Opinion
Motion No: 2017-01222 KC
11-21-2019
Natural Therapy Acupuncture, P.C., as Assignee of Jean, Benson, Appellant, v. Omni Indemnity Company, Respondent.
THOMAS P. ALIOTTA BERNICE D. SIEGAL, JJ. DECISION & ORDER ON MOTION Appeal from an order of the Civil Court of the City of New York, Kings County, entered November 2, 2016, which was determined by decision and order of this court dated December 21, 2018. Counsel for the respective parties were directed, by that decision and order, to show cause why an order should or should not be made and entered imposing such sanctions and costs, if any, against appellant's counsel pursuant to 22 NYCRR 130-1.1 (c) as this court may deem appropriate. Upon the order to show cause contained in the decision and order dated December 21, 2018, and upon the papers filed by appellant and respondent in response thereto, it is ORDERED that within 20 days after service of a copy of this decision and order upon it, The Rybak Firm, PLLC, counsel for appellant, is directed to pay a sanction in the sum of $4,000 to the Lawyers' Fund for Client Protection of the State of New York (see 22 NYCRR 130-1.1 [b]; 130-1.3); and it is further, ORDERED that the Clerk of the Civil Court of the City of New York, Kings County, shall enter judgment accordingly (see 22 NYCRR 130-1.2); and it is further, ORDERED that the Clerk of this court, or his designee, is directed to serve a copy of this decision and order upon counsel for the parties by regular mail; and it is further, ORDERED that within 10 days after payment of the sanction, The Rybak Firm, PLLC, shall file proof of payment with this court. By decision and order entered December 21, 2018, this court held that respondent, Omni Indemnity Company (Omni), had demonstrated that appellant had sued the wrong insurance carrier (Compas v Omni Indem. Co., 62 Misc 3d 132[A], 2018 NY Slip Op 51917[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2018]), a conclusion this court had reached in many previous appeals in similar cases commenced by various no-fault providers who were represented by the same attorney who is representing appellant on this appeal. In the December 21, 2018 decision and order, this court directed appellant's counsel to show cause why sanctions should not be imposed against appellant's counsel for continuing to assert arguments that had been previously interposed and rejected. In response, appellant's counsel stated: "14. In determining if sanctions are appropriate, the Court must look at the broad pattern of conduct by the offending attorneys or parties. . . 15. Additionally, courts must consider the "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 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" ' . . . 16. As the Appellate Division of this Department has recognized, the intent of is to prevent the waste of judicial resources and to deter vexatious litigation and dilatory or malicious litigation tactics' . . ." (citations omitted). We agree.
Background
In Great Health Care Chiropractic, P.C. v Omni Indem. Co. (40 Misc 3d 139[A], 2013 NY Slip Op 51450[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2013]), and then in Tam Med. Supply Corp. v Omni Indem. Co. (48 Misc 3d 142[A], 2015 NY Slip Op 51294[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2015]), this court held that the proof proffered by Omni was sufficient to make a prima facie showing that the plaintiffs in those actions had sued the wrong insurance company and that the plaintiffs' opposing papers, including, in Tam Med. Supply Corp., the transcript of a deposition of a vice president of claims employed by American Independent Companies, Inc., the parent company of both American Independent Insurance Company (AIIC) and Omni, were insufficient to raise a triable issue of fact. Thereafter, appellant's counsel continued to prosecute similar appeals on essentially the same facts and make the same arguments (see e.g. Arguelles, M.D., P.C. v Omni Indem. Co., 58 Misc 3d 137[A], 2017 NY Slip Op 51829[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2017]; Vladenn Med. Supply Corp. v Omni Indem. Co., 58 Misc 3d 132[A], 2017 NY Slip Op 51773[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2017]; Laga v Omni Indem. Co., 58 Misc 3d 132[A], 2017 NY Slip Op 51772[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2017]; Masigla v Omni Indem. Co., 58 Misc 3d 131[A], 2017 NY Slip Op 51767[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2017]). In response, Omni has consistently noted in its respondents' briefs that this court had already held, on substantially similar records, that Omni's proof was sufficient to prove that it was not the proper defendant, citing each of this court's prior decisions with that holding. Moreover, approximately 80 days after this court had already considered and rejected appellant's counsel's arguments in Tam Med. Supply Corp. v Omni Indem. Co. (48 Misc 3d 142[A], 2015 NY Slip Op 51294[U]), appellant's counsel filed a brief raising the same arguments (Arguelles, M.D., P.C. v Omni Indem. Co., 58 Misc 3d 137[A], 2017 NY Slip Op 51829[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2017]). Appellant's counsel has continued, without explanation, to make the same meritless arguments, even though attention was called to this court's previous rejections of such arguments and even after sufficient time had elapsed to permit appellant's counsel to ascertain whether there was a legal basis for doing so.
The Response By Appellant's Counsel
The response to this court's order to show cause by appellant's counsel falls into two categories. The first consists of arguments which appellant's counsel has previously presented to this court and which have been rejected multiple times. The second is comprised of arguments as to whether it is possible for a New York court to obtain personal jurisdiction over AIIC, an entity which is not a party to this action, which arguments are irrelevant to the question which was before this court. Appellant's counsel concedes that this court "had previously rejected the arguments put forth by Appellant on this appeal," but argues that "there are no boundaries between Defendant and Omni [sic]," "that Defendant [sic] uses its lack of New York licensure for that particular facet of the enterprise to simply to [sic] shield itself from litigation in this State, despite being fully aware that vehicles it insurers in Pennsylvania are likely to be driven to New York," and that counsel's conduct in this action was not frivolous because a law firm that had represented and continues to represent Omni is located in New York and "has filed numerous actions on behalf of AIIC in the Courts of the State of New York" (emphasis in original), providing a basis for jurisdiction over AIIC. To the extent appellant's counsel erroneously states that "there are no boundaries between Defendant and Omni [sic]" and "that Defendant [sic] uses its lack of New York licensure," appellant's counsel has seemingly lost sight of the fact that Omni is the defendant in this action. The attempt by appellant's counsel to demonstrate that counsel's arguments on appeal were not frivolous because there may be an open question as to whether New York courts may obtain personal jurisdiction over AIIC appears to conflate the appeals involving actions commenced by appellant's counsel against Omni with appeals involving actions commenced by appellant's counsel against AIIC. Indeed, the jurisdictional arguments relied upon by appellant's counsel to attempt to show that counsel's conduct in this appeal was not frivolous appear to have been lifted from appellate briefs submitted to this court in connection with prior and pending appeals involving AIIC rather than Omni wherein the issue was, and in pending appeals is, whether there was personal jurisdiction over AIIC rather than whether Omni was the proper party (see e.g. Pierre J. Renelique, M.D., P.C. v American Ind. Ins. Co., ___ Misc 3d ___ [U], 2019 NY Slip Op 51736[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2019]; Gentlecare Ambulatory Anesthesia Servs. v American Ind. Ins. Co., 63 Misc 3d 144[A], 2019 NY Slip Op 50635[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2019]; Pavlova v American Ind. Ins. Co., 60 Misc 3d 128[A], 2018 NY Slip Op 50943[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2018]; Compas Med., P.C. v American Ind. Ins. Co., 47 Misc 3d 134[A], 2015 NY Slip Op 50481[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2015]). Thus, any argument that AIIC is or should be subject to jurisdiction in New York is irrelevant to this case, and specifically to the question of whether this appeal was frivolous, since appellant sued Omni, not AIIC. In any event. we note that the suggestion that AIIC is subject to jurisdiction in New York because it is "fully aware that vehicles it insurers in Pennsylvania are likely to be driven to New York" was previously rejected by the Appellate Division, Second Department, in Matter of Eagle Ins. Co. v Gutierrez-Guzman (21 AD3d 489, 491 [2005] ["the mere unilateral act of . . . AIIC's alleged insured, in driving into New York State, without more, was insufficient to permit the court to exercise long-arm jurisdiction over AIIC under the CPLR"]). We also note that counsel's irrelevant argument that AIIC is subject to jurisdiction in this court because of its lawyer's location and conduct is being raised for the first time on this motion in an attempt to retroactively justify appellant's counsel's conduct. To the extent appellant's counsel asserts that counsel's conduct is not frivolous because there are triable issues of fact in this case concerning respondent's relationship with AIIC and "this precise issue was addressed by the Appellate Division, Second Department, in Matter of American Ind. Ins. Co. v Nova Acupuncture, P.C. (137 AD3d 1270 [2016]) [Nova])," appellant's counsel ignores the fact that neither appellant's motion papers nor its appellate brief ever cited to, let alone relied upon, Nova-which involved the jurisdiction of an arbitrator, not the long-arm jurisdiction of a New York court. Finally, in an attempt to demonstrate that counsel's conduct was not frivolous, appellant's counsel states that, subsequent to a meeting on or about May 10, 2018 wherein appellant's counsel was requested by the Clerk of this court to review his firm's pending appeals which involved Omni and the same issues, appellant's counsel: "discontinued multiple actions and withdrew many appeals, the large share of which were [against Omni.] Appellant's counsel discontinued and withdrew those appeals, even those made in good faith, where it deemed the record to be undeserving of this Honorable Court's time and resources if [the] appeals were to go forward." However, this court's records reveal that, between May 1, 2018 and the issuance of the underlying order to show cause on December 21, 2018, appellant's counsel did not withdraw a single appeal being prosecuted against Omni. Although such a blatant misrepresentation may, in and of itself, constitute a separate and independent basis which could support the further imposition of sanctions as a material factual statement that is false (see 22 NYCRR 130-1.1 [c] [3]), we will not treat it as such. We will, however, deem it to be indicative of appellant's counsel's cavalier approach to the prosecution of appeals against Omni. In view of the foregoing, we find that this appeal is frivolous with the meaning of 22 NYCRR 130-1.1. Accordingly, we determine that a sanction in the amount set forth above is warranted. PESCE, P.J., ALIOTTA and SIEGAL, JJ., concur. ENTER: Paul Kenny Chief Clerk
While appellant's counsel asserts that "Defendant uses its lack of New York licensure" to shield itself from litigation, Omni makes no such argument. Rather, Omni has argued that it is not the proper party since the insurance policy at issue was issued by AIIC. Indeed, it is AIIC that has argued in other actions that the court lacked personal jurisdiction over it (see e.g. Matter of Eagle Ins. Co. v Gutierrez-Guzman, 21 AD3d 489 [2005]; Gentlecare Ambulatory Anesthesia Servs. v American Ind. Ins. Co., 63 Misc 3d 144[A], 2019 NY Slip Op 50635[U][App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2019]; Pavlova v American Ind. Ins. Co., 60 Misc 3d 128[A], 2018 NY Slip Op 50943[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2018]; Compas Med., P.C. v American Ind. Ins. Co., 47 Misc 3d 134[A], 2015 NY Slip Op 50481[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2015]).