February 8, 2013

All Boro Psychological Servs., P.C. v Allstate Ins. Co. (2013 NY Slip Op 23043)

https://www.beynensonlaw.com/case-law/all-boro-psychological-servs-p-c-v-allstate-ins-co-2013-ny-slip-op-23043/

Court: Appellate Term, Second Department
Decided: February 8, 2013
Citation: 2013 NY Slip Op 23043 · 39 Misc 3d 9
Posture: Summary judgment
Outcome: Insurer prevailed
Later treatment: Followed in 2 later decisions (see Cited by)
Issues: Discovery and procedure Fraudulent incorporation (Mallela)
Legal questions: Mallela defense: preclusion and discovery (see the maps)

Cite as

All Boro Psychological Servs., P.C. v Allstate Ins. Co., 39 Misc 3d 9 (App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2013)

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 a basis for Mallela discovery, defeating the provider's summary judgment motion. The provider failed to object timely under CPLR 3122 and remained obligated to respond except as to privileged or palpably improper demands. Under CPLR 3124, the insurer needed only to show that no response had been received; the provider failed to establish that billing-fraud discovery concerned a defense precluded by an untimely denial. The insurer also supplied detailed reasons to investigate licensing eligibility under Mallela, a nonprecluded defense, supporting financial discovery and a deposition under CPLR 3101 (a). The Appellate Term, Second Department, affirmed denial of the provider's summary judgment motion under CPLR 3212 (f) and the grant of the insurer's cross motion to compel.

Reported in New York Official Reports at All Boro Psychological Servs., P.C. v Allstate Ins. Co. (2013 NY Slip Op 23043)

All Boro Psychological Servs., P.C. v Allstate Ins. Co.

2013 NY Slip Op 23043 [39 Misc 3d 9]

Accepted for Miscellaneous Reports Publication

AT2

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

As corrected through Wednesday, May 1, 2013

[*1]

All Boro Psychological Services, P.C., as Assignee of Latuana Edmeade, Appellant,
v
Allstate Ins. Co., Respondent.

Supreme Court, Appellate Term, Second Department, 2d, 11th and 13th Judicial Districts, February 8, 2013

APPEARANCES OF COUNSEL

Gary Tsirelman, P.C., Brooklyn (Irena Golodkeyer of counsel), for appellant. Abrams, Cohen & Associates, New York City (Barry Cohen of counsel), for respondent.

{**39 Misc 3d at 10} OPINION OF THE COURT

Memorandum.

Ordered that the order is affirmed, with $25 costs.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff appeals from an order of the Civil Court which denied plaintiff’s motion for summary judgment and granted defendant’s cross motion to compel plaintiff to provide full and complete responses to defendant’s discovery demands and to produce Vladimir Grinberg for an examination before trial (EBT).

Plaintiff was required, but failed, to challenge the propriety of defendant’s discovery demands pursuant to CPLR 3120 within the time prescribed by CPLR 3122. As a result, plaintiff{**39 Misc 3d at 11} is obligated to produce the information sought except as to matters which are palpably improper or privileged (see Fausto v City of New York, 17 AD3d 520 [2005]; Marino v County of Nassau, 16 AD3d 628 [2005]; Midwood Acupuncture, P.C. v State Farm Fire & Cas. Co., 21 Misc 3d 144[A], 2008 NY Slip Op 52468[U] [App Term, 2d Dept, 2d & 11th Jud Dists 2008]). 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 Midwood Acupuncture, P.C. v State Farm Fire & Cas. Co., 21 Misc 3d 144[A], 2008 NY Slip Op 52468[U] [2008]; Great Wall Acupuncture v State Farm Mut. Auto. Ins. Co., 20 Misc 3d{**39 Misc 3d at 12} 136[A], 2008 NY Slip Op 51529[U] [App Term, 2d Dept, 2d & 11th Jud Dists 2008]).

Pursuant to CPLR 3124, if a party fails to respond to or comply with any request, notice, interrogatory, demand or order under article 31 of the CPLR, the party seeking disclosure may move to compel compliance (see also CPLR 3126). There is no requirement upon the movant other than to show that no response had been received. Thus, in the case at bar, defendant was not required to demonstrate that its discovery demands were not palpably improper. Rather, in order to successfully oppose defendant’s cross motion to compel, plaintiff would have had to show that defendant’s defense of billing fraud was precluded because it was not asserted in a timely NF-10 denial of claim form, which plaintiff did not do.

Defendant set forth detailed and specific reasons for believing that plaintiff is a professional service corporation which fails to comply with applicable state or local licensing laws and, thus, is ineligible to recover no-fault benefits (see State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313 [2005]), a defense which is not precluded. By obtaining discovery of certain documents, such as plaintiff’s financial records, defendant will be able to ascertain whether plaintiff is ineligible for reimbursement of no-fault benefits (see e.g. CPLR 3101 [a]; One Beacon Ins. Group, LLC v Midland Med. Care, P.C., 54 AD3d 738 [2008]). In addition, defendant is entitled to an EBT of Vladimir Grinberg (see CPLR 3101 [a]; Sharma Med. Servs., P.C. v Progressive Cas. Ins. Co., 24 Misc 3d 139[A], 2009 NY Slip Op 51591[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2009]; Midwood Acupuncture, P.C. v State Farm Fire & Cas. Co., 21 Misc 3d 144[A], 2008 NY Slip Op 52468[U] [2008]; Great Wall Acupuncture v State Farm Mut. Auto. Ins. Co., 20 Misc 3d 136[A], 2008 NY Slip Op 51529[U] [2008]). Consequently, the Civil Court properly denied plaintiff’s motion for summary judgment (see CPLR 3212 [f]) and granted defendant’s cross motion to compel plaintiff to provide full and complete responses to defendant’s discovery demands and to produce Vladimir Grinberg for an EBT.

Accordingly, the order is affirmed.

Pesce, P.J., Rios and Solomon, 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 (rules on the question, but another ground decided the case)

Held the insurer gave detailed, specific reasons to believe the provider was ineligible under licensing laws, a defense not subject to preclusion, so it was entitled to financial-record discovery and an EBT, and summary judgment was properly denied under CPLR 3212 (f).

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

Of the 134 decisions on this question in the Second Department courts and the Court of Appeals, 111 (this one included) are in the same category.

Cited in this decision

A label shows how this decision treated the case it cites.

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.
State Farm Mut. Auto. Ins. Co. v Mallela (2005 NY Slip Op 02416) FollowedFraudulently 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.
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.

Cited by

A label shows how the later decision treated this one.

Clinton Place Med., P.C. v USAA Cas. Ins. Co. (2017 NY Slip Op 51012(U)) FollowedA provider that fails to object timely to discovery demands must respond except as to privileged or palpably improper matters.
K.O. Med., P.C. v USAA Cas. Ins. Co. (2017 NY Slip Op 51089(U)) FollowedA Mallela defense need not be preserved in a timely denial of claim.
Farshad D. Hannanian, M.D., P.C. v Allstate Ins. Co. (2015 NY Slip Op 51133(U))The treating provider's deposition was material and necessary to the insurer's medical necessity defense despite a pending summary judgment motion.
J.K.M. Med. Care, P.C. v USAA Gen. Indem. Co. (2018 NY Slip Op 50818(U))A provider that fails to timely object to discovery demands must respond unless the demands are privileged or palpably improper.

Similar decisions

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. (2011 NY Slip Op 21390)The insurer justified bank and tax discovery, but the provider's remaining responses were sufficient.
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.
Bath Med. Supply, Inc. v Allstate Indem. Co. (2010 NY Slip Op 20059)The insurer failed to justify discovery or preserve fraudulent-billing and EUO nonappearance defenses through proof of timely denials.
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.