Stein v City of New York
Annotate this CaseDecided on February 9, 2009
Supreme Court, Bronx County
Allan Stein, M.D. and Helen Stein, Plaintiffs,
against
The City of New York, District Attorney Bronx County, Assistant District of Attorney Daniel R. Wanderman, Both Individually and in His Official Capacity, New York Central Mutual Fire Insurance Company and Katherine Wagner, Both Individually and in Her corporate capacity, Defendants.
18015/08
Cynthia S. Kern, J.
Plaintiffs commenced this action against defendants alleging various state and
federal causes of action for false arrest and imprisonment, malicious prosecution and defamation,
as well as loss of consortium on the part of plaintiff Helen Stein, in connection with plaintiff
Allan Stein, M.D.'s ("Stein") arrest and indictment for medical insurance fraud. Defendants the
City of New York, District Attorney Bronx County and Assistant District of Attorney Daniel R.
Wanderman (collectively the "City defendants") now move pursuant to CPLR § 3211 (a)
(7) to dismiss plaintiffs' case for failure to state a cause of action or, alternatively, for summary
judgment dismissing the action pursuant to CPLR § 3212. Defendants New York Central
Mutual Fire Insurance Company and Katherine Wagner (collectively "NYCM") also seek
summary judgment dismissing the action against them and seeking to dismiss the City
defendants' cross-claim. These motions are consolidated for disposition. For the reasons set forth
below, the NYCM defendants' motion for summary judgment dismissing plaintiffs' causes of
action against them is granted in its entirety and the City defendants' cross-claim against the
NYCM defendants is dismissed. The City defendants' motion for summary judgment is denied in
its entirety.
Relevant Facts
In or about the year 2000, the Bronx District Attorney's Office (the "DA") was conducting an investigation of various medical providers as part of an undercover sting operation involving medical insurance fraud and staged vehicle accidents. As part of the investigation, undercover police officers would present to various medical providers with falsified symptoms designed to invoke the providers to perform certain tests. In connection with the operation, the [*2]DA's Office instructed NYCM to pay certain claims based upon "pretext policies," i.e., policies issued to undercover agents who were not actually involved in accidents. Plaintiff Stein was a practicing physiologist in the Bronx. As part of the investigation, several undercover agents made visits to plaintiff Stein's office claiming to be involved in motor vehicle accidents. Plaintiff Stein examined the agents and submitted bills to defendant NYCM for nerve conduction ("NCV") studies allegedly performed on the undercover agents. These bills were paid by NYCM, as instructed by the DA's office, without any independent investigation or verification.
In connection with the investigation of plaintiff Stein, Assistant District Attorney Daniel Wanderman ("Wanderman") met with Katherine Wagner ("Wagner") of NYCM to discuss the bills submitted by Stein to NYCM, the codes used to classify procedures and Wagner's testimony before a grand jury to obtain an indictment against Stein. Wagner and Wanderman met twice at Wanderman's office and Wanderman testified before the grand jury in or about March 2002. According to Wagner, the purpose of her testimony was to discuss the bills and the procedural codes. However, in the course of her discussions with Wanderman, she was asked if needles were required in order to conduct the NCV tests for which plaintiff Stein billed. Wagner testified at her deposition that she responded "yes," but added "I am not a doctor." In addition, Wagner states that she reiterated that the tests required needles "as far as [she] knew" in her grand jury testimony. Wagner states that she was not qualified as an expert during the grand jury testimony. In contrast, Wanderman alleges that when he spoke to Wagner about the NCV tests, Wagner advised him that in order to perform these tests, a needle had to be inserted into the wrist and inner elbow of the patient. Furthermore, Wanderman claims that Wagner stated that her knowledge was based upon special in-house training she had received and information from a neurologist, as well as classes she had taken.
Based upon the information obtained from Wagner that the NCV tests could only be conducted with needles and the undercover agents' statements that no needles were used by plaintiff during his examination of them, plaintiff was arrested on March 5, 2002 and charged with eight Felony counts of Insurance Fraud in the Third Degree, Attempted Grand Larceny in the Third Degree and Falsifying Business Records in the First Degree. Wanderman did not conduct any independent research as to the proper procedure for the NCV test nor speak with any medical professionals in making the decision to arrest plaintiff. The arrests of plaintiff and others were publicized throughout the New York Area via a press release issued by the DA's Office. In early 2003, following plaintiff Stein's arrest and indictment, plaintiffs' attorney advised Wanderman that the NCV test could properly be conducted, as had been done by plaintiff Stein, with electrodes rather than needles. Following independent research to confirm this, Wanderman moved for dismissal of all charges in March of 2003, preparing a Recommendation of Dismissal memorandum in this regard and all charges were dropped based upon a lack of evidence of "discernible fraud."
On a motion for summary judgment, the movant bears the burden of presenting sufficient
evidence to demonstrate the absence of any material issues of fact. See Wayburn v Madison
Land Ltd. Partnership, 282 AD2d 301 (1st Dept 2001). Summary judgment should not be
granted where there is any doubt as to the existence of a material issue of fact. See
Zuckerman v City of New York, 49 NY2d 557, 562 (1980). Once the movant establishes a
prima facie right to judgment as a matter of law, the burden shifts to the party opposing
the motion to "produce [*3]evidentiary proof in admissible form
sufficient to require a trial of material questions of fact on which he rests his claim." Id.
The NYCM Defendants' Motion
The court finds that the NYCM defendants are entitled to summary judgment dismissing the cause of action against them for malicious prosecution. In order to support a cause of action for malicious prosecution, plaintiff must establish (1) the initiation of a proceeding, (2) its termination favorably to plaintiff, (3) lack of probable cause, and (4) malice. See Present v Avon Products, Inc., 253 AD2d 183, 189 (1st Dept 1999). Failure to establish one of these elements results in the defeat of plaintiff's cause of action. See Brown v Sears Roebuck & Co., 297 AD2d 205 (1st Dept 2002). With regard to the first element, the Appellate Division, First Department, has held that one who does no more than disclose to a prosecutor all the material information within his or her knowledge is not deemed to be the initiator of the proceeding. See Present v Avon Products, Inc., supra. In this case, the undisputed facts establish that the investigation, arrest and prosecution of plaintiff Stein were all initiated and undertaken by the Bronx DA. It is conceded by the City defendants that NYCM's only role was to provide information requested by the DA, process and pay claims at the request of the DA and to testify to its knowledge of insurance coverage for certain procedures before the Grand Jury. Accordingly, it cannot be said that NYCM initiated proceedings against plaintiff Stein.Since plaintiffs have failed to establish the first element needed to make a prima facie case for malicious prosecution, their cause of action insofar as asserted against the NYCM defendants must be dismissed.
Similarly, the court finds that the NYCM defendants are entitled to summary judgment dismissing plaintiffs' cause of action against them for false arrest. To establish a cause of action for false arrest, plaintiff must show that (1) defendant intended to confine plaintiff, (2) plaintiff was conscious of the confinement, (3) plaintiff did not consent to the confinement, and (4) the confinement was not otherwise privileged. See Broughton v State, 37 NY2d 451 (1975). With regard to the first element, a civilian complainant, merely by furnishing information to law enforcement authorities who are free to exercise their own judgment as to whether an arrest should be made, will not be held liable for false arrest. See Du Chateau v Metro North Commuter Railroad Co., 253 AD2d 128 (1st Dept 1999). A failure to rebut defendant's prima facie showing that defendant did not instigate plaintiff's arrest but merely provided information to law enforcement authorities who determined arrest was appropriate warrants dismissal of the cause of action for false arrest. See McGowan v WABC AM Radio, Inc., 2002 NY Slip Op. 50409 (U), 2002 WL 31355612 (1st Dept 2002). In the instant case, the NYCM defendants have established their right to summary judgment by presenting evidence that they did no more than furnish information to the Bronx D.A. at the D.A.'s request. In opposition to the NYCM defendants' motion, plaintiffs fail to raise a triable issue of fact as to whether the NYCM defendants played an active role in plaintiff Stein's arrest. Therefore, the cause of action for false arrest against the NYCM defendants should be dismissed.
With regard to plaintiffs' defamation cause of action against the NYCM defendants, plaintiffs consented to its dismissal in their affirmation in opposition to summary judgment stating that the defamation action should be limited to the City defendants who issued the press release. Accordingly, plaintiffs' cause of action for defamation against the NYCM defendants is hereby dismissed. [*4]
Finally, a cause of action for loss of consortium, as derivative of the plaintiff-spouse's claim, is subject to dismissal when the primary claims fail. See Balestrero v Prudential Ins. Co., 283 A.D. 794 (2d Dept 1954); Camadeo v Leeds, 290 AD2d 355 (1st Dept 2002) (dismissal of direct claim mandates dismissal of spouse's loss of consortium claim). Since plaintiff Allan Stein has failed to establish a basis to recover against the NYCM defendants, plaintiff Helen Stein's loss of consortium cause of action against these defendants is likewise dismissed. Given the court's findings as set forth herein, there is no need to discuss the NYCM defendants' claim that they are immune from liability pursuant to New York State Insurance Law.
The City defendants' cross-claims for contribution and/or indemnity against NYCM are
likewise dismissed for the reasons set forth above and because the NYCM defendants present no
opposition on this point.
The City Defendant's Motion
The court finds that there are disputed issues of material fact which preclude the court's granting summary judgment to the City defendants. Initially, with regard to the claims against the City defendants for malicious prosecution, there is a disputed issue of material fact as to whether plaintiffs are able to establish the third and fourth elements of that cause of action, i.e., lack of probable cause and malice. As stated above, the elements of a claim for malicious prosecution are (1) the initiation of a proceeding, (2) its termination favorably to plaintiff, (3) lack of probable cause, and (4) malice. See Present, supra. The first two elements of this cause of action are not in dispute as it is conceded that the City defendants initiated a proceeding against plaintiff Stein and that it was terminated favorably to plaintiff. In the context of a malicious prosecution action, probable cause "consists of such facts and circumstances as would lead a reasonably prudent person in like circumstances to believe the plaintiff guilty." Colon v City of New York, 60 NY2d 78 (1983). Although a mistake of fact as to the identity of the criminal might not void probable cause, " a failure to make further inquiry when a reasonable person would have done so may evidence a lack of probable cause." Id. See also Ramos v City of New York, 285 AD2d 284 (1st Dept 2001). A presumption of probable case is created by a grand jury indictment. See Colon, 60 NY2d 78. However, that presumption may be overcome by a showing that defendant's conduct deviated so egregiously from what is accepted practice as to "demonstrate an intentional or reckless disregard for proper procedures." Hernandez v State of New York, 228 AD2d 902 (3d Dept 1996). Moreover, subsequent dismissal of the indictment is admissible to refute a claim of probable cause. See Broughton, 37 NY2d at 458. "Probable cause is a question of law to be decided by the court only where there is no real dispute as to the facts or proper inferences to be drawn from the facts. Parkin v Cornell University, Inc., 78 NY2d 523 (1991). Where there is conflicting evidence from which reasonable persons may draw different inferences, the question is one for the jury. Id.
In the instant case, the City defendants have established a prima facie case for summary judgment on the issue of probable cause by establishing that plaintiff Allan Stein was indicted by a grand jury. However, plaintiffs have raised a triable issue of fact as to whether probable cause existed by establishing that the indictment was dismissed by Wanderman on the basis that no crime had occurred. In addition, plaintiffs have raised an issue of fact as to whether Wanderman's conduct in relying on information provided to him by Wagner as to the proper procedure for nerve conduction studies was reasonable. Wagner's deposition testimony is [*5]strongly at odds with Wanderman's deposition testimony and with Wanderman's statements regarding Wagner's role set forth in the Recommendation for Dismissal memorandum. Wagner testified that she never discussed the use of needles in nerve conduction studies during the investigative stage of the proceeding. Rather, Wagner stated that the only times she discussed the use of needles in connection with the testing was after plaintiff Stein's arrest when meeting with Wanderman to prepare for her grand jury testimony and during the grand jury testimony itself. Moreover, Wagner testified that she made it clear that she was not a doctor and never stated that she had any medical training in this regard. In contrast, Wanderman alleges that Wagner told him, among other things, that she had special training on medical procedures and that she derived the information with regard to the use of needles in the nerve conduction studies directly from a neurologist. Given these factual disputes regarding the information Wanderman relied upon in making the decision to arrest plaintiff Stein and to seek an indictment, and the inferences to be drawn therefrom, the issue of probable cause cannot be determined as a matter of law. Accordingly, a question of triable fact exists precluding the court from determining whether probable cause existed.
Similarly, there exists an issue of triable fact as to whether the fourth element of a malicious prosecution claim, i.e., malice, has been met. The court is unable to determine based upon the record whether the City defendants acted with malice. In order to establish that there was malice, a plaintiff need not demonstrate the defendant's intent to do him personal harm, but need only show "a reckless or grossly negligent disregard for his or her rights." Ramos, 285 AD2d at 300. Malice may be manifested by an egregious deviation from proper investigative procedures. Id. Again, this record presents issues of fact arising from Wanderman's conduct and whether his reliance solely on information provided by Wagner to establish probable cause was reasonable or whether it constituted a departure from proper investigative procedure. Accordingly, the City defendants' motion for summary judgment dismissing the cause of action against them for malicious prosecution is denied.
The City defendants' motion for summary judgment dismissing the cause of action for false arrest and imprisonment is also denied because there exists material issues of triable fact as to the fourth element of that cause of action, i.e., that the confinement was "privileged." As stated above, to establish a cause of action for false arrest, plaintiff must show that (1) defendant intended to confine plaintiff, (2) plaintiff was conscious of the confinement, (3) plaintiff did not consent to the confinement, and (4) the confinement was not otherwise privileged. See Broughton, supra. The first three elements of false arrest are not in dispute. A determination that the confinement was "privileged," may be made based upon the existence of probable cause. Broughton, 37 NY2d at 458. An arrest made pursuant to a valid arrest warrant established a prima facie case of privilege. Id. at 457. However, where the arrest is made without a warrant, the defendant has the burden of proving that the arrest was justified. Id. at 458. To meet this burden, the defendant has the burden of showing that the arrest was supported by probable cause. Id. In this case, defendant was arrested without a warrant. As set forth above, there is an issue of fact as to whether probable cause existed in this case. Accordingly, the City defendants have not met their burden of establishing that the arrest was justified and therefore privileged and their motion for summary judgment dismissing plaintiff Stein's cause of action for false arrest is therefore denied. [*6]
The City defendants do not address plaintiffs' causes of action for defamation or loss of consortium in their motion for summary judgment. Accordingly, summary judgment as to those causes of action against the City defendants is likewise denied.
This constitutes the decision and order of the court.
Dated: February 9, 2009Enter: _____________________
J.S.C.
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