State Farm Mut. Auto. Ins. Co. v Emote Med. Servs., P.C. (2022 NY Slip Op 50818(U))

Index No. 151954/2022

Rivkin Radler LLP, Uniondale, NY (Vincent J. Pontrello of counsel), for plaintiffs.

No appearance for defendant.

In this action, plaintiffs seek a declaratory judgment relating to no-fault insurance coverage. Unlike the typical no-fault declaratory-judgment action, plaintiffs do not seek relief against a range of medical providers who have each claimed benefits for treatment provided following a particular covered automobile collision. Instead, plaintiffs have brought this action against one provider, addressing benefits claims for treatment provided following dozens of collisions. (See NYSCEF No. 1 at ｶ 1 [verified complaint]; NYSCEF No. 2 [listing claims].)

Plaintiffs allege that they denied each of these claims because defendant failed in each instance to appear for a properly requested examination under oath (EUO). (NYSCEF No. 1 at ｶｶ 26-32.) They allege that these EUOs were aimed at ascertaining whether defendant is ineligible to collect no-fault benefits under 11 NYCRR 65-3.16 (a) (12) due to, among other things, being controlled by nonphysicians in willful violation of New York law. (Id. at ｶｶ 23-24; see Andrew Carothers, M.D., P.C. v Progressive Ins. Co., 33 NY3d 389, 403-405 [2019] [*2][discussing this ground for denying no-fault claims].)

Plaintiffs now move without opposition for default judgment under CPLR 3215. The motion is denied.

DISCUSSION

Plaintiffs’ motion papers establish that defendant was properly served; and defendant has not appeared. The question is thus whether plaintiffs’ verified complaint, standing alone, provides proof of the facts constituting plaintiff’s claim. (See CPLR 3215 [f].) It does not.

A plaintiff denying a provider’s claim for no-fault benefits based on asserted failures to appear for an EUO must demonstrate that the EUO was timely and properly requested. (See Liberty Mut. Ins. Co. v Carranza, 2021 NY Slip Op 50284[U], at *1-2 [Sup Ct, NY County Apr. 7, 2021], citing American Transit Ins. Co. v Longevity Med. Supply, Inc., 131 AD3d 841, 841 [1st Dept 2015].) Plaintiffs have not satisfied these requirements.

Plaintiffs’ verified complaint alleges only that “[e]ach request was timely made,” that plaintiffs then “issued a timely denial on the prescribed denial on the prescribed NF-10 form,” and that these denials “were timely, proper, and consistent with the No-Fault Laws.” (NYSCEF No. 1 at ｶｶ 27, 31, 32.) Given the dozens of bills, EUO requests and follow-up requests, and denials involved (see NYSCEF No. 2 [list of claims]), these conclusory statements are insufficient. That is particularly true since plaintiffs have not submitted any evidence that the many EUO requests, follow-up requests, and denials in question were not simply generated by plaintiffs, but also correctly addressed and mailed to defendant. Plaintiffs do provide a lengthy, detailed chart of bills and EUO requests, organized by the underlying benefits claim. (See id.) That chart, however, omits the most important date for purposes of assessing timeliness—the date on which plaintiffs received the bills. (See id.; 11 NYCRR 65-3.5 [b] [requiring insurers to request EUO-based verification within 15 business days of receiving a provider bill].)

Additionally, the complaint alleges that defendant has “systematically failed and/or refused to appear for an EUO” on many occasions over the past year. (NYSCEF No. 1 at ｶ 29.) This allegation treats a failure to appear and a refusal to appear as interchangeable. But that is not necessarily so. For example, a provider may properly condition its appearance at an EUO on receiving the insurer’s specific objective justification for requesting the EUO under 11 NYCRR 65-3.5 (e). (See Kemper Independence Ins. Co. v Accurate Monitoring, LLC, 73 Misc 3d 585, 586-587, 589 [Sup Ct, NY County 2021].) Plaintiffs’ motion papers do not address whether defendant ever made that kind of request—or, if it did, what the response was.^[FN1] Similarly, [*3]although plaintiffs allege that each EUO request to defendant “endeavored to select places and times for the EUO that would be convenient to [defendant] and advised that a change of time, date, manner and location would be considered if requested” (NYSCEF No. 1 at ｶ 28), plaintiffs do not say whether defendant ever did request a change of that type for logistical/convenience reasons, and, if so, how plaintiffs responded.

Moreover, plaintiffs have not indicated whether any of defendant’s claims for treatment—or other benefits claims arising out of the numerous collisions underlying defendant’s treatment bills—have given rise to other no-fault proceedings by or against plaintiffs. It would be somewhat curious, given the sheer number of insurance claims appearing in plaintiffs’ EUO-request chart, if this action were the very first time that litigation involving one of those claims has arisen—possible, but curious. And if this action were not the first time that one of the no-fault claims identified in the chart has led to litigation, plaintiffs’ declaratory-judgment claims here would be subject to an obvious claim-preclusion objection.

Claim preclusion, to be sure, is an affirmative defense. (See CPLR 3211 [a] [5].) Plaintiffs thus were not required to rule it out in their complaint. For the same reason, the absence of any allegation addressing claim-preclusion-related issues is not itself grounds to deny plaintiffs’ default-judgment motion. But that absence does underscore the comparative thinness of plaintiffs’ motion papers compared to the typical showing in a no-fault coverage action—particularly given the number of claims and bills involved and the amount of money at stake.

The difficulty in this action is that plaintiffs’ true grievance appears to be their conclusion that defendant is not providing legitimate medical services and is ineligible under 11 NYCRR 65-3.16 (a) (12) to receive no-fault benefits. But this action does not pursue and support that grievance through seeking a declaration that speaks directly to defendant’s putative lack of eligibility. Instead, plaintiffs are seeking, in effect, to achieve that same result by relying on many asserted EUO-nonappearances to obtain a declaratory judgment supporting en masse plaintiffs’ denials of defendant’s treatment bills.

Proceeding in this manner might be simpler and more efficient from plaintiffs’ perspective than bringing many individual declaratory judgment actions, each premised on a particular failure of defendant to appear for an EUO. As reflected in the discussion above, though, the flip side of plaintiffs’ efficiency gains is that this court loses the information and documentation it needs to properly evaluate plaintiffs’ claims about defendant’s repeated EUO-nonappearances. (Cf. Travelers Indemnity Co. v Parisien, 2020 NY Slip Op 51561[U], at *3-4 [Sup Ct, Suffolk County Dec. 29, 2020] [expressing concern in a no-fault declaratory-judgment action about 13 different sets of treatment bills that “[u]ltimately, in the guise of convenience, plaintiffs are, in effect, seeking to circumvent the statutorily prescribed procedures that govern disputes between no-fault insurers and no-fault health services providers over the validity of reimbursement claims and the health services provider’s eligibility”].) In these circumstances, on this record, this court is loath to grant plaintiffs the default judgment that they seek.

At the same time, the court does not rule out the possibility that plaintiffs could still provide the details (and supporting documents) about their EUO requests needed to show that defendant repeatedly failed without justification to appear for timely and properly scheduled EUOs. The court thus sees no basis at this time to dismiss plaintiffs’ action altogether.

Accordingly, it is

ORDERED that plaintiffs’ motion for default judgment under CPLR 3215 is denied [*4]without prejudice; and it is further

ORDERED that if plaintiffs do not bring a renewed default-judgment motion within 60 days of entry of this order, the action will be administratively dismissed; and it is further

ORDERED that plaintiffs serve a copy of this order with notice of its entry on defendant by certified mail, return receipt requested, directed to defendant’s last-known address.

Footnotes

Footnote 1: Although the issue is not squarely presented by the current motion, plaintiff’s complaint does not provide that justification either. It alleges only that “various facts and circumstances . . . called into question” defendant’s eligibility to collect no-fault benefits and the legitimacy of defendant’s treatment and billing, without identifying any of those facts and circumstances. (NYSCEF No. 1 at 24.) That would not be sufficient under 11 NYCRR 65-3.5 (e), were the issue to be contested. (See Kemper Independence, 73 Misc 3d at 589 n 4; Country-Wide Ins. Co. v Delacruz, 71 Misc 3d 247, 251 [Sup Ct, NY County 2021], affd 205 AD3d 473, 473-474 [1st Dept 2022].)