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.

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.