Laches may prove fatal to opposing a summary judgment motion based upon CPLR 3212 (f)

Stoian v. Reed, 2009 NY Slip Op 07713 (3d Dept. 2009)

“We also reject plaintiffs’ assertion that Supreme Court abused its discretion in failing to grant them additional time with which to conduct discovery. Although the court had the discretion to permit further discovery if it found that “facts essential to justify opposition [to a motion for summary judgment] may exist but cannot then be stated” (CPLR 3212 [f])…

“[g]iven the fact that plaintiffs provide no reasonable excuse for delaying their request for additional discovery for over two years following depositions and, indeed, nearly six years after commencing this action, we find no abuse of discretion in Supreme Court’s decision to deny plaintiffs’ request (see Dalaba v City of Schenectady, 61 AD3d 1151, 1153 [2009]).”

An angry Appellate Division strikes a complaint based upon discovery violations

Northfield Ins. Co. v Model Towing & Recovery
2009 NY Slip Op 04878 (2d Dept 2009).

While this case represents nothing unique, the path the Appellate Division took was. The facts, as relayed to the reader, are that the following discovery orders were in place and in some way were violated:

1. Preliminary conference (7/28/05)- discovery was ordered to be completed prior to the Compliance Conference (12/19/06) .

2. Compliance conference (12/19/06) – discovery was ordered to be completed by 2/14/07.

3. There were various status conferences in between the dates of 2/14/07 and 12/12/07.

4. At the 12/12/07 status conference, discovery was ordered to be completed on or before 1/16/08.

5. Discovery was not completed on 1/16/08 .

6. A motion was interposed based upon the failure to comply with the 1/16/08 order. The Court in this order set forth a discovery schedule, and stated that it was to be obeyed under penalty of a 3126 remedy, upon a subsequent motion. In English, it looked as if the violation of this order would result in a conditional order of preclusion or a conditional order of dismissal.

Excluding status conferences and the P.C. order, there were 2 orders. Moreover, only one resulting order was the result of a motion made on notice.

The Defendant appealed the 1/16/08 order on the basis that the Court should have stricken the complaint. What happened next is something that is very rarely seen in downstate New York practice: The Appellate Division reversed the order of Supreme Court and struck the complaint.

Now for those of us who have practiced in Supreme Kings (my favorite example) as defendants and have had the opportunity to make discovery based motions in CCP, you will observe that it is almost impossible to obtain an order containing conditional preclusion or dismissal language, let alone an order that will unconditionally strike the complaint. Almost 10 discovery orders can be violated and a conditional order of dismissal, conditional order of preclusion or an absolute order of preclusion or dismissal will never occur. That is life, and we accept it because when these orders get appealed, the Appellate Division will usually not find an abuse of discretion and affirm the order of the Supreme Court, with the Defendant paying one bill of costs and disbursements to the recalcitrant Plaintiff.

Here, there were 3 disobeyed orders (including the P.C. order) and some status conferences that appeared to be disregarded. The Appellate Division, on appeal, reversed Supreme Court and struck the complaint. Since the SOL probably expired, the dismissal order was with prejudice. My question is as follows: are we going to see this type of vigilance in other cases, or is this case just an anomaly?

EBT’s in no fault practice – “laches does not apply”

Queens Chiropractic Mgt., P.C. v Country Wide Ins. Co. 2009 NY Slip Op 51073(U)(App. Term 2d Dept. 2009).

In yet another defeat to the Plaintiff’s bar in no-fault actions in the Second Department, the Appellate Term has now held that the passage of time will not in and of itself act to waive the right of an insurance carrier seeking to take an EBT of the Plaintiff.

While the facts do not state it, an EBT in no-fault is conditioned on the EBT not being palpably improper, which outside the corporate structure world, would mean that the insurance carrier has presumably presented proof of a timely and valid denial. The case law has already discussed this point.

This decision, as many know, is in contrast to Accurate Medical, P.C. v. Travelers Ins. Co. 13 Misc.3d 133(A)(App. Term 1st Dept. 2006), which held that:

“the record reveals that defendant served plaintiff with a notice of deposition and written discovery demands in August 2004. Defendant did not object to plaintiff’s written interrogatories nor did it avail itself of the opportunity to conduct plaintiff’s deposition prior to plaintiff filing a notice of trial in April 2006. Under these circumstances, and in view of defendant’s failure to show the need to conduct a deposition, the motion to vacate the notice of trial was properly denied.”

Accurate Medical did not cite to any authority for its rule of law, whereas the Queens Chiropractor Court cited to Kornblatt v Jaguar Cars, 172 AD2d 590 (2d Dept. 1991). The pertinent section of Kornblatt states the following:

“Finally, the plaintiff’s invocation of laches to prevent the production of the records lacks merit. In a deposition on March 9, 1988, JCI had requested the tax returns, but the plaintiff refused. Possessing the knowledge that JCI wanted the returns, then, any prejudice suffered by the plaintiff a year later when the court compelled their production was of his own making, and he cannot now complain.”

Yet, a reading of Kornblatt shows that a party resisting an EBT demand can assert laches, provided he or she demonstrates prejudice. But, it is hard to imagine how a showing of “prejudice” would be proved in a majority of litigated no-fault cases.

EBT's in no fault practice – "laches does not apply"

Queens Chiropractic Mgt., P.C. v Country Wide Ins. Co. 2009 NY Slip Op 51073(U)(App. Term 2d Dept. 2009).

In yet another defeat to the Plaintiff’s bar in no-fault actions in the Second Department, the Appellate Term has now held that the passage of time will not in and of itself act to waive the right of an insurance carrier seeking to take an EBT of the Plaintiff.

While the facts do not state it, an EBT in no-fault is conditioned on the EBT not being palpably improper, which outside the corporate structure world, would mean that the insurance carrier has presumably presented proof of a timely and valid denial. The case law has already discussed this point.

This decision, as many know, is in contrast to Accurate Medical, P.C. v. Travelers Ins. Co. 13 Misc.3d 133(A)(App. Term 1st Dept. 2006), which held that:

“the record reveals that defendant served plaintiff with a notice of deposition and written discovery demands in August 2004. Defendant did not object to plaintiff’s written interrogatories nor did it avail itself of the opportunity to conduct plaintiff’s deposition prior to plaintiff filing a notice of trial in April 2006. Under these circumstances, and in view of defendant’s failure to show the need to conduct a deposition, the motion to vacate the notice of trial was properly denied.”

Accurate Medical did not cite to any authority for its rule of law, whereas the Queens Chiropractor Court cited to Kornblatt v Jaguar Cars, 172 AD2d 590 (2d Dept. 1991). The pertinent section of Kornblatt states the following:

“Finally, the plaintiff’s invocation of laches to prevent the production of the records lacks merit. In a deposition on March 9, 1988, JCI had requested the tax returns, but the plaintiff refused. Possessing the knowledge that JCI wanted the returns, then, any prejudice suffered by the plaintiff a year later when the court compelled their production was of his own making, and he cannot now complain.”

Yet, a reading of Kornblatt shows that a party resisting an EBT demand can assert laches, provided he or she demonstrates prejudice. But, it is hard to imagine how a showing of “prejudice” would be proved in a majority of litigated no-fault cases.

A plain disaster

A.M. Med. Servs., P.C. v GEICO Ins. Co.
2009 NY Slip Op 51029(U)(App. Term 2d Dept. 2009)

Simply put, you have to read this case. It looks to be a real disaster. Three points of law seem to come from this case.

First, if you have an order that conditionally dismisses or precludes a party should an EBT not be performed on or before a certain date, the party wishing to give effect to that order needs to follow the Appellate Term’s Fogel decision. Yes Fogel.

The Appellate Term has previously applied Fogel, in a 5102(d) action, when it denied an EBT dismissal motion on the basis that the Defendant failed to offer evidence from someone with personal knowledge that EBT was attempted to be scheduled and did not occur. It is the same principle here or even in EUO cases. You need to obtain an affidavit from someone with personal knowledge that the EUO did not occur. This could be from a calendar clerk or attorney, provided the right foundation is laid in the affidavit or affirmation. That was probably missing in this case.

Second, late papers will be accepted provided there is no prejudice. The effect of this is self explanatory.

Third, Golia’s dissent is priceless and explains why we now have a different crop of attorneys (on both sides) fighting the appellate wars. I will leave it at that.

Some newer cases

It has been a real quiet few months in our world of law. Nothing too substantial has come out recently. There have been some procedural cases, which have an effect on all areas of law. Here are some of the cases I have found which have interesting overtones to them:

Stipulation of discontinuance with prejudice = presumption of res judicata

Support Billing & Mgt. Co. v State Farm Mut. Ins. Co.
2008 NYSlipOp 52226(U)(App. Term 2d Dept. 2008)

“A stipulation of discontinuance which specifies that it is “with prejudice” raises a presumption that the stipulation is to be given res judicata effect in future litigation on the same cause of action”

Discovery on a precluded defense requires proof of a timely denial – timely denial means more than it being facially timely…

Corona Hgts. Med., P.C. v State Farm Mut. Auto. Ins. Co.
2008 NYSlipOp 52185(U)(App. Term 2d Dept. 2008)

“Where a discovery demand concerns matters relating to a defense which a defendant is precluded from raising, it is palpably improper, notwithstanding the fact that the plaintiff did not specifically object thereto (see A.B. Med. Servs. PLLC, 11 Misc 3d 71). As defendant did not establish that it timely denied plaintiff’s claims, to the extent defendant seeks discovery in support of its defense of lack of medical necessity, discovery of such precluded matter is palpably improper”

Court sanctions more than one discovery device being demanded simulataneously

First Aid Occupational Therapy, PLLC v State Farm Mut. Auto. Ins. Co.

2008 NY Slip Op 51963(U)(App. Term 2d Dept, 2008).

In addition, defendant is entitled to conduct an EBT of plaintiff notwithstanding the fact that defendant also served a demand for discovery and inspection of documents (see Woods v Alexander, 267 AD2d 1060, 1061 [1999]; Iseman v Delmar Med.-Dental Bldg., 113 AD2d 276 [1985]; JMJ Contract Mgt. v Ingersoll-Rand Co., 100 AD2d 291, 293 [1984]).

CCA 1201 – give us a reason for allowing an extraterritorial subpoena

Bronxborough Med., P.C. v Travelers Ins. Co.
21 Misc.3d 21 (App. Term 2d Dept. 2008)

Inasmuch as plaintiff’s moving papers failed to establish that the interests of justice would be served by permitting plaintiff to serve, outside the City of New York and the adjoining counties, a subpoena which would require defendant’s employee to appear at trial, and, in addition, did not set forth the location at which plaintiff sought to serve the subpoena, plaintiff’s motion was properly denied.

Don’t send the peer or IME upon demand – the courts will forgive you, but the DOI probably will not.

Careplus Med. Supply, Inc. v New York Cent. Mut. Fire Ins. Co.

21 Misc.3d 18 (App. Term 2d Dept. 2008)

In response to a provider seeking to preclude an insurance carrier from raising a defense of lack of medical necessity based upon the pre-suit failure to turn over the peer or IME report in accordance with the regulations, the Appellate Term said no so fast…

“The Insurance Department Regulations provide no sanction for an insurer’s failure to provide a peer review report upon the written{**21 Misc 3d at 20}{**21 Misc 3d at 20} request for one by a provider (see e.g. A.B. Med. Servs. PLLC v Clarendon Natl. Ins. Co., 12 Misc 3d 143[A], 2006 NY Slip Op 51415[U] [App Term, 2d & 11th Jud Dists 2006]). While plaintiff urges the court to impose the sanction of preclusion here, we decline to do so because “[h]ad it been the intent of the Department of Insurance” to impose such a sanction, “it would have so provided”

Do not file a notice of trial without obtaining a final order of preclusion or dismissal, etc.

Iscowitz v. County of Suffolk
54 A.D.3d 725 (2d Dept. 2008)

“The plaintiffs waived any objection to the adequacy and timeliness of the disclosure by filing a note of issue and certificate of readiness prior to moving pursuant to CPLR 3126 for the imposition of a discovery sanction

Preclusion – The Appellate Division spells out why we should not sign preclusion stipulations.

Allen v Calleja
2008 NY Slip Op 08685 (2d Dept. 2008)

To warrant preclusion, “the Supreme Court must determine that the offending party’s lack of cooperation with disclosure was willful, deliberate, and contumacious” (Assael v Metropolitan Tr. Auth., 4 AD3d 443, 443; see CPLR 3126[2]; Moog v City of New York, 30 AD3d 490). Such conduct may be found where, for example, a party repeatedly fails to comply with court orders directing it to produce certain discovery without adequate excuses therefor

And when it comes to the inability to invoke “preclusion” based upon a single failure to comply with a conditional order of preclusion (when this was the first discovery order in the case), the Appellate Term, First Department said the following:

Pelham Parkway Neuro & Diagnostic, P.C. v. Liberty Mut. Ins. Co.

16 Misc.3d 130(A)(App. Term 1st Dept. 2007)

In this action to recover assigned first party no-fault benefits, the drastic sanction of precluding defendant from asserting its defense of exhaustion of policy limits was unwarranted in the absence of a showing that defendant’s single failure to comply with the parties’ discovery stipulation was willful and contumacious