Coverage Pointers - Volume IX, No. 2

Dear Coverage Pointers Subscribers:

We send greetings from the Annual Meeting of the Federation of Defense & Corporate Counsel, here Sun Valley, Idaho. The Sun Valley Resort, once known as the American Shangri-La, is a delightful venue. However, I am reminded of the immortal words of the late, great Allan Sherman:

Hello Muddah, Hello Fadduh

Here I am at Camp Granada

Camp is very entertaining

And they say we'll have some fun if it stops raining.

You probably don't remember that this great song was Number 2 on the Billboard Hot 100 in August of 1963, trailing only Stevie Wonder's Fingertips. For those Allan Sherman fans, you probably don't remember Sherman's rewrite of the opening verse for a 1964 Johnny Carson show:

Hello Muddah, Hello Fadduh

I am back at CampGranada

And I'm writing you this letter

Just to say my compound fracture's getting better.

Just so you know - and I'm sure you were curious -- the Number 1 song on the Billboard Hot 100 as I write this note is Hey There Delilah, performed by that famous singing group, Plain White T's, with these memorable lyrics:

Hey there Delilah

What's it like in New York City?

I'm a thousand miles away

But girl tonight you look so pretty

Yes you do

Times Square can't shine as bright as you

I swear it's true.

I swear it's true. Who could make up those lyrics?

Oh, back to insurance.

Legislative Update

On July 20, 2007, Senate Bill 6306 has been sent to the Governor for consideration. This bill, which adds a prejudice requirement to disclaimers by liability carriers based on late notice of claim and permits "claimants" to commence declaratory judgment actions against liability carrier before securing judgments against the insured, passed both houses of the Legislature late last month. Our sources tell me that signature by the Governor is not a sure thing .

Here's what new in the world of insurance, as the summer doldrums continue to keep the appellate decisions few and far between:With Revisions, Action for Agency Commissions Can Proceed but Action for Termination May Not

Damages for Failure to Procure Insurance Coverage are Only "Out of Pocket" Expenses

Does Interest Accrue? From Date Liability is Established OR from Date Both Liability and Serious Injury Determined?

STarosieleC'S serious (Injury) Side of New YorkNo-FaulT

Mark Starosielec

[email protected]

Plaintiff Obtains Pyrrhic Victory When Summary Judgment is Awarded to Defendants

Even when Defendants Concede Liability, Plaintiff Still Has to Prove Serious Injury

Only Slight Restrictions of Movement and Missing Just One Day of Work Dooms Plaintiff

Audrey's AngleonNo-Fault

Audrey Seeley

[email protected]

Arbitration

Since When is an Applicant Entitled to Reimbursement for a Laptop Computer???

Insurers Should Consider Whether Late Note of Claim is Attributed to Fraud and How Late the Application was Before Denying Benefits.

Insurer's Denial for Failure to Cooperate with Vocational Rehabilitation Efforts Premature - Applicant Should Have Been Afforded More Disability.

Litigation Deny, Deny, Deny (but Do it on Time

 

From Audrey Seeley, the Queen of No Fault, we bring you this message:

This edition brings more of the same: yet another decision where an insurer is deemed to have lost the defense of lack of insurance coverage in the first instance for not issuing a timely denial. Also, there's another decision on cooperation with vocational rehabilitation efforts. I must say that this issue of precluding carriers from arguing a fundamental coverage issue of the claim not even falling within the grant of coverage under no-fault does get under my skin. Insurers should ensure that they spot these issues and adamantly argue that a timely denial in the instance where the claim is not within the grant of coverage under the PIP endorsement is not required. Keep in mind that with respect to denial of a claim based upon a policy exclusion, i.e., intoxication or breach of policy condition, i.e., failure to appear for an IME, it is subject to a timely denial. If the insurer does not timely raise it the insurer is precluded from using it as a basis for the denial.

In fact, this issue brings me to my next topic of discussion - TRAINING. Please let us know if your department can use some training. We can cover topics such as:

· Drafting and issuing effective and timely denials;

· Strategy for preparing an arbitration submission of evidence;

· Preserving issues at arbitration as well as strategies for arbitrations;

· Considering when master arbitration should be sought;

· The current state of case law regarding plaintiff's prima facie case; and

· Recent trends we are seeing in arbitration and litigation.

So, keep those cards letters coming in and remember to write to the Governor if you have a view on the insurance legislation sitting on his desk and want him to know about it!

See you in a couple of weeks.

Dan

Hurwitz & Fine, P.C. is a full-service law firm
providing legal services throughout the State of New York.

 

Newsletter Editor

Dan D. Kohane
[email protected]

 

Insurance Coverage Team

Dan D. Kohane, Team Leader
[email protected]

Michael F. Perley
Audrey A. Seeley
Steven E. Peiper

Fire, First-Party and Subrogation Team
Andrea Schillaci, Team Leader
[email protected]
Jody E. Briandi
Steven E. Peiper

NO-FAULT/UM/SUM TEAM
Audrey A. Seeley, Team Leader
[email protected]
Tasha Dandridge
Mark Starosielec

APPELLATE TEAM
Dan D. Kohane
Scott M. Duquin

Index to Special Columns

 

Starosielec’s Serious Side of “Serious Injury”

 Audrey’s Angles on No Fault

Peiper on Property

Across Borders

 

 

Legislative Update

On July 20, 2007, Senate Bill 6306 has been sent to the Governor for consideration.  This bill, which adds a prejudice requirement to disclaimers by liability carriers based on late notice of claim and permits “claimants” to commence declaratory judgment actions against liability carrier before securing judgments against the insured, passed both houses of the Legislature late last month.  Our sources tell me that signature by the Governor is not a sure thing …

 

7/26/07            Automobile Coverage, Inc., v. American International Group, Inc.

Appellate Division, First Department
With Revisions, Action for Agency Commissions Can Proceed but Action for Termination May Not

Although inartfully drafted, lawsuit seeking allegedly unpaid agency commissions may go forward, but company was permitted to terminate the agency relationship without penalty.

 

7/26/07            Antinello v. Young Men’s Christian Association

Appellate Division, Third Department
Damages for Failure to Procure Insurance Coverage are Only “Out of Pocket” Expenses
Plaintiff fell off a ladder while working for Priority Electric.  Priority was a subcontractor on a renovation project with Bast Hatfield, the general contractor.  As so often happens, Plaintiff sues the property owner, YMCA, and Bast, the GC and a third party action was commenced against Priority.  The subcontract between Bast and Priority required Priority to indemnify Bast for all osses and claim arising out of Bast’s work and required Priority to procure insurance coverage naming Bast as an additional insured.  Priority failed to procure the promised coverage.

What damages can Bast secure from Priority for the failure to provide coverage?  Can it recover all resulting damages including the cost of indemnity?  “No,” holds the Third Department. The only recovery allowed for failure to procure coverage is the out-of-pocket expenses incurred.

7/17/07            Van Nostrand v. Froehlich
Appellate Division, Second Department Does Interest Accrue?  From Date Liability is Established OR from Date Both Liability and Serious Injury Determined?
A decidedly divided court, in a 3-2 decision, weighs in on a very important question.  If an plaintiff moves for partial summary judgment on liability and that motion is granted, does interest begin to accrue OR, must there first be a finding of “serious injury?”

Nothing that there is a split among the departments, the majority decides that “serious injury” is a “damages” rather than “liability” issue so that interest begins to register once negligence is established.  The strong dissent disagrees, holding that there can be no liability in an auto case involving covered persons unless and until the plaintiff establishes a “serious injury.”

With two dissenting votes, you can expect this case to receive Court of Appeals review.

 

 

STarosieleC’S serious (Injury) Side of New York No-FaulT
Mark Starosielec
[email protected]

 

7/24/07            Nociforo v. Penna

Appellate Division, Second Department

Plaintiff Obtains Pyrrhic Victory When Summary Judgment is Awarded to Defendants

Here, plaintiff won the battle (obtains leave to amend bill of particulars) but lost the war (complaint dismissed as summary judgment is granted). The lower court had denied defendants’ motion for summary judgment dismissing the complaint on the ground that the plaintiff did not sustain a serious injury, and granted the plaintiffs’ cross motion for leave to amend their bill of particulars.

 

The appellate division held that leave to amend a bill of particulars is to be freely given absent prejudice or surprise, unless the amendment is sought on the eve of trial. As such, that branch was affirmed.  However, the defendants did establish that the injured plaintiff did not sustain a serious injury. In opposition, the plaintiffs failed to raise a triable issue of fact. The plaintiffs relied on records without probative value since they were uncertified. Further, the affirmed medical report of the injured plaintiff’s examining orthopedist failed to raise a triable issue of fact as well. While his report’s range of motion findings were based upon his examination of the plaintiff, he failed to compare any of those findings to what is normal.

 

7/17/07            Abbas v. Cole

Appellate Division, Second Department

Even when Defendants Concede Liability, Plaintiff Still Has to Prove Serious Injury

In a very lengthy opinion, the Second Department affirmed a lower court order dismissing the plaintiff’s complaint. The case centered on the issue of whether or not a plaintiff, who has been granted a default judgment on the issue of liability in a case seeking compensation for personal injuries arising from a motor vehicle accident, is required to demonstrate the element of “serious injury” at the inquest on damages. The Court concluded that unless the issue of serious injury has been previously determined, the plaintiff must demonstrate at the damages inquest proof of a serious injury before there can be any recovery for pain and suffering.

 

After the plaintiff filed a lawsuit and upon the failure of the defendant to appear or answer the complaint, the plaintiff moved for leave to enter a default judgment. The defendant then cross-moved to extend his time to submit an answer and to compel the plaintiff to accept that answer. The lower court granted the plaintiff’s motion and denied the defendant's cross motion. Following an inquest on the issue of damages, the court entered judgment in favor of the plaintiff in the principal sum of $200,000. Thereafter, on appeal by the defendant, this court reversed the judgment on the ground that certain evidence was improperly admitted, and remitted the matter for "a new inquest at which the plaintiff will be required to establish, through admissible evidence, his damages, if any.

 

The allegation of serious injury is a requirement of the complaint in actions which seek damages pursuant to Insurance Law § 5104, and thus a necessary element of a prima facie case. The Court examined the issue of whether an injury that meets or exceeds such a threshold is a necessary element to be proven upon an inquest for damages, i.e., after the plaintiff has obtained a default judgment on the issue of liability. While “a defaulting defendant admits all traversable allegations in the complaint, including the basic issue of liability, an allegation of damage is not a traversable allegation and, therefore a defaulting defendant does not admit the plaintiff’s conclusion of damages.”

 

However, the peculiar nature of a “serious injury” claim crosses the boundaries of both the liability and the damages spheres of a lawsuit. While the injuries sustained by a plaintiff in an action arising from a motor vehicle accident constitute the measure of his or her damages, it is the "serious" nature of those injuries which must be established before any recovery for pain and suffering can be obtained (see Insurance Law § 5104).

By requiring the plaintiff to submit proof that he or she has sustained a serious injury, we are comporting with the original legislative intent of the "no-fault" law, which was “to eliminate recovery in a common-law tort action for minor personal injuries.” The First Department concluded that a plaintiff who has been granted a default judgment is required as a matter of law to establish at the inquest a prima facie case of serious injury. We now hold that the grant of a default judgment on the issue of liability in cases seeking damages does not necessarily obviate the plaintiff’s obligation to prove, at the inquest on damages, that he or she sustained a “serious injury” (see Van Nostrand v Froehlich,___ AD3d ___ [decided herewith]).

The exception to this rule would be where the defaulting defendant has, in effect, conceded the issue of serious injury after same has been pleaded and raised by the plaintiff (see Beresford v Waheed, 302 AD2d 342). The court’s holding in Beresford v Waheed (supra) does not stand for the proposition that once a plaintiff is awarded a default judgment, the defendant is thereafter precluded from raising the issue of serious injury.  Accordingly, the Beresford case was decided on purely procedural grounds, i.e., the defendant could not raise the issue of serious injury at the second inquest because the law of the case doctrine precluded reconsideration of the issue.

In contrast, in the instant case, the complaint did not allege that the plaintiff sustained a serious injury as defined in Insurance Law § 5102(d), and thus there was no “traversable allegation” in this regard which the defendant was required to deny (see Rokina Opt. Co. v Camera King, supra). It is also unclear whether the plaintiff even alleged the element of serious injury in his motion for leave to enter a default judgment so as to necessarily require the defendant to address the issue in his cross motion. Moreover, on the prior appeal, the defendant herein did not raise the issue of serious injury. Instead, the defendant only argued that even if the contested documents were admissible, they did not prove a prima facie case of damages because they did not show that the injuries were causally related to the motor vehicle accident.

7/17/07            Amato v. Fast Repair, Inc.

Appellate Division, Second Department

Only Slight Restrictions of Movement and Missing Just One Day of Work Dooms Plaintiff

The Appellate Division reversed a lower court order which had denied defendants’ motion pursuant to CPLR 4401 for judgment as a matter of law. The court held: to be entitled to judgment as a matter of law, a defendant must demonstrate that, upon viewing the evidence in the light most favorable to the plaintiff, the plaintiff failed to make out a prima facie case. Here, there was no rational process by which the court could find that the plaintiff established that he sustained a serious injury with regard to any of the applicable categories set forth in Insurance Law § 5102(d).

 

The plaintiff’s expert never attested to the fact that the plaintiff sustained a total loss of use of any of the body parts purportedly injured in the accident, thus the plaintiff failed to establish that he sustained a “permanent loss of use of a body organ, member, function or system.” The  plaintiff’s restriction of movement in his shoulders was only slight, thus the plaintiff failed to establish that he sustained a “significant limitation of use of a body function or system” or a "permanent consequential limitation of use of a body organ or member.” Since the plaintiff missed only one day of work as a result of the accident, he failed to establish a prima facie case that he sustained a medically-determined injury or impairment of a nonpermanent nature which prevented him from performing substantially all of the material acts which constituted his usual and customary daily activities for not less than 90 days during the 180 days immediately following the occurrence of the injury.

 

Audrey’s Angle on No-Fault

Audrey Seeley

[email protected]

 

The reporting of No-Fault arbitration awards is not at the same level of reported case law, meaning there is no one source to turn to for comprehensive research of arbitration awards.  We encourage you to submit to us, in a PDF format, at [email protected], any recent no-fault arbitration awards, especially Master Arbitration awards, that address interesting no-fault issues. 

 

Arbitration

 

7/24/07            In the Matter of the Arbitration of the Applicant and the Respondent

                        Arbitrator Veronica K. O’Connor, Erie County

Since When is an Applicant Entitled to Reimbursement for a Laptop Computer???

The Angle:    Yet again another decision where reasonable minds simply differ in analysis and opinion.  In this arbitration, which involves a claim for reimbursement for the purchase of a laptop in order to keep up with school work an insurer is precluded from arguing the most basic coverage issue – whether the claim falls within the grant of coverage under no-fault in the first instance.  Instead, there is a lot of discussion on failure to request timely verification and issue a timely denial.  I reviewed the standard PIP endorsement and I cannot find where a laptop computer would fall within the first instance within that which can be recovered under no-fault. 

 

Also, the award cites to Presbyterian Hosp. v. Aetna Cas. & Sur. Co., 233 AD2d 431 (2d Dept. 1996) which does not apply in this case.  In Presbyterian Hosp. the insurer was attempting to deny coverage based upon an exclusion in the policy.  Generally, an insurer must issue a timely denial if it is going to rely upon an exclusion or a breach of a condition under the policy.  The same requirement does not apply when there is no insurance coverage in the first instance.  See, Zappone v. Home Ins. Co., 55 NY2d 131 (1982).  While this was a concept applied to liability insurance it has been applied in the no-fault context.  See, Presybterian Hosp. v. Aetna Cas. & Sur. Co., 90 NY2d 274 (1997).  The consequence is waiver of the defense.  However, in this case the issue was whether reimbursement for the laptop even fell within the grant of coverage under the policy.  Accordingly, the insurer is not required to timely deny or even issue a denial.

 

It is unclear whether the insurer in this arbitration was permitted to submit a post arbitration memorandum of law on this particular issue.  However, it is recommended that the insurer either provide the memorandum of law at the arbitration or request the ability to submit a memorandum of law after the hearing.  I hope the insurer master arbitrates this award.

 

The Analysis: The Applicant, eligible injured person, was involved in an October 10, 2005, motor vehicle accident resulting in bilateral leg fractures.  The Applicant was 16 years old at the time of the accident and was hospitalized for approximately one month.  He was out of school for approximately five months, but during that timeframe worked on his studies from home.  During the five month time period he receiving tutoring and only possessed a desktop computer.  However, due to his leg castings he could not use the computer.  As a result, and without first inquiring from the school if a laptop was available for his use, he purchased a laptop for a little over $700.00.

 

The invoice for the laptop, which was purchased on October 25, 2005, was submitted to the insurer on February 8, 2006, together with other medical and household expenses.  On August 11, 2006, the Applicant resubmitted the invoice for the laptop since it had not been addressed by the insurer.   On September 12, 2006, the insurer denied the expense for the laptop on the basis that the expense was not a covered expense under No-Fault.

 

The assigned arbitrator reviewed the regulation pertaining to verification rights and the timeframe in which payment or denial is required.  The insurer was provided with an opportunity to submit additional evidence pertaining only to a verification request and whether the February 2006 submission was ever received.  The insurer provided no additional documentation, most likely because verification was not required due to a coverage issue.  The arbitrator awarded in favor of the Applicant finding that under Presbyterian the insurer was precluded from raising most defenses for not expeditiously processing the claim.  Of course, the phrase “most defenses” was not further discussed. 

 

7/20/07            In the Matter of the Arbitration of the Applicant and the Respondent

Arbitrator Mary Anne Theiss, Onondaga County

Insurers Should Consider Whether Late Note of Claim is Attributed to Fraud and How Late the Application was Before Denying Benefits.

The Angle:      I receive questions from insurers who receive applications for no-fault benefits late for applicants and want to know whether they should issue a denial for failure to submit the claim for benefits within 30 days from the accident date.  My first question to them is why is the application submitted late?  Usually I am dealing with a taxi or limo passenger who simply could not find the insurer’s information within 30 days.  Sometimes the applicant sits on the application due to life events.  The latter I have always considered a gray area and one worth delving further into in terms of what was the life event; how late is the application; and what effort did the applicant make to get the application submitted.  This arbitration award seems to indicate that perhaps the issue of fraud  is the driving factor.

 

The Analysis:  The Applicant, eligible injured person, was involved in an August 7, 2006, motor vehicle accident.  She reported the accident the same day or the following day to the insurer.  The insurer mailed the requisite no-fault application the same day the accident was reported.

 

After receiving no completed application, the insurer spoke with the Applicant on September 22, 2006.  The Applicant advised she had not mailed the application but would fax it along with a letter.  The Applicant did fax the application the same day and the insurer denied the entire claim on October 3, 2006, based upon the 30 day rule.  The Applicant’s purported reasonable excuse for not presenting her claim timely is that she was on vacation when the application came.  Thereafter, she went back to school as she was a teacher.  It is noted that the Applicant’s application was eight days late.

 

The assigned arbitrator held that the No-Fault regulation changed in 2002 from 90 days to 30 days to file a claim for no-fault benefits to prevent fraud.  The Applicant here was not attempting to defraud the insurer by running up fraudulent medical expenses.  It is mentioned that other factors to consider are the amount of time that passed, the circumstances of the case, and whether the applicant was a passenger in the motor vehicle. 

 

7/17/07            In the Matter of the Arbitration of the Applicant and the Respondent

Arbitrator Mary Anne Theiss, Onondaga County

Insurer’s Denial for Failure to Cooperate with Vocational Rehabilitation Efforts Premature – Applicant Should Have Been Afforded More Disability.

 

The Angle:      As I have said in the past, the defense of failure to cooperate with vocational rehabilitation efforts is difficult to prevail upon.  Here, the insurer did not have a strong independent medical review but did have blatent failure by the Applicant to comply with vocational rehabilitation.  This arbitration award was a compromise in that it awarded the Applicant some lost wages but once she became pregnant she should have been able to seek work. 

 

The Analysis: The Applicant, eligible injured person, was involved in a February 4, 2005, motor vehicle accident resulting in cervical and lumbar spine pain.  She treated with her primary care physician who ordered a cervical and lumbar spine MRI.  The cervical MRI was normal while the lumbar MRI revealed disc herniations at L2/L3 and L4/L5.  The Applicant was referred to a neurosurgeon who did not recommend surgery but advised she should treat with him again in one year.

 

In the Fall 2005, the primary care physician released Applicant to return to work light duty.  The Applicant was working as a part time lunch room monitor and full time resident aide.

 

The insurer also arranged during the Fall 2005 for vocational rehabilitation.  The Applicant missed several of her appointments and soon thereafter scheduled an appointment with her primary care physician who rendered her totally disabled.  Once the total disability note was provided to the vocational rehabilitation counselor the insurer ceased any further vocational rehabilitation efforts.

 

On February 10, 2006, the Applicant underwent an independent medical examination (“IME”).  The physician opined that the Applicant had disc herniations in the lumbar spine and mildly restricted lumbar spine range of motion related to the motor vehicle accident.  The physician further opined that the Applicant had a partial to moderate disability.  He recommended the Applicant continue with conservative, non-operative conservative care, as well as aqua therapy.  Thereafter, he opined that physical therapy, aqua therapy (yes he contradicted himself), and massage therapy were no longer medically necessary.  Further, the Applicant did not require further orthopedic care.

 

The insurer, based upon the IME, arranged for the Applicant to undergo vocational rehabilitation.  The Applicant provided minimal effort and the arbitrator found appeared to not provide full cooperation.

 

At the arbitration, the Applicant was eight months pregnant; made no effort to return to her job; and made no effort to apply for work.

 

The assigned arbitrator held that the denial was improper up until the time Applicant became pregnant as any disability from that point forward is attributed to her pregnancy.

 

Litigation

 

7/24/07            St. Vincent's Hospital & Medical Center v. Nationwide Mutual Ins. Co.

Appellate Division, Second Department

Deny, Deny, Deny (but Do it on Time

No Fault Carrier’s timely submission of an NF-10 which indicates that benefits denied on basis of “Independent Medical Exam” was sufficient, even where the IME report not attached particularly where claimant fails to complain about inadequacy of  substance of denial, but only complained about timeliness until it submitted reply papers

 

 

PEIPER on PROPERTY

Steven E. Peiper

[email protected]

 

Nothing new in the world of property insurance this week.

 

Across Borders

 

Visit the Hot Cases section of the Federation of Defense & Corporate Counsel website, www.thefederation.org. Dan Kohane serves as the FDCC’s President and Website Editor Emeritus.

 

7/23/2007        Perez  v. El Bamboo Bar/Club

New Jersey Superior Court, Appellate Division
General Liability Insurance: “Assault and/or Battery” Exclusion Precludes Insurer’s Duty to Defend Nightclub
Juan Perez, a third-party claimant, sued El Bamboo Bar and Club, Inc. (“El Bamboo”), claiming he was injured as a result of the nightclub’s failure to provide a safe environment for its patrons. ALEA London, Ltd. (“ALEA”) insured El Bamboo under a CGL policy, but denied a defense to El Bamboo pursuant to a policy exclusion precluding coverage for injuries resulting from “assault and/or battery.” The trial court dismissed El Bamboo’s coverage suit against ALEA, finding that the exclusion applied. The Appellate Division of the New Jersey Superior Court affirmed the trial court’s decision, holding that ALEA had no duty to defend.

Submitted by: Bruce D. Celebrezze, Esq. & Jamison R. Narbaitz of Sedgwick Detert Moran & Arnold LLP

 

Reported Decisions

 

Nociforo v. Penna

James P. Nunemaker, Jr., Jericho, N.Y. (Kathleen E. Fioretti of counsel), for appellants.
Grey & Grey, LLP, Farmingdale, N.Y. (Joan S. O'Brien of counsel), for respondents.

 

DECISION & ORDER

In an action to recover damages for personal injuries, etc., the defendants appeal, as limited by their brief, from so much an order of the Supreme Court, Suffolk County (Blydenburgh, J.), dated September 29, 2006, as denied their motion for summary judgment dismissing the complaint on the ground that the plaintiff Philip Nociforo did not sustain a serious injury within the meaning of Insurance Law § 5102(d), and granted the plaintiffs' cross motion for leave to amend their bill of particulars.

ORDERED that the order is modified, on the law, by deleting the provision thereof denying the defendants' motion for summary judgment dismissing the complaint on the ground that the plaintiff Philip Nociforo did not sustain a serious injury within the meaning of Insurance Law § 5102(d), and substituting therefor a provision granting the motion; as so modified, the order is affirmed insofar as appealed from, with costs to the defendants payable by the plaintiffs.

The court providently exercised its discretion in granting that branch of the plaintiffs' cross motion which was for leave to amend the bill of particulars to add a claim of aggravation and/or exacerbation of pre-existing spinal injuries. This Court has held that leave to amend a bill of particulars is to be freely given absent prejudice or surprise, unless the amendment is sought on the eve of trial (see Grande v Peteroy, 39 AD3d 590; Singh v Rosenberg, 32 AD3d 840, 842; Joaquin v Munoz, 21 AD3d 349). Under the facts of this case, there is no evidence that the amendment was sought on the eve of trial, or that the amendment would have prejudiced or taken by surprise the defendants. The defendants were well aware of the prior accident and injury history of the injured plaintiff Philip Nociforo as it related to his spine.

The Supreme Court, however, erred in denying the defendants' motion for summary judgment dismissing the complaint. The defendants, via their submissions, established that the injured plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). In opposition, the plaintiffs failed to raise a triable issue of fact as to whether the injured plaintiff sustained a serious injury or an aggravation of any pre-existing spinal injury. The plaintiffs relied on the hospital records of the injured plaintiff which related to his prior accident in February 2001. These submissions were without probative value since they were uncertified (see Isumen v Konopka, 38 AD3d 608; Mejia v DeRose, 35 AD3d 407, 408). The plaintiffs further relied on the report of the injured plaintiff's treating neurologist, Dr. Taufiq Azamy, which again dealt with the prior accident. This report was also without probative value since the report was unaffirmed (see Rodriguez v Cesar, 40 AD3d 731; Phillips v Zilinsky, 39 AD3d 728; see also Grasso v Angerami, 79 NY2d 813, 814; Pagano v Kingsbury, 182 AD2d 268, 270), as were the submitted June 14, 2001, cervical spine nerve conduction and lower extremity somatosensory studies of the injured plaintiff. The affirmed medical report of the injured plaintiff's examining orthopedist failed to raise a triable issue of fact as well. While the injured plaintiff's examining orthopedist set forth in his report range of motion findings based upon his February 2006 examination of the injured plaintiff, he failed to compare any of those findings to what is normal (see McNulty v Buglino, 40 AD3d 591; Cedillo v Rivera, 39 AD3d 453; Osgood v Martes, 39 AD3d 516; McLaughlin v Rizzo, 38 AD3d 856; Bluth v World Omni Fin. Corp., 38 AD3d 817; Fudol v Sullivan, 38 AD3d 593). He also failed, in his report, to establish any causation for the findings he did make (see Itskovich v Lichenstadter, 2 AD3d 406; Bonner v Hill, 302 AD2d 544). Lastly, the plaintiffs failed to submit any competent medical evidence that the injured plaintiff was unable to perform substantially all of his daily activities for not less than 90 of the first 180 days subsequent to the subject accident (see Felix v New York City Tr. Auth., 32 AD3d 527; Sainte-Aime v Ho, 274 AD2d 569).
MASTRO, J.P., RITTER, SKELOS, CARNI and McCARTHY, JJ., concur.

 

Abbas v. Cole

 

APPEAL by the plaintiff, in an action to recover damages for personal injuries, from an order and judgment (one paper) of the Supreme Court (David I. Schmidt, J.), dated October 21, 2005, and entered in Kings County, which upon, inter alia, the defendant's failure to appear or answer, and an inquest on damages, in effect, granted the defendant's motion pursuant to CPLR 4401 for judgment as a matter of law, and dismissed the complaint.

Kagan and Gertel, Brooklyn, N.Y. (Irving Gertel of counsel), for appellant.
Longo & D'Apice (Sweetbaum & Sweetbaum, Lake Success, N.Y. [Marshall D. Sweetbaum]    of counsel), for respondent.

OPINION & ORDER


SANTUCCI, J.In this case we address the issue of whether or not a plaintiff, who has been granted a default judgment on the issue of liability in a case seeking compensation for personal injuries arising from a motor vehicle accident, is required to demonstrate the element of "serious injury" at the inquest on damages. For the reasons that follow, we conclude that, unless the issue of serious injury has been previously determined, the plaintiff must demonstrate at the damages inquest proof of a serious injury before there can be any recovery for pain and suffering arising from a motor vehicle accident.

The case at bar has its genesis in a 1999 automobile collision between vehicles operated by the defendant, Roy Francis Cole, and the plaintiff, Malik G. Abbas. Upon the failure of the defendant to appear or answer the complaint, the plaintiff moved for leave to enter a default judgment. The defendant then cross-moved to extend his time to submit an answer and to compel the plaintiff to accept that answer. By order dated November 30, 2001, the Supreme Court granted the plaintiff's motion and denied the defendant's cross motion. Following an inquest on the issue of damages, the court entered judgment in favor of the plaintiff in the principal sum of $200,000. Thereafter, on appeal by the defendant, this court reversed the judgment on the ground that certain evidence was improperly admitted, and remitted the matter for "a new inquest at which the plaintiff will be required to establish, through admissible evidence, his damages, if any (see Insurance Law § 5102; Tamburello v Bensonhurst Car & Limo Serv., 305 AD2d 664)" (Abbas v Cole, 7 AD3d 649, 650). After the new inquest was held, the Supreme Court concluded as follows:

"The court finds that the evidence presented by plaintiff at inquest was insufficient as a matter of law to establish that plaintiff sustained a serious injury within the meaning of Insurance Law § 5102(d) and that defendant is, therefore, entitled to a directed verdict dismissing the action."

We affirm.

Since the passage of the Comprehensive Motor Vehicle Insurance Reparation Act in 1974 (now Insurance Law § 5101 et seq. — the so called "No Fault" statute), a plaintiff who seeks damages for pain and suffering arising from a motor vehicle accident must first establish that he or she has met or exceeded a "serious injury" threshold. Since that time, the question of what constitutes a serious injury has repeatedly engaged the judiciary and continues to be litigated. However, what has always been clear is that in an action arising from a motor vehicle accident, serious injury is a "threshold" issue (see Licari v Elliott, 57 NY2d 230, 239; Star v Badillo, 225 AD2d 610; Insurance Law § 5104). Indeed, the allegation of serious injury is a requirement of the complaint in actions which seek damages pursuant to Insurance Law § 5104, and thus a necessary element of a prima facie case thereunder (see CPLR 3016[g]; Starr v Badillo, supra; Thrall v City of Syracuse, 96 AD2d 715)).

We are now called upon to clarify the somewhat muddied waters surrounding the subject of whether an injury that meets or exceeds such a threshold is a necessary element to be proven upon an inquest for damages, i.e., after the plaintiff has obtained a default judgment on the issue of liability. While it is true that "a defaulting defendant admits all traversable allegations in the complaint, including the basic issue of liability, an allegation of damage is not a traversable allegation and, therefore a defaulting defendant does not admit the plaintiff's conclusion of damages" (Amusement Bus. Underwriters v American Intl. Group, 66 NY2d 878, 880; see Curiale v Ardra Ins. Co., 88 NY2d 268, 279; Rokina Opt. Co. v Camera King, 63 NY2d 728, 730; Hussein v Ratcher, 272 AD2d 446, 447; Kessler v Atlantic Ave. CVS, 271 AD2d 655, 656). We also note that no distinction should be drawn in this regard between a default premised upon the striking of the answer and a default in answering, since the two instances are functional equivalents (see Jones v Corley, 32 AD3d 530).

However, the peculiar nature of a "serious injury" claim crosses the boundaries of both the liability and the damages spheres of a lawsuit. While the injuries sustained by a plaintiff in an action arising from a motor vehicle accident constitute the measure of his or her damages, it is the "serious" nature of those injuries which must be established before any recovery for pain and suffering can be obtained (see Insurance Law § 5104). In fact, in the case of Perez v State of New York (215 AD2d 740, 741, 742), this court has previously stated:

"As a general principle, the liability phase of a bifurcated trial is not the proper juncture at which to adjudicate issues regarding the severity of the injuries of the party prosecuting the case. Indeed, in a jury trial the jury is commonly instructed to decide only the question of liability and to disregard as irrelevant any reference to injuries or medical treatment (see, PJI 1:35A [Supp]). As such, during the liability portion of a bifurcated trial arising out of an automobile accident, the fact-finder should be concerned with the apportioning of fault among the parties whose negligence it finds to have been a proximate cause of the accident (see, DiMauro v Metropolitan Suburban Bus Auth., 105 AD2d 236, 246). Issues which pertain to the extent of the injuries suffered by a plaintiff, including whether a plaintiff suffered a "serious injury" as such term is defined in Insurance Law § 5102(d), should generally be left for the damages phase of the trial (see, e.g., Keller v Terr, 176 AD2d 921; Moreno v Roberts, 161 AD2d 1099)" (emphasis added).

Thus, a defendant's default in cases involving injuries resulting from a motor vehicle accident may fairly be viewed as "establish[ing] only that he [or she] was at fault for the accident, not that the plaintiff suffered a serious injury" (Ortiz v Biswas, 4 AD3d 151; see also Pampafikos v Wander, 4 AD3d 152).

Furthermore, by requiring the plaintiff, even upon the default of the defendant, to nevertheless submit proof that he or she has sustained a serious injury, we are comporting with the original legislative intent of the "no-fault" law, which was "to eliminate recovery in a common-law tort action for minor personal injuries" (Zecca v Riccardelli, 293 AD2d 31, 33). Indeed, the Zecca case stands for the proposition that when a plaintiff is granted summary judgment on the issue of liability without opposition from the defendant, the grant of such partial summary judgment does not include a determination of the plaintiff's claim that he or she has sustained a serious injury as defined by Insurance Law § 5102(d). In this regard, we note that our colleagues in the Appellate Division, First Department initially disagreed with this conclusion (see Porter v SPD Trucking, 284 AD2d 181; Maldonado v DePalo, 277 AD2d 21), but thereafter decided that "before a plaintiff may proceed to damages under Insurance Law § 5104, both fault and serious injury must be established [and] [t]o the extent our holdings in Maldonado and Porter are to the contrary, we overrule them" (Reid v Brown, 308 AD2d 331, 332).

Subsequent thereto, and in reliance upon the holding in Reid v Brown (supra), the First Department concluded that a plaintiff who has been granted a default judgment is required as a matter of law to establish at the inquest a prima facie case of serious injury (see Toure v Harrison, 6 AD3d 270; Ortiz v Biswas, supra; Pampafikos v Wander, supra). We now add our collective voice on the issue, and hold that the grant of a default judgment on the issue of liability in cases seeking damages pursuant to Insurance Law § 5102 does not necessarily obviate the plaintiff's obligation to prove, at the inquest on damages, that he or she sustained a "serious injury" (see Van Nostrand v Froehlich,AD3d [decided herewith]).

 

The exception to this rule would be where the defaulting defendant has, in effect, conceded the issue of serious injury after same has been pleaded and raised by the plaintiff (see Beresford v Waheed, 302 AD2d 342). Contrary to the plaintiff's contention, our holding in Beresford v Waheed (supra) does not stand for the proposition that once a plaintiff is awarded a default judgment, the defendant is thereafter precluded from raising the issue of serious injury. In the Beresford case, the plaintiff moved for leave to enter a default judgment upon the defendant's failure to appear or answer. The plaintiff's motion papers included a verified complaint, and an affidavit of merit wherein she claimed that she had sustained "serious and permanent" injuries as a result of the accident. The defendant opposed the plaintiff's motion by cross-moving to compel service of his proposed answer. Although the defendant asserted in his proposed pleading that the plaintiff did not sustain a serious injury, in his cross motion, the defendant did not respond to the claim set forth in the plaintiff's affidavit of merit that she had sustained a serious injury. The only argument raised by the defendant in his cross motion with respect to the issue of a meritorious defense was that the plaintiff's vehicle came to an abrupt stop. The Supreme Court granted the plaintiff's motion and denied the defendant's cross motion. The defendant appealed without addressing the issue of whether the plaintiff sustained a serious injury. This court affirmed the order, finding that the defendant had failed to set forth either a reasonable excuse or a meritorious defense (see Beresford v Waheed, 288 AD2d 170). At the subsequent inquest, the plaintiff introduced evidence that she sustained a herniated disc and a bulging disc in her lumbar spine. The trial court awarded her the sum of $100,000 for past pain and suffering, and judgment was entered in her favor. Thereafter the defendant took a second appeal. This time the defendant argued that the plaintiff was required to establish at the inquest a prima facie case that she had sustained a serious injury. On the second appeal we held:

"Under the circumstances of this case, the defendant is precluded, pursuant to the doctrine of law of the case, from raising the issue of serious injury on this appeal since this Court affirmed the order granting the plaintiff's motion for leave to enter a default judgment (emphasis added). However, the Supreme Court improperly permitted the plaintiff's expert to base his opinion on a [MRI] that was not placed in evidence and was prepared by another healthcare professional who did not testify. Therefore, a new inquest on the issue of damages is required" (citations omitted).

"Our decision is consistent with the result reached in Zecca v Riccardelli, 293 AD2d 31). In Zecca this Court held that where a plaintiff is granted summary judgment on the issue of liability, without opposition from the defendant, the plaintiff, nonetheless, has the burden of establishing that he or she suffered a serious injury as defined by Insurance Law § 5102(d). In contrast to Zecca, the instant case did not involve an unopposed motion for summary judgment. Here, the defendant opposed the plaintiff's motion for leave to enter a default judgment by cross moving to compel service of his proposed answer. The defendant, in his cross motion, raised the issue of a meritorious defense without addressing the issue of a serious injury. In this case, the issue of whether the defendant set forth a meritorious defense, including the issue of serious injury, was fully litigated on the merits. Accordingly, there was a final adjudication on the merits with respect to the issue of a serious injury upon the Supreme Court's granting of the plaintiff's motion for leave to enter a default judgment which was subsequently affirmed by this Court"

(Beresford v Waheed, supra, 302 AD2d 342, 342-343; see also Singh v Friedson, 10 AD3d 721, 722).

Accordingly, the Beresford case was decided on purely procedural grounds, i.e., the defendant could not raise the issue of serious injury at the second inquest because the law of the case doctrine precluded reconsideration of the issue. "The law of the case is a rule of practice, an articulation of sound policy, that, when an issue is once judicially determined, that should be the end of the matter as far as Judges and courts of co-ordinate jurisdiction are concerned'" (Thomas v Dietrick, 284 AD2d 325, 325, quoting Martin v City of Cohoes, 37 NY2d 162, 165; see People v Evans, 94 NY2d 499). Consequently, in light of the fact that the defendant in Beresford never refuted the plaintiff's claim of serious injury, and since the court determined that plaintiff was entitled to a default judgment, the serious injury threshold issue was a fortiori decided on the merits. In addition, in affirming the order granting the plaintiff's motion for a default judgment, this court also determined that the plaintiff set forth a prima facie case, including the existence of a serious injury, which the defendant failed to refute. Although the matter was remitted for a new inquest after the second appeal, the remittitur was not for a determination of whether the plaintiff had sustained a serious injury. Rather, the remittur was required because the first inquest was based upon improperly admitted evidence, and thus the damages award had to be re-determined.

In contrast, in the instant case, the complaint did not allege that the plaintiff sustained a serious injury as defined in Insurance Law § 5102(d), and thus there was no "traversable allegation" in this regard which the defendant was required to deny (see Rokina Opt. Co. v Camera King, supra). It is also unclear whether the plaintiff even alleged the element of serious injury in his motion for leave to enter a default judgment so as to necessarily require the defendant to address the issue in his cross motion. Moreover, on the prior appeal, the defendant herein did not raise the issue of serious injury. Instead, the defendant only argued that even if the contested documents were admissible, they did not prove a prima facie case of damages because, inter alia, they did not show that the injuries were causally related to the motor vehicle accident. Finally, we again note that in our decision which remitted the instant matter for a new inquest on damages, we specifically cited Insurance Law § 5102(d) and the case of Tamburello v Bensonhurst Car & Limo Serv. (supra) (see Abbas v Cole, supra). In the Tamburello case, this court remitted the matter for a new inquest on the issue of damages, if any, after the trial court improperly refused to allow the defendants' counsel to participate, and additionally noted that "at the new inquest the plaintiff is required to establish, through admissible evidence, the extent of the injuries she sustained (see Insurance Law § 5102[d])" (emphasis supplied).

Therefore, on the record before us, and the conclusions reached herein, we affirm the order and judgment appealed from, with costs, and hold that the trial court properly dismissed the complaint based upon the plaintiff's failure to establish at the inquest a prima facie case of serious injury as that term is defined in Insurance Law § 5102(d) (see Toure v Harrison, supra; Ortiz v Biswas, supra; Pampafikos v Wander, supra).
RITTER, J.P., SKELOS, and DICKERSON, JJ., concur.

ORDERED that the order and judgment is affirmed, with costs.

Amato v. Fast Repair Inc.

Cheven, Keely & Hatzis, New York, N.Y.

(Thomas Torto and Jason Levine of counsel), for appellants.
Michael F. Kanzer & Associates, P.C. (Robert George Bombara,
Howard Beach, N.Y., of counsel), for respondent.

 

DECISION & ORDER

In an action to recover damages for personal injuries, the defendants appeal from a judgment of the Supreme Court, Kings County (Spodek, J.), entered December 29, 2005, which, upon, inter alia, an inquest on the issue of damages, and the denial of the defendants' motion pursuant to CPLR 4401 for judgment as a matter of law, is in favor of the plaintiff and against them in the principal sum of $160,000.

ORDERED that the judgment is reversed, on the law, with costs, the defendants' motion pursuant to CPLR 4401 for judgment as a matter of law is granted, and the complaint is dismissed.

To be entitled to judgment as a matter of law pursuant to CPLR 4401, a defendant must demonstrate that, upon viewing the evidence in the light most favorable to the plaintiff, the plaintiff failed to make out a prima facie case (see Magidenko v Consolidated Edison, 3 AD3d 553). The court may grant the motion only if there is no rational process by which the factfinder could find for the plaintiff against the moving defendant (see Szczerbiak v Pilat, 90 NY2d 553, 556). Upon the evidence presented at the inquest, there was no rational process by which the court could find that the plaintiff established that he sustained a serious injury with regard to any of the applicable categories set forth in Insurance Law § 5102(d) (see Abbas v Cole,AD3d [decided herewith]). Since the plaintiff's expert never attested to the fact that the plaintiff sustained a total loss of use of any of the body parts purportedly injured in the accident, the plaintiff failed to establish that he sustained a "permanent loss of use of a body organ, member, function or system" (Insurance Law § 5102[d]; see Oberly v Bangs Ambulance, 96 NY2d 295, 299; Candia v Omonia Cab Corp., 6 AD3d 641, 642). Moreover, since it was clear from the testimony of the plaintiff's own expert that the plaintiff's restriction of movement in his shoulders and cervical and lumbar spine was only slight, minor, or mild, the plaintiff failed to establish that he sustained a "significant limitation of use of a body function or system" or a "permanent consequential limitation of use of a body organ or member" (Insurance Law § 5102[d]; Toure v Avis Rent A Car Sys., 98 NY2d 345, 353; Licari v Elliott, 57 NY2d 230, 236). In addition, the restrictions of motion found by the plaintiff's expert were not based on a recent examination (see Laruffa v Yui Ming Lau, 32 AD3d 996). Since the plaintiff acknowledged at the inquest that he missed only one day of work as a result of the accident and thereafter returned to his usual duties, he failed to establish a prima facie case that he sustained a medically-determined injury or impairment of a nonpermanent nature which prevented him from performing substantially all of the material acts which constituted his usual and customary daily activities for not less than 90 days during the 180 days immediately following the occurrence of the injury (see Letellier v Walker, 222 AD2d 658).

In view of our determination, it is not necessary to address the defendants' remaining contentions. MILLER, J.P., RITTER, COVELLO and BALKIN, JJ., concur.

Van Nostrand v. Froehlich

 

APPEAL by the plaintiff, in an action to recover damages for personal injuries, from a second amended judgment of the Supreme Court (John P. Dunne, J.), entered December 23, 2005, in Nassau County, which, upon the granting of the defendants' motion to modify the date of accrual of interest as set forth in an amended judgment of the same court entered June 21, 2005, vacated that amended judgment, calculated interest from the date of the jury verdict on the issue of damages, and is in favor of the plaintiff and against the defendants in the total sum of $373,650.


Sanders, Sanders, Block, Woycik, Viener & Grossman, P.C.,
Mineola, N.Y. (Mark R. Bernstein of counsel), for appellant.
Michael E. Pressman, New York, N.Y. (Robert H. Fischler of
counsel), for respondents.

 

OPINION & ORDER


DILLON, J.This appeal presents the issue of when prejudgment interest is to be computed under CPLR 5002 in an automobile-related personal injury action where the serious injury threshold is an issue. We have not previously discussed at the appellate level the interplay between a plaintiff's entitlement to prejudgment interest under CPLR 5002 and the threshold injury requirements of Insurance Law § 5102(d). For reasons set forth below, we find that prejudgment interest is to be calculated from the date common-law liability attaches in favor of the plaintiff, either by default, summary judgment, or bifurcated liability trial, even though the plaintiff has yet to establish the existence of a serious injury under the Comprehensive Motor Vehicle Insurance Reparation Act (Insurance Law art 51, hereinafter the No-Fault Law).

 

RELEVANT FACTS AND PRIOR PROCEEDINGS

 

The vehicle driven by the plaintiff, Karen L. Van Nostrand, was rear-ended on September 2, 1999, while stopped at a red light on the eastbound portion of Hempstead Turnpike in East Meadow, Long Island. The offending vehicle was operated at the time of the collision by the defendant Rosario Froehlich. The Supreme Court issued an order dated March 8, 2002, granting the plaintiff summary judgment on the issue of common-law liability, and directed that there be a trial on the issue of damages. The order was served on counsel for the Froehlichs with notice of entry on April 17, 2002.

 

At the trial on the issue of damages, a jury awarded Van Nostrand $150,000 for past pain and suffering and $400,000 for future pain and suffering, as reflected by a judgment entered by the clerk of the Supreme Court, Nassau County, on January 17, 2004. On appeal, this court, inter alia, ordered a new trial on the issue of damages unless Van Nostrand filed a stipulation agreeing to reduce the damages to the sums of $100,000 for past pain and suffering and $200,000 for future pain and suffering (see Van Nostrand v Froehlich, 18 AD3d 539). Van Nostrand agreed to the reduction in damages by stipulation executed June 8, 2005, and submitted a proposed amended judgment with notice of settlement in accordance with this court's decision and order. The interest on the verdict, as reduced by this court, computed at 9% from April 17, 2002, totaled $7,150. The amended judgment was entered June 21, 2005.

 

By order to show cause dated July 19, 2005, the Froehlichs moved to modify the amended judgment. The Froehlichs argued that prejudgment interest had been improperly computed from the common-law liability finding of April 17, 2002, and that in automobile actions such as this, interest should instead be computed from the date that Van Nostrand established both liability and the existence of a serious injury. ^[FN1]

 

The Supreme Court granted the Froehlichs' motion to correct the interest contained in the amended judgment. A second amended judgment was entered December 23, 2005, reflecting interest measured from the date of Van Nostrand's damages verdict. The difference in the interest award was $3,500.

 

Van Nostrand appeals. We reverse the second amended judgment entered December 23, 2005, deny the motion, and reinstate the amended judgment entered June 21, 2005.
CPLR 5002 AND ITS INTERPRETIVE CASE LAW

 

The statute that entitles plaintiffs to prejudgment interest in civil proceedings is CPLR 5002. It is not to be confused with CPLR 5001, which speaks to preverdict interest for breach of contract measured from the date of breach (see DeLong Corp. v Morrison-Knudsen Co., 14 NY2d 346, 348; 155 Henry Owners Corp. v Lovlyn Realty Co., 231 AD2d 559, 560) and CPLR 5003, which speaks to postjudgment interest measured, of course, from when a monetary claim is reduced to judgment (see Pay v State of New York, 87 NY2d 1011, 1013; Matter of Matra Bldg. Corp. v Kucker, 19 AD3d 496).

CPLR 5002 provides that interest shall accrue "from the date the verdict was rendered . . . to the date of entry of final judgment." The purpose of the statute is not to be punitive as against defendants (see Love v State of New York, 78 NY2d 540, 544). Rather, the intent of the statute is to merely indemnify plaintiffs for the cost of the defendants having the use of another person's money between the time it is determined that compensation is due until judgment (see Love v State of New York, supra; Trimboli v Scarpaci Funeral Home, 37 AD2d 386, 389, affd 30 NY2d 687; Bermeo v Atakent, 241 AD2d 235, 247; Malkin v Wright, 64 AD2d 569, 570).

 

The language of CPLR 5002 measures interest from "verdict . . . report or decision" to the date of the entry of a final judgment. The terms "verdict," "report" or "decision" generally refer to the date that liability is established, even though the damages verdict is reached at a later time (see Rohring v City of Niagara Falls, 84 NY2d 60, 68; Love v State of New York, supra at 542). Courts engage, in effect, in a legal fiction that damages are known and become a fixed obligation from the moment liability is resolved (see Rohring v City of Niagra Falls, supra at 68). Indeed, CPLR 5002 contains no language requiring the amount of damages to be ascertained for interest to accrue (see CPLR 5002; Gunnarson v State of New York, 70 NY2d 923, 925; Garigen v Morrow, 303 AD2d 956). Interest accrues independent of whether either party causes a delay in reaching the damages trial (see Love v State of New York, supra at 544; Sawtelle v Southside Hosp., 305 AD2d 659, 660; Siegel, NY Prac § 411 [3d ed]).

 

The plaintiffs' entitlement to compensation is determined at three potential times during litigations, triggering interest under CPLR 5002. The first is when the defendant is held liable to the plaintiff as a result of a bifurcated liability trial, subject to the conduct of a damages trial. When trials are bifurcated, prejudgment interest is computed from the date of the liability finding (see Love v State of New York, supra at 544; Gunnarson v State of New York, supra at 924; Trimboli v Scarpaci Funeral Home, Inc., supra at 389; Malkin v Wright, supra at 570). The second circumstance is when the defendant is found liable to the plaintiff by means of summary judgment under CPLR 3212 (see Lifshits v Variety Poly Bags, 18 AD3d 622, 624, lv to app dismd 5 NY3d 847; Eisenberg v Rockland County, 19 AD3d 536; Carmody-Wait 2d NY Prac § 63:89, "What Constitutes a Verdict, Report, or Decision"). The third circumstance where interest can accrue under CPLR 5002 is when a judgment is awarded in favor of a plaintiff upon default of the defendant in failing to appear and answer, subject to an inquest to determine damages, or from when a defendant's answer is stricken (see Abbas v Cole,AD3d [decided herewith]; Diane v Ricale Taxi, Inc., 26 AD3d 232 [personal injuries incurred in automobile accident]; Gordon v City of New York, 188 Misc 2d 246, 249).

THE SERIOUS INJURY THRESHOLD - A QUESTION OF LIABILITY OR DAMAGES?

In Denio v State of New York (7 NY3d 159), the plaintiff incurred, as a result of his automobile accident, traumatic brain injury and multiple fractures of the jaw, face, pelvis, and ankles. There could never be any question that the plaintiff in Denio sustained injuries meeting the serious injury threshold of Insurance Law § 5102(d). The trial was bifurcated, and interest under CPLR 5002 was to be computed, according to the Court of Appeals, from the date of the liability verdict. No consideration was given by the Court of Appeals to whether the interest computation should be delayed to the finding of the trier of fact that a serious injury had been incurred. However, the existence of a "serious injury" under the insurance law is not always as clear as it was in Denio, as there is no shortage of automobile cases where the issue of serious injury falls into an arguably gray area.

 

The leading authority on when prejudgment interest is to be computed under CPLR 5002 is Love v State of New York (supra). In Love, the Court of Appeals held that prejudgment interest is to run from the point in a litigation "when the plaintiff's right to be compensated for the damages he or she sustained becomes fixed in law" (Love v State of New York, supra at 544). The Court of Appeals then explained that the right to compensation becomes fixed "[i]n a bifurcated trial . . . when the verdict holding the defendant liable is rendered," with the "only remaining question [being] the precise amount that is due" (Love v State of New York, supra at 544).

 

The essence of whether prejudgment interest should be computed from a finding of common-law liability in favor of the plaintiff, or from a finding of serious injury, is therefore inescapably dependent upon whether proof of serious injury is considered by law to be "liability" or "damages." If a question of liability, the running of prejudgment interest would need to abide the plaintiff's proof that a serious injury was incurred. If the serious injury threshold is a question of damages, prejudgment interest would compute from the establishment of bifurcated liability, because the Court of Appeals has expressly said so (see Love v State of New York, supra at 544; accord Denio v State of New York, supra at 163).

 

There has been a lack of unanimity among the four departments of the Appellate Division as to whether serious injury is a matter of liability or damages, which necessarily implicates CPLR 5002. The differences between the departments on this issue are not found in decisions addressing CPLR interest awards. Instead, the split between the departments is exposed in the automobile cases dealing with whether or not plaintiffs who have been granted summary judgment on liability are required to nonetheless establish serious injury at their damages trials. The Second and Third Departments took one position on this issue, while the First and Fourth Departments took a different position, although more recently the First Department appears to have switched sides and has left the Fourth Department standing alone.

 

This court has determined that the serious injury threshold is decidedly an issue of damages, not liability. The seminal cases are Perez v State of New York (215 AD2d 740) and Zecca v Riccardelli (293 AD2d 31). In Perez, the trial court dismissed the plaintiff's complaint at the conclusion of the plaintiff's evidence at a bifurcated liability trial on the ground that the plaintiff failed to prove that he had sustained a serious injury under Insurance Law § 5102. This court reversed, holding that "the liability phase of a bifurcated trial is not the proper juncture at which to adjudicate issues regarding the severity of injuries" (Perez v State of New York, supra at 741). The court noted that pursuant to PJI 1:35(A)(Supp.), juries in liability trials are routinely instructed to apportion fault among parties and to determine proximate cause without regard to injuries or medical treatment (id.). This court specifically held that the extent of plaintiffs' injuries, and whether such injuries qualify as serious under the Insurance Law, "should generally be left to the damages phase of the trial" (id.).

Three years later, in Zecca v Riccardelli (supra) this court held that when a finding is rendered in favor of a plaintiff on liability by means of summary judgment, even upon default of the defendant in opposing the motion, the plaintiff is nevertheless required to establish the existence of a serious injury at the trial on damages. The court presented a more detailed analysis of its reasoning in Zecca than it did in Perez. In Zecca, this court noted that an overriding purpose of the No-Fault Law was to eliminate from courts common-law tort actions involving minor personal injuries that fall beneath a defined threshold (see e.g. Licari v Elliott, 57 NY2d 230, 236 [minor, mild or slight limitations of use of body functions or systems are insignificant]). The courts were responsible for vetting serious injury automobile cases by application of basic summary judgment principles to avoid unnecessary jury trials where the injury is clearly minor (see Zecca v Riccardelli, supra at 33-34, citing Licari v Elliott, supra at 237). Viewed in this context, this court held that if summary judgment in favor of plaintiffs on default automatically satisfied the requirements of the serious injury threshold, courts would be abdicating their responsibility under the No-Fault Law by allowing recoveries for minor injuries (see Zecca v Riccardelli, supra at 34-35). As a result, the only logical conclusion under the No-Fault Law is to treat serious injury as quintessentially an issue of damages (see also e.g. Abbas v Cole, supra; Sheehan v Marshall, 9 AD3d 403, 404; Taylor v Dell Coffee Servs., 306 AD2d 460-461; Canfield v Beach, 305 AD2d 440, 442; Coumbes v Taylor, 298 AD2d 351, 352)^[FN2].

 

If anything, this court's discussions in Perez and Zecca failed to address an additional conceptual reason that the serious injury threshold is properly categorized as a question of damages, not liability. The well-accepted reasons for the enactment of the No-Fault Law were to promote the prompt resolution of injury claims, limit costs to insurers, and alleviate unnecessary burdens on the courts (see Pommells v Perez, 4 NY3d 566, 567, citing Comprehensive Automobile Insurance Reparations Act, L 1973, ch 13; Governor's Mem. Approving L 1973, ch. 13, McKinney's Session Laws of NY, at 2335). To control the pressing volume of automobile litigation within the state, the Legislature divided the universe of claims arising out of the use and operation of motor vehicles into two broad categories objectively defined in Insurance Law § 5102(d); namely, plaintiffs whose injuries qualify as "serious," and hence, are compensable, and plaintiffs whose injuries fall short of being "serious" and which are not compensable (see Insurance Law § 5102[d], 5104; Licari v Elliott, supra). The determination of whether a particular plaintiff establishes a serious injury, or fails to do so, necessarily involves an examination of the parties' evidence on damages. Such evidence is independent of the fault-based issues present in a bifurcated liability context such as duty, breach of duty, and proximate causality between acts or omissions on the one hand and an accident on the other. In other words, a plaintiff's injuries meet or fall short of the established threshold regardless of who is at fault behind the wheel.

 

Decisions of the Third Department also treat the serious injury threshold as an issue of damages (see e.g. Kelley v Balasco, 226 AD2d 880; Ives v Cornell, 211 AD2d 899).

 

In 2000, the First Department took an opposing view in Porter v SPD Trucking (284 AD2d 181) and Maldonado v DePalo (277 AD2d 21, 22). Porter held that a default judgment necessarily resolved the question of serious injury in favor of the plaintiff subject to defendants' right to contest the amount of plaintiffs' "real damages" at inquest (see Porter v SPD Trucking, supra at 181). Similarly, Maldonado held that summary judgment favoring plaintiffs necessarily decides the serious injury threshold in the plaintiffs' favor (see Maldonado v DePalo, supra at 22). However, not long after this Court's determination in Zecca v Riccardelli (supra), the First Department overruled its own holdings in Porter and Maldonado in 2003 with its decision in Reid v Brown (308 AD2d 331). By virtue of Reid v Brown, the First Department now holds that motor vehicle plaintiffs who obtain summary judgment on "fault" liability without opposition from defendants must still separately establish the existence of serious injuries (see Reid v Brown, supra at 332) during the damages phase of the litigation. Presumably, since Reid overruled both Porter and Maldonado, the same reasoning should now apply in the First Department to actions where the plaintiffs obtain judgment by default.

 

The Fourth Department walks a fine line apart from the other departments. Successful fault-based motions for summary judgment in favor of motor vehicle plaintiffs are considered partial summary judgments on the issue of "negligence," as distinguished from "liability" which includes both negligence and serious injury (see Ruzycki v Baker, 301 AD2d 48, 51). Parties in the Fourth Department who concede "liability" in motor vehicle actions therefore waive the opportunity to contest serious injury issues (see Simone v City of Niagra Falls, 281 AD2d 923). Under this rationale, the Fourth Department measures prejudgment interest under CPLR 5002 as running from the plaintiff's establishment of liability, meaning negligence, causation, and serious injury (see Manzano v O'Neil, 298 AD2d 829, 830 ^[FN3]; DePetres v Kaiser, 244 AD2d 851, 852).

 

We hold, consistent with our prior rulings in Perez v State of New York (supra) and Zecca v Riccardelli (supra) that serious injury is quintessentially an issue of damages, not liability. In the event a plaintiff at a damages trial fails to sustain the burden of establishing serious injury, the plaintiff is not entitled to any recovery despite proof of common law liability. If the serious injury threshold is established by a plaintiff at a damages trial, the jury will render a monetary award that fairly and justly compensates the plaintiff for all loss (see PJI 2:277; see generally McDougald v Garber, 73 NY2d 246). Regardless of whether damages are set at zero or at a liquidated amount, the calculation of interest can be made against the jury's determination of damages measured from the court's earlier finding of common law liability, whether that liability is a product of a default, a stricken pleading, summary judgment or a bifurcated trial.

 

Our dissenting colleagues argue that proof of serious injury must be presented before the right to compensation becomes fixed at law (see Love v State of New York, supra) so as to trigger interest under CPLR 5002. We disagree with this argument and maintain that interest must be calculated from the date that common law liability is determined in favor of the plaintiff. Four compelling reasons support our conclusion.

 

First, as already noted, the Court of Appeals expressly determined in Love v State of New York (supra at 542) that in personal injury actions, interest under CPLR 5002 runs from the date fault liability is established. While Love did not specifically address no fault insurance implications, the Court of Appeals' decision in Denio v State of New York (supra) was automobile-related and incidentally measured CPLR 5002 interest from the date that common-law liability was resolved in the plaintiff's favor (see Denio v State of New York, supra at 163). A reading of Love, and to a lesser extent Denio, demonstrates that the Court of Appeals views prejudgment interest as running from the liability determination, with its computation held in abeyance until the amount of damages is later determined (see Love v State of New York, supra at 544). It follows, therefore, that if proof of a threshold injury is an issue of damages as this court has consistently maintained, then interest is awardable from the finding of common-law liability, even if proof of a plaintiff's serious injury is extant or questionable. The actual computation of interest, retroactive to the liability finding, is not made until and unless the trier of fact determines that the serious injury threshold has, in fact, been affirmatively met at the damages trial.

 

Second, our dissenting colleagues, in concluding that prejudgment interest in a no- fault action is not triggered until the serious injury threshold is established, admittedly rely upon the Fourth Department's reasoning in Ruzycki v Baker (supra) and Manzano v O'Neil (supra). Implicitly, our dissenting colleagues depart from the stare decisis of this Department by which they are bound, wherein this court has held the serious injury threshold to be a matter of damages that is litigated during the damages phase of an action (see e.g., Sheehan v Marshall, 9 AD3d 403, 404; Zecca v Riccardelli, supra; Taylor v Dell Coffee Servs., 306 AD2d 460, 460-461; Perez v State of New York, supra; see also Uniform Rule 202.42[b]). As damages, threshold injury considerations are placed outside of the bifurcated liability finding which the Court of Appeals fixed in Love as triggering plaintiffs' right to compensation with prejudgment interest.

 

Our dissenting colleagues also suggest that the no-fault threshold is "[m]ost telling[ly]" grounded in liability rather than damages since, if an automobile plaintiff's verdict is overturned on appeal for insufficient proof at trial of serious injury, the remedy is dismissal of the complaint instead of a reduction of damages to $0 (dissenting opn at 17). Such an argument raises a distinction without a difference. In any action where plaintiffs' verdicts on appeal are reversed on the grounds that damages were not established at trial, whether automobile-related or not, the appellate remedy is the dismissal of the plaintiffs' complaints rather than a reduction of damages to $0 (see e.g. Pattison-Bolson Rug Serv. v Sloane, 45 AD2d 862 [plaintiff's complaint for breach of contract dismissed on appeal for failure to prove damages]; Gomez v Bicknell, 302 AD2d 107, 115, 117 [second counterclaim for breach of non-compete agreement dismissed on appeal for lack of proof at trial of damages]; accord Sharratt v Hickey, 20 AD3d 734 [complaint for defamation dismissed by trial court, affirmed on appeal, for plaintiff's failure to prove damages]. The remedy, therefore, does not support the conclusion of our dissenting colleagues that the division of liability and damages in actions arising out of the use and operation of motor vehicles (see Insurance Law § 5104) is any different from the division of liability and damages in other actions.

 

Third, there are various defenses to damages within and without the motor vehicle context which affect whether the plaintiffs, with common law liability in their favor, are entitled to any monetary award or to no award. One such defense is the plaintiff's nonuse of available seatbelts (see Vehicle and Traffic Law § 1229-c[8]), which is strictly limited to the jury's determination of damages and is not considered in resolving issues of liability (see Spier v Barker, 35 NY2d 444, 450; Garcia v Tri-County Ambulette Serv., 282 AD2d 206, 207; Dowling v Dowling, 138 AD2d 345). Another common defense presented at damages trials concerns allegations that the plaintiff's injuries pre-existed the subject accident (see e.g. Califano v Automotive Rentals, 293 AD2d 436, 437; Starace v Inner Circle Qonexions, 198 AD2d 493, 494) so as to negate proximate cause. Either of these defenses can reduce or even eliminate a plaintiff's entitlement to damages, yet the practice is to compute prejudgment interest from the liability finding and not to compute the interest award from the damages trial where seatbelt and pre-existing injury defenses are litigated (cf. Love v State of New York, supra). There is no persuasive reason to treat threshold injury issues any differently.

 

Fourth, if prejudgment interest is not awardable in automobile actions until after the serious injury threshold is established, an untenable dichotomy would exist between those plaintiffs and all non-automobile plaintiffs whose interest computations commence upon receiving a liability finding in their favor either as a result of default, summary judgment, or verdict from a trier of fact. If this court were to accept the defendants' interpretation of CPLR 5002, it would be placing motor vehicle personal injury plaintiffs on an unequal footing from all other plaintiffs who seek damages for personal injuries not involving automobile accidents. Indeed, the defendant's interpretation of CPLR 5002 would create two unequal classes of automobile plaintiffs, where those incurring clearly-defined serious injuries would be entitled to interest earlier in their litigations than other plaintiffs whose injuries are more questionable. The better practice, in our view, is to treat all plaintiffs equally, by measuring prejudgment interest to which they are entitled from the same bright-line event of established liability in their favor, whether upon default of the defendant, summary judgment, or verdict in a bifurcated liability trial.

For all of the foregoing reasons, we conclude that the second amended judgment entered December 23, 2005, which calculated interest from the date of Van Nostrand's damages verdict, is in error. The earlier amended judgment entered June 21, 2005, which measured prejudgment interest from the order granting Van Nostrand summary judgment on common-law liability, was correct. Accordingly, the second amended judgment entered December 23, 2005, is reversed, on the law, the defendants' motion to modify the date of accrual of interest is denied, and the amended judgment entered June 21, 2005, is reinstated.
MILLER, J.P., and KRAUSMAN, JJ., concur.

SPOLZINO, J., dissents and votes to affirm the amended judgment with the following

memorandum in which FISHER, J., concurs.

 

Prejudgment interest pursuant to CPLR 5002 runs from the date on which "the plaintiff's right to be compensated for the damages he or she sustained becomes fixed in law" (Love v State of New York, 78 NY2d 540, 544). The question presented by this appeal is how that date is defined in an action to recover damages for personal injuries that is governed by the Comprehensive Motor Vehicle Insurance Reparation Act (Insurance Law art 51), commonly known as the No-Fault Law. In such a case, as I see it, the plaintiff's entitlement to damages cannot be considered to be "fixed in law" until the plaintiff has satisfied the serious injury threshold established by the No-Fault Law (see Insurance Law § 5104[a]). Because that did not occur here until the damages phase of the trial, I would affirm the second amended judgment and therefore I dissent, respectfully.

The issue before us is presented in a rather ordinary automobile liability case that has a somewhat complex procedural history. The plaintiff was injured when her vehicle was struck from behind by a vehicle driven by the defendant. The plaintiff's motion for summary judgment was granted in March 2002. Although the record before us on this appeal does not include the motion for summary judgment, there is no dispute that the motion did not resolve whether the plaintiff had suffered a serious injury within the meaning of the No-Fault Law. Consequently, the matter proceeded to trial on the issues of both serious injury and damages.

In April 2003, a jury awarded the plaintiff the sum of $550,000 in damages. On appeal, we found that the award of damages for pain and suffering deviated materially from what would be reasonable compensation and therefore reversed the judgment entered on the jury's verdict and ordered a new trial unless the plaintiff agreed to a reduction in those damages (see Van Nostrand v Froehlich, 18 AD3d 539).

The plaintiff accepted our invitation to resolve the matter and an amended judgment was entered in June 2005. The amended judgment provided for interest from the date on which summary judgment had been granted, more than three years earlier. Arguing that prejudgment interest was not available from that date, the defendant moved for an order "amending and correcting" the judgment to provide for interest only from the date of the verdict. The Supreme Court granted the motion, to the detriment of the plaintiff in the amount of $13,500, a second amended judgment conforming to the order was entered in December 2005, and this appeal ensued.

Initially, the Supreme Court correctly considered the merits of the defendant's motion. Where the rate of interest is not litigated prior to the entry of judgment, the calculation of interest does not affect a substantial right of a party and an error in the calculation may be corrected by the court on a motion pursuant to CPLR 5019 (see Kiker v Nassau County, 85 NY2d 879). Consequently, the defendant's failure to raise any objection to the proposed amended judgment at the time it was noticed for settlement does not defeat his right to such relief or require that his motion be treated as an application to vacate a default pursuant to CPLR 5015. The issue, therefore, is whether prejudgment interest was properly calculated from the date on which summary judgment was granted.

 

CPLR 5002 provides that "[i]nterest shall be recovered upon the total sum awarded, including interest to verdict, report or decision, in any action, from the date the verdict was rendered or the report or decision was made to the date of entry of final judgment." The calculation of prejudgment interest in an action to recover damages for personal injuries is thus simple when the plaintiff's judgment is the result of a single jury verdict. The plaintiff is entitled to interest from the date of the verdict (see Rohring v City of Niagara Falls, 84 NY2d 60, 69; Sawtelle v Southside Hosp., 305 AD2d 659). Where the plaintiff's case is established other than by a jury verdict, however, or where a bifurcated trial results in two verdicts, the application of the statute is less clear.

 

It was in addressing this latter problem that the Court of Appeals defined the critical point at which prejudgment interest commences as the date on which "the plaintiff's right to be compensated for the damages he or she sustained becomes fixed in law" (Love v State of New York, 78 NY2d 540, 544). Thus, where the plaintiff prevails prior to trial, on the basis of the defendant's default in answering, for example, or on summary judgment, prejudgment interest will run from the date on which the plaintiff's motion for such relief was granted (see Diane v Ricale Taxi, Inc., 26 AD3d 232, 233; Lifshits v Variety Poly Bags, 18 AD3d 622, 624; Hayes v City of New York, 264 AD2d 610, 611; Sinn v Nationwide Mut. Ins. Co., 245 AD2d 1096). Where, by contrast, that right is not established prior to trial, and the trial is bifurcated, the holding of Love is that "the plaintiff's right to be compensated" becomes fixed, and interest thus commences to run, upon a favorable verdict on the issue of "liability."

 

In reaching this conclusion, the Court of Appeals had no occasion to consider whether the determination of liability that initiates the plaintiff's entitlement to prejudgment interest requires, in the context of the No-Fault Law, a finding that the plaintiff sustained a serious injury. The more recent decision of the Court of Appeals in Denio v State of New York (7 NY3d 159) does not fill this void. The issue in Denio was the rate at which prejudgment interest would accrue, not the date on which the plaintiff became entitled to recover interest. Although the effect of the Court of Appeals' determination was to affirm the imposition of prejudgment interest from the date of the "liability" verdict, which presumably means the date on which the defendant's negligence was established, that date was never an issue before the Court of Appeals. In fact, the parties stipulated to all aspects of the interest calculation other than the interest rate (see Denio v State of New York, supra at 163).

 

We, of course, are obligated to follow the holdings of the Court of Appeals. Our duty in that regard, however, extends only to issues necessarily decided by that Court (see Robinson Motor Xpress, Inc. v HSBC Bank, USA, 37 AD3d 117; Adirondack Trust Co. v Farone, 245 AD2d 840, 842; People v Bourne, 139 AD2d 210, 216; Monroe v City of New York, 67 AD2d 89, 103; cf. Art Masters Assoc. v United Parcel Serv., 77 NY2d 200, 208; Matter of Knight-Ridder Broadcasting v Greenberg, 70 NY2d 151, 160). Since the issue of the date on which the plaintiff's entitlement to interest commenced was not before the Court of Appeals in Denio, Denio is not authority with respect to that point.

 

The No-Fault Law altered the automobile liability dynamic dramatically. Prior to the adoption of the No-Fault Law, a plaintiff in an automobile liability action was treated no differently from a plaintiff in any other negligence case. After establishing the elements of a negligence claim, i.e., that the defendant owed a duty of care to the plaintiff, that the defendant breached that duty, and that the defendant's breach was a proximate cause of the plaintiff's injuries, the only burden remaining upon the plaintiff was to establish the amount of his or her damages (see Pfaffenbach v White Plains Express Corp., 17 NY2d 132). The No-Fault Law provides, however, that "there shall be no right of recovery for non-economic loss, except in the case of a serious injury, or for basic economic loss" (Insurance Law § 5104[a]). It thus interposes between the plaintiff and the entry of judgment the additional requirement of establishing serious injury. Without proof of serious injury, the plaintiff cannot recover (see Licari v Elliott, 57 NY2d 230; Star v Badillo, 225 AD2d 610, 611).

 

My colleagues read this statutory requirement as having little, if any, effect upon when "the plaintiff's right to be compensated for the damages he or she sustained becomes fixed in law" (Love v State of New York, supra at 544). As a result, they conclude that even in a no-fault case, the determination that the defendant was negligent marks the commencement of prejudgment interest, without regard to when the serious injury threshold is satisfied. This conclusion, however, misperceives the nature of the plaintiff's case under the No-Fault Law and is inconsistent with both the language of the statute and the manner in which the statute has been consistently interpreted.

 

The explicit language of the No-Fault Law is sufficient to resolve this debate. As noted, the statute provides that "there shall be no right of recovery for non-economic loss, except in the case of a serious injury, or for basic economic loss" (Insurance Law § 5104[a]). The statute thus, by its terms, abolishes the plaintiff's right of recovery; it does not merely limit the damages that the plaintiff may recover. If a plaintiff has no right of recovery without establishing serious injury, it is difficult to understand how "the plaintiff's right to be compensated for the damages he or she sustained becomes fixed in law" (Love v State of New York, supra at 544) until serious injury has been established.

 

Even if the statutory language in this regard can be considered ambiguous, however, any doubt as to the effect of the statute has been removed by the fact that from the statute's earliest days, the Court of Appeals has described it as a bar to liability, rather than as a limitation on damages. Just two years after the enactment of the No-Fault Law, the Court of Appeals upheld the statute's constitutionality against a due process challenge, holding that "the law now challenged provides more than an adequate substitute for the cause of action it abrogates" (Montgomery v Daniels, 38 NY2d 41, 58 [emphasis supplied]). In the same decision, the Court of Appeals held that the statute did not deprive plaintiffs of their constitutional right to a jury trial (see NY Const. art. I, § 2) because that constitutional guaranty applies only "if the plaintiff has a claim to assert" and the statute "properly abrogates the claim in part, [and] to that extent there remains nothing to which the right to trial by jury may attach" (Montgomery v Daniels, supra at 66-67 [emphasis supplied]). More recently, in Pommells v Perez (4 NY3d 566), the Court of Appeals described the effect of the statute as follows: "Only in the event of serious injury' as defined in the statute, can a person initiate suit against the car owner or driver for damages caused by the accident" (id. at 571 [emphasis supplied]).

 

In line with these repeated characterizations of the statute as depriving a plaintiff of a right to recover in the absence of proof of serious injury, the Court of Appeals has consistently treated the failure to establish serious injury as barring claims, not merely as limiting damages. Thus, in Licari v Elliott (supra at 230), the Court of Appeals held that in the absence of proof of serious injury, the No-Fault Law requires dismissal of the claim for failure to establish a prima facie case, thereby precluding submission of the matter to the jury. In reaching this conclusion, the Court found that "[t]acit in this legislative enactment is that any injury not falling within the new definition of serious injury is minor and a trial by jury is not permitted under the no-fault system" (Licari v Elliot, supra at 235) and that satisfaction of the serious injury threshold is necessary to "permit a plaintiff to maintain a common-law cause of action in tort" (Licari v Elliot, supra at 237 [emphasis supplied]). Following Licari, the Court of Appeals has held that the complaint is properly dismissed where the plaintiff fails to make out a prima facie case of serious injury (see Scheer v Koubek, 70 NY2d 678, 679) because the plaintiff "has not met the statutory threshold for maintaining this action" (Gaddy v Eyler, 79 NY2d 955, 957).

 

My colleagues in the majority ignore these decisions. Instead, they focus on the dichotomy between "liability" and "damages," concluding that because serious injury is tried in the damages phase of a bifurcated trial, the plaintiff's entitlement to interest, accruing upon "liability," has already been established. Such analysis, however, ignores the reasoning of Love in preference for its phraseology.

 

Outside the context of a no-fault case, it is entirely consistent to say that "the plaintiff's right to be compensated for the damages he or she sustained becomes fixed in law" (Love v State of New York, supra at 544) upon a jury verdict on common-law liability, as the Love court did. To read Love as holding that interest runs from the same point in a no-fault case simply because that determination is labeled "liability" and serious injury is tried with damages ignores the fact that under the clear language of the No-Fault Law and the consistent holdings of the Court of Appeals the failure to satisfy the no-fault threshold defeats not just the plaintiff's damages, but the plaintiff's claim.

 

The cases decided under the No-Fault Law draw a clear distinction between the usual elements of a plaintiff's negligence case — duty, breach, and proximate cause — and the serious injury threshold. Consistent with this distinction, we held in Pena v Castillo (306 AD2d 519), for example, that the granting of plaintiff's motion for summary judgment as to the negligence of the defendant did not preclude the defendant from subsequently moving for summary judgment dismissing the complaint for failure to establish serious injury (Pena v Castillo, supra at 520). Similarly, in Sheehan v Marshall (9 AD3d 403), we held that where summary judgment is properly granted on "liability," but the issue of serious injury is not raised, the issue remains for trial. That, of course, is what happened here. Most recently, in Abbas v Cole,AD3d [decided herewith]) we have held that where the plaintiff obtains a default judgment in a no-fault case without either pleading the facts that underlie the plaintiff's serious injury claim or establishing serious injury in the motion for the default judgment, the issue of serious injury must be addressed at the inquest. Along the same lines, we have recognized that a stipulation of "liability" does not necessarily include an admission that the plaintiff has suffered a serious injury (see Taylor v Dell Coffee Services, 306 AD2d 460). We, therefore, have dismissed a complaint when the plaintiff is prevented by an order of preclusion from establishing serious injury (see Rahman v MacDonald, 17 AD3d 438, 439).

 

Most telling, however, where the issue does reach the jury, but we find on appeal that the jury's verdict in favor of the plaintiff on the issue of serious injury cannot stand, we do not reduce the amount of the verdict to $0 but, rather, we dismiss the complaint (see Rodriguez v Virga, 24 AD3d 650, 651-652). The majority dismisses this point as a distinction without a difference on the basis of its theorem that the effect of the No-Fault Law is to reduce the damages of a plaintiff who cannot prove serious injury to $0. In such circumstances, the argument follows, the plaintiff who may have proved some damages, but not damages rising to the level of serious injury, is nonetheless nonsuited because of the reduction to zero, by operation of the No-Fault Law, of those damages that the plaintiff did prove. If this concept, which has never before been articulated, had been the basis for our decision in Rodriguez, however, presumably we would have said so. Instead, we simply dismissed the complaint as a matter of law for failure to prove serious injury. It is hard to see this as anything other than a reflection of our understanding, based upon the language of the No-Fault Law and the legion of cases construing it that have been discussed above, that the absence of serious injury does not merely affect the plaintiff's damages, but defeats the plaintiff's claim, and thereby precludes the plaintiff from establishing an entitlement to recovery that is "fixed in law," as the plaintiff must in order for prejudgment interest to commence.

 

This distinction drives the analysis with respect to the accrual of prejudgment interest. Where the plaintiff's action is subject to the No-Fault Law, the determination that the defendant has been negligent does not, in itself, establish the plaintiff's entitlement to recovery because the No-Fault Law additionally requires proof that the plaintiff suffers from a serious injury (see Licari v Elliott, supra; Star v Badillo, supra). As a result, the plaintiff's right to recover is not "fixed in law" on the date of the negligence determination, but, rather, on the date on which both negligence and serious injury are established. Thus, the plaintiff cannot be entitled to prejudgment interest under Love until the latter date.

 

Our holdings in Perez v State of New York (215 AD2d 740) and Zecca v Riccardelli (293 AD2d 31) do not compel a contrary result. To begin with, as noted above, the characterization of the serious injury determination as being one of "liability" or "damages" does not resolve the issue. The issue is not cast by Love in those terms. Rather, "what is dispositive on this point is when the plaintiff's right to be compensated for the damages he or she sustained becomes fixed in law" (Love v State of New York, supra at 544). Neither Perez nor Zecca addresses that issue or even provides a guidepost for deciding it.

 

Perez held only that the trial court, having advised the claimant that no medical testimony would be permitted during the liability phase of the trial, erred in granting the State's motion to dismiss at the close of the claimant's case because of the plaintiff's failure to establish serious injury. To be sure, we noted that "[a]s a general principle, the liability phase of a bifurcated trial is not the proper juncture at which to adjudicate issues regarding the severity of injuries" and that "[i]ssues which pertain to the extent of the injuries suffered by a plaintiff, including whether a plaintiff suffered a serious injury . . . should generally be left for the damages phase of the trial" (Perez v State of New York, supra at 741-742). What these comments address, however, is the manner in which a no-fault trial is to be conducted. Absent from the analysis is any conclusion that serious injury is conceptually an element of damages, rather than liability, or that the plaintiff's entitlement to recovery can be "fixed in law" prior to the offer of such proof.

 

Zecca was a summary judgment case. The issue in Zecca was whether summary judgment in favor of the plaintiff on the issue of "liability" necessarily included summary judgment in the plaintiff's favor as to serious injury. Rejecting what was then the position of our colleagues in the First Department (see Maldonado v DePalo, 277 AD2d 21), we held that it did not (see Zecca v Riccardelli, supra at 34-35; see also Canfield v Beach, 305 AD2d 440, 442; Coumbes v Taylor, 298 AD2d 351, 352). Our conclusion rested, however, not on the argument that serious injury is an element of damages, but upon the process by which summary judgment motions are made, opposed, and addressed. Specifically, we found in Zecca that since the plaintiff had not raised the issue of serious injury in the moving papers, the plaintiff had not established his entitlement to judgment as a matter of law with respect to that issue, as the moving party is required to do in order to prevail on a motion for summary judgment (see Zecca v Riccardelli, supra at 35; see also Alvarez v Prospect Hosp., 68 NY2d 320, 324; Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853). Solely as a result of that failure of proof, the issue of serious injury was not resolved on the summary judgment motion and, consequently, remained for trial.

 

Thus, neither Perez nor Zecca addresses, let alone establishes, that serious injury is an element of damages, rather than liability. In order to reach the conclusion that they do, and then to extrapolate that our court is "committed" by these decisions to finding that a no-fault plaintiff's entitlement to recovery is "fixed in law" before he or she offers any proof of serious injury, requires a reading of these cases that is beyond expansive. Stare decisis depends upon a careful exegesis of our decisions to determine what we have necessarily held in light of the issues required to be decided by the particular case. Such a reading of Perez and Zecca compels the conclusion that they are related tangentially , at best, to the issue that is before us here. To say, in the absence of any attempt to rebut this conclusion, that the refusal to read these cases otherwise is a violation of our stare decisis obligation, is simply incorrect. It is no offense to our stare decisis obligation, therefore, to disregard Perez and Zecca in reaching, on the basis of the analysis that has been set forth, the same conclusion as our colleagues in the Fourth Department, that prejudgment interest in a no-fault case does not commence until serious injury is established (see Ruzycki v Baker, 301 AD2d 48, 51; Manzano v O'Neil, 298 AD2d 829).

 

The conclusion that a no-fault plaintiff has not established that his or her right to recover is "fixed in law," and consequently is not entitled to prejudgment interest, until he or she has satisfied the serious injury threshold does not, of course, prevent a plaintiff from recovering interest prior to the damages verdict. A plaintiff in a no-fault case can establish serious injury prior to trial in the same manner as any other element of his of her case. If the defendant fails to appear or answer, the plaintiff is entitled to a default judgment (see CPLR 3215[a]). Where the issue of serious injury has been resolved by the motion for a default judgment, the plaintiff need only establish the amount of damages at the inquest (see Abbas v Cole, supra; Beresford v Waheed, 302 AD2d 342). Where the defendant does answer, the plaintiff may nevertheless establish serious injury without a trial by moving for partial summary judgment on the issue (see CPLR 3212[e]; Hillman v Eick, 8 AD3d 989; Mustello v Szczepanski, 245 AD2d 553). However, when the plaintiff establishes the elements of negligence plus serious injury, it is then that his or her entitlement to recovery "becomes fixed in law" and, under Love, prejudgment interest begins to run.

 

I do not see the existence of issues with respect to the seat-belt defense or proximate cause as requiring a different result. The seat-belt defense (see Vehicle and Traffic Law § 1229-c[8]) is, by its terms, only an issue of damages (see Spier v Barker, 35 NY2d 444, 450; Stein v Penatello, 185 AD2d 976). It is, therefore, irrelevant to the plaintiff's proof of serious injury and, consequently, to the date on which "the plaintiff's right to be compensated for the damages he or she sustained becomes fixed in law" (Love v State of New York, supra at 544). Although proof that the defendant's conduct is the proximate cause of the plaintiff's injuries is, by contrast, a necessary element of the plaintiff's case, there is no authority that I have been able to locate, and none is cited by my colleagues, to establish that a plaintiff is entitled to recover prejudgment interest before establishing that element. Indeed, even the conclusion to which my colleagues ascribe would not allow a plaintiff to recover prejudgment interest without such proof, since proximate cause is a necessary element of common-law liability (see Martin v Herzog, 228 NY 164, 170).

 

The contention that no-fault plaintiffs will be treated differently than other personal injury plaintiffs if they are not entitled to prejudgment interest upon establishing the defendant's common-law liability also provides no cogent reason, in my view, to depart from the rule established in Love. The distinction with respect to the elements necessary to fix a defendant's obligation to pay damages was drawn by the Legislature when it enacted the No-Fault Law. The conclusion that prejudgment interest does not accrue until serious injury is established follows directly from the application of the rule established in Love to that distinction. We are not at liberty to disregard it (see Patrolmen's Benevolent Assn. of City of N.Y. v City of N.Y., 41 NY2d 205; Bender v Jamaica Hosp., 40 NY2d 560; New Amsterdam Cas. Co. v Stecker, 3 NY2d 1; Metzer v Koenigsberg, 302 NY 523), even if no-fault plaintiffs will be treated differently as a result.

 

Moreover, I am not persuaded that no-fault plaintiffs in a jurisdiction such as ours, where bifurcation is the rule in negligence cases (see Martinez v Town of Babylon, 191 AD2d 483, 484; CPLR 603; 22 NYCRR 202.42), suffer unfairly when compared to similarly-situated no-fault plaintiffs in jurisdictions that prefer unified trials. Even in this Department, not all no-fault trials will be bifurcated, since unified trials remain appropriate where the nature of the injuries has "an important bearing" on the issue of liability (see 22 NYCRR 202.42[a]; Pasquaretto v Cohen, 37 AD3d 440, lv deniedNY3d [June 27, 2007]). Even when the trial is bifurcated, the damages phase will generally proceed immediately after the liability verdict, before the same judge and jury (see 22 NYCRR 202.42[e]). As a result, any delay in the accrual of prejudgment interest resulting from the need to prove serious injury will be minimal. Bifurcation, moreover, often provides benefits to plaintiffs that are unavailable where unified trials are the rule, such as being able to establish liability, and thereby greatly enhance one's settlement posture, without expending the funds necessary to provide expert medical testimony.

 

In any event, the issue here is not the date on which it is fair for a plaintiff's prejudgment interest to commence in a no-fault case. The issue is what that date is in accordance with the undisputed legal standard. That standard defines prejudgment interest as running from the date on which "the plaintiff's right to be compensated for the damages he or she sustained becomes fixed in law" (Love v State of New York, supra at 544). Here, my colleagues in the majority would hold that standard to have been met on the date summary judgment was awarded to the plaintiff, despite the fact that the plaintiff had not yet introduced any evidence demonstrating that she had suffered a serious injury. Since, in the absence of such proof, the plaintiff could not prevail, her entitlement to recover cannot have "become fixed in law" at that time and, under Love, prejudgment interest was not then available to her. The second amended judgment should therefore be affirmed.

 

ORDERED that the second amended judgment entered December 23, 2005, is reversed, on the law, with costs, the defendants' motion to modify the date of accrual of interest is denied, and the amended judgment entered June 21, 2005, is reinstated.

ENTER:

James Edward Pelzer

Clerk of the Court

Footnotes

Footnote 1: The order to show cause invoked CPLR 5015, which authorizes a court to relieve a party of a judgment on the ground of excusable default, in this case the default being the Froehlichs' failure to object to the amended judgment prior to its settlement. The order to show cause also invoked CPLR 5019, which authorizes the court to cure mistakes, defects, or irregularities that appear in judgments. While Van Nostrand opposed the order to show cause on the ground, inter alia, that the Froehlichs did not establish an excusable default and merit in the settlement of the amended judgment, these issues are outside the scope of the instant appeal.

Footnote 2:One narrow exception recognized by this court exists when a defendant opposes a default motion and fails to include the serious injury threshold among the meritorious defenses discussed (see Beresford v Waheed, 302 AD2d 342, 343). The holding of Beresford is consistent with this court's reasoning (id.).

Footnote 3:The case of Manzano v O'Neil should be familiar to personal injury practitioners. It was one of the three serious injury actions examined by the Court of Appeals for other legal propositions in the often-cited Toure v Avis Rent A Car Systems (98 NY2d 345).

 

 Antinello v. Young Men’s Christian Association

Lustig & Brown, L.L.P., Buffalo (Randolph E.
Sarnacki of counsel), for third-party defendant-appellant.
Maynard, O'Connor, Smith & Catalinotto, L.L.P.,
Albany (Michael T. Snyder of counsel), for defendant and third-
party plaintiff-respondent.

MEMORANDUM AND ORDER


Carpinello, J.

Appeal from that part of an order of the Supreme Court (Nolan Jr., J.), entered October 23, 2006 in Warren County, which partially granted third-party plaintiff's motion for summary judgment on the third-party complaint.

Plaintiff allegedly fell off a ladder in the course of his employment with third-party defendant, Priority Electrical Design & Construction, LLC, which was a subcontractor on a commercial renovation project pursuant to an agreement with defendant Bast Hatfield, Inc., the general contractor. He thereafter commenced this action against the property owner and Bast, which prompted this third-party action against Priority. The subcontract at issue required Priority to indemnify Bast for losses and claims arising out of its electrical work and to procure insurance naming Bast as an additional insured. It is undisputed that Priority failed to comply with its obligation to procure such insurance.

In prosecuting the third-party action, Bast moved to strike Priority's answer for alleged noncompliance with discovery and, alternatively, for summary judgment on those claims premised on contractual indemnity and Priority's failure to provide insurance coverage. Finding insufficient proof that Priority engaged in willful or contumacious conduct, Supreme Court denied Bast's motion to strike the answer. The court also denied summary judgment directing contractual indemnification on the ground that Bast failed to tender proof at this juncture establishing its right to such relief. The court did, however, grant summary judgment on those causes of action alleging Priority's breach of its contractual obligation to provide insurance. Priority now appeals.

Priority argues that its liability to Bast for violating its contractual requirement to obtain insurance is limited to out-of-pocket expenses. We agree. Supreme Court's statement that the breach of insurance procurement agreement renders "the promisor liable for all resulting damages including the promisee's liability to plaintiff and the costs incurred in defense" (emphasis added) is contrary to precedent applicable to the particular facts of this case. Where, as here, a promisee has general liability coverage (compare Kinney v Lisk Co., 76 NY2d 215, 217 [1990]), any damages arising out of an agreement to procure insurance are limited to out-of-pocket expenses (see Inchaustegui v 666 5th Ave. Ltd. Partnership, 96 NY2d 111, 114 [2001]; Kwoksze Wong v New York Times Co., 297 AD2d 544, 547-548 [2002]; Amato v Rock-McGraw, Inc., 297 AD2d 217, 219 [2002]; Sheppard v Blitman/Atlas Bldg. Corp., 288 AD2d 33, 35 [2001]; Carnegie Hall Corp. v City Univ. of N.Y., 286 AD2d 214, 216-217 [2001]; see generally Taylor v Gannett Co., 303 AD2d 397, 399 [2003]; Lerer v City of New York, 301 AD2d 577, 578 [2003]; Taylor v Doral Inn, 293 AD2d 524, 525 [2002]; Trokie v York Preparatory School, 284 AD2d 129, 130 [2001]; but see Moll v Wegmans Food Mkts., 300 AD2d 1041, 1042 [2002]).

Notably, Bast does not address the application of Inchaustegui v 666 5th Ave. Ltd. Partnership (supra) and its progeny to the precise facts of this case or dispute Priority's argument that any damages as a result of its failure to obtain insurance are limited. Rather, Bast avoids the issue by arguing that Priority's answer should have been stricken and that it should have been granted summary judgment on the issue of contractual indemnification. Having failed to file a cross appeal, Bast has waived the right to appellate review of these issues (see Hecht v City of New York, 60 NY2d 57, 61-62 [1983]; Buchta v Union-Endicott Cent. School Dist., 296 AD2d 688, 689 [2002]; Citicorp Mtg. v Rodelli, 249 AD2d 736, 738 [1998]; Weimer v City of Johnstown, 249 AD2d 608, 611 [1998], lv denied 92 NY2d 806 [1998]; Stiber v Cotrone, 132 AD2d 791, 793 [1987], lv dismissed 70 NY2d 796 [1987]; see also Millard v Alliance Laundry Sys., LLC, 28 AD3d 1145, 1148 [2006]). In any event, both contentions lack merit.

Mercure, J.P., Rose, Lahtinen and Kane, JJ., concur. ORDERED that the order is modified, on the law and the facts, without costs, by reversing so much thereof as failed to limit any potential damage award in favor of defendant Bast Hatfield, Inc. under the insurance procurement causes of action in the third-party complaint; and, as so modified, affirmed.

Automobile Coverage, Inc., v. American International Group, Inc.

Itamar J. Yeger, New Hempstead, for appellant.
Tyler, Cooper & Alcorn, LLP, New Haven, CT (Robert B.
Flynn of counsel), for respondents.

Judgment, Supreme Court, New York County (Bernard J. Fried,
J.), entered September 26, 2005, dismissing the complaint pursuant to an order, same court and Justice, entered September 19, 2005, which, in an action for, inter alia, breach of a general agency agreement, upon defendants' motion to dismiss the complaint for failure to state a cause of action, dismissed the amended complaint, unanimously reversed, on the law, without costs, the judgment vacated, and the cause of action for breach of contract regarding misappropriation of policy "expirations" reinstated, with leave to replead the various claims for commissions owed. Appeal from the aforesaid order unanimously dismissed, without costs, as subsumed in the appeal from the judgment.

Notwithstanding the inartfully pleaded first cause of action, the contract claim for misappropriation of policy "expirations" (see Richard T. Blake & Assoc. v Aetna Cas. & Sur. Co., 255 AD2d 569, 570 [1998]) should not have been dismissed, since the amended complaint sets forth the terms allegedly breached and defendants do not contend that any provision of the agreement negates such claim (cf. Goldsmith v Sopher & Co., 249 AD2d 232 [1998]). The first cause of action also contains a disorganized and confusing statement of claims for commissions allegedly owed, including claims for unpaid commissions during the 90-day period after plaintiff's receipt of defendants' notice of termination, override commissions owed pursuant to an addendum to the agreement, and commissions owed pursuant to Insurance Law § 3425(j). The motion court summarily dismissed the first cause of action for breach of contract without mentioning plaintiff's several, separate claims for commissions and whether they may still be viable despite termination of the parties' agreement. In any event, these claims are insufficiently pleaded (CPLR 3013), and plaintiff's submission in opposition to defendants' motion does not cure the defect. Accordingly, plaintiff is granted leave to amend its breach of contract cause of action solely as to the commissions' claims. The amended pleading should separately set forth each commission claim, including, but not limited to, the facts underlying each claim, the statute or contract provision on which each claim is based, the reason why each claim is viable despite the termination of the parties' agreement, and the amount sought on each claim.

However, plaintiff's remaining allegations for breach of contract are conclusory and belied by unambiguous language in the agreement providing for termination at will. That language negates any argument that defendants were required to give plaintiff a reason for the termination (see Shapiro v Prudential Ins. Co. of Am., 81 AD2d 661, 662 [1981]). There is no merit to plaintiff's contention that the termination notice was ambiguous, and therefore ineffective, in that it requested plaintiff to continue to perform its duties under the agreement until the transition was completed; such finalization of arrangements cannot be construed as a condition precedent to the effectiveness of the termination (see Oppenheimer & Co. v Oppenheim, Appel, Dixon & Co., 86 NY2d 685, 691 [1995]; cf. Zuckerwise v Sorceron Inc., 289 AD2d 114, 114-115 [2001]). Nor is there merit to plaintiff's contention that the termination, if effective, was nullified by subsequent breaches of the agreement during the 90-day period after receipt of the notice of termination. While those alleged subsequent breaches may provide a basis for separate contract claims, they could not rescind or nullify a termination at will (compare Tibbetts Contr. Corp. v O & E Contr. Co., 15 NY2d 324 [1965] [repudiation of agreement nullified by subsequent acceptance of benefits evincing an intent to revive agreement]).

The conversion cause of action, although properly setting forth the elements of that tort (see Colavito v New York Organ Donor Network, Inc., 8 NY3d 43, 49-50 [2006]), was properly dismissed as merely seeking damages for breach of contract (see Richbell Info. Servs. v Jupiter Partners, 309 AD2d 288, 306 [2003]). The Connecticut Franchise Act is not implicated in view of the New York choice-of-law clause and the fact that the agreement expressly governed business activities in New York only. We have considered plaintiff's causes of action for tortious interference with contract and prospective business relations, unjust enrichment, an accounting and breach of General Business Law § 349, and find that they do not state a cause of action. Leave to replead was otherwise properly denied for failure to submit a copy of the proposed pleading or demonstrate how it would cure the fatal deficiencies of the existing one (see Seven Seventeen Corp. v JP Morgan Chase & Co., 32 AD3d 802 [2006]).

St. Vincent's Hospital & Medical Center v. Nationwide Mutual Insurance Company

Joseph Henig, P.C., Bellmore, N.Y., for appellants.
Epstein, Rayhill, & Frankini, Woodbury, N.Y. (James Frankini
of counsel), for respondent.

 

DECISION & ORDER

In an action pursuant to Insurance Law 5106 (a) to recover no-fault benefits allegedly due under insurance contracts issued by the defendant, the plaintiffs appeal from so much of an order of the Supreme Court, Nassau County (Covello, J.), dated May 23, 2005, as denied that branch of their motion which was for summary judgment in favor of the plaintiff St. Vincent's Hospital & Medical Center on the first cause of action.

ORDERED that the order is affirmed insofar as appealed from, with one bill of costs.

The first cause of action allegedly arose out of an automobile accident on November 24, 2002, in which Rizero Delmonico (hereinafter Delmonico), the assignor of the plaintiff St. Vincent's Hospital & Medical Center (hereinafter St. Vincent's), was injured. From December 4, 2003, through December 16, 2003, St. Vincent's allegedly provided medical services to Delmonico relating to the injuries sustained in the accident. At the time of the accident, the defendant, Nationwide Mutual Insurance Company, insured Delmonico under an automobile policy which contained a New York State no-fault endorsement.

On March 5, 2004, St. Vincent's, as Delmonico's assignee, sent by certified mail to the defendant, inter alia, a hospital facility form (NYS Form N-F 5) for payment of its hospital bill in the principal sum of $42,486.21. The N-F 5 form was received by the defendant on March 8, [*2]2004. In the first cause of action, as is relevant here, St. Vincent's sought to recover the sum of $42,486.21. The plaintiffs moved for summary judgment thereon arguing that the defendant failed to provide to St. Vincent's a denial of claim form (NYS Form N-F 10) within 30 days as required by Insurance Law 5106 (a) and 11 NYCRR former 65.15(g). In opposition to St. Vincent's prima facie demonstration of entitlement to judgment as a matter of law on the first cause of action, the defendant submitted, inter alia, a copy of the N-F 10 form mailed on March 22, 2004, which stated that the denial was based upon the results of an "Independent Medical Exam" (hereinafter IME) but which did not annex a copy of the IME report or otherwise explain the basis for the denial.

The Supreme Court correctly denied that branch of the motion which was for summary judgment in favor of St. Vincent's on the first cause of action. The Supreme Court correctly concluded that the defendant issued a timely denial of claim on the prescribed N-F 10 form (see Insurance Law § 5106[a]; 11 NYCRR former 65.15[g][3]; 11 NYCRR 65-3.4[c][11]; cf., New York Presbyt. Hosp. v AIU Ins. Co., 20 AD3d 515; Bonetti v Integon Natl. Ins. Co., 269 AD2d 413), and, accordingly, raised a triable issue of fact on the first cause of action (see Dandrea v Hertz, 23 AD3d 332).

We decline to consider the issue of the adequacy of the defendant's denial of claim, and specifically, St. Vincent's argument that the N-F 10 form failed to adequately set forth the reason that the no-fault claim was denied. St. Vincent's raised this issue for the first time in its reply papers, and there is no evidence that the defendant had an opportunity to submit a sur-reply (see Guarneri v St. John, 18 AD3d 813; Matter of Hayden v County of Nassau, 16 AD3d 415).