June 10, 2024
Kim v State Farm Ins. Co. (2024 NY Slip Op 51364(U))
https://www.beynensonlaw.com/case-law/kim-v-state-farm-ins-co-2024-ny-slip-op-51364u/
- Judge
- Malik, J.
- Decided
- June 10, 2024
- Citation
- 2024 NY Slip Op 51364(U)
- Posture
- Summary judgment
- Outcome
- Split result
Posture, outcome, issues and treatment by other decisions are Beynenson Law’s classification. Treatment labels are assigned by a language model reading the citing decision; negative and appeal-history labels are checked by a second reader.
Summary
Editorial summary by Beynenson Law, not part of the court’s decision.
Reported in New York Official Reports at Kim v State Farm Ins. Co. (2024 NY Slip Op 51364(U))
[*1]| Kim v State Farm Ins. Co. |
| 2024 NY Slip Op 51364(U) |
| Decided on June 10, 2024 |
| Civil Court Of The City Of New York, New York County |
| Malik, J. |
| Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. |
| This opinion is uncorrected and will not be published in the printed Official Reports. |
Decided on June 10, 2024
Henry Lin Kim As Assignee of DENAR BALCAZAR, Plaintiff(s),
against State Farm Insurance Company, Defendant(s). |
Index No. CV-706270-22/NY
Attorneys for Plaintiff
Law Offices of Gabriel & Moroff, P.C.
2 Lincoln Avenue, Ste 302
Rockville Centre, NY 11570
Tel. (516)388-7040
Attorneys for Defendant
Bennett Bricklin & Saltzburg LLC
40 Wall Street, Ste 1002
New York, NY 10005
Tel. (646)565-5044 Rena Malik, J.
Denar Balcazar, plaintiff-assignor was involved in a motor vehicle accident on March 10, 2021, and sought medical treatment from Henry Lin Kim (plaintiff). Plaintiff commenced this action against State Farm Insurance Company seeking to recover $2,101.17 representing the balance of alleged first-party no-fault benefits for medical services provided to plaintiff-assignor.
Upon the foregoing papers, defendant moves for summary judgment dismissing the complaint on the grounds that plaintiff failed to appear at an examination under oath (EUO).[FN1] In [*2]support, defendant submits an attorney affirmation and an affidavit of Richa Sinha, defendant’s claim specialist, which attests to the standard business practices and procedures including processing of claims, the issuances of denials, defendant’s mailing and electronic transmission procedures, and the documents associated with the claims that are the subject of this action.
Plaintiff opposes the motion and cross-moves for summary judgment, arguing the claims were timely submitted and payment is overdue, and that there is a question of fact as to whether the requested examinations before trial were properly scheduled and whether plaintiff’s objection to the examination under oath was reasonable.
The movant on a motion for summary judgment must make a prima facie showing of entitlement to judgment as a matter of law by tendering sufficient evidence to eliminate any material issues of fact from the case (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]; Zuckerman v City of New York, 49 NY2d 557, 562 [1980]). CPLR 3212 provides that a summary judgment motion must be supported by an affidavit of a person with knowledge of the facts, as well as other admissible evidence (see JMD Holding Corp. v Congress Fin. Corp., 4 NY3d 373, 384-386 [2005]). Once such a showing is made, “the burden shifts to the party opposing the motion for summary judgment to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact which require a trial of the action” (Alvarez v Prospect Hosp.,68 NY2d 320, 324 [1986], citing Zuckerman v City of New York, 49 NY2d at 562).
The no fault insurance scheme is designed to provide a quick resolution of the reimbursement of claims, avoid litigation, and incentivize an insurer to seek verification of a claim, deny it, or pay it in short order (see Viviane Etienne Med. Care, P.C. v Country Wide Ins. Co., 25 NY3d 498, 506-07 [2015]; Matter of Med. Socy. of State v Serio, 100 NY2d 854, 860 [2003]). The procedure to verify, deny, or pay claims is codified and governed by Insurance Law 5106 (a).
Defendant’s Motion for Summary Judgment
“[A]n appearance at an EUO is a condition precedent to the insurer’s liability on the policy” (see Ultimate Health Prods., Inc. v Travelers Ins. Co., 47 Misc 3d 129(A), 2015 NY Slip Op 50377[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dist 2015], citing 11 NYCRR § 65—1.1; see also GLM Med., P.C. v State Farm Mut. Auto. Ins. Co., 30 Misc 3d 137(A), 2011 NY Slip Op 50194 [U] [App Term, 2d Dept, 2nd, 11th & 13th Jud Dists 2011]).
“To establish its prima facie entitlement to summary judgment dismissing a complaint on the ground that a provider had failed to appear for an EUO, an insurer must demonstrate, as a matter of law, that it had twice duly demanded an EUO from the provider, that the provider had twice failed to appear, and that the insurer had issued a timely denial of the claims” (Oleg’s Acupuncture, P.C. v State Farm Mut. Auto. Ins. Co., 63 Misc 3d 152(A), 2019 NY Slip Op 50760[U] [App Term, 2d Dept, 2nd, 11th & 13th Jud Dists 2019]).
The First Department has also held that the insurer must demonstrate a specific objective justification for the EUO: “11 NYCRR 65-3.5 (e) requires an EUO request be based on application of objective standards, and that the insurer must have a specific objective justification. Summary judgment is premature under CPLR 3212 where an insurer fails to [*3]provide a medical provider with its objective justification for requesting the EUO” (Country-Wide Ins. Co. v Alicea, 214 AD3d 530 [1st Dept 2023], citing Country-Wide Ins. Co. v Delacruz, 205 AD3d 473, 473 [1st Dept 2022]). “When an insurer requires an examination under oath of an applicant to establish proof of claim, such requirement must be based upon the application of objective standards so that there is specific objective justification supporting the use of such examination” (11 NYCRR 65-3.5). “Th[e] [First Department] has explained that the insurer’s reason for the EUO is essential for medical providers to oppose an insurer’s summary judgment motion, and that information is in the exclusive knowledge and control of the insurer” (Country-Wide Ins. Co. v Alicea, 214 AD3d 530 [1st Dept 2023], citing Am. Tr. Ins. Co. v Jaga Med. Servs., P.C., 128 AD3d 441 [1st Dept 2015]).
In the action at bar, defendant established the timely and proper mailing of the EUO scheduling letters and the denial of claim forms, and that plaintiff did not appear for the EUOs. Several letters were sent attempting to schedule the examination under oath for 4 different dates (see NYSCEF Doc Nos 10-14, consisting of scheduling letters, statement on the record, bills, explanation of review and denial of claim forms, and proof of mailing and affidavits of mailing) (see, e.g., Oleg’s Acupuncture, P.C. v State Farm Mut. Auto. Ins. Co., 63 Misc 3d 152[A], 2019 NY Slip Op 50760[U] [App Term, 2d Dept, 2nd, 11th & 13th Jud Dists 2019]).
Defendant’s State Farm EUO scheduling letters of May 4, 2021 (relating to treatment dated March 22, 2021 and March 29, 2021) and May 19, 2021 (relating to treatment date of April 5, 2021) reference several stated reasons for additional verification by EUO: pattern in nature and frequency of services rendered; medical justification for the services; whether the manner and performance of services was medically necessary; whether provider is billing for services not provided; and whether provider is operating in violation of licensing laws (NYSCEF Doc No. 10). Defendant sent these letters to provider in connection with 6 other injured parties in addition to the treatment of the assignor of the instant claim (Denar Balcazar) and did not reference any facts or circumstances specific to the Balcazar claim. Accordingly, the Court finds that defendant State Farm’s scheduling letters failed to state a “specific objective justification” for an EUO with respect to the instant claim (see Country-Wide Ins. Co. v Alicea, 214 AD3d 530 [1st Dept 2023]).
By letters dated June 15, 2021, June 30, 2021, July 12, 2021, July 28, 2021 and August 9, 2021 State Farm’s attorneys also sent EUO scheduling letters and in addition a list of documents to produce at the EUO. Many of the documents sought by State Farm in these letters are of similar nature to the EUO letter sent by State Farm in the action Dynamic Med. Imaging, P.C., as Assignee of Staffa Pasqualino v State Farm Mut. Auto. Ins. Co. (29 Misc 3d 278 [NY Dist Ct, Nassau County, 2010]) that was held by that Court to be essentially an inappropriate pre-action discovery demand regarding a potential Mallela fraudulent incorporation defense and beyond the scope and purpose of a no-fault EUO (see State Farm Mut. Auto Ins. Co. v Mallela, 4 NY3d 313 [2005]). For instance, the documents sought here include those which “evidence ownership of Henry Lin Kim, M.D. and HLK Medical, P.C.,” “original and amended articles of incorporation, corporate by-laws, documentation of the names and addresses of shareholders, stock certificates, and stock ledgers,” “professional credentials for each individual who is an owner, shareholder or member of Henry Lin Kim, M.D. and HLK Medical, P.C.,” “writings relating to the relationship between Henry Lin Kim, M.D. and HLK Medical, P.C. and all entities or individuals from which it leases space and/or obtains patient referrals,” and “writings regarding all entities and/or individuals that provided management, consulting, administrative, billing services or patient [*4]referrals to Henry Lin Kim, M.D. and HLK Medical, P.C. and any payments made to persons or entities that rendered such services” (NYSCEF Doc No. 10).
In the action at bar, plaintiff through counsel by letter dated May 12, 2021 [FN2] objected to the EUO request raising specifically the concern that the request appears to be of improper scope addressed towards establishing a Mallela defense, and also raised concerns as to the extent and scope, location and date, and reimbursement for lost wages and transportation costs (NYSCEF Doc No. 19).
The Court agrees that many of the documents sought by defendant in the EUO document request appear directed at pre-action discovery into the provider’s business operations rather than prompt resolution of no-fault benefits to the injured party Denar Balcazar in accordance with the insurance regulations (cf. Repwest Ins. Co. v Advantage Radiology, P.C., 42 Misc 3d 1210[A] [Sup Ct, NY County 2014] [where the EUO request held to be proper included a request for insurance policies, documents related to bodily injuries and photographs of the collision at issue, and not corporate organizational and financial documents]).
In the absence of a specific objection justification for the EUO, a party fails to establish, as a matter of law, that it complied with the governing regulations, and a motion for summary judgment is properly denied (see Country-Wide Ins. Co. v Delacruz, 205 AD3d 473, 474 [1st Dept 2022]). Accordingly, defendant’s motion for summary judgment on the basis that plaintiff failed to appear for the EUO is accordingly denied.
Plaintiff’s Cross Motion for Summary Judgment
“[A] plaintiff demonstrates prima facie entitlement to summary judgment by submitting evidence that payment of no-fault benefits are overdue, and proof of its claim, using the statutory billing form, was mailed to and received by the defendant insurer” (Viviane Etienne Med. Care, P.C. v Country-Wide Ins. Co., 25 NY3d 498, 501 [2015]). The Court finds that the cross-motion should be denied on the grounds that it fails to include a party affidavit someone with personal knowledge of the facts constituting its claim as required by CPLR 3212. Accordingly, plaintiff has not met its burden of proof for an award of summary judgment.
Accordingly, it is hereby
ORDERED, defendant’s motion for summary judgment (mot. seq. 001) is denied; and it is further
ORDERED, that plaintiff’s cross-motion for summary judgment (mot. seq. 002) is denied; and it is further
ORDERED, that the parties shall appear for a pre-trial conference in Part 41 at 9:30 a.m. on July 25, 2024.
This constitutes the decision and order of the Court.
DATED: June 10, 2024ENTER:
New York, New York
RENA MALIK
Judge of the Civil Court
Footnote 1:Although defense counsel’s affirmation in support tersely references the argument that the policy benefits have been exhausted (NYSCEF Doc No 7 at ¶ 2), the papers otherwise only argue dismissal on the grounds that the plaintiff failed to appear for an EUO. Accordingly, the Court does not discuss whether the policy benefits have been exhausted.
Footnote 2:The Court notes that Plaintiff’s May 12, 2021 letter of objection addressed two of the three treatment dates at issue.
Legal questions (5)
Questions of no-fault law this decision rules on, from our Legal Questions pages. Bars count the decisions on the question by year and court, coloured by category; circles are this decision and the decisions on the question it cites or that cite it. Point at a bar or circle for details. The categories and summaries are Beynenson Law’s classification, made by a language model and checked by a second reading.
On summary judgment or another pretrial motion, what must a no-fault claimant show to establish its prima facie case?
This decision: Insufficient: claimant did not prove the claim was submitted (mailed to and received by the insurer)
Held the provider's cross motion failed because it was not supported by an affidavit of someone with personal knowledge of the facts constituting its claim.
Of the 52 decisions on this question in the First Department courts and the Court of Appeals, 3 (this one included) are in the same category.
Did the insurer prove its IME/EUO no-show defense: mailed, compliant scheduling requests and the claimant’s nonappearance?
This decision: Insurer did not show its requests met the regulatory timing, follow-up or justification requirements
Held the insurer did not establish compliance with the regulations because its form EUO letters, sent for several claimants, stated no specific objective justification tied to this claim, so its summary judgment motion was denied.
Of the 165 decisions on this question in the First Department courts and the Court of Appeals, 39 (this one included) are in the same category. 4 decisions in other departments that cite or are cited by this one are on the full map.
Is an IME/EUO no-show defense precluded if the insurer did not timely deny the claim on that ground?
This decision: Timely denial required as part of the no-show defense, and the insurer showed it (rules on the question, but another ground decided the case)
Applied the rule that an EUO no-show defense requires a timely denial and found the insurer established timely and proper mailing of its denial of claim forms, though the motion failed on another ground.
Of the 36 decisions on this question in the First Department courts and the Court of Appeals, 4 (this one included) are in the same category. 2 decisions in other departments that cite or are cited by this one are on the full map.
Did a party’s evidence establish that it mailed a no-fault claim, denial, verification request or examination notice?
This decision: The insurer's (or its agent's) proof established mailing of its denial, verification request or IME/EUO notice (rules on the question, but another ground decided the case)
Held the insurer established the timely and proper mailing of its EUO scheduling letters and denial of claim forms through its claim specialist's affidavit and affidavits of mailing.
Of the 161 decisions on this question in the First Department courts and the Court of Appeals, 110 (this one included) are in the same category. 2 decisions in other departments that cite or are cited by this one are on the full map.
May the insurer raise and investigate a Mallela (fraudulent incorporation) defense, or is it precluded, waived or denied discovery?
This decision: Insurer may not pursue or investigate the Mallela defense here (rules on the question, but another ground decided the case)
Agreed with the provider's objection that the EUO document demands for ownership, incorporation and management records were improper pre-action discovery aimed at a Mallela defense, beyond the scope of a no-fault EUO.
Of the 24 decisions on this question in the First Department courts and the Court of Appeals, 7 (this one included) are in the same category. One decision in other departments that cites or is cited by this one is on the full map.
Cited in this decision
A label shows how this decision treated the case it cites.
- Viviane Etienne Med. Care, P.C. v Country-Wide Ins. Co. (2015 NY Slip Op 04787) FollowedA provider establishes entitlement to summary judgment on overdue no-fault claims with admissible proof of mailing and receipt of statutory claim forms.
- Ultimate Health Prods., Inc. v Travelers Ins. Co. (2015 NY Slip Op 50377(U))Appearance at a duly scheduled EUO is a condition precedent to an insurer's liability under the policy.
- GLM Med., P.C. v State Farm Mut. Auto. Ins. Co. (2011 NY Slip Op 50194(U))EUO scheduling letters need not highlight the time and place in bold or larger type.
- Oleg’s Acupuncture, P.C. v State Farm Mut. Auto. Ins. Co. (2019 NY Slip Op 50760(U)) FollowedA different contact in an EUO letter does not undermine an otherwise sufficient affirmation of nonappearance by an attorney at the same firm.
- Country-Wide Ins. Co. v Alicea (2023 NY Slip Op 01474) FollowedAn insurer's EUO nonappearance summary judgment motion is premature without disclosure of its objective justification for requesting the EUO. The insurer obtained a declaration that it owed no benefits and a permanent stay of further actions involving the injured claimant.
- Country-Wide Ins. Co. v Delacruz (2022 NY Slip Op 03068) FollowedThe insurer's EUO nonappearance motion was premature because it withheld the specific objective justification for requesting the EUO. The Appellate Division, First Department, affirmed denial of summary judgment against the providers under CPLR 3212 (f).
- American Tr. Ins. Co. v Jaga Med. Servs., P.C. (2015 NY Slip Op 03925)The insurer's summary judgment motion based on the claimant's EUO nonappearance was denied because essential discovery remained outstanding.
- Dynamic Med. Imaging, P.C. v State Farm Mut. Auto. Ins. Co. (2010 NY Slip Op 20285) FollowedAn insurer may not obtain summary judgment for EUO nonappearance based on a demand for advance production of corporate and financial records.
- State Farm Mut. Auto. Ins. Co. v Mallela (2005 NY Slip Op 02416)Fraudulently incorporated medical providers are ineligible for no-fault reimbursement under 11 NYCRR 65-3.16 (a) (12).
Similar decisions
- Natural Therapy Acupuncture, P.C. v State Farm Mut. Auto. Ins. Co. (2013 NYSlip Op 51935(U))The provider's EUO objections were unpreserved, and the insurer established timely notices and denials and the provider's nonappearance.
- New York Core Chiropractic, P.C. v Ameriprise Ins. Co. (2021 NY Slip Op 50599(U))An EUO request sent after 15 business days but within 30 calendar days tolls the time to pay or deny, with a reduction for lateness.
- Central Park Physical Medicine & Rehab., P.C. v Travelers Indem. Co. of Conn. (2017 NY Slip Op 51354(U))The provider's two EUO nonappearances breached a condition precedent, and its post-denial letters did not excuse noncompliance.
- Sloan v Nationwide Mut. Ins. Co. (2022 NY Slip Op 50997(U))The insurer's EUO defense failed because its initial request and its denial following the second nonappearance were untimely.
- Pedro Torres-Jimenez, MD PC v Nationwide Affinity Ins. Co. of Am. (2026 NY Slip Op 50073(U))A timely verification request's toll does not give an insurer further opportunities to make otherwise untimely verification requests.