Fraudulent Procurement Defense Requires Section 3105 Evidence Standards in New York

Six claims did not all fail for the same reason. In Compas Medical v Praetorian, 2016 NY Slip Op 51000(U), three involved procurement denials and three involved outstanding verification. The insurer lost its dismissal motion on all six; the provider’s motion remained denied.

Still current (September 2026): Prompt Medical Group v Erie (2026) confirms the need for proof supporting a verification toll and timely procurement denial; it does not dispense with the separate underwriting showing discussed in Compas.

Last reviewed: September 2026.

Three procurement claims; three verification claims

For causes one through three, Praetorian failed to establish timely mailing of EUO scheduling letters. It therefore failed to prove a toll extending its time to deny on procurement-fraud grounds. The court also found insufficient proof that the alleged residence misrepresentation was material, citing Fatmir. These were separate defects.

For causes four through six, the insurer did prove timely mailing of verification requests and follow-ups, with an initial showing that it had not received the information. But the provider’s owner supplied an affidavit supporting a presumption that the response was mailed and received. That left a factual dispute about whether those claims were premature.

Neither party obtained judgment

The provider failed to establish an untimely denial or a timely denial that was conclusory, vague or without legal merit. On June 22, 2016, the appellate court modified the order to deny Praetorian’s cross-motion and otherwise affirmed. It did not direct payment.

The mailing failure concerned claims one through three. For claims four through six, the insurer proved its mailings; the provider’s response evidence created the dispute. Nor does the reference to Fatmir establish that one claims witness can never supply admissible evidence; the question is what the particular record proves.

Jason’s July 2016 reaction

Jason called the citation to Fatmir a change in the cases he was reading. His ‘first time’ and ‘game changer’ descriptions are preserved as his contemporary assessment, not a judicial finding about the doctrine’s origin:

The citing of Fatmir now opens up a new door regarding the evidence necessary to substantiate “material misrepresentations” in establishing a fraudulent procurement defense.

The case-law defined argument as I understood it was that the defense was predicated upon the “fraudulent procurement” of an insurance policy and not what could be classified as a “material misrepresentation” defense. The difference, while subtle, was the difference between application of Fatmir and a standard presentation of proof where the coverage specialist gives testimony relative to the policy premium amounts relative to the policy as written and the policy as should have been written.

But this is the first time that the application of Ins. Law 3105 has been introduced into the fraudulent procurement paradigm. I would categorize this case as a game changer, although not as significant as when the Second Department held that fraudulent procurement was a precludable defense. (Westchester Med. Ctr. v GMAC Ins. Co. Online, Inc.)

Connect to the Encyclopedia

Start with the fraudulent procurement and material misrepresentation hub, then compare these records:

• Great Health Care (2014): a procurement defense lost to preclusion
• Renelique (March 2016): a factual issue without entitlement to dismissal
• Renelique (November 2016): materiality and competing motion burdens
• Alignment (2020): ownership, use and the underwriting record
• Veksler (2018): materiality without an assigned-risk exception

For review of a particular no-fault dispute, contact the firm with the policy, application and claim record.