Opinion
Index No. 100348/2011
07-27-2012
ZVI HERSCHMAN, Plaintiff, v. KERN, AUGUSTINE, CONROY & SCHOPPMANN; RUDOLPH GABRIEL, RALPH ERBAIO, DANETTE SLEVINSKI AND MICHAEL SCHOPPMANN, Defendants.
, J.:
Plaintiff Zvi Herschman (Herschman) seeks compensation from defendants, four individual attorneys and a law firm (together, defendants or KACS), for legal malpractice and the violation of Judiciary Law § 487. Defendants, Herschman's former counsel, move, pursuant to CPLR 3211 (a) (1), (5) and (7), to dismiss the complaint, or, in the alternative, for an order, pursuant to CPLR 3211 (c), converting the motion to summary judgment.
Background
It is undisputed that, commencing in 2004, defendants represented Herschman, a physician, concerning various matters. In 2005, the Centers for Medicare and Medicaid Services (Medicare) commenced an investigation of Herschman. Herschman was also, over the years, the subject of additional investigations, commenced by the New York State Department of Health's Office of Professional Medical Conduct (OPMC), concerning Medicare billing and patient care.
For simplicity, the word "Medicare" will be used to refer to any entity associated with the Medicare program that participated in conducting billing investigations of plaintiff.
In the complaint, Herschman alleges that, in 1996, he hired Jerrold Levoritz to provide counseling services for patients at plaintiff's office. Herschman contends that, although Levoritz was not a licensed psychologist, Levoritz stated that he had been employed as a psychologist for the State of New York for more than 25 years (Def. Mov., Exh. 1 [Complaint], ¶¶ 18-22). Herschman further alleges that on April 5, 2005, Medicare requested licensing credentials for Levoritz, and that Herschman referred the matter of the investigation of Levoritz's credentials and the making of a response to the Medicare inquiry to KACS (id., ¶ 21-22). Herschman asserts that, in April 2005, KACS learned that Levoritz did not have a license to work as a psychologist and that in November 2005, KACS discovered that Levoritz did not have a PhD degree. Herschman claims that the defendants failed to inform him of this, and of the results of any investigation into Levoritz's background. Herschman asserts that defendants also failed to respond to Medicare about the requirements for a person to perform psychological services in a private doctor's office (id., ¶ 27).
Herschman claims that, in or around November 2005, Medicare audited him and requested patient medical records, and that he forwarded this inquiry, and his response to it, to KACS, so that defendants could respond to Medicare, but that KACS failed to do so (id., ¶¶ 33-36). Plaintiff alleges that as a result of defendants' failure to act, he was charged with criminal acts and arrested on October 27, 2009, and that defendants failed to respond to his requests for help when he called to inform them of his pending arrest (id., ¶¶ 37-38). Herschman contends that defendants permitted the Medicare investigation to proceed without providing information that would have exonerated him, and that had defendants properly responded to Medicare, he would not have been arrested or charged with any crimes (id., ¶¶ 42, 48). Specifically, Herschman states that defendants permitted the Medicare investigation to proceed without advising him of a 2007 Office of Inspector General (OIG) report that Herschman states demonstrates that no license is required to provide psychological services under the supervision of one licensed to provide such services (id., ¶ 41).
Herschman also alleges that while the Medicare investigation that led to his arrest was ongoing, defendants placed the Medicare portion of the file into storage, unaware that it remained there until 2010 (id., ¶¶ 44-45). Herschman alleges that when KACS was asked to provide documents concerning the investigation to his attorneys in the criminal case, defendants stated that the file, which had been placed into storage, did not exist (id., ¶ 54). He further alleges that defendants deceived him, by informing him that they were working with and responding to Medicare to provide necessary information, when they were not, and by stating that they were representing him to Medicare, and by billing him for work that was not performed (id., ¶¶ 49-50, 54, 57). Herschman asserts that he relied on defendants' statements, which were false and deceptive, and which violated Judiciary Law § 487 (id., ¶¶ 49-50, 57-60).
Herschman also maintains that defendants were negligent in failing to properly represent him before OPMC on other matters, and in failing to obtain the Department of Health report to ascertain that the report was false and inaccurate, and in failing to deliver materials to OPMC (id., ¶¶ 51-52).
Although not specified in the complaint, it appears that based on Herschman's affidavit submitted in opposition to the motion, that the Department of Health report was written in connection with OPMC's investigation into a case concerning a patient who died in Herschman's care while undergoing a rapid detoxification procedure.
In support of their motion to dismiss, defendants submit, inter alia, the affidavits of attorneys that worked on the case and correspondence with Herschman. Defendants also present evidence that Herschman stated that Levoritz was providing psychological services to patients and that Herschman knew that Levoritz was not licensed. Specifically, they point out that in Herschman's correspondence to defendants, addressing a Medicare letter dated April 14, 2005, he stated that "all patients are seen by me and [Levoritz], with [Levoritz] spending more time on the patient psychology issues" (Def. Mov., Gabriel Aff., Exh. D, at 1). In correspondence addressing an October 28, 2005 Medicare letter, Herschman stated that "Dr. Levoritz, [is] the psychologist who works with me (he is not licensed, though he was a psychologist in the NYC Board of ED for 30 years)" (id., Gabriel Aff, Exh. K), and that Levoritz never saw a patient without Herschman being present, and under Herschman's direct supervision, "somewhat as a chaperon [sic], scribe, and assistant" (id.). The documents also reflect that defendants sent Herschman a Medicare "Provider Background Questionnaire," asking him to review it, make corrections, sign and return it, which lists Jerrold Levoritz as "Jerrold Levoritz, MSEd.; independent contractor" (id., Gabriel Aff, Exh. M, at 3).
Defendants contend that the record demonstrates that they provided Medicare with all documents and information that Herschman was willing to provide. Defendants also submit the felony complaint lodged against Herschman (the Criminal Complaint), dated October 27,2009.The Criminal Complaint alleges that Herschman violated Penal Law § 155.40 (Grand Larceny in the Second Degree) and Penal Law § 176.25 (Insurance Fraud in the Second Degree) for stealing and wrongfully obtaining $98,539.47 from Medicare by billing for psychological services that were never rendered during the period from January 3, 2003 through March 20, 2007.
As discussed in this court's order of March 30, 2012, over plaintiff's objection, the court accepted defendants' supplemental reply, which included some public records involved in the underlying criminal actions against plaintiff and Levoritz. Plaintiff was afforded an opportunity to respond to these submissions, but he chose not to do so.
Regarding the criminal case against Levoritz, the defendants submit the Superior Court Information, dated February 24, 2010, and the transcript of Levoritz's plea bargain (Def. Sup. Reply Aff., Exh. 3, Exh 4). The Information accuses Levoritz of grand larceny in the second degree, for wrongfully obtaining $98,539.47 from Medicare by billing for psychological services not rendered during the period from January 3, 2003 through March 20, 2007. The Information further accuses Levoritz of acting in concert with another to falsify business records, by creating treatment notes for patients, documenting services that were not provided to them to aid a healthcare provider with billing and receiving payment from Medicare for psychological services not rendered. The transcript of Levoritz's plea bargain, dated February 24, 2010, demonstrates that Levoritz pleaded guilty to both charges. While this motion was pending, defendants submitted proof that on May 17, 2012, Herschman was tried and convicted of Grand Larceny in the Second Degree.
In opposition to the motion, Herschman submits an affidavit in which he states that Levoritz was working as a psychologist in the New York City school system in 1996, and showed him his Board of Education identification card, so that Herschman did not question his credentials. Herschman provides details about services that he avers Levoritz provided, and states that he billed Medicare for these services pursuant to section 410.26 of Title 42 of the Code of Federal Regulations (CFR). Plaintiff contends that this regulation permitted him to bill for psychological services that Levoritz provided to patients, incident to Herschman's physician services, so long as he supervised Levoritz (the "Incident To Rule"). Herschman states that he fired Levoritz in 2006, when Levoritz admitted to him that he was not licensed.
Herschman avers that in November 2005, Medicare commenced an investigation of his billing for services provided by Levoritz incident to Herschman's physician services. Herschman further avers that defendants ascertained that Levoritz was not licensed in 2005, but failed to advise him of this, or to direct him, and also failed to communicate with Medicare properly to avoid his arrest. Herschman maintains that regardless of whether or not Levoritz was authorized to bill Medicare, he authorized to do so for Levoritz's services under the Incident To Rule. Herschman also avers that had defendants conducted an adequate investigation, and discovered that Levoritz was a fraud or unlicensed, that they should have advised him of this, and cooperated with Medicare to resolve the matter. Herschman states that defendants' failure to do so, and to represent him in connection with the Incident To Rule, led to his October 27, 2009 arrest. Herschman asserts that in January 2011, after his office provided an OPMC attorney with a package that included an OIG report addressing the Incident To Rule, and the applicable CFR reference, that OPMC dropped its investigation against him concerning Levoritz.
Herschman also states that there were other matters in which defendants failed to provide OPMC with requested documents, including OPMC's investigation into a case concerning a patient who died while undergoing a rapid detoxification procedure. In particular, according to Herschman, OPMC's independent physician reviewed the case, and found that Herschman had done nothing wrong, and that defendants learned of this report, but did nothing. Herschman further avers that, in February 2010, a Department of Health investigator, a pharmacist, admitted at his deposition that his report was inaccurate, and testified that defendants had access to that report. He also states that in light of OPMC's expert's exoneration of him, that had defendants properly handled this matter it should have been resolved, but instead it is still ongoing at OPMC. Concerning another OPMC investigation, involving an adolescent, Herschman states that defendants failed to forward records to OPMC that he sent to their offices many times.
Herschman asserts that during the course of their representation of him, defendants misled him and deceived him into believing that they were advocating on his behalf when they were not, and failed to provide him with proper legal representation on all matters for which he retained them. Herschman further asserts that as a result of their negligence, carelessness, and fraud, he was arrested and charged with criminal acts, and stands accused of professional misconduct.
Discussion
Although on a motion to dismiss a complaint pursuant to CPLR 3211 (a) (7), "the pleading is to be afforded a liberal construction," and "the facts as alleged in the complaint [are presumed] as true" (Leon v Martinez, 84 NY2d 83, 87 [1994]), "factual claims [that are] either inherently incredible or flatly contradicted by documentary evidence are not entitled to such consideration" (Mark Hampton, Inc. v Bergreen, 173 AD2d 220, 220 [1st Dept 1991] [citation omitted]). "Factual allegations presumed to be true on a motion pursuant to CPLR 3211 may properly be negated by affidavits and documentary evidence" (Wilhelmina Models, Inc. v Fleisher, 19 AD3d 267, 269 [1st Dept 2005]; see Biondi v Beekman Hill House Apt. Corp., 257 AD2d 76 [1st Dept 1999], affd 94 NY2d 659 [2000] [affirmations and correspondence showed that plaintiff did not have a claim]). To the extent that such evidence is considered, "the standard of review under a CPLR 3211 motion is whether the proponent of the pleading has a cause of action, not whether he has stated one" (Biondi, 257 AD2d at 81 [citation and quotation marks omitted]).
Plaintiff argues that the motion should be denied because the defendants have submitted affirmations in support of their motion, as opposed to affidavits required by CPLR 2106. As defendants have submitted affidavits in reply, adopting their moving affirmations, "there is no indication that [plaintiff] was prejudiced by the technical defect in opposing the motion" (Berkman Bottger & Rodd, LLP v Moriarty, 58 AD3d 539, 539 [1st Dept 2009] [regarding CPLR 2106]), and the motion is not properly denied on this ground.
Defendants contend that the legal malpractice cause of action should be dismissed as Herschman cannot prove the required elements of the claim. These elements are: "(1) the negligence of the attorney; (2) that the negligence was the proximate cause of the loss sustained; and (3) proof of actual damages [internal quotation marks and citation omitted]" (Ulico Cas. Co. v Wilson, Elser, Moskowitz, Edelman & Dicker, 56 AD3d 1, 10 [1st Dept 2008]). As to the negligence element of the tort, "a plaintiff must demonstrate that the attorney failed to exercise the ordinary skill and knowledge commonly possessed by a member of the legal profession" and that the breach of duty to use such care proximately caused the plaintiff to suffer "actual and ascertainable damages" (Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438,442 [2007] [citation and quotation marks omitted]). To prevail on this motion, defendants, as movants, must establish that plaintiff is unable to prove at least one of the elements of his claim (see Pedro v Walker, 46 AD3d 789, 790 [2d Dept 2007]).
Concerning the proximate cause element of the claim, the complaint alleges that Herschman hired defendants to defend him concerning OPMC and Medicare's investigations into Levoritz's credentials and his billing for Levoritz's psychological services to patients under the Incident To Rule. It is further alleged that Herschman's October 2009 arrest was proximately caused by defendants': (1) failure to investigate Levoritz and advise Herschman that Levoritz did not have the required credentials, (2) failure to advise him and provide him and Medicare with information about Herschman's billing for Levoritz in connection with the Incident To Rule; (3) failure to timely settle the Medicare/OPMC matters concerning the Incident To Rule; and (4) failure to provide records to Herschman's criminal defense attorneys. Herschman also asserts that defendants committed malpractice by failing to settle a $98,539.47 matter with Medicare, for example through restitution, so as to avoid the criminal charges, and that had defendants done their job, the Medicare issues would have been resolved and his arrest avoided.
The court notes that the documentary evidence, consisting of the parties' correspondence (see Schutty v Speiser Krause P.C., 86 AD3d 484, 484 [1st Dept 2011]), demonstrates that Herschman knew that Levoritz was not licensed in 2005, before he hired KACS, and contradicts the allegations in the complaint that Herschman did not know that Levoritz was unlicensed until he confronted him in 2006.
However, the documentary evidence submitted on this motion flatly contradicts the allegations in the complaint and the statements in Herschman's affidavit that any negligence by defendants proximately caused defendants' arrest and criminal prosecution for Medicare fraud, and therefore the complaint must be dismissed (see Sonnenschine v. Giacomo, 295 AD2d 287 (1st Dept 2002)[affirming trial court decision dismissing complaint for legal malpractice as counsel for defendants could not be held liable for malpractice, regardless of any negligence which may have caused defendants' answer to be stricken, absent evidence that defendants had a meritorious defense]; Russo v. Feder, Kaszovitz, Isaacson, Weber, Skala & Bass, LLP, 301 AD2d 63 [1st Dept 2002] [unsuccessful opposition to summary judgment motion in trip and fall action not shown to be legal malpractice where the evidence did not plaintiff's claim and thus plaintiff could not show that but for counsel's alleged negligence he would have obtained a favorable result]). In particular, while the alleged acts of negligence in the complaint relate to the investigation of Levoritz and his lack of credentials and Herschman's defense based on the Incident To Rule, the documentary evidence reveals that the criminal prosecution of Herschman was unrelated to these matters. In particular, the Criminal Complaint indicates that Herschman was arrested for billing Medicare for services that were never rendered, and not for billing the services provided by Levoritz as an unlicensed psychologist.
Moreover, there is nothing in the record suggesting that had defendants provided Medicare with additional information or settled the investigation of Levoritz's claim that Herschman would have been able to avoid criminal prosecution for charging Medicare for services that were never rendered, and Herschman's contentions to the contrary are speculative and unpersuasive. Likewise, allegations that defendants failed to provide documents to his criminal attorneys that would have enabled him to avoid arrest are insufficient as Herschman does not identify the documents, or how they could have aided his defense.
In his affidavit, Herschman amplifies conclusory allegations in his complaint regarding two separate OPMC investigations, one concerning a patient who died while undergoing a detoxification procedure and another concerning an adolescent. However, even considering the additional statements in Herschman's affidavit, the complaint fails to state a cause of action for legal malpractice against defendants in connection with these investigations, and it cannot be inferred from the pleadings any negligence by defendants in connection with these investigations was a proximate cause of damages to Herschman, particularly as Herschman suggests that such investigations will and have been resolved in his favor. Accordingly, the legal malpractice cause of action must be dismissed, and the court need not consider defendants' additional arguments, including that the cause of action is time-barred.
Defendants also move to dismiss plaintiff's Judiciary Law § 487 claim, asserting that the claim is not sufficiently specific, as the complaint states only that the defendants deceived Herschman by making false, misleading and deceptive statements that they were representing him and properly dealing with the Medicare investigation (Complaint, ¶¶ 57, 58).
In opposition, Herschman argues that the facts alleged show a pattern of deceit, whereby defendants continually made representations to plaintiffs, over the years, "that they were representing him properly in connection with the Medicare investigation, when they were in fact not doing so . .. but sent plaintiff's file, in connection with the Medicare investigation, to a storage facility" (PI. Memo, of Law, at 4). Herschman argues that while he was relying on defendants' representation of him, they deceived him, by placing the file concerning the OPMC investigation file into storage, and that it is questionable as to why defendants would have done so during an ongoing investigation (Ronemus Aff, ¶ 22).
In support, of his position, Herschman attaches a receipt or label, from a records management company, indicating that a file had been placed in storage concerning an OPMC investigation of Herschman (Ronemus Aff, ¶22, id., Exh. I). In addition, Herschman submits the affidavit of his wife, Aviva Lehrfield Herschman, who avers that she visited KACS on February 16, 2010, to retrieve all of the Herschman's file materials, and that the file produced that day did not include anything pertaining to issues in connection with Medicare or Levoritz, and that the portion of the file was placed in storage with a records management company on or about December 10, 2008. Ms. Herschman further avers that she returned the next day and was provided with a file labeled "Medicare" that had been retrieved from the records management company. Ms. Herschman states this file contained various documents relating to the issue of defendants' representation of plaintiff in connection with Medicare and Levoritz.
Judiciary Law § 487, provides, in part, that: "An attorney or counselor who is . .. guilty of any deceit or collusion, or consents to any deceit or collusion, with intent to deceive the court or any party . .. [i]s guilty of a misdemeanor, and in addition to the punishment prescribed therefor by the penal law, he forfeits to the party injured treble damages, to be recovered in a civil action." Judiciary Law § 487 claims based on fraud must be pleaded with sufficient particularity (see Briarpatch Ltd., L.P. v Frankfurt Garbus Klein & Selz, P.C., 13 AD3d 296, 297 [1st Dept 2004], Iv denied, 4 NY3d 707 [2005] [claim of "violation of Judiciary Law § 487 [was] not pleaded with sufficient particularity"]; CPLR 3016 [b]).
Although the statute does not expressly require a pattern of chronic delinquency, in certain instances, the Appellate Division, First Department, has made it a prerequisite to recovery (Dinhofer v. Medical Liability Mut. Ins. Co. 92 AD3d 480 [1st Dept 2012]; Nason v. Fisher, 36 AD3d 486 [1st Dept 2007], but see, Amalfitano v. Rosenberg, 533 F3d 117 [2d Cir 2008]). Here, the complaint contains insufficient allegations of chronic delinquency or a pattern of misconduct. Moreover, Herschman's claims under Judiciary Law § 487 fail to allege the type of intentional, egregious conduct required to permit recovery under the statute. Judiciary Law § 487 concerns intentional deception, and not merely negligence (Specialized Indus. Services Corp. v. Carter, 68 AD3d 750 [2d Dept 2009]; Scarborough v Napoli, Kaiser & Bern, LLP, 63 AD3d 1531 [4th Dept], rearg. denied, 66 AD3d 150 [2009]). In this connection, Herschman does not indicate that one of the defendants, or anyone else from the firm, specifically represented to him that KACS was performing work concerning the Medicare investigation after December 10, 2008, when Herschman states that the file was sent to storage. In addition, Herschman does not provide any specific facts to suggest that defendants did not respond to any specific Medicare inquiry made during this time period, or that suggest that he was billed for work that was not then performed. Accordingly, Herschman does not provide factual allegations from which an inference of deceit may be drawn, and the claim under Judiciary Law § 487 must be dismissed.
The record shows that prior to December 2008, defendants were in contact with Medicare, as Medicare sent a request for Herschman to fill out the provider background questionnaire (Def. Mov., Erbaio Aff, Exh. BB).
Conclusion
In view of the foregoing, it is
ORDERED that defendants' motion to dismiss the complaint is granted, and the complaint is dismissed with costs and disbursements to defendant as taxed by the Clerk of the Court upon the submission of an appropriate bill of costs; and it is further
ORDERED that defendants' motion for an order converting the motion to summary judgment denied; and it is further
ORDERED that the Clerk is directed to enter judgment accordingly.
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J.S.C.