David M. Barshay
David M. Barshay ()

The No-Fault Regulations, 11 NYCRR §65-1.1,1 provide, in pertinent part:

Conditions

Action Against Company. No action shall lie against the [Insurance] Company unless, as a condition precedent thereto, there shall have been full compliance with the terms of this coverage.

Notice. In the event of an accident, written notice setting forth details sufficient to identify the eligible injured person, along with reasonably obtainable information regarding the time, place and circumstances of the accident, shall be given by, or on behalf of, each eligible injured person, to the Company, or any of the Company’s authorized agents, as soon as reasonably practicable, but in no event more than 30 days after the date of the accident, unless the eligible injured person submits written proof providing clear and reasonable justification for the failure to comply with such time limitation.

This provision is commonly known as the “30 Day Rule” as it requires written notice of the accident and injuries within 30 days of the accident. Historically, the time to submit written notice was 90 days. See 11 NYCRR 65.12, repealed. However, as part of the comprehensive amendments to the regulations effective April 5, 2002, and in an effort to reduce fraudulent claims, it was shortened to the current 30 days.

The 30 Day Rule is usually satisfied by timely completion and submission of the No-Fault Application N-F 2 form. The failure to timely submit such form was the subject of a recent decision in Delta Diagnostic Radiology, P.C. v. Citiwide Auto Leasing, 2017 NY Slip Op. 50924(U) (App. Term 2d, 11th & 13th Jud. Dists. 2017). In that case, the plaintiff medical provider’s assignor was injured while operating the self-insured defendant’s rental vehicle. The defendant denied the plaintiff’s claim “because the No-Fault application was not received within 30 days from the date of the accident.” Id. The plaintiff moved for summary judgment and the defendant cross-moved for summary judgment. The lower court denied the plaintiff’s motion and granted the defendant’s cross-motion. On appeal, the Appellate Term reversed. With respect to the 30 Day Notice Rule defense, the Appellate Term observed that “one day after the accident, defendant received notice of the accident when plaintiff’s assignor ‘appeared in [d]efendant’s rental location and completed an Accident/Damage report’,” id., and also submitted the police accident report. “Consequently, defendant received written notice of the accident within 30 days of its occurrence.”

This decision confirms that while timely submission of a completed N-F 2 form will satisfy the 30 Day Rule, see 11 NYCRR 65-3.3(d), it is not mandatory, as long as some form of written notice, such as an accident report, identifying the eligible injured person and containing information regarding the underlying accident is timely provided. In fact, 11 NYCRR 65-3.3(c), specifically provides: “Receipt of a Department of Motor Vehicles Accident Report 104 (MV 104), or other accident report indicating injuries to eligible injured persons, shall be deemed written notice of a claim.”

Of course, an insurer or self-insurer may specifically require submission of a completed N-F 2 form, and may presumably hold the claim open pending receipt of the requested form.2 However, if timely written notice was otherwise satisfied through submission of another form of document, then failure to submit a completed N-F 2 would not serve as a basis for denying a claim.

EUO/IME No-Show

As is apparent from the number of reported decisions on the topic, the examination under oath (EUO) or independent medical examination (IME) no-show defense appears to continue to be a hot topic in No-Fault insurance. The regulatory authority for an insurer’s right to demand cooperation at a scheduled EUO or IME is 11 NYCRR 65-1.1, Conditions, which provides, inter alia:

Upon request by the Company, the eligible injured person or that person’s assignee or representative shall:

* * *

(b) as may reasonably be required submit to examinations under oath by any person named by the Company and subscribe the same;

The eligible injured person shall submit to medical examination by physicians selected by, or acceptable to, the Company, when, and as often as, the Company may reasonably require.

11 NYCRR 65-3.5 further provides:

(d) If the additional verification required by the insurer is a medical examination, the insurer shall schedule the examination to be held within 30 calendar days from the date of receipt of the prescribed verification forms.

(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. 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 so that there is specific objective justification supporting the use of such examination. Insurer standards shall be available for review by Department examiners.

Doctor Goldshteyn Chiropractic, P.C. v. ELRAC, 2017 NY Slip Op 50923(U) (App. Term 2d, 11th & 13th Jud. Dists. 2017) concerned the acceptable methods of serving an EUO scheduling notice on the injured person. In that case, the defendant insurer mailed EUO scheduling letters to the injured person by regular first class mail, with a duplicate copy of the letters sent by either certified mail or certified mail, return receipt requested. The lower court granted the defendant’s motion for summary judgment and the Appellate Term affirmed. As the court presumably found the defendant sufficiently proved the mailing of its scheduling letters by regular mail, the plaintiff’s argument—that there was an issue of fact as to the method of mailing used for the duplicate copy of the scheduling letters—was rejected. In other words, regular first class mailing of the scheduling letters is sufficient, and there is no requirement that a second copy of the letters be sent.

In Acupuncture Healthcare Plaza I, P.C. v. Allstate Ins., 2017 NY Slip Op. 50939(U) (App. Term 2d, 11th & 13th Jud. Dists. 2017), the court confirmed that strict time limits apply to the mailing of EUO scheduling letters. The defendant in that case moved for summary judgment based on the injured person’s alleged failure to appear for scheduled EUOs. The initial scheduling letter was timely mailed. However, after holding that the follow-up verification request provision of 11 NYCRR 65-3.6(b)3 applied to follow up EUO scheduling letters, the court found that the second, follow-up EUO scheduling letter was not timely mailed.

As a result, because defendant’s follow-up EUO scheduling letter was untimely, the NF-10 denial of claim form which defendant eventually sent was untimely. Consequently, defendant is precluded from raising its proferred defense and, thus, defendant’s motion for summary judgment dismissing the complaint should have been denied.

Moreover, although 11 NYCRR 65-3.8(l) permits a “deviation from the rules set out in this section” by reducing the number of days to pay or deny the claim once proof of claim and any requested additional verification is received, the court held that because the follow-up verification request provision applied to the second EUO scheduling letter, the provisions in §65-3.8(l) did not apply. Therefore, the time restrictions for mailing the second EUO scheduling letter are to be strictly applied.

It is assumed that the “new” provisions in the No-Fault Regulations (Regulation 68-C), for medical services rendered on or after April 1, 2013, did not apply to the claim in that case. If they did, however, it would appear the provisions in 11 NYCRR 65-3.5(p)4 may have caused a different result.

In St. Locher Med., P.C. v. IDS Prop. Cas. Ins., 2017 NY Slip Op. 50919(U) (App. Term 2d, 11th & 13th Jud. Dists. 2017), the focus was on the first EUO scheduling letter. Reversing the lower court’s granting of summary judgment to the defendant, the Appellate Term held: “Defendant’s moving papers failed to establish that the first EUO scheduling letter defendant sent to plaintiff had been timely, since defendant stated that the letter was sent more than 30 days after defendant had received the claims.”

Utopia Equip. v. ELRAC, 2017 NY Slip Op. 50949(U) (App. Term 2d, 11th & 13th Jud. Dists. 2017) concerned the sufficiency of an IME scheduling notice. In that case, as is often the case, the defendant utilized a third-party IME vendor to schedule IMEs of the injured person. The defendant also utilized a third-party administrator (TPA) to process the claims. Thus, the IME scheduling notices stated that they were being sent by the IME vendor on behalf of the TPA, and presumably did not mention the defendant. In opposition to the defendant’s motion for summary judgment, the plaintiff argued that scheduling notices were defective, as they failed to advise the injured person that they pertained to the claim involving the defendant. It is possible such argument may prevail where the notice is completely devoid of any information regarding the injured person’s claim. Here, however, the court rejected the plaintiff’s argument, as the court observed that “the letters clearly apprised the assignor that they were being sent on behalf of defendant’s claims processing company, to whom plaintiff’s assignor had submitted the NF-2 application for no-fault benefits.” Thus, where the assignor previously communicated with, and submitted his N-F 2 form to the TPA regarding his claim, he cannot be heard to complain that he does not know who the TPA is or to what claim the IME notice pertains.

In Mind & Body Acupuncture, P.C. v. American Commerce Ins., 2017 NY Slip Op. 50918(U) (App. Term 2d, 11th & 13th Jud. Dists. 2017), the defendant relied upon the affirmation of counsel to establish the non-appearance of the plaintiff at requested EUOs. The defendant’s motion for summary judgment was granted, and on appeal, the Appellate Term reversed. The court held: “The affirmation by a partner in the law firm retained by defendant to conduct examinations under oath (EUOs) of plaintiff did not satisfy defendant’s burden of presenting proof by someone with personal knowledge of the nonappearance of plaintiff at the EUOs in question.”

In Village Med. Supply v. American Country Ins., 2017 NY Slip Op. 50941(U) (App. Term 2d, 11th & 13th Jud. Dists. 2017), the defendant attempted to rely upon the injured person’s failure to appear for scheduled IMEs as a meritorious defense to justify vacating a default judgment. The court observed, “the denial of claim forms annexed to defendant’s moving papers were dated more than one month before defendant had received the claims. In view of the foregoing, we need not determine whether defendant demonstrated an excusable default.” As the defendant failed to prove it denied the claims in dispute, its IME no-show defense would be precluded.

Additionally, the defendant argued that statutory interest should not have accrued prior to commencement of suit. 11 NYCRR 65-3.9(c) provides, in pertinent part:

If an applicant does not request arbitration or institute a lawsuit within 30 days after the receipt of a denial of claim form or payment of benefits calculated pursuant to Insurance Department regulations, interest shall not accumulate on the disputed claim or element of claim until such action is taken.

The court found the defendant’s “argument lacks merit in light of defendant’s failure to establish that it had ever mailed denial of claim forms to plaintiff for the claims at issue.”

Endnotes:

1. 11 NYCRR 65-2.4 contains a nearly identical provision for self-insureds.

2. See 11 NYCRR 65-3.4(b), which provides:

Unless the insurer will pay the claim as submitted within 30 calendar days, then, within five business days after notice is received by the insurer at the address of its proper claim processing office, either orally pursuant to subdivision (a) of this section or in any other manner, the insurer shall forward to the applicant the prescribed application for motor vehicle no-fault benefits (NYS Form N-F 2) accompanied by the prescribed cover letter (NYS Form N-F 1).

3. That section provides:

(b) 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.

4. 65-3.5(p) provides:

With respect to a verification request and notice, an insurer’s non-substantive technical or immaterial defect or omission, as well as an insurer’s failure to comply with a prescribed time frame, shall not negate an applicant’s obligation to comply with the request or notice. This subdivision shall apply to medical services rendered, and to lost earnings and other reasonable and necessary expenses incurred, on or after April 1, 2013.