Unitrin Advantage Ins. Co. v Dowd (2020 NY Slip Op 50594(U))

Index No. 156945/2016

Goldberg, Miller & Rubin, P.C., New York, NY (Harlan R. Schreiber and Timothy R. Bishop of counsel), for plaintiff.

Economou & Economou, P.C., Syosset, NY (Ralph C. Caio of counsel), for defendant.

This motion concerns whether plaintiff Unitrin Advantage Insurance Company must pay approximately $12,000 in no-fault insurance benefits to defendant Andrew J. Dowd, M.D. (plus interest and attorney fees), for two surgeries Dr. Dowd performed in 2011.

BACKGROUND

Several individuals (nonparties in this action) allegedly suffered a collision while in a vehicle covered by a no-fault insurance policy issued by Unitrin. One individual, Quente Wright, was treated by Dr. Dowd. In July 2011, Dr. Dowd operated on Wright. Dowd submitted a benefits claim to Unitrin for that surgery (for $5,943.59), which Unitrin received on August 1, [*2]2011. In September 2011, Dowd performed a second surgery on Wright, and submitted a second claim to Unitrin (for $6,106.56), which Unitrin received on October 7, 2011.

Unitrin was skeptical that Wright had been involved in a legitimate, rather than staged, collision. It was similarly skeptical that Wright had sustained any injuries requiring surgery. On September 22, 2011, Unitrin mailed to Dr. Dowd a request that he appear for an examination under oath (EUO) to answer questions about the medical necessity of the first surgery. The EUO was scheduled for October 6, 2011. Dr. Dowd did not appear for the EUO. Unitrin sent him a second letter, on October 11, 2011, requesting that he appear for a rescheduled EUO on October 25. Dowd again did not appear. Unitrin denied Dowd’s benefits claims for both surgeries based on his repeated failure to appear for an EUO.

Dr. Dowd disputed Unitrin’s denial of his claims for benefits. That dispute has a somewhat lengthy and involved procedural history that is not relevant here. What matters now is that in the current action, Unitrin is seeking a declaratory judgment that Dr. Dowd is not entitled to benefits. Dowd moves for summary judgment under CPLR 3212. He argues that he has established as a matter of law that he properly submitted claims for medical services rendered and that Unitrin failed to issue a timely denial of those claims. Unitrin cross-moves for summary judgment under CPLR 3212. According to Unitrin, Dr. Dowd failed to appear for a timely and properly scheduled EUO about the services that he claimed to have provided. Unitrin argues that it therefore properly denied the two claims

As to the benefits claim relating to the first surgery, Dr. Dowd’s motion is granted, and Unitrin’s cross-motion is denied. As to the benefits claim relating to the second surgery, Dr. Dowd’s motion is denied, and Unitrin’s cross-motion is granted.

DISCUSSION

A provider of medical services can establish a prima facie showing of entitlement to summary judgment by submitting admissible proof that the requisite claim forms were mailed and received by the carrier and that the payment is overdue. (See Insurance Law § 5106 [a]; New York & Presbyterian Hosp. v Countrywide Ins. Co., 44 AD3d 729, 843 [2d Dept 2007].) Here, Unitrin does not contest that it received the requisite claim forms from Dr. Dowd or that the claims remain unpaid. Unitrin argues instead that Dowd is not entitled to benefits because he, as Wright’s assignor, violated the terms of the applicable no-fault policy by failing to appear for an EUO upon request.

A no-fault insurer seeking a declaration of no coverage due to asserted violations of the terms of the policy must first demonstrate that it complied with each procedural and timeliness requirement of 11 NYCRR § 65-3.5, governing the handling of no-fault claims. (See American Transit Ins. Co. v Longevity Med. Supply, Inc., 131 AD3d 841, 841 [1st Dept 2015].) Among other things, § 65-3.5 provides that once an insurer receives the verification forms for a pending claim for benefits, the insurer then has 15 business days to seek further verification—for example, through requesting a claimant to appear for an EUO. (See id. § 65-3.5 [b]; Unitrin Advantage Ins. Co. v All of NY, Inc., 158 AD3d 449, 449 [1st Dept 2018].) A claimant’s failure [*3]without reasonable cause to appear for a timely and properly scheduled EUO is grounds to deny coverage.

Here, Unitrin does not seriously contest that its EUO requests were untimely as to the first surgery: The first request was mailed out on September 22, 2011, well beyond the 15-day period following Unitrin’s August 1 receipt of the benefits claim for the first surgery. Unitrin argues, though, that the EUO requests were timely as to the second surgery—and that Dr. Dowd’s failure to appear for an EUO means that Unitrin is entitled to deny benefits for both surgeries. This court disagrees.

To be sure, Unitrin’s starting premise is correct: A no-fault insurer may properly request an individual covered by no-fault insurance to appear for an EUO prior to receiving that individual’s benefits claim; and the insurer may properly deny benefits if the individual does not appear as requested. (See Mapfre Ins. Co. of NY v Manoo, 140 AD3d 468, 469 [1st Dept 2016].) But Unitrin’s conclusion does not follow. Where a claimant (such as a medical provider) submits multiple claims for benefits, and the insurer’s EUO request is timely as to some of those claims and untimely as to others, the insurer is entitled to deny coverage only as to those claims for which it timely requested verification—not as to all claims. (See All of NY, 158 AD3d at 449-450.)

This court is not persuaded by Unitrin’s contrary argument. Unitrin contends that in Hertz Vehicles, LLC v Alluri (171 AD3d 432 [1st Dept 2019]), the insurer had submitted one claim for which there was an untimely EUO request and one claim for which there was a timely request, which (assertedly) led both Supreme Court and the First Department to hold that the insurer could deny all claims retroactive to the date of loss. This contention has two key shortcomings.

First, neither the trial nor appellate decisions in Alluri actually say that where an EUO request is timely only as to one out of two claims (and then not complied with), the insurer can properly deny benefits as to both claims. Instead, each decision refers only to one claim for benefits, for which the insurer’s EUO request had been timely under Manoo. (See Hertz Vehs. v Alluri, 2017 NY Slip Op 32578 [U], at *3-*4 [Sup Ct, NY County Dec. 11, 2017]; Alluri, 171 AD3d at 432.)

Second, if the First Department had held in Alluri that one timely EUO request entitles an insurer to deny benefits even as to claims for which an untimely request had been made, that holding would have been inconsistent with the Court’s ruling the year before in All of NY Yet Alluri does not discuss, or even mention, All of NY Rather, Alluri relies on Manoo (see 171 AD3d at 432); and the holding in Manoo is premised on the Court’s conclusion that the insurer had “establish[ed] that it timely and properly mailed the notices for EUOs” to the covered individual. (140 AD3d at 469.)

Unitrin also points to the First Department’s statement in Unitrin Advantage Ins. Co. v Bayshore Phys. Therapy, LLC that “when defendants’ assignors failed to appear for the requested [medical examinations], plaintiff had the right to deny all claims retroactively to the date of loss.” ((82 AD3d 559, 560 [1st Dept 2011] [emphasis added]). But even Bayshore itself notes [*4]that the insurer there met its burden to “establish[] that it requested [medical examinations] in accordance with the procedures and time-frames set forth in the No—Fault implementing regulations.” (Id.; see also American Transit Ins. Co. v Longevity Med. Supply, Inc., 131 AD3d 841, 842 [1st Dept 2015] [emphasizing this point].) And it would be odd to say, in effect, that an insurer can still deny a benefits claim due to a claimant or assignor’s failure to appear at an EUO despite failing to timely or properly request the EUO after receiving that claim. Regardless, to the extent that a contradiction does exist between the First Department’s holdings in Bayshore and in All of NY, this court must follow the First Department’s most recent holding on the subject. (See Vaughan v Leon, 94 AD3d 646, 649 n 2 [1st Dept 2012].)

Unitrin’s EUO request upon receipt of the first claim was untimely. This court concludes, therefore, that Unitrin may not deny Dr. Dowd’s otherwise-sufficient claim for benefits from the first surgery based on Dowd’s failure to appear for an EUO.

That still leaves the claim for benefits from the second surgery. Under Manoo and Alluri, Unitrin’s EUO request was timely as to the second benefits claim—particularly since a key subject for questions at the EUO, namely the medical necessity of surgery on Quente Wright, would have been the same for both benefits claims. Dr. Dowd asserts, though, that the EUO request was improper: It did not sufficiently identify from whom Unitrin was seeking an EUO. This court disagrees. Unitrin has produced two EUO request letters that plainly request the appearance for an EUO of a principal from Dr. Dowd’s medical practice (i.e., either Dr. Dowd himself or someone with comparable authority), and also specify the subjects to be discussed at the EUO and the EUO’s time and place. Dr. Dowd does not contest that these letters were properly mailed. Nor does he contest that he failed to appear as requested. That is sufficient to establish that Dr. Dowd failed to comply with a requirement of the applicable no-fault insurance policy in this case as to his second claim for benefits.

Accordingly, it is hereby

ORDERED that the branch of Dr. Dowd’s motion under CPLR 3212 seeking summary judgment as to his claim for benefits in the amount of $5,943.59 (received by Unitrin on August 1, 2011) is denied; and it is further

ORDERED that the branch of Unitrin’s cross-motion under CPLR 3212 seeking summary judgment as to Dr. Dowd’s claim for benefits in the amount of $5,943.59 (received by Unitrin on August 1, 2011) is granted; and it is further

ADJUDGED AND DECREED that Unitrin owes no duty to pay Dr. Dowd that claim for benefits; and it is further

ORDERED that the branch of Dr. Dowd’s motion under CPLR 3212 seeking summary judgment as to his claim for benefits in the amount of in the amount of $6,106.56 (received by Unitrin on October 7, 2011) is granted; and it is further

ORDERED that the branch of Unitrin’s cross-motion under CPLR 3212 seeking [*5]summary judgment as to Dr. Dowd’s claim for benefits in the amount of $6,106.56 (received by Unitrin on October 7, 2011) is denied; and it is further

ADJUDGED AND DECREED that Dr. Dowd shall have judgment against Unitrin in the amount of $6,106.56; plus interest on that sum at 2% per month, running from November 6, 2012, until the entry of judgment; plus attorney fees as provided for under Insurance Law § 5106 (a) and 11 NYCRR § 65-4.6; and it is further

ORDERED that Dr. Dowd shall serve a copy of this order with notice of its entry on all parties and on the office of the County Clerk, which shall enter judgment accordingly; and it is further

ORDERED that notice of entry may be served by mail or overnight delivery service, with Dr. Dowd to e-file a copy of notice of entry (and accompanying affidavit(s) of service) on NYSCEF once filing of notices of entry in pending nonessential matters is again permitted by order of Chief Administrative Judge Lawrence Marks.

Date: 5/21/20