Friday, September 29, 2006

Ready or Not

Today's entry at U.S. District Judge Jerry Buchmeyer's legal humor blog (taken from the archives of his column for the the Texas Bar Journal) presents the classic scenario of the strategizing one attempts at a court's calendar call. Choosing the perfect moment to let the court and your adversary know you're not ready to proceed is, indeed, an art.

The Court: Okay. Do y'all want a hearing today after 11 then?

Mr. George: No. I'm not ready today your honor.

The Court: Okay. Y'all want to put it off till next Monday.

Mr. Shumate: I can't be ready today either.

The Court: Okay.

Mr. George: Well, then I may be ready.

Have a good weekend.

Tuesday, September 26, 2006

Law & Order: SIU

One of the initial goals for this blog was to intersperse posts on recent news with a background primer on no-fault. Of course, this concept presumes that there exists a class of persons who are both a) reading this blog with sufficient interest to revisit periodically, and b) not very well-versed in no-fault. It is perhaps my own inherent self-deprecating nature that makes me inclined to believe that, to the extent that this blog is read at all (assuming that, say, Matthew Lerner, Esq. and Nicole L. Black, Esq. are real persons and not robots with high marks on their Turing tests), only those so masochistic as to already know no-fault rather well would be interested in visiting. This probably leads to postings here that assume too much with regard to the reader's knowledge. We are open to any commentary as to whether the blog is indeed too insular, what types of postings would be most useful (e.g., basic educational, statutory and case law reportage, issue-specific practice notes, etc.).

All of that being said, it has occurred to me that the previous posting assumed too much on the part of the reader's knowledge of the existence, structure, and entrenchment of no-fault fraud. To that end, an NYS OAG press release from July 31, 2006 concerning seventeen (17) grand jury indictments relative to a particular investigation may be of some value. The factual basis of the some of the charges is enlightening:

In the first indictment, three defendants, including a doctor and a medical clinic owner, are charged with Enterprise Corruption, a class "B" felony. The defendants allegedly earned millions of dollars through their operation and control of AR Medical Art, P.C. (AR Medical), a medical clinic in the Midwood section of Brooklyn that "treated" persons purportedly injured in car accidents. Other charges in the indictment include scheme to defraud, money laundering, grand larceny, insurance fraud, falsifying business records, and offering a false instrument for filing.
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In the two other indictments unsealed today, 14 people were charged with staging car accidents throughout New York City and attending clinics, including AR Medical, for treatment of their feigned injuries. These two staged accident ring indictments charged the defendants with scheme to defraud, insurance fraud, larceny, falsifying business records, and offering a false instrument for filing.
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The enterprise corruption indictment alleges that although the owner of record of AR Medical was Dr. Alexander Rozenberg, a physician specializing in physical rehabilitation, he did not control the operations or the financial affairs of the clinic. Instead, Inna Polack, who lacks a health provider license, secretly owned the clinic and decided what medical and health services were to be provided to patients. The defendants acquired patients through a network of "steerers," who were paid to refer patients to AR Medical. Steerers solicited patients by staging motor vehicle accidents and by offering the clinic’s "services" to real car accident victims.
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The indictment further alleges that, following referrals of patients to AR Medical, Rozenberg conducted cursory medical evaluations, fabricated patients’ symptoms, falsely diagnosed extensive soft tissue injuries, and referred patients for prolonged, unnecessary treatment and testing. This treatment included months of physical therapy, chiropractic care, acupuncture, and psychological counseling, as well as MRIs, x-rays, and nerve testing.

The AR Medical situation brings together many of the various defenses often described collectively as "fraud" or as relating to an "SIU" issue (SIU being an acronym for Special Investigations Unit, which carriers in New York are required by regulation to operate). For example, both of the following are complete defenses to a no-fault personal injury protection ("PIP") claim: a) the monies earned by a professional medical corporation are being directed to the true lay operators of the facility rather than the licensed person who is involved on paper only (see State Farm Mut. Auto Ins. Co. v Mallela, 4 N.Y.3d 313 (2005)), and b) the alleged motor vehicle loss was not accidental (see Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 N.Y.2d 195 (1997); Metro Medical Diagnostics, P.C. v. Eagle Insurance Company, 293 A.D.2d 751 (2d Dep't, 2002); State Farm v. Laguerre, 305 A.D.2d 490 (2d Dep't, 2002)). In practical litigation terms, these defenses lead to the submissions of the lengthiest motion and opposition papers, as well as the lengthiest jury trials.

Monday, September 25, 2006

Carothers, Part CLXXXVI

The latest (and surely most wide-reaching) event in the saga of the no-fault claims of Andrew Carothers, M.D., P.C. has come courtesy of Judge Peter Paul Sweeney (formerly of Civil Court, Richmond County, up until this past Friday - he has now returned to his former home of Civil/Kings). See Matter of Carothers v Insurance Cos. Represented by Bruno Gerbino & Soriano LLP & Freiberg & Peck LLP, 2006 NY Slip Op 26372 (Civ. Ct., Richmond Cty., 2006). At least Judge Sweeney has gone out with something of a bang (relative to no-fault, at least).

All of this may seem very trite (even moreso to those who aren't practicing in the no-fault world and hence aren't shocked that a court would order that a party would actually have to appear for an EBT), but it has consumed much of this past summer for the no-fault defense bar, including your humble correspondent, and most New York City Civil Court motion clerks. For example, BG&S submitted a brief in the matter (as if same was not contextually obvious from the caption), which is more or less all that I can recall about the month of June this year.1

See also, Andrew Carothers, M.D., P.C. v. GEICO Indem. Co., 2006 NY Slip Op 26326 (Civ. Ct., Kings Cty., 2006; Battaglia, J.)

Sadly, there is not much information available online addressing the background of the Carothers situation, or of the prior facilities, Deajess Medical Imaging, P.C., Preferred Medical Imaging, P.C., and Boston Post Road Medical Imaging, P.C. Judge Sweeney describes the situation a little bit, and I have a PDF of the decision in AIU Ins. Co. v. Deajess Medical Imaging, P.C., 235 NYLJ 28, p. 22, col. 1 (Sup. Ct. Nassau Co. 2/10/06). Additional information is summarized in Preferred Med. Imaging, P.C. v Liberty Mut. Ins. Co., 2006 NY Slip Op 50437(U) (Dist. Ct., Suffolk Cty., 2006).

To really get a feel for the entire affair, the truly dedicated might be inclined to visit the Supreme Court, Kings County and copy the pleadings in Medical Capital Corporation, et al., v. MRI Global Imaging, Inc. (Index No. 41099/04). That lawsuit concerned Deajess, Preferred, etc. suing their management company after their relationship went sour.

Anyway, stay tuned to this space in 2007 or so for a report on the results of the Appellate Term decision on the inevitable appeal.

1. The Joint Brief submitted on behalf of the defendants represented by Bruno, Gerbino & Soriano, LLP & Freiberg & Peck, LLP was authored by Craig J. Bruno, Esq., with noted contributions by Vincent F. Gerbino, Esq., Damin J. Toell, Esq., Brian M. Martin, Esq., and Craig J. Freiberg, Esq.

Sunday, September 24, 2006

Just to Show We're Alive

Summer is finally technically over, so presumably we have no further excuses left for our failure to maintain this blog. In a show of good faith, please to enjoy a new link in our blogroll to Small Town Lawyer. Joel H. Seachrist, Esq., of Beckman & Seachrist, has been kind enough to link to us in his wonderfully useful (and, not to mention, disturbingly more frequently-updated than the blog at bar) blog.

While we rev up further postings, we should all be chewing over the decision in New York & Presbyt. Hosp. v New York Cent. Mut. Fire Ins. Co., 2006 NYSlipOp 05336 (App. Div., 2d Dep't, July 5, 2006). In a very short decision, the following two (2) sentences are (potentially) the most important: "The defendant correctly contends that the plaintiff hospitals lacked standing. The proof adduced at trial included unsigned assignment of benefit forms." Id., citing to Leon v Martinez, 84 NY2d 83 (1994).

To be sure, the lack of a signature is a very deep defect in an assignment. However, with standing now being brought into the game as a necessary result of the operation of a no-fault assignment, one can only wonder what other defects might also preclude standing. Indeed, given that the Appellate Division cites to a non-no-fault case (what Hon. Philip S. Straniere formerly referred to as "real cases"), does this mean that general contract law applies to the determination of the validity of a no-fault assignment? How far can this all go? Have we perhaps entered a Twilight Zone-esque world in which even such outlandish laws and rules as those embodied within the CPLR (gasp!) apply to no-fault?! The mind boggles and the heart quivers.

On a more realistic note, what is the remaining force of the decision in Presbyterian Hosp. v. Aetna Cas. & Sur. Co., 233 A.D.2d 433 (2d Dep't, 1996)? In particular, compare the sentences quoted from New York & Presbyt. Hosp. v New York Cent. Mut. Fire Ins. Co., supra, with the following: "[The carrier] failed to allege any deficiency in the plaintiff hospital's assignment in its denial of claim. As a result, it waived any such defense." 233 A.D.2d at 433 (citations omitted). Does the newer decision overrule the older one? Or should we perhaps create a meta-rule of "a carrier waives any defense premised upon any deficiency in an assignment of benefits if it fails to allege such deficiency in a timely denial of claim form, unless such deficiency works to preclude standing"? Most pressingly, should we resolve all of this prior to the 10th anniversary of Presbyterian Hosp. v. Aetna Cas. & Sur. Co. on November 18 of this year?

Anyhow, I'm open to suggestions as to where we'll all have drinks to celebrate Presbyterian Hosp. v. Aetna Cas. & Sur. Co.'s birthday (and/or to use the occasion to celebrate/mourn its demise). November 18, 2006 is a Saturday, after all.