All Boro Psychological Services, P.C. v Auto One Ins. Co. (2012 NY Slip Op 50777(U))

SUPREME COURT, APPELLATE TERM, SECOND DEPARTMENT, 2d, 11th and 13th JUDICIAL DISTRICTS

Appeal from an order of the Civil Court of the City of New York, Kings County (Carolyn E. Wade, J.), entered April 5, 2010. The order, insofar as appealed from, denied plaintiff’s motion for summary judgment and granted defendant’s cross motion to dismiss the complaint pursuant to CPLR 3126 or, in the alternative, to compel plaintiff to respond to its discovery demands, to the extent of compelling plaintiff to respond to defendant’s discovery demands.

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 an order of the Civil Court denying its motion for summary judgment and granting defendant’s cross motion to dismiss the complaint pursuant to CPLR 3126 or, in the alternative, to compel plaintiff to respond to its discovery demands, to the extent of compelling plaintiff to provide defendant with, among other things, verified responses to its discovery demands “including 1099s, K-1s & W2s showing distributions . . ., proof of payment for spaces used and lease agreements, management agreements (and) corporate tax returns.”

While plaintiff argues that defendant is not entitled to the discovery ordered by the court, inasmuch as plaintiff failed to timely challenge the propriety of defendant’s notice for discovery and inspection (see CPLR 3122 [a]) or timely object to defendant’s “demand for verified written interrogatories” (see CPLR 3133 [a]), plaintiff is obligated to produce the information sought except as to matters which are privileged or palpably improper (see Fausto v City of New York, 17 AD3d 520 [2005]; Marino v County of Nassau, 16 AD3d 628 [2005]; Midborough Acupuncture, P.C. v State Farm Ins. Co., 21 Misc 3d 10 [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]; A.B. Med. Servs. PLLC v Utica Mut. Ins. Co., 11 Misc 3d 71 [App Term, 2d & 11th Jud Dists 2006]). To the extent the discovery demands concern matters relating to defenses which defendant is precluded from raising, they are palpably improper notwithstanding the fact that plaintiff did not specifically object thereto (see Midborough Acupuncture, P.C., 21 Misc 3d 10; Great Wall Acupuncture, 20 Misc 3d 136[A], 2008 NY Slip Op 51529[U]; A.B. Med. Servs. PLLC, 11 Misc 3d 71).

Defendant set forth detailed and specific reasons for its belief that plaintiff may be [*2]ineligible to recover assigned first-party no-fault benefits because it is a professional service corporation which fails to comply with applicable state or local licensing laws (see State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313 [2005]), a defense which is not precluded (Bath Med. Supply, Inc. v Allstate Indem. Co., 27 Misc 3d 92 [App Term, 2d, 11th & 13th Jud Dists 2010]). By obtaining discovery of the documents directed by the Civil Court, defendant will be able to ascertain whether plaintiff is ineligible to recover assigned no-fault benefits (see e.g. One Beacon Ins. Group, LLC v Midland Med. Care, P.C., 54 AD3d 738 [2008]). Plaintiff’s remaining contentions lack merit. Accordingly, the order, insofar as appealed from, is affirmed.

Pesce, P.J., Weston and Rios, JJ., concur.
Decision Date: April 27, 2012