Star Med. Servs. P.C. v Utica Mut. Ins. Co. (2006 NY Slip Op 50505(U))

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd and 11th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Kings County (Ann E. O’Shea, J.), entered December 29, 2004. The order, insofar as appealed from as limited by the brief, denied plaintiff’s motion for summary judgment.

Order, insofar as appealed from, reversed without costs, plaintiff’s motion for summary judgment granted and matter remanded to the court below for a calculation of the statutory interest and an assessment of attorney’s fees.

In this action to recover assigned first-party no-fault benefits, plaintiff health care provider moved for summary judgment. In opposition to the motion, defendant argued that plaintiff’s assignor failed to attend examinations under oath (EUOs) and that the accident was in furtherance of an insurance fraud scheme. However, defendant failed to prove that the applicable insurance policy contained an endorsement authorizing EUOs as a form of verification (Capio Med., P.C. v Progressive Cas. Ins. Co., 7 Misc 3d 129[A], 2005 NY Slip Op 50526[U] [App Term, 2d & 11th Jud Dists]; Star Med. Servs. P.C. v Eagle Ins. Co., 6 Misc 3d 56, 57 [App Term, 2d & 11th Jud Dists 2004]). Thus, the EUO requests did not toll the 30-day claim determination period (11 NYCRR 65-3.8 [c]) rendering the denial untimely (Careplus Med. Supply Inc. v Travelers Home & Mar. Ins. Co., 7 Misc 3d 133[A], 2005 NY Slip Op 50648[U] [*2][App Term, 2d & 11th Jud Dists]).

Although the defense based on a claim that the accident was staged in furtherance of a scheme to defraud survives the preclusive effect of an untimely denial (Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 282 [1997]), none of the investigative reports and statements offered in support of the fraud claim were in admissible form. Moreover, the attorney’s factual allegations in support of the defense constituted mere inadmissible hearsay and the affirmation of defendant’s claims representative, standing alone, did not establish a triable issue of fraud. Accordingly, the order, insofar as appealed from, is reversed, plaintiff’s motion for [*3]
summary judgment is granted and the matter is remanded to the court below for a calculation of the statutory interest and an assessment of attorney’s fees pursuant to Insurance Law § 5106 (a) and the regulations promulgated thereunder.

Pesce, P.J., and Rios, J., concur

Golia, J., dissents in a separate memorandum.

Golia, J., dissents and votes to affirm the order denying plaintiff’s motion for summary judgment.

In the first instance, it is important to note that the majority finds that the defendant properly demanded that the assignor appear for an examination under oath (EUO) on several occasions in accordance with the regulations, and that on each occasion the plaintiff’s assignor failed to appear.

The majority does not contest that the revised regulations issued by the Department of Insurance provide that the plaintiff’s assignor must submit to EUOs as often as the insurer “may reasonably” require (11 NYCRR 65-1.1[d]). Indeed, it is also
uncontested that the claims at issue herein were submitted subsequent to the effective date of the revised regulations. One would surmise that the majority would therefore conclude that this action must be dismissed.

However, that is not the case. Despite all these facts and circumstances, the majority finds that the defendant failed to raise a triable issue of fact solely because it did not produce a copy of the actual contract of insurance to establish that the “right” to demand an EUO was contained in the contract. This holding appears inappropriate, at least when one considers the long line of decisions involving EUOs prior to the issuance of this revised regulation (pre-April 5, 2002) (see A.B. Med. Servs. PLLC v Lumbermens Mut. Cas. Co., 2003 NY Slip Op 51392[U] [App Term, 2d & 11th Jud Dists]; Ocean Diagnostic Imaging P.C. v State Farm Mut. Auto. Ins. Co., 5 Misc 3d 53 [App Term, 9th & 10th Jud Dists 2004]; A.B. Med. Servs. v Eagle Ins. Co., 3 Misc 3d 8 [App Term, 9th & 10th Jud Dists 2003]). In that line of cases, it was held that even though the policy of insurance required submission to an EUO, demands for same had no significance inasmuch as there was no specific provision in the regulations providing for such an examination, a finding that I do not agree with.

Now that the Insurance Department revised its regulations to meet said holdings, this Court denies their effect by now requiring the defendant to produce a copy of the insurance policy when it was never required to do so in the past.

It is for this reason that I dissent and would affirm the lower court’s denial of the plaintiff’s motion for summary judgment.
Decision Date: March 27, 2006