Walking out of an EUO leads to a disclaimer and a whole lot more

American States Ins. Co. v Huff, 2014 NY Slip Op 05366 (1st Dept. 2014)

(1) “laintiff’s motion for summary judgment as sought a declaration that plaintiff properly disclaimed coverage of its insured…”

(2) “Plaintiff commenced this action, in effect, seeking a declaration that it is not obligated to pay these no-fault benefits to defendants because, among other reasons, Huff failed to complete an examination under oath (EUO), as required by the subject insurance policy. Thus, plaintiff asserts that Huff breached a condition precedent to coverage under the policy, and defendant medical providers are not entitled to recover Huff’s no-fault benefits.”

(3) “We find that Supreme Court properly granted summary judgment in plaintiff’s favor. In support of its motion, plaintiff relied primarily upon Huff’s EUO, which was corroborated by the affidavit of plaintiff’s investigator who was present at the examination. The EUO established that Huff appeared for his EUO, but departed before questions regarding the accident and his injuries had been asked. The aborted EUO of Huff, the named insured, established a prima facie case that Huff had breached a condition precedent to coverage under the policy.”

(4) “In opposition, defendants do not dispute what occurred at the EUO. Instead, defendants argue that the transcript of the EUO was inadmissible. We find, however, that the EUO transcript of Huff was admissible evidence on the motion for summary judgment as it was certified by the court reporter and is considered a party admission (see Zalot v Zieba, 81 AD3d 935, 936 , lv denied 117 NY3d 703 ))”

(5) “Insofar as defendants complain that plaintiff did not seek another EUO, the record demonstrates that Huff, represented by counsel, was advised of the ramifications of his refusal to continue the EUO, and confirmed that he understood.”

(6) “An assignee “stands in the shoes” of an assignor and thus acquires no greater rights than its assignor (see Arena Const. Co. v Sackaris & Sons, 282 AD2d 489 ; see also Dilon Med. Supply Corp. v Travelers Ins. Co., 7 Misc 3d 927, 930 ). Since the defense of the breach of a condition precedent to coverage under the policy may indisputably be raised by plaintiff against Huff, it is available as against defendants, who accepted assignments of no-fault benefits (see Hammelburger v Foursome Inn Corp., 54 NY2d 580, 586 ; Losner v Cashline, L.P., 303 AD2d 647, 648 ).”

This is perhaps the DJ of the year so far.  So many principles of law have been established and/or confirmed.  First, the medical provider and or assignor must cooperate with the EUO, i.e., attend it and answer questions.  Second, the failure to cooperate during the EUO through walking out during it, objecting too many times, engaging in obstructionist behavior can lead to a violation of a condition precedent to coverage, provided Park v. Long Island Insurance Company warnings are set forth.

The unsettled question that may play out now is: what constitutes obstructionist behavior?  We know the outter bounds of what constitutes this behavior.  But, how many objections is required before a disclaimer may be issued?  What happens if an EIP or medical provider lies during the EUO?  How does Utica v. Timms (you can lie and not lose your benefits) work into this equation?  There a lot of unanswered questions.  In my mind, the extremes will allow for a disclaimer.  Misrepresentations and a few inappropriate objections will probably not trigger a Huff remedy.

On top of that, the contents of the EUO transcript are admissible without further foundation against the medical provider.  Counsel for Defendant was successful at making that argument in Civil Court Kings County against me a few years ago, i.e., you cannot use the contents of the EUO transcript against the innocent assignee.  I thought it was an incredulous argument, which would be shot down at the Appellate Term or Appellate Division.

Funny enough, counsel in the Civil Kings case pressed his luck in front of the First Department and rightfully saw what five learned jurists had to say about that argument.  These are all good things in my mind.

I believe that this case is probably somewhere between the ATIC dj appeals and Unitrin as to its precedential value.

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• Understanding EUO Denial: When Insurance Companies Can Substantiate Coverage Denials
• First Department upholds EUO DJ victory
• EUO no-show DJ is successful (for the most part)
• No reasonable excuse found
• New York No-Fault Insurance Law

Legal Update (February 2026): Since this 2014 decision, New York’s no-fault regulations and EUO procedures may have been modified through Insurance Department amendments or regulatory updates. Practitioners should verify current provisions regarding EUO requirements, disclaimer procedures, and evidentiary standards, as procedural rules and coverage requirements under Insurance Law Article 51 are subject to ongoing regulatory revision.