Another EUO bonanza

Examinations Under Oath (EUOs) serve as a critical investigative tool for no-fault insurers seeking to verify the legitimacy of claims or obtain additional information about accidents and injuries. However, the procedural requirements governing EUO scheduling are strictly construed by New York courts, and failures to comply with regulatory mandates can render otherwise valid EUO requests unenforceable. When insurers fail to follow proper procedures, they risk losing their ability to disclaim coverage based on non-appearance.

The intersection of EUO procedures with declaratory judgment actions presents additional complexity. Insurance carriers sometimes seek judicial declarations that no coverage exists based on assignors’ failure to appear for scheduled examinations. These declaratory judgment actions raise important questions about privity, notice, and the rights of medical providers who have received assignments of benefits but were not parties to the underlying coverage dispute.

Case Background

In J.K.M. Medical Care v Ameriprise, the insurer had commenced a Supreme Court action seeking a declaratory judgment that no coverage existed based on the assignor’s failure to appear for scheduled EUOs. The Supreme Court granted the insurer’s motion and issued a declaration in its favor. Subsequently, the medical provider filed a separate Civil Court action to recover no-fault benefits, and the insurer moved for summary judgment based on the Supreme Court’s prior declaration.

The medical provider challenged the applicability of the declaratory judgment, arguing that it was neither named in nor served with the Supreme Court proceeding. Additionally, the provider had not yet executed an assignment of benefits at the time the Supreme Court action was commenced, meaning it was not in privity with the assignor when that litigation began. The provider further challenged the underlying validity of the EUO scheduling letters, arguing they failed to comply with regulatory requirements.

Jason Tenenbaum’s Analysis

J.K.M. Med. Care, P.C. v Ameriprise Ins. Co., 2016 NY Slip Op 26424 (App. Term 2d Dept. 2016)

(1) “Plaintiff herein was neither named nor served in the Supreme Court proceeding, nor, at the time, was plaintiff in privity with its assignor, who was a named party in that proceeding, as the assignment of benefits had been executed before defendant had commenced the Supreme Court proceeding to compel the assignor’s appearance at an EUO or for declaratory relief upon the assignor’s failure to appear. As plaintiff had no full and fair opportunity to appear and defend its interests in the Supreme Court proceeding, the present action in the Civil Court is not subject to summary judgment dismissing the complaint by virtue of the Supreme Court declaration”

(2) “Defendant argues that, even in the absence of a judicial declaration, the order granting defendant’s motion for summary judgment dismissing the complaint should be affirmed on the alternative ground that plaintiff’s assignor had failed to appear for duly scheduled EUOs. However, contrary to defendant’s assertion, defendant failed to establish that it had timely and properly mailed its EUO scheduling letters”

(3) “Furthermore, plaintiff properly argues that the scheduling letters failed to advise the assignor, in accordance with 11 NYCRR 65-3.5 (e), that she would be reimbursed for any loss of earnings and reasonable transportation costs incurred in complying with the request for an EUO.”

When do the malpractice insurance carriers get called? This is not going to be a “U” or “A” citation, so names will appear on this order in the report. Yikes.

Legal Significance

The Appellate Term’s decision establishes three critical principles that protect medical providers in EUO-based coverage disputes. First, declaratory judgments obtained against assignors do not automatically bind assignees who were not parties to the original proceeding and who were not in privity with the assignor at the time the action was commenced. This temporal element of privity is crucial — an assignment executed after the declaratory judgment action begins does not create retroactive privity sufficient to bind the assignee.

Second, even when insurers obtain favorable declaratory judgments, they must still establish the underlying merits of their coverage defenses in subsequent litigation brought by assignees. The court’s analysis demonstrates that declaratory judgments are not self-executing shields against provider claims when the provider lacked a full and fair opportunity to litigate the coverage issues.

Third, and perhaps most significantly, the decision reinforces strict compliance requirements for EUO scheduling letters. The insurer’s failure to include mandatory language regarding reimbursement for lost earnings and transportation costs rendered the EUO scheduling letters defective under 11 NYCRR 65-3.5(e), regardless of whether the assignor actually incurred such expenses or would have appeared if properly advised.

Practical Implications

For insurance carriers, this decision highlights the risks of relying on declaratory judgment actions to resolve coverage disputes when medical providers have not yet assigned their claims or are not parties to the proceeding. Carriers must ensure that assignees receive proper notice and an opportunity to be heard, or risk having to relitigate the same issues in subsequent provider actions.

The decision also underscores the importance of meticulous compliance with EUO scheduling requirements. Every scheduling letter must include all mandated advisements, including the specific language about reimbursement for lost earnings and transportation costs. Omitting this language — even if the insurer believes the assignor would not have appeared anyway — can be fatal to an EUO no-show defense.

For medical providers, the ruling provides important procedural protections. Providers who were not parties to prior declaratory judgment actions are not bound by unfavorable determinations, even if their assignors were parties. Additionally, providers can challenge the underlying validity of EUO scheduling procedures, and technical defects in scheduling letters can defeat otherwise legitimate EUO no-show defenses.

Related Articles

• Understanding EUO Requirements in New York No-Fault Insurance Cases
• How to Challenge EUO No-Show Denials: When Improper Notice Can Reverse Insurance Denials in New York
• New York EUO Requirements: When Examination Under Oath Demands Are Untimely
• EUO No-Show Consequences: What Happens When You Skip Your Examination Under Oath in New York
• New York No-Fault Insurance Law

Legal Update (February 2026): Since this post’s publication in December 2016, Part 65 regulations governing no-fault insurance practices, including EUO scheduling requirements under 11 NYCRR 65-3.5, may have been amended or updated. Practitioners should verify current regulatory provisions regarding EUO notice requirements, reimbursement obligations, and procedural compliance standards, as regulatory changes could affect the analysis of proper EUO scheduling discussed in this decision.