No Fault Defender – A Defense Attorney's Perspective on New York No-Fault Law

Archive for the ‘Sufficiency of letters and requests’ Category

Dynamic Med. Imaging, P.C. v State Farm Mut. Auto. Ins. Co., 2010 NY Slip Op 20285 (Dis. Nassau 2010)

I am somewhat flabbergasted at this decision.  I am pretty down the middle (I think) and I really try to be as fair as I can on this blog.  With that introduction, I will say the following.  I would probably volunteer to do the appeal on this one, just because it is off on the law, the facts and is against the trend of every modern case that has come out of both branches of the Appellate Term, Second Department, as well as some “hidden” Appellate Division precedent, which I will not disclose.  You can read the facts of this case at your leisure.

There has been a lot of activity on the Supreme Court front, in the realm of declaratory judgment actions, as to whether a insurance carrier must prove prima facie that the deponent willfully failed to attend an EUO (or IME) .  In the most recent case that came down Progressive Northeastern Ins. Co. v Arguelles Med. P.C., 2009 NY Slip Op 32353(U)(Sup. Ct. NY Co. 2009)(Friedman, J.), a declaration of non coverage was denied due to the failure of the carrier to make a threshold showing that the witness willfully failed to attend the EUOs.  See, Unitrin Advantage Ins. Co. v. Carothers, 17 Misc.3d 1121 (Sup. Ct. NY Co. 2008)(Diamond, J.).  See also, Brentwood Pain & Rehabilitation Services, P.C. v. Progressive Ins. Co. 2009 NY Slip Op 31181(u)(Sup. Ct. NY Co. 2009).

Certain cases not involving violations of the condition precedent portion of the no-fault endorsement hold that the carrier must meet the Thrasher “willful disvowal” standard in order to substantiate a no-fault non-cooperation defense.  Simmons v. State Farm, 16 AD3d 1117 (4th Dept. 2005); Park v. Long Island Ins. Co., 13 AD3d 506 (2d Dept. 2004). But see, Utica Mut. Ins. Co. v. Timms, 293 AD2d 669, 670 (2d Dept. 2002).

It follows, however, that the Thrasher standard would not involve the failure to comply with a portion of the policy that is delineated as a condition precedent to coverage.  See e.g., Stephen Fogel Psychological, P.C. v. Progressive Cas. Ins. Co., 35 AD3d 720 (2d Dept. 2006); Adams v. Allstate Ins. Co., 210 A.D.2d 319 (2d Dept. 1994); Inwood Hill Med., P.C. v General Assurance Co. , 10 Misc 3d 18 (App Term. 1st Dept 2005).

Thus, as to the EUO non-appearance defense, the failure to attend two properly scheduled EUO’s should support a prima facie defense against the compensability of no-fault benefits.  A.B. Medical Services, PLLC v. American Transit Ins. Co., 2009 N.Y. Slip Op. 52067(U)(App. Term 2d Dept. 2009).  A showing of willfulness is not required, and would would only apply if the deponent attended the EUO but was obstructing the examination.  Park, supra. A review of the law also discloses that a finding of reasonableness will generally be inferred from the proximity of the date of the EUO to the scheduling date and the location of the EUO in relation to where the Claimant resides or his attorney has an office.  Great Wall Acupuncture v. New York Cen. Mut. Ins. Co., 22 Misc.3d 136(A)(App. Term 2d Dept. 2009); Eagle Surgical Supply, Inc., v. Progressive Cas. Ins. Co., 21 Misc.3d 49 (App. Term 2d Dept. 2009)

In order to oppose an EUO no-show defense, the burden is on the Plaintiff to demonstrate a lack of reasonableness.  Factors to consider would be whether the EUO was at an odd time, or whether the EUO was scheduled to be held at a location distant from the deponent or his attorney’s office.  Other factors unique to a case may also militate against a finding of reasonableness.  The proof of lack of reasonableness will either rebut the presumption of reasonableness raising an issue of fact or prima facie demonstrate the lack of reasonableness of the EUO request. See, id.

Accordingly, the decision of Justice Friedman and others who believe that a carrier must demonstrate that the deponent willfully failed to appear for two properly scheduled EUOs is probably incorrect.

See Dave Gottlieb’s post at NFP on this for his insight.

The Appellate Term, Second Department seems to be all over the place with the “EUO” cases. The analysis is really needlessly strained and hard to follow. The latest case demonstrates this… Two parts of the opinion are set forth herein.

Great Wall Acupuncture, P.C. v New York Cent. Mut. Fire Ins. Co.
2009 NYSlipOp 50294(U)(App. Term 2d Dept. 2009)

Plaintiff asserts that the EUO scheduling letters were ineffective since they were not sent to plaintiff but rather to an attorney. However, since defendant’s counsel received a letter from said attorney a short time before the initial EUO scheduling letter was mailed advising counsel that the attorney represented plaintiff with respect to EUO requests which were already pending, such a contention lacks merit

A review of the record indicates that defendant established that the insurance policy in effect when the EUOs were sought contained an endorsement authorizing verification by EUO. Inasmuch as the accident in which plaintiff’s assignor was allegedly injured occurred after the April 5, 2003 effective date of the emergency first amendment to revised Department of Insurance Regulation 68, contrary to plaintiff’s contention, defendant was not required to schedule the EUO within 30 days of receiving plaintiff’s claims but only within a reasonable time thereafter. Since the date selected for the EUO was reasonable and plaintiff did not appear for the scheduled EUO, defendant’s motion for summary judgment should have been granted since the action was premature

First, while I agree that in principle an EUO scheduling letter, or any other correspondence, should only be sent to an attorney representing the Party to be deposed, when one is on notice of the same, the regulations do not agree with that proposition of law. The regulations require that the notices be mailed to the injured person and his or her authorized representatives. I am not sure solely sending it to the attorney complies with the regs. But that part of the opinion does not necesarily trouble me.

It is the second part. Why does the App. Term, 2nd Dept keep saying that the failure to attend EUO’s makes the action premature? The failure to attend an EUO is a policy violation – albeit shceduled as additional verification requests – and the claim must be denied. The denial must be within the latter of 30 days of the last EUO appointment or date of receipt of the bill. This is the law. I also do not understand why the App. Term is saying that upon one failure to attend an EUO, the claim is still premature? We shall see how the Court fixes this, or if the App. Div is going to have straighten this out, similar to Fogel and AB Liberty…