Devonshire Surgical Facility v Prudential Prop. & Cas. Co.

[*1] Devonshire Surgical Facility v Prudential Prop. & Cas. Co. 2006 NY Slip Op 52057(U) [13 Misc 3d 1229(A)] Decided on October 25, 2006 Civil Court Of The City Of New York, New York County Mendez, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on October 25, 2006
Civil Court of the City of New York, New York County

Devonshire Surgical Facility and Carnegie Hill Orthopedic Services, P.C., a/a/o Irma Evangelista, Plaintiff(s)/, Petitioner(s),

against

Prudential Property & Casualty Company, Defendant(s)/, Respondent(s).



24429 CVN 2005



Attorneys for plaintiffs:

Law Offices of Christopher McCollum

Attorneys for defendant:

Robin, Harris, King, Yuhas, Fodera & Richman

Manuel J. Mendez, J.

The defendant moves to serve an amended answer pursuant to CPLR §3025 to assert a claim alleging that Devonshire Surgical Facility is not a legally authorized provider entitled to reimbursement under the no-fault regulations and for summary judgment pursuant to CPLR §3212.Plaintiff opposes said motion and argues there is no need for a license or permit for an office based facility, the provider has been a general partnership since 1999 and as of July 13, 2006 has been converted into a Limited Liability Corporation.

BACKGROUND

This is an action to recover first party no-fault benefits for medical services rendered to the assignor, Irma Evangelista, by plaintiff, Devon Surgical Facility and Carnegie Hill Orthopedic Services. The defendant has denied claims for services rendered by Devon Surgical Facility, and now seeks to amend it's Answer to add as a fourteenth affirmative defense a claim that plaintiff Devon Surgical Facility is not a, " licensed, incorporated, or otherwise legally authorized as a provider entitled to reimbursement under the no-fault regulations." The defendant is also seeking summary judgment on the grounds that a medical provider requires [*2]proper licensing as a condition precedent to payment and that plaintiff is not such an entity. In support of this motion the defendant annexes as "Exhibits C and F," certifications from the New York Department of State, dated March 16, 2006 that neither Devonshire Surgical Facility or Devonshire Surgical Facility, L.L.P. existed as of that date as either and Incorporated

entity or a Limited Partnership. Defendant annexed to the motion papers as "Exhibit G"

certification from the New York State Education Department, that as of April 10, 2006 neither Devonshire Surgical Facility or Devonshire Surgical Facility, L.L.P. were registered professional agencies. Plaintiff in opposition alleges the provider has been a general partnership since 1999, but only annexes as "Exhibit B" to it's opposition papers, a certified copy, dated July 14, 2006, of the certificate of conversion indicating the date of the filing of the articles of organization is May 4, 2006. No other records or copies of records or affidavits by any of the partners or Allen Chamberlin, M.D., were provided in support of plaintiff's position that Devonshire Surgical Facility was organized as a general partnership in 1999.



LEGAL ANALYSIS

Upon a review of all the papers on this motion, the Court finds that defendant has provided a sufficient basis to amend the answer to include a fourteenth affirmative defense. CPLR§3025(b) states that leave to amend pleadings "shall be freely given upon such terms as may be just..."(See CPLR§3025(b) ). " In the absence of undue prejudice and unfair advantage," the Court will be permit pleadings to be amended (See Leutloff vs. Leutloff, 47 Misc 2d 458, 262 NYS2d 736 [1965]). A defense of the nature requested herein is effective if the party can demonstrate a well founded belief that there was fraud involved in the corporation and therefore, no reimbursement is mandated See State Farm Mutual Auto. Ins. Co. v. Mallela, 4 NY3d 313, 827 NE2d 758, 794 NYS2d 700 [2005] and Metroscan Imaging P.C. v. GEICO Ins. Co., 8 Misc 3d 829, 797 NYS2d 737 [2005]. In this instance, the defendant has provided proof in the form of certifications from both the Department of State and the New York State Department of Education that Devonshire Surgical Facility was not registered prior to March 16 2006 and April 10, 2006, as proof of it's belief that Allen Chamberlin, M.D. had a management agreement with non-licensed professionals and has violated the business corporation law and the education law, the Court finds that is a basis to allow the answer to be amended for purposes of asserting a claim of fraud.

In order to prevail on a motion for summary judgment, the proponent must make a prima facie showing of entitlement to judgment as a matter of law, through admissible evidence, eliminating all material issues of fact. Id.; Klein v. City of New York, 89 NY2d 833, 834-35 [1996]; Ayotte v. Gervasio, 81 NY2d 1062, 1062 (1993), Alvarez v. Prospect Hospital, 68 NY2d 320, 324 [1986]. Once the moving party has satisfied these standards, the burden shifts to the opponent to rebut that prima facie showing, by producing contrary evidence, in admissible form, sufficient to require a trial of material factual issues. Kaufman v Silver, 90 NY2d 204, 208 [*1997]; Amatulli v Delhi Constr. Corp., 77 NY2d 525, 533-34 [1999]; Iselin & Co. v Mann Judd Landau, 71 NY2d 420, 427 [1988]. In determining the motion, the court must construe the evidence in the light most favorable to the non-moving party. (SSBS Realty Corp. v. Public [*3]Service Mut. Ins. Co., 253 AD2d 583, 584-85 [1st Dept. 1998]; Martin v. Briggs, 235 AD2d 192, 196 [1st Dept. 1997]).

In this instance the defendant has provided proof in the form of certifications that

the plaintiff provider Devonshire Surgical Facility was not properly licensed or

incorporated pursuant to Business Corporation Law §1507 and 1508, and Education Law §6507(4) (c) as required by 11NYCRR 65-3.16(a)(12) and Insurance Law § 5102, by providing certifications from both the New York State Education Department, as of April 10, 2006 and from the New York Department of State, dated March 16, 2006, that indicated as of those date, neither Devonshire Surgical Facility or Devonshire Surgical Facility, L.L.P. existed as either an Incorporated entity or a Limited Partnership. Although plaintiff has asserted in it's opposition papers that Devonshire Surgical Facility was organized as a general partnership in 1999 and bore Tax ID number 13-4016045, no proof was provided of this assertion, and there was no affidavit provided in support of the opposition papers by either Dr. Allen Chamberlin or any of the other alleged general partners. The provision of certified documents and not just computer printouts by the defendant, distinguishes this application from that previously before Hon. Barbara Jaffe in Devonshire Surgical Facility a/a/o Ivory West v. NYCTA, Index No. 22728/05. In addition, an otherwise valid cause of action should not be defeated where it may be impossible to provide a detailed statement of the circumstances surrounding the fraud because that information may be within the possession of or peculiarly the knowledge of the plaintiff provider, in this instance, Devonshire Surgical Facility. See, Oxford Health Plans, Inc. v. BetterCare Health Care Pain Mgt. & Rehab, P.C., 305 AD2d 223, 762 NYS2d 344 [2003], citing to Houbigant, Inc. v. Deloitte & Touche, 303 AD2d 92, 98 [2003] . Finally, as for plaintiff's contention that the date of the regulation postdates the instant claims, the Court of Appeals in, State Farm Mutual Auto. Ins. Co. v. Mallela, 4 NY3d 313, supra , issued a ruling that involved pre-April 4 , 2002 claims, therefore, it would not be logical to read that case as applying only to claims submitted on or after that date. See Allstate Ins. Co. v. Belt Parkway Imaging, P.C., 2006 NY Slip Op. 07279, [App. Div., 1st Dept., 10/12/06] , citing to Metroscan Imaging, P.C. v. GEICO Ins. Co., 8 Misc 3d 829, supra aff'd 2006 WL 2333130 [App Term]. In this instance absent a more sufficient showing by plaintiff, that the provider was properly licensed pursuant to the regulations, the defendants have met their burden.

Accordingly the defendant's motion to amend it's answer to include a fourteenth affirmative defense of fraud and for partial summary judgment as to Devonshire Surgical Facility is granted, those causes of actions pertaining to Carnegie Hill Orthopedic Services a/a/o Irma Evangelista will remain as the defendant has provided no basis to deny those claims.

Movant shall serve a copy of this Order with Notice of Entry upon all sides and the appropriate court clerk within twenty (20) days of entry of this Order.

The foregoing shall constitute the Decision and Order of the Court.

Dated:October 25, 2006 [*4]