July 20, 2009

Sharma Med. Servs., P.C. v Progressive Cas. Ins. Co. (2009 NY Slip Op 51591(U))

Headnote

The main issues in this case were whether a provider was entitled to recover assigned first-party no-fault benefits, and whether the defendant insurance company was entitled to a deposition of the owner of the plaintiff corporation. The court considered the defendant's motion to dismiss the complaint due to the plaintiff's inadequate response to discovery demands and failure to produce its owner for a deposition. The main holding of the case was that the defendant was entitled to a deposition of the plaintiff's owner, as the defendant had set forth reasons for believing that the plaintiff may be ineligible to recover benefits as a fraudulently incorporated professional service corporation. The court reversed the order denying the defendant's motion to dismiss the complaint and granted the defendant's motion to direct the plaintiff to produce its owner for a deposition within 60 days.

Reported in New York Official Reports at Sharma Med. Servs., P.C. v Progressive Cas. Ins. Co. (2009 NY Slip Op 51591(U))

Sharma Med. Servs., P.C. v Progressive Cas. Ins. Co. (2009 NY Slip Op 51591(U)) [*1]

Sharma Med. Servs., P.C. v Progressive Cas. Ins. Co.

2009 NY Slip Op 51591(U) [24 Misc 3d 139(A)]

Decided on July 20, 2009

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This opinion is uncorrected and will not be published in the printed Official Reports.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 July 20, 2009

SUPREME COURT OF THE STATE OF NEW YORK

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

PRESENT: : WESTON, J.P., RIOS and STEINHARDT, JJ
2008-668 K C.

Sharma Medical Services, P.C. as assignee of JANELLA ADAMS, MARA ALPIN, RAMON BRAVO, COLIN CAMPBELL and JOSEPH D’AMBROSIO, Respondent,
against
Progressive Casualty Insurance Company, Appellant.

Appeal from an order of the Civil Court of the City of New York, Kings County (Lila Gold, J.), entered January 10, 2008. The order denied defendant’s motion to dismiss the complaint and granted plaintiff’s cross motion for a protective order.

Order reversed without costs, plaintiff’s cross motion for a protective order denied and defendant’s motion to dismiss the complaint granted to the extent of directing plaintiff to produce its owner, Perumunda K. Sharma, for a deposition within
60 days of the date of the order entered hereon, or on such other date to which the parties shall agree.

In this action by a provider to recover assigned first-party no-fault benefits, defendant moved to dismiss the complaint pursuant to CPLR 3126 due to plaintiff’s inadequate response to defendant’s discovery demands and plaintiff’s failure to produce its owner, Perumunda K. Sharma (Sharma), for a deposition. Plaintiff opposed the motion and cross-moved for a protective order. The Civil Court denied defendant’s motion, finding that defendant had failed to submit sufficient factual evidence to establish its entitlement to an order compelling the deposition of Sharma, and granted plaintiff’s cross motion for a protective order. This appeal by defendant ensued.

The record reveals that defendant set forth detailed and specific reasons for believing that plaintiff may be ineligible to recover no-fault benefits as a fraudulently incorporated professional service corporation (see State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313 [2005]). Consequently, defendant is entitled to a deposition of Sharma, plaintiff’s owner (see CPLR 3101 [a]; see also Midwood Acupuncture, P.C. v State Farm Fire and Casualty Company, 21 Misc 3d 144[A], 2008 NY Slip Op 52468[U] [App Term, 2d & 11th Jud Dists 2008]). Accordingly, plaintiff’s cross motion for a
protective order is denied and defendant’s motion to dismiss the complaint pursuant to CPLR [*2]3126 is granted to the extent of directing plaintiff to produce its owner, Sharma, for an examination before trial.
Weston, J.P., Rios and Steinhardt, JJ., concur.
Decision Date: July 20, 2009