December 19, 2011

Allstate Social Work & Psychological Servs., P.L.L.C. v Autoone Ins. Co. (2011 NY Slip Op 52295(U))

https://www.beynensonlaw.com/case-law/allstate-social-work-psychological-servs-p-l-l-c-v-autoone-ins-co-2011-nyslip-op-52295u/

Court: Appellate Term, Second Department
Decided: December 19, 2011
Citation: 2011 NY Slip Op 52295(U) · 34 Misc 3d 128(A)
Posture: Other motion
Outcome: Split result
Issues: Discovery and procedure Fraudulent incorporation (Mallela)
Legal questions: Mallela defense: preclusion and discovery (see the maps)

Cite as

Allstate Social Work & Psychological Servs., P.L.L.C. v Autoone Ins. Co., 34 Misc 3d 128(A), 2011 NY Slip Op 52295(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.

A provider that fails to timely challenge discovery demands must respond except as to privileged or palpably improper matters. The Appellate Term, Second Department, modified the order, insofar as appealed from, to limit compelled production to the period specified in the interrogatories, otherwise affirming. Discovery concerning precluded defenses is palpably improper, but licensing ineligibility under Mallela is not precludable, and the provider did not show that the demands concerned precluded defenses. The compelled management agreements, leases, and landlord information were limited to January 1, 2002 through May 2, 2005. The challenge to vacatur of the notice of trial was unpreserved; alternatively, vacatur was proper under 22 NYCRR 208.17 (c) because the notice incorrectly stated that discovery was complete.

Reported in New York Official Reports at Allstate Social Work & Psychological Servs., P.L.L.C. v Autoone Ins. Co. (2011 NY Slip Op 52295(U))

[*1]

Allstate Social Work & Psychological Servs., P.L.L.C. v Autoone Ins. Co.

2011 NY Slip Op 52295(U) [34 Misc 3d 128(A)]

Decided on December 19, 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This opinion is uncorrected and will not be published in the printed Official Reports.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 December 19, 2011

SUPREME COURT OF THE STATE OF NEW YORK

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

PRESENT: : RIOS, J.P., WESTON and GOLIA, JJ
2010-1125 K C.

Allstate Social Work and Psychological Services, P.L.L.C. as Assignee of IRLYNE THELAMY, DANIEL FROST and MAKSIM ZHOGLO, Appellant,
against
Autoone Ins. Co., Respondent.

Appeal from an order of the Civil Court of the City of New York, Kings County (Robin D. Garson, J.), entered February 2, 2010. The order, insofar as appealed from as limited by the brief, granted the branch of defendant’s motion seeking to vacate the notice of trial, and granted the branch of defendant’s motion seeking to compel plaintiff to respond to defendant’s discovery demands to the extent of directing plaintiff to “respond to defendant’s written demands and provide management agreements, lease agreements, and the names/addresses of all landlords.”

ORDERED that the order, insofar as appealed from, is modified by providing that the branch of defendant’s motion seeking to compel plaintiff to respond to its discovery demands is granted to the extent of directing plaintiff to respond to defendant’s written demands, and to provide defendant with management agreements, lease agreements, and the names and addresses of all landlords, limited to the time period between January 1, 2002 and May 2, 2005; as so modified, 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, as limited by its brief, from so much of an order as granted the branch of defendant’s motion seeking to vacate the notice of trial, and granted the branch of defendant’s motion seeking to compel plaintiff to respond to defendant’s discovery demands to the extent of directing plaintiff to “respond to defendant’s written demands and provide management agreements, lease agreements, and the names/addresses of all landlords.”

Plaintiff contends on appeal that the Civil Court should not have granted the branch of defendant’s motion seeking to vacate the notice of trial. A review of the record, however, indicates that, in its affirmation in opposition to defendant’s motion, plaintiff failed to argue that the notice of trial should not be vacated. Consequently, this contention is unpreserved for appellate review. In any event, since defendant timely moved to vacate the notice of trial (see Uniform Rules of the New York City Civil Court [22 NYCRR] § 208.17 [c]), which notice contains the erroneous statement that discovery has been completed (see Savino v Lewittes, 160 AD2d 176 [1990]; Queens Chiropractic Mgt, P.C. v Country Wide Ins. Co., 23 Misc 3d 142[A], [*2]2009 NY Slip Op 51073[U] [App Term, 2d, 11th & 13th Jud Dists 2009]; First Aid Occupational Therapy, PLLC v State Farm Mut. Auto. Ins. Co., 21 Misc 3d 128[A], 2008 NY Slip Op 51963[U] [App Term, 2d & 11th Jud Dists 2008]; Great Wall Acupuncture, P.C. v General Assur. Co., 21 Misc 3d 45 [App Term, 2d & 11th Jud Dists 2008]), the notice of trial was properly vacated (see Gregory v Ford Motor Credit Co., 298 AD2d 496, 497 [2002]).

Inasmuch as plaintiff failed to timely challenge the propriety of defendant’s discovery demands, it 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]). Discovery demands concerning matters relating to defenses which a defendant is precluded from raising are palpably improper even where the 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 v Utica Mut. Ins. Co., 11 Misc 3d 71 [App Term, 2d & 11th Jud Dists 2006]). An affirmative defense that a professional service corporation 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]), is not precludable. In the instant case, plaintiff has failed to demonstrate that defendant is seeking to obtain discovery relating to precluded defenses.

In view of the fact that defendant’s interrogatories sought information for the time period of January 1, 2002 until the date of the interrogatories, May 2, 2005, the order is modified by providing that the branch of defendant’s motion seeking to compel plaintiff to respond to its discovery demands is granted to the extent of directing plaintiff to respond to defendant’s written demands, and to provide defendant with management agreements, lease agreements, and the names and addresses of all landlords, limited to the time period between January 1, 2002 and May 2, 2005. Plaintiff’s remaining contentions lack merit.

Rios, J.P., Weston and Golia, JJ., concur.
Decision Date: December 19, 2011

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 demands for management agreements, leases and landlord identities were not palpably improper because the Mallela licensing defense is not precludable, so the provider, having failed to timely object, had to produce them (limited to 2002-2005).

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

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

Queens Chiropractic Mgt., P.C. v Country Wide Ins. Co. (2009 NY Slip Op 51073(U)) FollowedThe insurer's timely motion to vacate the notice of trial was warranted because the provider incorrectly certified that discovery was complete.
First Aid Occupational Therapy, PLLC v State Farm Mut. Auto. Ins. Co. (2008 NY Slip Op 51963(U)) FollowedThe provider's notice of trial was properly vacated because its certificate of readiness incorrectly stated that discovery was complete or waived.
Great Wall Acupuncture, P.C. v General Assur. Co. (2008 NY Slip Op 28350) FollowedA timely motion to vacate a notice of trial should be granted when the certificate of readiness wrongly states discovery is complete.
Midborough Acupuncture, P.C. v State Farm Ins. Co. (2008 NY Slip Op 28291) FollowedThe insurer established grounds for discovery concerning the provider's possible fraudulent incorporation, including corporate tax information.
Great Wall Acupuncture v State Farm Mut. Auto. Ins. Co. (2008 NY Slip Op 51529(U)) FollowedThe insurer established entitlement to corporate eligibility discovery, but failed to justify disclosure of the owner's personal tax returns.
A.B. Med. Servs. PLLC v Utica Mut. Ins. Co. (2006 NY Slip Op 26068) FollowedA defense of fraudulent corporate licensure is not precluded by an insurer's failure to timely deny no-fault claims.
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).

Cited by

Sanford Chiropractic, P.C. v New S. Ins. Co. (2020 NY Slip Op 50609(U))A provider's unsworn interrogatory answers supplied by counsel do not comply with CPLR 3133 (b).

Similar decisions

Allstate Social Work & Psychological Svcs., PLLC v Auto One Ins. Co. (2011 NY Slip Op 52362(U))The insurer's motion to compel supplemental discovery was premature because the provider had no opportunity to respond to the new demands.
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.
All Boro Psychological Servs., P.C. v Allstate Ins. Co. (2013 NY Slip Op 51124(U))The insurer's SIU file was discoverable because it failed to show that the investigation began after a decision to deny the claims.
Allstate Social Work & Psychological Svcs, PLLC v GEICO Gen. Ins. Co. (2010 NY Slip Op 52162(U))A provider that fails to timely challenge discovery demands must respond, except as to privileged or palpably improper matters.
Q-B Jewish Med. Rehabilitation, P.C. v Allstate Ins. Co. (2011 NY Slip Op 51551(U))The insurer justified financial and tax discovery on provider eligibility, but the provider's remaining discovery responses were sufficient.