S & M Supply Inc. v State Farm Mut. Auto. Ins. Co. (2004 NY Slip Op 50693(U))

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM : 9th and 10th JUDICIAL DISTRICTS

Appeal by plaintiff from so much of an order of the District Court, Nassau County (M. Massell, J.), dated May 19, 2003, as denied its motion for summary judgment.

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

In this action to recover assigned first-party no-fault benefits for medical services, plaintiff established a prima facie entitlement to summary judgment by the submission of a proper proof of claim (see Insurance Law § 5106 [a]; Mary Immaculate Hosp. v Allstate Ins. Co., 5 AD3d 742 [2004]; Damadian MRI in Elmhurst, P.C. v Liberty Mut. Ins. Co., NYLJ, Dec. 29, 2003 [App Term, 9th & 10th Jud Dists]; Amaze Med. Supply Inc. v Eagle Ins. Co., NYLJ, Dec. 29, 2003 [App Term, 2d & 11th Jud Dists]). In opposition, defendant failed to raise any triable issues of fact. Defendant denied plaintiff’s claims on the ground that plaintiff’s assignors failed to appear for scheduled examinations under oath (EUOs) and on the basis of allegedly fraudulent conduct in connection with the accident. It is uncontroverted that plaintiff’s claim forms, submitted subsequent to April 5, 2002, were received by the defendant between April 18, 2002 [*2]and May 6, 2002, and that the defendant did not issue the denial of claim forms until September 12, 2002, well beyond the 30-day statutory period within which it had to pay or deny the benefits (see 11 NYCRR 65-3.8 [c]).

Moreover, defendant’s requests for EUOs did not toll the 30-day statutory time period. The applicable revised insurance regulation, effective on April 5, 2002, includes EUOs in the prescribed “Mandatory Personal Injury Protection Endorsement,” providing that an eligible injured person shall submit to EUOs as may reasonably be required (11 NYCRR 65-1.1[d]). In order to toll the 30-day period in which to pay or deny the claim, a request for EUOs as additional verification to establish the proof of claim, must be done within 15 business days of receipt of the prescribed verification forms (11 NYCRR 65-3.5 [b]). EUOs are also subject to the same 30-day scheduling period required of independent medical examinations (11 NYCRR 65-3.5 [d]), and to virtually identical scheduling and reimbursement conditions imposed on medical examinations (11 NYCRR 65-3.5 [e]). Similarly, where an EUO, as a medical examination, has been requested as verification, it is deemed to have been received by the insurer on the day the examination was performed (11 NYCRR 65-3.8 [a] [1]).

Consistent with the Insurance Department’s interpretation of the new regulation, which is entitled to great deference (see Matter of Medical Malpractice Ins. Ass. v Superintendent of Ins., 72 NY2d 753 [1988], cert denied 490 US 1080), the insurer must include the revised prescribed endorsement with new or renewal policies issued on or after April 5, 2002, and the claim rules are to be governed by the policy endorsement in effect (see Circular Letter No. 9 [2002]). Therefore, as to the claims submitted on or after April 5, 2002, an insurer’s request for EUOs may toll the 30-day period, depending on the policy endorsement in effect, and the insurer’s compliance with the regulatory time periods and conditions applicable to EUOs.

In the instant case, defendant’s opposition papers failed to establish the terms of the insurance policy in effect. Absent a showing that the subject insurance policy contained an endorsement permitting EUOs, defendant has failed to establish that its time to deny the claim was tolled by virtue of its EUO request. However, even assuming the existence of an appropriate endorsement provision in the policy, defendant has failed to establish entitlement to a tolling of the 30-day period. Defendant’s first requests for EUOs by letters dated June 14, 2002 were not made within the requisite 15-day time period for additional verification (11 NYCRR 65-3.5 [b]), nor did these schedule the examinations within the requisite 30 calendar days from the date of receipt of the prescribed verification forms (11 NYCRR 65-3.5 [d]). The remaining letters forwarded by defendant did not constitute proper verification requests for EUOs and thus did not extend defendant’s time to pay or deny the claim. Accordingly, defendant’s denial of benefits was untimely, and defendant is precluded from asserting the defense of non-compliance with its requests for EUOs (see Presbyterian Hosp. In City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 282 [1997]).

With regard to the defendant’s denial of benefits based on alleged fraudulent conduct, it is well settled that if a collision is caused in furtherance of an insurance fraud scheme, it would not be a covered accident (Matter of Metro Med. Diagnostics v Eagle Ins. Co., 293 AD2d 751 [2002]; see also State Farm Mut. Auto Ins. Co. v Laguerre, 305 AD2d 490 [2003]), and defendant is not precluded from asserting this defense despite an untimely denial of the claim (Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195, 201 [1997]; Matter of Metro [*3]Med. Diagnostics v Eagle Ins. Co., 293 AD2d at
752). The defendant’s submissions in support of its allegations of fraud, consisting of an affidavit of an attorney who had no personal knowledge of the facts, and the unsworn letter of its investigator with the Special Investigative Unit, do not constitute evidentiary proof in admissible form (Rue v Stokes, 191 AD2d 245 [1993]), and consequently fail to raise triable issues of fact. Accordingly, plaintiff’s motion for summary judgment should have been granted, and the matter should be remanded for the calculation of statutory interest and an assessment of attorney’s fees pursuant to Insurance Law § 5106 (a) and the regulations promulgated thereunder.
Decision Date: June 30, 2004