The Rogak Report: 25 Aug 2009 ** No Fault - EUO Letters **
FOR EUO NO-SHOW DEFENSE, COPY OF POLICY NEED NOT BE SUBMITTED TO COURT; CERTIFIED MAIL OK FOR EUO SCHEDULING LETTERS
Hastava & Aleman Assoc., P.C. a/a/o Lionel McIntyre v. State Farm Mut. Auto Ins. Co. 2009 NY Slip Op 51818(U) Decided on July 2, 2009 Civil Court Of The City Of New York, Bronx County Tapia, J. Edited by Lawrence N. Rogak
This very interesting decision stands for two propositions: first, that a no-fault insurer need not attach a copy of its policy, or the no-fault endorsement, to sustain its defense of EUO no-shows. And second, that sending EUO scheduling letters via certified mail, return receipt requested, supported by a mailing log and affidavits, is acceptable proof that the letters were mailed.
In this no-fault action regarding the recurring issue of Examination Under Oath letters and their presumption of mailing, this Court, after oral arguments and review of the motion papers, granted Defendant's Pre-Answer Motion to Dismiss Plaintiff's Complaint.
"The above-captioned matter is demonstrative of other no-fault cases that have similar issues because the case at hand involves two topics that other motions seek to resolve: (1) violation of no-fault policy conditions and (2) unanswered verification requests. Those two main problems in turn spawn the ancillary issue regarding sufficient mailing procedures to make timely requests."
"Defendant argues that Plaintiff's Complaint must be dismissed as a matter of law because Plaintiff violated no-fault policy conditions when it failed to appear for its scheduled EUO. Plaintiff, in turn, claims that Defendant failed to provide a copy of the subject insurance policy in its moving papers as well as failed to show that the EUO letters were actually sent."
"Section I of 11 NYCRR § 65-1.1 states the following with respect to conditions for proof of claim:
"Upon request by the Company, the eligible injured person or that person's assignee orrepresentative shall:
(a) execute a written proof of claim under oath;
(b) as may reasonably be required to submit to examinations under oath by any person named bythe Company and subscribe the same;
(c) provide authorization that will enable the Company to obtain medical records; and
(d) provide any other pertinent information that may assist the Company in determining the amountdue and payable."
"In the instant case, Plaintiff claims that Defendant unnecessarily cited the aforementioned policy condition because 'the central issue here is derived from the terms contained within the written policy agreement between the parties.' Plaintiff therefore asserts that in order for Defendant to prevail on its motion, the State Farm policy itself should be included as part of the record instead of depending on the no-fault regulations under 11 NYCRR § 65-1.1. To support its argument, Plaintiff discusses Allstate Ins. Co. v. Ganesh, 8 Misc 3d 922 (Sup Ct, Bronx County 2005), a case dealing with a petitioner's arbitration stay of an uninsured motorist claim."
"In Ganesh, the respondent, the injured individual, sought coverage from the offending party's insurance carrier [State Farm-petitioner]. State Farm disclaimed the coverage on the basis that the collision was not a motor vehicle accident, but instead, was an intentionally staged event, thereby constituting fraud. State Farm therefore disclaimed coverage to the injured party because per its written policy, intentionally caused losses are not covered."
"The Bronx Supreme Court held that State Farm did not validly disclaim coverage because it did not give sufficient admissible evidence that it was a staged event [i.e. offering the written policy as admissible evidence]. According to Hon. Billings, 'because no party introduced State Farm's policy in evidence, State Farm never proved, most fundamentally, that the policy . . . excluded intentionally caused losses or losses involving particular conduct or imposed any conditions on anyone relating to a claimed loss.' As such, the petitioner's arbitration stay was granted and the respondent was allowed to seek coverage under State Farm's policy."
"Here, Plaintiff's reliance on Ganesh is flawed because unlike Ganesh, this instant action deals with the issue of an EUO "no-show" which is expressly outlined in the no-fault regulations, guiding principles which written policies are based upon. Ganesh, on the other hand, dealt with the issue of coverage with respect to a questionably fraudulent claim that requires dissection of the written policy itself. Ganesh is also distinguishable from the case at bar because the relief sought in Ganesh was for a stay of arbitration of an uninsured motorist claim, as opposed to dismissal of the complaint based on non-compliance to policy conditions. As such, Ganesh fails to support Plaintiff's claim that Defendant is required to provide the written policy as evidence."
"Revisiting 11 NYCRR § 65-1.1, that section is part of the revised no-fault regulations which took effect on April 5, 2002, and adopted the mandatory Personal Injury Protection endorsement authorizing EUOs to be incorporated into insurance policies. In other words, compliance to a scheduled EUO is read into the written policy, and the insurer is not required to offer it as evidence to prove its claim."[FN1]
"Likewise, in the case at hand, Defendant is not required to include its written policy as part of the record because its defense [of the EUO "no-show"] is found in the Endorsement. Thus, the mandatory Endorsement applies whether or not the written insurance policy actually contains it."
"Based on the moving papers, the date of accident was on August 27, 2008. According to NY Insurance Law § 3425 (a)(8), 'With respect to auto insurance, 'required policy period' means a period of one year from the date as of which a covered policy becomes effective after first issuance or voluntary renewal.' Furthermore, under SZ Medical P.C. v. State Farm Mutual Auto Ins. Co., 9 Misc 3d 139(A) (App Term 1st Dept 2005), the date of the written policy's issuance determines if the Endorsement is applicable, and not the date when the plaintiff submits a claim."
"Applying the above to the instant action, the subject insurance policy contract could be deemed to have been issued/renewed well after April 5, 2002, given that the date of accident occurred well over six years after the effective Endorsement date. It would therefore be duplicative to submit a copy of the policy because its legislative intent was to read the Endorsement into all policies [post-April 5, 2002].[FN2] As such, Defendant does not need to submit the policy contract because the insurance contact in effect incorporates the Endorsement that authorizes EUOs under 11 NYCRR § 65-1.1."
"Plaintiff in the case at bar is therefore in violation of the policy condition requiring submission of EUOs for verification purposes in order to make a determination of first-party benefits because Plaintiff did not appear at the two scheduled EUOs as required by the Endorsement. Accordingly, Plaintiff failed to submit valid proof of claim. The discussion now turns to the mailing mechanics involved in procuring such verifications."
"According to 11 NYCRR § 65-3.5 (a), once the insurer receives the NF-2 application for benefits, the insurer 'shall forward to the parties . . . those prescribed verification forms it will require prior to payment of the initial claim.'"[FN3]
"In this instant matter, the issue before the Court is whether the mailing of a letter via certified mail return receipt requested is entitled to the same presumption of receipt as regular first-class mail in the absence of the signed returned receipt. This Court determines that it is."
"Here, Defendant argues that Plaintiff did not appear to the scheduled EUO despite timely notification to Plaintiff.[FN4] To substantiate its argument, Defendant provided a sworn affidavit from a calendar clerk at the law office who explained that she was personally responsible for scheduling/handling EUOs."
"Defendant also provided a sworn affidavit from a Claims Representative who attested her personal knowledge of State Farm's mailing procedures of EUO letters via certified mail."[FN5]
Plaintiff counters that Defendant failed to meet its prima facie burden of proving that the two EUO letters were actually mailed because Defendant's supporting affidavits are not from individuals who personally mailed the EUO letters. See Pl.'s Aff. in Opp. at pp. 6-7. Plaintiff further argues that Defendant's affidavits "[a]re actually just a string of several irrelevant and/or conclusory assertions." Id. at p. 10. To support its contentions, Plaintiff relies on Clark v. Columbian Mut. Life Ins. Co., 221 AD2d 227 (1st Dept 1995).
In Clark, the defendant moved for summary judgment on the basis that no triable issues of fact remained with respect to denying the plaintiff's life insurance proceeds, especially after sending notices to the plaintiff to make payments so that his life insurance policy would remain active. The plaintiff denied receipt of those notices and further argued that the defendant's deponent who testified on the regular office procedures of mailing the notices failed to show that he was aware of the computer-generated mailing log which listed the names of those receiving such notices. Id. at 228. The Court denied the motion, finding no presumption of receipt by the insured. Id. at 228-29.
Plaintiff's reliance on Clark is misplaced because Defendant in the instant case submitted mail lists into evidence, whereas the deponent in Clark was not even aware of the computer-generated mail lists that were used for cross-referencing of the envelopes containing the notices. See Def.'s Reply Aff. at ¶ 6. In addition, the plaintiff in Clark expressly denied receipt of the notice. Here, Plaintiff, in its pleadings, did not explicitly or implicitly deny that it never received the EUO letters. Instead, Plaintiff contends that Defendant failed to show that the EUO letters were actually mailed. This Court therefore turns to the final issue of the presumption [*5]of mailing/receipt.
B. Plaintiff's contentions
What constitutes "sufficient mailing" under no-fault regulations with respect to raising the presumption that an EUO letter was sent and received via certified mail, return receipt requested?
Here, Plaintiff contends that Defendant has the burden to show that the EUO requests were actually mailed. Based on Defendant's sworn statements, the EUO letters were sent via certified mail. Thus, the question before the Court is whether the use of certified mail return receipt requested creates a more demanding presumption of mailing and receipt threshold above and beyond that of a letter sent via regular first-class USPS mail. The court finds that it does not.
1. Legal presumption: a basic discussion
This Court finds that Defendant has met its burden because 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.
Under Rule 301 of the Federal Rules of Evidence, a "[p]resumption imposes on the party against whom it is directed the burden of going forward with evidence to rebut or meet the presumption . . ." Sufficient evidence can therefore be considered by a fact finder in order to rebut a presumption.[FN6] The least sufficient approach to a presumption is the "permissible inference" one in which a fact finder may conclude that a presumed fact exists. See Black's Law Dictionary, 8th ed 2004. A permissible presumption, then, allows someone to infer that a presumed fact does exist from a basic one. Applying this to the mailed letter example, it can therefore be presumed that proper mailing occurred and it is more likely than not that the letter was received.[FN7]
"Does the presumption of receipt by regular mail apply to items of sent certified mail?Defendant established prima facie proof that it mailed requests for additional verification of the claim by providing sworn affidavits from two State Farm office employees as well as an employee from the office of Defendant's lawyers, all who have personal knowledge of mailroom procedures of EUO letters."
"More importantly, Defendant submitted its mail list which is not only additional prima facie proof of mailing, but is key to creating the presumption of receipt.[FN8] The very function of "return receipt" is to provide proof of delivery, as guaranteed by the U.S. Postal System."[FN9]
"Here, Plaintiff relies on State of New York v. International Fidelity Ins. Co.,
181 Misc 2d 595 (Sup Ct, Albany County 1999) to support its contention that Defendant failed to meet its prima facie burden to prove actual mailing of the EUO letters. In Int'l Fidelity a non-no-fault case the movant-plaintiff-NYS sought to prove that it never received the defendant's cancellation notices about the terminated bonds which were sent via certified mail. The cross-movant-defendant-IFIC argued that it was entitled to summary judgment because NYS could not rebut the presumption of receipt of the cancellation notices."
"The Albany County Court held, inter alia, that routine office practices cannot create a presumption of receipt of letters sent via certified mail. As the Court stated, 'To create a presumption of receipt, IFIC has the burden of describing a standard office procedure used to ensure that items are properly mailed, or provide proof of the actual mailing."
"Plaintiff's reliance on Int'l Fidelity is misplaced because State Farm submitted both sworn affidavits from a claims representative with personal knowledge about mailroom procedures and proof of actual mailing to complement those affidavits, as previously mentioned in II.A. of this decision. See also Hernandez, supra. Furthermore, State Farm retained its mail lists, unlike the plaintiff [NYS] in Int'l Fidelity, who destroyed its mail logs."
"Also, in the case at hand, even if... State Farm Claims Representative did not attest that she was personally responsible for preparing the EUO letters and mailing them via certified mail, return receipt, the fact that State Farm retained its mail lists serves as its safety net, thereby allowing it to create the presumption of receipt because those mail lists represent actual proof of mailing. Defendant should therefore not be punished for taking advantage of various mailing options which aim to ensure delivery from both the sender's and recipient's ends."
"Mailing procedures' technological developments, today, ensure that items are mailed and received so that presumptions can be eliminated. In fact, the USPS has the capacity to reproduce the image of the green return receipt card as a PDF attachment when certified mail is procured via the internet, or else when the sender did not receive the green card back and instead goes to the USPS to follow up on the status of the card." See FN . 9.
"As footnoted earlier, the regulation is not specific about the means in which to send substantially equivalent written notices to the required parties; it merely instructs the insurer to 'forward' them. See NYCRR § 65-3.5 (a). In fact, it may very well have been the legislative intent of the NY Insurance Department to be vague in order to avoid enforcement of a particular form of mailing in the event it becomes outdated, which would breed any problems regarding receipt. 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."
"Satisfying no-fault policy conditions does not have to be compromised at the expense of challenging mailing procedures because proof of mailing of verification letters via regular USPS is enough to create a presumption of receipt. In addition, use of certified mail does not create a more demanding presumption of mailing and receipt beyond that of a letter that was properly mailed. The regulations make no distinction between sending a letter via regular mail or via certified mail."
"WHEREFORE Defendant's Pre-Answer Motion to Dismiss Plaintiff's Complaint is hereby GRANTED."Footnotes
Footnote 1: See Dana Woolfson LMT, a/a/o Tania Rega v. GEICO, 20 Misc 3d 948 (Civ Ct, NY County 2008) (holding that an insurer does not need to produce the insurance policy at trial to show that the contract contained the Endorsement).
Footnote 2: See Eagle Chiropractic, P.C. a/a/o Annette Monk et. al. v. Chubb Indemnity Ins. Co., 19 Misc 3d 129(A), 2008 WL 712036 (NY Sup App Term 9th & 10th Jud Dists 2008) (stating that the Endorsement was required to be included in auto insurance policies issued or renewed after April 5, 2002).
Footnote 3: The regulation uses "forward" to describe the manner in which notification is to be effected. The only kink is determining what constitutes sufficient "notice" because the regulation does not specify the mailing procedure by which to notify the injured party.
Footnote 4: The EUO was requested with respect to the medical bill of $67.40 which was submitted after other bills were disclaimed. See Def.'s Aff. at ¶ 11. The sought-after EUO is for Theresa M. Hastava, D.C., the individual in question for being fraudulently involved with the healthcare practice. See Claudia Fulco Aff. at ¶ 19.
Footnote 5: Per 11 NYCRR ¶ 65-3.6 (b), timely verification requests are made either via phone calls or by mail. Defendant sent the first EUO letter via certified mail on or about October 29, 2008, with reference numbers 102808JK35 and 102808JK36. The second letter was sent on or about December 1, 2008, with reference numbers 120108JK24 and 120108JK25. See Def.'s Reply Aff. at ¶¶ 10-11.
Footnote 6: As per Notes of Committee on the Judiciary, House Report No. 93-650.
Footnote 7: See Nassau Ins. Co. v. Murray, 46 NY2d 828, 829 (NY 1978) where the 1st department held that "It is settled law that a properly addressed and stamped envelope placed in a U.S. mailbox is presumed to have been received by the addressee."
Footnote 8: See Hernandez v. Merchants Mut. Ins. Co., 14 Misc 3d 1215(A) (Sup Ct, Bronx County 2006), where movant-defendant-insurer sought summary judgment to dismiss the plaintiff's complaint, arguing it timely disclaimed coverage via written notice and quoting Residential Holding Corp. v. Scottsdale Ins., 286 A.D2d 679 (NYAD 2d Dept 2001) (where proof of actual mailing or proof of a standard office practice/procedure designed to ensure that items are properly addressed and mailed).
Footnote 9: See , accessed June 22, 2009.