FALMOUTH HOSPITAL ASSOCIATION, INC. v. ENTERPRISE RENT-A-CAR COMPANY OF BOSTON, INC.

FLYNN, J. Falmouth Hospital Association, Inc. ("Falmouth") has appealed the allowance of a motion for summary judgment filed by Enterprise Rent-A-Car Company of Boston, Inc. ("ERAC"). Pursuant to Mass. R Civ. P., Rule 56(c), we view the evidence in the light most favorable to the nonmoving party, Falmouth. Augat, Inc. v. Liberty Mut. Ins. Co., 410 Mass. 117, 120 (1991).

On December 29, 2011, Brendan Felix ("Felix") was involved in an accident while occupying a rental vehicle owned and self-insured by ERAC under a bond pursuant to G.L.c. 90, §34A. Felix received emergency room treatment at Falmouth. On January 7, 2012, ERAC received medical bills and records from Falmouth for treatment it rendered to Felix. The medical bills received from Falmouth indicated that Felix lived at 23 Samoset Road, East Sandwich, MA 02537. The medical records from Falmouth also listed Felix's address as 23 Samoset Road, East Sandwich, MA 02537.

To investigate whether the accident was "staged" or fabricated for purposes of secondary gain as alleged by the adverse operator and to investigate whether Felix was truly injured in this alleged accident, ERAC requested its counsel to schedule and conduct an examination under oath ("EUO") of Felix. Counsel mailed correspondence to Felix on January 12, 2012 via first class mail with the U.S. Postal Service, postage prepaid, requesting that Felix appear for an EUO on February 2, 2012. Counsel for ERAC mailed the correspondence to the same address for Felix that was listed in both Falmouth's own medical records and bills. After sending the January 12, 2012 correspondence to Felix, it was noticed that the wrong date of loss was referenced in that correspondence, and counsel for ERAC mailed another correspondence with the correct date of loss to Felix via first class mail with the U.S. Postal Service, postage prepaid, requesting that Felix appear for the EUO on February 2, 2012. This correspondence, dated January 25, 2012, was also sent to 23 Samoset Road, East Sandwich, MA 02537, the address provided in both Falmouth's medical records and medical bills.

On February 2, 2012, counsel for ERAC was present at his office to conduct the EUO at the scheduled time, but Felix failed to appear. On February 13, 2012, correspondence was mailed via first class mail with the U.S. Postal Service, postage prepaid,

Page 26

to Felix advising him that he failed to appear for his EUO on February 2, 2012 and notifying him that his EUO was being rescheduled for March 2, 2012. Counsel mailed this February 13, 2012 correspondence to 23 Samoset Road, East Sandwich, MA 02537, the address listed in Falmouth's medical records and medical bills for Felix. On March 2, 2012, counsel was present at the Holiday Inn, 1127 Iyarmough Road, Hyannis, MA to conduct Felix's EUO at the scheduled time, but Felix failed to appear. None of the letters mailed to Felix at 23 Samoset Road, East Sandwich, MA 02537 notifying Felix of the dates for his EUOs were ever returned from the U.S. Postal Service as being undeliverable, unable to forward, unclaimed, or the like. At no time after the letters were mailed to Felix did counsel ever receive contact from Felix. After Felix's failure to appear for two scheduled EUOs, ERAC denied the plaintiff's PIP claim. After the denial, ERAC received an application for PIP benefits from Felix, dated March 6, 2012. That application stated a mailing address of a P.O. Box in Forestdale, MA.

Falmouth brought an action under G.L.c. 90, §34M seeking to recover personal injury protection ("PIP") benefits for treatment rendered to Felix. ERAC moved for summary judgment, asserting that Falmouth's patient, Felix, failed to cooperate with ERAC and appear for an EUO requested by ERAC. Falmouth filed its opposition. The trial court initially denied ERAC's motion on the ground that the affidavits in support of summary judgment failed to recite that the notices of the scheduled EUOs were deposited in the mail, postage prepaid. ERAC filed a renewed motion for summary judgment, which Falmouth again opposed. The trial court allowed ERAC's renewed motion for summary judgment, and Falmouth has appealed.

Summary judgment is appropriate where there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. "We review a grant of summary judgment de novo to determine 'whether, viewing the evidence in the light most favorable to the nonmoving party, all material facts have been established and the moving party is entitled to a judgment as a matter of law.'" Juliano v. Simpson, 461 Mass. 527, 529-530 (2012), quoting Augat, Inc., supra at 120. See Mass. R. Civ. P., Rule 56(c). "The moving party bears the burden of affirmatively demonstrating the absence of a triable issue." Lev v. Beverly Enters.-Mass., Inc., 457 Mass. 234, 237 (2010). "Conclusory statements, general denials, and factual allegations not based on personal knowledge [are] insufficient to avoid summary judgment." Madsen v. Erwin, 395 Mass. 715, 721 (1985), quoting Olympic Jr., Inc. v. David Crystal, Inc., 463 F.2d 1141, 1146 (3d Cir. 1972).

Rule 56(e) of the Mass. R Civ. P. states, in part:

"Supporting and opposing affidavits shall be made on personal knowledge, shall set forth such facts as would be admissible in evidence and shall show affirmatively that the affiant is competent to testify to the matters stated therein."

Typically, hearsay documents may be used as evidence in opposition to summary judgment "provided some showing is made (or it is obvious) that they can be replaced by proper evidence at trial." Eisenstadt v. Centel Corp., 113 F.3d 738, 742 (7th Cir. 1997).

Page 27

After the subject accident and the receipt of Felix's bills and records from Falmouth, the PIP adjuster, Jennifer Duffy ("Duffy"), attempted to secure Felix's cooperation by having him appear for an EUO. At ERAC's request, counsel mailed three separate letters to Felix via first class mail with the U.S. Postal Service, postage prepaid, at the address listed on both the medical records and medical bills submitted by Falmouth to ERAC for payment under PIP.

It is well established by Massachusetts common law that there is a presumption that an addressee received mail that was deposited with the post office, postage prepaid. See Eveland v. Lawson, 240 Mass. 99, 103 (1921) ("The depositing of a letter in the post office, postage prepaid, properly addressed to a person to his place of business or residence, is prima facie evidence that it was received in the ordinary course of mails."). See also Commonwealth v. Crosscup, 369 Mass. 228, 239 (1975), citing Anderson v. Town of Billerica, 309 Mass. 516, 518 (1941), Hobart-Farrell Plumbing & Heating Co. v. Klayman, 302 Mass. 508, 509-510 (1939), and Huntley v. Whittier, 105 Mass. 391, 392-393 (1870). It is notable that none of the letters mailed to Felix at 23 Samoset Road, East Sandwich, MA 02537 notifying him of the dates of his EUOs ever came back as being undeliverable from the U.S. Postal Service. It is also undisputed that Felix failed to appear for both scheduled EUOs.

Submission to an EUO when one has been demanded by the insurer is a condition precedent to recovery under an insurance policy, and failure to submit to such an examination constitutes a material breach of the insurance contract. Mello v. Hingham Mut. Fire Ins. Co., 421 Mass. 333, 337 (1995) (affirming grant of summary judgment to insurer that denied fire coverage under homeowner's policy where insured invoked privilege against self-incrimination and failed to submit to EUO). Massachusetts law conforms with the general principle that submission to an EUO, so long as the request is reasonable, is strictly construed as a condition precedent to the insurer's liability. "It is the law in most jurisdictions that the submission to an examination, if the request is reasonable, is strictly construed as a condition precedent to the insurer's liability." Id.

An insured's wilful, unexcused refusal to comply with a reasonable request for an EUO constitutes a material breach of a condition precedent to the insurance contract and discharges the insurer's obligations thereunder. The insurer need not show prejudice in such circumstances. Where there is a "wilful and unexcused refusal" by an insured to undertake an EUO, there is an exception to the general rule that the insurer must show prejudice from the insured's failure to fulfill an obligation to the insurance company before it may decline to provide coverage under an automobile insurance policy. See Boffoli v. Premier Ins. Co., 71 Mass. App. Ct. 212, 216 (2008) (PIP coverage); Morales v. Pilgrim Ins. Co., 58 Mass. App. Ct. 722, 724 (2003) (uninsured motorist coverage); Lorenzo-Martinez v. Safety Ins. Co., 58 Mass. App. Ct. 359, 363 (2003) (uninsured motorist coverage). Based upon Massachusetts common law and the cooperation requirements of G.L.c. 90, §34M, it is clear that ERAC is entitled to utilize a noncooperation defense to Falmouth's request for PIP benefits for treatment it rendered to Felix. See G.L.c. 90, §34M.

The fact that ERAC received a PIP application listing a P.O. Box for Felix after ERAC had already denied the plaintiffs PIP claim does not alter the presumption that Felix received the three letters scheduling his EUO "in the ordinary course of mails." See Eveland, supra at 103. There is no admissible evidence in the record showing that Felix did not receive the prior mailings to 23 Samoset Road, East Sandwich, MA

Page 28

02537 simply because he listed a P.O. Box on his PIP application in March of 2012. In short, Falmouth failed to produce any admissible evidence in opposition to summary judgment to overcome ERAC's prima facie evidence of Felix's receipt of mailings and subsequent noncooperation for failure to appear for an EUO. Falmouth does suggest that Felix in fact did not live at 23 Samoset Road in East Sandwich in Felix's application for PIP benefits. This application is dated March 6, 2012, the same date as the denial of benefits from ERAC. This application gives Felix's mailing address as P.O. Box 54 Forestdale, MA. This document, while being self-serving, may ultimately be admissible, but any implied statement suggesting that Felix's address had changed and, therefore, that he arguably did not receive the requests to appear for an EUO would be hearsay and therefore inadmissible. The potential question of material fact is "did Felix receive the requests to appear for an EUO?" As stated above, the proper mailings presume receipt as a matter of law. Falmouth has attempted to rebut that presumption of receipt by reference to a document provided post-mailings that contains, at best, a hearsay statement as to a now current different mailing address and contains no statements regarding the question of receipt of the previous mailings. Falmouth has failed to create a true question of material fact by way of admissible evidence. This issue could have easily been framed to avoid summary judgment by simply providing an affidavit from Felix. [Note 2]

Summary judgment in favor of ERAC is affirmed.