Pavlova v Ameriprise Auto & Home

[*1] Pavlova v Ameriprise Auto & Home 2018 NY Slip Op 28347 Decided on November 2, 2018 Civil Court Of The City Of New York, Kings County Rosado, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and subject to revision before publication in the printed Official Reports.

Decided on November 2, 2018
Civil Court of the City of New York, Kings County

Ksenia Pavlova, D.O. a/a/o HUSBAND ANTHONY, Plaintiff,

against

Ameriprise Auto & Home, Defendant.



68027/14



Attorney for Plaintiff:

The Rybak Firm PLLC by Karina Barska Esq.

Attorney for Defendant:

Bruno Gerbino & Soriano LLP by Michael Callinan, Esq.
Mary V. Rosado, J.

In this action by a provider to recover first-party no-fault benefits, Defendant Ameriprise Auto & Home (hereinafter "Defendant") moves to renew and reargue this court's decision dated June 21, 2017 denying Defendant's motion for summary judgment and granting Plaintiff Ksenia Pavlova D.O. a/a/o Husband Anthony's (hereinafter "Plaintiff") cross-motion for summary judgment as to their prima facie case. This motion came before the court on July 26, 2018. [FN1] In addition to oral arguments of counsel, the court considered the following submissions of the parties, pursuant to CPLR 2219(a):

Title Number

Defendant's Order to Show Cause for Leave to Renew and Reargue entered August 18, 2017; Defendant's Affirmation in Support dated August 17, 2017 and Supporting Exhibits A-D 1-2

Plaintiff's Affirmation in Opposition undated 3

Defendant's Reply Affirmation in Further Support of Defendant's Order to Show Cause to Reargue dated June 18, 2018 4

Upon the foregoing papers, the Decision and Order of the Court is as follows:

In the underlying motion, Defendant requested summary judgment based upon Plaintiff's

failure to appear for an examination under oath and based upon the insured's alleged material misrepresentations when originally obtaining the insurance policy. Defendant claimed that the insured knew but did not disclose that the assignor, who has a poor driving record, would be driving the insured's vehicle. Plaintiff cross-moved requesting that the court deny Defendant's motion and grant Plaintiff summary judgment based upon proper mailing of the bills and Defendant's failure to pay or deny the claims within 30 days. After oral argument, this court [*2]signed a consent order on June 21, 2017 which read as follows: Upon the foregoing cited papers, the Decision/Order on Defendant's motion for summary judgment and Plaintiff's cross motion for summary judgment and after oral arguments is as follows: Defendant's motion is denied as there are triable issues of fact as to the timely and proper generation and mailing of the denials, the EUO letters and the defense of EUO no show. Plaintiff's cross motion is granted to the following extent, and the following facts are not in dispute and are deemed established for all purposes in this action pursuant to CPLR 3212(g). Plaintiff's established its prima facie case for all purposes in this action. The sole issues for trial are Defendant's prima facie and the defense of EUO no show.

A motion for leave to reargue shall be based upon "matters of fact or law allegedly overlooked or misapprehended by the court in determining the prior motion, but shall not include any matter of fact not offered on the prior motion" (CPLR 2221 [d] [2]).

Defendant argues that this Court overlooked facts and arguments when it found the underlying motion insufficient for dismissal. Specifically, Defendant argues that the court overlooked the alleged material misrepresentations made when the insured obtained the insurance policy because the order does not mention the arguments made by the parties about the alleged material misrepresentations. In opposition, Plaintiff claims that the motion was correctly determined after extensive oral argument.

The court notes that the order for which Defendant seeks reargument was drafted on consent of the parties after the parties were given an opportunity to address their claims in front of the court. Further, the order was drafted by one of the attorneys who originally argued the case and was reviewed by both attorneys before it was presented to the court for signature. Therefore, the parties should have ensured that all of the pertinent arguments were included. They failed to do so. However, given that there is no record of the proceedings, it is difficult to reconstruct the circumstances that led to the instant motion.

Given that this the order does not mention Defendant's material misrepresentation defense, Plaintiff's motion for leave to reargue is granted.

Examination Under Oath No Show Defense

The no-fault regulations require an insurer to either pay or to deny a claim for no-fault benefits within 30 days from the date of receipt of the claim (Insurance Law 5106[a]; 11 NYCRR 65-3.8 [a]). An insurer may toll the 30-day period to pay or deny a claim by properly requesting verification within 15 business days from its receipt of the proof of claim form or bill (11 NYCRR 65-3.5[b]; Compas Med, PC v Praetorian Ins Co, 49 Misc 3d 152[A] [App Term 2nd Dept 2015]). 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 by mail. At the same time the insurer shall inform the applicant and such person's attorney of the reason(s) why the claim is delayed by identifying in writing the missing verification and the party from whom it was requested" (11 NYCRR § 65-3.6[b]). "The insurer is entitled to receive all items necessary to verify the claim directly from the parties from whom such verification was requested" (11 NYCRR 65-3.5[c]). "A claim need not be paid or denied until all demanded verification is provided" (New York & Presbyterian Hosp. v Progressive Cas. Ins. Co., 5 AD3d 568, 570 [App Div 2d Dept 2004]).

In order to succeed on a motion for summary judgment, a movant must establish his [*3]claim or defense sufficiently to warrant the court, as a matter of law, to direct judgment in his favor and he must do so by tender of evidentiary proof in admissible form (see CPLR 3212[b]; Zuckerman v City of New York, 49 NY2d 557, 562 [1980]). Here, Defendant must prove that its requests for examination under oath were timely mailed and that Plaintiff failed to appear at said examinations.

Further, 11 NYCRR 65-3.5 specifies the requirements for the notice of independent medical examinations or examinations under oath. It states in part:

(e) All examinations under oath and medical examinations requested by the insurer shall be held at a place and time reasonably convenient to the applicant and medical examinations shall be conducted in a facility properly equipped for the performance of the medical examination. The insurer shall inform the applicant at the time the examination is scheduled that the applicant will be reimbursed for any loss of earnings and reasonable transportation expenses incurred in complying with the request.

However, where an examination under oath had been mutually rescheduled or was supposed to be mutually rescheduled, a no-show on those dates would not be deemed to constitute a failure to appear (see DVS Chiropractic, P.C. v Interboro Ins. Co., 36 Misc 3d 138[A] [App Term, 2d Dept 2012]).

When a party who is required to appear fails to attend a scheduled examination under oath, the insurer must contact the party within 10 days in order to afford the party a second opportunity to attend an examination under oath (11 NYCRR 65-3.6[b]). If the party fails to appear at the rescheduled mutually agreed upon examination under oath, an insurer may issue a denial of pending claims based upon the failure to meet the condition for coverage.

It is well settled that an appearance at an examination under oath or independent medical examination "is a condition precedent to the insurer's liability on the policy" and an insurer can deny a claim retroactively to the date of loss for a claimant's failure to attend an examination under oath (11 NYCRR 65-1.1).

Once the movant established his defense or claim the burden then shifts to the non-moving party to produce evidence in admissible form to demonstrate, based on affirmative proof, the existence of a disputed material issue of fact sufficient to require a trial (see SRM Card Shop, Inc. v 1740 Broadway Assocs., L.P., 2 AD3d 136, 139-140 [App Div 1st Dept 2003]; CPLR 3212[b]).

In the instant matter, Defendant affirms that their first examination under oath request dated June 5, 2014 was mailed to the Plaintiff and requested Plaintiff's appearance at an examination under oath on June 23, 2014. When Plaintiff did not appear for the examination under oath, Michael A. Callinan, Esq. placed a statement on the record that Plaintiff failed to appear.

Similarly, Defendant affirms that a second examination under oath request dated June 30, 2014 was mailed to the assignor and her counsel requesting the assignor's appearance at an examination under oath on July 11, 2014. When Plaintiff did not appear for the examination under oath, Michael A. Callinan, Esq. placed a statement on the record that Plaintiff failed to appear and he had no contact with Plaintiff. Thereafter, Defendant issued denials on July 22, 2014 based on Plaintiff's failures to appear.

Mr. Callinan's affidavit and statements on the record do not constitute evidence of two "failures to appear." The relevant issue is instead, that Plaintiff requested an adjournment.

In a letter dated July 7, 2014, Plaintiff's counsel objected to the request for an [*4]examination under oath on July 11, 2014, stating that it was not at a time or place convenient to Plaintiff and that it should be rescheduled. Even though Defendant asserts that it received the letter on July 15, 2014, this court finds that as a result of this letter, the examination under oath should have been rescheduled to a mutually agreeable time. Plaintiff's inability to appear at the July 11, 2014 examination under oath does not constitute a "failure to appear." Defendant should have followed up as required pursuant to 11 NYCRR 65-3.6 and rescheduled an examination under oath at a place and time reasonably convenient for Plaintiff.

Therefore, Defendant failed to provide a sufficient basis for summary judgment based upon Plaintiff's failure to appear at an examination under oath.

Material Misrepresentation Defense

Following Defendant's denials on July 22, 2014 based on Plaintiff's failure to appear for an examination under oath, Defendant states that it reconsidered the invoices and sent out another denial for the invoices on August 15, 2014 based on fraud (see Defendant's original Affirmation in Support of their motion to Dismiss dated May 19, 2016 at page 11). "To establish the right to rescind an insurance policy, an insurer must show that its insured made a material misrepresentation of fact when he or she secured the policy" (Interboro Ins. Co. v Fatmir, 89 AD3d 993, 994 [App Div 2d Dept 2011]; see also Novick v. Middlesex Mut. Assur. Co., 84 AD3d 1330 (2d Dept 2011]). A misrepresentation is material if the insurer would not have issued the policy had it known the facts misrepresented (see Insurance Law § 3105[b]). "To establish materiality as a matter of law, the insurer must present documentation concerning its underwriting practices, such as underwriting manuals, bulletins, or rules pertaining to similar risks, that show that it would not have issued the same policy if the correct information had been disclosed in the application" (Schirmer v. Penkert, 41 AD3d at 690—691 [2d Dept 2007]). The defense that an insured made a material misrepresentation when obtaining the insurance policy is subject to preclusion if not interposed in a timely denial (Healthy Way Acupuncture, P.C. v USAA Gen. Indem. Co., 53 Misc 3d 128[A] [App Term, 1st Dept 2016]; see also Westchester Medical Center v GMAC Ins. Online, Inc., 80 AD3d 603 [App Div 2nd Dept 2011]).

The examination under oath of assignor Anthony Husband occurred on June 19, 2014. Defendant provided the affidavit of Veronica Ware, underwriter who asserts that if Defendant was aware of the facts disclosed in the examination under oath of the assignor, including details of the assignor's driving record and his access to the vehicle, Defendant "would not have issued the subject policy of insurance on the same terms as the policy that was issued" (see aff of Veronica Ware at 7).

Ms. Ware's affidavit is conclusory and Defendant failed to provide documentation concerning its underwriting practices that show that it would not have issued the same policy if the correct information had been disclosed. Furthermore, the affidavit suggests that although Defendant would not have issued the same exact policy, Defendant may have issued a policy at a higher premium. Additionally, Defendant does not establish timely denial based on fraud following the completed examination under oath. The examination under oath of Mr. Husband occurred on June 19, 2014 and Defendant admits that they did not issue a denial based upon fraud until August 15, 2014.

Therefore, Defendant failed to provide a sufficient basis for summary judgment based upon its defense of material misrepresentation.

Based upon the foregoing, upon reargument, this court finds that the facts and law in this matter were fully considered and applied and correctly, and, as such, this court's decision to deny [*5]Defendant's motion for summary judgment is upheld.

This constitutes the Decision and Order of the Court.

Dated: November 2, 2018

New York, New York

__________________

Mary V. Rosado, J.C.C. Footnotes

Footnote 1:Although this motion was filed timely by Defendant, the court notes that it took a long time to get before the court and the court heard oral argument from the parties a year later.