Lender Med. Supply, Inc. v Hartford Ins Co.

[*1] Lender Med. Supply, Inc. v Hartford Ins Co. 2012 NY Slip Op 50903(U) Decided on May 1, 2012 Civil Court Of The City Of New York, Kings County Levine, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on May 1, 2012
Civil Court of the City of New York, Kings County

Lender Medical Supply, Inc A/A/O SHARISSE HARRIS, Plaintiff The Hartford Ins Co., , Defendant.



046391/10



A P P E A R A N C E S :

ATTORNEYS FOR PLAINTIFF:

Gary Tsirelman, P.C.

65 Jay Street, Third Floor

Brooklyn, NY 11201

ATTORNEYS FOR DEFENDANT:

Iseman, Cunningham, Riester & Hyde, LLP

2649 South Road, Suite 230

Poughkeepsie, New York 12601

Katherine A. Levine, J.

Recitation, as required by CPLR 2219(a), of the papers considered in the review of this motion

PapersNumbered

Notice of Motion and Affidavits Annexed.............. ..............................1

Notice of Cross-Motion and Affidavits Annexed.. ...............................

Answering Affidavits............................................................................. .2

Replying Affidavit of defendant.............................................................3

Exhibits.....................................................................................................

Other: .......................................................................................................

Upon the foregoing cited papers, the Decision/Order on this Motion is as follows:

This case presents raises a new twist to previous rulings that the notification requirements for verification requests, as contained in 11 NYCRR §§65-3.5 and 3.6, do not apply to examinations under oath ("EUOs") that are scheduled prior to the insurance company's receipt of claim forms ("pre claim EUO").

Defendant Hartford Insurance Co. ("defendant" or "Hartford") seeks summary judgment [*2]based upon the assignor's failure to appear at both a pre-claim EUO, which was adjourned on consent, and an EUO noticed and scheduled subsequent to defendant's receipt of the claim which, under precedent, triggers strict regulatory time deadlines for compliance with verification requests. Plaintiff Lender Medical Supply, Inc. ("plaintiff" or "Lender") opposes defendant's motion on the grounds that since the first scheduled EUO was adjourned on consent, defendant had to request that the assignor appear for two other EUOs, pursuant to 11 NYCRR §65-3.6(b), before it could deny the claim, which it failed to do.

Lender provided medical equipment to its assignor on September 18, 2009. Hartford, by letter dated October 9, 2009, scheduled the assignor for an EUO to be held on November 10, 2009. On October 23, 2009, after it had sent the EUO request but prior to the scheduled date of the EUO, Hartford received the claim from plaintiff. Defendant granted the assignor's request for an adjournment by letter dated November 10, 2009 and rescheduled the assignor's EUO for November 17, 2009. After the assignor failed to appear at the rescheduled EUO, the defendant issued a denial dated December 8, 2009 based upon the assignor's failure to appear for both EUOs.

As a condition to coverage under the revised Personal Injury Endorsement ("PIP"), "the eligible person ...shall...as may reasonably be required submit to examinations under oath by any person named by the [insurer] and subscribe the same[11 NYCRR §65 - 1.1(d) [Sec. I. Conditions, Proof of Claim (b)]. Another condition to coverage under this section sets forth that an eligible person shall submit to medical examination by physicians selected by or acceptable to the insurer as often as the insurer may reasonably require."

11 NYCRR §65-3.5 details the verification procedures to be followed after the insurer receives the completed application for no fault benefits (NYS form N-F2). The insurance regulations provide for EUOs and IMEs as part of an insurer's "entitlement to additional verification" following receipt of a provider's statutory claim forms. Stephen Fogel Psychological v. Progressive Casualty Ins. Co., 7 Misc 3d 18, 19 (App. Term. 2d Dept. 2004), aff'd in pert part 35 AD3d 720 (2d Dept. 2006). See also, All-Boro Medical Supplies, Inc. v Progressive Ins. Co., 20 Misc 3d 554 (Civil Ct., Kings Co,. 2008); Lumbermen's Mutual Casualty Company v. Inwood Hill Medical P.C., et al, 2005 NY Slip Op 51101(U), 8 Misc 3d 1014(A) (Sup. Ct., NY Co. 2005). An insurer may toll the 30 day period it has in which to deny a claim by properly requesting verification within 15 days from the receipt of the proof of claim form or bill (11 NYCRR §65.3.5). See, Psych. & Massage Therapy Assoc., PLLC v. Progressive Casualty Ins. Co., 5 Misc 3d 723 (Civ Ct. Queens Co., 2004).

Where an EUO is requested as additional verification after receipt of the claim, the insurer must schedule an EUO within a reasonable time frame and as "expeditiously as possible." Eagle Surgical Supply, Inc. v. Progressive Cas. Ins. Co., 21 Misc 3d 49, 51 (App. Term, 2d Dept. 2008). See Bayside Rehab. & Physical Therapy P.C. v. GEICO, 24 Misc 3d 542, 546 (Civil Ct., Richmond Co. 2009). If the "requested verification has not been supplied to the insurer 30 calendar days after the original receipt, the insurer shall, within 10 calendar days, follow up with the party from whom the verification was requested., either by a telephone call or [*3]by mail. 11 NYCRR § 65-3.6(b). "A claim need not be paid or denied until all demanded verification is provided." New York & Presbyt. Hosp. v Progressive Cas. Ins. Co., 5 AD3d 569, 570 (2d Dept. 2004). See, Insurance Law § 5106(a); 11 NYCRR §§65-3.5(c), 65-3.8(a)(1).

Failure to submit a timely follow up request will void the tolling provisions of the time in which to submit a denial and will preclude a defendant from asserting the defense based on failure to produce requested verification, including failure to appear for a post-claim EUO. See, All-Boro Medical Supplies supra at 557; Kings Medical Supply Inc. v. Kemper Auto & Home Ins. Co., 2005 NY Slip Op 51450(U), 7 Misc 3d 128(A) (App. Term, 2 & 11th Dist. 2005). Therefore, in order for an insurer to predicate its denial based upon an assignor's failure to appear for a post-claim EUO, it must prove that it sent both an original and follow up request and that the injured party failed to appear for both scheduled EUOs. See, Advanced Medical, P.C. v. Utica Mutual Ins. Co., 2009 NY Slip Op 51023(U), 23 Misc 3d 141(A) (App. Term, 2d Dept. 2009).

The detailed and narrowly construed verification procedures contained in 11 NYCRR 65-1.1(d) and 65-3.5(d) governing EUOs that are requested after receipt of a claim do not apply to EUO demands prior to the submission of a claim form. See Stephen Fogel Psychological, P.C. v. Progressive Ins. Co., 7 Misc 3d 18, 21 (App. Term, 2nd Dept. 2004). The right to an EUO prior to an insurer's receipt of the claim is "not afforded by the verification procedures and timetables," but rather by the mandatory personal injury protection, "which is independent of the verification procedures." Id at 21. Furthermore, these detailed verification procedures are "not amenable to application at a stage prior to the submission of a claim form." Id, at 21. See, Prime Psychological Services, P.C. (Ortiz) v. Nationwide Property and Cas. Ins. Co., 24 Misc 3d 230 (Civil Ct., Richmond Co. 2009) (an insurer not required to send EUO requests to the provider's attorney for a pre claim EUO); Bayside Rehab., supra, an insurer need not notify the assignee medical services provider of pre claim IME cut off notice).

Therefore, an insurer is not obligated to send out a follow up request after an assignor failed to appears for a pre-claim EUO.[FN1] Prime Psychological Services (Horne) v ELRAC, 2009 NY Slip Op 52579(U), 25 Misc 3d 1244(A) (Civil Ct., Richmond Co. 2009). It can properly deny the claim, retroactive to the date of loss, for the assignor's failure to attend the one pre-claim scheduled IME so long as it mails the denial within 30 days of its receipt of the claim. Stephen Fogel Psychological, P.C. v. Progressive Cas. Ins. Co., 35 AD3d 720, 722 (2d Dept. 2006); Amaze Medical Supply, Inc., 2006 NY Slip Op 50909(U), 12 Misc 3d 127(A) (App. Term, 2d Dept. 2006); Prime Psychological (Horne), supra; All-Boro, supra. [*4]

Here, defendant cannot deny the claim based upon the assignor's failure to attend the EUO that was scheduled prior to defendant's receipt of the claim. By letter dated November 10, 2009 defendant's attorney confirmed that at the request of the assignor's attorney, the EUO was adjourned and that Hartford would provide his client with one final opportunity to appear for an EUO on November 17, 2009. Defendant's consent to the adjournment vitiated its right to count the assignor's failure to appear at the EUO as a no show. See Vitality Chiropractic, P.C..v . Kemper, 14 Misc 3d 94 (App. Term, 2d Dept. 2006)(mutually agreed upon rescheduling of initial IME is not equivalent of failure to supply requested verification.)

Furthermore, once defendant received the claim from the plaintiff, it was required to adhere to statutory and regulatory scheme of verification for the processing of no-fault claims. All-Boro Medical Supplies, supra, 20 Misc 3d at 556-557. Thus, defendant was required to send a follow-up request for an EUO pursuant to 11 NYCRR §65-3.6(b), once the assignor failed to appear for the scheduled November 17th date. Having failed to issue a follow up request, defendant could not assert, as a matter of law, the assignor's failure to appear for the EUO as its basis to deny the claim. See, All- Boro, supra at 557.

Accordingly, defendant's motion for summary judgment is denied and the case is to proceed to trial.

The foregoing shall constitute the Decision and Order of the Court.

Dated: May 01, 2012___________________________

Katherine A. LevineJudge, Civil Court

Footnotes

Footnote 1:Insurer could have properly denied plaintiff's claim upon plaintiff's failure to show up for a pre-claim EUO as a violation of a condition precedent to coverage. See Neomy Medical, P.C. v. American Transit Ins. Co., 2011 NY Slip Op 50536(U), 31 Misc 3d 1208(A)(Civ. Ct., 2011).