Hello from China – we can depose you

Yu Hui Chen v Chen Li Zhi, 2011 NY Slip Op 01267 (2d Dept. 2011)

“Here, the Supreme Court improvidently exercised its discretion in denying the plaintiff’s cross motion for a protective order pursuant to CPLR 3103(a) directing that his deposition be conducted by remote electronic means. The plaintiff demonstrated that traveling from China to the United States for his deposition would cause undue hardship”

Dr. Collins again

RLC Med., P.C. v Allstate Ins. Co., 2010 NY Slip Op 51962(U)(App. Term 2d Dept. 2010)

By virtue of reading these opinions, religiously, for about 7 years, it amazes me that I continually see the same names of doctors who the Appellate Term compels to attend depositions on Mallela related issues.  Dr. Collins has lately become a regular, and this case follows every other RLC medical I have come across lately.

I know through reading thousands of NF-3’s, EMG reports and other testing data, Dr. Collins seems to have been involved in many of these P.C.’s.  I also recall a case a few years back where Dr. Collins was an independent contractor for the one and only A.B. Medical.

The more things change, the more they stay the same.

The spreadsheet was not in admissible form?

Total Family Chiropractic v Mercury Cas. Co., 2010 NY Slip Op 51470(U)(App. Term 2d Dept. 2010)

This was another one that did not necessarily go my way.  By way of explanation, this was a complicated case, where the defense was whether plaintiff assignors made or conspired to make material misrepresentations in the procurement of the insurance policy.

The bills were delayed pending EUO’s of the assignors.  The assignors were coy about admitting that Karoy Brown resided with his soon to be bride, Crystal Franklin Brown.  There were four vehicles that were registered and owned by Crystal Franklin.  Evidence was adduced that a trailer was parked in front of the Franklin residence, which contained lawn mowers and other equipment.  Karoy alleged that he commuted from New Jersey to Patchogue to perform landscaping for a man whose name and number he could not remember.  He worked between 3-5 days per week, for 12 hours per day.  He would always go back home to New Jersey at the end of the day.  Both assignors denied using the vehicles for any commercial purposes.  Karoy had a suspended driver’s license during the relevant time period.  Also, Karoy made a pass at the court reporter after the EUO.  Thank goodness Crystal did not see that.

Evidence was also adduced that Crystal kept logs of  the jobs that were performed.  Both Assignors had cellphones.  Crystal had a lease for her place, and had a landlord.  Other material information was in existence.

The bills were delayed following the EUO in order to obtain this information.  Once obtained, a further investigation would be done, which would shed more light on this case.

Nobody ever complied with the verification requests.

Had the supplied information demonstrated that the vehicles were used for commercial purposes or that Karoy was a resident and used the vehicle, then the claims would have most likely been denied due to the making of material misrepresentations in the procurment of the insurance policy.

Dueling motions for summary judgment were made following commencement of this action.  A spreadsheet was used to log all of the pertinent dates for each bill.  This case was pre-LMK so there were tons of bills for $33.70 and $67.40 flying around out there.

The Court said the following: “In an attempt to establish that the time period in which it had to pay or deny the claims was tolled due to outstanding verification requests, defendant relied upon spreadsheets annexed to the affidavit of its claim representative. However, because the claim representative did not establish that the spreadsheets constituted evidence in admissible form (see CPLR 4518 [a]; People v Kennedy, 68 NY2d 569, 579-580 [1986]; Palisades Collection, LLC v Kedik, 67 AD3d 1329, 1330-1331 [2009]; Speirs v Not Fade Away Tie Dye Co., 236 AD2d 531 [1997]), defendant has not shown that it made timely verification requests.”

The information annexed to the spreadsheets were the dates the bills were received, verifications sent, etc.  All of this information was annexed to the motion itself.  In fact, the motion was about 1000 pages.  The spreadsheet was more or less illustrative.  I mean, I usually put a chart in my motion and put the information in the said chart.  Since there was so much information for each bill, I used a spreadsheet instead of one of my charts in this case.

The affidavit of the claims representative had the standard language that this court previously found to be sufficient to allow the entry of all of the documents into evidence.  The information in the spreadsheet was incorporated by reference.  The case the court cites, Pallisades Collection, involved an assigned credit card debt that Pallisades purchased from Discover.  Pallisades had to establish a business record foundation involving Discover’s business practices, in order to allow the entry of Discover’s data into evidence.

Here, the information was always stored and processed by Mercury.  The affidavit, after laying a foundation for the dates and form of the documents,  said that the spreadhseets annexed to the affidavit memorialized the information pertinent to the claim.  I have to disagree with the court on this one.

Anyway, the moral of the story is this.  If you have information that requires a spreadsheet, make sure you somehow incorporate the actual spreadsheet as part of the affidavit.

E.g.

“3. The following represents the claims handling in this matter:

[INSERT SPREADSHEET]

4. blah blah.

5. Facsimiles shall be deemed originals.”

On the bright side, the notice of trial was stricken so that Mercury can now search this state to find the Brown family and invite them to come in for an EBT.

Consolidation and belated discovery denied

SEE COMMENTS FROM DAMIN TOELL, ESQ. – for further explanation of this case.

Kipor Medicine, P.C. v GEICO, 2010 NY Slip Op 51247(U)(App. Term 2d Dept. 2010)

The branch of defendant’s motion seeking consolidation should have been denied since defendant failed to demonstrate that the actions it sought to consolidate had common questions of law or fact (see CPLR 602 [a]; S & B Neurocare, P.C. v GEICO Ins. Co., 20 Misc 3d 132[A], 2008 NY Slip Op 51450[U] [App Term, 2d & 11th Jud Dists 2008]). In addition, the branch of [*2]defendant’s motion seeking leave to amend the answer should have been denied since defendant’s papers presented no evidence that the proposed amendment might have merit (see CPLR 3025 [b]; Ingrami v Rovner, 45 AD3d 806, 808 [2007]). Defendant sought to amend its answer to assert that plaintiff’s certificate of incorporation had been revoked following the surrender, in April 2006, of the medical license of plaintiff’s sole shareholder. Plaintiff, however, is entitled to wind up its affairs and seek to recover no-fault benefits for the services it rendered to its assignors prior to April 2006 (see e.g. A.B. Med. Servs., PLLC v Travelers Indem. Co., 26 Misc 3d 69 [App Term, 9th & 10th Jud Dists 2009]). Defendant has not demonstrated that the facts herein are akin to a fraudulent incorporation (see State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313 [2005]).

Moreover, since defendant failed to submit an affidavit specifying that any unusual or unanticipated conditions had developed after the notice of trial had been filed which made it necessary for defendant to engage in further pretrial proceedings (see Uniform Rules for New York City Civ Ct [22 NYCRR] § 208.17 [d]; S & B Neurocare, P.C. v GEICO Ins. Co., 20 Misc 3d 132[A], 2008 NY Slip Op 51450[U]), the branch of defendant’s motion seeking to compel plaintiff to respond to discovery demands and produce its sole shareholder for an examination before trial should also have been denied.

Two points.  One, consolidation motions seem to have the same rules as severance motions.  While it is easy to sever, it is equally as difficult to consolidate.  Two, belated discovery following the filing of a notice of trial is shunned upon.

A better question is assuming the facts as presented by Justice Golia are accurate (see below), why would anybody prosecute this type of action.  Does this make the law firm prosecuting this action a co-conspirator or accessory after the fact to a fraud?  I am not sure –

“Unlike the majority, I do not find that defendant failed to demonstrate that the actions it sought to consolidate had common questions of law or fact,” or that defendant’s papers presented no evidence that the proposed amendment might have merit,” or that additional discovery should also have been denied.” Notwithstanding the foregoing, I agree with the majority in the ultimate result in that defendant waited nearly two years from the time it knew that Dr. Meisher had committed insurance fraud and was losing his medical license. Indeed, it was this very defendant, GEICO, that was the named victim” in the case to which Dr. Meisher entered his guilty plea. I can find no valid reason for this particular defendant to have ignored these concerns for such an extended period of time. Certainly, if defendant had submitted the same motion within a reasonable time, I would have voted to affirm the order of the Civil Court.”

EBT in aid of arbitration? No dice.

Matter of Travelers Indem. Co. v United Diagnostic Imaging, P.C., 2010 NY Slip Op 03944 (2d Dept. 2010)

“The test for ordering disclosure to aid in arbitration is “necessity,” as opposed to “convenience” (Hendler & Murray v Lambert, 147 AD2d 442, 443 [internal quotation marks omitted]). Thus, court-ordered disclosure to aid in arbitration is justified only where that relief is “absolutely necessary for the protection of the rights of a party” to the arbitration (Hendler & Murray v Lambert, 147 AD2d at 443 [internal quotation marks omitted]). [*2]

Here, the petitioner already has evidence sufficient to establish a potential defense in the arbitration proceedings (cf. 11 NYCRR 65-1.1[d], 65-3.2[c], 65-3.5[b], [c], [e]). Furthermore, the petitioner can potentially obtain the requested disclosure in the context of those proceedings (see 11 NYCRR 65-4.5[o][2]; cf. Matter of Katz [Burkin], 3 AD2d 238, 238-239). Finally, the record provides no indication that if a disclosure directive is made during those proceedings, the requested disclosure will, at that point, be unavailable (cf. Bergen Shipping Co., Ltd. v Japan Marine Servs., Ltd., 386 F Supp 430, 435 n 8). Under the circumstances, the petitioner failed to demonstrate the existence of extraordinary circumstances justifying court-ordered disclosure to aid in those proceedings. Accordingly, the Supreme Court improvidently exercised its discretion in granting the petition.”

The Appellate Division seems to be continuing its cruisade to insulate the arbitration forum from any collateral attack.  Travelers Indem. Co. v. United Diagnostic Imaging, P.C., 70 A.D.3d 1043 (2d Dept. 2010); Mercury Cas. Co. v. Healthmakers Medical Group, P.C., 67 A.D.3d 1017 (2d Dept. 2010).

Also, look at the the regulagtory provisions that were delimited by a “c.f.” cite: 65-3.2(c) “Do not demand verification of facts unless there are good reasons to do so. When verification of facts is necessary, it should be done as expeditiously as possible.”; 65-1.1(d) “[Claimant shall] provide any other pertinent information that may assist the Company in determining the amount due and payable.”; 65-3.5 (allowing verification via EUO under the tight claims determinative time frames).

It appears that this might have been a Mallela case, and the Court was not willing to allow the same type of discovery in arbitral proceedings that it would allow in plenary actions.  Compare, One Beacon Ins. Group, LLC v. Midland Medical Care, P.C., 54 A.D.3d 738 (2d Dept. 2008).

Also, note the purported ability to obtain discovery through the arbitration proceeding itself.  We saw this doctrine enunciated in another context a few years  ago.  In re Progressive Northeastern Ins. Co. (New York State Ins. Fund),  56 A.D.3d 1111 (3d Dept. 2008).  Yet, should the arbitrator refuse to grant you the sought after discovery, you are probably out of luck.  See, Mercury Cas. Co. v. Healthmakers Medical Group, P.C..

Finally, without knowing what the proofs were in this matter, I cannot say that I necessarily agree or disagree with the outcome of the ultimate disposition of the case.  I take issue, however, with the court denying discovery on the basis that the information could have been obtained during the claims determination phase, inasmuch as broad discovery is usually allowed where true coverage issues or non-precludable standing issues arise.

Miss an EBT deadline – have your answer stricken and go directly to inquest

Bernal v Singh, 2010 NY Slip Op 03053 (2d Dept. 2010)

“It is settled that the nature and degree of the penalty to be imposed pursuant to CPLR 3126 lies within the sound discretion of the Supreme Court (see CPLR 3126[3]; Joseph v Iannace, 6 AD3d 502, 503; Ordonez v Guerra, 295 AD2d 325, 326; Yona v Beth Israel Med. Ctr., 285 AD2d 460, 461). The record herein supports the Supreme Court’s determination that the defendants’ failure to appear for depositions on June 5, 2009, was willful and contumacious (see Beneficial Mortg. Corp. v Lawrence, 5 AD3d 339, 340; Rowell v Joyce, 10 AD3d 601). The attorneys for both sides had agreed upon that date at a compliance conference on June 1, 2009, just four days earlier, and the resulting compliance conference order had directed the depositions to proceed on that date starting at 10:00 A.M. in the courthouse.”

I am not sure how many previous orders were violated, but the extreme penalty of putting a defendant in default under the circumstances as presented in this opinion seems quite drastic.

Appellate Term holds CPLR 3212(f) relief is inappropriate under three separate circumstances

Bath Med. Supply, Inc. v Allstate Indem. Co., 2010 NY Slip Op 20059 (App. Term 2d Dept. 2010)

First, the Appellate Term, Second Department, appears to have, for the first time that  I can recall, denied a 3212(f) application when the defense is based upon a corporate structure issue.  The court found it relevant that many of the corporate documents, which the 3212(f) defense was based upon, are readily available.

Second, the portion of the 3212(f) application, which was based upon the purported need for an EBT of the assignor based upon an allegation that the assignor received the supplies, was denied since the defense may have been precluded.

Third, even if the defense was not precluded, a deposition of the assignor without a subpoena, as we know, is palpably improper.

“The court denied plaintiff’s motion for summary judgment pursuant to CPLR 3212 (f) on the ground that defendant was entitled to discovery pertaining to its contention that plaintiff had billed insurance companies for medical supplies which were never provided. However, defendant failed to make any showing that its denial of claim forms were timely mailed and that it is not precluded from raising fraudulent billing as a defense (see Fair Price Med. Supply Corp. v Travelers Indem. Co., 10 NY3d 556 [2008]; Presbyterian Hosp. in City of NY v Maryland Cas. Co., 90 NY2d 274, 282 [1997]). Consequently, the court’s determination that discovery was necessary to obtain facts relevant to this precluded defense was improper, and, thus, plaintiff’s motion for summary judgment should not have been denied on that basis.

A defense that plaintiff may be ineligible to recover no-fault benefits because it failed to adhere to applicable statutes (cf. State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313 [2005]) is not precluded, notwithstanding defendant’s failure to demonstrate that its denial of claim forms were timely sent. However, defendant has offered no factual basis for its contention that plaintiff was not properly incorporated as a provider of durable medical equipment or failed to obtain any license that may have been required at the time it delivered medical equipment to its assignor. Further, in light of the availability of public records documenting plaintiff’s licensing status, defendant “failed to demonstrate that discovery was needed in order to show the existence of a triable issue of fact (see CPLR 3212 [f])” (Delta Diagnostic Radiology, P.C. v Interboro Ins. Co., 25 Misc 3d 134[A], 2009 NY Slip Op 52222[U] [App Term, 2d, 11th & 13th Jud Dists 2009]; see also Corwin v Heart Share Human Servs. of NY, 66 AD3d 814, 815 [2009] [summary judgment should be deferred pending discovery only when the opponent “offer[s] an evidentiary basis to suggest that discovery might lead to relevant evidence and that facts essential to justify opposition to the motion were exclusively within the knowledge and control of the plaintiff”]).”

We note that, insofar as the order conditioned the grant of defendant’s cross motion on the nonappearance of plaintiff’s assignor for an examination before trial, the order was improper. As plaintiff’s assignor is neither a party to this action nor under plaintiff’s control (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), the sanctions provided by CPLR 3126 (3) for nondisclosure cannot be imposed on plaintiff for failing to produce its assignor for an examination before trial (MIA Acupuncture, P.C. v Mercury Ins. Co., ___ Misc 3d ___, 2009 NY Slip Op 29509 [App Term, 2d, 11th & 13th Jud Dists 2009]).

Note to attorney: resist the urge to object if your client is being deposed as a non-party at a deposition

I am going to copy and paste what I think is the pertinent portion of the decision in Thompson v Mather, 2010 NY Slip Op 01239 (4th Dept. 2010):

“In its order deciding the motion, Supreme Court directed that plaintiff and defendants are to “consider providing general releases to the [physicians] . . . with respect to their initial treatment of [plaintiff]” and that, if such releases are provided, plaintiff will “be entitled to have a videotaped deposition of [the physicians] during which deposition the attorneys for the [physicians] shall not be permitted to speak . . . .” The order further provided that, if the general releases are not provided, then the attorneys for the parties and the physicians “shall seek to work out ground rules for a non-party deposition” of the physicians. The order then provided that, if the attorneys are unable to “work out ground rules,” plaintiff will not be entitled to take the videotaped depositions of the physicians and they “are to be subpoenaed to testify” at trial.

We agree with plaintiff that counsel for a nonparty witness does not have a right to object during or otherwise to participate in a pre-trial deposition. CPLR 3113 (c) provides that the examination and cross-examination of deposition witnesses “shall proceed as permitted in the trial of actions in open court.” Although counsel for the physicians correctly conceded at oral argument of plaintiff’s motion in Supreme Court that she had no right to object during or to participate in the trial of this action, she nevertheless asserted that she was entitled to object during nonparty depositions and videotaped deposition questioning. We cannot agree that there is such a distinction, based on the express language of CPLR 3113 (c). Indeed, we discern no distinction between trial testimony and pre-trial videotaped deposition testimony presented at trial. We note in addition that 22 NYCRR 202.15, which concerns videotaped recordings of civil depositions, refers only to objections by the parties during the course of the deposition in the subdivision entitled “Filing and objections” (see 22 NYCRR 202.15 [g] [1], [2]). We thus conclude that plaintiff is entitled to take the videotaped depositions of the physicians and that counsel for those physicians is precluded from objecting during or otherwise participating in the videotaped depositions.

Lastly, we note that the practice of conditioning the videotaping of depositions of nonparty witnesses to be presented at trial upon the provision of general releases is repugnant to the fundamental obligation of every citizen to participate in our civil trial courts and to provide truthful trial testimony when called to the witness stand. Contrary to nonparty respondents’ contention, the fact that the statute of limitations has not expired with respect to a nonparty treating physician witness for the care that he or she provided to a plaintiff provides no basis for such a condition.”

Here is what this case says: 1) If you are a non-party at a deposition, then your attorney cannot say anything.  It is similar to when your client testifies before a grand jury in New York.  You as an attorney can sit there, but you cannot utter a peep.  2) A court, in this type of situation, must unconditionally compel a witness with knowledge of the facts to testify at a deposition.  3) I also think this case represents the reason behind the enactment of CPLR Sec. 3117(a)(4).  But see, S.J. Pahng, M.D., P.C. v. Progressive Northeastern Ins. Co., 20 Misc.3d 137(A)(App. Term 2d Dept. 2007).

The failure of an assignor to appear for an EBT is not a basis for a 3126 sanction against the assignee

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?

The Appellate Division has given guidance as to certain portions of the EBT venue provisions

The Appellate Division examined the provision of the CPLR deposition venue statute as it applies to parties who would be significantly inconvenienced in coming to a downstate deposition center, when they reside a lengthy distance from that location.  In Gartner v Unified Windows, Doors & Siding, Inc., 2009 NY Slip Op 09186 (2d Dept. 2009), the Appellate Division observed the following:

“While depositions of the parties to an action are generally held in the county where the action is pending (see CPLR 3110[1]), if a party demonstrates that conducting his or her deposition in that county would cause undue hardship, the Supreme Court can order the deposition to be held elsewhere (see LaRusso v Brookstone, Inc., 52 AD3d 576, 577; Hoffman v Kraus, 260 AD2d 435, 437). Here, the Supreme Court providently exercised its discretion in denying the appellant’s motion to compel Dora Lillian Alvarado Hernandez, a plaintiff in Action No. 1, and the infant children of David Leonard Coy-Sanchez and Elquin Astaiza Ceballos, the decedents in Action Nos. 1 and 2, respectively, to appear in New York for depositions upon oral examination. The Supreme Court further providently exercised its discretion in granting the cross motion of the plaintiffs in Action No. 1 to compel the appellant to take any deposition upon oral examination of Hernandez and Coy-Sanchez’s infant son (hereinafter the infant son) in Colombia, or to take the depositions of those persons upon written questions, when it determined that the infant son and Hernandez, the wife of the decedent in Action No. 1—who are the next of kin and the real parties in interest—were unable to leave Colombia to travel to New York for deposition (see Hoffman v Kraus, 260 AD2d at 437). Given this undue hardship, it was appropriate for the Supreme Court to [*2]find that an exception to the rule articulated in CPLR 3110(1) was warranted.

The Supreme Court proposed three viable, nonexclusive solutions to the appellant with respect to conducting the outstanding depositions of Hernandez and the infant son pursuant to CPLR 3108: (1) flying the appellant’s New York counsel to Bogota, Colombia, to conduct the depositions upon oral examination at the United States Embassy in that city, with the travel costs and cost of translation to be borne by the plaintiffs in Action No. 1, (2) retaining local counsel in Bogota to conduct the depositions upon oral examination at that location, and (3) conducting the depositions upon written questions. We note that, in addition, those depositions may also be conducted via videoconferencing pursuant to CPLR 3113(d), with the deponents remaining at the United States Embassy in Bogota, Colombia (see Rogovin v Rogovin, 3 AD3d 352, 353). If the appellant elects to pursue this option, the cost of such videoconferencing is to be borne by the plaintiffs in Action No. 1 (see CPLR 3113[d]).”

The Appellate Division has now approved the use of a smorgasbord of options in order to alleviate the problem of the deponent who lives a lengthy distance from the county where the action is venued.