SUPREME COURT OF THE STATE OF NEW YORK

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

Appeal from an order of the Civil Court of the City of New York, Queens County (Diane A. Lebedeff, J.), entered April 3, 2008. The order, insofar as appealed from, (1) granted plaintiff’s motion to strike defendant’s answer pursuant to CPLR 3126 only to the extent of directing defendant to respond to plaintiff’s demand for written interrogatories and for discovery and inspection within 60 days of the date of the order or be precluded from offering or soliciting evidence at trial; (2) granted defendant’s cross motion, which sought to compel plaintiff to produce its owner, Valentina Anikeyeva, for a deposition and to provide discovery, to the extent of directing plaintiff to respond to items 1-3, 6, 8, 10, 11 and 14 of defendant’s supplemental demand for discovery and inspection, and (3) stated that defendant “reserves [its] right to re-notice owner for EBT.”

Order, insofar as appealed from, modified by providing that defendant’s cross motion to compel discovery is denied; as so modified, affirmed without costs.

In this action by a provider to recover assigned first-party no-fault benefits, the Civil Court granted plaintiff’s motion to strike defendant’s answer pursuant to CPLR 3126 to the extent of compelling defendant to respond to plaintiff’s demands for written interrogatories and for discovery and inspection within 60 days or be precluded from offering or soliciting evidence at trial. The court also granted defendant’s cross motion to compel a deposition and responses to discovery demands to the extent of compelling plaintiff to respond to items 1-3, 6, 8, 10, 11 and 14 of defendant’s supplemental demand for discovery and inspection. The court further stated that defendant “reserves [its] right to re-notice owner for EBT.”

Although plaintiff contends that the court erred when it failed to strike defendant’s answer due to defendant’s failure to provide responses to plaintiff’s discovery demands, “striking [a [*2]pleading] is inappropriate absent a clear showing that the failure to comply with discovery demands is willful, contumacious, or in bad faith” (Conciatori v Port Auth. of NY & N.J., 46 AD3d 501, 504 [2007]; see Espinal v City of New York, 264 AD2d 806 [1999]). In our view, plaintiff failed to make such a “clear showing” (Conciatori, 46 AD3d at 504). Accordingly, contrary to plaintiff’s contention, the record does not support “the extreme relief requested by the plaintiff[]” (id.).

However, plaintiff correctly argues that the Civil Court erred when it ordered plaintiff to respond to specified items set forth in defendant’s supplemental demand for discovery and inspection. By cross-moving to compel responses to its supplemental demand for discovery and inspection on the same day as it served said supplemental demand, defendant failed to give plaintiff an opportunity to respond to the supplemental demand or to object thereto. Indeed, defendant cross-moved before plaintiff even received the supplemental demand. As a result, defendant’s cross motion should have been denied as premature (see Sagiv v Gamache, 26 AD3d 368 [2006]).

Plaintiff further argues that defendant is not entitled to a deposition of plaintiff’s owner, Valentina Anikeyeva. We note that the Civil Court did not compel plaintiff to produce her for a deposition. In any event, under the facts of this case, such a contention lacks merit (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]).

Pesce, P.J., Weston and Steinhardt, JJ., concur.
Decision Date: July 31, 2009

SUPREME COURT OF THE STATE OF NEW YORK

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

Appeal from an order of the Civil Court of the City of New York, Kings County (Genine D. Edwards, J.), entered April 19, 2007, deemed from a judgment entered July 2, 2007 (see CPLR 5501 [c]). The judgment, entered pursuant to the April 19, 2007 order granting plaintiff’s motion for summary judgment, awarded plaintiff the principal sum of $4,267.13.

Judgment reversed without costs, so much of the order entered April 19, 2007 as granted plaintiff’s motion for summary judgment upon its claims pertaining to assignors Natasha Wright and Junior Ford vacated, said branches of plaintiff’s motion for summary judgment denied without prejudice, and matter remitted to the Civil Court for the calculation of statutory interest and attorney’s fees upon the $428.56 claim pertaining to assignor Steven Stryr.

Plaintiff commenced the instant action to recover first-party no-fault benefits assigned to it by Natasha Wright, Junior Ford and Steven Stryr. By order dated April 19, 2007, the Civil Court granted plaintiff’s motion for summary judgment, and this appeal ensued. The appeal is deemed to be from the judgment that was subsequently entered pursuant to the April 19, 2007 order (see CPLR 5501 [c]).

Contrary to plaintiff’s contention, the subject order was not entered upon defendant’s default inasmuch as the CPLR 2219 (a) recitation states that the court considered defendant’s opposing papers (see CPLR 2219 [a]; Mitchell v Sebrew, 17 Misc 3d 137[A], 2007 NY Slip Op 52301[U] [App Term, 2d & 11th Jud Dists 2007]; A.B. Med. Servs PLLC v New York Cent. Mut. Fire Ins. Co., 6 Misc 3d 133[A], 2005 NY Slip Op 50115[U] [App Term, 2d & 11th Jud Dists 2005]).

Defendant contends on appeal, as it did before the Civil Court, that plaintiff’s motion for [*2]summary judgment was made in violation of a previously ordered stay issued by the Supreme Court, Nassau County (Brennan, J.). Upon a review of the order issued by Justice Brennan, which was appended to defendant’s opposition papers, we find that the order barred plaintiff from moving for summary judgment upon plaintiff’s claims pertaining to assignors Natasha Wright and Junior Ford (see A.T. Med., P.C. v State Farm Ins. Co., 19 Misc 3d 138[A], 2008 NY Slip Op 50875[U] [App Term, 2d & 11th Jud Dists 2008]). Consequently, plaintiff’s motion for summary judgment is denied without prejudice with respect to these claims.

However, inasmuch as the stay is inapplicable to claims pertaining to assignor Steven Stryr, the stay did not bar the branch of plaintiff’s motion which sought summary judgment upon the $428.56 claim to recover assigned first-party no-fault benefits for services rendered to Stryr. As the sole argument raised on appeal by defendant concerns the stay issued by Justice Brennan, defendant failed to establish that plaintiff was not entitled to summary judgment upon the $428.56 claim pertaining to Stryr.

Accordingly, the judgment is reversed, so much of the order entered April 19, 2007 as granted plaintiff’s motion for summary judgment upon its claims pertaining to assignors Natasha Wright and Junior Ford is vacated, said branches of plaintiff’s motion for summary judgment are denied without prejudice, and the matter is remitted to the Civil Court for the calculation of statutory interest and an assessment of attorney’s fees due on plaintiff’s claim for $428.56, pertaining to assignor Steven Stryr, pursuant to Insurance Law § 5106 (a) and the regulations promulgated thereunder.

Pesce, P.J., Weston and Steinhardt, JJ., concur.
Decision Date: July 31, 2009

SUPREME COURT OF THE STATE OF NEW YORK

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

Appeal from an order of the Civil Court of the City of New York, Kings County (Lila Gold, J.), entered July 20, 2007. The order granted so much of defendant’s motion as sought to disqualify Gary Tsirelman, Esq., and Gary Tsirelman, P.C. from representing plaintiff in this action.

Order affirmed without costs.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff appeals from an order of the Civil Court which granted so much of a motion by defendant as sought to disqualify Gary Tsirelman, Esq., and Gary Tsirelman, P.C. from representing plaintiff in this action.

“Whether counsel should be allowed to act as both attorney and witness is a matter addressed to the sound discretion of the court. . . In a disqualification situation any doubt is to be resolved in favor of disqualification” (Solomon v New York Prop. Ins. Underwriting Assn., 118 AD2d 695, 695-696 [1986] [citations omitted]). In the instant case, Gary Tsirelman is both counsel to and sole owner of plaintiff medical provider, and defendant has raised an issue of fact as to whether plaintiff is eligible to receive reimbursement of first-party no-fault benefits (see State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313 [2005]). In light of defendant’s showing that Tsirelman will almost certainly be called as a witness, and that the ultimate determination may well hinge in part on his credibility, the Civil Court properly disqualified Gary Tsirelman, Esq., and Gary Tsirelman, P.C. from representing plaintiff in this action (see Code of Professional Responsibility DR 5-102 [22 NYCRR 1200.21], now Rules of Professional Conduct rule 3.7 [22 NYCRR 1200.29]; Luk Lamellen u. Kupplungsbau GmbH v Lerner, 167 AD2d 451, 452 [1990]; Solomon, 118 AD2d 695). [*2]

Pesce, P.J., Weston and Steinhardt, JJ., concur.
Decision Date: July 29, 2009

SUPREME COURT OF THE STATE OF NEW YORK

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

Appeal from an order of the Civil Court of the City of New York, Kings County (Loren Baily-Schiffman, J.), entered February 28, 2008. The order denied plaintiff’s motion for summary judgment.

Order reversed without costs, plaintiff’s motion for summary judgment granted and matter remitted to the Civil Court for the calculation of statutory interest and an assessment of attorney’s fees.

In this action by a provider to recover assigned first-party no-fault benefits, the Civil Court denied plaintiff’s motion for summary judgment, holding that there are questions of fact as to whether plaintiff’s assignor is an innocent third party or was involved in, or had knowledge of, the identity theft which resulted in defendant’s issuance of the automobile insurance policy. The instant appeal by plaintiff ensued.

While defendant contends that plaintiff is not entitled to summary judgment because the insurance policy was obtained fraudulently as a result of identity theft, the record is bereft of any evidence that plaintiff’s assignor participated in or was aware of such a fraudulent scheme (cf. A.B. Med. Servs. PLLC v Commercial Mut. Ins. Co., 12 Misc 3d 8 [App Term, 2d & 11th Jud Dists 2006]). Since defendant did not cancel the insurance policy prior to the accident (see Vehicle and Traffic Law § 313), defendant failed to demonstrate the existence of an issue of fact so as to defeat plaintiff’s motion for summary judgment (see Matter of Metlife Auto & Home v Agudelo, 8 AD3d 571 [2004]; D.A.V. Chiropractic, P.C. v GEICO Indem. Co., 21 Misc 3d 138[A], 2008 NY Slip Op 52304[U] [App Term, 9th & 10th Jud Dists 2008]; cf. A.B. Med. Servs. PLLC, 12 Misc 3d 8). Accordingly, the order is reversed, plaintiff’s motion for summary judgment is granted, and the matter is remitted to the Civil Court for the calculation of statutory [*2]interest and an assessment of attorney’s fees pursuant to Insurance Law § 5106 (a) and the regulations promulgated thereunder.

Pesce, P.J., Weston and Steinhardt, JJ., concur.
Decision Date: July 29, 2009

SUPREME COURT OF THE STATE OF NEW YORK

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

Appeal from an order of the Civil Court of the City of New York, Kings County (Kathryn E. Freed, J.), entered April 4, 2007, deemed from a judgment of the same court entered June 20, 2007 (see CPLR 5501 [c]). The judgment, entered pursuant to the April 4, 2007 order granting plaintiff’s motion for summary judgment, awarded plaintiff the principal sum of $578.90.

Judgment reversed without costs, order granting plaintiff’s motion for summary judgment vacated and plaintiff’s motion for summary judgment denied.

In this action by a provider to recover assigned first-party no-fault benefits, defendant appeals from an order of the Civil Court granting plaintiff’s motion for summary judgment. The appeal is deemed to be from the judgment that was subsequently entered pursuant to the order (see CPLR 5501 [c]).

Since plaintiff’s motion for summary judgment was supported by an affidavit of an employee of a third-party billing company which failed to comply with CPLR 4518, plaintiff failed to make a prima facie showing of its entitlement to summary judgment (see Art of Healing Medicine, P.C. v Travelers Home & Mar. Ins. Co., 15 Misc 3d 144[A], 2007 NY Slip Op 51161[U] [App Term, 2d & 11th Jud Dists, 2007], affd 55 AD3d 644 [2008]; Andrew Carothers, M.D., P.C. v GEICO Indem. Co., ___ Misc 3d ___, 2009 NY Slip Op 29155 [App Term, 2d, 11th & 13th Jud Dists 2009]; 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 Dists 2006]). Consequently, plaintiff’s motion for summary judgment should have been denied.

In light of the foregoing, we reach no other issue.

Pesce, P.J., Weston and Steinhardt, JJ., concur.
Decision Date: July 24, 2009

SUPREME COURT OF THE STATE OF NEW YORK

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

Appeal from an order of the Civil Court of the City of New York, Kings County (Alice Fisher Rubin, J.), entered July 10, 2007. The order granted defendant’s motion for summary judgment dismissing the complaint and denied plaintiff’s cross motion seeking summary judgment and sanctions.

Order modified by providing that defendant’s motion for summary judgment is denied; as so modified, affirmed without costs.

In this action by a provider to recover assigned first-party no-fault benefits, plaintiff appeals from an order of the Civil Court which granted defendant’s motion for summary judgment dismissing the complaint and denied plaintiff’s cross motion seeking summary judgment and sanctions.

The affidavits proffered by defendant in support of its motion for summary judgment were executed out of state. Although the affidavits were accompanied by documents that purported to be certificates of conformity, the certificates did not comply with Real Property Law § 299-a and, thus, the affidavits did not comply with CPLR 2309 (c) (see Ford Motor Credit Co. v Prestige Gown Cleaning Serv., 193 Misc 2d 262 [2002]). Since this defect was duly objected to by plaintiff in the Civil Court, defendant failed to introduce competent evidence in admissible form establishing its entitlement to summary judgment (see Impulse Chiropractic, P.C. v New York Cent. Mut. Fire Ins. Co., 19 Misc 3d 127[A], 2008 NY Slip Op 50498[U] [App Term, 2d & 11th Jud Dists 2008]). Consequently, defendant’s motion for summary judgment should have been denied (id.).

Contrary to plaintiff’s contention, plaintiff’s cross motion for summary judgment was properly denied. Plaintiff failed to establish that its billing records constituted evidence in admissible form pursuant to CPLR 4518 (see Art of Healing Medicine, P.C. v Travelers Home & Mar. Ins. Co., 55 AD3d 644 [2008]; Dan Med., P.C. v New York Cent. Mut. Fire Ins. Co., 14 Misc 3d 44 [App Term, 2d & 11th Jud Dists 2006]; Midborough Acupuncture, P.C. v New York Cent. Mut. Fire Ins. Co., 13 Misc 3d 132[A], 2006 NY Slip Op 51879[U] [App Term, 2d [*2]& 11th Jud Dists 2006]). Plaintiff’s remaining contentions lack merit.

Pesce, P.J., Weston and Steinhardt, JJ., concur.
Decision Date: July 24, 2009

APPELLATE TERM OF THE SUPREME COURT, FIRST DEPARTMENT

Defendant appeals from an order of the Civil Court of the City of New York, Bronx County (Ben R. Barbato, J.), dated May 17, 2007, which denied its motion to dismiss plaintiff’s action as time barred.

Per Curiam.

Order (Ben R. Barbato, J.), dated May 17, 2007, affirmed, without costs.

Assuming, without deciding, that defendant qualifies as a self-insurer, plaintiff’s action for first party no-fault benefits is governed by a six-year statute of limitations (see Richard Denise, MD, P.C. v New York City Trans. Auth., appeal numbered 07-308, decided herewith), and was thus timely commenced.

THIS CONSTITUTES THE DECISION AND ORDER OF THE COURT.
Decision Date: July 22, 2009

SUPREME COURT OF THE STATE OF NEW YORK

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

Appeal from an order of the Civil Court of the City of New York, Queens County (Diane A. Lebedeff, J.), entered October 6, 2008. The order, insofar as appealed from, granted the branches of defendant’s motion seeking to amend the answer to include the defense of fraudulent incorporation and to compel plaintiff to produce its owner, Valentina Anikeyeva, for a deposition.

Appeal dismissed.

In this action by a provider to recover assigned first-party no-fault benefits, the Civil Court, by order entered October 6, 2008, granted defendant leave to amend the answer to include the defense of fraudulent incorporation and directed plaintiff to produce its owner, Valentina Anikeyeva, for a deposition within 60 days of the order. The order also stated that plaintiff’s failure to produce its owner for the deposition would result in dismissal. Plaintiff appeals from the order entered October 6, 2008.

Subsequent to the entry of the order appealed from, the Civil Court, upon an application by defendant which plaintiff opposed, entered an order dismissing the complaint with prejudice due to plaintiff’s failure to comply with the October 6, 2008 order. A judgment was entered pursuant thereto on April 10, 2009.

The appeal must be dismissed because the right of direct appeal from the October 6, 2008 order terminated with the entry of judgment in this action (see Matter of Aho, 39 NY2d 241, 248 [1976]).

Weston, J.P., Rios and Steinhardt, JJ., concur.
Decision Date: July 20, 2009

SUPREME COURT OF THE STATE OF NEW YORK

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

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

[*1]

Supreme Court, Appellate Term, Second Department, July 20, 2009

APPEARANCES OF COUNSEL

Law Office of Alden Banniettis, Brooklyn (Jeff Henle of counsel), for appellant. Bruno, Gerbino & Soriano, LLP, Melville (Charles W. Benton of counsel), for respondent.

{**25 Misc 3d at 40} OPINION OF THE COURT

Memorandum.

Judgment affirmed without costs.

In this action by a provider to recover assigned first-party no-fault benefits, defendant argued at trial that there was no coverage for plaintiff’s assignor’s alleged injuries because the injuries were not sustained in a covered accident. Following the nonjury trial, the Civil Court dismissed the complaint, finding that defendant had sustained its burden of proving lack of coverage by a preponderance of the evidence. On appeal, plaintiff contends that defendant had to prove, by clear and convincing evidence, rather than by a mere preponderance of the evidence, that the alleged injuries were the result of an insurance fraud scheme. Plaintiff further argues that even if the Civil Court correctly determined that defendant’s burden could be satisfied by defendant proving its defense by a mere preponderance of the evidence, the evidence presented by defendant was insufficient to satisfy this burden.

In its decision, the Civil Court noted that, while an insurer may put forth evidence of a fraudulent scheme in order to prove that a collision was not an accident, the insurer need not prove fraud (see Matter of Eagle Ins. Co. v Davis, 22 AD3d 846 [2005]). As stated in the court’s decision,

“courts commonly invoke the term ‘fraud’ when discussing the defense of lack of coverage; this may be because so many cases involving allegedly noncovered incidents center on accidents purportedly staged for the purpose of generating fraudulent insurance claims . . . Perhaps the seminal embodiment of this formulation is the Second Department’s pronouncement [in State Farm Mut. Auto. Ins. Co. v Laguerre (305 AD2d 490, 491 [2003])] that ‘[a] deliberate collision caused in furtherance of an insurance fraud scheme is not a covered accident’ ” (V.S. Med. Servs., P.C. v Allstate Ins. Co., 11 Misc 3d 334, 339 [2006]).

However, explained the Civil Court, “it does not matter whether the accident was staged in furtherance of an insurance fraud scheme or was deliberately caused under some other [*2]circumstances” (id. at 335). Rather, the court need only determine “whether the incident was unintentional (i.e., a true accident) or whether at least one driver intended to make contact (i.e., a deliberate event)” (id. at 340). This is because “[i]f the collision{**25 Misc 3d at 41} was an intentional occurrence, then it is outside the scope of the no-fault policy regardless of why or how it occurred or who was behind it” (id. at 341). We agree with the Civil Court’s reasoning regarding this issue.

In Fair Price Med. Supply Corp. v Travelers Indem. Co. (42 AD3d 277, 284 [2007], affd 10 NY3d 556 [2008]), the Appellate Division explained that “[w]hat excuses the insurer’s compliance with the 30-day rule in a staged-accident case is not the egregiousness of the fraud; rather, it is the absence of coverage for something that is not an ‘accident.’ ” As noted by the Appellate Division, “[t]he rationale for such [a] holding[ ] is that a deliberate collision that is caused in furtherance of an insurance fraud scheme is simply not an ‘accident’ covered by the subject insurance policy” (id. at 283). Thus, in the case at bar, defendant could properly premise its defense upon a lack of coverage and could establish this defense by a preponderance of the evidence; defendant was not required to establish that the subject collision was the product of fraud, which would require proof of all of the elements of fraud, including scienter (see Apollo H.V.A.C. Corp. v Halpern Constr., Inc., 55 AD3d 855 [2008]), by clear and convincing evidence (see Simcuski v Saeli, 44 NY2d 442 [1978]; Hutt v Lumbermens Mut. Cas. Co., 95 AD2d 255 [1983]). Upon a review of the record, we agree with the Civil Court’s determination that defendant’s proof, which plaintiff failed to rebut, established by a preponderance of the evidence its defense of lack of coverage (see Praimnath v Torres, 59 AD3d 419 [2009]). Accordingly, the judgment is affirmed.

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