Central Park Physical Medicine & Rehab., P.C. v Travelers Indem. Co. of Conn. (2017 NY Slip Op 51354(U))

Reported in New York Official Reports at Central Park Physical Medicine & Rehab., P.C. v Travelers Indem. Co. of Conn. (2017 NY Slip Op 51354(U))

Upon the following papers numbered 1 to 15 read on this motion for an order seeking Summary Judgment for dismissal of complaint in favor of defendant ; by Notice of Motion/Order to Show Cause and supporting papers 1,2,10 ; Notice of Cross Motion and supporting papers; Answering Affidavits and supporting papers 11,13 ; Replying Affidavits and supporting papers 14,15 ; Filed papers ; Other exhibits: 3-9,12 ;(and after hearing counsel in support of and opposed to the motion), it is,

ORDERED that the motion by defendant seeking summary judgment for dismissal of the complaint pursuant to CPLR 3212, is granted. The complaint is dismissed.

Defendant moves by summary judgment for dismissal of plaintiff assignee’s complaint seeking reimbursement of first-party no-fault benefits for medical services provided to plaintiff’s assignor from 10/23/14 through 12/23/14 in the total sum of $5,510.00, as the result of an automobile accident of 10/17/14.

The grounds for dismissal are the failure of plaintiff’s assignee to attend two (2) duly scheduled Examinations Under Oath (“EUO’s”) set by defendant for 01/07/15, and the follow-up for 01/28/15. Defendant asserts the failure to attend the EUO’s breached a condition precedent for payment under defendant’s no-fault insurance policy.

In the event dismissal is denied, defendant seeks to reduce the contested fees sought by plaintiff to that provided in accordance with the New York State Workers’ Compensation Fee Schedule, and asks the Court to take judicial notice of the attached schedules. Defendant also seeks dismissal of plaintiff’s claim for statutory attorney fees, on the grounds that plaintiff wrongfully pursued fees in excess of that permitted by law under the New York State Workers’ Compensation Fee Schedule.

In opposition to the motion, plaintiff asserts that defendant has failed to provide “good [*2]reasons” to justify the EUO’s. In addition, plaintiff asserts that defendant’s proof in support of the motion for summary judgment is insufficient to satisfy defendant’s prima facie burden of showing the timely and proper mailing of the EUO’s set for 01/07/15 and 01/28/15, and for showing that the denial of claims were mailed within 30 days of the last EUO date. Morever, plaintiff asserts defendant failed to demonstrate its requested verifications were mailed to the applicant and applicant’s attorney, as required by statute.

Plaintiff also asserts that defendant failed in its prima facie burden of showing the absence of plaintiff’s assignee at the duly scheduled EUO’s, through an affidavit of someone with personal knowledge of the failure to attend.

Plaintiff also contests defendant’s statement that plaintiff never responded to defendant’s EUO requests. Plaintiff contends it responded with three (3) letters to defendant, stating, inter alia, it intended to comply with defendant’s EUO demands, but was requesting more information from defendant so that it could properly prepare. Plaintiff also contends that the letters provided dates that plaintiff’s assignee was available for the EUO’s. Plaintiff further asserts that it was defendant who did not respond to plaintiff’s letters. Plaintiff asks the Court to deny the dismissal motion, to the extent that it allow plaintiff the opportunity to re-schedule a mutually convenient date with defendant to comply with the prior EUO requests.

In reply, defendant opposes plaintiff’s request, stating that plaintiff chose to ignore the two prior EUO requests and should not now be granted a third.

A proponent of a motion for summary judgment must make a prima facie showing of entitlement to judgment as a matter of law with proof in admissible form sufficient to establish the lack of any material issues of fact (see Alvarez v Prospect Hospital, 68 NY2d 320, 324 [1986]; Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]; Zuckerman v City of New York, 49 NY2d 557, 562 [1980]); see also Manhattan Medical v State Farm Mut. Ins. Co., 20 Misc 3d 1144[A][Civ. Ct. Richmond Cty. 2008]).

A summary judgment motion must be supported by an affidavit of a person having knowledge of the facts and the affidavit shall recite all the material facts and show there is no defense to the cause of action or that the cause of action or defense has no merit (see CPLR 3212[b]). A conclusory affidavit or an affidavit by an individual who lacks personal knowledge of the facts does not satisfy the proponent’s prima facie burden (see JMD Holding Corp. v Congress Financial Corp., 4 NY3d 373 [2005]).

A failure to comply with an insurer’s demand to submit to an EUO verification, is a material breach of the policy, precluding recovery of the policy proceeds (see Interboro Ins. Co. v Clennon, 113 AD3d 596 [2nd Dept 2014]; Unitrin Advantage Ins. Co. v Bay Shore Physical Therapy, PLLC., 82 AD3d 559 [2nd Dept 2011]; Argento v Aetna Cas. & Sur. Co., 184 AD2d 487 [2nd Dept 1992]).

Here, the Court finds as a matter of law that defendant insurer demonstrated by proof in admissible form that it twice demanded an EUO verification of plaintiff’s assignee (see Palafox PT, P.C. v State Farm Mut. Auto. Ins. Co., 49 Misc 3d 143[A][App Term, 2nd, 11th & 13th Jud Dists 2015]), for 01/07/15 and a follow-up verification for 01/28/15, by scheduling letters which were properly mailed in accordance with defendant’s standard office practices and procedures, and in accordance with no-fault regulations (see St. Vincent’s Hosp. of Richmond v GEICO, 50 AD3d 1123, 1124 [2nd Dept 2008]; Gutierrez v Elrac, Inc., 48 Misc 3d 138[A][App Term, 2nd, 11th & 13th Jud Dists 2015]; Urban Radiology, P.C. v Tri-State Consumer Ins. Co., 27 Mis3d 140[A][App Term, 2nd, 11th & 13th Jud Dists 2010]).

The submitted proof also demonstrated defendant’s mailing methods were sufficient to create a rebuttable presumption of proper mailing (see New York Presbyt. Hosp. v Allstate Ins. Co., 29 AD3d 547 [2nd Dept 2006]). “…Proof of proper mailing gives rise to a presumption that the item was received by the addressee” (see Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679, 680 [2nd Dept 2001]).

The Court notes that plaintiff’s assignee has not refuted or denied receipt of the EUO verification requests, thereby failing to rebut the presumption of receipt raised by defendant’s proofs of mailing.

The Court further finds that plaintiff’s assignee failed to appear at both duly scheduled EUO’s, without excuse, or timely notice, as demonstrated by the affirmation of the attorney who was present and assigned to conduct the EUO on each scheduled date (see Delta Dignostic Radiology, P.C. v Esurance, 48 Misc 3d 138[A][App Term, 2nd, 11th & 13th Jud Dists 2015]; Natural Therapy Acupuncture, P.C. v State Farm Mut. Auto. Ins. Co., 42 Misc 3d 137[A][App Term, 2nd, 11th & 13th Jud Dists 2014]).

The Court also determines that the NF-10 denial of claim forms were timely mailed to plaintiff in accordance with defendant’s standard office practices and procedures to ensure that items were properly addressed and mailed, especially for the generating and mailing of NF-10 denial of claim notices (see 11 NYCRR 65-3.8[a][1]; St. Vincent’s Hosp. of Richmond v GEICO, supra; Ortho-Med Surgical Supply, Inc. v MVAIC, 28 Misc 3d 139[A] [App Term, 2nd, 11th & 13th Jud Dists 2010]; Delta Diagnostic Radiology, P.C. v Chubb Group of Ins., 17 Misc 3d 16, 18 [App Term, 2nd, 11th & 13th Jud Dists 2007]). The NF-10 denial of claim forms were dated 02/11/15 and timely mailed within the 30 day period within which defendant was required to pay or deny the claims (see 11 NYCRR §65-3.8[a][1]). Defendant has shown that its standard office practices and procedures ensured plaintiff’s receipt of the denials of claim, and created an additional, rebuttable presumption for each mailing (see New York Presbyt. Hosp. v Allstate Ins. Co., supra).

Therefore, the Court finds that defendant has made a prima facie showing by admissible evidence, of entitlement to summary judgment dismissing the complaint, as a matter of law.

Once a showing of entitlement to summary judgment has been 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 (see CPLR 3212 [b]; Alvarez v Prospect Hospital, supra; Winegrad v New York Univ. Med. Ctr., supra; Zuckerman v City of New York, supra).

Here, plaintiff does not deny receipt of the timely mailings, thereby failing to rebut the presumption of receipt raised by defendant’s proof of mailings (see S & M Supply Inc. v GEICO, 2003 NY Slip Op. 51192[U][App Term, 2nd & 11th Jud Dists 2003]; Harbor Medical & Diagnostics P.C. v Allstate Ins. Co., 11 Misc 3d 1063[A][Civ Ct, New York City 2006]). Nor has plaintiff sufficiently demonstrated that it timely and legally satisfied its duty to communicate with defendant with a statement of why it could not provide what the verifications sought (see Dilon Med. Supply Corp. v Travelers Ins. Co.,7 Misc 3d 927, 931-932 [NY City Civ. Ct. 2005]).

The Court notes that plaintiff contends it responded to defendant’s two (2) EUO verification requests by letters dated 03/16/15, 06/15/15 and 07/14/15 (see All Health Medical Care, P.C. v GEICO, 2 Misc 3d 907 [Civil Ct., Queens Co. 2004]). However, the Court finds that the response letters were sent well after the submitted bills in dispute had already been denied by defendant’s NF-10 denial of claim forms dated 02/11/15. The denial of claim forms were based [*3]upon the failure to appear at the EUO’s set for 01/07/15 and 01/28/15, which absences breached the condition precedent for payment under defendant’s no-fault insurance policy.^[FN1]

Defendant insurer then had 30 days to pay or deny each claim after the last EUO verification date (see Insurance Law §5106[a]; 11 NYCRR §65-3.8[a][1]and 3.8[c]; Jamil M. Abraham, M.D., P.C. v Country-Wide Ins. Co., 3 Misc 3d 130[A][App Term, 2nd & 11th Jud Dists 2004] lv. denied), which it denied within 14 days.

Therefore, the Court finds plaintiff’s letters of 03/16/15, 06/15/15 and 07/14/15 were not timely to challenge the issue of compliance with defendant’s verification requests, as the absence of plaintiff’s assignee at the set EUO dates precluded its compliance, and breached the condition precedent for payment under the no-fault insurance policy (see Dilon Med. Supply Corp. v Travelers Ins. Co. supra).

Plaintiff also argues that defendant failed to demonstrate its requested EUO verification scheduling letters were mailed both to the applicant and applicant’s attorney, as required by statute. The Court finds that EUO verification scheduling requests and follow-up EUO verification requests by an insurer must be sent to the party from whom the EUO verification is sought, where, as here, it is the plaintiff, as an insurer must follow the no-fault regulations (see 11 NYCRR §65-3.5[b] and §65-3.6[b]; Advantage Radiology, P.C. v Nationwide Mut. Ins. Co.,55 Misc 3d 91 [App Term, 9th & 10th Jud Dists 2017]; Doshi Diagnostic Imaging Servs. v State Farm Ins. Co., 16 Misc 3d 42,44 [App Term, 9th & 10th Jud Dists 2007]). Therefore, plaintiff’s argument lacks merit.

Plaintiff further contends that defendant did not provide a reasonable basis for requesting the EUO’s. Defendant argues it demonstrated its reasonable basis as being an ongoing investigation of the propriety and eligibility of the nature and frequency of plaintiff’s billing, as well as the ongoing legal relationship between the corporation and the individuals who actually rendered the billed-upon services. The Court finds that the issue of a reasonable basis for the EUO’s was raised by plaintiff through its letters sent to defendant after the plaintiff’s claims had already been denied on 02/11/15 for breach of the condition precedent for payment under defendant’s no-fault insurance policy. As a result of these circumstances, the issue was rendered moot and need not now be considered by the Court.

Moreover, in as much as defendant demonstrated the failure of plaintiff to timely respond to or appear at the EUO verification dates, without excuse, plaintiff waived its defenses and is therefore estopped from contesting the reasonableness of the EUO requests (see Natural Therapy Acupuncture, P.C. v State Farm Mut. Auto.Ins. Co., 42 Misc 3d 137[A][App Term, 2nd Dept 2014]; see also Morris Med., P.C. v Amex Assur. Co., 37 Misc 3d 140[A][App Term, 2d, 11th & 13th Jud Dists 2012]). The defendant should not be put in the position of second guessing why plaintiff failed to respond to the verification requests (see Canarsie Chiropractic, P.C. v State Farm Mut. Ins. Co., 27 Misc 3d 1228[A][NY City Civ Ct 2008]). Plaintiff’s inaction to defendant’s timely notifications is fatal to its causes of action for alleged services rendered (see [*4]Crescent Radiology PLLC. v American Transit Ins. Co., 31 Misc 3d 134[A][App Term, 9th & 10th Jud Dist 2011]; Interboro Ins. Co. v Clennon, supra).

Plaintiff also raises the issue that defendant failed to demonstrate the EUO scheduling requests were mailed to plaintiff or its attorneys. The proof demonstrates that the EUO verification requests were only sent to plaintiff, not plaintiff’s attorneys, as no proof was submitted which demonstrated that plaintiff’s attorneys had officially appeared on behalf of plaintiff at the time of the EUO scheduling requests. Therefore, the issue is moot and plaintiff’s contention lacks merit.

The remaining issue raised by plaintiff requests that it be allowed the opportunity to schedule another EUO on a mutually convenient date with defendant, so that plaintiff may now comply with the prior EUO verification requests. Defendant opposes the request after demonstrating that it mailed two (2) EUO scheduling letters for 01/07/15 and 01/28/15, which plaintiff chose to ignore, and the claims were then timely denied.

The Court finds that defendant met its prima facie burden of demonstrating it timely and properly mailed to plaintiff the two (2) EUO scheduling requests, which by presumption of law, were received by plaintiff.^[FN2] By ignoring the 2 EUO scheduling letters and not appearing on the required EUO dates, plaintiff breached a condition precedent for payment under defendant’s no-fault insurance policy(see Interboro Ins. Co. v Clennon, supra;Five Boro Psychological Services, P.C. v Progressive Northeastern Ins. Co., 27 Misc 3d 141[A][App Term, 2nd, 11th & 13th Jud Dists 2010]). The claims were then properly denied by defendant and there is no legal basis for the Court to compel defendant to agree to plaintiff’s request. Therefore, plaintiff’s request is denied.

For the foregoing reasons, the Court finds that plaintiff has failed in its burden to produce evidentiary proof in admissible form sufficient to establish material issues of fact which require a trial of the action.

Accordingly, the motion for summary judgment by defendant seeking dismissal of the complaint pursuant to CPLR 3212, is granted.

It is not necessary for the Court to rule upon any remaining contentions of the parties, as they have been rendered academic.

The foregoing constitutes the decision, order and judgment of this Court.