Opinion
DBDCV186026112S
06-10-2019
BETHEL URGENT CARE CENTER, LLC v. BEYOND URGENT CARE MANAGEMENT, LLC
UNPUBLISHED OPINION
OPINION
Krumeich, J.
The defendant Beyond Urgent Care Management, LLC ("Beyond") has moved to stay all proceedings in the consolidated cases due to a recent federal criminal indictment in the District of New Jersey of Aaron Williamsky ("Williamsky") and Nadia Levit ("Levit"), the principals of Beyond. Defendants’ counsel have moved for leave to withdraw as counsel on the grounds that the attorney-client relationship has irretrievably broken down. Plaintiff has objected to the stay. Trial is scheduled to commence in six weeks on July 18, 2019. For the reasons stated below, the motions are denied.
The Motion to Stay Proceedings is Denied
Defendant argued the stay is required in the interests of justice because Williamsky’s and Levit’s "defense in the criminal case may be severely prejudiced if they are compelled to testify in the civil litigation ..." Defendant argues that "it is likely that Beyond would be required to forego its claims and defenses" if Williamsky and Levit "upon advice of criminal counsel plead the Fifth and refuse to testify at trial ..."
In Tyler v. Shenkman-Tyler, 115 Conn.App. 521, 527-28 (2009), the Appellate Court established factors for a court to consider in exercising its discretion to stay proceedings where there are parallel civil and criminal proceedings: "The issue is whether the court so abused its discretion in refusing to grant the motions for continuance that it deprived the defendant of due process. ‘The matter of continuance is traditionally within the discretion of the trial judge, and it is not every denial of a request for more time that violates due process even if the party fails to offer evidence or is compelled to defend without counsel ... There are no mechanical tests for deciding when a denial of a continuance is so arbitrary as to violate due process. The answer must be found in the circumstances present in each case, particularly in the reasons presented to the trial judge at the time the request is denied.’ ... In all of these cases, the courts held that when there are parallel civil and criminal proceedings, the courts have discretion to stay discovery in a civil proceeding or to stay the action in its entirety if required by the interests of justice ... The propriety of a stay is determined on a case-by-case analysis ... ‘In determining whether to impose a stay ... the court must balance the interests of the litigants, nonparties, the public and the court itself ... The factors a court should consider include: [1] the interests of the plaintiff in an expeditious resolution and the prejudice to the plaintiff in not proceeding; [2] the interests of and burdens on the defendants; [3] the convenience to the court in the management of its docket and in the efficient use of judicial resources; [4] the interests of other persons not parties to the civil litigation; and [5] the interests of the public in the pending civil and criminal actions.’" (Citations omitted.)
The threshold issue to decide is whether the civil and criminal cases here are "parallel" proceedings. See Trustees of the Plumbers & Pipefitters Nat. Pension Fund v. Transworld Mechanical, Inc., 886 F.Supp. 1134, 1139 (S.D.N.Y. 1995) ("[t]he first question to be resolved is the extent to which the issues in the criminal case overlap with those present in the civil case, since self-incrimination is more likely if there is a significant overlap"). In Tyler, 115 Conn.App. at 530 n.5, the Appellate Court noted that in parallel proceedings there is a "significant overlap" in issues: "[a] preliminary question must be the extent to which the issues in the criminal case would overlap with those in the civil case, because self-incrimination is more likely if there is a significant overlap ... Here, in the defendant’s criminal case, the issue is whether he intentionally set fire to the plaintiff’s property. The dissolution proceeding involves the distribution of the parties’ marital assets, one of which would be the subject property in Niantic. Although there is some limited overlap, they are not parallel proceedings. Furthermore, the defendant’s blanket refusal to testify at the dissolution trial did not automatically result in his forfeiting the outcome of the civil proceeding."
Defendant’s counsel appended a copy of the federal criminal indictments by a Grand Jury in New Jersey against Williamsky and Levit to their motions to withdraw. Williamsky and Levit are charged with conspiracy, Medicare fraud, kickbacks, wire fraud and money laundering (Williamsky only) in connection with alleged inflated billing for orthotic braces, manufactured in Hong Kong, and sold to Medicare patients through durable medical equipment ("DME") supply companies owned or controlled by them "in and around New Jersey, New York and elsewhere," billed by a New Jersey company, and marketed by companies in the Philippines. The indictment charged "they would open and/or purchase certain DME companies; submit fraudulent claims to Medicare on behalf of those companies; close those companies one-by-one to avoid Medicare audits and recoupment by Medicare of any fraudulent claims; and then open and/or purchase new DME companies."
From the indictment it appears that there is no overlap of issues between the civil and criminal proceedings. In the consolidated civil case brought by Bethel, LLC against Beyond, it is alleged that Bethel, LLC was formed to operate urgent care centers in Bethel and New Milford. Dr. Mathew Amara was its sole member and manager. Williamsky owned defendant Beyond, that became the manager of Bethel, LLC pursuant to an operating agreement. In this case plaintiff Bethel, LLC alleged that (1) Beyond breached the operating agreement by commingling funds and failure to account, (2) violated C.G.S. § 34-255d by making distributions to itself that rendered Bethel, LLC unable to pay debts when due, (3) violated duties of loyalty and care under C.G.S. § 34-255h, (4) fraudulently induced entry into the operating agreement, (5) failed to transfer promised assets as consideration, (6) misled the public that Beyond, not Bethel, LLC, is the medical services provider, (7) conversion and (8) statutory theft in violation of C.G.S. § 52-564.
In the consolidated civil case brought by Bethel, LLC and Beyond against Dr. Amara it is alleged he breached the operating agreement, breached fiduciary duties, committed conversion and statutory theft and violated the Connecticut Unfair Trade Practices Act ("CUTPA"). Dr. Amara counterclaimed against Beyond and alleged that Beyond misappropriated and converted patient records, denied him access to the records such that he could not care for his patients and breached his services agreement.
None of the issues in the consolidated civil cases pertain to the criminal case against Williamsky and Levit, who are not parties to the civil actions. None of the various companies named in the indictment have any obvious connection to the consolidated case. Beyond is not mentioned in the criminal indictment and is not alleged to have acted as a DME supply company but as a management company in its relationship with Bethel, LLC and Dr. Amara. In Hill Wallack LLP’s motion to withdraw she refers to the New Jersey prosecution as "an unrelated health care fraud case."
Although these are not parallel cases, the Tyler factors in balance weigh against stay of these proceedings. The interests of plaintiff Bethel, LLC and counterclaim plaintiff Dr. Amara in expeditious resolution of their claims are obvious. This action has been pending for over a year and concerns the parties’ interest in and ability to resume care for patients, a business that was allegedly taken away from them by Beyond and given to a third party. This case has been actively litigated and trial is only six weeks away, which also favors the convenience of the court in the management of its docket and in the efficient use of judicial resources. The indictment also refers to possible forfeiture of the criminal defendants’ assets so the plaintiff and counterclaim plaintiff’s interest in expeditious trial and prejudgment remedy hearing becomes even more urgent. There is an interest in the public in the civil cases to the extent it concerns urgent care medical services in Bethel and Milford. There will be no effect on the public’s interest in the criminal prosecution if the civil cases are allowed to proceed. Given the lack of overlap of issues, it is unlikely the prosecution will receive an unfair advantage if the civil cases are tried first. See Trustees, 886 F.Supp. at 1139-40.
The only factors that weigh in favor of the stay are the interests and burdens on Beyond and the interests of Williamsky and Levit. Beyond has asked for a stay until termination of the criminal proceedings in federal court. This is not a stay limited to a relatively short, definite period. Williamsky and Levit were arrested in April 2019, presumably shortly after the Grand Jury issued the indictment. The civil cases pending since March 29, 2018, are on the eve of trial.
In Tyler the Appellate Court observed: "At the time the court denied the defendant’s motion to have the matter continued until the outcome of the criminal proceeding, the dissolution proceeding had been pending for almost one year, and no date had been set for the criminal trial. The record gives no indication as to how quickly the criminal trial might have taken place thereafter and, in fact, the criminal proceeding is still pending. Under the circumstances of this case, the court properly could have concluded that it would be unreasonable to postpone a dissolution trial for such an excessive period of time. Accordingly, we cannot conclude that the court abused its discretion in denying the indefinite continuances as requested by the defendant." 115 Conn.App. at 530-31.
Beyond is hampered in its defense and prosecution because Williamsky is incarcerated in New Jersey and Levit is out on bail on condition she not leave the State of New Jersey. These obstacles are not insurmountable. Depositions may be taken by commission or by remote electronic means. Testimony may be admitted at trial by video or telephonically or by remote electronic means. The Court frequently admits live testimony of inmates by remote electronic means. Video testimony is common for witnesses unavailable to testify in person. Levit’s conditions of bail may be modified to permit her to testify in person at the trial or her testimony may be admitted by video or remote electronic means from a New Jersey location.
The self-incrimination argument is undercut by the lack of overlap between the criminal and civil proceedings. Beyond argues that "[i]f this litigation is allowed to proceed, Williamsky and Levit, principal witnesses for the Defendant, could be in danger of exposing significant information to the prosecution in the federal case, and incriminating themselves." (Emphasis in original.) This hypothetical seems unlikely to occur given the different issues involved. If Beyond is concerned about admission of criminal conduct in the matters at issue in the civil case, there is always a possibility a party or witness may invoke Fifth Amendment rights against self-incrimination and presumably will make an informed choice after considering the consequences. In Tyler the defendant chose to exercise his right to not testify: "[i]n the present case, there is no question that the defendant had the right to assert his fundamental constitutional right against self-incrimination ... The fifth amendment privilege against self-incrimination not only protects an individual from being called involuntarily as a witness against himself in a criminal proceeding, but also affords him the right to refuse to answer questions in a civil proceeding where the answers might incriminate him in a future criminal proceeding ... Here, the defendant exercised his privilege and was not compelled to testify. His fifth amendment privilege is intact and has not been waived in connection with his future criminal proceeding." 115 Conn.App. at 525-26 (citations omitted). The proper course to protect Williamsky’s and Levit’s constitutional rights is to reserve the question until their examination and the invoking of the privilege. This is a courtside trial so there is no question of possibly prejudicing a jury. Compare, Rhode v. Milla, 287 Conn. 731, 737 (2008). Ultimately, whether Beyond presents testimony from its principals depends on the witnesses’ own choices and strategy. See State v. Easton, 111 Conn.App. 538, 543 (2009). If Williamsky and Levit decline to participate in litigation of the civil cases then Beyond, the company formed by Williamsky, properly will bear the burden of their non-participation and the consequences that flow therefrom.
The Fifth Amendment privilege against self-incrimination "not only protects the individual against being involuntarily called as a witness against himself in a criminal prosecution but also privileges him not to answer official questions put to him in any other proceeding, civil or criminal, formal or informal, where the answers might incriminate him in future criminal proceedings." Lefkowitz v. Turley, 414 U.S. 70, 77, 94 S.Ct. 316, 322, 38 L.Ed.2d 274 (1973). The privilege does not, however, forbid the drawing of adverse inferences against parties to civil actions when they refuse to testify in response to probative evidence offered against them. The prevailing rule is that the Fifth Amendment "does not preclude the inference where the privilege is claimed by a party to a civil cause." 8 Wigmore, Evidence (McNaughton Rev. 1961) s 2272, p. 439; see also Baxter v. Palmigiano, 425 U.S. 308, 318, 96 S.Ct. 1551, 1557, 47 L.Ed.2d 810 (1976)." Olin Corp. v. Castells, 180 Conn. 49, 53-54 (1980).
The motion for stay is denied.
The Motion to Withdraw as Counsel is Denied
Feiner Wolfson, LLC, which has been lead counsel in the consolidated cases since their commencement, and Hill Wallack, LLP, a New Jersey law firm admitted pro hac vice on February 25, 2019, have both moved to withdraw claiming that "the attorney-client relationship has irretrievably broken down." Both claim communications with Williamsky and Levit, the principals of Beyond, have "ceased." Feiner Wolfson, LLC has also asserted that Beyond has breached its written engagement letter. At oral argument counsel for Hill Wallack, LLP mentioned not being paid.
Trial of this case is scheduled to begin on July 18, 2019, which is also the date scheduled for the continued prejudgment remedy proceeding, as the Court noted in its order dated May 6, 2019. These cases have not been assigned for trial on October 3, 2019, as counsel stated in their motions.
In Rosenfeld v. Rosenfeld, 115 Conn.App. 570, 578 (2009), the Appellate Court, in an analogous situation where defendant sought to discharge counsel and delay trial, held: "[a] defendant has no unbridled right to discharge counsel on the eve of trial ... In order to work a delay by a last minute discharge of counsel there must exist exceptional circumstances." No exceptional circumstances exist here. To the contrary, the failure of Williamsky and Levit to communicate with counsel may be seen as a strategy to delay trial of the civil litigation. In any event, withdrawal of counsel so close to trial and the prejudgment remedy hearing "will have a materially adverse effect on the client ..." State v. Dijmarescu, 182 Conn.App. 135, 146 (2019).
"Thus, in accordance with rule 1.16(b)(1), withdrawal is appropriate for any reason provided that it will not have a materially adverse effect on the client. Additionally, withdrawal is also appropriate if the representation has been rendered unreasonably difficult by the client. Thus, a breakdown in communication between attorney and client may properly constitute good cause to withdraw as counsel." Dijmarescu, 182 Conn.App. at 145-46 (footnote omitted). "Rule 1.16(b) of the Rules of Professional Conduct dictates when a lawyer may properly terminate representation, and provides, in relevant part, that ‘[e]xcept as stated in subsection (c), a lawyer may withdraw from representing a client if: (1) withdrawal can be accomplished without material adverse effect on the interests of the client; ... (6) the representation will result in an unreasonable financial burden on the lawyer or has been rendered unreasonably difficult by the client; or (7) other good cause for withdrawal exists.’ (Emphasis added.)
The Court does not find "good cause" to grant the motion to withdraw as required under Practice Book § 3-10. See generally 1 Conn. Prac., Super.Ct. Civ Rules § 3-10 (2018 ed.). In State v. Williams, 102 Conn.App. 168, 205 (2007), the Appellate Court, in another analogous situation, referred to various factors to consider when a criminal defendant wants to substitute trial counsel: "In evaluating whether the trial court abused its discretion in denying [the] defendant’s motion for substitution of counsel, [an appellate court] should consider the following factors: [t]he timeliness of the motion; adequacy of the court’s inquiry into the defendant’s complaint; and whether the attorney/client conflict was so great that it had resulted in total lack of communication preventing an adequate defense."
The Court is not convinced that there is a total lack of communication and an irretrievable breakdown in attorney-client relationship. According to representations by New Jersey counsel there have been communication of a sort through a daughter and both defendants are represented by criminal defense counsel. That communication may be more difficult and require greater effort, such as traveling to New Jersey or visiting a client in prison, is not good cause to withdraw. Moreover, both counsel represented that they only recently learned about the criminal indictment and much of their difficulty communicating with their client’s principals stem from new circumstances since April where Williamsky’s and Levit’s priorities have understandably been diverted from the civil action. Counsel need to exert reasonable efforts to re-focus the client to prepare for the upcoming trial and prejudgment remedy hearing on July 18, 2019. Counsel also need to address outstanding discovery demands of Bethel, LLC and Dr. Amara to protect Beyond’s interests and in accordance with their professional responsibilities as officers of the court.
Perhaps Williamsky and Levit will be more motivated to communicate with counsel and to pay legal bills now that Beyond’s motion for stay has been denied. If Beyond’s principals persist in failing to cooperate with counsel their non-cooperation will likely result in discovery sanctions and default. Beyond will need counsel to represent its interests in the pending cases. Counsel have been placed in a difficult position by their client, but they have professional obligations to continue to represent their client now that their motion to withdraw has been denied.