PDG Psychological P.C. v State Farm Mut. Ins. Co. (2019 NY Slip Op 50543(U))

CV-130940-03/QU

LAW OFFICES OF DAVID B. O’CONNOR P.C.

Counsel for Plaintiff PDG Psychological P.C. As Assignee of Glendon Steve Antoine

2606 East 15th Street

Brooklyn, New York 11235

By: David Bryon O’Connor, Esq.

MCDONNELL ADELS & KLESTZICK, PLLC

Counsel for Defendant State Farm Mutual Insurance Co.

401 Franklin Avenue

Garden City, New York 11530

By: Julie Andrea Linwood, Esq. and Alisa Ann Burns, Esq.

I. Background

In this action, PDG Psychological P.C. (the “Plaintiff”) seeks to recover no-fault insurance benefits for alleged services rendered to Plaintiff’s assignor, Glendon Steve Antoine, based on an alleged automobile accident that occurred on or about May 5, 2003. Plaintiff served a summons and complaint on defendant State Farm Mutual Insurance Co. (the “Defendant”) on or about November 6, 2003. In turn, Defendant allegedly served its verified answer and discovery demands to Plaintiff on or about December 22, 2003.

Plaintiff moved for summary judgment and Defendant made a cross-motion to dismiss for failure to provide discovery or, in the alternative, to compel discovery. There is no indication that Plaintiff provided any responses to Defendant’s discovery demands prior to Defendant’s cross-motion. On July 8, 2005, the Court issued an order (the “July 8, 2005 Order”) denying Plaintiff’s motion for summary judgment for failure to establish a prima facie case and granting [*2]Defendant’s cross-motion, holding that “the action is dismissed unless with[in] thirty days after service of a copy of this order, with notice of entry, [P]laintiff provides a response to all previously served discovery demands and appears for an examination under oath.” On or about October 24, 2005, Plaintiff provided responses to Defendant’s discovery demands.

A prolonged period of inactivity appears to have followed and, on June 6, 2007, this case was converted to inactive, and the record indicates that both parties subsequently continued to remain inactive. Defendant alleges that in March 2011 it served notice of entry of the July 8, 2005 Order, with an attached copy of the July 8, 2005 Order, to Plaintiff. Plaintiff asserts that it did not receive a copy of the July 8, 2005 Order until March 11, 2011.

Nevertheless, this matter largely remained dormant until, on or about August 10, 2017, Plaintiff served a notice of trial and certificate of readiness, without having appeared for an examination under oath (“EUO”) as required by the July 8, 2005 Order. On August 17, 2017, Defendant moved: (1) to dismiss the complaint for failure to provide complete and meaningful discovery; or, in the alternative, (2) to strike Plaintiff’s notice of trial; (3) to compel Plaintiff to provide responses to Defendant’s discovery demands and appear for an examination before trial (“EBT”); and (4) to stay the accrual of no-fault interest. On April 18, 2018, this Court issued a decision and order (the “April 18, 2018 Decision”) denying Defendant’s motion to dismiss and granting Defendant’s motions to strike the notice of trial and to compel Plaintiff to appear for an EUO within 30 days of service of the order with notice of entry or the case would be dismissed. Defendant now moves to reargue the April 18, 2018 Decision and requests: (1) an order compelling Plaintiff to provide complete and meaningful discovery responses before appearing for an EUO; and (2) staying accrual of no-fault interest.

In accordance with Rule 2219 [a] of the Civil Practice Law and Rules (“CPLR”), the Court considered: (1) Defendant’s motion to reargue, Defendant’s counsel’s affirmation and attached exhibits; (2) Plaintiff’s counsel’s affirmation in opposition to said motion and attached exhibits; and (3) Defendant’s counsel’s affirmation in reply to Plaintiff’s affirmation in opposition and attached exhibits.

II. Discussion

As an initial matter, Defendant argues that Plaintiff could not transfer this action to the Law Offices of David B. O’Connor P.C., which is the third counsel for Plaintiff, because there is no record of Defendant being served with a consent to change attorney form, pursuant to CPLR 321 [b], evidencing the change from original counsel to the second counsel. However, this argument was made for the first time in Defendant’s reply papers, which function to address arguments made in opposition to the position taken by the movant—not to permit the movant to introduce new arguments or new grounds for the requested relief (see Allstate Ins. Co. v. Dawkins, 52 AD3d 826, 827 [2d Dept 2008]). Thus, this Court declines to issue a decision on this argument, but notes that a consent to change attorney form for the transition of this action from second counsel to the Law Offices of David B. O’Connor P.C. was submitted and Defendant has not claimed that Plaintiff’s technical failure in complying with CPLR 321 [b] for the transition from the original counsel to second counsel caused Defendant any prejudice (see Sperry Assocs. Fed. Credit Union v. John, 160 AD3d 1007, 1009 [2d Dept 2018]).

CPLR 2221 (d) states, in pertinent part, that “a motion for leave to reargue . . . shall be based upon matters of fact or law allegedly overlooked or misapprehended by the court in determining the prior motion, but shall not include any matters of fact not offered on the prior motion.” Defendant asserts that the April 18, 2018 Decision overlooked the deficiencies in [*3]Plaintiff’s October 24, 2005 discovery responses and the portion of Defendant’s motion seeking a stay of the accrued interest. Given that the April 18, 2018 Decision did not specifically address these issues, the Defendant’s motion is granted and the Court amends its April 18, 2019 Decision as explained below.

A. Discovery Responses

Defendant identified only three of the discovery responses provided by Plaintiff, on or about October 24, 2005, as insufficient. Specifically, Defendant asserts that Plaintiff’s responses to Question 5 and Question 7, of Defendant’s Demand for Verified Interrogatories, are insufficient because they indicate that proof of mailing for the bills at issue had been attached to Plaintiff’s responses, but no proof of mailing was attached. Defendant further asserts that Plaintiff’s response to Question 18 is insufficient because Question 18 requests “the name and address of the office manager and/or individual who assisted in preparing and sending the bills and/or verification of treatment forms attached to the Plaintiffs complaint” and, Plaintiff simply responded “not applicable.”

i. Motion to Dismiss

The Court reaffirms the denial of Defendant’s motion to dismiss based on Plaintiff’s alleged failure to comply with the July 8, 2005 Order. The July 8, 2005 Order provides that the 30-day deadline for Plaintiff to respond to Defendant’s discovery demands, and avoid dismissal, could only be initiated by “service of a copy of the order, with notice of entry,” and Plaintiff has not provided proof that the July 8, 2005 Order was ever served with notice of entry beyond Plaintiff’s submission of an unexecuted copy of a notice of entry dated May 1, 2011. Accordingly, Plaintiff’s October 24, 2005 responses were timely.

Furthermore, to the extent that any of Plaintiff’s responses are substantively insufficient, dismissal is not appropriate “where there is no clear showing that the failure to comply with discovery demands was willful or contumacious” (see Walter B. Melvin, Architects, LLC v. 24 Aqueduct Lane Condominium, 51 AD3d 784, 785 [2d Dept 2008] (noting that striking a pleading is a “drastic remedy” and further finding that “while the plaintiff was clearly dissatisfied with the responses to its demands, there was no showing of a pattern of willful failure to respond to discovery demands or comply with disclosure orders, so as to justify striking the defendant’s answer”); Conway v. Brooklyn Gas Union Co., 212 AD2d 498, 498 [2d Dept 1995]). The portion of Plaintiff’s response to Questions 5 and 7 that states “[s]ee attached proof of mailing,” suggests an intent to comply and Plaintiff’s failure to attach proof of mailing could simply be a misunderstanding or oversight. With respect to Plaintiff’s response to Question 18, “not applicable” may simply be an indication that such information is not available, and Plaintiff intends to satisfy its burden by providing evidence of Plaintiff’s “standard office practice or procedure designed to ensure that items are properly addressed and mailed” (Residential Holding Corp. v. Scottsdale Ins. Co., 286 AD2d 679, 680 [2d Dept 2001]). Accordingly, dismissal is not proper, and Plaintiff should be given a chance to clarify its responses (see Spiegel v. Goodman, 98 AD2d 815, 815 [2d Dept 1983]; Escobar v. St. Vincent’s Med. Ctr. Of Richmond, 2003 NY Slip Op 51674[U], *1 [App Term, 2nd & 11th Jud Dists 2011]).

ii. Motion to Strike Notice of Trial

The Court reaffirms its grant of Defendant’s motion to strike Plaintiff’s notice of trial. A notice of trial is properly vacated when the certificate of readiness incorrectly states a material fact regarding the completion of discovery (see Amoroso v. City of New York, 66 AD3d 618, 618 [2d Dept 2009]; Garofalo v. Mercy Hosp., 271 AD2d 642, 642 [2d Dept 2000]; Citywide Social [*4]Work & Psychological Servs., PLLC v. Autoone Ins. Co., 2011 NY Slip Op 51308[U], *1 [App Term, 2d Dept, 11th & 13th Jud Dists 2011] (finding that the court properly vacated a notice of trial due to outstanding discovery mandated in a prior order that directed plaintiff to provide discovery responses and appear for an examination before trial). It is undisputed that the EUO compelled in the July 8, 2005 Order has not yet occurred. Accordingly, Plaintiff’s statement that discovery has been completed in the certificate of readiness filed with the notice of trial in the current matter is erroneous and the notice of trial is properly stricken (see Amoroso, 66 AD3d at 618).

iii. Motion to Compel

This Court grants Defendant’s motion to compel sufficient responses to Questions 5, 7 and 18 of Defendant’s Demand for Verified Interrogatories. CPLR 3101 [a] provides that “[t]here shall be full disclosure of all matter material and necessary in the prosecution or defense of an action, regardless of the burden of proof.” The phrase “material and necessary” is “to be interpreted liberally to require disclosure, upon request, of any facts bearing on the controversy which will assist preparation for trial by sharpening the issues and reducing delay and prolixity” Allen v. Crowell-Collier Pub. Co., 21 NY2d 403, 406 [1968]. The test in determining whether discovery is material and necessary “is one of usefulness and reason” (Id.).

The information sought by Questions 5, 7 and 18 is material and necessary and Plaintiff’s responses require clarity in light of their aforementioned issues. Thus, Plaintiff must provide sufficient responses to Questions 5, 7 and 18, and Plaintiff must produce any proof of mailing in its possession for the bills at issue. Plaintiff must provide said responses and documents to Defendant by no later than May 16, 2019 or this matter will be dismissed. Plaintiff may only extend this deadline with leave of the Court.

Additionally, although the Court reaffirms its grant of Defendant’s motion to compel Plaintiff to appear for an EUO, this Court finds that Plaintiff’s EUO is not preconditioned on Plaintiff’s discovery responses. The July 8, 2005 Order simply states that the Plaintiff must “respon[d] to all previously served discovery demands and appear[ ] for an examination under oath” to avoid dismissal (emphasis added). Contrary to Defendant’s suggestion otherwise, the July 8, 2005 Order does not address whether Plaintiff is required to respond to the discovery demands prior to being afforded the opportunity to appear for an EUO. Moreover, Defendant has not referred to any law that justifies its inactivity, with respect to both Defendant’s belated objections to Plaintiff’s discovery responses and apparent failure to even attempt to schedule an EUO.

In the over 12 years since the July 8, 2005 Order was issued, there is no evidence that the Defendant has served a notice of taking oral deposition pursuant to CPLR 3107 or even contacted Plaintiff about scheduling an EUO. Defendant seemingly blames its 12 years of inactivity on Plaintiff’s deficient discovery responses. However, the “ultimate determination of compliance [with respect to discovery] is the province of the court” (see Jones v. White Metal Rolling & Stamping Corp., 86 AD2d 687, 687-688 [3d Dept 1982]). Upon receiving responses from Plaintiff that Defendant deemed insufficient on or about October 24, 2005, Defendant could have immediately moved to compel satisfactory answers, but failed to do so (see J.R. Stevenson Corp. v. Dormitory Authority of State of NY, 112 AD2d 113, 117 [1st Dept 1985]). Considering that the July 8, 2005 Order provides that this matter “is” dismissed “unless“ Plaintiff responds to discovery requests and appears for an EUO, Defendant’s dilatory conduct played a significant role in this matter being brought to a standstill because Defendant waited [*5]almost 12 years to object to Plaintiff’s discovery responses and never afforded Plaintiff with an opportunity to appear for an EUO.

In light of Defendant’s delay in conducting an EUO of the Plaintiff and in order to expedite the completion of pretrial preparation, this Court further finds that if the Defendant fails to conduct an EUO of the Plaintiff by July 1, 2019, Defendant will be deemed to have waived it’s right to depose the Plaintiff, Plaintiff will no longer be obligated to appear for an EUO pursuant to the July 8, 2005 Order and Plaintiff will be permitted to file a notice of trial. If Plaintiff fails to appear for an EUO, at a time and place to be specified in written notice from Defendant of not less than 20 days beforehand or at such time and place as the parties may agree, this matter will be dismissed. This deadline may only be extended with leave of the Court.

B. Statutory Interest

The determination as to staying the accrual of no-fault interest cannot be made at this point. Prejudgment interest that accrues on overdue no-fault benefits at a rate of two percent per month “is a statutory penalty designed to encourage prompt adjustments of claims and inflict a punitive economic sanction on those insurers who do not comply” (East Acupuncture P.C. v. Allstate Ins. Co., 61 AD3d 202, 211 [2d Dept 2009]; see Aminov v. Country Wide Ins. Co., 986 NYS2d 909, 910 [App Term, 2d Dept, 11th & 13th Jud Dists 2014] (referring to interest accumulated pursuant to Insurance Department Regulations as prejudgment interest)). The Insurance Department Regulations provide that statutory prejudgment interest shall accumulate “unless the applicant unreasonable delays the . . . court proceeding” (11 NYCRR 65-3.9 [d]; see Aminov, 986 NYS2d at 910; Devonshire Surgical Facility v. Am. Tr. Ins. Co., 2011 NY Slip Op 50793[U], *5 [Civ Ct NY County 2011] (further noting that a “court proceeding ends with entry of judgment”)).

An award of this interest is only available to a prevailing claimant who has proven that that first party benefits are overdue (see Insurance Law § 5106 [a] (“benefits are overdue if not paid within thirty days after the claimant supplies proof of the fact and amount of loss sustained [and] [a]ll overdue payments shall bear interest at the rate of two percent per month”); Viviane Etienne Med. Care, P.C. v. Country-Wide Ins. Co., 25 NY3d 498, 502 [2015] (noting plaintiff’s “prima facie burden of showing the fact and amount of loss sustained”). Further proceedings in this matter must be conducted to determine whether the benefits at issue are overdue (see Viviane, 25 NY3d at 502; see also Solow v. Wellner, 205 AD2d 339, 341[2nd Dept 1994], affd 86 NY2d 528 [1995] (“[A] determination as to the landlord’s entitlement to prejudgment interest on back rent recovered is premature at this point [because] [a]lthough CPLR 5001 (a) provides that interest shall be recovered on monetary damages awarded for breach of contract . . . such award, like that of attorney’s fees, is generally only available to the prevailing party [and] [f]urther proceedings must be conducted to determine whether any of the parties will attain that status.”).

In fact, the July 8, 2005 Order found that Plaintiff failed to meet its prima facie burden in moving for summary judgment (see Alvarez v. Prospect Hosp., 68 NY2d 320, 324 [1986] (noting that “failure to make such a prima facie showing requires denial of the [summary judgment] motion,” as opposed to the dismissal of a complaint). A determination by this Court on whether interest is tolled would be purely academic when there has not been an initial determination that interest is actually owed and accumulating, and this Court is prohibited from issuing such an advisory opinion (see Saratoga County Chamber of Commerce, Inc. v. Pataki, 100 NY2d 801, 810 [2003]).

Furthermore, this Court also lacks evidence that is critical in determining the parameters of any tolling period in this matter. For example, Defendant has not submitted affidavits of service to prove service of its discovery demands or service of the July 8, 2005 Order with notice of entry. Additional evidence is also needed to determine whether Plaintiff is the cause of any unreasonable delay in this court proceeding, which must be established before interest can be tolled (see 11 NYCRR 65-3.9 [d]). Indeed, the extent to which Plaintiff caused any delay in this matter is questionable because Plaintiff’s ability to move forward in prosecuting this matter after the issuance of the July 8, 2005 Order was arguably limited by Defendant’s failure to provide Plaintiff with an opportunity to appear for an EUO. Notably, Defendant does not deny that it ignored Plaintiff’s alleged attempt to schedule an EUO even 12 years after the issuance of the July 8, 2005 Order.

Therefore, the Court denies Defendant’s motion to stay the accrual of no-fault interest, but Defendant may resubmit its motion on a later date.

III. Conclusion

Accordingly, the Court denies Defendant’s motion to dismiss, grant’s Defendant’s motion to strike, grants Defendant’s motion to compel, and denies Defendant’s motion to stay interest.

This constitutes the decision and order of the Court.

Dated: April 3, 2019

Jamaica, New York

Hon. John C.V. Katsanos

Judge, Civil Court