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.”

Untimely EUO demands

LMS Acupuncture, P.C. v Titan Ins. Co.,  2017 NY Slip Op 51229(U)(App. Term 2d Dept, 2017)

“Plaintiff correctly argues on appeal that defendant failed to demonstrate that it was entitled to summary judgment dismissing the first through third causes of action, as the EUO requests at issue had been sent more than 30 days after defendant had received the claims underlying those causes of action, and, therefore, the requests were nullities with respect to those claims ”

The number is 30.  65-3.8(l); 65-3.5(b)

Sloppy EUO practice comes back to haunt Allstate

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

“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 St. Vincent’s Hosp. of Richmond v Government Empls. Ins. Co., 50 AD3d 1123 [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. ”

When you are an “EUO firm” and you bill hourly, these are mistakes that make people cringe.

Mutual rescheduling issues

Apple Massage Therapy, P.C. v Adirondack Ins. Exch., 2017 NY Slip Op 50935(U)(App. Term 2d Dept. 2017)

According to the affidavit submitted by defendant in support of its motion, the initial EUO had been rescheduled two times by mutual agreement, each time prior to the scheduled date. We do not consider a mutual rescheduling, which occurs prior to the date of a scheduled [*2]EUO, to constitute a failure to appear (see Vitality Chiropractic, P.C. v Kemper Ins. Co., 14 Misc 3d 94 [App Term, 2d Dept, 2d & 11th Jud Dists 2006]). Consequently, as defendant did not demonstrate that there had been a failure to appear at both an initial and a follow-up EUO, defendant did not establish as a matter of law that plaintiff had failed to comply with a condition precedent to coverage (see Stephen Fogel Psychological, P.C. v Progressive Cas. Ins. Co., 35 AD3d 720 [2006]; Avicenna Med. Arts, P.L.L.C. v Ameriprise Auto & Home, 47 Misc 3d 145[A], 2015 NY Slip Op 50701[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2015]; DVS Chiropractic, P.C. v Interboro Ins. Co., 36 Misc 3d 138[A], 2012 NY Slip Op 51443[U] [App Term, 2d, 11th & 13th Jud Dists 2012]). As a result, the branch of defendant’s motion seeking summary judgment dismissing the complaint based upon the assignor’s failure to appear at two duly scheduled EUOs should have been denied.”

Mutual rescheduling issues apparent from the fact of the documents.

EUO is untimely and not a double no-show

Sovereigh Acupuncture, P.C. v American Commerce Ins. Co., 2017 NY Slip Op 50922(U)(App. Term 2d Dept. 2017)

(1) ” The Civil Court granted plaintiff’s motion, and denied defendant’s cross motion on the ground, among others, that the facts submitted by defendant in support of its cross motion showed that, while defendant declared that plaintiff had failed to appear for scheduled EUOs, defendant had rescheduled each EUO before the date set for each EUO and that, prior to each EUO, defendant was aware that plaintiff was unable to appear.”

(2) “With respect to the claims which defendant admits it received between January 18, 2012 and February 14, 2012, defendant’s moving papers demonstrate that the first EUO scheduling letter sent to plaintiff was mailed more than 30 days after defendant had received these claims. As a result, contrary to defendant’s contention, defendant failed to demonstrate that it had properly denied these claims based upon plaintiff’s failure to appear for [*2]duly scheduled EUOs.”

(3) “defendant’s papers demonstrate that, prior to each scheduled EUO of plaintiff, defendant sent plaintiff a letter rescheduling the EUO of plaintiff for a different date. As a result, the fact that plaintiff did not appear on the date originally set forth in a scheduling letter does not constitute a failure to appear, as defendant had already changed the date for which that EUO had been scheduled. In view of the foregoing, defendant failed to show a triable issue of fact as to whether it had properly denied these claims based upon plaintiff’s failure to appear for two duly scheduled EUOs.”

It appears that Defendant did not challenge Plaintiff’s prima facie case on appeal or in the court below.  Even if a challenge was made, the Court in a rare move found that Defendant’s defense lacked merit as a matter of law.  This seems to only occur when a defendant lays bear their proofs and the Court concludes there is no conceivable way a defense could be found to exist.  In this case, the letters were late and one of the EUO no shows was a reschedule.

Why appeal this?  I am curious.   Is there a point of well-settled no-show law that defendant is trying to push that cannot be discerned?

An EUO defense that was precluded

St. Locher Med., P.C. v IDS Prop. Cas. Ins. Co., 2017 NY Slip Op 50919(U)(App. Term 2d Dept. 2017)

“As plaintiff argues, defendant’s moving papers failed to establish that the first EUO scheduling letter defendant sent to plaintiff had been timely, since defendant stated that the letter was sent more than 30 days after defendant had received the claims”

Why not call and settle if you are defendant?   This is the law in both the First and Second Departments.

Where was the partner? Not at the office

Mind & Body Acupuncture, P.C. v American Commerce Ins. Co., 2017 NY Slip Op 50918(U)(App. Term 2d Dept. 2017)

“As plaintiff argued in opposition to defendant’s motion and on appeal, the affirmation by a partner in the law firm retained by defendant to conduct examinations under oath (EUOs) of plaintiff did not satisfy defendant’s burden of presenting proof by someone with personal knowledge of the nonappearance of plaintiff at the EUOs in question”

Interestingly: “no brief filed.”  And, $30 in costs (the maximum the court can award)

EUO letter to Assignor did toll time to pay or deny

Doctor Goldshteyn Chiropractic, P.C. v ELRAC, Inc., 2017 NY Slip Op 50923(U)(App. Term 2d Dept. 2017)

“Plaintiff’s contention that defendant failed to establish that its time to pay or deny claims seeking to recover the sums of $241.30, $1,310.94, and $1,019.62 was tolled because defendant had not timely mailed EUO scheduling letters to plaintiff’s assignor lacks merit. While plaintiff correctly asserts that the letter from defendant dated January 27, 2011 is a delay letter, defendant established that the first EUO scheduling letter had been timely and properly mailed to plaintiff’s assignor on January 4, 2011 (see St. Vincent’s Hosp. of Richmond v Government Empls. Ins. Co., 50 AD3d 1123 [2008]; 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])”

This is an interesting case because (I think) it lays out what is necessary to timely delay a bill for pending EUOs/IMEs and, afterwards, denying the same.  Most of the caselaw that has discussed the issue has not been favorable to the carriers.

Here, the carrier presented (1) EUO letter to Assignor; and (2) Timely delay letter to medical provider stating that bill is delayed pending EUO.

I would note that if the EIP attended and the bill was denied on other grounds, you would still need the same proof to show the time to pay or deny is tolled.  Oftentimes (and I have seen it accidentally out of here), the motion-writer thinks that you only need to present the delay to the provider to prove a toll.  This is not the case – do not fall into that trap.

You always need (1) the underlying EUO/IME letter with proof of mailing and (2) proof of attendance to prove the toll.

No-show based upheld despite objection – with a caveat

First Class Med., P.C. v State Farm Mut. Auto. Ins. Co., 2017 NY Slip Op 50593(U)(App. Term 2d Dept. 2017)

(1) “At the outset we note that plaintiff failed to establish that it had mailed (see St. Vincent’s Hosp. of Richmond v Government Empls. Ins. Co., 50 AD3d 1123 [2008]) the objection letters that it attached to its opposition papers (see generally Crescent Radiology, PLLC v American Tr. Ins. Co., 31 Misc 3d 134[A], 2011 NY Slip Op 50622[U] [App Term, 9th & 10th Jud Dists [*2]2011] [where a plaintiff fails to object to an EUO request at the time it is requested, the plaintiff’s objections to the request may not be raised for the first time during litigation]).”

(2)  “In any event, the no-fault regulations provide that an insurer may request that a provider submit to an EUO as may reasonably be required (see 11 NYCRR 65-1.1 [b]) and, here, defendant demonstrated that the requests for the EUOs at issue pertain to claims which it had received after the January 11, 2013 EUO had been conducted.”

Clearly, we have a situation where the EUO of the EIP occurred and then the facility was then brought in for an EUO.  Objection letters were generated but not mailed.  Would it have mattered if the letters were nailed?  I see the words “in any event” and that could mean even if it was mailed, it would not be sufficient.  I am unsure, however, if that is the case.

There has been a dearth of cases on this issue viz. can an EUO be validly blocked when an objection letter as to the EUO is mailed to the carrier.  Again, we are waiting for the case where the objections letters are mailed and the Court reaches this precise issue.  Stay tuned.

Objective reasons?

Parisien v Metlife Auto & Home, 2017 NY Slip Op 50208(U)(App. Term 2d Dept, 2017)

“Contrary to plaintiff’s contention, 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 Barakat Med. Care, P.C. v Nationwide Ins. Co., 49 Misc 3d 147[A], 2015 NY Slip Op 51677[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2015]).”

Compare this to the more common scenario where the plaintiff objects or requests a reason for the EUO.  c.f American Transit Ins. Co. v. Jaga Med. Servics, P.C.