February 2, 2012

Eastern Star Acupuncture, P.C. v Allstate Ins. Co. (2012 NY Slip Op 22029)

Headnote

The defendant insurance company had refused to pay first-party no-fault benefits to the plaintiffs, which were providers in this case. Their claims had been marked off the trial calendar but were later moved to restore the action to trial. However, the defendant argued that prosecution of the claims of the plaintiff Painless Medical, P.C. could not be pursued due to the death of the sole shareholder, officer, and director of the company. The defense claimed that the appointed administrator, Anna Val, did not have the authority to pursue pending litigation or collect settlements and judgments involving this provider. The court ruled that Ms. Val had the authority and power to recover property belonging to the estate, prosecute an action to recover assets belonging to the estate, and settle claims for money owed to the estate, and she did not have to be a member of the profession in which the professional corporation was authorized to practice. The main issue decided was whether Anna Val had the authority to pursue pending litigation or collect settlements and judgments involving the provider after being appointed as administrator of the estate, and the court ruled that she did have the authority. The holding of the court was that the motion to restore the action was made within a year after it had been marked off the trial calendar, and counsel's affirmation satisfactory justified the reason, showing a readiness to proceed to trial, and the order was affirmed.

Reported in New York Official Reports at Eastern Star Acupuncture, P.C. v Allstate Ins. Co. (2012 NY Slip Op 22029)

Eastern Star Acupuncture, P.C. v Allstate Ins. Co.

2012 NY Slip Op 22029 [36 Misc 3d 41]

Accepted for Miscellaneous Reports Publication

AT2

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

As corrected through Wednesday, September 5, 2012

[*1]

Eastern Star Acupuncture, P.C., et al., as Assignees of Yaira Abraham, Respondents,
v
Allstate Insurance Co., Appellant.

Supreme Court, Appellate Term, Second Department, 2d, 11th and 13th Judicial Districts, February 2, 2012

APPEARANCES OF COUNSEL

Bruno, Gerbino & Soriano, LLP, Melville (Charles W. Benton of counsel), for appellant.

{**36 Misc 3d at 42} OPINION OF THE COURT

Memorandum.

Ordered that the order is affirmed, without costs.

This action by providers to recover assigned first-party no-fault benefits was “marked off” the trial calendar on September 25, 2009. On May 26, 2010, plaintiffs moved to restore the action to the trial calendar pursuant to Uniform Rules for New York City Civil Court (22 NYCRR) § 208.14 (c). In a supporting affirmation, plaintiffs’ counsel stated that plaintiffs were “prepared to proceed to trial, and . . . to present proof . . . that payment of no-fault benefits [was] overdue.” In opposition, defense counsel argued that prosecution of the claims of plaintiff Painless Medical, P.C. could not be pursued because Dr. Ronald Collins, the sole shareholder, officer and director of Painless Medical, P.C., had passed away on September 15, 2008, and Anna Val, Esq., who had been appointed as the administrator of the estate of Dr. Collins on September 9, 2009, had no authority over Painless Medical, P.C. Defendant argued, among other [*2]things, that Ms. Val lacked the capacity to administer or become a shareholder of Painless Medical, P.C. because she did not possess a license to practice medicine, which is a requirement of Business Corporation Law §§ 1507 and 1508, and, therefore, she was not entitled to pursue pending litigation or collect settlements and judgments involving this provider.

“[A] corporation can act only through its officers and agents” (14A NY Jur 2d, Business Relationships § 627; see also 14A NY Jur 2d, Business Relationships § 614). Upon Dr. Collins’ death, Painless Medical, P.C. continued to exist (see Business Corporation Law § 1510), but was powerless to continue prosecuting its claims in this action until there was someone with authority who could authorize proceeding with this litigation (see Ocean Diagnostic Imaging, P.C. v Merchants Mut. Ins. Co., 15 Misc 3d 9 [App Term, 2d & 11th Jud Dists 2007]). After her appointment by the Surrogate’s Court to act as the administrator of Dr. Collins’ estate, Ms. Val had the authority and power to, among other things, recover property belonging to Dr. Collins’ estate, prosecute an action to recover assets belonging to the estate, and settle claims for money owed to the estate (see e.g. 38 NY Jur 2d, Decedents’ Estates §§ 1442, 1513, 1521, 1532). It was not necessary that she be a member of the profession in which the professional corporation is authorized to practice, because Ms. Val was not acting in a professional capacity, i.e., as a director{**36 Misc 3d at 43} or officer of the professional corporation, but rather as an administrator, whose role is to preserve the value of, and prevent loss to, the estate.

The motion to restore was made within one year after the action had been “marked off” the trial calendar, and counsel’s supporting affirmation satisfactorily explained the reason that the action was “marked off” and showed a readiness to proceed to trial (see Uniform Rules for NY City Civ Ct [22 NYCRR] § 208.14 [c]). Accordingly, the order is affirmed.

Weston, J.P., Pesce and Rios, JJ., concur.