EUO and IME No Show: There Must Be an End
The concepts of "EUO/IME No Show" are well known in the no-fault world. However, what an insurer has to do to establish that an assignor failed to appear at an examination under oath (EUO) or independent medical examination (IME) has generated much litigation, with varying results. With the recent Appellate Division, First Department, decision in Unitrin Advantage Ins. v. Bayshore Physical Therapy, 82 A.D.3d 559 (1st Dept. 2011), lv. denied, 17 N.Y.3d 705 (2011), which generally states that "no show" defenses cannot be precluded by late denials, it is likely that the courts will continue to see more litigation based on an assignor's failure to appear for scheduled examinations. It is time for the no-fault regulations to be clarified with regard to the proof and mailing requirements for an insurer to sustain a "no show" defense.
Examinations Under Oath
Appearance at a properly demanded EUO is a condition precedent to an insurance carrier's liability to pay no-fault benefits. 11 NYCRR §65-1.1(d); Five Boro Psychological Services v. Progressive Northeastern Ins., 27 Misc.3d 141[A] (App. Term 2d Dept. 2010), Richmond Radiology v. American Transit Ins., 33 Misc.3d 135[A] (App. Term 2d Dept. 2011); LDE Medical Services v. Encompass Ins., 29 Misc.3d 130[A] (App. Term 2d Dept. 2010); Crotona Heights Medical v. Farm Family Cas. Ins., 27 Misc.3d 134[A] (App Term 2d Dept. 2010).
Pursuant to 11 NYCRR §65-3.5(e), when an insurer requires an examination under oath of an applicant to establish proof of claim, such requirement must be based upon the application of objective standards. This requirement has also generated controversy. In Crescent Radiology v. American Tr. Ins., 2011 NY Slip Op 50622(U), the Appellate Term, Second Department, held that since the plaintiff failed to respond to the insurer's EUO requests, the plaintiff will "not be heard to complain that there was no reasonable basis for the EUO request." In Westchester County Med. Ctr. v. NY Cent. Mut. Fire Ins., 262 AD2d 553, 555 (2d Dept. 1999), the court explained that "[a]ny confusion on the part of the plaintiff as to what [verification] was being sought should have been addressed by further communication, not inaction." Furthermore, in , 27 Misc.3d 1228(A) (NYC Civ. Ct., Kings 2010), the court held that "[t]here is no provision of the No Fault Regulations which allows a claimant or insurance company to ignore a Verification Request or response."
IMEs
Another condition precedent to an insurance carrier's liability to pay no-fault benefits under this section is that an "eligible injured person shall submit to medical examination by physicians selected by, or acceptable to, the Company [the insurer], when, and as often as, the Company may reasonably require." 11 NYCRR 65-1.1. Full compliance with this provision is a condition precedent to the insurer's liability for the payment of benefits under the policy. Id.
The insurance regulations allow for 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., 7 Misc.3d 18, 19 (App. Term 2d Dept. 2004) aff'd 35 AD3d 720 (2d Dept. 2006). If the requested verification has not been supplied to the insurer 30 calendar days after the original request, the insurer shall, within 10 calendar days, follow up with the party from whom the verification was requested, either by a telephone call, properly documented in the file, or by mail. 11 NYCRR §65-3.6(b). "A claim need not be paid or denied until all demanded verification is provided." NY & Presbyt. Hosp. v. Progressive Cas. Ins., 5 A.D.3d 568, 570 (2d Dept. 2004). See, Insurance Law §5106(a); 11 NYCRR §§65-3.5(c), 65-3.8(a)(1).
Failure to forward a timely follow-up request for verification will void tolling of the time in which to submit a denial and will preclude the insurer from asserting the defense based on failure to produce requested verification, including failure to appear for EUOs or IMEs. , 20 Misc.3d 554, 557 (NYC Civ. Ct., Kings Co. 2008); see also, King's Medical Supply v. Kemper Auto & Home Ins., 7 Misc.3d 128[A] (App. Term 2d Dept. 2005). Therefore, for an insurer to base its denial on an assignor's failure to appear for post-claim IMEs, it must prove that it sent both an original and follow-up request and that the injured party failed to appear for both scheduled IMEs. See, Advanced Medical v. Utica Mutual Ins., 23 Misc.3d 141[A] (App. Term 2d Dept. 2009).
Two Questions
Two questions that are frequently litigated are: How does an insurer satisfy its burden of proof that: (1) it sent both an original and follow-up request for an EUO or IME; and (2) the injured party failed to appear for the scheduled EUOs or IMEs?
How does an insurer satisfy its burden of proof that it sent both an original and follow-up request for an EUO or IME? A letter or notice that is properly stamped, addressed and mailed is generally presumed to be received by the addressee. , 38 Misc.3d 1210(A) (N.Y. Civ. Ct., Kings 2013). The presumption of receipt may be created by either proof of actual mailing or proof of a standard office practice or procedure designed to ensure that items are properly addressed and mailed. Nassau Ins. v. Murray, 46 N.Y.2d 828 (1978); Residential Holding v. Scottsdale Ins., 286 A.D.2d 679 (2d Dept. 2001).
An insurer does not have to prove "actual mailing" as long as it submits proof of a "standard office practice or procedure designed to ensure that items are properly addressed and mailed...." Residential Holding v. Scottsdale Ins., 286 A.D.2d at 680; see also, Tracy v. William Penn Life, 234 A.D.2d 745, 747 (3d Dept. 1996); Radiology Today v. GEICO Ins., 25 Misc.3d 133(A) (App. Term 2d Dept. 2009); Amaze Medical Supply v. Allstate Ins., 3 Misc.3d 133(A) (App. Term 1st Dept. 2004). The burden then shifts to the plaintiff to prove non-receipt. A simple denial of receipt has been held insufficient to rebut this presumption. See, Id.; see also, Countrywide Home Loans v. Brown, 305 A.D.2d 626 (2d Dept. 2003). "In addition to a claim of no receipt, there must be a showing that the routine office practice was not followed or was so careless that it would be unreasonable to assume that the notice was mailed." Nassau Ins. v. Murray, 46 N.Y.2d 828; see also Badio v. Liberty Mutual Fire Ins., 12 A.D.3d 229 (1st Dept., 2004).
An insurer or its representative who chooses to mail its EUO or IME letters via certified mail return receipt requested, instead of regular mail, may have a greater obligation in order to reach a legal presumption of receipt. In St. Vincent's Hosp. of Richmond v. GEICO, 50 A.D.3d 1123 (2d Dept. 2008), the court held that when an item is mailed by certified mail, "the insurer has or should have actual proof of mailing and actual proof of delivery or proof the reason the mail was not delivered or received by the addressee. When such proof is available, it should be provided to the court as proof of actual mailing."
In , 35 Misc.3d 1213A (D. Ct., Nassau 2012), the court denied the insurer's motion for summary judgment, finding that the insurer failed to establish whether the EUO notices mailed to the assignor by certified mail return receipt requested were delivered, returned as undeliverable as addressed, or returned as unclaimed. If the addressee does not reside at the address to which the letter is addressed, it will either be forwarded to the addressee at his or her new address provided one is on file with the Postal Service, or returned to the sender with a notation, undeliverable as addressed. See also, Temple B'nai Shalom of Great Neck v. Village of Great Neck Estates, 32 A.D.3d 391 (2d Dept. 2006); lv. den. 8 N.Y.3d 813 (2007); cert. den. 552 U.S. 1183 (2008). NY Hosp. Med. v. Allstate Ins., 2012 N.Y. Slip Op. 30418(U) (Sup. Ct., Nassau 2012), supports this position in that it recently rejected the insurer's "no show" argument, basing its decision in part on the fact that the insurer failed to submit copies of the certified mail and return receipts for the EUO letters and the attorney's affirmation was insufficient to establish the dates upon which said notice letters were actually mailed.
A First Department decision to the contrary is , 24 Misc.3d 1239A (NYC Civ. Ct., Bronx 2009). The issue before the court was whether the mailing of a letter via certified mail return receipt requested was entitled to the same presumption of receipt as regular first-class mail in the absence of the signed returned receipt. The court determined that it was. "Here the Court adheres to the longstanding precept that a basic fact [i.e. a mailed letter] raises the existence of a presumed fact [i.e. receipt of the letter] until the presumption is rebutted by admissible evidence.... Until the no-fault regulations streamline its mailing requirement, it is presumed that a properly addressed letter that was mailed was duly delivered to the intended individual when using any method of mailing that the USPS offers, however basic or sophisticated that form of mailing is." (italics added).
How does an insurer satisfy its burden of proof that the injured party failed to appear for the scheduled EUOs or IMEs? For an insurer to prove that the eligible injured person and/or assignee of no-fault benefits failed to appear at scheduled IMEs or EUOs, it must provide an affidavit from someone with knowledge that the denials were proper and timely mailed in accordance with the insurer's standard office practices and procedures; an affidavit from someone with knowledge that the IME/EUO letters were proper and timely mailed pursuant to the company's standard office practices and procedures and in the case of IMEs, an affidavit from the doctor or someone with personal knowledge that the claimant failed to appear. These three requirements generate significant case law.
The answers to the above questions are easier when the assignor merely fails to appear for the EUOs or IMEs. But what about the scenario where the claimant requests an adjournment the day of the EUO or IME, the day before the EUO or IME or two days before the EUO or IME? And what if the vendor's letter clearly indicates that any change in the appointment must be done prior to 48 hours? In Five Boro Psychological Servs. v. Praetorian Ins., 36 Misc.3d 133(A) (App. Term, 2d Dept. 2012), within 48 hours prior to the IME, the claimant called to cancel the IME. The IME was rescheduled, and the claimant failed to appear. As a result, the insurer issued a denial based on the claimant's failure to appear at the IMEs. The court held that the insurer failed to establish that the claimant had failed to appear for two scheduled IMEs, as the insurer did not establish, as a matter of law, that the first postponement did not represent a mutual agreement to reschedule.
Other recent decisions from the Appellate Term, Second Department, have similarly held that mutually rescheduled IMEs or EUOs do not constitute "no shows." See, DVS Chiropractic v. Interboro Ins., 36 Misc.3d 138A (App. Term 2d Dept. 2012). This position was followed in Lender Med. Supply v. Hartford Ins., 35 Misc.3d 1226A (N.Y. Civ. Ct., Kings 2012), where the court held that "the Defendant's consent to the adjournment vitiated its right to count the assignor's failure to appear at the EUO as a no show."
To date, the First Department does not appear to have ruled on this issue.
There seems to be a loophole in this reasoning in that a savvy plaintiff or plaintiff's attorney merely needs to call prior to the date of the examination and request an adjournment. If the insurer reschedules, then it is considered a "mutually rescheduled" appointment. If the insurer fails to reschedule (i.e., fails to issue a follow-up verification request), it will be precluded from asserting failure to appear as the basis for denial of the claim. As there is no established limit to the number of adjournments that can be requested, the IMEs and EUOs could in theory be postponed indefinitely. The postponements may also be viewed as a tactic to give the assignor additional time to build up his no-fault claim and cost the insurer additional expenses for "No-Show" medical appointments and/or attorney fees.
Furthermore, if the court denies the insurer's summary judgment motion, the insurer would need to produce at the time of trial, not only a representative from the insurance company but a representative from the vendor that scheduled the examinations and in the case of an IME, a representative from the doctor's office, to sustain its burden of proof.
In sum, until the no-fault regulations are updated with regard to the proof and mailing requirements for an insurer to successfully sustain a "no show" defense, this pattern of inconsistencies is unlikely to end.
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Robyn M. Brilliant is a solo practitioner in Manhattan practicing in no-fault law and personal injury. Susan Nudelman, an attorney, assisted in the preparation of this article.
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