February 21, 2012
Medical Polis, P.C. v Progressive Specialty Ins. Co. (2012 NY Slip Op 50342(U))
https://www.beynensonlaw.com/case-law/medical-polis-p-c-v-progressive-specialty-ins-co-2012-ny-slip-op50342u/
- Decided
- February 21, 2012
- Citation
- 2012 NY Slip Op 50342(U) · 34 Misc 3d 153(A)
- Posture
- Other motion
- Outcome
- Insurer prevailed
- Later treatment
- Distinguished in 2 and followed in 2 later decisions (see Cited by)
- Legal questions
- Mallela defense: preclusion and discovery (see the maps)
Posture, outcome, issues and treatment by other decisions are Beynenson Law’s classification. Treatment labels are assigned by a language model reading the citing decision; negative and appeal-history labels are checked by a second reader.
Summary
Editorial summary by Beynenson Law, not part of the court’s decision.
Reported in New York Official Reports at Medical Polis, P.C. v Progressive Specialty Ins. Co. (2012 NY Slip Op 50342(U))
| Medical Polis, P.C. v Progressive Specialty Ins. Co. |
| 2012 NY Slip Op 50342(U) [34 Misc 3d 153(A)] |
| Decided on February 21, 2012 |
| Appellate Term, Second Department |
| Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. |
| This opinion is uncorrected and will not be published in the printed Official Reports. |
SUPREME COURT OF THE STATE OF NEW YORK
APPELLATE TERM: 2nd, 11th and 13th JUDICIAL DISTRICTS
PRESENT: : RIOS, J.P., WESTON and GOLIA, JJ
2010-1596 Q C. ———————————— 1;———————————— 151;———————————— ———————————— 1;-x
against
Progressive Specialty Ins. Co., Respondent. ———————————— 1;———————————— 151;———————————— ———————————— 1;-x
Appeal from an order of the Civil Court of the City of New York, Queens County (William A. Viscovich, J.), entered May 10, 2010. The order, insofar as appealed from, granted the branches of defendant’s motion seeking to compel disclosure and thereafter to produce plaintiff’s owner, Nikolai Lagoduke, for an examination before trial, and denied plaintiff’s cross motion for a protective order.
ORDERED that the order, insofar as appealed from, is affirmed, without costs.
In this action by a provider to recover assigned first-party no-fault benefits, plaintiff appeals from so much of an order as granted the branches of defendant’s motion seeking to compel disclosure and thereafter to produce plaintiff’s owner, Nikolai Lagoduke, for an examination before trial, and denied plaintiff’s cross motion for a protective order. At issue on this appeal is whether defendant’s failure to assert a defense pursuant to State Farm Mut. Auto. Ins. Co. v Mallela (4 NY3d 313 [2005]) precludes it from seeking discovery related to that defense. We conclude that, based on the record before us, defendant made sufficient allegations of fraudulent incorporation to warrant disclosure.
It is well settled that a party is entitled to full disclosure of all matter that is “material and necessary in the prosecution or defense of an action” (CPLR 3101 [a]). What is “material and necessary” is left to the sound discretion of the court and includes “any facts bearing on the controversy which will assist preparation for trial by sharpening the issues and reducing delay and prolixity. The test is one of usefulness and reason” (Allen v Crowell-Collier Publ. Co., 21 NY2d 403, 406 [1968]; Young v Tierney, 271 AD2d 603 [2000]). Where, as here, an insurer requests discovery concerning a Mallela defense, the request should be granted as long as there are sufficient allegations supporting such a defense (see e.g. Kipor Medicine, P.C. v GEICO, 28 Misc 3d 129[A], 2010 NY Slip Op 51247[U] [App Term, 2d, 11th & 13th Jud Dists 2010]; Midborough Acupuncture P.C. v State Farm Ins. Co., 13 Misc 3d 58 [App Term, 2d & 11th Jud Dists 2006]; Lexington Acupuncture, P.C. v State Farm Ins. Co., 12 Misc 3d 90 [App Term, 2d & 11th Jud Dists 2006]). A Mallela defense is nonwaivable and may be asserted at any time notwithstanding the absence of a timely denial (see Midwood Acupuncture, P.C. v State Farm [*2]Auto. Ins. Co., 14 Misc 3d 131[A], 2007 NY Slip Op 50052[U] [App Term, 2d & 11th Jud Dists 2007]).
Here, although defendant never moved to amend its answer to assert a defense based on fraudulent incorporation, it did submit an affidavit containing sufficient allegations of fraudulent incorporation. Defendant included an affidavit from its Senior Special Investigator, who set forth, in detail, plaintiff’s close connection with another medical provider whose owner was convicted of, among other things, fraud and falsifying business records. Since defendant made adequate allegations of fraudulent incorporation, the Civil Court did not abuse its discretion in granting those branches of defendant’s motion seeking to compel disclosure on that issue, and in denying plaintiff’s cross motion for a protective order (see Kipor Medicine, P.C. v GEICO, 28 Misc 3d 129[A], 2010 NY Slip Op 51247[U]).
Accordingly, the order, insofar as appealed from, is affirmed.
Rios, J.P., and Weston, J., concur.
Golia, J., concurs in a separate memorandum.
Golia, J., concurs in the following memorandum:
I concur for the reasons stated in my concurrence in Lexington Acupuncture, P.C. v General Assur. Co. (___ Misc 3d ___, 2012 NY Slip Op ______ [Appeal No. 2010-165 K C], decided herewith). While there exist certain differing factual elements in these two matters, those facts have no significance here, and consequently play no part in the legal issues in controversy.
Additionally, the failure of the defendant in this matter to assert every affirmative defense
asserted in Lexington Acupuncture, P.C. is of no consequence. The inclusion of any one
satisfactory affirmative defense would be sufficient. Furthermore, and just as importantly, as
stated in my Lexington Acupuncture, P.C. concurrence, a Mallela claim is
non-precludable and can be raised at any time (see State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313 [2005]).
Decision Date: February 21, 2012
Legal questions
A question of no-fault law this decision rules on, from our Legal Questions pages. Bars count the decisions on the question by year and court, coloured by category; circles are this decision and the decisions on the question it cites or that cite it. Point at a bar or circle for details. The categories and summaries are Beynenson Law’s classification, made by a language model and checked by a second reading.
May the insurer raise and investigate a Mallela (fraudulent incorporation) defense, or is it precluded, waived or denied discovery?
This decision: Insurer may raise or investigate the Mallela defense here (rules on the question, but another ground decided the case)
Held the insurer could obtain disclosure and an EBT of the owner on fraudulent incorporation although it never pleaded the defense, because the defense is nonwaivable and its investigator's affidavit made sufficient specific allegations.
Of the 136 decisions on this question in the Second Department courts and the Court of Appeals, 112 (this one included) are in the same category.
Cited in this decision
A label shows how this decision treated the case it cites.
- State Farm Mut. Auto. Ins. Co. v Mallela (2005 NY Slip Op 02416)Fraudulently incorporated medical providers are ineligible for no-fault reimbursement under 11 NYCRR 65-3.16 (a) (12).
- Kipor Medicine, P.C. v GEICO (2010 NY Slip Op 51247(U)) FollowedThe insurer failed to support consolidation, amendment of its answer, and further discovery after the notice of trial.
- Midborough Acupuncture P.C. v State Farm Ins. Co. (2006 NY Slip Op 26360)An insurer's fraudulent-incorporation defense survives an untimely denial, and discovery into provider ownership and licensing is material.
- Lexington Acupuncture, P.C. v State Farm Ins. Co. (2006 NY Slip Op 26251)The provider's summary judgment motion was premature because discovery could establish fraudulent incorporation and reimbursement ineligibility.
- Midwood Acupuncture, P.C. v State Farm Mut. Auto. Ins. Co. (2007 NY Slip Op 50052(U)) FollowedFraudulent licensing under 11 NYCRR 65-3.16 (a) (12) is a nonwaivable defense outside the 30-day preclusion rule.
Cited by
A label shows how the later decision treated this one.
- Apazidis, M.D., P.C. v State Farm Mut. Auto. Ins. Co. (2021 NY Slip Op 50498(U)) DistinguishedThe insurer's summary judgment motion failed on hearsay proof of good cause and verification notices naming a different provider.
- Jiang Acupuncture PC v State Farm Ins. Co. (2023 NY Slip Op 50961(U)) DistinguishedThe insurer failed to prove good cause for licensing verification with admissible evidence supporting summary judgment.
- Medical Polis, P.C. v Progressive Ins. Co. (2012 NY Slip Op 50864(U)) FollowedAn insurer may obtain Mallela discovery despite omitting the defense from its answer if its moving papers sufficiently allege ineligibility.
- All Boro Psychological Servs., P.C. v Allstate Ins. Co. (2014 NY Slip Op 50870(U)) FollowedAn insurer's SIU file is discoverable unless the insurer establishes that it was prepared solely for litigation.
- Jamaica Wellness Med., P.C. v USAA Cas. Ins. Co. (2015 NY Slip Op 25313)The insurer's bank subpoena was quashed because it omitted the notice required by CPLR 3101 (a) (4).
Similar decisions
- Radiology Today, P.C. v GEICO Gen. Ins. Co. (2011 NY Slip Op 21161)The provider's untimely discovery challenge and failure to produce any discovery supported dismissal of its complaint.
- New York First Acupuncture, P.C. v State Farm Mut. Auto. Ins. Co. (2009 NY Slip Op 52217(U))A fraudulent-incorporation defense need not be asserted in a timely denial of claim.
- Five Boro Psychological Servs., P.C. v AutoOne Ins. Co. (2010 NY Slip Op 20131)The provider's summary judgment motion was denied because unproduced discovery could support the insurer's Mallela defense.
- RLC Med., P.C. v Allstate Ins. Co. (2010 NY Slip Op 50642(U))The insurer established a need for discovery of facts in the provider's possession concerning alleged fraudulent incorporation.
- K.O. Med., P.C. v USAA Cas. Ins. Co. (2017 NY Slip Op 51089(U))A Mallela defense need not be preserved in a timely denial of claim.