EUO letters were mailed and the Claimant failed to attend the EUO: summary judgment granted

Points of Health Acupuncture, P.C. v Lancer Ins. Co., 2010 NY Slip Op 51455(U)(App.Term 2d Dept. 2010)

You have seem this before.

“Contrary to the Civil Court’s findings, defendant established the timely mailing of the EUO scheduling letters. Defendant submitted the affirmation of a partner in the law firm retained by defendant to conduct plaintiff’s EUO in which he set forth in detail his firm’s standard office practice and procedure for the mailing of EUO scheduling letters (see New York & Presbyt. Hosp. v Allstate Ins. Co., 29 AD3d 547 [2006]; Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679 [2001]; Top Choice Med., P.C. v New York Cent. Mut. Fire Ins. Co., 22 Misc 3d 133[A], 2009 NY Slip Op 50230 [U] [App Term, 2d, 11th & 13th Jud Dists 2009]). In addition, counsel alleged facts sufficient to establish that plaintiff had failed to appear at counsel’s law office for the duly scheduled EUOs (see Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 35 AD3d 720 [2006]; W & Z Acupuncture, P.C. v Amex Assur. Co., 24 [*2]Misc 3d 142[A], 2009 NY Slip Op 51732[U] [App Term, 2d, 11th & 13th Jud Dists 2009]). Since the appearance of the plaintiff at an EUO is a condition precedent to the insurer’s liability on the policy (see Insurance Department Regulations [11 NYCRR] § 65-1.1; Stephen Fogel Psychological, P.C., 35 AD3d at 722), the Civil Court should have granted defendant’s motion for summary judgment dismissing the complaint. We note that, contrary to the Civil Court’s finding, the affidavit submitted by defendant’s no-fault specialist established that defendant timely mailed its denial of claim forms.”

EUO no-show (case #3)

Points of Health Acupuncture, P.C. v Lancer Ins. Co., 2010 NY Slip Op 51338(U)(App. Term 2d Dept. 2010)

Part I:

“[c]ontrary to the finding of the Civil Court, defendant established the timely mailing of the EUO scheduling letters with respect to plaintiff’s claims for the sums of $222.76 (dates of service: October 23, 2006 and October 30, 2006), $501.21 and $167.07. Defendant submitted the affirmation of a partner in the law firm retained by defendant to conduct plaintiff’s EUO in which he set forth in detail his firm’s standard office practice and procedure for the mailing of EUO scheduling letters.  In addition, counsel alleged facts sufficient to establish that plaintiff had failed to appear at counsel’s law office for the duly scheduled EUOs,”

Part II:

“The first set of letters sent by defendant to plaintiff after defendant received plaintiff’s $334.14 claim (dates of service: July 24, 2006-July 31, 2006) and plaintiff’s $222.76 claim (dates of service: August 14, 2006 and August 15, 2006) merely stated that defendant was waiting for the results of an investigation by its special investigation unit as well as the scheduling of an EUO. Since it is well settled that an insurer’s delay letters, which request no verification, do not toll the statutory time period within which a claim must be paid or denied (see Nyack Hosp. v Encompass Ins. Co., 23 AD3d 535 [2005]; Careplus Med. Supply, Inc. v Selective Ins. Co. of Am., 25 Misc 3d 48 [App Term, 9th & 10th Jud Dists 2009]; Ocean Diagnostic Imaging P.C. v Citiwide Auto Leasing Inc., 8 Misc 3d 138[A], 2005 NY Slip Op 51314[U] [App Term, 2d & 11th Jud Dists 2005]), defendant did not toll the statutory period within which defendant had to pay or deny said claims. While the rest of the letters sent by defendant in response to the remaining claims sent by plaintiff were in fact verification requests, the affidavit submitted by defendant’s no-fault specialist failed to establish that they were timely mailed (see New York & Presbyt. Hosp., 29 AD3d 547; Residential Holding Corp., 286 AD2d 679; Top Choice Med., P.C. v New York Cent. Mut. Fire Ins. Co., 22 Misc 3d 133[A], 2009 NY Slip Op 50230[U] [App Term, 2d, 11th & 13th Jud Dists 2009]).”

Part III:

“Notwithstanding the foregoing, defendant correctly asserts that plaintiff’s cross motion for summary judgment was premature under CPLR 3212 (f). Defendant established that while facts may exist that are essential to justify the denial of plaintiff’s summary judgment motion, defendant was unable to set forth such facts with respect to its non-precluded defense that plaintiff was fraudulently incorporated.”

As to Part I: These bills were probably received after the EUO defaults.

As to Part II: These bills were probably received prior to the EUO defaults and the EUOs were probably not scheduled within 15-30 days after receipt of the bills, so this makes sense.  It appears that the the carrier said that the bills would be delayed until its counsel felt like setting up EUO’s.

As to Part III: “You can have it both ways”???

Now, here is something interesting.  If you are conducting EUO’s to get information from providers based upon corporate structure issues, then aren’t you admitting that you do not have sufficient material to mount a meaningful defense?  Yet in this case, the court held that even though the carrier admitted (through its actions of scheduling provider EUO’s) that it had insufficient evidence to mount a meaningful defense on the issue of corporate structure, the carrier’s papers were still sufficient to: (a) raise an issue of fact in answering a summary judgment motion; and (b) allow for broad discovery.

I think the carrier should have to elect its remedy.  The carrier must: (a) seek an EUO and either deny for a provider’s default or conduct a more in depth investigation including denying for corporate fraud issues should the provider attend; or (b) deny based upon the information the carrier has and hopes it has enough information to survive summary judgment, trial or arbitration.

But, is it fair that an insurance carrier should deny for an EUO, which was improperly scheduled, and then get to defend on the basis for which the EUO was scheduled, i.e., corporate fraud?

I think summary judgment should have been granted to the provider on the second set of bills.  Sorry for not towing the company line on this one – but fair is fair.

Lastly, this is why the District Court was wrong in Dynamic v. State Farm.  The carrier, should it believe something is amiss, must schedule EUO’s, and the provider should attend or detail why the EUO’s are improper.  These issues need to be developed pre-litigation.

Notwithstanding the above, if the carrier’s EUO demands are untimely, then all defenses including those that the EUO was supposed to expound upon should be precluded, as a matter of equity.  Sloppy work on either the defense or the plaintiff side should not be tolerated.

EUO no-show (case #2)

Infinity Health Prods., Ltd. v Progressive Ins. Co., 2010 NY Slip Op 51334(U)(App. Term 2d Dept. 2010)

“To raise a triable issue of fact based on the assignor’s failure to appear at scheduled EUOs, defendant was required to demonstrate that its initial and follow-up requests for verification were timely (see Insurance Department Regulations [11 NYCRR] §§ 65-3.5 [b]; 65-3.6 [b]) and establish, by an affidavit of one with personal knowledge, that the assignor had failed to appear for the EUOs (see Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 35 AD3d 720 [2006]). Since defendant failed to establish that the EUO scheduling letters were timely mailed (see Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679 [2001]), defendant failed to demonstrate that the 30-day claim determination period (Insurance Department Regulations [11 NYCRR] § 65-3.8) was tolled. As a result, defendant failed to establish that its denial of claim forms were timely and, thus, that it is not precluded from raising as a defense the failure of plaintiff’s assignor to appear for an EUO.”

I previously published a blog entry where I discussed the EUO time frames in great detail.  At least, the court seems to finally be consistent here on what is necessary to prove the EUO no-show defense.

And then there is the dissent, with which I completely agree.

This one takes the cake

Dynamic Med. Imaging, P.C. v State Farm Mut. Auto. Ins. Co., 2010 NY Slip Op 20285 (Dis. Nassau 2010)

I am somewhat flabbergasted at this decision.  I am pretty down the middle (I think) and I really try to be as fair as I can on this blog.  With that introduction, I will say the following.  I would probably volunteer to do the appeal on this one, just because it is off on the law, the facts and is against the trend of every modern case that has come out of both branches of the Appellate Term, Second Department, as well as some “hidden” Appellate Division precedent, which I will not disclose.  You can read the facts of this case at your leisure.

Partner's affirmation demonstrated the "no-show" component of an EUO no-show defense

Crotona Hgts. Med., P.C. v Farm Family Cas. Ins. Co., 2010 NY Slip Op 50716(U)(App. Term 2d Dept. 2010)

“In opposition to plaintiff’s motion and in support of its cross motion for summary judgment, defendant submitted the affirmation of a partner in the law firm retained by defendant to conduct plaintiff’s EUO. Counsel alleged facts sufficient to establish that plaintiff had failed to appear at counsel’s law office for duly scheduled EUOs”

A partner’s affirmation is sufficient so show a non-appearance at an EUO.  The affirmation probably established how the partner knew that the Plaintiff failed to attend the EUO.  See generally, Progressive Classic Ins. Co. v. Kitchen, 46 A.D.3d 333 (1st Dept. 2007).

Partner’s affirmation demonstrated the “no-show” component of an EUO no-show defense

Crotona Hgts. Med., P.C. v Farm Family Cas. Ins. Co., 2010 NY Slip Op 50716(U)(App. Term 2d Dept. 2010)

“In opposition to plaintiff’s motion and in support of its cross motion for summary judgment, defendant submitted the affirmation of a partner in the law firm retained by defendant to conduct plaintiff’s EUO. Counsel alleged facts sufficient to establish that plaintiff had failed to appear at counsel’s law office for duly scheduled EUOs”

A partner’s affirmation is sufficient so show a non-appearance at an EUO.  The affirmation probably established how the partner knew that the Plaintiff failed to attend the EUO.  See generally, Progressive Classic Ins. Co. v. Kitchen, 46 A.D.3d 333 (1st Dept. 2007).

EUO scheduling letters must be sent within the same time frame that exists for verifying bills

St. Vincent Med. Care, P.C. v Travelers Ins. Co., 2010 NY Slip Op 50446(U)(App. Term 2d Dept. 2010)

“While defendant properly argues that an EUO need not be scheduled to be held within 30 days of the receipt of the claim form (see Eagle Surgical Supply, Inc. v Progressive Cas. Ins. Co., 21 Misc 3d 49 [App Term, 2d & 11th Jud Dists 2008]), defendant nevertheless failed to demonstrate that the EUO scheduling letters were timely mailed. Defendant admits that it received the three subject bills on October 27, 2006. As the EUO scheduling letters were mailed on December 18, 2006, 52 days after receipt of the bills, they were untimely and did not toll defendant’s time to pay or deny those bills (see Insurance Department Regulations [11 NYCRR] § 65-3.5 [b]; § 65-3.6 [b]; § 65-3.8 [j]; see also Eagle Surgical Supply, Inc., 21 Misc 3d at 51).”

Keep in mind the following.  When you delay a bill for an EUO, the provider must receive a delay letter specifying that the claim is being delayed pending the EUO of the EIP or assignee.  A follow-up delay with respect to that bill must be sent within 31-40 days after that first delay letter is sent.  This must be done for each bill!

Now, the EUO scheduling letters that the carrier’s attorney sends or the carrier itself  sends must also be sent within 15-30 days of receipt of the first bill.  After the first no-show, a follow-up EUO scheduling letter must be sent within 10 days of the said no-show.

In putting the above two rules together, it should be observed that if a bill is timely delayed for an EUO, yet the EUO scheduling letter is not sent within 15-30 days after receipt of the bill, then the EUO delay will be invalid.  This is very confusing, and I think the proposed new regulations actually clarify this very discreet issue, and perhaps this issue only as it relates to EUOs.

The admissibility of an EUO and the applicability of CPLR 3212(f)

RLC Med., P.C. v Allstate Prop. & Cas. Ins. Co., 2009 NY Slip Op 52691(U)(App. Term 2d Dept. 2009)

“Defendant denied Craigg’s $269.60 claim based upon the assignor’s EUO testimony. Since the purported EUO transcript annexed to defendant’s opposition papers is not in admissible form, we decline to consider it. Accordingly, Craigg was entitled to summary judgment upon said claim.”

Question: Why was it not in admissible form?  My thought is that Defendant annexed to her papers the condensed EUO  that was not certified by the stenographer.  Not good.

Same case:

“In opposition to plaintiffs’ motion, defendant established that while facts may exist that are essential to justify denial of the branch of the summary judgment motion seeking to recover upon claims submitted by RLC, defendant was unable to set forth sufficient facts to establish the defense of fraudulent incorporation (see Insurance Department Regulations [11 NYCRR] § 65-3.16 [a] [12]; State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313 [2005]) since such information was within RLC’s possession and RLC had not complied with defendant’s discovery demands therefor (see CPLR 3212 [f]). Consequently, the District Court properly denied the branch of the motion for summary judgment upon the claims submitted by RLC….”

CPLR 3212(f) again.  Dave Gottlieb over at NFP and on his CPLR blog has detailed this subdivision of the summary disposition statute for some time.  In New York practice, it usually takes a really good reason to deny a summary judgment motion without prejudice, in accordance with subdivision (f) of Rule 3212 of the CPLR.  In no-fault and 5102(d) threshold practice, subdivision (f) is successfully invoked as a matter of course in the case of a Mallela violation or when a Plaintiff moves on the basis that he or she sustained a serious injury prior to the performance of Defendant’s IME’s.

Outside of these two situations, the usual trend is to deny a CPLR 3212(f) application.  Here is a prime example – Delta Radiology, P.C. v. Interboro Insurance Company, 25 Misc.3d 134(A)(App. Term 2d Dept. 2009):

“Contrary to defendant’s contention, although plaintiff’s claim was submitted more than 45 days after the services at issue were rendered, defendant waived its reliance on the 45-day rule (Insurance Department Regulations [11 NYCRR] § 65-1.1) as a basis to deny the claim because defendant had failed to communicate to plaintiff, as required by the No-Fault Regulations, that late submission of the proof of claim will be excused where the applicant can provide a reasonable justification for the late submission ( see Insurance Department Regulations [11 NYCRR] § 65-3.3[e]; SZ Med. P.C. v. Country-Wide Ins. Co., 12 Misc.3d 52 [App Term, 2d & 11th Jud Dists 2006] ). Further, defendant failed to demonstrate that discovery was needed in order to show the existence of a triable issue of fact ( see CPLR 3212[f] ).”

Must a carrier demonstrate that a deponent willfully failed to attend EUO’s in order to substantiate this defense?

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.

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

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.