State Farm Mut. Auto. Ins. Co. v Garden Med. Care, P.C. (2023 NY Slip Op 50762(U))

Index No. 651387/2022

Bennett, Bricklin & Saltzburg, LLC, New York, NY (Alex R. Garriga of counsel), for plaintiffs.

No appearance for defendant.

This is a no-fault insurance coverage action. Plaintiffs, State Farm Mutual Automobile Insurance Company and State Farm Fire & Casualty Company, seek a declaratory judgment that defendant, Garden Medical Care, P.C., has no right to receive payment for hundreds of no-fault claims for medical treatment, totaling approximately $312,000. (See NYSCEF No. 10 at 6 [spreadsheet of claims at issue].) Plaintiffs are contending that defendant’s claims for treatment are foreclosed by defendant’s (asserted) failure or refusal to provide information and documents in response to discovery requests served by plaintiffs following defendant’s examination under oath (EUO).

Plaintiffs now move without opposition for default judgment under CPLR 3215. The motion is denied.

BACKGROUND

Defendant is a medical provider, submitting treatment bills to no-fault insurers like plaintiffs, as the assignee of injured persons eligible for no-fault coverage. Between July and September 2021, defendant submitted hundreds of no-fault bills for treatment provided in [*2]connection with numerous no-fault claims. (See generally NYSCEF No. 10 [claims spreadsheet].) In response to each bill, plaintiffs asked defendant to appear for an EUO. (See id.) Plaintiffs allege that before doing so, they had investigated defendant’s billing and treatment practices and its eligibility to receive no-fault benefits. (See NYSCEF No. 1 at 28 [verified complaint]; see also NYSCEF No. 12 at ¶¶ 4-10 [affidavit of Michael Bodnar, State Farm Special Investigative Unit investigator].)

Defendant’s principal appeared for an EUO in September 2021. (See NYSCEF No. 1 at ¶ 34.) Although the affidavit of plaintiffs’ investigator describes defendant’s EUO testimony (see NYSCEF No. 12 at ¶¶ 12-16), plaintiffs have not provided a copy of the full EUO transcript. Plaintiffs represent that following the EUO, they served demands seeking further information and documents. (See NYSCEF No. 1 at ¶ 35; NYSCEF No. 12 at ¶¶ 17-18.) The demands themselves have not been provided. Plaintiffs further represent that defendant provided some of the requested discovery, objected to some of plaintiffs’ demands, and asserted that some of the requested documents were not in its possession. (NYSCEF No. 1 at ¶ 38; NYSCEF No. 12 at ¶ 19.) Plaintiffs do not provide copies of defendant’s responses and objections.

Plaintiffs contend that they still need more information to evaluate the eligibility of the claims for reimbursement that defendant has refused to provide: financial records from April 1, 2021, to the present, including complete bank records, general ledgers, profit and loss statements, and balance statements; documents reflecting the purchase, sale, or transfer of any ownership or investment interest in defendant, a professional corporation; documents concerning examinations performed and billed by defendant; documents concerning agreements with anyone providing billing and/or management services on behalf of defendant; documents concerning the referral, solicitation, and procurement of patients for the defendant; documents concerning the Extracorporeal Shock Wave Therapy (ESWT) machine device owned by defendant; scheduling documents for individuals who provided services for defendant; and articles or publications that support, among other things, defendant’s use of ESWT to treat patients’ conditions.^[FN1] (NYSCEF No. 12 at 20.)

Plaintiffs allege that given defendant’s (asserted) failure to comply sufficiently with plaintiffs’ post-EUO verification requests, plaintiffs timely denied payment on all of the no-fault treatment bills at issue. Plaintiffs then brought this action for a no-coverage declaration with respect to those bills. Plaintiffs now move for default judgment.

DISCUSSION

A plaintiff moving for default judgment must demonstrate proper service, the defendant’s default, and the facts constituting plaintiff’s claim. (See CPLR 3215 [f].) Plaintiffs have shown that it properly served defendant (see NYSCEF No. 4 [affidavit of service]; and defendant has not appeared. But plaintiffs have not provided proof of the facts constituting its claim.

Plaintiffs’ claim rests on defendant’s (putative) failure to respond to post-EUO document demands warranted by defendant’s EUO testimony. But plaintiffs’ motion papers do not attach copies of (i) the EUO transcript; (ii) plaintiffs’ post-EUO demands; (iii) defendant’s responses and objections to those demands; or (iv) defendant’s document production. Absent those materials, this court cannot assess the key question presented by plaintiffs’ motion—whether defendant failed to respond adequately to post-EUO verification requests that plaintiffs were entitled to make. The brief, conclusory statements to that effect in plaintiffs’ complaint and SIU affidavit are not alone sufficient.

Accordingly, it is

ORDERED that plaintiffs’ default-judgment motion is denied; and it is further

ORDERED that if plaintiffs do not bring a renewed default-judgment motion within 30 days of entry of this order, the action will be dismissed; and it is further

ORDERED that plaintiffs serve a copy of this order with notice of its entry on defendant by certified mail, return receipt requested, directed to defendant’s last-known address.

Footnotes

Footnote 1: Plaintiffs’ additional verification requests for bank records, documents about billing/management services, and documents relating to the purchase, sale, or transfer of ownership or investment interests appear to be seeking information into so-called Mallela issues—i.e., whether defendant here fails to meet applicable state or local licensing requirements, such that plaintiffs are entitled to withhold no-fault payments. (See State Farm Mut. Auto. Ins. Co. v Mallela (4 NY3d 313, 319 [2005] [construing 11 NYCRR 65-3.16 [12]].) This court need not, and does not, address on this motion whether plaintiffs have established sufficient cause for seeking that information from defendant during the claim-verification process. (See HKP Physical Therapy, P.C. v Government Empls. Ins. Co., 67 Misc 3d 282, 296-301 [Civ Ct, NY County 2019] [discussing threshold showing for seeking Mallela discovery].)