January 10, 2011

62-41 Woodhaven Med., P.C. v Adirondack Ins. Exch. (2011 NY Slip Op 50026(U))

https://www.beynensonlaw.com/case-law/62-41-woodhaven-med-p-c-v-adirondack-ins-exch-2011-ny-slip-op50026u/

Court: Appellate Term, Second Department
Decided: January 10, 2011
Citation: 2011 NY Slip Op 50026(U) · 30 Misc 3d 131(A)
Posture: Other motion
Outcome: Insurer prevailed
Later treatment: Followed in 1 later decision (see Cited by)
Issues: Discovery and procedure Fraudulent incorporation (Mallela)
Legal questions: Mallela defense: preclusion and discovery (see the maps)

Cite as

62-41 Woodhaven Med., P.C. v Adirondack Ins. Exch., 30 Misc 3d 131(A), 2011 NY Slip Op 50026(U) (App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2011)

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.

The insurer's specific licensing concerns established special circumstances warranting disclosure of the provider's tax records. In an assigned no-fault benefits action, the insurer cross-moved under CPLR 3126 to dismiss for discovery noncompliance or compel disclosure. Its papers gave detailed and specific reasons to believe the provider failed applicable licensing requirements under 11 NYCRR 65-3.16 (a) (12) and Mallela. Those reasons warranted disclosure under CPLR 3101. The Appellate Term, Second Department, affirmed the order, insofar as appealed from, compelling corporate tax returns and professional employees' tax records and providing for dismissal if the provider failed to produce them.

Reported in New York Official Reports at 62-41 Woodhaven Med., P.C. v Adirondack Ins. Exch. (2011 NY Slip Op 50026(U))

[*1]

62-41 Woodhaven Med., P.C. v Adirondack Ins. Exch.

2011 NY Slip Op 50026(U) [30 Misc 3d 131(A)]

Decided on January 10, 2011

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This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on January 10, 2011

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd, 11th and 13th JUDICIAL DISTRICTS

PRESENT: : GOLIA, J.P., PESCE and STEINHARDT, JJ
2009-1635 Q C.

62-41 Woodhaven Medical, P.C. as Assignee of WILSON RODRIGUEZ, Appellant,
against
Adirondack Ins. Exchange c/o ONE BEACON INS. CO., Respondent.

Appeal from an order of the Civil Court of the City of New York, Queens County (Diane A. Lebedeff, J.), entered June 11, 2009. The order, insofar as appealed from as limited by the brief, granted the branch of defendant’s cross motion seeking to compel plaintiff to produce copies of its corporate tax returns and its tax records regarding its professional employees, and provided that the complaint would be dismissed in the event plaintiff failed to produce these documents.

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 moved for summary judgment. Defendant cross-moved, pursuant to CPLR
3126, to dismiss the complaint due to plaintiff’s failure to provide the information requested in defendant’s interrogatories and defendant’s notice for discovery and inspection or, in the alternative, to compel plaintiff to provide such information. Plaintiff appeals, as limited by the brief, from so much of the Civil Court’s order as granted the branch of defendant’s cross motion seeking to compel plaintiff to produce copies of its corporate tax returns and its tax records regarding its professional employees, and provided that the complaint would be dismissed in the event plaintiff failed to produce these documents.

Defendant’s cross motion papers set forth detailed and specific reasons for believing that plaintiff is ineligible to recover no-fault benefits because plaintiff fails to meet applicable state and local licensing requirements (see Insurance Department Regulations [11 NYCRR] § 65-3.16 [a] [12]; State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313 [2005]). As defendant’s cross motion papers were sufficient to establish that special circumstances exist which warrant [*2]disclosure of plaintiff’s corporate tax returns and its professional employees’ tax records (see CPLR 3101; One Beacon Ins. Group, LLC v Midland Med. Care, P.C., 54 AD3d 738 [2008]; Great Wall Acupuncture v State Farm Mut. Auto. Ins. Co., 20 Misc 3d 136[A], 2008 NY Slip Op 51529[U] [App Term, 2d & 11th Jud Dists 2008]; Statewide Med. Servs., P.C. v Travelers Ins. Co., 13 Misc 3d 134[A], 2006 NY Slip Op 52014[U] [App Term, 1st Dept 2006], revg 9 Misc 3d 1124[A], 2005 NY Slip Op 51773[U] [Civ Ct, Bronx County 2005]; see also Dore v Allstate Indem. Co., 264 AD2d 804 [1999]; cf. Benfeld v Fleming Props., LLC, 44 AD3d 599, 600 [2007]; Altidor v State-Wide Ins. Co., 22 AD3d 435 [2005]), the order, insofar as appealed from, is affirmed.

Golia, J.P., Pesce and Steinhardt, JJ., concur.

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.

Mallela defense: preclusion and discovery

Open the full map

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

Upheld a conditional order compelling production of corporate and employee tax records because the insurer gave detailed, specific reasons to believe the provider failed licensing requirements, establishing special circumstances.

Defense may be pursuedDefense barredThis decisionCites it or cited by itCited or followed

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. One decision in other departments that cites or is cited by this one is on the full map.

Cited in this decision

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).
One Beacon Ins. Group, LLC v Midland Med. Care, P.C. (2008 NY Slip Op 06813)The insurers raised a triable issue of fraudulent incorporation despite evidence of physician ownership and oversight of the provider.
Great Wall Acupuncture v State Farm Mut. Auto. Ins. Co. (2008 NY Slip Op 51529(U))The insurer established entitlement to corporate eligibility discovery, but failed to justify disclosure of the owner's personal tax returns.
Statewide Med. Acupuncture Servs., PC v Travelers Ins. Co. (2005 NY Slip Op 51773(U))The insurer's incorporation-fraud allegations lacked a reliable foundation for compelling depositions of the providers' owner and acupuncturists.

Cited by

A label shows how the later decision treated this one.

Harden St. Med., P.C. v Charter Oak Fire Ins. Co. (2017 NY Slip Op 50675(U)) FollowedThe insurer's subpoena for the provider's bank records was enforceable because the records were material to its fraudulent-incorporation defense.

Similar decisions

Queens Brooklyn Med. Rehab, P.C. v Allstate Ins. Co. (2011 NY Slip Op 52010(U))The insurer established special circumstances warranting disclosure of the provider's tax documents concerning licensing eligibility.
VE Med. Care, P.C. v Auto One Ins. Co. (2012 NY Slip Op 50571(U))The insurer established grounds to amend its answer to assert fraudulent incorporation and obtain the provider's tax documents.
All Boro Psychological Services, P.C. v Auto One Ins. Co. (2012 NY Slip Op 50777(U))A provider that misses discovery objection deadlines must respond except as to privileged or palpably improper demands.
Q-B Jewish Med. Rehabilitation, P.C. v Allstate Ins. Co. (2012 NY Slip Op 50152(U))The insurer's specific reasons to question the provider's licensing compliance supported discovery of its financial and tax records.
Queens Brooklyn Med. Rehab, P.C. v New York Cent. Mut. Fire Ins. Co. (2011 NY Slip Op 50978(U))The provider's appeal from a conditional discovery order became academic after a subsequent order dismissed the action.