Opinion
No. 2023-50497 Index No. 000000/2022
04-21-2023
State Farm Fire and Casualty Company, Plaintiff, v. R.L., E.G., G.R., A.A. and M.A., Participant, Defendants, and Z.K.K., Adverse Vehicle Defendant, and CHAND MEDICAL, P.C., EQUINOX PHYSICAL THERAPY, P.C., MACINTOSH MEDICAL, P.C., BIG APPLE MEDICAL GROUP CORP., BRUNO PSYCHOLOGICAL SERVICES, P.C., SMS THERAPY SUPPLY, INC., PULMONARY AND SLEEP MEDICAL, P.C., TITAN DIAGNOSTIC IMAGING SERVICES, INC., 5-STAR CHIROPRACTIC SERVICES, P.C., BEDFORD MEDICAL SERVICES, P.C., A TO Z SUPPLY SERVICES, INC., ECLIPSE MEDICAL IMAGING, P.C., FAMILY HEALTH NP, P.C., MORNING STAR PHYSICAL THERAPY, P.C., HEALTHY BIG APPLE CHIRO, P.C., NEW TIMES ACUPUNCTURE, P.C., NEXRAY MEDICAL IMAGING, P.C., NEXRAY MEDICAL IMAGING, P.C. d/b/a SOUL RADIOLOGY, PROMETHEUS IMAGING, LLC, RIDGEWOOD DIAGNOSTIC LABORATORY, LLC, THODEN CHIROPRACTIC, P.C., ELENA STYBEL, D.O. and DIANNA BRUNO, PSY.D., Provider Defendants.
Plaintiff: represented by Mcdonnell, Adels & Klestzick, PLLC. Defendants, A to Z Supply Services, Inc.: represented by Kopelevich & Feldsherova, PC Ridgewood Diagnostic Laboratory, LLC, Elena Stybel, D.O. and Dianna Bruno, PSY.D: represented The Rybak Firm, PLLC.
Unpublished Opinion
Plaintiff: represented by Mcdonnell, Adels & Klestzick, PLLC.
Defendants, A to Z Supply Services, Inc.: represented by Kopelevich & Feldsherova, PC Ridgewood Diagnostic Laboratory, LLC, Elena Stybel, D.O. and Dianna Bruno, PSY.D: represented The Rybak Firm, PLLC.
HON. CONRAD D. SINGER, J.S.C.
The following papers were read on this motion:
Amended Order to Show Cause and Supporting Papers [Seq. 001] X
Defendants RIDGEWOOD DIAGNOSTIC LABORATORY, LLC, ELENA STYBEL, D.O, and DIANNA BRUNO, PSY.D.'s Affirmation in Opposition to Motion [Seq. 001] X
Defendant A TO Z SUPPLY SERVICES, INC. Affirmation in Opposition to Motion [Seq. 001] X
Upon the foregoing e-filed papers, the motion filed by the plaintiff, STATE FARM FIRE AND CASUALTY COMPANY ["STATE FARM", or "plaintiff"], for an Order pursuant to CPLR §§ 2201, 6301, and 6313, granting the plaintiff an immediate stay on all pending lawsuits, arbitrations, and other proceedings arising from the underlying incident of March 18, 2021, assigned claim number 00-00X0-00X, commenced against the plaintiff by the defendants, their employees, agents and all persons acting on their behalf subject to the determination of this action; and enjoining the defendants named herein, their employees, agents and all persons acting on their behalf, from filing or commencing any additional lawsuits, arbitrations, and other proceedings arising from the underlying incident of March 18, 2021 assigned claim number 00-00X0-00X against the Plaintiff, subject to the determination of this action, which seeks to resolve all issues between these parties, is determined as hereinafter follows:
The plaintiff commenced this action for declaratory judgment by filing a Summons and Verified Complaint on July 1, 2022. This action concerns a motor vehicle collision which occurred on March 18, 2021 [the "March 18, 2021, incident"].
STATE FARM alleges that effective March 5, 2021, Participant Defendant M.A. ["A."] insured a 2006 Saturn bearing vehicle identification number (VIN) 0X0X0XX00XX00 through STATE FARM. Defendant A.'S vehicle was insured by STATE FARM under a policy of insurance bearing policy number 0000-000-00, and the subject policy provided Personal Injury Protection Benefits ["PIP"] of $50,000 per person, Optional Basic Economic Loss Coverage ["OBEL"] of $25,000 per person, and Supplementary Uninsured Motorists Coverage of $25,000 per person/$50,000 per accident. The STATE FARM policy was cancelled effective May 1, 2021, due to the non-payment of the STATE FARM policy premium.
STATE FARM alleges that Participant Defendants, R.L. ["L."], E.G. ["G."], G.R. ["R."], and A.A. ["A."] [collectively, and together with defendant A., "Participant Defendants"] were purportedly occupants of the 2006 Saturn insured by the plaintiff at the time of the underlying March 18, 2021, incident. Participant Defendants L., G., R. and A. have received and/or are continuing to receive medical treatment from the Provider Defendants named herein as a result of the underlying March 18, 2021, incident.
STATE FARM alleges that in conjunction with the March 18, 2021, incident, the Provider Defendants submitted numerous bills to the plaintiff for unnecessary, excessive and costly medical "treatment" of Participant Defendants L., G., R. and A.. STATE FARM further alleges that in addition to Participant Defendants G., R. and A., who were purportedly passengers in the 2006 Saturn insured by Provider Defendant A. at the time of the March 18, 2022, incident, STATE FARM is also exposed to third-party liability and property damage lawsuits by Adverse Vehicle Defendant Z.K.K. ["R." or "Adverse Vehicle Defendant"]. Therefore, the plaintiff alleges that the full liability coverage limits of the STATE FARM insurance policy are exposed.
STATE FARM seeks a declaration that the March 18, 2021, incident was not a covered "accident", but was instead a non-covered event intended to look like an "accident", and is therefore not covered by the STATE FARM policy of insurance. STATE FARM further seeks a declaration that it is not obligated to provide any coverage for the March 18, 2021, incident to any of the defendants named in this action due to the material misrepresentations made by the Participant Defendants regarding events surrounding the March 18, 2021, incident.
STATE FARM also seeks an additional declaration that it is not legally obligated to provide any coverage for claims submitted to it by or on behalf of the Participant Defendants and the Provider Defendants, CHAND MEDICAL, P.C., EQUINOX PHYSICAL THERAPY, P.C., MACINTOSH MEDICAL, P.C., BIG APPLE MEDICAL GROUP CORP., BRUNO PSYCHOLOGICAL SERVICES, P.C., SMS THERAPY SUPPLY, INC., PULMONARY AND SLEEP MEDICAL, P.C., TITAN DIAGNOSTIC IMAGING SERVICES, INC., 5-STAR CHIROPRACTIC SERVICES, P.C., BEDFORD MEDICAL SERVICES, P.C., A TO Z SUPPLY SERVICES, INC., ECLIPSE MEDICAL IMAGING, P.C., FAMILY HEALTH NP, P.C., MORNING STAR PHYSICAL THERAPY, P.C., HEALTHY BIG APPLE CHIRO, P.C., NEW TIMES ACUPUNCTURE, P.C., NEXRAY MEDICAL IMAGING, P.C., NEXRAY MEDICAL IMAGING, P.C. d/b/a SOUL RADIOLOGY, PROMETHEUS IMAGING, LLC, RIDGEWOOD DIAGNOSTIC LABORATORY, LLC, THODEN CHIROPRACTIC, P.C., ELENA STYBEL, D.O. and DIANNA BRUNO, PSY.D., [collectively, "Provider Defendants"], who rendered treatment to the Participant Defendants in connection with the incident of March 18, 2021, because Participant Defendants L., A., and A. breached a condition precedent to coverage by failing to attend Examinations Under Oath ("EUOs") noticed in connection with the March 18, 2021, incident.
By its motion, STATE FARM seeks an Order pursuant to CPLR 2201, 6301, and 6313, immediately staying all pending lawsuits, arbitrations, and other proceedings arising from the March 18, 2021, incident commenced by the defendants against the plaintiff, subject to the determination of this action, and enjoining the defendants, et al., from filing or commencing any additional lawsuits, arbitrations, and other proceedings arising from the underlying March 18, 2021, incident against the plaintiff subject to the determination of this action. This Court granted a temporary stay of all pending lawsuits, arbitrations, and other proceedings arising from the March 18, 2021, incident, pending a hearing and determination of this action. That stay is still in effect.
Provider defendant A TO Z SUPPLY SERVICES, INC., opposes the plaintiff's motion and, separately, provider defendants RIDGEWOOD DIAGNOSTIC LABORATORY, LLC, ELENA STYBEL, D.O,, and DIANNA BRUNO, PSY.D. have also filed an affirmation in opposition to the plaintiff's motion.
As a threshold matter, while the plaintiff's motion seeks a stay pursuant to CPLR 2201 and a preliminary injunction pursuant to CPLR 6301, the opposing Provider Defendants have established that, because the plaintiff is not seeking a stay of the instant action, and CPLR 2201 only empowers the Court to grant a stay of the proceedings in an action pending in this Court, the plaintiff's motion must be treated as one for a preliminary injunction pursuant to CPLR 6301, rather than a stay pursuant to CPLR 2201. (See, e.g., 21st Century Advantage Ins. Co. v Cabral, 35 Misc.3d 1240 (A) [Sup Ct Nassau County 2012], St. Paul Travelers Ins. Co. v Nandi, 15 Misc.3d 1145 (A) [Sup Ct Queens County 2007]).
The plaintiff seeks a preliminary injunction staying and enjoining the parties from litigating or commencing any proceedings arising from the March 18, 2021, incident. "To establish the right to a preliminary injunction, the plaintiff must prove by clear and convincing evidence (1) the likelihood of ultimate success on the merits, (2) irreparable injury absent the grant of the injunction, and (3) a balance of the equities in the plaintiff's favor." (Keneally, Lynch & Bak, LLP v Salvi, 190 A.D.3d 961 [2d Dept 2021] [citations omitted]; see also Gonzalez v 231 Maujer St., HDFC, 157 A.D.3d 869, 870 [2d Dept 2018]; Doe v. Axelrod, 73 N.Y.2d 748, 750 [1988]). The decision to grant a preliminary injunction is committed to the sound discretion of the court. (Tatum v Newell Funding, LLC, 63 A.D.3d 911, 912 [2d Dept 2009] [citations omitted]).
"A party seeking the drastic remedy of a preliminary injunction must establish a clear right to that relief under the law and the undisputed facts". (Matter of Wheaton/TMW Fourth Ave., LP v New York City Dept. of Bldgs., 65 A.D.3d 1051, 1052 [2d Dept 2009] [citations omitted]). "The purpose of a preliminary injunction is to maintain the status quo, not to determine the ultimate rights of the parties." (Matter of Wheaton/TMW Fourth Ave., LP, 65 A.D.3d at 1052).
The plaintiff seeks a declaration that the March 18, 2021, incident was not a covered "accident", but was instead a non-covered event intended to look like an "accident", i.e., a "staged accident". Where a motor vehicle collision is the result of an intentional or "staged" event, there is no insurance coverage. (See, Metro Med. Diagnostics, P.C. v Eagle Ins. Co., 293 A.D.2d 751, 751-52 [2d Dept 2002]). The plaintiff's motion consists of, inter alia, an affidavit from STATE FARM claim specialist T.M. with supporting exhibits appended thereto. Rather than provide "clear and convincing evidence" of the likelihood of the plaintiff's success on the merits, M.'s supporting affidavit largely consists of unsubstantiated and hearsay-based assertions. For example, she references uncertified police reports [Exhibit 1 to M. Affidavit], she cites to an "ISO ClaimSearch" database record that was obtained from an unidentified third-party concerning defendant L.'S alleged involvement in prior accidents ["Exhibit 4 to M. Affidavit], and her reference to an investigation into the insured's claimed address in Albany is largely based on hearsay.
The plaintiff has put forth some evidence which appears to indicate that questionable circumstances are involved in the subject collision. For example, she references discrepancies between the sworn EUO testimony given by Participant Defendants R. and G., who were both alleged passengers in the car that was operated by defendant L. However, in light of the other evidentiary deficiencies in the plaintiff's motion papers, the Court finds that the plaintiff failed to "establish a clear right to [a preliminary injunction] under the law and the undisputed facts". (See Matter of Wheaton/TMW Fourth Ave., LP v New York City Dept. of Bldgs., 65 A.D.3d 1051, 1052 [2d Dept 2009] [citations omitted]).
The Court further finds that the opposing defendants' respective motion papers have raised certain issues as to whether the plaintiff complied with the no-fault insurance claim procedures and regulations concerning EUOs and claim denials and the plaintiff's motion papers do not substantively address their compliance with these regulations. "While the existence of issues of fact alone will not justify denial of a motion for a preliminary injunction, the motion should not be granted where there are issues that subvert the plaintiff's likelihood of success on the merits... to such a degree that it cannot be said that the plaintiff established a clear right to relief". (Cooper v Bd. of White Sands Condominium, 89 A.D.3d 669, 669, 931 N.Y.S.2d 696, 697 [2d Dept 2011] [citations omitted]). The Court finds that the disputed factual issues in this case are sufficiently significant to "subvert the plaintiff's likelihood of success on the merits" with respect to its claims arising from the Participant Defendants/Assignors' alleged failure to appear for their EUOs. Accordingly, the Court finds that the plaintiff has failed to establish a likelihood of success on the merits.
The plaintiff's failure to demonstrate by "clear and convincing evidence" a likelihood of success on the merits warrants outright denial of the plaintiff's motion for a preliminary injunction. (Tatum v Newell Funding, LLC, 63 A.D.3d 911, 912 [2d Dept 2009] ["Here, the Supreme Court properly denied the plaintiffs' motion for a preliminary injunction because the plaintiffs failed to demonstrate, by clear and convincing evidence, a likelihood of success on the merits."]).
Furthermore, while the plaintiff asserts that the denial of a preliminary injunction would cause the plaintiff "irreparable injury" because it would have to proceed with "multiple, similar lawsuits and arbitrations and the risk of inconsistent judgments", the Court finds that under the facts of this particular case, the plaintiff has "failed to demonstrate that it would suffer any imminent and nonspeculative harm in the absence of the requested injunctive relief... and failed to demonstrate that any injuries it would suffer would not be compensable by money damages". (Am. Commerce Ins. Co. v Francois, 125 A.D.3d 903 [2d Dept 2015] [internal citations omitted]). The Court further finds that the plaintiff has failed to establish that the balancing of equities favors granting the preliminary injunction, particularly in light of he issues raised by the opposing Provider Defendants. To the extent that the plaintiff is ultimately successful in establishing that the March 18, 2021, incident was "staged", the Provider Defendants were not involved with such fraudulent conduct and the opposing Provider Defendants have established that the granting of a preliminary injunction would harm them to the extent it would delay the resolution of their claims for the medical services they provided to the injured parties.
Based on the foregoing, and in this Court's discretion, the Court finds that the plaintiff has failed to establish entitlement to a preliminary injunction pursuant to CPLR 6301. Therefore, the plaintiff's motion for a preliminary injunction will be DENIED, and the temporary restraining order issued by this Court in the Amended Order to Show Cause entered October 19, 2022, shall be vacated. Accordingly, it is hereby, ORDERED, that the plaintiff's motion for an Order pursuant to CPLR 2201, 6301, and 6313, staying all pending lawsuits, arbitrations, and proceedings arising from the underlying March 18, 2021, incident, and, inter alia, enjoining the defendants named herein, their employees, agents, and all persons acting on their behalf, from filing or commencing any additional lawsuits, arbitrations, and other proceedings arising from the underlying March 18, 2021, incident [Seq. 001], is DENIED in its entirety; and it is further, ORDERED, that the temporary restraining order which was granted by this Court in the Order to Show Cause entered on October 19, 2022 [NYSCEF Doc. No.66], is hereby VACATED; and it is further, ORDERED, that all other requests for relief not specifically addressed herein shall be deemed DENIED.
This constitutes the Decision and Order of the Court.