Montvale Surgical Ctr., LLC. v State Farm Mut. Auto. Ins. Co. (2020 NY Slip Op 50106(U))

CV-6239-18/HU
C. Stephen Hackeling, J.

Upon the following papers numbered 1 to 20 read on this motion to dismiss plaintiff’s complaint by Notice of Motion/Order to Show Cause and supporting papers 1,2,6; Notice of Cross Motion and supporting papers 7,8,13; Answering Affidavits and supporting papers 7,8,13; Replying Affidavits and supporting papers 14-18,20; Filed papers; Other exhibits: 3-5,9-12,19; (and after hearing counsel in support of and opposed to the motion), it is,

ORDERED that the motion by defendant to dismiss plaintiff’s complaint pursuant to CPLR 3211(a)(3), on the ground that plaintiff lacks legal capacity to sue in the State of New York, pursuant to BCL §1312(a), is denied, with prejudice; and it is further

ORDERED that the alternative motion by defendant to compel discovery and a deposition of plaintiff, is denied; and it is further

ORDERED that the cross-motion by plaintiff for summary judgment pursuant to CPLR 3212, and plaintiff’s request for an order pursuant to CPLR 3212(g), are both denied.

Plaintiff health service provider, a limited liability corporation,^[FN1] seeks reimbursement of No-Fault benefits in the sum of $7,943.11, as assignee of a New York No-Fault claimant, for medical and surgical services rendered to its Brooklyn assignor, at its New Jersey surgical center on 05/04/2018, stemming from an automobile accident of 1/08/2018.

Plaintiff lists its address as 6 Chestnut Ridge Road, Montvale, New Jersey 07645 on the summons, and the submitted, uncertified medical records (see CPLR 4518) not objected to by defendant, show the same address as the location of the surgery rendered on 5/04/2018.

Defendant now moves for dismissal pursuant to CPLR 3211(a) (3), arguing that plaintiff lacks standing to bring this action in the State of New York, because plaintiff has failed to register with the Secretary of State in New York to operate as a foreign corporation authorized to do business in New York, pursuant to BCL §1312(a). Defendant asserts plaintiff is a New Jersey corporation whose business activities within New York State are so systematic and regular as to manifest continuity of activity,^[FN2] and contends that online data activity demonstrates that plaintiff has over 627 pending cases against insurance companies in the New York State court system.

Alternatively, defendant moves pursuant to CPLR 3101 for an order compelling plaintiff to appear for deposition, to address the issue of plaintiff’s legal capacity to sue in the State of New York.^[FN3]

In opposition to the motion to dismiss, plaintiff denies it qualifies as a foreign corporation required to register with the New York Secretary of State to operate as a foreign corporation doing business in New York, stating its contact with the State of New York is “incidental” and not “systematic” as claimed by defendant. Plaintiff asserts a denial of its right to sue in a New York State Court, based upon an assignment of a New York No-Fault claim, is a violation of the interstate commerce clause of the U.S. Constitution.

Plaintiff further contends that plaintiff’s assignor is a New York resident (living in Brooklyn), who assigned his New York No-Fault contract to plaintiff, who brought the instant suit to collect for unpaid medical services rendered to plaintiff’s assignor at its New Jersey medical facility.

In addition, plaintiff cross-moves for summary judgment for the sums delineated in the complaint, contending it timely provided its claim to defendant, thirty days have since transpired, and defendant has not paid or denied the claim.

In the alternative, plaintiff seeks an order pursuant to CPLR 3212(g), stating that plaintiff [*2]has met its prima facie case in the event of trial.

In opposition to plaintiff’s motion for summary judgment, defendant contends that contrary to plaintiff’s statement, defendant has denied the claim within 30 days of its receipt, and attaches documents of proof in support of this contention.

Here, the Court determines that defendant has failed to satisfy its burden of demonstrating that plaintiff was a foreign corporation “doing business” in the State of New York, and was thereby subject to the registering conditions placed by BCL §1312 on foreign corporate capacity to sue in New York (see Pergament Home Ctrs. v Net Realty Holding Trust, 171 AD2d 736 [2nd Dept 1991]). Though there is no admissible proof that plaintiff is a New Jersey Corporation, plaintiff asserts in its complaint that it is a LLC. and has a New Jersey address. Plaintiff also asserts its business contact with the State of New York is “incidental” and not “systematic.” In addition, defendant contends that plaintiff is a New Jersey business, which plaintiff does not deny.

Therefore, the Court determines that defendant has failed to overcome the presumption that plaintiff is doing business in its state of incorporation, and not in the State of New York (see Highfill, Inc. v Bruce and Iris, Inc., 50 AD3d 742 [2nd Dept 2008]).

The Court further finds that there is no proof that plaintiff maintains an office or phone listing, or owns real property or has employees or sales reps, in the State of New York (see Uribe v Merchants Bank of New York, 266 AD2d 21, 22 [1st Dept 1999]; see also S & T Bank v Spectrum Cabinet Sales, Inc., 247 AD2d 373 [2nd Dept 1998]).

Indeed, though defendant broadly links over 627 pending cases in the State of New York court system brought by plaintiff against insurance companies, as evidence of plaintiff’s New York systemic activities, the linkage is disingenuous and unavailing. First, defendant’s proof is by inadmissible hearsay. Next, plaintiff’s activities in the State of New York, appear to be limited to collection lawsuits from assignments under New York’s No-Fault law, brought in New York courts for unpaid medical services rendered in its business as a health service provider and surgical center in the State of New Jersey.

Moreover, the instant action does not equate to an assignment of a collection of account receivables for consumer debt purchased by a plaintiff, for enforcement through the New York State court system (see Centurion Capital Corp. v Guarino, 35 Misc 3d 1219[A][Civ Ct, City of New York, 2012]), nor an assignment to recover money for goods sold in New York by an out-of-state (Pennsylvania) corporation (see S & T Bank v Spectrum Cabinet Sales, Inc., supra]).

The Court finds that the undisputed facts remain that plaintiff is a health service provider and surgical center, rendering services at its health care facility located in New Jersey, which requires incidental litigation for collection of its unpaid charging fees in the courts of the State of New York, where entrance as a plaintiff is contemplated through assignments under New York’s No-Fault law. It is not as a corporate entity whose actual business is as a systematic purchaser of assignments for collection enforcement in the courts of the State of New York.

The Court notes that even if plaintiff was required to register as a foreign corporation doing business in the State of New York, it is not a jurisdictional defect, and does not defeat the action, as a plaintiff may cure the failure to obtain a certificate pursuant to BCL §1312 at any time prior to resolution of the action by judgment (see Uribe v Merchants Bank of New York, supra; Hot Roll Mfg. Co. v Cerone Equipment Co., 38 AD2d 339 [3rd Dept, 1972]; see also Virgilio Flores, S.A. v Jerome Radelman, Inc., 567 F. Supp 577 [1982]). As a result, the instant circumstances do not create a true legal incapacity to sue within the meaning of CPLR 3211[a][3] [*3](see Paper Manufacturers Co. v Ris Paper Co., 86 Misc 2d 95 [City of New York, Civ Ct, 1976]).

Accordingly, the motion by defendant to dismiss plaintiff’s complaint pursuant to CPLR 3211(a)(3), on the ground that plaintiff lacks legal capacity to sue in the State of New York pursuant to BCL §1312(a), is denied, with prejudice.

Defendant’s alternative motion to compel discovery and a deposition of plaintiff “if defendant (sic) disputes that it lacks capacity to sue” is denied. The issue of plaintiff’s legal capacity to sue under BCL §1312(a) is now moot, given the Court’s instant ruling, thereby eliminating the need for defendant’s request for discovery and deposition for this purpose. Supervision of discovery and the setting of reasonable terms and conditions rests within the sound discretion of the Court (see Hernandez v City of Yonkers,74 AD3d 1025, 1026 [2nd Dept 2010]). Accordingly, defendant’s alternative motion to compel discovery and a deposition of plaintiff, is denied.

Plaintiff’s cross-motion for summary judgment pursuant to CPLR 3212, upon the grounds that defendant has failed to pay or deny the bills within 30 days of receipt of plaintiff’s claim or properly toll the time, for dates of service on 05/04/18, is denied (see 11 NYCRR 65-3.8[a][1]). Defendant has refuted plaintiff’s contentions with documents demonstrating that it timely provided a denial of claim to plaintiff,^[FN4] thereby creating a question of fact on this issue requiring a trial (see Alvarez v Prospect Hospital, 68 NY2d 320, 324 [1986]; Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]; Zuckerman v City of New York, 49 NY2d 557,562 [1980]).

Furthermore, the Court finds that plaintiff has failed to demonstrate a prima facie case in support of summary judgment, as the necessary element provided by the Assignment of Benefits form submitted by plaintiff’s assignor, states it is for an accident which occurred on 3/19/18, not the subject accident of 1/08/18 (see Alvarez v Prospect Hospital, supra; Winegrad v New York Univ. Med. Ctr.,supra; Zuckerman v City of New York, supra).

Any remaining contentions lack merit.

The foregoing constitutes the decision and order of this Court.

Dated: January 20, 2020

J.D.C.

Footnotes

Footnote 1:Though defendant claims plaintiff is a New Jersey corporation, there is no admissible evidence substantiating this claim.

Footnote 2:Defendant’s papers are contradictory, in that paragraph 10 of the affirmation in support of the motion states plaintiff did not do any business in New York, while paragraph 13 states plaintiff has been doing large amounts of New York business. Furthermore, defendant states in paragraph 18 that plaintiff lists a New York business address, which is clearly false, as demonstrated by the New Jersey address listed in the summons and the lack of any other address listed in any other papers.

Footnote 3:Defendant’s Notice of Motion seeks an order compelling plaintiff to appear for deposition, only, but its affirmation supports discovery of plaintiff (¶ 3) and documentary discovery (¶ 20), on the issue of plaintiff’s legal capacity to sue in the State of New York.

Footnote 4:In paragraph 12 of the Affirmation in Support, Defendant cites Amer-A-Med Health Products, Inc. v GEICO Ins. Co., 2010 NY Slip Op 32258(U)(Sup Ct Nass Cty). However, the correct cite is 2010 NY Slip Op 31032, and the case does not stand for the proposition “that foreign No-Fault providers must comply with BCL §1312(a).”