November 12, 2010

RLC Med., P.C. v Allstate Ins. Co. (2010 NY Slip Op 51962(U))

https://www.beynensonlaw.com/case-law/rlc-med-p-c-v-allstate-ins-co-2010-ny-slip-op-51962u/

Court: Appellate Term, Second Department
Decided: November 12, 2010
Citation: 2010 NY Slip Op 51962(U) · 29 Misc 3d 134(A)
Posture: Summary judgment
Outcome: Insurer prevailed
Issues: Discovery and procedure Fraudulent incorporation (Mallela)
Legal questions: Mallela defense: preclusion and discovery (see the maps)

Cite as

RLC Med., P.C. v Allstate Ins. Co., 29 Misc 3d 134(A), 2010 NY Slip Op 51962(U) (App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2010)

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 established that discovery concerning the provider's alleged fraudulent incorporation was needed to oppose summary judgment. The Appellate Term, Second Department, reversed the order granting the provider summary judgment and denying the insurer's cross motion to compel its owner's deposition. Under CPLR 3212 (f), essential facts potentially supporting the defense were within the provider's possession and could not yet be stated because the provider had not produced its owner. The defense rested on 11 NYCRR 65-3.16 (a) (12) and Mallela, and the insurer established entitlement to the deposition under CPLR 3101 (a). The provider was directed to produce its owner within 60 days or another agreed date; summary judgment was denied without prejudice to renewal after the deposition.

Reported in New York Official Reports at RLC Med., P.C. v Allstate Ins. Co. (2010 NY Slip Op 51962(U))

[*1]

RLC Med., P.C. v Allstate Ins. Co.

2010 NY Slip Op 51962(U) [29 Misc 3d 134(A)]

Decided on November 12, 2010

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This opinion is uncorrected and will not be published in the printed Official Reports.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 November 12, 2010

SUPREME COURT OF THE STATE OF NEW YORK

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

PRESENT: : RIOS, J.P., PESCE and GOLIA, JJ
2009-1487 K C.

RLC Medical, P.C. as Assignee of GORDON DOUGLAS, Respondent,
against
Allstate Insurance Company, Appellant.

Appeal from an order of the Civil Court of the City of New York, Kings County (Kathy J. King, J.), entered August 11, 2008. The order granted plaintiff’s motion for summary judgment and denied defendant’s cross motion to compel plaintiff to produce Dr. Ronald Collins for a deposition.

ORDERED that the order is reversed, without costs, defendant’s cross motion to compel plaintiff to produce Dr. Ronald Collins for a deposition is granted, plaintiff is directed to produce Dr. Collins for a deposition within 60 days of the date of the order entered hereon, or on such other date to which the parties shall agree, and plaintiff’s
motion for summary judgment is denied without prejudice to renewal upon the completion of Dr. Collins’ deposition.

In this action by a provider to recover assigned first-party no-fault benefits, defendant sought various forms of discovery. Plaintiff subsequently moved for summary judgment. Defendant opposed the motion and cross-moved to compel plaintiff to produce Dr. Ronald Collins, plaintiff’s owner, for a deposition. The Civil Court granted plaintiff’s motion for summary judgment and denied defendant’s cross motion. The instant appeal by defendant ensued.

Inasmuch as defendant raises no issue on appeal with respect to plaintiff’s prima facie case, we do not pass upon the propriety of the Civil Court’s determination with respect thereto.

In opposition to plaintiff’s motion, and in support of its cross motion to compel discovery, defendant established that facts may exist which are essential to oppose plaintiff’s summary judgment motion but which could not then be stated (see CPLR 3212 [f]). Defendant indicated that it could not set forth sufficient facts to establish one of its defenses, to wit, plaintiff’s alleged fraudulent incorporation (see Insurance Department Regulations [11 NYCRR] § 65-3.16 [a] [12]; State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313 [2005]), since such information was within plaintiff’s possession and plaintiff had not complied with defendant’s notice to produce Dr. Collins for a deposition. In addition, defendant established its entitlement to depose Dr. Collins (see CPLR 3101 [a]; RLC Med., P.C. v Allstate Ins. Co., 27 Misc 3d 130[A], 2010 NY Slip Op 50642[U] [App Term, 2d, 11th & 13th Jud Dists 2010]; Sharma Med. Servs., P.C. v [*2]Progressive Cas. Ins. Co., 24 Misc 3d 139[A], 2009 NY Slip Op 51591[U] [App Term, 2d, 11th & 13th Jud Dists 2009]; Midwood Acupuncture, P.C. v State Farm Fire and Cas. Co., 21 Misc 3d 144[A], 2008 NY Slip Op 52468[U] [App Term, 2d & 11th Jud Dists 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]).

Accordingly, plaintiff’s motion for summary judgment is denied without prejudice to renewal following the completion of Dr. Collins’ deposition, and defendant’s cross motion for an order compelling plaintiff to produce Dr. Collins for a deposition is granted.

Rios, J.P., Pesce and Golia, JJ., concur.
Decision Date: November 12, 2010

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

Held the insurer entitled to depose the provider's owner on its fraudulent incorporation defense and denied the provider summary judgment as premature because the facts needed to oppose were within the provider's possession.

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.

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).
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.
Sharma Med. Servs., P.C. v Progressive Cas. Ins. Co. (2009 NY Slip Op 51591(U))The insurer's detailed reasons to suspect fraudulent incorporation entitled it to depose the provider's owner.
Midwood Acupuncture, P.C. v State Farm Fire & Cas. Co. (2008 NY Slip Op 52468(U))The insurer established grounds for corporate eligibility discovery, but failed to justify disclosure of the provider owner's personal tax returns.
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.

Cited by

Apazidis, M.D., P.C. v State Farm Mut. Auto. Ins. Co. (2021 NY Slip Op 50498(U))The 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))The insurer failed to prove good cause for licensing verification with admissible evidence supporting summary judgment.

Similar decisions

Flatlands Med., P.C. v Allstate Ins. Co. (2012 NY Slip Op 50582(U))A provider's failure to object timely to discovery demands does not require disclosure of privileged or palpably improper matters.
All Boro Psychological Servs., P.C. v Allstate Ins. Co. (2014 NY Slip Op 50870(U))An insurer's SIU file is discoverable unless the insurer establishes that it was prepared solely for litigation.
State Farm Mut. Auto. Ins. Co. v RLC Med., P.C. (2017 NY Slip Op 03979)The insurer failed to show that deposing the provider's estate administrator would yield relevant evidence or information bearing on its claims.
Clinton Place Med., P.C. v USAA Cas. Ins. Co. (2017 NY Slip Op 51012(U))A provider that fails to object timely to discovery demands must respond except as to privileged or palpably improper matters.
Bedford Park Med. Practice, P.C. v New York Cent. Mut. Fire Ins. Co. (2008 NY Slip Op 50289(U))The provider's cross motion for summary judgment failed because its corporate officer did not lay a business-record foundation.