Opinion
No. HUCV371–16.
05-11-2017
HARDEN STREET MEDICAL, P.C., a/a/o Louna Mercure, Plaintiff, v. The CHARTER OAK FIRE INSURANCE COMPANY, Defendant.
Upon the following papers numbered 1 to 27 read on this motion by plaintiff for an order to quash subpoena and defendant's motion to strike Notice of Trial by Notice of Motion / Order to Show Cause and supporting papers 1–10, 11–16; Notice of Cross Motion and supporting papers; Answering Affidavits and supporting papers 17–22; Replying Affidavits and supporting papers 23–27; Filed papers; Other; it is,
ORDERED that the motion by plaintiff brought by order to show cause, seeking to quash the subpoena issued to its non-party bank, J .P. Morgan Chase Bank, by defendant's counsel, and the notice of motion brought by defendant, seeking to strike the plaintiff's Notice of Trial and Certificate of Readiness, and to remove the matter from the trial calendar, are consolidated; and it is further
ORDERED that the motion by plaintiff seeking to quash the subpoena issued by defendant's counsel to plaintiff's non-party bank, J.P. Morgan Chase Bank, is denied; and it is further
ORDERED that the stay issued by the Court, is hereby vacated, and the subpoena duces tecum issued by defendant to J.P. Morgan Chase Bank is valid and enforceable by the issuing party; and it is further
ORDERED that the motion by defendant to strike the Notice of Trial and Certificate of Readiness dated December 22, 2016, filed by plaintiff pursuant to 22 NYCRR § 212.17(a), is granted, and the action shall be stricken from the trial calendar pursuant to 22 NYCRR § 212.17(c). The Clerk of the Court is directed to strike the action from the trial calendar.
Defendant's counsel seeks to strike plaintiff's Notice of Trial and Certificate of Readiness pursuant to 22 NYCRR § 208.17, however, the correct cite is 22 NYCRR § 212.17.
This is an action by plaintiff health care provider seeking recovery of payment for medical services rendered on 10/04/12–02/21/13 in the total sum of $7,286.21, as the result of a car accident of plaintiff's assignor, under New York's No–Fault Law.
Defendant caused a subpoena duces tecum to be served, by fax, on plaintiff's non-party bank, J.P. Morgan Chase Bank, of which receipt and acceptance was acknowledged in a letter attached as an exhibit by defendant. It required production of bank records, including copies of banking statements, canceled checks, deposit slips, signature cards, corporate resolutions, account authorizations, bank account registers, ledgers and electronic transfers for plaintiff for the years 2012 through the present, for all accounts titled in the name of Harden Street Medical, PC, including Account number 978760122.
Plaintiff moves by order to show cause for a protective order pursuant to CPLR 2304, seeking to quash the subpoena duces tecum. Plaintiff objects to the service by fax on the non-party bank, J.P. Morgan Chase Bank, stating it was improperly served. Plaintiff complains the subpoena is being improperly used as a "fishing expedition" for discovery or for the existence of evidence. Plaintiff also protests the subpoena fails to set forth factual predicates for the relief sought, and the material requested is overbroad and an unsupportable demand for discovery.In opposition to plaintiff's motion to quash, defendant submits an affidavit from an employee and Manager of the Medical Fraud Division, who was previously a Fraud Investigator for defendant, as well as an employee in claims and the Special Investigative Units. He submits the factual findings of his investigative report, which include certain patterns that are notoriously indicative of fraudulent situations involving no-fault claims, including inter-relationships with different named medical entities and management companies, and named individuals, based at the same address. Defendant asserts its demands are properly within a subpoena duces tecum, and are material and necessary to search for Mallella fraud claims (see State Farm v. Mallella, 4 NY3d 313 [2005] ).
Mallella permits insurance carriers with no-fault claims to pursue fraud investigations for good cause and withhold reimbursement from fraudulently licensed medical corporations.
Defendant also moves by motion to strike the Notice of Trial and Certificate of Readiness dated 12/22/16, which was filed by plaintiff pursuant to 22 NYCRR § 212.17. Defendant asserts that plaintiff has failed to comply with the discovery demands of defendant, and yet filed a Certificate of Readiness and Notice of Trial with the Court.
The Court notes that defendant does not move to compel discovery pursuant to CPLR 3124. Therefore, the Court makes no ruling in this regard, other than stated within this decision.
The Court also notes the motion to strike the Notice of Trial and Certificate of Readiness was timely brought within 20 days pursuant to 22 NYCRR § 212.17 [c], and this was not raised by any party as an issue. Both motions, by plaintiff and by defendant, were marked submit on the same date, and have been consolidated by the Court for the within rendered decision.
The Court notes that plaintiff has not denied defendant's assertion that plaintiff has not complied with the discovery demands of defendant, including outstanding interrogatories, notice for discovery and inspection pursuant to CPLR 3101, and notice to take deposition upon oral examination. Indeed, counsel for defendant submits his affirmation in support of the motion to strike, stating that "there is pending discovery in the within matter, this matter is not ready to be placed on the trial calendar, and the Court has been incorrectly informed by plaintiff's counsel that discovery has been completed ..."
Here, the Court finds that defendant has complied with the notice requirement of CPLR 3101[a][4] in stating on the face of the subpoena "the circumstances or reasons such disclosure is sought or required" (see Matter of Kapon v. Koch, 23 NY3d 32 [2014] ; Jamaica Wellness Med. P.C. v. USAA Cas. Ins. Co., 49 Misc.3d 926 [Civ Ct of City of New York, Kings Cty 2015] ).
The Court further determines that defendant has demonstrated its discovery demands are both material and necessary (see CPLR 3101[a] ; State Farm Mut. Auto. Ins. Co. v. Mallela, supra ), and "is in keeping with this state's policy of liberal discovery" (see Matter of Kapon v. Koch, supra at 39). There is no requirement that the subpoenaing party demonstrate that it cannot obtain the requested disclosure materials from any other source ( Id. at 38 ). The use of the words "material and necessary" must be interpreted to require disclosure "of any facts bearing on the controversy which will assist preparation for trial by sharpening the issues and reducing delay and prolixity" ( Id. at 38, citing Allen v. Crowell–Collier Publ. Co., 21 N.Y.2d 403 [1968] ).
Disclosure from a non-party "requires no more than a showing that the requested information is relevant to the prosecution or defense of the action" (see Bianchi v. Galster Management Corp., 131 AD3d 558 [2nd Dept 2015] ). Therefore, plaintiff's objections to the disclosure demands in the subpoena lack sufficient merit (see also One Beacon Ins. Group, LLC. v. Midland Med. Care, P.C., 54 AD3d 738 [2nd Dept 2008] ; Q–B Jewish Med.Rehabilitation, P.C. v. Allstate Ins. Co., 33 Misc.3d 64 [App. Term, 2nd Dept 2011] ).
The Court also determines that plaintiff's motion to quash the subpoena has failed in its burden to demonstrate that the discovery sought is "utterly irrelevant" to the action or that the "futility of the process to uncover anything legitimate is inevitable or obvious" (Id. at 34; CPLR 3103[a] ). The burden is on the moving party to establish the need for a protective order (see Vivitorian Corp. v. First Cent. Ins. Co., 203 A.D.2d 452, 453 [2nd Dept 1994] ; CPLR 3103[a] ). Also, a motion for a protective order is addressed to the sound discretion of the Court (see Jamaica Wellness Med. P.C. v. USAA Cas. Ins. Co., supra ).
In the view of the Court, defendant is entitled to financial records to ascertain whether the health care provider is actually ineligible to recover assigned no-fault benefits (see State Farm Mut. Auto. Ins. Co. v. Mallela, supra; All Boro Psychological Services, P.C. v. Auto One Ins. Co., 35 Misc.3d 136[A] [App Term, 2nd, 11th & 13th Jud Dists, 2012] ), including corporate tax returns and tax records (see 62–41 Woodhaven Med. P.C. v. Adirondack Ins. Exch., 30 Misc.3d 131[A] [App Term, 2nd, 11th & 13th Jud Dists 2011], and bank records to show whether disproportionate shares of a professional corporation's revenue is evidence of ownership and/or control by an unlicensed individual (see One Beacon Ins. Group, LLC. v. Midland Med. Care, P.C., supra ).
Moreover, plaintiff's argument that defendant improperly served the subpoena duces tecum, by fax, on plaintiff's non-party bank, is unavailing. The bank accepted service of the subpoena without objection.
Therefore, plaintiff's motion to quash the subpoena duces tecum served by defendant on plaintiff's non-party bank, J.P. Morgan Chase Bank, is denied. The stay by the Court is lifted and the subpoena duces tecum remains valid and enforceable by defendant.
The motion by defendant to strike the Notice of Trial and Certificate of Readiness dated December 22, 2016, filed by plaintiff, is granted, to the extent that the action shall be stricken from the calendar pursuant to 22 NYCRR § 212.17(c). The Clerk of the Court is directed to strike the action from the calendar.
The foregoing constitutes the decision and order of this Court. Submit judgment.