Must a carrier demonstrate that a deponent willfully failed to attend EUO's in order to substantiate this defense? October 22, 2009

There has been a lot of activity on the Supreme Court front, in the realm of declaratory judgment actions, as to whether a insurance carrier must prove prima facie that the deponent willfully failed to attend an EUO (or IME) .  In the most recent case that came down Progressive Northeastern Ins. Co. v Arguelles Med. P.C., 2009 NY Slip Op 32353(U)(Sup. Ct. NY Co. 2009)(Friedman, J.), a declaration of non coverage was denied due to the failure of the carrier to make a threshold showing that the witness willfully failed to attend the EUOs.  See, Unitrin Advantage Ins. Co. v. Carothers, 17 Misc.3d 1121 (Sup. Ct. NY Co. 2008)(Diamond, J.).  See also, Brentwood Pain & Rehabilitation Services, P.C. v. Progressive Ins. Co. 2009 NY Slip Op 31181(u)(Sup. Ct. NY Co. 2009).

Certain cases not involving violations of the condition precedent portion of the no-fault endorsement hold that the carrier must meet the Thrasher “willful disvowal” standard in order to substantiate a no-fault non-cooperation defense.  Simmons v. State Farm, 16 AD3d 1117 (4th Dept. 2005); Park v. Long Island Ins. Co., 13 AD3d 506 (2d Dept. 2004). But see, Utica Mut. Ins. Co. v. Timms, 293 AD2d 669, 670 (2d Dept. 2002).

It follows, however, that the Thrasher standard would not involve the failure to comply with a portion of the policy that is delineated as a condition precedent to coverage.  See e.g., Stephen Fogel Psychological, P.C. v. Progressive Cas. Ins. Co., 35 AD3d 720 (2d Dept. 2006); Adams v. Allstate Ins. Co., 210 A.D.2d 319 (2d Dept. 1994); Inwood Hill Med., P.C. v General Assurance Co. , 10 Misc 3d 18 (App Term. 1st Dept 2005).

Thus, as to the EUO non-appearance defense, the failure to attend two properly scheduled EUO’s should support a prima facie defense against the compensability of no-fault benefits.  A.B. Medical Services, PLLC v. American Transit Ins. Co., 2009 N.Y. Slip Op. 52067(U)(App. Term 2d Dept. 2009).  A showing of willfulness is not required, and would would only apply if the deponent attended the EUO but was obstructing the examination.  Park, supra. A review of the law also discloses that a finding of reasonableness will generally be inferred from the proximity of the date of the EUO to the scheduling date and the location of the EUO in relation to where the Claimant resides or his attorney has an office.  Great Wall Acupuncture v. New York Cen. Mut. Ins. Co., 22 Misc.3d 136(A)(App. Term 2d Dept. 2009); Eagle Surgical Supply, Inc., v. Progressive Cas. Ins. Co., 21 Misc.3d 49 (App. Term 2d Dept. 2009)

In order to oppose an EUO no-show defense, the burden is on the Plaintiff to demonstrate a lack of reasonableness.  Factors to consider would be whether the EUO was at an odd time, or whether the EUO was scheduled to be held at a location distant from the deponent or his attorney’s office.  Other factors unique to a case may also militate against a finding of reasonableness.  The proof of lack of reasonableness will either rebut the presumption of reasonableness raising an issue of fact or prima facie demonstrate the lack of reasonableness of the EUO request. See, id.

Accordingly, the decision of Justice Friedman and others who believe that a carrier must demonstrate that the deponent willfully failed to appear for two properly scheduled EUOs is probably incorrect.

See Dave Gottlieb’s post at NFP on this for his insight.

The showdown we have been waiting for October 21, 2009

Andrew Carothers, M.D., P.C. v Geico Indemnity Company, 2009 NY Slip Op 85909(U)(2d Dept. 2009)

The Appellate Division, on October 15, 2009, granted Plaintiff Andrew Carothers, P.C., leave to appeal the adverse decision of the Appellate Term, Second Department, which reversed the order of the Civil Court, Kings County, and held that Plaintiff failed to establish its prima facie case at a plenary trial.

If you recall, the Carothers case, the following was stated:

“The witness testified that plaintiff’s no-fault claim forms were prepared by plaintiff and transmitted electronically to AHCS to be printed and mailed to defendant. He further testified that the remaining subject documents were forwarded by plaintiff to AHCS. Even assuming that the witness was familiar with plaintiff’s business practices and proceduresand that, as an employee of plaintiff’s billing company, the witness would be competent to testify about such practices and procedures he still failed to establish, by laying the requisite foundation that the documents were plaintiff’s business records and, therefore, admissible in court pursuant to the business records exception to the rule against hearsay.  Upon reconsideration of this court’s decision in Pine Hollow Med., P.C. v. Progressive Cas. Ins. Co., 13 Misc.3d 131(A), 2006 WL 2829824, 2006 N.Y. Slip Op. 51870(U) [App. Term, 2d & 11th Jud. Dists. 2006], we conclude that the law was misapplied to the facts presented in that case. Accordingly, to the extent that it is not in accord with this decision, it should no longer be followed.

In light of plaintiff’s failure to establish the admissibility of its evidence, including its claim forms, plaintiff did not establish a prima facie case Even under the standard set forth in Pine Hollow Med., P.C., 13 Misc.3d 131(A), 2006 N.Y. Slip Op. 51870(U), the witness’ testimony was not sufficient to lay the proper foundation for the records plaintiff sought to introduce into evidence because AHCS did not incorporate plaintiff’s records into its own records, but merely received, printed and mailed them. Accordingly, defendant was entitled to judgment dismissing the complaint.”  (internal citations omitted)

I believe that this case is going to spell the end of Dan Medical, which requires that a business record foundation (CPLR § 4518[a]) be laid for the entry of the bills into evidence in order to satisfy a provider’s prima facie.  For those who believe that Art of Healing Medicine, P.C. v. Travelers Home and Marine Ins. Co., 55 AD3d 644 (2d Dept. 2008)(upholding the business record foundation model to satisfy a prima facie case) is dispositive, I think one should evaluate New York Presb. Hosp. v. New York Cent. Mut. Fire Ins. Co., 31 AD3d 403 (2d Dept. 2006)(finding that a signed assignment of benefits is part of a prima facie case), and how the Appellate Division,immediately moved away from this model, eventually leading in the Court of Appeals holding that a signed assignment of benefits is nor part of a prima facie case. Hospital for Joint Diseases v. Travelers Prop. Cas. Co.,  NY3d 312 (2008)

May an expert support his testimony with a journal article or learned treatise on direct examination in explaining why his opinion represents the generally accepted practice in the relevant community? October 10, 2009

In federal practice and in the practice of most states that have codified their rules of evidence, the answer to this question is a resounding yes.  Historically, the answer to this question in New York, however, has been a “no”.  Over the last few years, the courts in New York have tackled this question, whether directly or indirectly, and have reached inconsistent decisions.  It is thus a mixed bag as to how a New York court would resolve this issue as you will see below.  I believe that there is one point of consensus on this issue:  an expert on direct examination may mention that a journal article or learned treatise conforms to his or her medical rationale.  Beyond this, the law is unsettled.

The Appellate Division, Second Department in the matter of Zito v. Zabarsky, 28 AD3d 42, 45 (2d Dept. 2006), observed that an expert on direct examination may utilize an authoritative  medical journal for its truth in concluding that the service or procedure was or was not generally accepted in the relevant medical community .  However, two years later, the Appellate Division, First Department came to a contrary ruling.  In Lenzini v. Kessler, 48 AD3d 220 (1st Dept. 2008), the Appellate Division, First Department, observed the following: “Although a scientific text is inadmissible as hearsay when offered for its truth or to establish a standard of care, it may be introduced to cross-examine an expert witness where it has been demonstrated that the work is the type of material commonly relied upon in the profession and has been deemed authoritative by such expert.”

But, in the recent matter of Brown v. Speaker, 2009 NY Slip Op 07156 (1st Dept. 2009), the Appellate Division, First Department, significantly backtracked from their holding in Lenzini.  The Brown Court made the following observation as to the propriety of accepting a medical journal or treatise for the truth of the matter asserted: “Defendants’ expert, testifying about the standard of care at the time of plaintiff’s surgery in 2000, was properly permitted to rely on articles from 1999-2000 journals that were well-respected and accepted by experts in the field.”

So where do we go from here?

Here I am October 7, 2009

I am sure that those of you who read my blog on a regular or semi-regular basis have figured out who I was by now.  Let me know what you all think of the new layout that wordpress offers.  It is really neat.

Lastly, I owe a giant debt of gratitude to my friend marc of, who not only is hosting this site, but has provided me with a significant amount of technical support.

The Fourth Department for the first time in a decade has discussed the issue of what constitues a prima facie case October 5, 2009

In the matter of Sunshine Imaging Association/wny Mri v Government Employees Ins. Co., 2009 NY Slip Op 06984 (4th Dept. 2009), the Appellate Division, Fourth Department finally chimed in as to what constitutes a prima facie case in a no-fault action.  The last time the Fourth Department discussed this issue, they held that a plaintiff, as part of its prima facie case, needed to prove that a service was medically necessary.  It looks like the Fourth Department has now joined the other Appellate Divisions, as to the elements of a prima facie case.

The Court held as follows: “Although plaintiff made a prima facie showing of entitlement to judgment as a matter of law by submitting evidence that the prescribed statutory billing forms were received by defendant and that defendant’s payment of no-fault benefits to plaintiff was overdue (see A.B. Med. Servs., PLLC v Liberty Mut. Ins. Co., 39 AD3d 779, 780; LMK Psychological Servs., P.C. v Liberty Mut. Ins. Co., 30 AD3d 727, 728), defendant raised a triable issue of fact by submitting its denial of claim forms setting forth that the services for which plaintiff sought to recover no-fault benefits were not medically necessary (see Countrywide Ins. Co. v 563 Grand Med., P.C., 50 AD3d 313, 314; A.B. Med. Servs., PLLC, 39 AD3d at 780-781).”

Finally, the Appellate Division, Fourth Department, in discussing whether severance of a joined claim was acceptable, stated the following: “Although this action was commenced “by a single assignee against a single insurer and all [causes of action] allege the erroneous nonpayment of no-fault benefits . . ., they arise from [14] different automobile accidents on various dates in which the [14] unrelated assignors suffered diverse injuries and required different medical treatment” (Poole v Allstate Ins. Co., 20 AD3d 518, 519).”

The Appellate Division, Fourth Department, at least as to severance, has followed the lead of the First and Second Departments, when it found that severance was appropriate in the above circumstance.  Notably, the Appellate Division, Fourth Department, has declined, in the severance arena, to follow Third Department precedent, which unconditionally permits the joinder of all claims against a common insurance carrier.

To those who practice in Buffalo on the Plaintiff’s side, you must be breathing a sigh of relief after reading this case.  Nobody can now ethically hold you to the Hobby v. CNA standard requiring a plaintiff to make a prima facie showing, in the first instance, that a service is medically necessary.