Opinion
Index No. 157781/2021
07-13-2023
State Farm Fire and Casualty Company, Plaintiff, v. Antonio Blackburn, ROMONA BERRY, ZORIA NYACK, AAG PHYSICAL THERAPY P.C., ADVANCED UROLOGY ASSOCIATES, P.C., ADVANTAGE RADIOLOGY, P.C., AGASAKY MULTI SERVICES INC, BRONX CHEMISTS RX INC, FLAWLESS QUALITY CARE SERVICES INC., GEPP PSYCHOLOGICAL SERVICES, PLLC, IDEAL CARE PHARMACY, INC., KARIN GEPP, PH.D., LIFELINE MEDICAL IMAGING P.C., LIVING WATER ACUPUNCTURE, P.C., METRO PAIN SPECIALISTS PROFESSIONAL CORPORATION, NYC FAMILY HEALTH NP P.C., PROMPT RECOVERY MED INC, RANA UNITED, INC., SHOP-N-SAVE PHARMACY INC, and TMVQS CORP., Defendants.
Siegel & O'Leary LLP, Melville, NY (Kevin W. O'Leary of counsel), for plaintiff. Kopelovich & Feldsherova, P.C., Brooklyn, NY (David Landfair of counsel), for defendants Ideal Care Pharmacy, Inc. and TMVQS Corp. Law Offices of Gabriel & Moroff, P.C., Rockville Center, NY (Matthew Sledzinski of counsel), for defendants Advantage Radiology, P.C., Agasaky Multi Services, Inc., and Shop-N-Save Pharmacy. No appearances for defendants Flawless Quality Care Services Inc., Lifeline Medical Imaging P.C., and Prompt Recovery Med Inc.
Unpublished Opinion
Siegel & O'Leary LLP, Melville, NY (Kevin W. O'Leary of counsel), for plaintiff.
Kopelovich & Feldsherova, P.C., Brooklyn, NY (David Landfair of counsel), for defendants Ideal Care Pharmacy, Inc. and TMVQS Corp.
Law Offices of Gabriel & Moroff, P.C., Rockville Center, NY (Matthew Sledzinski of counsel), for defendants Advantage Radiology, P.C., Agasaky Multi Services, Inc., and Shop-N-Save Pharmacy.
No appearances for defendants Flawless Quality Care Services Inc., Lifeline Medical Imaging P.C., and Prompt Recovery Med Inc.
Gerald Lebovits, J.
This is a no-fault-insurance-coverage action. Plaintiff, State Farm Fire & Casualty Company, moves under CPLR 3212 for summary judgment on its request for a no-coverage declaration as against appearing defendants Advantage Radiology, P.C., Agasaky Multi Services, Inc., Flawless Quality Care Services Inc., Ideal Care Pharmacy, Inc., Lifeline Medical Imaging P.C., Prompt Recovery Med Inc., Shop-N-Save Pharmacy Inc., and TMVQS Corp. These defendants are all medical-provider assignees of one or more of the alleged injured persons, nonappearing defendants Antonio Blackburn, Romona Berry, and Zoria Nyack.
This court previously granted default judgment against Blackburn, Berry, Nyack, and several of their medical-provider assignees who had not appeared in the action. (See NYSCEF No. 80.)
State Farm's summary-judgment motion is granted as to all defendants against whom judgment is sought except for defendant TMVQS. With respect to TMVQS, the motion is denied, and summary judgment is granted to TMVQS as the non-moving party.
DISCUSSION
State Farm premises its claim for declaratory judgment on evidence that Blackburn, Berry, and Nyack each failed twice to appear for examinations under oath (EUOs) scheduled under the terms of the underlying no-fault insurance policy.
A no-fault insurer seeking a declaration of no coverage due to claimants' failures to appear for EUOs requested under the no-fault policy must first demonstrate that the insurer complied with the procedural and timeliness requirements of 11 NYCRR 65-3.5, governing the handling of no-fault claims. (See American Transit Ins. Co. v. Longevity Med. Supply, Inc., 131 A.D.3d 841, 841 [1st Dept 2015].) The sole exception to this rule is when the insurer establishes that it requested additional verification of the no-fault claim in the form of an EUO before the insurer received any NF-3 bills from treating providers. In that case, the requirements of § 65-3.5 do not apply. (Mapfre Ins. Co. of NY v Manoo, 140 A.D.3d 468, 469 [1st Dept 2016].)
If an insurer requests an EUO after receiving bills from treating providers, that EUO must be requested within 15 business days of the receipt of a bill. (See 11 NYCRR 65-3.5 [b], [d]; American Transit Ins. Co. v Acosta, 2022 NY Slip Op 01097 [1st Dept Feb. 17, 2022].) An insurer seeking judgment against a given provider need not show that it timely requested an EUO relative to a bill received from that provider; rather, as long as the EUO requests were timely relative to a bill from any provider, the claimant's failures to appear at the EUO will support the insurer's coverage defense. (See Country-Wide Ins. Co. v Duff, 2022 NY Slip Op 51289[U], at *1 [Sup Ct, NY County Dec. 20, 2022], citing Unitrin Direct Ins. Co. v Beckles, 188 A.D.3d 620, 621 [1st Dept 2020].)
1. The underlying collision in this case occurred on February 6, 2021. (See NYSCEF No. 112 at 1 [no-fault benefits application].) State Farm mailed its first EUO letters to Blackburn, Berry, and Nyack on February 23, 2021-less than 15 business days later. (See NYSCEF No. 102 at 3 [affidavit of mailing to Blackburn]; NYSCEF No. 108 at 3 [affidavit of mailing to Berry]; NYSCEF No. 113 at 3 [affidavit of mailing to Nyack].) Thus, regardless whether the timeliness requirements of § 65-3.5 did (or did not) apply here, State Farm's EUO letters were timely. State Farm has also established that the three injured parties did not appear for the scheduled EUOs, or for timely and properly rescheduled EUOs. (See NYSCEF Nos. 104, 109, 114 [statements on the record about nonappearances]; NYSCEF Nos. 105, 110, 115 [letters rescheduling EUOs]; NYSCEF Nos. 106, 111, 116 [statements on the record about nonappearances at rescheduled EUOs].)
Defendants Ideal Care and TMVQS argue that State Farm has not shown that the EUO letters to Blackburn were sent to the correct address. (See NYSCEF No. 130 at 7-8.) This argument is unpersuasive: Among other things, the street address used by State Farm matches the one given for Blackburn in Ideal's own medical bills sent to State Farm. (Compare e.g. NYSCEF No. 119 at 70 [medical bill], with NYSCEF No. 102 at 3 [affidavit of mailing for first Blackburn EUO letter].) And Ideal Care does not provide a reason to believe that this mailing address was incorrect.
This evidence establishes, prima facie, that State Farm is entitled as a matter of law to its requested no-coverage declaratory judgment. Defendants, with the exception of defendant TMVQS, do not provide evidence that would raise a material dispute of fact.
There is no merit to Ideal Care and TMVQS's contention that State Farm failed to show that it timely mailed its denials of their claims. (NYSCEF No. 130 at 8-9.) The Appellate Division, First Department, has made clear that a failure to appear for a properly requested EUO "is a breach of a condition precedent to coverage under the No-Fault policy, and therefore fits squarely within the exception to the preclusion doctrine." (Unitrin Advantage Ins. co. v Bayshore Physical Therapy, PLLC, 82 A.D.3d 559, 560 [1st Dept 2011].) As a result, "plaintiff had the right to deny all claims retroactively to the date of loss, regardless of whether the denials were timely issued." (Id.)
2. Defendants argue that State Farm has not provided a specific objective justification for requesting the three EUOs in this case. (See NYSCEF No. 130 at 4-7; NYSCEF No. 136 at 5-6.) But State Farm did provide the necessary justification: The underlying collision happened nearly 200 miles from the garaging address given by the policyholder when obtaining the insurance policy, yet the policyholder was not in the vehicle at the time of the collision; and the alleged injured persons' medical-provider assignees submitted claims for thousands of dollars worth of treatment, but the accident seemingly was not serious enough to lead to the generation of a police report. (See NYSCEF No. 89 at ¶¶ 12-15, 19.) These justifications are sufficient to meet State Farm's burden on this motion.
Ideal Care and TMVQS vigorously attack the sufficiency and persuasiveness of State Farm's proffered justifications. (NYSCEF No. 130 at ¶¶ 15-20.) But these defendants provide no authority for the proposition that an insurer must demonstrate that it was right in believing that the circumstances of the collision warranted EUOs, not merely identify the basis for that belief. Nor is this court persuaded that an insurer's account of its justifications must go into the degree of detail that these defendants apparently believe to be required. (See id. at ¶ 16; cf. Kemper Independence Ins. Co. v Accurate Monitoring, LLC, 73 Misc.3d 585, 589 [Sup Ct, NY County 2021] [holding that "an insurer's [EUO] justification provided during the claims-verification process" is not required to be "lengthy or detailed"].)
Defendants Shop-N-Save Pharmacy, Agasaky Multi Services, and Advantage Radiology argue that summary judgment should be denied as premature under CPLR 3212 (f) because defendants have not had full discovery into the file for the claims at issue created by plaintiff's special investigations unit (SIU), or the opportunity to take depositions of plaintiff's SIU representative or other claims representatives. (See NYSCEF No. 136 at ¶¶ 9-13.) But the record reflects that these defendants first served demands for these categories of discovery in October 2021 (see NYSCEF No. 32); and no indication exists in the record that defendants followed up on these demands, sought this court's assistance in obtaining the requested discovery, or moved to compel its production in the 14 months that ensued before plaintiff filed this summary judgment motion in early 2023. The court is unpersuaded that the motion is premature on these facts. (See Duff, 2022 NY Slip Op 51289[U], at *2 [rejecting the defendants' argument that the plaintiff's summary-judgment motion was premature, when defendants had a year to obtain the discovery at issue before plaintiff moved for summary judgment].) In any event, these defendants do not provide a basis beyond "mere hope or conjecture" to believe that the discovery at issue would uncover evidence supporting their opposition to summary judgment. (Voluto Venture, LLC v Jenkens & Gilchrist Parker Chapin LLP, 44 A.D.3d 557, 557 [1st Dept 2007].)
3. TMVQS argues that because its sole owner and principal has executed an affidavit withdrawing TMVQS's claims, and right to submit claims, arising from the treatment at issue in this action, no live controversy exists between State Farm and TMVQS that might support a declaratory judgment. (See NYSCEF No. 130 at ¶¶ 35-45 [affirmation of counsel]; NYSCEF No. 121 [affidavit].) This court agrees.
The affidavit on which TMVQS relies is clear, detailed, and specific in its withdrawal with prejudice of claims seeking payment from State Farm and its binding representations to refrain from submitting future claims for payment to State Farm. (See NYSCEF No. 121.) And it expressly authorizes State Farm to use the affidavit to obtain dismissal or withdrawal of any bills submitted, or legal proceedings commenced, in violation of its terms. (Id. at ¶ 6.) This court concludes that the affidavit eliminates any justiciable controversy that might exist here between State Farm and TMVQS.
State Farm does not identify a live controversy, either. At most, State Farm says that absent a formal stipulation of discontinuance, State Farm lacks (i) sufficient assurance that TMVQS will refrain from later trying to repudiate its principal's affidavit, and (ii) a basis for obtaining costs from TMVQS should TMVQS breach the affidavit. (See NYSCEF No. 140 at ¶¶ 39-41.) State Farm provides no authority, though, for the proposition that its desire to lock TMVQS even more firmly into the latter's withdrawal of its claims against State Farm is, standing alone, enough to support a declaratory-judgment claim. In these circumstances, the court grants summary judgment to TMVQS as the nonmoving party, dismissing State Farm's claims against it. (See CPLR 3212 [b].)
Accordingly, it is
ORDERED that the branch of State Farm's motion seeking summary judgment under CPLR 3212 against defendant TMVQS is denied in light of the affidavit executed by TMVQS's principal, and summary judgment is awarded to TMVQS dismissing State Farm's claims against it, no costs; and it is further
ORDERED that the branches of State Farm's motion seeking summary judgment under CPLR 3212 against defendants Advantage Radiology, P.C., Agasaky Multi Services Inc., Flawless Quality Care Services Inc., Ideal Care Pharmacy, Inc., Lifeline Medical Imaging P.C., Prompt Recovery Med Inc., and Shop-N-Save Pharmacy Inc., are granted; and it is further
ADJUDGED AND DECREED that State Farm is not obligated to provide any coverage, reimbursements, or pay any monies, sums or funds to any defendant named in the preceding paragraph for all no-fault related services for which claims and/or bills have been, or may in the future be, submitted by those defendants to the plaintiff, for treatment provided to Antonio Blackburn, Romona Berry, and Zoria Nyack, arising from the collision that occurred on February 6, 2021; and it is further
ORDERED that State Farm's remaining claims in this action are severed and shall continue; and it is further
ORDERED that State Farm serve a copy of this order with notice of its entry on all parties and on the office of the County Clerk, which shall enter judgment accordingly.