DJ went south

Unitrin Advantage Ins. Co. v All of NY, Inc., 2018 NY Slip Op 00810 (1st Dept. 2018)

In the approximately  10 years, since Unitrin brought the notion of the condition precedent DJ.  And now, 9 years later, it has almost been destroyed on a less than stellar record.  You should read the record and then look at the oral argument (nobody asked a question except to point certain documentation was missing and it continued with the apology that it was a long day).

Point I

“Although the failure of a person eligible for no-fault benefits to appear for a properly noticed EUO constitutes a breach of a condition precedent, vitiating coverage, Unitrin was still required to provide sufficient evidence to enable the court to determine whether the notices it served on Dr. Dowd for the EUOs satisfied to the timeliness requirements of 11 NYCRR 65—3.5(b) and 11 NYCRR 65—3.6(b) (see Kemper Independence Ins. Co. v Adelaida Physical Therapy, P.C., 147 AD3d 437, 438 [1st Dept 2017], citing Mapfre Ins. Co. of N.Y. v Manoo, 140 AD3d 468, 470 [1st Dept 2016]). The bills for the first and second dates of medical services, May 15, 2013, and May 22, 2013, were both received by Unitrin on June 17, 2013. In accordance with 11 NYCRR 65-3.5(b), Unitrin had 15 business days to request the EUO, or by July 1, 2013. Unitrin’s July 15, 2013 scheduling letter, even if properly mailed, was not timely as to either date of service.”

Two problems here.  First this was a provider EUO.   The record discloses, establishes and  discuss the fact that the patient EUO gave cause (allegedly) for the provider EUOs.  Yet, no discussion of that timeline was set forth in the motion (see Quality v. Utica – allowing the tolling of a provider EUO based upon a prior patient EUO).  I don’t get it.  the EUO process started before the received billing.  Had this been discussed, the 3.5(b) issue would be non-existent and I think the case would have been affirmed.

Also, did counsel discuss the one day off the back for each day between 15 business days and 30-calendar days?  I sense that discussion did not occur.

Point II

Now, a bad global denial is fatal? ” The second examination date, August 12, 2013, is not mentioned, and therefore did not sufficiently apprise the provider as to the reason for denial (see Nyack Hosp. v State Farm Mut. Auto. Ins. Co., 11 AD3d 664, 664-665 [2d Dept 2004]).”

It is like anything else – some cases need to settle.  This was one of them – watch the argument and you will see what I mean.  Luckily, Manoo settled or the First Department DJ as we know it would probably be dead.  That was a complete disaster in motion.

I think Defendant is entitled to attorney’s fees if the EIP was a driver or insured.

Many issues here will await another fully contested appeal.

 

 

 

 

EUO no-show: Declaratory Judgment substantiated

Hertz Vehs. LLC v Significant Care, PT, P.C., 2018 NY Slip Op 00456 (1st Dept. 2018)

The affidavit of the Hertz claims handler personally assigned to this claim, as corroborated by the NF-10 denial of claim form (Wausau Bus. Ins. Co. v 3280 Broadway Realty Co. LLC, 47 AD3d 549, 549 [1st Dept 2008]; see also American Tr. Ins. Co. v Longevity Med. Supply, Inc., 131 AD3d 841, 842 [1st Dept 2015]), stated that the date Pavlova’s bill was received by the insurer was July 18, 2014. Hertz therefore established its compliance with 11 NYCRR 65-3.5(b) by generating the first EUO scheduling letter within 15 days of receipt of the provider’s bill, and compliance with 11 NYCRR 65-3.6(b), by generating the second EUO scheduling letter less than 10 days after the first nonappearance on August 7, 2014.

Hertz also established proof of mailing because it included an affidavit of service, which was executed by the person who mailed the EUO notices and who attested that each was mailed by regular mail to the address provided on the claimant’s claim form, as well as to claimant’s attorney, in a “postpaid, properly addressed wrapper, in an official depository under the exclusive care and custody of the United States Postal Service within the State of New York” (see American Tr. Ins. Co. v Lucas, 111 AD3d 423, 424 [1st Dept 2013]; see also Deluca v Smith, 146 AD3d 732, 732 [1st Dept 2017]).

Pavlova’s argument, raised for the first time on appeal, that the second EUO nonappearance date was not a non-appearance because the claimant’s counsel was present, and because there was a statement on the record which not only acknowledged claimant’s nonappearance, but also agreed to reschedule the EUO, is unpreserved and unavailing.

There is no safety valve for a late follow-up

Acupuncture Healthcare Plaza I, P.C. v Allstate Ins. Co.,  2017 NY Slip Op 50939(U)(App. Term 2d Dept. 2018)

I think I failed to specifically comment on this case.  In light of Atlantic Radiology, we now have a difference of opinion between the courts.

“In the papers submitted in support of its motion, defendant admitted receiving plaintiff’s claim form. In an affirmation, defendant’s counsel established that an initial EUO scheduling letter had been timely mailed to plaintiff’s assignor (see Vincent’s Hosp. of Richmond v Government Empls. Ins. Co., 50 AD3d 1123, 857 N.Y.S.2d 211 [2008]; 11 NYCRR 65-3.5 [b]), but further demonstrated that the follow-up EUO scheduling letter had not been timely mailed (see 11 NYCRR 65-3.6 [b]).  Contrary to defendant’s contention, 11 NYCRR 65-3.8 [l] specifically states that it does not apply to follow-up requests for verification. As a result, because defendant’s follow-up EUO scheduling letter was untimely, the NF-10 denial of claim form which defendant eventually sent was untimely

No need to send letter to attorney

Recover Med. Servs., P.C. v Ameriprise Ins. Co.,  2017 NY Slip Op 51892(U)(App. Term 2d Dept. 2017)

Upon review of my blog, I failed to note this case.

With respect to the remaining three bills, there is no merit to plaintiff’s argument that, pursuant to 11 NYCRR 65-3.6 (b), defendant was required to send plaintiff’s attorney a delay letter upon sending the follow-up EUO scheduling letter to plaintiff. The requirement to send a delay letter arises only where the verification is sought from a person or entity other than the plaintiff (see Advantage Radiology, P.C. v Nationwide Mut. Ins. Co., 55 Misc 3d 91, 53 N.Y.S.3d 452 [App Term, 2d Dept, 9th & 10th Jud Dists 2017]; see also GNK Med. Supply, Inc. v Tri-State Consumer Ins. Co., 37 Misc 3d 138[A], 964 N.Y.S.2d 59, 2012 NY Slip Op 52195[U] [App Term, 1st Dept 2012]). Here, where defendant sought plaintiff’s EUO, there was no such requirement.”

This case is just an off shoot of Advantage Radiology.

Charley Deng called the wrong number

Charles Deng Acupuncture, P.C. v State Farm Mut. Auto. Ins. Co., 2017 NY Slip Op 51764(U)(App. Term 2d Dept. 2017)

“While plaintiff’s owner asserts that, upon receiving the EUO scheduling letters, he called defendant’s investigator and left a message asking to reschedule the EUOs, plaintiff nevertheless failed to raise a triable issue of fact, since the person plaintiff’s owner allegedly called was not the investigator identified in defendant’s EUO scheduling letter as the person to be called in case of any issue, and the phone number allegedly called was not the same as the phone number set forth in defendant’s EUO scheduling letter.”

Had the affidavit listed the person who should have been called, then a triable issue of fact would have been established?

Timeliness of the EUO relative to the billings (again)

Sama Physical Therapy, P.C. v IDS Prop. Cas. Ins. Co., 2017 NY Slip Op 51751(U)(App. Term 2d Dept. 2017)

Recover Med. Servs., P.C. v Ameriprise Ins. Co., 2017 NY Slip Op 51892(U)(App. Term 2d Dept. 2017)

Active Care Med. Supply Corp. v Ameriprise Auto & Home, 2017 NY Slip Op 51835(U)(App. Term 2d Dept. 2017)

Neptune again..

(From Sama)

“Defendant’s moving papers failed to establish that the first EUO scheduling letter that defendant had sent to plaintiff was timely with respect to the claims underlying the first and second causes of action, as defendant stated that the letter had been sent more than 30 days after defendant had received those claims

Proof of no-show?

St. Locher Med., P.C. v IDS Prop. Cas. Ins. Co., 2017 NY Slip Op 51732(U)(App. Term 2d Dept. 2017)

“Contrary to plaintiff’s contention, the proof submitted by defendant established that plaintiff had failed to appear for duly scheduled examinations under oath (see Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 35 AD3d 720 [2006]; Ortho Prods. & Equip., Inc. v Interboro Ins. Co., 41 Misc 3d 143[A], 2013 NY Slip Op 52054[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2013]). Furthermore, “the failure to set forth the dates of the scheduled examinations in the denial of claim form[s] did not render the denial[s] conclusory, vague, or without merit as a matter of law”

I would love to see someone make a motion to compel the law firm that sent the EUO letters (and represents the carrier on this claim) to comply with a non-party subpoena to substantiate the basis of the no-show.   see CPLR 3212(f);  NYCCCA 1201.  It would be an interesting transcript or set of transcripts.

NYCCCA 1201 (” subpoena and a subpoena duces tecum, and the powers of the court with reference to them, shall be governed by the CPLR, except that they shall be served only within the city of New York or in a county adjoining such city.  But the court, upon motion of a party which need not be on notice, may issue either kind of subpoena and permit its service elsewhere outside the city of New York if satisfied that the interests of justice would be served thereby.

Non objected to EUO

Gentlecare Ambulatory Anesthesia Servs. v Geico Ins. Co., 2017 NY Slip Op 51518(U)(App. Term 2d Dept. 2017)

Furthermore, defendant was not required to set forth objective reasons for requesting EUOs in order to establish its prima facie entitlement to summary judgment, as an insurer need only demonstrate “as a matter of law that it twice duly demanded an [EUO] from the [provider] . . . that the provider failed to appear and that the [insurer] issued a timely denial of the claims” (Interboro Ins. Co. v Clennon, 113 AD3d 596, 597 [2014]; see Parisien v Metlife Auto & Home, 54 Misc 3d 143[A], 2017 NY Slip Op 50208[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2017]; Palafox PT, P.C. v State Farm Mut. Auto. Ins. Co., 49 Misc 3d 144[A], 2015 NY Slip Op 51653[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2015]).”

I am still waiting for this Court to answer the following question: What happens when the medical provider objects to the EUO?  No answer on this one yet.

EUO no-show sustained

Sharp View Diagnostic Imaging, P.C. v Esurance, 2017 NY Slip Op 51466(U)(App. Term 2d Dept. 2017)

The letter “delaying the bill” as opposed to the “letter seeking verification”

“Plaintiff argues on appeal that defendant improperly relied on letters that “did not seek any documents or information” from plaintiff in order to toll defendant’s time to pay or deny the claims at issue. However, defendant alleged that it had sent letters scheduling examinations under oath (EUOs) (see ARCO Med. NY, P.C. v Lancer Ins. Co., 34 Misc 3d 134[A], 2011 NY Slip Op 52382[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2011]), which letters were attached to defendant’s cross motion, and plaintiff has raised no issue with respect to the sufficiency of those letters (see Great Health Care Chiropractic, P.C. v Nationwide Ins., 46 Misc 3d 130[A], 2014 NY Slip Op 51812[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2014]).”

The Appellate Term in prior cases is to blame for allowing this argument to remain as that Court never delineated the former from the latter.  From what i have seen, a delay letter stating the bill is delayed for an EUO coupled with proof of the EUO letter addresses the issue. On a “no-show” case, the issue should not come up as the carrier needs to present all of this evidence to meet its case.

But when a bill is delayed for an EUO, the Assignor attends and the bill is denied on medical necessity grounds, this issue is more acute.  This is because the document prepared for the carrier – whether it be arbitration or litigation – will often rely on the bill delay, an assertion that the EIP attended the EUO, a denial and the peer-IME report.  Missing is the scheduling letter, proof of its mailing and the EUO transcript.

When EUO counsel is not an attorney

Venture v Preferred Mut. Ins. Co., 2017 NY Slip Op 06594 (1st Dept. 2017)

At its core, Venture stands for the proposition that EUO counsel’s letters, memorandum and other information discerned during the investigation will no be shield from discovery due to the stature of the interlocutor  as an attorney.  If this case does conflict EUO counsel on first-party cases when an issue of fact arises as to the necessity or basis of an EUO, it is hard to imagine what case would disqualify counsel.

 

“Order, Supreme Court, New York County (Robert R. Reed, J.), entered December 29, 2016, which denied plaintiffs’ motion to renew their motion for production of certain documents, and to depose and disqualify defendant’s counsel, unanimously reversed, on the law and facts, without costs, the motion to renew granted, and the matter remanded to Supreme Court for a hearing in which counsel for plaintiffs and defendant will be permitted to probe the issue of whether Peter Dodge, Esq. served as an investigator, solely as an attorney, or in some type of hybrid role, including examining Dodge under oath, and for the court to make a determination as to Dodge’s role, supported by factual findings, and reconsider plaintiffs’ motion based on its findings. Appeal from order, same court and Justice, entered January 21, 2016, unanimously dismissed, without costs, as academic in view of the foregoing.

Defendant Preferred Mutual Insurance Company issued a homeowner insurance policy to plaintiffs, providing [*2]  $325,000 in coverage for their property located at 38 Morton Hill Road, Roscoe, New York, for the period from January 8, 2013 through January 8, 2014. The policy also provided $227,500 in personal property coverage.

On or about November 17, 2013, there was a fire, which completely destroyed the house and all of plaintiffs’ property. Plaintiffs allege that they provided defendant timely notice of the fire and of their claim under the policy, including sworn proof of loss. Plaintiff Daniel Venture provided defendant with a good faith valuation of the property loss, based on his best estimate as a lay person.

Plaintiffs claim that during the investigation into the fire, defendant and its attorney attempted to develop incriminating evidence against them and their sons, in an effort to avoid defendant’s obligations under the policy and to subject plaintiffs to criminal prosecution.

In a letter dated February 14, 2014, from defendant’s attorney, Peter Dodge of the law firm Dodge & Monroy, to defendant’s employees, Michael McGuire and Wendy Bodie, Dodge conveyed his evaluation and analysis report of the testimony of plaintiffs’ sons, Ivan Venture and Paris Venture. Dodge discussed testimony [*3]  that a white Jeep, possibly belonging to the Ventures, was seen backed up to the property on November 17, 2013 (the date of the fire). He concluded that “[t]his testimony will serve to establish not only material misrepresentations on behalf of Daniel Venture, Ivan Venture and Paris Venture, but also that someone from the family was located on the premises on November 17, 2013.” Dodge referenced the legal standard for arson and stated as follows:

 

“We note that Mr. Venture was significantly in arrears for over four years on the mortgage to the property in question. Daniel Venture also over estimated [sic] the value of the home at $394,000.00. He estimated that he owes $160,000.00. The statement of loss from Focus Investigations indicates that the actual cash value of the home was $184,275.00. The appraisal amounted between $109,000 and $137,000.00. We believe that it is highly suspicious that Mr. Venture did not go back to check on the property until one week later. It is also highly  [**2] suspicious that he did not contact any investigative agencies about the fire until two weeks later. We note that the Ventures all have internal alibis as to where everyone was on November 17, 2013. However, all [*4]  of the alibis are within the family except for a family friend named Martin Rabovich. We note that the investigative agency from Delaware County has indicated in their report that the fire is suspicious and that an intentional setting of the fire has not been ruled out. Our expert, Joseph Myers, opines that the fire was incendiary, through to the process of deduction.”

By letter dated February 28, 2014, defendant denied coverage under the policy, citing provisions of the policy which render it void in the case of misrepresentation, concealment, or fraud, and which exclude coverage for “intentional acts.” Defendant concluded, based on its investigation, that “the fire was incendiary in origin and intentionally set by you [plaintiffs] or someone on your behalf at your direction. Further, during the course of the investigation, you engaged in fraudulent conduct, swore falsely with respect to the claim and willfully concealed and misrepresented material facts.” The letter sets forth in detail the testimony and evidence supporting defendant’s determination.

In their complaint, plaintiffs assert causes of action for breach of contract and “bad faith insurance denial.” Plaintiffs served discovery [*5] demands seeking the entire claims file relating to the policy, as well as all reports, memos, communications, and other documents generated by any person or entity performing the investigation on defendant’s behalf, and any such documents showing that the fire was incendiary and that plaintiffs or their children had any involvement with causing the fire.

In response to the request for the claims file, defendant redacted certain documents due to “privilege,” and withheld on the basis of attorney-client privilege all correspondence between defendant and the Dodge law firm. The internal coverage opinion letter authored by Dodge had not been produced, and defendant did not provide them with a privilege log.

Accordingly, by notice of motion dated April 10, 2015, plaintiffs moved: (1) for defendant to produce an unredacted version of the coverage memorandum, and other documents withheld on the basis of privilege, for in camera review; (2) for leave to issue a subpoena for a deposition, and production of documents for review, in camera, of attorney Peter Dodge and Dodge & Monroy; and (3) to disqualify Dodge & Monroy from representing defendant.

The court directed defendant to produce the withheld [*6]  documents, as well as a privilege log for review in camera. After conducting an in camera review of the documents in question, the court denied plaintiffs’ motion. In a one paragraph order without any factual findings, the court determined that the withheld or redacted documents were subject to attorney client privilege, constituted attorney work product, were prepared in anticipation of litigation, or related only to the setting of reserves. The court further held that plaintiffs had not met their burden of showing any need for a deposition or production of documents from, or any basis for disqualification of, defendant’s counsel.

 

Plaintiffs assert that their June 21, 2016 deposition of Michael McGuire, who worked within defendant’s Special Investigation Unit, revealed that attorney Peter Dodge played a more significant role in the claims investigation and denial than previously understood. Plaintiffs also discovered through McGuire’s deposition that it was Dodge who first suggested that the claim be denied, and that he drafted the denial letter.

 

By notice of motion dated September 21, 2016, plaintiffs moved pursuant to CPLR 2221(e) to renew their prior motion, specifically seeking production of [*7]  all documents concerning the insurance claim and investigation, including all draft disclaimer letters, an unredacted coverage opinion, all examination under oath (EUO) summaries, all documents previously produced in camera, and communications with plaintiffs’ neighbor, Dan Baldo, and other witnesses. Plaintiffs also renewed their request that Dodge & Monroy be disqualified, and for leave to issue a subpoena for Peter Dodge’s deposition and for a copy of his case file. Plaintiffs also sought a stay of discovery pending a decision on their motion. The court denied plaintiffs’  [**3]  motion, holding that they had failed to set forth any new facts or evidence.1

 

“[T]he CPLR establishes three categories of protected materials, also supported by policy considerations: privileged matter, absolutely immune from discovery (CPLR 3101[b]); attorney’s work product, also absolutely immune (CPLR 3101[c]); and trial preparation materials, which are subject to disclosure only on a showing of substantial need and undue hardship in obtaining the substantial equivalent of the materials by other means CPLR 3101 [d][2]” (Spectrum Sys. Intl. Corp. v Chemical Bank, 78 N.Y.2d 371, 376-377, 581 N.E.2d 1055, 575 N.Y.S.2d 809 [1991]). “[I]n order for attorney-client communications to be privileged, the document must be primarily or predominantly a communication of a legal [*8]  character” (Brooklyn Union Gas Co. v American Home Assur. Co., 23 AD3d 190, 191, 803 N.Y.S.2d 532 [1st Dept 2005]). “[T]he burden of establishing any right to protection is on the party asserting it; the protection claimed must be narrowly construed; and its application must be consistent with the purposes underlying the immunity” (Spectrum Sys. Intl. Corp. v Chemical Bank, 78 NY2d at 377; Brooklyn Union Gas Co., 23 AD3d at 191).

“Reports of insurance investigators or adjusters, prepared during the processing of a claim, are discoverable as made in the regular course of the insurance company’s business” (Brooklyn Union Gas, 23 AD3d at 190). “Furthermore, attorney work product applies only to documents prepared by counsel acting as such, and to materials uniquely the product of a lawyer’s learning and professional skills, such as those reflecting an attorney’s legal research, analysis, conclusions, legal theory or strategy” (id. at 190-191). “Documents prepared in the ordinary course of an insurance company’s investigation to determine whether to accept or reject coverage and to evaluate the extent of a claimant’s loss are not privileged and are, therefore, discoverable. In addition, such documents do not become privileged merely because an investigation was conducted by an attorney” (id. at 191 [internal quotation marks omitted]; National Union Fire Ins. Co. of Pittsburgh, Pennsylvania v TransCanada Energy USA, Inc., 119 AD3d 492, 493, 990 N.Y.S.2d 510 [1st Dept 2014], lv dismissed 24 N.Y.3d 990, 995 N.Y.S.2d 707, 20 N.E.3d 653 [2014]).

On appeal, plaintiffs contend that Dodge was not acting in a legal capacity and, rather, performed [*9]  the function of a claims investigator. Defendant claims that the investigation was solely performed by McGuire, and that Dodge’s role consisted of conducting EUOs and providing legal advice based thereon. It also states that all of the information requested by plaintiffs in their motion to renew was already provided to the court as part of the in camera review and, in that sense, was not new.”