Country-Wide Ins. Co. v. Alvarez

Country-Wide Ins. Co. v Alvarez 2024 NY Slip Op 32874(U) August 13, 2024 Supreme Court, New York County Docket Number: Index No. 654510/2021 Judge: Emily Morales-Minerva Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication.

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SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: HON. EMILY MORALES-MINERVA PART 42M Justice ---------------------------------------------------------------------------------X INDEX NO. 654510/2021 COUNTRY-WIDE INSURANCE COMPANY, MOTION DATE 04/03/2024 Plaintiff, MOTION SEQ. NO. 005 - V -

MARVIN ALEXANDER CASTRO ALVAREZ, NEW YORK CITY HEALTH AND HOSPITALS CORPORATION D/B/A LINCOLN MEDICAL MENTAL HEALTH CENTER, NEUROLOGICAL SURGERY, P.C.,SOUTH NASSAU COMMUNITIES HOSPITAL, ORTHOPAEDICS. SPINE AND SPORTS MEDICINE, LLC,ADVANCED ORTHOPEDICS AND JOINT PRESERVATION P.C.,METRO PHARMACY DECISION+ ORDER ON D/B/A SIMPLEPHARM, BROOKLYN MEDICAL PRACTICE, MOTION P.C.,UNICORN ACUPUNCTURE P.C.,ECLIPSE MEDICAL IMAGING P.C.,SURGICORE OF JERSEY CITY, LLC,PMGT MEDICAL AND SURGICAL ASSOCIATES, LLP, LERMAN MEDICAL, P.C.,NEUROTRACK, LLC,LIMA SUPPLY INC, MPO MS, INC

Defendants. ---------------------------------------------------------------------------------X

The following e-filed documents, listed by NYSCEF document number (Motion 005) 86, 87, 88, 89, 90, 91, 92, 93, 94, 95, 96, 97, 98, 99,100,101,102,103,104,105,106,107,108,109,110,111,112,113, 114, 115, 116, 117, 118, 119, 120, 121 were read on this motion to/for JUDGMENT-SUMMARY APPEARANCES:

Jaffe & Velazquez, LLP, New York, New York (Carl J. Gedeon Esq., of counsel), for Plaintiff.

The Ryback Firm, LLC, Brooklyn, New York (Oleg Rybak, Esq., of counsel), for Defendant SURGICORE.

HON. EMILY MORALES-MINERVA:

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This is a declaratory judgment action, pursuant to CPLR §§ 3001 1

and 3017 (b) , 2 arising in the context of no-fault insurance (see

Comprehensive Motor Vehicle Insurance Reparation Act [Insurance

Law] § 5101, et seq.). In the subject motion (sequence no.

005), plaintiff COUNTRY-WIDE INSURANCE COMPANY (INSURANCE

COMPANY) moves for an order granting it summary judgment against

defendant SURGICORE OF JERSEY CITY, LLC ("SURGICORE"}, assignee

of the insurance benefits of defendant MARVIN ALEXANDER CASTRO

ALVAREZ ("ALVAREZ"} ( see CPLR § 3212 [governing summary

judgment] ) . INSURANCE COMPANY reasons that ALVAREZ breached a

condition precedent to coverage, voiding the policy and leaving

SURGICORE without a right to recovery, as a matter of law.

SURGICORE submits opposition, arguing, among other things,

that INSURANCE COMPANY'S denial of claim is untimely, and the

subject motion is premature. INSURANCE COMPANY submits a reply.

For the reasons set forth below, the motion is denied in

its entirety.

1 CPLR § 3001 provides, in part: "The supreme court may render a declaratory judgment having the effect of a final judgment as to the rights and other legal relation so the parties to a justiciable controversy whether or not further relief is or could be claims." 2 CPLR § 3017 (bl provides: •rn an action for a declaratory judgment, the demand for relief in the complaint shall specify the rights and other legal relations on which a declaration is requested and state whether further or consequential relief is or could be claimed and nature and extent to any such relief which is claimed."

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BACKGROUND

On September 13, 2019, defendant MARVIN ALEXANDER CASTRO

ALVAREZ ("ALVAREZ") was involved in an automobile accident. For

related injuries, he received medical treatment and/or medical

supplies from defendant SURGICORE OF JERSEY CITY, LLP

( "SURGICORE") . ALVAREZ assigned his no-fault benefits to

SURGICORE, among other defendants not a part to this motion. 3

Upon receiving verification of treatment from another

medical provider, INSURANCE COMPANY mailed a letter, dated May

26, 2020, to defendant ALVAREZ and his attorney, requesting that

ALVAREZ attend an Examination Under Oath ("EUO") scheduled for

June 19, 2020 (NYSCEF Doc. No. 095, EUO First Notice Letter).

The letter indicated that INSURANCE COMPANY sought to "clarify

some of the facts and circumstances surrounding [the] claim"

(id. at p. 2).

3 This action has been resolved as to defendant injured party and all other defendant medical providers. INSURANCE COMPANY entered stipulations of settlement with defendants NEW YORK CITY HEALTH AND HOSPITALS CORPORATION D/B/A LINCOLN MEDICAL MENTAL HEALTH CENTER, METRO PHARMACY D/B/A SIMPLEPHARM, LIMA SUPPLY INC., and MPO MS, INC {NYSCEF Doc. Nos. 64, 66). Further, by decision and order, dated March 12, 2024, the Court (N. Bannon, J.S.C) issued a default judgment against defendants ALVAREZ, NEUROLOGICAL SURGERY, P.C., SOUTH NASSAU COMMUNITIES HOSPITAL, ORTHOPAEDICS, SPINE AND SPORTS MEDICINE, LLC, BROOKLYN MEDICAL PRACTICE, P.C., UNICORN ACUPUNCTURE P.C., ECLIPSE MEDICAL IMAGING P.C., PGMT MEDICAL AND SURGICAL ASSOCIATES, LLP, LERMAN MEDICAL, PC and NEUROTRACK, LLC (NYSCEF Doc. No. 84). Finally, INSURANCE COMPANY confirmed that it discontinued this action as against defendant ADVANCED ORTHOPEDICS AND JOINT PRESERVATION, P.C. (see NYSCEF Doc. No. 80, affirmation in support of plaintiff's counsel, dated Oct. 25, 2023, at 3, 1 9).

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Due to the COVID-19 pandemic, INSURANCE COMPANY adjourned

the examinations under oath from June 19, 2020, to July 17,

2020, and then from July 17, 2020, to August 17, 2020 (NYSCEF

Doc. No. 029, EUO Cancellation Notice; NYSCEF Doc No. 095, EUO

Rescheduling Letters; NYSCEF Doc. No. 96, EUO Rescheduling

Letter). INSURANCE COMPANY notified both defendant ALVAREZ and

his attorney of the adjournments via letter (id.).

However, on August 17, 2020, neither defendant ALVAREZ nor

his counsel appeared for the examination under oath (see NYSCEF

Doc. No. 097, certified transcript, dated August 17, 2020 at p.

3). INSURANCE COMPANY then rescheduled the examination to

September 14, 2020 (NYSCEF Doc. No. 098, Final EUO Scheduling

Letter) .

In its rescheduling notice, INSURANCE COMPANY again broadly

noted the purpose of the examination under oath was to "clarify

some of the facts and circumstances surrounding [the] claim"

(id.). At the subsequent EUO, neither ALVAREZ nor his attorney

appeared (see NYSCEF Doc. No. 099, certified transcript of EUO,

dated September 14, 2020). The next day, INSURANCE COMPANY

denied all claims and coverage for ALVAREZ'S breach of a

condition precedent (NYSCEF Doc. No. 102, Denial of Claim

letter) .

Thereafter, on July 21, 2021, INSURANCE COMPANY filed the

instant complaint, seeking a declaratory judgment that defendant

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ALVAREZ and defendant medica l p rov i ders h ave no rights under the

insurance policy, and that INSURANCE COMPANY owes no duty to pay

no-fault claims on ALVAREZ'S beha lf (NYSCEF Doc . No. 001) .

De fendants ALVAREZ, NEUROLOGICAL SURGERY, P .C., SOUTH NASSAU

COMMUNITI ES HOSPITAL, ORTHOPAEDICS, SPINE AND SPORTS MEDICINE,

LLC , BROOKLYN MEDICAL PRACTICE, P.C., UNICORN ACUPUNCTURE, P . C. ,

ECLIPSE MEDICAL IMAGING, P.C., SURGICORE OF JERSEY CITY, LLC,

PMGT MEDICAL AND SURGICAL ASSOCIATES, LLP, LERMAN MEDICAL, P.C.,

and NEUROTRACK, LLC, fai led t o submit an answe r.

Consequently, INSURANCE COMPANY filed a motion ( seq . no.

00 1 ), pu rsuant to CPLR § 3215, f o r l eave to enter a default

judgment against the above lis ted defendants. The Court (N .

Bannon, J.S.C.} denied said mot ion without prejudice to renewal

(see NYSCEF Doc . No. 069, Decis i on and Order, February 1, 2023)

Later , on October 27, 2023, INSURANCE COMPANY filed a

mo t ion (se q. no. 0 04 ) to r e n ew a nd reargue its applic ation for a

defaul t judgment . 4 Dur ing the pendency of sa id motion, defendan t

SURG I CORE fi led an untimely answer and demand for verified

interroga tories , subject to no opposition (NYSCEF Doc. No. 82,

An s wer, November 21, 2023; NYSCEF Doc. No . 083 , Notice of

Discovery and Inspection, November 21, 2023) .

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has failed to provide sufficient justification requesting EUOs

and has failed to comply with discovery demands, making the

subject application for summary judgment premature.

ANALYSIS

Law of the Case

SURGICORE's first argument that the Court should deny

INSURANCE COMPANY an order of summary judgment because it issued

untimely requests for examination under oath is unavailing. The

Court (N. Bannon, J.S.C.) explicitly held that INSURANCE COMPANY

timely scheduled the EUOs within the statutory period, pursuant

to 11 NYCRR § 65-3.S(b) (NYSCEF Doc. No. 84, Decision and

Order). This substantive determination cannot be relitigated in

the context of this motion, and it is the law of the case

(Glynwill Invs., N.V. v Shearson Lehman Hutton, Inc., 216 AD2d

78, 79 [1st Dept 1995]).

However, said holding does not defeat SURGICORE's remaining

arguments, addressed immediately below.

Swnmary Judgment

On a motion for summary judgment, the moving party must "'make

a prima facie showing of entitlement to judgment as a matter of

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support of the instant motion (see Country-Wide Ins. Co. v

Evans, 2022 NY Slip Op 33966 [U] [Sup Ct, NY County 2022]) .

INSURANCE COMPANY's conclusory assertion that it seeks

clarification about the facts of defendant ALVAREZ's car

accident -- without indication of what facts are in question, or

why -- is not sufficient (see Delacruz, 205 AD3d at 473).

While an insurer's reasoning for an examination under oath need

not be lengthy or overly detailed, the insurer must be specific

enough to show that the request is not routine or arbitrary (see

Kemper Indep. Ins. Co. v Accurate Monitoring, LLC, 73 Misc.3d

585, 588 [Sup Ct, NY County 2021]).

INSURANCE COMPANY is correct that a failure to state the

objective justification in the request for an EUO does not alone

render the request improper. However, insurers must provide

justification for the EUO process thereafter -- "whether during

the claims-verification process or in later litigationn which

INSURANCE COMPANY has failed to do (Evans, 2022 NY Slip Op

33966[U], *3, citing Delacruz, 205 AD3d at 473-474).

Finally, contrary to INURANCE COMPANY's contention,

SURGICORE is not required to "lodge any objection . within a

specific time frame," particularly when the insurer, as here,

provides no justification for the examination under oath

(Delacruz, 205 AD3d at 474; Country-Wide Ins. Co. v Alicea, 183

NYS3d 848 [1st Dept 2023]).

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In any event, SURGICORE appears correct that INSURANCE

COMPANY's motion for an order of summary judgment is premature

(see CPLR § 3212 [f]). Prior to this motion, SURGICORE served

discovery requests on INSURANCE COMPANY seeking information

concerning the purpose of the EUOs and INSURANCE COMPANY has yet

to respond (compare Country-Wide Ins. Co. v Henderson, 77 Misc3d

1218 (A), *2 [Sup Ct, NY County 2022] [holding: summary judgment

motion premature where plaintiff moved for summary judgment two

months after defendant filed answer and before having provided

discovery being sought], with Country-Wide Ins. Co. v Duff, 77

Misc3d 1216(A), *3 [Sup Ct, NY County 2022] [holding: summary

judgment motion not premature where one-year prior to plaintiff

moving for summary judgment, defendant served discovery request

on plaintiff, and defendants had not only received responses to

those requests, but objected to them as incomplete, and took no

further action to compel]). "The reason for the EUO request is

a fact essential to justify opposition to plaintiff's summary

judgment motion, [that is] exclusively within the knowledge and

control of [plaintiff]" (American Tr. Ins. Co. v Jaga Med.

Servs. P.C., 128 AD3d 441, 441 [1st Dept 2015]; Alicea, 183

NYS3d at 848).

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Accordingly, it is

ORDERED that plaintiff COUNTRY-WIDE INSURANCE COMPANY'S

motion (seq. no. 005) for summary judgment 1s denied in its

entirety; and it is further

ORDERED that the matter is scheduled for a virtual preliminary

conference on October 15, 2024, at 11:00 A.M. in Part 42.

THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT.

~⁴{j!;h£22f?t~ EMI MORALES-MINERVA, J.S.C.

~ CHECK ONE: CASE DISPOSED NON-FINAL DISPOSITION

GRANTED 0 DENIED GRANTED IN PART □ OTHER APPLICATION: SETTLE ORDER SUBMIT ORDER

CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT □ REFERENCE

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Footnotes

[4] Plaint i ff filed a motion to r e n e w and reargue (seq . no. 003 ) on Septembe r 29, 202 3, wh ic h was denied without p rej udice to renew u pon pro per paper s by inc luding a Memorandum o f Law with i n thirty days (NYSCE F Doc . No . 77, Decis ion and Order, N . Ba nnon, J .S .C.) . Plainti ff f iled the i ns t ant appl i ca ti on on October 27 , 2023, with the requisite Memorandum of Law. 654510/2021 COUNTRY-WIDE INSURANCE COMPANY vs. ALVAREZ , MARVIN ALEXANDER Page 5 of 12 CASTRO ET AL Motion No. 005

[5] of 12 [* 5] On March 12, 2024, the Court (N. Bannon, J.S.C.) granted INSURANCE COMPANY's motion to renew the Court's denial of a default judgment and, upon renewal, granted a default judgment against the non-answering defendants, except for the late-filing SURGICORE (NYSCEF Doc. No. 84, Decision and Order, N. Bannon, J. S. C.). Justice Bannon found that INSURANCE COMPANY established (1) that it received verification of treatment forms from certain medical providers on May 18, 2020 and May 20, 2020, and timely sent its first scheduling notice on May 26, 2020, (2) that ALVAREZ failed to appear for his EUOs on August 17, 2020, and on September 14, 2020, and (3) that INSURANCE COMPANY was, therefore, entitled to judgment as against all non- answering defendants for breach of a condition precedent that voided the insurance policy (id.). INSURANCE COMPANY then filed the subject motion (seq. no. 005) for an order, granting it summary judgment against the only remaining defendant SURGICORE. 5 In opposition, defendant SURGICORE argues, among other things, that INSURANCE COMPANY has failed to establish the timeliness of its denial of the claim, 5 In support of its motion, plaintiff submitted the Application for Motor Vehicle No-Fault Benefits form ("NF-2 form") and Claim Auto Loss Report (NYSCEF Doc. No. 094); the requests for examinations under oath (NYSCEF Doc. Nos. 095, 096, 098); the certified transcript of statements on the record at the scheduled examination under oath, reflecting defendant ALVAREZ'S non- appearance (NYSCEF Doc. Nos. 097, 099); an affidavit of Jessica Mena-Sibrian, No-Fault Litigation/Arbitration Supervisor (NYSCEF Doc. No. 100); an affidavit of Annie Persaud, EUO clerk (NYSCEF Doc. No. 101); the Denial of Claim form (NYSCEF Doc. No. 102); and the Verification of Treatment by Attending Physician forms ( "NF-3 form") (NYSCEF Doc. No. 103) . 654510/2021 COUNTRY-WIDE INSURANCE COMPANY vs. ALVAREZ, MARVIN ALEXANDER Page 6 of 12 CASTRO ET AL Motion No. 005 [* 6] 6 of 12

[7] of 12 [* 7] law, tendering [evidentiary proof in admissible form] to demonstrate the absence of any material issues of fact'" (Nomura Asset Capital Corp. v Cadwalader, Wickersham & Taft LLP, 26 NY3d 40, 49 [2015], citing Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]; CPLR § 3212 [b]; Friends of Animals v Associated Fur Mfrs.,

[46] NY2d 1065, 1066 [1979] [providing movant must support the subject application with "'evidentiary proof in admissible form'"]}. Further, it is black letter law that such proof shall include the "affidavit" of a person having personal knowledge of the facts, "a copy of the pleadings" and "other available proof, such as depositions and written admissions" (CPLR § 3212 [b]). The court must view the facts in the light most favorable to the non-movant, giving it the benefit of all reasonable inferences (see De Lourdes Torres v Jones, 26 NY3d 742 [2016]). If the moving party makes the requisite showing, the non-moving party then has the burden "'to establish the existence of [factual issues] which require a trial of the action'" (id. at 763, citing Vega v Restani Constr. Corp., 18 NY3d 499, 503 [2012], quoting Alvarez, 68 NY2d at 324). It is well established that "failure to submit to an EUO and 'subscribe to the same' violates a condition precedent to coverage" (Hertz Vehicles, LLC v Best Touch PT, P.C., 162 AD3d 617, 618 [1st Dept 2018]; see 11 NYCRR § 65-2. 4 [c] [2]) . " [A] violation of a condition precedent to coverage vitiates the [insurance] policy" 654510/2021 COUNTRY-WIDE INSURANCE COMPANY vs. ALVAREZ, MARVIN ALEXANDER Page 8 of 12 CASTRO ET AL Motion No. 005 [* 8] 8 of 12 (PV Holding v Hank Ross Med., P.C., 188 AD3d 429, 430 [1st Dept 2020]). However, the inquiry does not end there. 6 The governing regulations provide that a no-fault insurer must have a "specific objective justification supporting the use of [the EUO]n (11 NYCRR § 65-3.S[e]). If a medical-provider defending a no-fault-coverage action, as here, questions whether the insurer had a proper basis for seeking the EUO, the insurer must identify its justification for the EUO request (see Country-Wide Ins. Co. v Delacruz, 205 AD3d 4 7 3, 4 74 (1st Dept 2 O2 2] ) . In the "absence of any justification for the EUO, [the insurer] cannot establish, as a matter of law, that it complied with the governing regulationsn {Delacruz, 205 AD3d at 474; accord Kemper Independence Ins. Co. v AB Med. Supply, Inc., 187 AD3d 671 [1st Dept 2020]). Applying these principles, INSURANCE COMPANY'S motion papers fail to establish entitlement to summary judgment. No objective ·justification for the examinations is set forth in either the scheduling letters, the affidavits of Jessica Mena- Sibrian and Annie Persaud, or the other evidence submitted in 6 An opposed motion for summary judgment (seq. no. 005) involves a stricter standard of review than an unopposed request for default judgment (mot. seqs. 001, 004) (see Country-Wide Ins. Co. v Evans, 2022 NY Slip Op 33966 [U], *2 [Sup Ct, NY County 2022]). 654510/2021 COUNTRY-WIDE INSURANCE COMPANY vs. ALVAREZ, MARVIN ALEXANDER Page 9 of 12 CASTRO ET AL Motion No. 005 9 of 12 [* 9]