February 26, 2008

Nagle Med. Plaza, P.C. v Allstate Ins. Co. (2008 NY Slip Op 50349(U))

https://www.beynensonlaw.com/case-law/nagle-med-plaza-p-c-v-allstate-ins-co-2008-ny-slip-op-50349u/

Court: Appellate Term, Second Department
Decided: February 26, 2008
Citation: 2008 NY Slip Op 50349(U) · 18 Misc 3d 139(A)
Posture: Summary judgment
Outcome: Split result
Issues: Provider's prima facie case Fraudulent incorporation (Mallela)
Legal questions: Claimant's prima facie case on motions · Fraudulent incorporation (Mallela) (see the maps)

Cite as

Nagle Med. Plaza, P.C. v Allstate Ins. Co., 18 Misc 3d 139(A), 2008 NY Slip Op 50349(U) (App Term, 2d Dept, 2d & 11th Jud Dists 2008)

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 provider's business-record foundation and the insurer's proof of fraudulent incorporation were insufficient for summary judgment. The provider's president failed to establish personal knowledge of its recordkeeping practices sufficient to authenticate the documents supporting its motion. The insurer relied on the owner's EUO testimony denying knowledge of many aspects of daily operations. That testimony did not establish as a matter of law that a nonphysician business manager was the provider's true owner or that the provider was ineligible for reimbursement under Mallela. The Appellate Term, Second Department, reversed the provider's judgment, vacated the portion of the order granting its motion, and denied that motion. The denial of the insurer's cross motion remained undisturbed, and the matter was remanded.

Reported in New York Official Reports at Nagle Med. Plaza, P.C. v Allstate Ins. Co. (2008 NY Slip Op 50349(U))

[*1]

Nagle Med. Plaza, P.C. v Allstate Ins. Co.

2008 NY Slip Op 50349(U) [18 Misc 3d 139(A)]

Decided on February 26, 2008

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This opinion is uncorrected and will not be published in the printed Official Reports.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 February 26, 2008

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd and 11th JUDICIAL DISTRICTS

PRESENT: : PESCE, P.J., and RIOS, J.
2006-2122 Q C

Nagle Medical Plaza, P.C. as assignee of Elijah Holder, Respondent,
against
Allstate Insurance Company, Appellant.

Appeal from an order of the Civil Court of the City of New York, Queens County (Diane A. Lebedeff, J.), entered September 28, 2006, deemed from a judgment entered on December 8, 2006 (see CPLR 5501 [c]). The judgment, entered pursuant to the September 28, 2006 order granting plaintiff’s motion for summary judgment and denying defendant’s cross motion for summary judgment, awarded plaintiff the principal sum of $3,532.04.

Judgment reversed without costs, so much of the order entered September 28, 2006 as granted plaintiff’s motion for summary judgment vacated, plaintiff’s motion for summary judgment denied, and matter remanded to the court below for all further proceedings.

In this action by a provider to recover assigned first-party no-fault benefits, the court granted plaintiff’s motion for summary judgment and denied defendant’s cross motion for summary judgment. A judgment was subsequently entered. The instant appeal by defendant ensued.

On appeal, defendant asserts that the affidavit by plaintiff’s president, submitted in support of plaintiff’s motion for summary judgment, failed to lay a proper foundation for the admission of the documents annexed to plaintiff’s moving papers and that, as a result, plaintiff failed to establish a prima facie case. We agree. The affidavit submitted by plaintiff’s president was insufficient to establish that he possessed personal knowledge of plaintiff’s practices and procedures so as to lay a foundation for the admission, as business records, of the documents annexed to plaintiff’s moving papers. Accordingly, plaintiff failed to make a prima facie showing of its entitlement to summary judgment (see Bath Med. Supply, Inc. v Deerbrook Ins. Co., 14 Misc 3d 135[A], 2007 NY Slip Op 50179[U] [App Term, 2d & 11th Jud Dists 2007]; Dan Med., P.C. v New York Cent. Mut. Fire Ins. Co., 14 Misc 3d 44 [App Term, 2d & 11th Jud [*2]Dists 2006]). Consequently, plaintiff’s motion for summary judgment is denied.

Turning to the merits of defendant’s cross motion for summary judgment, we are of the opinion that the court below correctly denied same. Defendant argued that plaintiff was ineligible to receive reimbursement for no-fault benefits since at the time that the services billed for were rendered, plaintiff was a fraudulently incorporated
professional service corporation (see State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313 [2005]). In support of said contention, defendant annexed the transcript of an examination under oath of plaintiff’s owner. While said individual denied knowledge of many aspects of the everyday operations of plaintiff, his testimony was inadequate to establish, as a matter of law, that plaintiff is ineligible for reimbursement of no-fault benefits on the ground that plaintiff’s business manager, a non-physician, was the true owner of plaintiff (see id.; Boston Post Rd. Med. Imaging, P.C. v Progressive Ins. Co., 15 Misc 3d 145[A], 2007 NY Slip Op 51173[U] [App Term, 9th & 10th Jud Dists 2007]). Accordingly, the court below properly denied defendant’s cross motion for summary judgment (see Zuckerman v City of New York, 49 NY2d 557 [1980]).
Pesce, P.J., and Rios, J., concur.
Decision Date: February 26, 2008

Legal questions (2)

Questions 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.

Claimant's prima facie case on motions

Open the full map

On summary judgment or another pretrial motion, what must a no-fault claimant show to establish its prima facie case?

This decision: Insufficient: claim forms not shown admissible as business records / merits of claim not proved

Held the provider failed its prima facie case because its president's affidavit did not show personal knowledge of its practices and procedures sufficient to lay a business-records foundation for the annexed documents.

Proof sufficientMailing/receipt not shownOverdue not shownBusiness-record foundation lackingOther element missingThis decisionCites it or cited by itCited or followed

Of the 1,063 decisions on this question in the Second Department courts and the Court of Appeals, 208 (this one included) are in the same category.

Fraudulent incorporation (Mallela)

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On the merits, when may a no-fault insurer withhold payment because unlicensed persons own or control the provider (Mallela)?

This decision: Insurer's proof of unlicensed ownership/control insufficient

Held the owner's EUO testimony, though showing ignorance of everyday operations, was inadequate to establish as a matter of law that a non-physician business manager was the true owner, so the insurer's summary judgment motion failed.

Defense establishedTriable issueDefense not establishedNot a Mallela groundThis decisionCites it or cited by itCited or followed

Of the 61 decisions on this question in the Second Department courts and the Court of Appeals, 13 (this one included) are in the same category.

Cited in this decision

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

Bath Med. Supply, Inc. v Deerbrook Ins. Co. (2007 NY Slip Op 50179(U)) FollowedThe insurer's challenge to the provider's business-records foundation was considered despite being raised for the first time on appeal.
Dan Med., P.C. v New York Cent. Mut. Fire Ins. Co. (2006 NY Slip Op 26483) FollowedThe provider failed to establish its prima facie case because its corporate officer did not lay a business-records foundation for the claim documents.
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).
Boston Post Rd. Med. Imaging, P.C. v Progressive Ins. Co. (2007 NY Slip Op 51173(U)) FollowedThe insurer failed to establish that the provider was ineligible under Mallela or had sold the claims at issue.

Similar decisions

RLC Med., P.C. v Allstate Ins. Co. (2009 NY Slip Op 51131(U))The provider's billing manager failed to establish admissible business records, defeating the provider's motion for summary judgment.
V.S. Med. Servs., P.C. v Allstate Ins. Co. (2007 NY Slip Op 50400(U))The provider failed to prove claim submission because its corporate officer's affidavit lacked a sufficient business-records foundation.
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.
Midborough Acupuncture P.C. v State Farm Ins. Co. (2006 NY Slip Op 26360)An insurer's fraudulent-incorporation defense survives an untimely denial, and discovery into provider ownership and licensing is material.
Bedford Park Med. Practice, P.C. v New York Cent. Mut. Fire Ins. Co. (2008 NY Slip Op 50289(U))The provider's cross motion for summary judgment failed because its corporate officer did not lay a business-record foundation.