October 28, 2011

Q-B Jewish Med. Rehabilitation, P.C. v Allstate Ins. Co. (2011 NY Slip Op 21390)

https://www.beynensonlaw.com/case-law/q-b-jewish-med-rehabilitation-p-c-v-allstate-ins-co-2011-ny-slip-op-21390/

Court
Appellate Term, Second Department
Decided
October 28, 2011
Citation
2011 NY Slip Op 21390 · 33 Misc 3d 64
Posture
Other motion
Outcome
Split result
Later treatment
Followed in 1 later decision (see Cited by)
Issues
Discovery and procedure Fraudulent incorporation (Mallela)
Legal questions
Mallela defense: preclusion and discovery (see the maps)
Cite as
Q-B Jewish Med. Rehabilitation, P.C. v Allstate Ins. Co., 33 Misc 3d 64 (App Term, 2d Dept 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.

The insurer justified bank and tax discovery, but the provider's remaining responses were sufficient. The Appellate Term, Second Department, modified the order, insofar as appealed from, to limit compelled disclosure to bank statements, canceled checks, income and payroll tax records, and W-2 or 1099 forms, followed by the owner's deposition. Detailed licensing concerns under Mallela established materiality and special circumstances under CPLR 3101 (a). The court affirmed striking the action from the trial calendar because the certificate of readiness misstated that discovery was complete despite outstanding documents and the owner's failure to appear for a deposition. Considering the insurer's untimely motion was within the Civil Court's discretion under CPLR 2004 and 22 NYCRR 208.17 (c), given the minimal delay.

Reported in New York Official Reports at Q-B Jewish Med. Rehabilitation, P.C. v Allstate Ins. Co. (2011 NY Slip Op 21390)

Q-B Jewish Med. Rehabilitation, P.C. v Allstate Ins. Co.
2011 NY Slip Op 21390 [33 Misc 3d 64]
Accepted for Miscellaneous Reports Publication
AT2
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
As corrected through Wednesday, December 28, 2011

[*1]

Q-B Jewish Med. Rehabilitation, P.C., as Assignee of Mikhail Abramov, Appellant,
v
Allstate Insurance Company, Respondent.

Supreme Court, Appellate Term, Second Department, October 28, 2011

APPEARANCES OF COUNSEL

Khavinson & Associates, P.C., Brooklyn (Stefan Belinfanti of counsel), for appellant. McDonnell & Adels, P.L.L.C., Garden City (James J. Cleary, Jr., of counsel), for respondent.

{**33 Misc 3d at 65} OPINION OF THE COURT

Memorandum.

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 defendant’s discovery demands is granted to the extent of compelling plaintiff to provide the documents sought in items 19, 20, and 21 of defendant’s notice to produce and in interrogatory 11 (c) within 60 days of the date of this decision and order, and by further compelling plaintiff to produce its owner, John McGee, for an examination before trial within 30 days thereafter, or on such other date to which the parties shall agree, but in no event later than 60 days thereafter; 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 from so much of an order as granted defendant’s motion to strike the action from the trial{**33 Misc 3d at 66} calendar and compel plaintiff to respond to defendant’s discovery demands and to produce its owner for an examination before trial (EBT).

It is uncontroverted that plaintiff filed a certificate of readiness for trial which stated that all pretrial discovery had been completed, despite the fact that its purported owner had not appeared for a scheduled EBT and there was outstanding documentary discovery. While defendant’s motion to strike the action from the trial calendar was untimely, under the circumstances presented, including the de minimis nature of the delay in moving to strike the action from the trial calendar, contrary to plaintiff’s contention, it cannot be said that the Civil Court’s determination to consider the motion rather than deny it as untimely was an improvident exercise of discretion (see CPLR 2004; Uniform Rules for NY City Civ Ct [22 NYCRR] § 208.17 [c]).

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 [*2]laws and, thus, 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 and tax 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]).

The record indicates that plaintiff objected to producing items 19 through 21 of defendant’s notice to produce, which sought plaintiff’s bank statements and canceled checks (item 19), plaintiff’s federal and state tax returns including attachments and schedules (item 20), and plaintiff’s payroll tax filings (item 21), and to providing the W-2 or 1099 forms sought in interrogatory 11 (c). We find that plaintiff’s objection to the foregoing demands lacked merit. Defendant has shown that plaintiff’s bank records are material and necessary (see CPLR 3101 [a]), and that special circumstances exist which warrant the disclosure of plaintiff’s income tax returns and payroll tax filings (see CPLR 3101 [a]; AVA Acupuncture, P.C. v AutoOne Ins. Co., 28 Misc 3d 134[A], 2010 NY Slip Op 51350[U] [App Term, 2d, 11th & 13th Jud Dists 2010]; 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]; Statewide Med. Servs., P.C. v Travelers Ins. Co., 13 Misc 3d{**33 Misc 3d at 67} 134[A], 2006 NY Slip Op 52014[U] [App Term, 1st Dept 2006], revg 9 Misc 3d 1124[A], 2005 NY Slip Op 51773[U] [Civ Ct, Bronx County 2005]; see also Dore v Allstate Indem. Co., 264 AD2d 804 [1999]; cf. Benfeld v Fleming Props., LLC, 44 AD3d 599, 600 [2007]; Altidor v State-Wide Ins. Co., 22 AD3d 435 [2005]). In addition, defendant is entitled to an EBT of McGee following the production of the documents (see CPLR 3101 [a]). However, as the record further reflects that plaintiff’s responses to the remainder of defendant’s interrogatories and defendant’s notice to produce were sufficient, the Civil Court should not have ordered plaintiff to provide additional responses.

In light of the foregoing and the misstatements of material facts contained within plaintiff’s certificate of readiness, the Civil Court did not improvidently exercise its discretion in granting the branch of defendant’s motion that sought to strike the action from the trial calendar and granting disclosure to the extent indicated above.

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

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