The failure of an assignor to appear for an EBT is not a basis for a 3126 sanction against the assigneeDecember 20, 2009

Mia Acupuncture, P.C. v Mercury Ins. Co., 2009 NY Slip Op 29509 (App. Term 2d Dept. 2009)

In this case and the other joined cases, the insurance carrier moved to compel the deposition of the assignor under penalties of a CPLR Section 3126 sanction.  The underlying defense involved an allegation of the making of material misrepresentations when the insurance policy was procured.  The Appellate Term stated the following:

“By its terms, the CPLR 3126 (3) dismissal sanction is applicable only to the disclosure violations of parties, not nonparties (see Siegel, NY Prac § 367 [4th ed]). By virtue of their assignment of no-fault benefits to their providers, eligible injured persons have divested themselves of their interest in those benefits, and they are not parties to actions commenced by their assignees (see e.g. Leon v Martinez, 84 NY2d 83, 88 [1994]; Cardtronics, LP v St. Nicholas Beverage Discount Ctr., Inc., 8 AD3d 419, 420 [2004]; 6A NY Jur 2d, Assignments §§ 59, 85). Similarly, a provider’s party status cannot be imputed to the assignor by virtue of an assignment. Thus, since plaintiff’s assignor is not an officer, member or employee of plaintiff or otherwise under plaintiff’s control, the Civil Court properly denied the motion for sanctions as against plaintiff pursuant to CPLR 3126,  (Connors, Practice Commentaries, McKinney’s Cons Laws of [*2]NY, Book 7B, CPLR C3101:20; see Doelger, Inc. v L. Fatato, Inc., 7 AD2d 1003 [1959]; National Bank of N. Hudson v Kennedy, 223 App Div 680 [1928]…”)

What is intriguing is that there are plenty of decisions that hold otherwise, and many of these cases were presented in my briefs in MIA Acupuncture and the other joined cases.  While I won’t rewrite my brief, here are some of the cases that were presented in my briefs:   Furniture Fantasy Inc. v. Cerrone, 154 AD2d 506 (2d Dept. 1989); Allstate Ins. Co. v. Caggiano, 7 Misc.3d 135(A)(App. Term 2d Dept. 2005); Shapiro Bros. Factors v. Moskowitz, 33 NYS2d 67 (App. Term 1st Dept. 1941); Collins v. Jamestown Mut. Ins. Co., 56 Misc.2d 964 (Sup. Ct. Schoharie County 1968), aff’d, 32 AD2d 725 (3d Dept. 1969); NY & Presbyterian Hosp. v. Safeco Ins. Co., 2007 NY Slip Op 32774(u)(Sup. Ct. New York Co. 2007); Dannenberg v. General Ins. Co. of America, 198 NYS.2d 533 (Sup. Ct. NY. Co. 1960).

Perhaps a reader of this blog will take this cause up to the First Department?