Avalon Radiology, PC. v Ameriprise Ins. Co., 2016 NY Slip Op 26182 http://www.nycourts.gov/reporter/3dseries/2016/2016_26182.htm
Defendant issued denial based upon the failure of plaintiff’s assignor, Avalon Radiology P.C., to appear for two Examinations Under Oath (EUOs). Defendant’s first EUO request, stated that the examination would consist of questions pertaining to among other things, provider’s corporate entity. Provider responded to the first request with a letter, requesting the good faith, objective reason for defendant’s request for an EUO pertaining to provider’s corporate status and licensure, as well as the basis for suspecting it had engaged in fraudulent behavior. In response, defendant sent a second letter stating that it was not required to provide the specific objective justification for its EUO request and rescheduling the EUO.
The Court stated that:
In pertinent part, the applicable no-fault regulation, 11 NYCRR 65-3.5(e), provides as follows: “…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.”An insurer is not required as a pre-condition to a demand for an EUO to provide the justification for the request. Where the recipient of a duly made demand for an EUO fails to request the justification for the demand, the right to receipt of such justification is waived as to that recipient. Thus, the failure to respond to a duly made demand for an EUO relieves the insurer of an obligation to demonstrate the reasonableness of the requests. Westchester County Med. Ctr. V. New York Cent. Mut. Fire Ins. Co., 262 AD2d 553 (1999); Morris Med., P.C. v Amex Assur. Co., 37 Misc 3d 140(a), 2012 Slip Op 52260(U)(App. Term 2d, 11th, & 13th Jud. Dists.); Crescent Radiology, PLLC v American Transit Ins. Co., 31 Misc 3d 134(A), 2011 Slip Op. 50622(U)(App. Term 9th & 10th Jud. Dists.); see also IDS Property Casualty Ins. Co. V Stracar Med. Serv, P.C., 116 AD3d 1005 (2nd Dep’t 2014); Interboro Ins. Co. V Clennon, 113 AD3d 596 (2nd Dep’t 2014); NY Rehab pain Management & Medical Services, PC v State Farm Ins. Co. 2016 NY Slip Op. 50821(U), 2016 WL 3040528 (Sup.Ct. Nass.Co.)(provider did not timely [prior to date scheduled for EUO] request insurer to provide the reason for EUO demands).
Thus, Avalon’s request for the objective reason in response to the first EUO request triggered an obligation on the part of the defendant-insurer to respond by providing the specific objective justification for the EUO request. The insurer’s response in this case to the effect that it was not obligated to do so is plainly wrong. The insurer clearly had an obligation to comply with No-Fault regulation 65-3.5(e)and supply the requesting party, in this case the provider, with the “specific objective justification supporting the use of such examination.” The regulations do not allow the insurer to use an EUO as a fishing expedition. There must be a specific objective reason for the request. See American Transit v Jaga Medical Services, P.C., 128 AD3d 441 (1st Dep’t 2015); American Transit v Curry, 45 Misc 3d 171 (Sup.Ct. NY Co. 2013). If the Court were to conclude otherwise, the cited language of the applicable regulation would be rendered meaningless.
Because the defendant-insurer failed to provide the requisite “specific objective justification supporting the use of such examination” in response to the plaintiff’s timely demand for same, the initial and subsequent EUO requests were non-compliant with the regulations. Clearly, the plaintiff’s response to the defendant’s initial request did not constitute an absolute refusal to appear for an EUO. Had a sufficient response been made by the defendant, plaintiff would have been obligated to appear at a subsequently scheduled EUO, the first request having [*2]been vitiated by plaintiff’s timely response in the form of a request for the justification for the EUO. See Metro Psychological Servs. P.C. v Mercury Cas. Co., 49 Misc 3d 143 (App Term 1st Dept 2015); Palafox PT PC v State Farm Mut Auto Ins Co, 49 Misc 3d 144(A), 2015 NY Slip Op 51653(U)(App Term, 2d Dept 2015). Defendant therefore has not demonstrated that plaintiff’s assignor twice failed to appear for properly scheduled EUOs (see Palafox PT PC v State Farm Mut Auto Ins Co, supra).
How often does a carrier do this? Quite often. This case seems to say that is improper.