[*1]

Civil Court of the City of New York, Queens County, November 6, 2003

APPEARANCES OF COUNSEL

Biedermann, Hoenig, Massamillo & Ruff, New York City (Philip C. Semprevivo, Jr., of counsel), for defendant. Amos Weinberg, Great Neck (Harvey Woll of counsel), for plaintiffs. Martin N. Kroll, Garden City, for Jamil Abraham M.D., plaintiff.

{**2 Misc 3d at 738} OPINION OF THE COURT

Bernice D. Siegal, J.

The instant action to recover first-party no-fault benefits from defendant Countrywide Insurance Company was commenced on or about May 27, 1997. Attorney Amos Weinberg commenced this action purportedly on behalf of eight named plaintiffs, Park Health Center, Jamil Abraham, M.D., Michael Schur, D.C., Myong Choi, M.D., Robert Stoessel, Ph.D., Robert Ceglio, D.C., Ira Casson, M.D., and Leonard Koven, Ph.D., to recover for alleged services provided to the same assignor, Dale Grant. Issue was joined in June 1997. While on its face this matter appeared to be a simple “No Fault” trial, the issues were far more complicated, as the trial was interwoven with allegations of improprieties against counsel for plaintiffs and plaintiff Jamil Abraham. It is those allegations that gave rise to defendant’s request for sanctions against attorney Amos Weinberg and Dr. Abraham, which are the subject of this decision.

In March 2000, a pretrial deposition was held by defendant of an employee of plaintiff Park Health Center and a purported representative of each of the named plaintiffs. On June 26, 2002, the case was marked ready and proceeded to trial before this court. At trial, defendant claimed that Amos Weinberg, the attorney of record for plaintiffs, did not rightfully represent each and every purported plaintiff. Defendant presented evidence from Dr. Ceglio, by way of affidavit, and Dr. Stoessel, by way of in-court testimony, who claimed they never authorized attorney Weinberg to commence litigation on their behalf. The court also became aware that Dr. Koven was deceased and that his estate was subject to a United States bankruptcy proceeding commenced prior to his death.^[FN1] Dr. Abraham was found in contempt for failing to comply with the decision and order of the United [*2]States Bankruptcy Court dated December 3, 2001 directing the transfer of Dr. Koven’s assets to a bankruptcy trustee. (In re Leonard I. Koven, Bankr Ct, ED NY, Dec. 3, 2001, Milton, J., case No. 897-82570-633.) Further, even if Dr. Koven had ever authorized collections on his behalf, it was apparently withdrawn on August 14, 1997. (See defendant’s exhibit H.)

The trial was adjourned to August 9, 2002, and leave was given to defendant to make a motion to dismiss based upon the newly {**2 Misc 3d at 739}discovered facts and for the imposition of sanctions. These companion motions, the first to dismiss, to sever and to take additional depositions, and the second for sanctions against Dr. Abraham and attorney Weinberg, were made by defendant and noticed for August 9, 2002. They were adjourned on consent to September 13, 2002, when the parties stipulated to the following: that the motion to dismiss was withdrawn without prejudice to renew upon the completion of discovery, that depositions of Drs. Abraham, Casson, Schur and Choi would be held by November 26, 2002, and that their claims would be severed for trial. A control date for trial was set for December 10, 2002. The court set down the sanctions motion for a separate hearing and directed that both Dr. Abraham and attorney Weinberg appear and testify. Mr. Weinberg declined, but appeared on November 15, 2002, only after the court issued a contempt order.^[FN2]

Given the facts that devolved from the testimony of Amos Weinberg, among others, and the documents admitted into evidence during the hearing, the court gave leave for Dr. Abraham to retain counsel to represent his interests in opposing the sanctions motion. After reviewing the evidence adduced at the hearing and the papers submitted pursuant to the motion to dismiss, the court dismissed the actions by way of written decision dated June 30, 2003. The court reserved its decision as to the imposition of sanctions, and makes its determination within this order.

The court finds that the actions of both attorney Amos Weinberg and plaintiff Dr. Jamil Abraham to be the very essence of frivolous conduct, warranting sanctions pursuant to 22 NYCRR 130-1.1 (c). The dismissal order has significant bearing on the imposition of sanctions as against both attorney Weinberg and Dr. Abraham, as the bases for dismissal form the foundation for guiding this court as to the behavior and actions of both Mr. Weinberg and Dr. Abraham.

Dismissal of a case is not, by itself, grounds for sanctions. Rather, sanctions may be imposed for conduct found to be frivolous, that is, such conduct that

“(1) is completely without merit in law and cannot be supported by a reasonable argument for an extension,{**2 Misc 3d at 740} modification or reversal of existing law;

“(2) it is undertaken primarily to delay or prolong the resolution of the litigation, or to harass or maliciously injure another; or

“(3) it asserts material factual statements that are false.” (22 NYCRR 130-1.1 [c].)

“In determining whether the conduct undertaken was frivolous, the court shall consider, among other issues the circumstances under which the conduct took place, including the time available for investigating the legal or factual basis of the conduct, and whether or not the conduct [*3]was continued when its lack of legal or factual basis was apparent, should have been apparent, or was brought to the attention of counsel or the party.” (Id.)

While the factors listed above are precatory in determining sanctionable conduct, “what remedy [to impose] is dictated by considerations of fairness and equity.” (Levy v Carol Mgt. Corp., 260 AD2d 27, 34 [1st Dept 1999].) Moreover, “[s]anctions are retributive, in that they punish past conduct. They are also goal oriented, in that they are useful in deterring future frivolous conduct not only by the particular parties, but also by the Bar at large. The goals include preventing the waste of judicial resources, and deterring vexatious litigation and dilatory or malicious litigation tactics.” (Levy, 260 AD2d at 34 [citation omitted].) The measure of sanctions should be proportionate to the amount sought in the lawsuit, the culpability of the party’s conduct and prejudice to the adversary. (See Vicom v Silverwood, 188 AD2d 1057 [4th Dept 1992].)

The evidence adduced at the hearing clearly proves that attorney Amos Weinberg and Dr. Jamil Abraham engaged in sanctionable conduct. In the order dismissing the claims, the court found that Mr. Weinberg had failed to prove that he actually represented the named plaintiffs, with the exception of Dr. Abraham and Park Health Center. Defendant successfully raised the issue of representation through the affidavit of Dr. Ceglio and Dr. Stoessel’s testimony, who stated that Mr. Weinberg and Dr. Abraham had no authority to act on their behalf. When the court directed Mr. Weinberg and Dr. Abraham to prove their authority to pursue the claims on behalf of the other named plaintiffs, the evidence presented was grossly insufficient. The parties attempted to prove Dr. Abraham’s authority by submitting letters dating back to 1986 from the individual plaintiffs authorizing Dr. Abraham’s d/b/a’s the right to deposit all checks made {**2 Misc 3d at 741}payable to the individual plaintiffs. (See defendant’s exhibit L.) Mr. Weinberg presented no offer of proof for Dr. Choi. He attempted to introduce purported authorizations dated August 20, 2002 from Drs. Casson and Schur. However, the authorizations were annexed to an affirmation which attorney Weinberg admitted he did not sign, although it bore his “signature.”^[FN3] As no valid proof of authorization to act on behalf of Drs. Choi, Casson and Schur was presented, the court dismissed their actions.

The court dismissed the actions of Dr. Abraham and permitted the discontinuance by stipulation of the causes of action of Park Health Center, and on behalf of the trustee in bankruptcy, Dr. Koven. It was only after the case was ready for trial and additional court-ordered discovery was conducted that the parties stipulated to a discontinuance by Park Health Center, which never had a cause of action. There was also no evidence that the deceased Dr. Koven ever authorized Mr. Weinberg or Dr. Abraham to act on his behalf. Further, the court found that Dr. Abraham “supplied false and fraudulent information” by way of his employee testifying at the 2000 deposition and by failing to disclose the bankruptcy and death of plaintiff Dr. Koven. The court further found that “Dr. Abraham, as the self-appointed collections agent for the other purported claimants herein, by his contumacious conduct infected the entire case brought to court” and accordingly dismissed his claim as well. [*4]

Although difficult to untangle the knotted relationship between Dr. Abraham and attorney Weinberg, the court first addresses the improprieties of the officer of the court and his sordid conduct leading to months of hearings and motions. It is this relationship that lays at the heart of Mr. Weinberg’s sanctionable conduct. He abdicated his responsibility as an officer of the court, and in so doing permitted a number of meritless and baseless actions to go forward, forcing both defendant and the court to expend enormous energy, time and resources. He admitted that he never signed any of the documents that came before the court bearing his signature, including verifications and affirmations. While Dr. Abraham and his employees acted as conduits or procurers of legal matters for Mr. Weinberg, Weinberg{**2 Misc 3d at 742} abdicated his responsibility by relying solely on Dr. Abraham and by never confirming any of the “facts” or “clients.” He never once spoke with his “clients” to verify the claim or the very existence of either the clients or the claim.

This failure to adequately represent his “clients” is made clear by the evidence that Mr. Weinberg was unaware that his “client” Dr. Koven was deceased. While it is still questionable whether Dr. Koven ever retained Mr. Weinberg independently or through Dr. Abraham, the fact that Dr. Koven’s bankruptcy and subsequent death went undetected by Mr. Weinberg for a significant period of time indicates his dereliction of legal duty. Further, after the initial conference before this court when the truth about the deceased Dr. Koven was “discovered,” Mr. Weinberg nevertheless entered judgment on Dr. Koven’s behalf in another matter.

Had Mr. Weinberg or his employees taken the time to review the documents or interview the purported clients at the inception of the action or at any time during the next five years, the enormous effort of both defendant and the court would not have been expended. Instead, defendant was forced to locate and investigate the “plaintiffs” in this matter and through such labor discovered two plaintiffs had never heard of Mr. Weinberg and did not authorize him to represent them in this matter. None of the underlying documents supported any cause of action on behalf of Park Health and a simple review of the documents furnished would have eliminated that plaintiff without extensive discovery and motion practice undertaken by defendant.

When given the opportunity to come before this court to explain the apparent lack of merit and inconsistencies exposed by defendant, Mr. Weinberg flouted the authority of the court by failing to appear. Instead, Mr. Weinberg only appeared before the court once a contempt order was issued against him. (See Park Health Ctr. v Countrywide Ins. Co., Nov. 6, 2003, Siegal, J., Index No. 26244/97.) Upon appearing in court, Mr. Weinberg failed to present even a scintilla of evidence to prove his authority to act on behalf of the “plaintiffs.” Mr. Weinberg did not produce even one document in admissible form, nor introduce a single affidavit. Further, no attempt at all was made to prove any link between attorney Weinberg and client Dr. Choi. Significantly, the instant action was marked ready for trial. Five years is indeed ample opportunity for counsel to get it right.

As for Mr. Abraham, his conduct in covering up the bankruptcy and death of Dr. Koven is sanctionable. It is uncontroverted{**2 Misc 3d at 743} that Dr. Abraham knew of the double infirmity of Dr. Koven in 2000 when the bankruptcy trustee held depositions in search of assets. Nevertheless, Dr. Abraham continued to pursue claims on behalf of Dr. Koven, including the instant matter. Further, the evidence indicated that Dr. Abraham cashed checks made payable to Dr. Koven after the deposition. Dr. Abraham, likewise, was fully aware that Park Health Center had no interest in any of the claims and should not have been named as a plaintiff, since it was his employees that submitted the claims [*5]to defendant in this matter.

Accordingly, the court awards sanctions against Mr. Weinberg and Dr. Abraham each in the amount of $3,000, along with both equally paying defendant’s reasonable legal fees. Mr. Weinberg shall submit his $3,000 payment to the Lawyers’ Fund for Client Protection. Dr. Abraham shall deposit the same with the clerk of the court for transmittal to the Commissioner of Taxation and Finance. Both parties shall make such payments within 60 days from the date of entry of this order.

Footnotes

Footnote 1: The matter was initially severed and erroneously discontinued without prejudice. It was then severed with leave of the court for the trustee to represent the estate, and restored to the record pending substitution. By way of affidavit, the trustee in bankruptcy discontinued the action (see affidavit sworn to on Aug. 5, 2002).

Footnote 2: See order dated November 6, 2002, finding Amos Weinberg in contempt. However, the order deferred the court’s determination of punishment until November 15, 2002, at which time Mr. Weinberg testified and was ordered to pay $250.

Footnote 3: Mr. Weinberg testified that he regularly does not sign any of the papers submitted to court, including verifications, affirmations, judgments, etc. The court concluded in its decision dismissing the claims that an affirmation not signed by the affirmant is without force and effect. (Park Health Ctr. v Countrywide Ins. Co., June 30, 2003, Siegal, J., Index No. 26244/97.)

Civil Court Of The City Of New York, Queens County

Index No. 26244/97

BERNICE D. SIEGAL, J.

The defendant insurer brings the instant motion to for summary judgment dismissing the complaint in the within action to recover payments claimed due for medical services allegedly rendered under No-Fault upon several grounds, including, inter alia, that the complaint was improperly verified by a signature falsely purporting to be that of plaintiff’s attorney; failure to state a cause of action; frivolous obstruction with the discovery phase; and that the individual physicians named as party plaintiffs herein did not authorize counsel nor plaintiff Park Health Center ( hereinafter Park Health) to institute this action in their behalf.

Procedural History

The within action, naming Park Health, its principal Dr. Jamil Abraham, and Drs. Michael Schur, Myong Choi, Robert Stoessel, Robert R. Ceglio, Ira Casson and Leonard Koven as plaintiffs, was commenced on May 27, 1997 by summons and verified complaint comprised of 54 separate causes of action, to recover claimed unpaid No-fault benefits for services allegedly provided by the named plaintiffs for injuries sustained by five assignors and arising out of separate accidents. Issue was joined by defendant’s answer on June 30, 1997.

The matter was assigned to this court on June 14, 2002 when, at conference, defendant raised issues as to whether one of the named claimants, Dr. Leonard Koven was, in fact, deceased, and whether two of the other named claimants had authorized plaintiffs’ counsel to bring the action on their behalf.

Subsequently, on September 13, 2002, defendant moved to dismiss the complaint and for [*2]the imposition of sanctions against plaintiffs’ attorney, Amos Weinberg, and plaintiffs Park Health and Dr. Jamil Abraham pursuant to 22 NYCRR § 130-1.1. On that date, the parties stipulated that the branch of the motion to dismiss was withdrawn without prejudice to renewal upon completion of discovery, that depositions of Drs. Abraham, Casson, Schur and Choi would be held by November 26, 2002, that the claims of Drs. Abraham, Casson, Schur and Choi would be severed from the other claims and that the claims of Dr. Koven would be discontinued without prejudice. The court, also on said date, set the defendant’s motion for the imposition of sanctions down for a hearing on October 18, 2002.

On October 18, 2002, the court reinstated the claims of Dr. Koven, in view of the fact that the court had not had jurisdiction to discontinue his claims as this particular plaintiff had filed for bankruptcy and a substitution of the trustee in bankruptcy as a party plaintiff was required. On the hearing date, plaintiffs’ attorney, Amos Weinberg, failed to appear and, as per decision and order dated November 6, 2002 and for the reasons set forth therein, was found to be in civil contempt by the court. The sanctions hearing was continued to November 15, 2002, upon which date the court was to determine Mr. Weinberg’s punishment. As Amos Weinberg appeared and testified at the continued sanctions hearing on November 15th, the court found his contempt to be purged, although imposing a fine of $250 for his failure to appear at the October 18th hearing. At the hearing, the trustee in bankruptcy, Neil Ackerman, was substituted for Dr. Koven. Also, at the November 15th proceeding, plaintiff Park Health conceded that it did not specifically assert any cause of action in the within complaint. The hearing was continued to February 24 2003, at which time, defendant brought the instant motion and the court heard oral argument thereon.

The matter was then further adjourned to June 24, 2003 for continuation of the sanctions hearing and pending decision on the instant motion.

Findings of Fact and Conclusions of Law

As the court has noted above, plaintiff Park Health Center has conceded it has not asserted any cause of action in the within complaint and the causes of action pertaining to the claims of Drs. Koven, Ceglio and Stoessel have been severed from the within action. The court further notes that as per stipulation dated July 12, 2002, those causes of action asserted ( as set forth in the within complaint) by Dr. Ceglio have been discontinued with prejudice. Therefore, the instant motion is solely concerned with, and the court need only address, the causes of action allegedly asserted by plaintiffs Drs. Abraham, Casson, Schur and Choi.

Defendant is moving for dismissal of the remaining causes of action on several grounds, first among them being defendant’s assertion that plaintiffs’ attorney, Amos Weinberg, did not himself sign the verified complaint and other papers in the within action and that, therefore, the complaint must be deemed a nullity and dismissed.

With respect to this ground, the verification of a pleading must be signed by the [*3]attorney purportedly verifying it; not by a printed name or rubber stamp, but by the attorney’s own signature (see Security Pacific National Trust Company -v- Cuevas 176 Misc 2nd 846, 849; Sandymark Realty Corp. -v- Creswell 67 Misc 2nd 630). In the matter at bar, Amos Weinberg admitted at the November 15, 2002 sanctions hearing that he himself did not sign the verification, but rather one of his secretaries did. Undoubtedly, therefore, the verification was defective. Section 3022 of the CPLR provides that ” [a] defectively verified pleading shall be treated as an unverified pleading. Where a pleading is served without a sufficient verification in a case where the adverse party is entitled to a verified pleading, he may treat it as a nullity, provided he gives notice with due diligence to the attorney of the adverse party that he elects to do so.” In this case, the court finds that defendant was made aware of the defective ( insofar as it was not, in fact, signed by the affiant attorney) verified complaint upon Weinberg’s testimony at the November 15th hearing. However, as there is no indication on the record that defendant elected to treat the complaint as a nullity until service of the instant notice of motion on January 24, 2003- approximately two months later, defendant has failed to show the required due diligence ( see Colon -v- Vacco 242 AD 2nd 973). Even assuming arguendo that defendant acted more expeditiously in rejecting the “verified” complaint, defendant has not shown any legal basis that the complaint in the within No-Fault action was required to be verified.

Accordingly, while Amos Weinberg’s conduct regarding his alleged signing of the verification and other papers herein cannot be excused and may well be sanctionable, that branch of the within motion for dismissal is denied.

However, the same is not true for failure to sign an affirmation holographically. An unsigned affirmation is of no force and effect ( American Security Insurance Company -v- Austin 110 AD 2nd 697). It follows that an affirmation not properly subscribed is a nullity ( Macri -v- St. Agnes Cemetary 44 Misc 2nd 702).The rule permitting affirmations by attorneys rather than sworn-to statements before a notary was promulgated in 1966 ” to simplify the attorney’s practice”( Id.). Attorney Weinberg has pushed this permissive rule too far in authorizing someone else to subscribe his affirmation. Therefore, any affirmation not holographically subscribed by him shall be deemed a nullity and not considered by the court.

Defendant is also moving for dismissal of those causes of action pertaining to plaintiffs Drs. Schur, Casson and Choi upon the ground that none of the aforementioned claimants authorized counsel ( Amos Weinberg) to commence this action on their behalf. With respect to this branch of the motion, where the authority of an attorney to appear on a party’s behalf has been questioned, the burden falls upon the attorney asserting his or her authority to prove same ( NRK Management Corp. -v- Donahue 109 Misc 2nd 601) and ” where an attorney’s authority has been questioned, [ it is important that] proof of that authority be given. Otherwise, a party may later demonstrate that the attorney who purported to represent him had no authority to do so …”( NRK Management, supra, at 603). Furthermore, it has been held that where a plaintiff has not authorized an attorney purportedly appearing for him to commence an action, the complaint is subject to dismissal ( Ulanoff -v- Croyden Shirt Co., Inc. 14 Misc 2nd 13, aff’d 12 AD 2nd 508, app den’d 9 NY 2nd 650). [*4]

In this regard, proof has been offered by defendant, in the form of Weinberg’s November 15th hearing testimony, evincing his lack of authorization to commence the within action on behalf of Drs. Choi, Schur and Casson. Weinberg testified that he had never met any of these plaintiffs, had never spoken to any of them, had never attempted to personally contact them, nor has his office ever tried to make contact in any manner with them. Also, he presented no documents in his files indicating he was so authorized by these plaintiffs to bring this action in their names. Furthermore, when asked if he ever had an agreement with any of these individuals with respect to his representing them, Weinberg responded that he assumed he was authorized to do so. Defendant, therefore, has made a prima facie showing of Amos Weinberg’s lack of authority. With the burden of proof now shifting to Amos Weinberg, no evidence has been presented in support of his authority to commence any claim herein on behalf of Dr. Choi. With respect to Dr. Casson and Dr. Schur, plaintiffs submitted, as evidentiary support, signed and notarized letters dated August 2, 2002 authorizing Weinberg to pursue collections of money on their behalf. Taken on face value, the authorizations permit Weinberg to pursue monetary collections on behalf of these doctors beginning August 2, 2002. However, the record remains void of any evidence that Weinberg was authorized to bring suit in the names of Drs. Casson and Schur when the action was commenced in May, 1997. Not only do these authorizations fail to establish permission to commence this action in May, 1997, they fail to prove that Amos Weinberg was even known to these plaintiffs in 1997. Such proof is insufficient to defeat this branch of defendant’s motion for summary judgment to dismiss. If such authorizations existed in May, 1997, it was imperative that Weinberg come forth with same, which he has failed to do.

Significantly, even if the court were to overlook the apparent lack of authorization in 1997, the documents purported to authorize both Dr. Abraham and Mr. Weinberg as collection agents for Drs. Casson and Schur are not properly before the Court. These statements were appended to two affirmations, dated August 20, 2002 and January 28, 2003, submitted by Attorney Weinberg, which due to his failure to properly subscribe the affirmations, are not being considered by this court.

Accordingly, the branch of the motion for summary judgment for dismissal of the causes of action herein pertaining to Drs. Choi, Casson and Schur on the ground of counsel’s lack of authority to institute the causes of action on behalf of these plaintiffs is granted; and the causes of action pertaining to plaintiffs Dr. Choi, Dr. Casson and Dr. Schur are dismissed.

With respect to the ten remaining causes of action asserted by plaintiff Dr. Abraham, defendant has moved for dismissal, pursuant to CPLR § 3126(3), upon the ground of the willful obstruction of discovery. Defendant specifically contends that Dr. Abraham had an employee of his, Lionel Bhadai, testify on his behalf at a March, 2000 deposition in which Bhadai testified under oath that Dr, Koven was at that time a medical provider at Park Health, despite the fact that Dr. Koven had filed for bankruptcy in April, 1997 and had died in November, 1998. As to this ground, a complaint may be dismissed where there is a ” clear showing that the failure to comply with discovery demands is willful, contumacious and in bad faith” ( Yona -v- Beth Israel Medical Center [*5]285 AD 2nd 460, 461; see also Brown -v- Michelin Tire Corp. 204 AD 2nd 255). Dr. Abraham admitted at the November 15th hearing that he became aware of Dr. Koven’s bankruptcy and subsequent death when served with the bankruptcy notice sometime in 1998. However, he attempts to excuse Bhadai’s clearly erroneous deposition testimony on the basis that Bhadai was merely negligent in assuming facts on matters of which he had no clear knowledge. Given that Dr. Abraham conceded at the November 15th hearing that while he selected Bhadai to testify at the deposition, he-Dr. Abraham- would have been the best person to testify. While the court finds that Bhadai himself may have only been negligent, plaintiff Dr. Abraham’s conduct in this regard, which had the effect of hiding from defendant the fact of a claimant’s death and, at the time the action was commenced- the filing of bankruptcy, was willful conduct, done in bad faith, attributable to plaintiff Dr. Abraham. Furthermore, a court’s striking of a pleading has been upheld where a party has “supplied false and fraudulent information”, as Dr. Abraham implicitly did with regard to Dr. Koven,s bankruptcy and subsequent death ( see Garnett -v- Hudson Rent A Car 258 AD 2nd 559). Additionally, in light of the above, Dr. Abraham, as the self-appointed collections agent for the other purported claimants herein, by his contumacious conduct infected the entire case brought before the court.

Accordingly, that branch of the motion for summary judgment to dismiss, upon the foregoing ground, the causes of action asserted by plaintiff Dr. Abraham, is granted and those causes of action are dismissed.

Date Judge, Civil Court

Decision Date: June 30, 2003