Applying Delacruz, the First Department accepted a specific objective justification for EUOs under 11 NYCRR 65-3.5 (e), noting it was disclosed in discovery (Liberty Mut. v Mercado); the Civil Court, Queens County, noted that the Second Department, unlike the First, does not require the insurer to show why it sought the EUO (Flatbush Acupuncture v Repwest). The Second Department limited a claimant who settled her medical bills to the amount she paid (Allstate v Kapeleris). The Appellate Term, Second Department, upheld licensing-eligibility verification requests under Mallela in three Burke appeals, and held article 75 fees under 65-4.10 (j) (4) free of the 65-4.6 (d) cap (Quick Health v American Tr.).
Our summary of the month’s decisions, not the courts’ words.
Appellate Division, Second Department
Feb 13, 2025
2025 NY Slip Op 00839
Insurer prevailed
The injured claimant's no-fault recovery was limited to the amount paid to settle medical bills, rather than the original billed amount. The Appellate Division, Second Department, affirmed the judgment, insofar as appealed from, following a nonjury trial in the insurer's de novo action under Insurance Law § 5106 (c). The claimant challenged the adequacy of the benefits and attorney-fee awards. Having paid $25,109.88 to settle directly billed medical expenses, the claimant incurred reasonable treatment expenses in that amount and was not responsible for the original bills. The court also upheld the $76,856.67 attorney-fee award as a provident exercise of discretion under Insurance Law § 5106 (a) and 11 NYCRR 65-4.10 (j) (4).
Appellate Division, First Department
Feb 4, 2025
2025 NY Slip Op 00631
Insurer prevailed
The insurers established an objective justification for EUOs and timely requests that the injured claimants failed to attend. The Appellate Division, First Department, affirmed summary judgment declaring that the insurers had no obligation to reimburse the appealing providers for assigned no-fault claims. Under 11 NYCRR 65-3.5 (e) and Country-Wide Ins. Co. v Delacruz, the explanation, though limited, sufficiently showed that the EUOs were not arbitrary or routine. The insurers moved after discovery closed and had disclosed the basis for their requests during discovery. The claimants' failure to attend the timely requested EUOs breached a condition precedent to coverage and voided the policy ab initio under Unitrin Advantage Ins. Co. v Dowd.
Appellate Term, Second Department
Feb 14, 2025
2025 NY Slip Op 50195(U)
Insurer prevailed
The provider failed within 120 days to supply requested eligibility verification or written proof reasonably justifying noncompliance. The Appellate Term, Second Department, affirmed summary judgment dismissing the complaint and denial of the provider's cross motion. Under Mallela, business records bearing on licensing eligibility could be requested during verification, rather than only through litigation discovery. The provider's nullity objections did not satisfy 11 NYCRR 65-3.5 (o). Its amended papers were not unauthorized sur-reply papers under CPLR 2214 (c), having preceded the insurer's reply by almost six months. Nevertheless, neither submission raised a triable issue: denial of summary judgment in the insurer's declaratory judgment action was not a final merits determination and had no preclusive effect.
Appellate Term, Second Department
Feb 14, 2025
2025 NY Slip Op 50196(U)
Insurer prevailed
The provider's qualified assertion that it mailed verification did not establish compliance or a reasonable justification for noncompliance. The Appellate Term, Second Department, affirmed summary judgment dismissing the complaint and denial of the provider's cross motion. The owner's assertion that responses were mailed only insofar as proper and in the owner's possession raised no triable issue under 11 NYCRR 65-3.5 (o). Business-record requests bearing on licensing eligibility were permissible under 11 NYCRR 65-3.16 (a) (12), Mallela, and the companion appeal decided the same day, No. 2023-961 K C. Denial of summary judgment in the insurer's declaratory action was not preclusive. The court therefore did not reach the procedural rejection of the provider's amended submission.
Appellate Term, Second Department
Feb 14, 2025
2025 NY Slip Op 50197(U)
Insurer prevailed
The insurer's isolated failure to serve its answer was excusable, and a default declaratory judgment supplied a potentially meritorious defense. The Appellate Term, Second Department, affirmed the order, insofar as appealed from, opening the default and compelling acceptance of the late answer under CPLR 3012 (d). A law-office employee inadvertently failed to serve a timely prepared answer. The mistake was isolated rather than repeated neglect, and the provider showed no prejudice; CPLR 2005 permitted acceptance of law office failure. A declaratory judgment conclusively determined that the insurer owed no coverage for the provider's and assignor's claims arising from an intentional collision. That judgment supported a res judicata defense even though entered on default.
Appellate Term, Second Department
Feb 14, 2025
2025 NY Slip Op 50194(U)
Insurer prevailed
An insurer may request business records during verification to determine whether a provider fails no-fault licensing requirements. The Appellate Term, Second Department, affirmed summary judgment dismissing the complaint and denial of the provider's cross motion. Management agreements, W-2 forms, bank records, and leases were permissible requests under 11 NYCRR 65-3.16 (a) (12), Mallela, and the companion appeal Burke 2 Physical Therapy, P.C. v State Farm Mut. Auto. Ins. Co., decided the same day, No. 2023-961 K C. Denial of the insurer's summary judgment motion in a declaratory judgment action had no preclusive effect because it was not a final merits determination. The court therefore did not reach the procedural rejection of the provider's amended submission.
Appellate Term, Second Department
Feb 14, 2025
2025 NY Slip Op 25040
Provider prevailed
An insurer's filing of a discontinuance without paying the settlement did not bar judgment under CPLR 5003-a (e). The Appellate Term, Second Department, reversed the order vacating the provider's default judgment under CPLR 5015 (a) (4), denied that branch, and remitted the remaining branches for determination. The provider had tendered an executed release and stipulation, which the insurer filed without paying the settlement. Under CPLR 5003-a (a) and (e), failure to pay within 21 days of tender permits entry of judgment without further notice. Tender of the stipulation is a condition of that relief, and its filing here did not eliminate jurisdiction. Discretionary vacatur under CPLR 5015 (a) (1) remained undecided.
Appellate Term, Second Department
Feb 13, 2025
2025 NY Slip Op 50191(U)
Provider prevailed
The insurer's policy-exhaustion defense failed at trial and on appeal where later-received claims were paid after the provider's denial. The Appellate Term, Second Department, affirmed the judgment for the provider after a nonjury trial. It rejected the insurer's sole contention under 11 NYCRR 65-3.15, Nyack Hosp. v General Motors Acceptance Corp., and other cited policy-exhaustion authorities.
Appellate Term, Second Department
Feb 13, 2025
2025 NY Slip Op 25038
Provider prevailed
Attorney's fees for a successful article 75 challenge to a no-fault award are not subject to the arbitration fee cap. The Appellate Term, Second Department, reversed the judgment's attorney-fee award, insofar as appealed from, and remitted for a new determination. Under 11 NYCRR 65-4.6 (d), the provider was entitled to mandatory arbitration fees of 20 percent of benefits plus interest, subject to a $1,360 cap; those fees totaled $426.71. Separately, 11 NYCRR 65-4.10 (j) (4) entitled the provider to reasonable fees for successfully vacating the master arbitrator's award, without a regulatory cap. The District Court must state the evidentiary basis for that award. The provider was also entitled to reasonable fees for the appeal.
Trial court, Second Department
Feb 21, 2025
2025 NY Slip Op 50301(U)
Provider prevailed
The insurer's reargument motion was denied because its attorney's affidavit failed to establish personal knowledge of the EUO nonappearance. The Civil Court, Richmond County, left standing its denial of summary judgment based on the assignor's alleged failure to attend two EUOs. Under CPLR 2221, the affidavit had not been overlooked: it stated only that the attorney placed a default statement on the record, without stating that the attorney was present at the scheduled time and location. The nonappearance assertion was therefore conclusory hearsay. The default transcript also lacked an admissibility foundation under CPLR 3116 and 3117 and could not establish the attorney's presence or the assignor's nonappearance.
Trial court, Second Department
Feb 13, 2025
2025 NY Slip Op 25032
Insurer prevailed
An insurer in the Second Department need not disclose its objective justification for an EUO to obtain summary judgment for nonappearance. The Civil Court, Queens County, granted the insurer's motion dismissing the action and denied the provider's cross motion. The assignor missed two scheduled EUOs without objecting; the provider challenged the absence of a stated justification. The court followed binding Second Department authority while acknowledging contrary First Department authority. It read 11 NYCRR 65-3.5 (e) as requiring objective standards subject to review by Department of Financial Services examiners, without requiring disclosure to claimants or providers. Department counsel opinions supported that reading, and the provider raised no factual issue concerning nonattendance.
