EUO is a Condition Precedent


Fail to Appear for, or Sign and Return, EUO Breaches Material Condition

People who commit insurance fraud tend to run from serious insurers who deny claims for fraud, misrepresentation, concealment or failure to fulfill conditions precedent. State Farm filed an unopposed motion for summary judgment against defendants All Med Merchandise and Trading, Inc., Haar Orthopedics & Sports Medicine, P.C., Park Avenue Orthopedics, P.C., and Anthony Vigorito, D.C., probably because the defendants knew they had no case and placed their efforts to collect from fraud by going against insurers who would rather pay than fight.

In State Farm Mutual Automobile Insurance Company v. Advantage Med Innovations, Inc., Ake Services,  Inc.,All City Family Healthcare Center, Inc.,Allmed Merchandise And Trading, Inc.,Apt Physical Therapy, et. al, Index No. 157328/2019, 2021 NY Slip Op 31344(U), Supreme Court Of The State Of New York New York County Part IAS Motion 46 (April 21, 2021) the trial court was asked to rule on State Farm’s Motion for Summary Judgment claiming fraud by the insured.


State Farm sought a declaration that it had no duty to provide coverage or make a payment of claims for no-fault benefits made by or on assignment of Peter S. Rosario, the insured party, Cheyenne Griffin, the driver, and Shreick Hoffman and Omar Osborne, passengers in the vehicle. The no-fault claims sought to be nullified arise out of a two-vehicle collision that occurred on October 28, 2018 at approximately 9:00 p.m. on Pennsylvania Avenue and Stanley Avenue in Brooklyn, New York.

State Farm’s motion against All Med Merchandise and Trading, Inc., Haar Orthopaedics and Sports Medicine, P.C., Park Avenue Orthopaedics, P.C., and Anthony Vigorito, D.C. was based on an intentional act and that Griffin, Hoffman and Osborne’s injuries did not arise from the incident, that Hoffman failed to appear for his examination under oath, and that Griffin and Osborne failed to return subscribed copies of their examination under oath transcripts.


An intentional and staged collision caused in the furtherance of an insurance fraud scheme is not a covered accident under a policy of insurance. A no-fault insurer is not required to establish that the subject collision was the product of fraud, which would require proof of all elements of fraud, including scienter, by clear and convincing evidence. Rather, a no-fault insurer must demonstrate the facts elicited during an investigation which make up the founded belief that the alleged injury does not arise out of an insured incident.

In support of the motion, plaintiff submitted the examination under oath transcripts of Cheyenne Griffin and Omar Osborne, as well as an affidavit of merit from Timothy Dacey, claims specialist for plaintiff State Farm Mutual Insurance Company.

Griffin testified that the light at the intersection was green, she proceeded through the intersection and was almost fully through the intersection, when another vehicle pulled out of a parking space and forcefully hit her vehicle’s right bumper.

Osborne was asked how he found his attorney, he stated that the lawyer contacted him, picked him up and told him that he had a lawyer. He guesses that the therapy people gave them his contact information.

State farm submitted the affidavit of claims specialist Timothy Dacey. He testified that the claimants began receiving tens of thousands of dollars’ worth of treatment from various medical providers. Dacey further averred that the claim’s legitimacy was questioned since the insured was not in the vehicle at the time of the accident and that the insured’s policy was cancelled one month after the accident due to non-payment. Additionally, the fact that the insured obtained new insurance with GEICO and was subsequently involved in two additional losses, one on November 11, 2018 and the other on November 25, 2018 involving a friend driving the insured’s vehicle. Lastly, the fact that none of the claimants alleged injuries at the scene of the accident and thereafter began undergoing significant treatment with a large number of medical providers, also contributed to the plaintiff questioning the legitimacy of the claimants’ representations.

The court concluded that State Farm met its prima facie burden establishing that there is a founded belief that the collision was intentionally caused, that the loss was not a covered event, and that the claimants’ injuries did not arise from an insured incident as evident from inconsistencies in the transcripts. Additionally, State Farm asserted that Hoffman failed to appear for his examination under oath, and Griffin and Osborne failed to subscribe their examination under oath transcripts, violating a condition precedent to no-fault coverage.

The failure of a person eligible for no-fault benefits to appear for a properly noticed EUO constitutes a breach of a condition precedent, vitiating coverage. The injured party or that party’s assignee, medical service provider, must then submit written proof of claim or it will be precluded from offering any defenses at trial.

As to Griffin and Osborne who submitted to their EUO’s, although they appeared, they failed to subscribe and return their EUO transcripts. The claimants’ failure to subscribe and return the transcripts of their examinations under oath violated a condition precedent to coverage and warranted denial of the claims.

State Farm’s summary judgment motion was granted.


This decision from New York is an example of the need for insurers faced with a potentially fraudulent claim to refuse to pay. It will find that fraud perpetrators are unwilling to fight an honest attempt to defeat a claim that was fraudulent since it is more profitable to assert fraudulent claims against insurers who are unwilling or unable to fight a fraudulent claim. Since the fraud in this case was obvious State Farm was obligated to fight. It did so and avoided a fraudulent claim. The court should have referred the defendants to the local prosecutor for criminal prosecution of attempted insurance fraud.

© 2021 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost

equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 52 years in the insurance business. He is available at and

Mr. Zalma is the first recipient of the first annual Claims Magazine/ACE Legend Award.

Over the last 53 years Barry Zalma has dedicated his life to insurance, insurance claims and the need to defeat insurance fraud. He has created the following library of books and other materials to make it possible for insurers and their claims staff to become insurance claims professionals.

Go to the podcast Zalma On Insurance at;  Follow Mr. Zalma on Twitter at; Go to Barry Zalma videos at at; Go to Barry Zalma on YouTube-; Go to the Insurance Claims Library – Read posts from Barry Zalma at; and the last two issues of ZIFL at  podcast now available at

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