EUO Declaratory Judgment

Nationwide Affinity Ins. Co. of Am. v George, 2020 NY Slip Op 02801 (2d Dept. 2020)

I think you have to read the docket here to understand what happened. It appears the mailing issues involved completion or lack of completion of apartment numbers. The record appears to show that various documents were with and without apartment numbers. The court thus was not going to disturb Supreme Court’s findings on the issues. The proof of no-show was based upon bust statements.

What was interesting is the mutual rescheduling issue. I could not find anything in the record supporting a mutual rescheduling of the first EUO. The Second EUO issue is interested. Defendant presented a bust statement where attorney Diamond was present and never mentioned his client’s were running late. Then, after this litigation was commended, Diamond presented an affirmation that his clients were running late.

The Court properly found an issue of fact was not raised. Had the carrier relief on affidavits (as opposed to bust statements), I think the outcome would differ. This has to be the first time I can state bust statements really made the difference.

Finally, the Court granted judgment despite four bills not being paid or denied – the basis for the disclaimer (besides EUO no show) that the bills were untimely submitted.

I suspect the Court did not like the provider’s hype-technical arguments that, on balance, had minimal record support and opened the Unitrin door, whether inadvertantly or otherwise. Tough loss for the provider, but these things do happen

The Master Cheng

“Reliance by the Civil Court and defendant upon the part of the Supreme Court’s amended declaratory judgment stating that all judgments in any actions involving plaintiff herein, Master Cheng Acupuncture, P.C., as assignee of Defou, McKenzie and Jacques “are vacated” is misplaced, as “in general, relief from a judgment may only be sought from the court which rendered it” (Chestnut Hill Real Estate v Contractors Cas. & Sur. Co., 280 AD2d 446, 446 [2001]; Bronx Med. Diagnostic, P.C. v Global Liberty Ins. of NY, 65 Misc 3d 149[A], 2019 NY Slip Op 51842[U], *2 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2019]; see Campbell v Bank of Am., N.A., 155 AD3d 820 [2017]; Commissioner of Labor of State of NY v Hinman, 103 AD2d 886 [1984]). As the Supreme Court lacked the authority to vacate the judgment which had been rendered by the Civil Court in the instant action (see Campbell, 155 AD3d 820; Chestnut Hill Real Estate, 280 AD2d 446; Commissioner of Labor of State of NY, 103 AD2d 886; Bronx Med. Diagnostic, P.C., 65 Misc 3d 149[A], 2019 NY Slip Op 51842[U]), the Civil Court erred in finding that it was constrained by the Supreme Court’s judgment to grant the branch of defendant’s motion seeking to vacate so much of the September 6, 2016 judgment as was in favor of plaintiff as assignee of Jocelyn Defou, Ebenior Jacques and Thahina McKenzie. Consequently, that part of the judgment should not have been vacated”

“We note that the amended declaratory judgment permanently stayed enforcement of so much of the September 6, 2016 judgment as was in favor of plaintiff as assignee of Defou, Jacques and McKenzie.”

What did we learn here? A Supreme Court cannot vacate another court’s judgment, but can permanently stay its enforcement.

DJ following a default

Actual Chiropractic, P.C. v Global Liberty Ins. Co. of N.Y., 2020 NY Slip Op 50185(U)(App. Term 2d Dept. 2020)

“On the instant appeal, defendant has annexed to its brief an order of the Supreme Court, Bronx County, entered February 9, 2018, which held, among other things, that all civil lawsuits, judgments and other proceedings “that have been brought or may be brought by . . . Actual [*2]Chiropractic, P.C.” seeking no-fault benefits under the same claim number and regarding the same assignor and motor vehicle accident as in the case at bar are permanently stayed. As a court may take judicial notice “on appeal, of reliable documents, the existence and accuracy of which are not disputed” and, generally, “of matters of public record” (Brandes Meat Corp. v Cromer, 146 AD2d 666, 667 [1989]; see Headley v New York City Tr. Auth., 100 AD3d 700 [2012]), this court, in the interest of judicial economy, takes judicial notice of the Supreme Court’s order entered February 9, 2018, which permanently “stays” the parties from proceeding further in the action at bar.

In light of the stay issued by the Supreme Court, this appeal has “been rendered academic as any determination on [this] appeal[ ] would not, under the facts of this case, have a direct effect upon the parties” (Matter of Claudia G. [Ermelio G.], 71 AD3d 894, 895 [2010]).”

Mr. Ss is at it again

SS Med. Care, P.C. v 21st Century Ins. Co., 2019 NY Slip Op 51267(U)(App. Term 2d Dept. 2019)

To me, the Supreme Court judgment needed to permanently stay all arbitrations and litigation. That end result would invariably run around the 5015(a)(1) analysis and the definition of a judgment. Further appeals will test this paradigm. The lesson here, I think, is for the attorneys to settle or re-settle better Supreme Court judgments.

(1) ” By order entered May 6, 2015, the Supreme Court granted a motion by 21st Century for summary judgment in the declaratory judgment action, finding that the insurer had established, prima facie, that it possessed a founded belief that the collision at issue was intentional and, thus, not covered by the insurance policy in question, and that the provider and its assignor had failed to raise a triable issue of fact. On February 4, 2016, a declaratory judgment was entered in the Supreme Court pursuant to the May 6, 2015 order.”

(2) “We note that, by its order entered on August 16, 2011, the Civil Court rendered its determination to grant SS Medical’s motion for summary judgment, thus, completing the court’s judicial function (see Vogel v Edwards, 283 NY 118 [1940]). Thereafter, and prior to the issuance of the Supreme Court’s temporary stay of pending and future lawsuits against 21st Century, plaintiff applied in the Civil Court for the entry of a judgment pursuant to the August 16, 2011 order. As the order had resolved the motion, the entry of the judgment in the Civil Court on February 2, 2012, pursuant the August 16, 2011 order, was simply a ministerial act of the clerk (see e.g. Aetna Cas. & Sur. Co. v Whitestone Gen. Hosp., 142 Misc 2d 67 [Sup Ct, NY County 1988]).”

Can’t backdoor the Master award through a DJ

Hereford Ins. Co. v Iconic Wellness Surgical Servs., LLC, 2019 NY Slip Op 50801(U)(App. Term 1st Dept. 2019)

“Civil Court erred in vacating the master arbitrator’s no-fault award on the ground that it is contrary to a subsequent order rendered by the Supreme Court, New York County, which declared that petitioner-insurer is not liable for no-fault benefits arising from the underlying automobile accident. While the preclusive effect of a pre-arbitration judicial decision may be sufficient to vacate an arbitral award (see Matter of Tokio Mar. & Fire Ins. Co. v Allstate Ins. Co., 8 AD3d 492 [2004]), a post-arbitration judicial determination concerning the insurer’s liability is not one of the limited grounds for vacating an arbitration award (see Matter of Hirsch Constr. Corp. [Cooper], 181 AD2d 52 [1992], lv denied 81 NY2d 701 [1992]). Indeed, if a motion to vacate an arbitration award on this ground could be entertained, “the arbitration award would be the beginning rather than the end of the controversy and the protracted litigation which arbitration is meant to avoid would be invited” (Matter of Mole [Queen Ins. Co. of Am.], 14 AD2d 1, 3 [1961]).”

“We have considered petitioner Hereford’s alternative grounds for vacating the award and find them unavailing. The master arbitrator’s affirmance of the lower arbitration award was not irrational (see Matter of Petrofsky [Allstate Ins. Co.], 54 NY2d 207, 211 [1981]), nor did it ignore controlling law (see Matter of Global Liberty Ins. Co. v ISurply, LLC, 163 AD3d 418 [2018]).”

I think the smarter approach would have been to consolidate the DJ action with the Article 75 action (COA #1 DJ; COA #2 Art 75) and to move by Notice of Petition. This assumes the the DJ had merit and was not one to force a default in an attempt to create unfounded res judicata.

You know DFS does NOT approve of this disclaimer

Hereford Ins. Co. v Forest Hills Med., P.C., 2019 NY Slip Op 03926 (1st Dept. 2019)

” Moreover, movant defendants failed to demonstrate a meritorious defense. The failure by the occupants of the vehicle to subscribe and return the transcripts of their examinations under oath violated a condition precedent to coverage and warranted denial of the claims (see Hertz Vehs., LLC v Gejo, LLC, 161 AD3d 549[1st Dept 2018]). “

I really find this basis to disclaim coverage disingenuous. The EIP came to the EUO, told his or her story, lied or did not lie. We go from there. I cannot fathom how the failure to return an EUO transcript – which is a sworn to document and which may be used against the deponent or the assignee as a matter of course – warrants the loss of no-fault benefits.

I am quite sure that DFS did not put the “and subscribe the same” (11 NYCRR 65-1.1[b]) language in the regulations to authorize the voiding of coverage due to the failure to sign the transcript. I also suspect this case will spur either an emergency amendment from DFS or an opinion letter. Thankfully, this appeared in the context of a motion to vacate a default, which means the Court of Appeals will not touch this matter, i.e., the failure to establish a reasonable excuse is reviewed under an abuse of discretion standard that will not be upset on appeal.

I think this basis for a disclaimer is the colloquial playing with fire.

Nationwide took an ax to Unitrin

Nationwide Affinity Ins. Co. of Am. v Jamaica Wellness Med., P.C., 2018 NY Slip Op 07850 (4th Dept. 2018)

(1) “We conclude that a defense premised upon nonappearance at an EUO is “more like a normal’ exception from coverage (e.g., a policy exclusion)” than one involving “a lack of coverage in the first instance (i.e., a defense implicat[ing] a coverage matter’)” (Fair Price Med. Supply Corp., 10 NY3d at 565; see also Hospital for Joint Diseases, 9 NY3d at 319-320; Presbyterian Hosp. in City of N.Y., 90 NY2d at 281-286; see generally Central Gen. Hosp., 90 NY2d at 199). Unlike defenses where preclusion thereof would result in coverage where it never existed, such as those premised upon the lack of a contract with the person claiming coverage or for the vehicle involved in the accident, the termination of the contract prior to the accident, or the cause of the purported injuries being something other than a vehicular accident (see Hospital for Joint Diseases, 9 NY3d at 319; Central Gen. Hosp., 90 NY2d at 200; Zappone v Home Ins. Co., 55 NY2d 131, 136-138 [1982]), the EUO nonappearance defense allows the insurer to avoid liability for the payment of no-fault benefits where the insured or assignee has breached a condition in an existing policy providing coverage”

(2) “We further agree with defendant that, contrary to the court’s determination and Nationwide’s contention, our holding in Interboro Ins. Co. v Tahir (129 AD3d 1687 [4th Dept 2015]) is not controlling. The no-coverage exception to the preclusion remedy was not at issue and the insurer disclaimed coverage in that case; thus, it is factually distinguishable and legally unpersuasive inasmuch as the broad language regarding vitiation of the contract for failure to comply with a condition precedent was not central to the holding and did not account for the conceptual differences between types of conditions precedent (see id. at 1688).”

What saddens ms it that Tahir was my case.  It is also remarkable that the Court did not examine NYP v. C-Wide.  I also am upset that nobody sought to really delve into the policy language itself, and to contrast it with the notion of a condition precedent in other contexts.

The issue is one step closer to Court of Appeals scrutiny.

https://ad4.nycourts.gov/go/live/channel.asp?id={F23F2521-D06B-4824-8ADD-F51A30AD02B8}

Oral Argument Start time: 27:20

Where was the reasonable excuse?

Two cases, differing fact patterns and no showing at all of a reasonable excuse.

Right Solution Med. Supply, Inc. v Republic W. Ins. Co., 2018 NY Slip Op 51125(U)(App. Term 2d Dept. 2018)

“In support of its motion, defendant submitted an affidavit by plaintiff’s assignor in which plaintiff’s assignor admitted that the December 21, 2009 accident underlying this no-fault proceeding had been staged, and an order dated April 26, 2013, from the Supreme Court, New York County, in a declaratory judgment action, entered on default, finding that defendant herein had no duty to pay any no-fault benefits to plaintiff herein and its assignor, among others, with respect to this accident. The Civil Court denied defendant’s motion, finding that defendant had failed to establish a reasonable excuse for its failure to proceed at trial.

Defendant’s motion should have been granted, as defendant demonstrated both a reasonable excuse for its failure to proceed at trial and a meritorious defense (see CPLR 5015 [a] [1]; Eugene Di Lorenzo, Inc. v A.C. Dutton Lbr. Co., 67 NY2d 138, 141 [1986]).”

Clearly, the affidavit of the Assignor was powerful tool in opening the default. I wish the Court was more honest and opened the default upon the residual inherent good cause and interest of justice discretion all trial courts and appellate courts have.  That would have been a more honest and better decision.

Allstate Ins. Co. v North Shore Univ. Hosp., 2018 NY Slip Op 05268 (2d Dept. 2018)

(1) “On January 29, 2015, the plaintiff commenced this action pursuant to Insurance Law [*2]§ 5106(c) for a de novo determination of the defendant’s claims for recovery of no-fault benefits. The plaintiff then moved for leave to enter a default judgment because the defendant failed to timely appear or answer the complaint. In an order entered April 21, 2015, the Supreme Court granted the plaintiff’s motion for leave to enter a default judgment. On June 8, 2015, the court entered a default judgment.

In July 2016, the defendant moved pursuant to CPLR 5015(a)(1) to vacate its default, and pursuant to CPLR 2004 and 3012(d) to extend its time to answer the complaint. In an order entered October 19, 2016, the Supreme Court denied the motion, and the defendant appeals”

(2) In July 2016, the defendant moved pursuant to CPLR 5015(a)(1) to vacate its default, and pursuant to CPLR 2004 and 3012(d) to extend its time to answer the complaint. In an order entered October 19, 2016, the Supreme Court denied the motion, and the defendant appeals.

The defendant’s motion was timely made (see CPLR 5015[a][1]; 2103[b][2]). A defendant seeking to vacate a default pursuant to CPLR 5015(a)(1) on the ground of excusable default must demonstrate a reasonable excuse for the default and a potentially meritorious defense to the action (see CPLR 5015[a][1]; Eugene Di Lorenzo, Inc. v A.C. Dutton Lbr. Co., 67 NY2d 138, 141; EMC Mtge. Corp. v Toussaint, 136 AD3d 861, 862; Lane v Smith, 84 AD3d 746, 748). Here, the defendant demonstrated a reasonable excuse for its default and a potentially meritorious defense to the action

When I see 5015(a)(1) and 2103(b)(2) together, I am sensing that the one year period to vacate ran from when the order was mailed on arbitration counsel.  I just cannot tell from this decision, but it definitely opens up the door to vacturs of trial de novo defaults with the presentment of the right facts.

Dilemma and dogma

Hertz Vehicles, LLC v Best Touch PT, P.C.,2018 NY Slip Op 04854 (1st Dept. 2018)

(1) “Plaintiff failed to meet its burden of filing “proof of the facts constituting the claim” for a default declaratory judgment (CPLR 3215[f]) against the medical provider defendants, i.e., proof establishing that the notices of examination under oath (EUO) that it served on those defendants complied with the timeliness requirements of 11 NYCRR 65-3.5(b) (see Kemper Independence Ins. Co. v Adelaida Physical Therapy, P.C., 147 AD3d 437 [1st Dept 2017]; Natl. Liab. & Fire Ins. Co. v Tam Med. Supply Corp., 131 AD3d 851 [1st Dept 2015]). An insurer must request any “additional verification . . . to establish proof of claim” within 15 business days after receiving the “prescribed verification forms” it forwarded to the parties required to complete them (11 NYCRR 65-3.5[a], [b]). As none of the motion papers, including the affidavit by plaintiff’s claims adjuster, annexes or gives the dates of the prescribed verification forms or other proofs of claim submitted by the medical provider defendants, it is not possible to determine whether the EUO notices were sent to them within 15 business days of plaintiff’s receipt of the form”

What was interesting is in the last appeal of a lost DJ, the Court appeared to walk around 65-3.5 and 65-3.6 when the issue involved a default.  The rationale could be found in the dissent of Longevity and sub silentio set forth in the majority opinion in the same.  This case now applies the summary judgment standard to defaults.

(2) “Plaintiff’s argument on appeal that the providers’ bills are “prescribed verification forms” and its attempt to relate the deadlines applicable to one defendant’s EUO requests to another defendant’s submission of claims documentation or appearance for an EUO are unpreserved and, in any event, unsupported.”

Certain defense attorneys have tried to use the bootstrap method to establish timeliness.  I never bought it.

(3)  “The court erred in denying plaintiff’s motion for a default judgment against Bellevue on the ground that the motion did not contain any letter reflecting that Bellevue’s EUO transcript was sent to her for signature. The motion does contain such a letter, dated March 14, 2016, as well as a follow-up letter, dated April 20, 2016, and accompanying affidavits of service. As the [*2]failure to submit to an EUO and “subscribe the same” violates a condition precedent to coverage (see 11 NYCRR 65-2.4[c][2]), plaintiff provided adequate proof of its claims against Bellevue (see DTG Operations, Inc. v Park Radiology, P.C., 2011 NY Slip Op. 32467[U], *5-6 [Sup Ct, NY County 2011]”

This should worry anyone because I highly doubt that DFS (absent a Thrasher showing) ever advocated for a voiding of the policy due to the failure to sign a transcript.  I see a circular letter coming on this issue, similar to when DFS issued a circular letter to overturn Soundshore.

Mailing to the attorney

Global Liberty Ins. Co. v New Century Acupuncture, P.C., 2018 NY Slip Op 03444 (1st Dept. 2018)

“Plaintiff sent an initial IME scheduling letter, and a re-scheduling letter, to both Davis and her attorney. After Davis failed to appear for the re-scheduled IME, plaintiff sent a third letter to the attorney, which indicated on its face that a copy had been sent to Davis. However, it is undisputed that the letter to Davis was sent to the wrong address. Thus, there was no reason for the attorney to know that Davis had not received notice of the re-scheduled IME and to tell her of the new IME date and location. Under these circumstances, the motion court properly found that plaintiff failed to demonstrate that it provided adequate notice, reasonably calculated to apprise Davis that her appearance at an IME at a specified date and location was required”