HEREFORD INSURANCE COMPANY v. Cross Bay Orthopedic Surgery et al., Defendants–Appellants. (2025)

Order, Supreme Court, New York County (Mary V. Rosado, J.), entered October 1, 2024, which, to the extent appealed from as limited by the briefs, granted plaintiff's cross-motion for summary judgment as against defendants Cross Bay Orthopedic Surgery, Maspeth Med Supply, Inc., Multimed Supply, Inc., NYC Best Supply Inc., and Ozone RX Inc., unanimously affirmed, with costs.

The appealing defendants argue that a failure to subscribe an transcript from an examination under oath (EUO) is a violation of a condition precedent to contract performance rather than violation of a condition precedent to coverage.  However, these defendants failed to raise this argument before Supreme Court, and the issue is therefore unpreserved for our review (see Pirraglia v. CCC Realty N.Y. Corp., 35 A.D.3d 234, 235, 828 N.Y.S.2d 6 [1st Dept. 2006]).  In any event, the argument is also unavailing, as we have previously held that a claimant's failure to subscribe EUO transcripts did, in fact, violate a condition precedent to coverage, voiding the policy ab initio and warranting denial of the claim (see Kemper Independence Ins. Co. v. Cornerstone Chiropractic, P.C., 185 A.D.3d 468, 468–469, 124 N.Y.S.3d 794 [1st Dept. 2020];  Unitrin Advantage Ins. Co. v. Bayshore Physical Therapy, PLLC, 82 A.D.3d 559, 560, 918 N.Y.S.2d 473 [1st Dept. 2011], lv denied 17 N.Y.3d 705, 2011 WL 2535157 [2011]).

Likewise, defendants failed to preserve their argument that under the standard articulated in Thrasher v. United States Liab. Ins. Co., 19 N.Y.2d 159, 168, 278 N.Y.S.2d 793, 225 N.E.2d 503 (1967), this Court must determine whether the claimants’ failure to subscribe their EUO transcripts was willful.  Even were it preserved, this argument is also unavailing.  “The doctrine of willfulness, as addressed in Thrasher ․ applies in the context of liability policies, and has no application in the No–Fault context, where the eligible injured party has full control over the requirements and conditions necessary to obtain coverage” (Unitrin Advantage Ins. Co., 82 A.D.3d at 561, 918 N.Y.S.2d 473).  This case involves no-fault coverage, and we find no reason to depart from Unitrin Advantage.

Also unpreserved is defendants’ argument that plaintiff's subscription demands were untimely.  Furthermore, as with defendants’ other unpreserved arguments, the argument is unavailing.  “An insurer must request any ‘additional verification ․ to establish proof of claim’ within 15 business days after receiving the ‘prescribed verification forms’ it forwarded to the parties required to complete them” (Hertz Vehicles, LLC v. Best Touch PT, P.C., 162 A.D.3d 617, 618, 80 N.Y.S.3d 33 [1st Dept. 2018], quoting 11 NYCRR 65–3.5[a], [b]).  Plaintiff timely sent the subscription demand as the depositions for both claimants were noticed for September 20, 2021, and plaintiff made its subscription demands on October 1 and October 7, 2021;  thus, only 9 and 14 business days, respectively, elapsed.

Defendants may not rely on the claimants’ submission of their subscribed EUO transcripts in June 2024 to argue that the claimants complied with plaintiff's demand.  An insurer may deny a claim if 120 days pass without a claimant providing the required verification or a valid written excuse (see 11 NYCRR 65–3.8[b][3]).  Plaintiff requested the subscriptions in October 2021, and years passed before claimants responded.

We have considered defendants’ remaining contentions and find them unavailing.