826, 827 (2d Dept 2008). * * * WHEREFORE, it is respectfully requested that Petitioner’s Petition to Vacate Arbitration Award be denied, with costs; that the Award of the Master Arbitrator be affirmed; that this Court enters judgment in favor of Respondent in the amount of $860.93, plus statutory interest, attorney’s fees pursuant to 11 NYCRR 65-4,10(j)(4), $260.00 additional attorney’s fees as awarded by the Master Arbitrator, costs and disbursements, arbitration filing fees, and prospective Marshall's fees; and for such other and further relief that this Court deems just and proper. Dated: 01/16/2015 Gary Tsirelman, P.C. 129 Livingston Street Brooklyn, NY 11201 (718) 438-1200 Of Counsel to Ursulova Law Offices, P.C. Attorneys for Respondent 1225 Franklin Avenue, Suite 325 Garden City, NY 11530) ‘Tsireiman SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK Index #: 653404/2014 MAPFRE Insurance Company of New York, Petitioner, -against- Eternity Acupuncture, P.C. alalo Tatyana Sagolovich, Respondent _ OPPOSITION Gary Tsirelman, PC 129 Livingston Street Brooklyn, NY 11201 (718) 438-1200 Of Counsel to Ursulova Law Offices, P.C. Attorneys for Respondent Eternity Acupuncture, P.C. 1225 Franklin Avenue, Suite 325 Garden City, NY 11530 Pursuant to 22 NYCRR 130-1.1, the undersigned, an attorney duly admitted to practice in the courts of New York State, certifies that, upon information and belief and reasonable inquiry, the contentions contained in the annexed documents are not frivolous. Dated: 01/16/2015 Signature: Print Signer’s Name: TO: Bruno, Gerbino & Soriano, LLP 445 Broad Hollow Road, Suite 220 Melville, NY 11747