Opinion
Index No. 150262/2021 Motion Seq. No. 002
03-06-2023
PV HOLDING CORP. INCLUDING ALL OF ITS SUBSIDIARIES AND AFFILIATES, INCLUDING BUT NOT LIMITED TO AVIS BUDGET, LLC, AVIS CAR RENTAL, LLC, BUDGET CAR RENTAL, LLC, BUDGET TRUCK RENTAL, LLC, PAYLESS CAR RENTAL, INC. AND ZIPCAR, INC., Plaintiff, v. HYUN PHYSICAL THERAPY, P.C., et al., Defendants.
Unpublished Opinion
Motion Date 02/09/2022
PRESENT: HON. DAVID B. COHEN, Justice
DECISION + ORDER ON MOTION
HON. DAVID B. COHEN, JUSTICE
The following e-filed documents, listed by NYSCEF document number (Motion 002) 59, 60, 61, 62, 63, 64, 65, 66, 67, 68, 69, 70, 71, 77, 78, 79, 80, 81, 82, 83, 84, 85, 86, 87, 88, 89, 90, 91 were read on this motion to/for JUDGMENT-SUMMARY.
In motion sequence number 002, plaintiff moves, pursuant to CPLR 3212, for an order granting summary judgment against defendants Comprehensive Psychological Services, P.C., MG Chiropractic, P.C., BP Dynamic Rehab, PT, P.C., Joseph A Raia, MD, P.C., INEW Rehab Physical Therapy, P.C., Reliance Chiropractic, P.C., Comprehensive Psychological Evaluation, P.C. and Grand Medical Supply Corp. (collectively, answering defendants), and declaring that it is not obligated to provide a defense or coverage for the answering defendants' no-fault claims related to alleged injuries suffered as a result of an accident which took place on December 26, 2019. Answering defendants oppose the motion.
On December 21, 2021, this Court issued an order granting plaintiffs motion for a default judgment against claimants/defendants Leon Hinds, Diamond Brown and Laura Matthews, dismissing all No-Fault lawsuits, arbitration awards, judgments and claims involving these claimants arising from the December 26, 2019 accident (see NYSCEF DOC. NO. 56). Plaintiff concedes that claimants/defendants Sekaya Bloom, Isaac Tafari, Isaac Heaston, and Sean Cooper were never served with the pleadings (NYSCEF 39).
PLAINTIFF'S AMENDED COMPLAINT (NYSCEF DOC 19)
Plaintiff alleges that claimants were involved in a motor-vehicle collision on December 26, 2019, while occupants of a 2019 Chevrolet rental vehicle, owned and self-insured by Avis (see NYSCEF DOC. NO. 19, ¶ 22). Following the accident, plaintiff received notice that claimants all reported to have sustained serious bodily injuries as a result of the collision (id. at ¶ 24). Subsequently, the claimants began receiving medical treatment from answering defendants, as well as the other provider/non-answering defendants (id. at ¶ 28).
Plaintiff alleges that following an investigation into the accident, the legitimacy of claimants' injuries was questioned, as the claimants all had prior extensive injuries, no injuries were reflected on the police report, and the Avis vehicle incurred minor damage (see NYSCEF DOC. NO. 69, ¶ 8). Based on this information, plaintiff questioned whether the accident was a covered loss, and if the claimants' injuries arose from an insured accident or were not causally related to the accident (id. at ¶ 9). Therefore, pursuant to its rights under New York State's No-Fault regulations, plaintiff sought an Examination Under Oath (EUO) for each claimant to confirm the legitimacy of the loss and the necessity of any alleged treatment and referrals (id. at ¶10).
According to plaintiff, all seven claimants failed to appear for their EUOs, thereby violating a condition precedent to coverage for all claims submitted by claimants or their assignees. As a result, plaintiff has denied all claimants' claims (id. at ¶ 23).
DISCUSSION
It is well settled that "[t]he proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to eliminate any material issues of fact" (Alvarez v Prospect Hosp., 68 N.Y.2d 320, 324 [1986] citing Winegrad v New York Univ. Med. Ctr., 64 N.Y.2d 851, 853 [1985]). Once the movant has made a prima facie showing, the burden shifts to the opposing party to "present evidentiary facts in admissible form sufficient to raise a genuine, triable issue of fact" (Casper v Cushman & Wakefield, 74 A.D.3d 669, 669 [1st Dept 2010], Iv dismissed 16 N.Y.3d 766 [2011] [internal quotation marks and citation omitted]).
The court's function on summary judgment is "issue-finding rather than issue-determination" (Mayo v Santis, 74 A.D.3d 470, 471 [1st Dept 2010]). In deciding the motion, "the court should draw all reasonable inferences in favor of the nonmoving party" and deny summary judgment if there is any doubt as to the existence of a material issue of fact (Assaf v Ropog Cab Corp., 153 A.D.2d 520, 521 [1st Dept 1989] [citations omitted]). "'[M]ere conclusions, expressions of hope or unsubstantiated allegations or assertions are insufficient'" to defeat a motion for summary judgment (Siegel v City of New York, 86 A.D.3d 452, 455 [1st Dept 2011], quoting Zuckerman v City of New York, 49 N.Y.2d 557, 562 [1980]).
Furthermore, since summary judgment is a drastic remedy, it should never be granted when there is any doubt as to the existence of a triable issue of fact (Rotuba Extruders v Ceppos, 46 N.Y.2d 223, 231 [1978]). When the existence is even arguable or debatable, summary judgment should be denied (Stone v Goodson, 8 N.Y.2d 8, 12 [1960]).
ALLEGATIONS
In support of its motion, plaintiff submits an affirmation of its counsel, who outlines the alleged efforts made by plaintiff to notice the EUOs, and the affidavit of a litigation consultant for Sedgwick Claims Management Services, in which the consultant identifies Avis's business procedures with respect to recordkeeping of all documents related to all claims, including the claims in this matter (NYSCEF DOC. NO. 60). Based on these documents and documents submitted as exhibits, plaintiff asserts that the initial EUO notices were sent to all claimants on January 31, 2020, prior to receipt of any claims, and were thus timely pursuant to 11 NYCRR § 65-3.5(b) (see NYSCEF DOC. NO. 60 "Khalifa affirmation" at ¶¶ 22-27). The only exception is the initial EUO letter to Hinds, which was sent nine days after his NF-2 claim form was received (id at ¶ 28).
Answering defendants allege that plaintiff did not properly schedule or notice any EUO requests in a timely manner, as required by 11 NYCRR § 65-3.5(b) (see NYSCEF DOC. NO. 83, ¶¶ 41, 43), and/or did not properly follow up with EUO requests as required by the statute (see NYSCEF DOC. NO. 77, ¶¶ 17-19; see also NYSCEF DOC. NO. 83, ¶ 44). As a result, they argue, the scheduled EUOs were a nullity (see NYSCEF DOC. NO. 77, ¶ 6). Answering defendants also observe that plaintiff failed to submit its alleged denial letters or to proffer evidence that the claims were denied in a timely manner (see NYSCEF DOC. NO. 77, ]f46; see also NYSCEF DOC. NO. 83, ¶ 63). Answering defendants thus maintain that plaintiff has not met its prima facie burden, thereby warranting denial of the motion.
NO-FAULT LAW
The First Department has held that the failure of a person eligible for no-fault benefits to appear for a properly noticed EUO constitutes a breach of a condition precedent which vitiates coverage (Mapfrelns. Co. of N.Y. vManoo, 140 A.D.3d 468, 470 [1st Dept 2016], citing Hertz Corp. v Active Care Med. Supply, Corp., 124 A.D.3d 411, 411 [1st Dept 2015]; Allstate Ins. Co. v Pierre, 123 A.D.3d 618, 618 [1st Dept 2014]). Under the New York State Mandatory Personal Injury Protection Endorsement, it is a condition precedent that an insured individual fully comply with the conditions creating coverage, including an appearance at an EUO as reasonably required (id. at 469). An insurer seeking a declaration of non-payment, based on a violation of a condition precedent, must adhere to the notice and timeliness requirements of 11 NYCRR §§ 65-3.5(b) and 65-3.6(b) (Unitrin Advantage Ins. v All of NY, Inc, 158 A.D.3d 449, 449 [1st Dept 2018]).
Section 65-3.5(b) states that entitlement to no-fault benefits requires compliance with all conditions precedent, including that:
Subsequent to the receipt of one or more of the completed verification forms, any additional verification required by the insurer to establish proof of claim shall be requested within 15 business days of receipt of the prescribed verification forms. Any requests by an insurer for additional verification need not be made on any prescribed or particular form. If a claim is received by an insurer at an address other than the proper claims processing office, the 15 business day period for requesting additional verification shall commence on the date the claim is received at the proper claims processing office. In such event, the date deemed to constitute receipt of claim at the proper claim processing office shall not exceed 10 business days after receipt at the incorrect office.
Section 65-3.8(c) provides that "within 30 calendars days after proof of claim is received, the insurer shall either pay or deny the claim in whole or in part."
Furthermore, 11 NYCRR § 65-3.6(b) provides:
Verification requests. At a minimum, if any requested verifications 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 telephone call, properly documented in the file, 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.
However, the notification requirements for verification requests do not apply to EUOs that are scheduled prior to the insurance company's receipt of a claim form (Mapfre, 140 A.D.3d at 469-470, citing Stephen Fogel Psychological, P.C v Progressive Cas. Ins. Co., 7 Misc.3d 18, 21 [App Term, 2d Dept, 2d & 11th Jud Dists 2004], affd 35 A.D.3d 720 [2d Dept 2006]; see also New York Cent. Mut. Fire Ins. Co. v Bronx Chiropractic Servs, PC, 2014 NY Slip Op 33210[U] [Sup Ct, NY County 2014]). However once presented with a claim form, the insurer is required to comply with the follow-up provisions of 11 NYCRR §§ 65-3.5(b) and 65-3.6(b) (Mapfre, 140 A.D.3d at 470, citing Inwood Hill Med., PC v General Assur. Co., 10 Misc.3d 18, 19-20 [App Term, 1st Dept 2005]).
CLAIMANTS BROWN. BLOOM. HEASTON. AND TAFARI
With regards to claimant Brown, plaintiff has made a prima facie showing that Brown was both properly noticed for her EUO and timey served with her EUO scheduling letter, and did not appear for either her initial pre-claim EUO scheduled on February 14, 2020 or her rescheduled EUO on March 10, 2020 (see NYSCEF DOC. NO. 60 at ¶¶ 15-17; NYSCEF DOC. NO. 63). As plaintiff received Brown's first claim on March 3, 2020, the notification requirements for verification requests under 11 NYCRR §§ 65-3.5 and 65-3.6 do not apply (see Mapfre, 140 A.D.3d at 469-470).
With regards to claimants Bloom, Heaston, and Tafari, plaintiff has made a prima facie showing that they were properly noticed for a timely pre-claim EUO and failed to appear. Plaintiff establishes that these claimants were served with EUO scheduling letters on January 31, 2020, and that Tafari was directed to appear on February 18, 2020 while Bloom and Heaston were directed to appear on February 19, 2020. Plaintiff further establishes that none of them appeared for their respective EUOs (see NYSCEF DOC. NO. 60, ¶¶ 19, 27, 35).
The claimants' failure to appear for an EUO constitutes a breach of a condition precedent vitiating coverage, thereby voiding the policy ab initio (see Unitrin Advantage Ins. Co. v Bayshore Physical Therapy, PLLC, 82 A.D.3d 559, 560 [1st Dept 2011]). Moreover, plaintiff need not demonstrate that the claims were timely denied as the failure to appear for an EUO constitutes an absolute defense to coverage (see American Tr. Ins. Co. v Lucas, 111 A.D.3d 423, 424-425 [1st Dept 2013], citing New York & Presbyt. Hosp. v Country-Wide Ins. Co., 17 N.Y.3d 586, 593 [2011]).
In opposition, answering defendants do not raise a triable issue of fact regarding the service or timeliness of the EUO notices or the claimants' non-appearances.
CLAIMANTS MATTHEWS AND COOPER
With regards to claimants Matthews and Cooper, plaintiff has failed to make a prima facie showing that claimants Matthews and Cooper were properly noticed for an EUO and failed to appear, absent the submission of any affidavits of service to demonstrate where and when they were scheduled to appear for an EUO. While plaintiff submits an affirmation and affidavit, neither affiant demonstrates first-hand knowledge as to the service of EUO scheduling letters for Matthews or Cooper.
CLAIMANT HINDS
Plaintiff has made a prima facie showing that claimant Hinds was both properly noticed for and did not appear for an EUO scheduled on February 14, 2020, and a rescheduled EUO on March 19, 2020. Plaintiff received an NF-2 claim form on behalf of Hinds on January 22, 2020, and therefore, it was required to comply with the provisions governing verifications for no-fault claims (see Mapfre, 140 A.D.3d at 470). Pursuant to 11 NYCRR § 65-3.5(b), plaintiff had 15 business days from receipt of the NF-2 claims to notice Hinds for an EUO, and plaintiff demonstrates that it served the EUO letter on Hinds on January 31, 2020, nine days after receipt of the initial NF-2 form (see NYSCEF DOC. NO. 60, Kovacik affidavit at ¶ 28). Plaintiff also submits an affidavit of service showing that Hinds was served with an EUO letter on January 31, 2020, directing him to appear for the EUO on February 14, 2020 (see NYSCEF DOC. NO. 63), and that he failed to appear (see NYSCEF DOC. NO. 60, Khalifa Affirmation at ¶ 6).
Plaintiff then sent Hinds a letter on February 26, 2020, rescheduling the EUO to March 10, 2020 (id). That EUO was then rescheduled to March 19, 2020, but Hinds again failed to appear (see NYSCEF DOC. NO. 60, Khalifa Affirmation at ¶ 9). Both the EUO and rescheduled EUO were thus timely noticed.
In opposition, answering defendants do not raise a triable issue of fact regarding the EUO notices or Hinds's non-appearance.
CONCLUSION
Upon the foregoing documents, it is
ORDERED that plaintiffs motion for summary judgment on its first cause of action seeking a declaration that it is not obliged to provide a defense to, and provide coverage for, the defendants Comprehensive Psychological Services, P.C., MG Chiropractic, P.C., BP Dynamic Rehab, PT, P.C., Joseph A Raia, MD, P.C, INEW Rehab Physical Therapy, P.C, Reliance Chiropractic, P.C., Comprehensive Psychological Evaluation, P.C. and Grand Medical Supply Corp., in the action of PV Holding Corp., v Hyun Physical Therapy, et. al, Sup Ct, NY County, Index No. 150262/2021, is granted with respect to claimants Leon Hinds, Diamond Brown, Sekaya Bloom, Isaac Heaston, and Isaac Tafari (s/h/a Isaac Tafuri); and it is further
ADJUDGED and DECLARED that plaintiff herein is not obliged to provide a defense to, and provide coverage for the defendants Comprehensive Psychological Services, P.C, MG Chiropractic, P.C, BP Dynamic Rehab, PT, P.C, Joseph A Raia, MD, P.C, INEW Rehab Physical
Therapy, P.C., Reliance Chiropractic, P.C., Comprehensive Psychological Evaluation, P.C. and Grand Medical Supply Corp., with respect to claimants Leon Hinds, Diamond Brown, Sekaya Bloom, Isaac Heaston, and Isaac Tafari (s/h/a Isaac Tafuri) only, in the said action pending in New York County; and it is further
ORDERED that plaintiffs motion is denied with respect to claimants Laura Matthews and Sean Cooper; and it is further
ORDERED that as plaintiff failed to serve the pleadings on claimants/defendants Sekaya Bloom, Isaac Tafari, Isaac Heaston, and Sean Cooper and its time to do so has expired (CPLR 306-b), its claims against these defendants are hereby severed and dismissed; and it is further
ORDERED that plaintiff submit a proposed judgment in accordance with this decision forthwith, by filing on NYSCEF and email to cpaszko@nycourts.gov; and it is further
ORDERED that if no other claims remain for adjudication, plaintiff is directed to file a stipulation of discontinuance within 30 days of the date of this order. Otherwise, the remaining parties are directed to appear for a status/compliance conference on April 18, 2023 at 10 am, in person, and the failure to appear will result in the dismissal of the remaining claims in this action.