"I think Unitrin was wrongly decided"

In New York no-fault insurance law, the legal consequences of an insured’s failure to appear for an Independent Medical Examination (IME) have generated significant debate among appellate courts. At the heart of this controversy lies a fundamental question: Does an IME no-show constitute a breach of a policy term (limiting damages but not voiding coverage) or a failure of a condition precedent (allowing the insurer to void the policy ab initio)?

The First Department’s 2011 decision in Unitrin Advantage Insurance Co. v Bayshore Physical Therapy, PLLC established that IME no-shows represent failures of conditions precedent, effectively treating them as tantamount to lack of coverage altogether. This approach has faced criticism from other appellate departments and individual jurists who view it as inconsistent with established insurance law principles and unduly harsh on injured parties who may have legitimate reasons for missing examinations.

A recent concurring opinion in American Trust Insurance Co. v Acosta provides a window into ongoing judicial dissatisfaction with the Unitrin framework and suggests that this area of law may be ripe for reconsideration.

Case Background: A Concurrence Challenging Binding Precedent

In American Trust Insurance Co. v Acosta, the First Department addressed an insurer’s summary judgment motion based on the insured’s failure to appear for medical examinations. The majority opinion, bound by the precedent established in Unitrin, applied the condition precedent framework to the IME no-show defense. However, a concurring justice took the unusual step of explicitly stating disagreement with Unitrin while acknowledging the obligation to follow controlling departmental precedent.

The concurrence articulated that IME no-shows should be treated as breaches of policy terms rather than failures of conditions precedent. This distinction carries significant legal consequences: a breach of policy term limits the insurer’s liability for the specific claim but does not void coverage entirely, whereas a failure of condition precedent allows the insurer to deny coverage ab initio as if the policy never provided protection for the accident.

The majority opinion also highlighted procedural failures by the insurance company, noting that it could not discern from the record whether the insurer complied with regulatory time frames requiring IME requests within 15 days of receiving claims and scheduling within 30 days. This procedural deficiency proved fatal to the insurer’s summary judgment motion, regardless of the substantive legal framework applied to IME no-shows.

Jason Tenenbaum’s Analysis

American Tr. Ins. Co. v Acosta, 2022 NY Slip Op 01097 (1st Dept. 2022)

(Concurrence)

“Insofar as the majority opinion is premised on our precedent in Unitrin Advantage Ins. Co. v Bayshore Physical Therapy, PLLC (82 AD3d 559, 560 , lv denied 17 NY3d 705 ), I am constrained to concur; however, I favor the reasoning of our sister departments that the failure to appear for a medical examination (ME) constitutes a breach of policy term and not a failure of condition precedent that would entitle the insurer to void the policy ab initio. The defense of failure to appear for an ME is more akin to a policy exclusion than a lack of coverage in the first instance such as where the policy had terminated prior to the accident or the injuries were not caused by the covered accident (see e.g. Nationwide Affinity Ins. Co. of Am. v Jamaica Wellness Med., P.C., 167 AD3d 192 ).”

When carriers continuously throw garbage into the system and fail to oppose an appeal, this is the outcome. The majority opinion said

“defendants argued in opposition to the summary judgment motion, because it is impossible to discern from the record whether plaintiff complied with the requisite time frames requiring it to request MEs within 15 days of receiving defendants’ claims and scheduling the MEs within 30 days of receiving their claims (11 NYCRR 65-3.5, ), plaintiff failed to establish its prima facie entitlement to summary judgment (Longevity Med. Supply, 131 AD3d at 841-842;)”

Well, well, well…

Legal Significance: The Condition Precedent vs. Breach of Policy Term Debate

The concurrence’s explicit criticism of Unitrin reveals deeper tensions in New York insurance law. Treating IME no-shows as failures of conditions precedent grants insurers extraordinary power—the ability to retroactively void all coverage based on a missed examination that occurred after the accident and after medical treatment was provided. This approach seems inconsistent with fundamental insurance principles that distinguish between coverage determinations (did the policy provide coverage for this accident?) and post-loss cooperation requirements (did the insured fulfill their obligations after coverage attached?).

Other appellate departments have adopted the more measured approach endorsed by the concurrence, treating IME no-shows as breaches of policy terms. Under this framework, an insurer can deny the specific claims for which the IME was sought, but cannot void coverage entirely. This distinction matters significantly in cases where multiple providers treated the insured: under Unitrin, all providers lose coverage; under the breach-of-policy-term approach, only providers whose claims are directly affected by the IME refusal face potential denial.

The concurrence’s reasoning draws a sensible distinction between true coverage defenses (such as policy termination before the accident or injuries not caused by the covered accident) and post-loss cooperation failures. The former category represents situations where coverage never attached; the latter involves situations where coverage existed but the insured’s post-accident conduct potentially limits recovery.

The majority opinion’s focus on the insurer’s procedural failures highlights another critical issue: insurers seeking to deny claims based on IME no-shows must strictly comply with regulatory requirements, including the 15-day request window and 30-day scheduling timeframe. When insurers fail to meet these deadlines or provide inadequate documentation of compliance, courts will deny summary judgment regardless of whether the insured actually failed to appear.

Practical Implications for Insurers and Healthcare Providers

For insurance companies, this decision serves as both a warning and an opportunity. The warning: procedural compliance with IME scheduling regulations is non-negotiable. Insurers must maintain meticulous records demonstrating that they requested examinations within 15 days of receiving claims and scheduled them within 30 days. Sloppy record-keeping or delayed examination requests will doom summary judgment motions, as occurred here.

The opportunity: the concurrence signals potential future doctrinal change. While Unitrin remains controlling precedent in the First Department, mounting criticism from within the bench suggests that the Court of Appeals or future First Department panels may reconsider this framework. Insurers should anticipate that the condition precedent approach may not remain viable indefinitely.

For healthcare providers and their attorneys, this case offers multiple defense strategies. First, challenge the insurer’s procedural compliance with IME scheduling requirements, demanding proof of timely requests and scheduling. Second, in departments outside the First, argue for the breach-of-policy-term framework rather than the condition precedent approach. Third, even in the First Department, cite the Acosta concurrence as evidence of judicial discontent with Unitrin, preserving arguments for potential future doctrinal development.

Providers should also recognize that insurers’ failures to properly oppose appeals or present adequate records can result in favorable outcomes even under unfavorable substantive law. As Jason Tenenbaum notes, when carriers “continuously throw garbage into the system and fail to oppose an appeal,” they create opportunities for providers to prevail based on the insurer’s own procedural deficiencies.

Key Takeaway

While Unitrin’s condition precedent framework remains controlling law in the First Department, significant judicial criticism suggests this doctrine may be reconsidered in the future. A First Department justice’s concurring opinion explicitly advocating for the breach-of-policy-term approach signals potential doctrinal evolution. In the meantime, insurers must maintain strict procedural compliance with IME scheduling regulations, as failures in timing or documentation will result in denied summary judgment motions regardless of whether the insured actually missed examinations.

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• Understanding IME No-Shows in New York No-Fault Insurance: Rights, Consequences, and Strategic Considerations
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• Understanding CPLR 3212(a): Critical Timing Rules for Summary Judgment Motions in New York
• No-Fault Verification Requirements: When Partial Compliance Isn’t Enough
• New York No-Fault Insurance Law