October 27, 2011

Queens Brooklyn Med. Rehab, P.C. v Allstate Ins. Co. (2011 NY Slip Op 52010(U))

https://www.beynensonlaw.com/case-law/queens-brooklyn-med-rehab-p-c-v-allstate-ins-co-2011-ny-slip-op52010u/

Court: Appellate Term, Second Department
Decided: October 27, 2011
Citation: 2011 NY Slip Op 52010(U) · 33 Misc 3d 134(A)
Posture: Other motion
Outcome: Insurer prevailed
Issues: Fraudulent incorporation (Mallela) Discovery and procedure
Legal questions: Mallela defense: preclusion and discovery (see the maps)

Cite as

Queens Brooklyn Med. Rehab, P.C. v Allstate Ins. Co., 33 Misc 3d 134(A), 2011 NY Slip Op 52010(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.

The insurer established special circumstances warranting disclosure of the provider's tax documents concerning licensing eligibility. In an action for assigned no-fault benefits, the insurer moved to strike the provider's notice of trial, and the Civil Court granted the motion to the extent of compelling production of certain tax documents. The insurer supplied detailed and specific reasons to believe the provider failed to satisfy applicable state and local licensing requirements under 11 NYCRR 65-3.16 (a) (12) and Mallela. Those papers justified disclosure under CPLR 3101. The Appellate Term, Second Department, affirmed the order, insofar as appealed from, sustaining the insurer's entitlement to the requested documents.

Reported in New York Official Reports at Queens Brooklyn Med. Rehab, P.C. v Allstate Ins. Co. (2011 NY Slip Op 52010(U))

[*1]

Queens Brooklyn Med. Rehab, P.C. v Allstate Ins. Co.

2011 NY Slip Op 52010(U) [33 Misc 3d 134(A)]

Decided on October 27, 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This opinion is uncorrected and will not be published in the printed Official Reports.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 October 27, 2011

SUPREME COURT OF THE STATE OF NEW YORK

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

PRESENT: : PESCE, P.J., WESTON and RIOS, JJ
2010-505 Q C.

Queens Brooklyn Medical Rehab, P.C. as Assignee of DIANA URUCHIMA, Appellant,
against
Allstate Insurance Company, Respondent.

Appeal from an order of the Civil Court of the City of New York, Queens County (William A. Viscovich, J.), entered February 11, 2010. The order, insofar as appealed from as limited by the brief, granted defendant’s motion to strike plaintiff’s notice of trial to the extent of compelling plaintiff to produce certain tax documents.

ORDERED that 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 plaintiff’s notice of trial to the extent of compelling plaintiff to produce certain tax documents.

Defendant’s moving papers set forth detailed and specific reasons for believing that plaintiff is ineligible to recover no-fault benefits because plaintiff fails to meet applicable state and local licensing requirements (see Insurance Department Regulations [11 NYCRR] § 65-3.16 [a] [12]; State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313 [2005]). As defendant’s motion papers were sufficient to establish that special circumstances exist which warrant disclosure of plaintiff’s tax documents at issue (see CPLR 3101; One Beacon Ins. Group, LLC v Midland Med. Care, P.C., 54 AD3d 738 [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]; Statewide Med. Servs., P.C. v Travelers Ins. Co., 13 Misc 3d 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]), the order, insofar as appealed from, is affirmed.

Pesce, P.J., Weston and Rios, JJ., concur.
Decision Date: October 27, 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

Upheld compelled disclosure of the provider's tax documents because the insurer gave detailed, specific reasons to believe the provider failed licensing requirements, establishing special circumstances.

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. One decision in other departments that cites or is cited by this one is on the full map.

Cited in this decision

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

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).
One Beacon Ins. Group, LLC v Midland Med. Care, P.C. (2008 NY Slip Op 06813) FollowedThe insurers raised a triable issue of fraudulent incorporation despite evidence of physician ownership and oversight of the provider.
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.
Statewide Med. Acupuncture Servs., PC v Travelers Ins. Co. (2005 NY Slip Op 51773(U))The insurer's incorporation-fraud allegations lacked a reliable foundation for compelling depositions of the providers' owner and acupuncturists.

Similar decisions

62-41 Woodhaven Med., P.C. v Adirondack Ins. Exch. (2011 NY Slip Op 50026(U))The insurer's specific licensing concerns established special circumstances warranting disclosure of the provider's tax records.
Q-B Jewish Med. Rehabilitation, P.C. v Allstate Ins. Co. (2012 NY Slip Op 50152(U))The insurer's specific reasons to question the provider's licensing compliance supported discovery of its financial and tax records.
VE Med. Care, P.C. v Auto One Ins. Co. (2012 NY Slip Op 50571(U))The insurer established grounds to amend its answer to assert fraudulent incorporation and obtain the provider's tax documents.
Queens Brooklyn Med. Rehab, P.C. v New York Cent. Mut. Fire Ins. Co. (2011 NY Slip Op 50978(U))The provider's appeal from a conditional discovery order became academic after a subsequent order dismissed the action.
Jamaica Dedicated Med. Care, P.C. v Allstate Ins. Co. (2013 NY Slip Op 51745(U))The insurer justified discovery on provider licensing eligibility, and the provider's certificate of readiness incorrectly stated discovery was complete.