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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]).

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8 Responses

    1. Quite an astute statement. So, do I have reason to believe that the District Courts are now going to be the preferred venue to bring assigned no-fault actions?

  1. I don’t see anyone rushing to Long Island.

    But that raises an interesting point. You seem to suggest that a given Term can, in effect, control its caseload and that of its lower courts by issuing determinations consistently contrary to the plaintiff, thus, necessitating forum “shopping” as a defensive measure. Of course, that’s not really forum shopping in the traditional sense, unless seeking fairness and due process is now considered gamesmanship.

    1. No-fault is interesting, jurisdictionally, because almost every lower court in this state has jurisdiction over every insurance carrier that writes in this state. Let me explain. A Civil, City or District Court has jurisdiction over an insurance carrier as long as that carrier does business in a particular county. Except for the one odd decision from the Appellate Term in relation to a Brooklyn filing last year involving Travelers, an insurance carrier has never been able to avoid being hailed into a lower court in any of New York’s 62 counties. This is because insurance companies that write in New York invariably sell policies in all of New York.

      Contrariwise, for jurisdiction to attach in a Supreme Court action, the insurance company can only be pegged in a county where an actual office is maintained or where the plaintiff resides. This would only be a limited number of counties.

      The Appellate Term is thus placed in a de facto calendar control position, involving no-fault actions. Are decisions rendered due to the nascent dislike towards certain providers and their counsel? I really do not think so. What I do know is the providers and attorneys who tend to lose have lackluster papers.

      Is it true that calendar congestion somehow effects the decisions that are rendered? I again will not opine on that, but if calendar congestion leads to shoddy lawyering, then your guess is as good as mine. I would sense that if the Nassau County District Court had the volume of cases that the City Civil Courts had as well as some of the less literate players who practice out in the City practicing on Long Island, then the Long Island branch of the Appellate Term might be less forgiving to the providers than they are now.

      Again, I am just looking at the statistics inasmuch as anyone else who follows this stuff does. Take it for what it is worth.

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