All Boro Psychological Servs., P.C. v Allstate Ins. Co. (2014 NY Slip Op 50870(U))

Decided on May 22, 2014

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 (Pamela L. Fisher, J.), entered November 30, 2011. The order, insofar as appealed from, denied the branch of plaintiff’s motion seeking to compel defendant to produce its Special Investigation Unit file and granted the branch of defendant’s cross motion seeking to compel plaintiff to respond to defendant’s discovery demands and to produce Dr. John Braun and Vladimir Grinberg for depositions.

ORDERED that the order, insofar as appealed from, is modified by providing that the branch of plaintiff’s motion seeking to compel defendant to produce its Special

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff appeals from so much of an order of the Civil Court as denied the branch of plaintiff’s motion seeking to compel defendant to produce its Special Investigation Unit (SIU) file and granted the branch of defendant’s cross motion seeking to compel plaintiff to respond to defendant’s discovery demands and to produce Dr. John Braun and Vladimir Grinberg for depositions.

To avoid having to produce its SIU file, defendant had to establish that its SIU file was prepared solely for litigation (Landmark Ins. Co. v Beau Rivage Rest., 121 AD2d 98, 101 [1986] see also Bombard v Amica Mut. Ins. Co., 11 AD3d 647 [2004]). As defendant failed to demonstrate that it had decided to deny plaintiff’s claims prior to commencing its investigation, the contents of defendant’s SIU file are not privileged and are discoverable (Bombard, 11 AD3d at 648).

With respect to defendant’s cross motion, plaintiff contends that defendant is not entitled to any discovery regarding whether plaintiff 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]) because defendant previously entered into stipulations, in unrelated actions, which, among other things, stated that, as of the date the stipulations were entered into, plaintiff was “in full compliance with any licensing requirements affecting its right to obtain reimbursement under the applicable No Fault laws and regulations.” However, as the issue was [*2]resolved in a stipulation and not after it was actually litigated, the doctrine of collateral estoppel is inapplicable (Kaufman v Eli Lilly & Co., 65 NY2d 449, 456-457 [1985]). Consequently, defendant is not barred from obtaining discovery regarding whether plaintiff is in compliance with applicable state and local licensing laws.

Contrary to plaintiff’s contention, defendant sufficiently demonstrated that defendant’s discovery demands which concerned a Mallela defense are “material and necessary in the prosecution or defense of an action” (CPLR 3101 [a] All Boro Psychological Servs., P.C. v Allstate Ins. Co., 40 Misc 3d 131[A], 2013 NY Slip Op 51124[U] [App Term, 2d, 11th & 13th Jud Dists 2013] Medical Polis, P.C. v Progressive Specialty Ins. Co., 34 Misc 3d 153[A], 2012 NY Slip Op 50342[U] [App Term, 2d, 11th & 13th Jud Dists 2012]). Defendant further established its entitlement to depose Vladimir Grinberg and plaintiff’s owner, Dr. John Braun (see CPLR 3101 [a] All Boro Psychological Servs., P.C. v Allstate Ins. Co., 40 Misc 3d 131[A], 2013 NY Slip Op 51124[U] see also 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 Progressive Cas. Ins. Co., 24 Misc 3d 139[A], 2009 NY Slip Op 51591[U] [App Term, 2d, 11th & 13th Jud Dists 2009]).

Accordingly, the order, insofar as appealed from, is modified by providing that the branch of plaintiff’s motion seeking to compel defendant to produce its SIU file is granted.

Pesce, P.J., Aliotta and Solomon, JJ., concur.