Key Takeaway
Court rejects insurer's discovery attempts to find primary coverage and investigate fraudulent incorporation in NY no-fault case, ruling demands improper.
Pomona Med. Diagnostic P.C. v Adirondack Ins. Co., 2012 NY Slip Op 51165(U)(App. Term 1st Dept. 2012)
Defendant appeared to work under a novel theory that it could use discovery to figure out who is primary and, in the alternative, to find out if Plaintiff was fraudulentally incorporated. Defendant’s attempt to obtain discovery on the first score was a loser, on the law. Defendant’s attempt to obtain discovery on the second score was a loser, on the law.
“The defendant insurer’s motion to strike the notice of trial and compel discovery should have been denied. Insofar as defendant sought discovery pertaining to its affirmative defense that another insurance carrier was primarily liable, the information was immaterial and, in result, the demands were palpably improper (see Duhe v Midence, 1 AD3d 279 ), since defendant cannot properly rely on this defense as a basis to deny plaintiff’s no-fault claim (see 11 NYCRR 65-3.12; M.N. Denatal Diagnostics, PC v Government Empl. Ins. Co., 81 AD3d 541 ). Nor has defendant set forth any case-specific allegations in support of its defense that plaintiff was fraudulently incorporated so as to justify discovery on this issue (cf. One Beacon Ins. Group, LLC v Midland Med. Care, PC, 54 AD3d 738 ). Defendant “will not be allowed to use pretrial discovery as a fishing expedition when they cannot set forth a reliable factual basis for what amounts to, at best, mere suspicions” (Devore v Pfizer Inc., 58 AD3d 138, 144 , lv denied 12 NY3d 703 ).”
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- New York No-Fault Insurance Law
Legal Update (February 2026): Since this 2012 decision, New York’s no-fault regulations under 11 NYCRR Part 65 have undergone multiple amendments, including updates to priority of coverage provisions and discovery limitations in no-fault litigation. Additionally, appellate courts have continued to refine the standards for when discovery may be permitted regarding fraudulent incorporation defenses and priority disputes. Practitioners should verify current regulatory provisions and recent case law developments when addressing similar coverage priority and discovery issues.
