Schepp, Part X_X

The Appellate Term, Second Department released its long awaited decisions today in Boston Post Rd. Med. Imaging, P.C. a/a/o Adrian Black v. Progressive Ins. Co., 2007 NYSlipOp 51173(U) (App. Term, 2d Dep't, 2007) and Boston Post Rd. Med. Imaging, P.C. a/a/o Ira Bright v. Progressive Ins. Co., 2007 NYSlipOp 51174(U) (App. Term, 2d Dep't, 2007). Judge Gianelli of District Court, Nassau County, Hempstead Part had granted Progressive, represented by McDonnell & Adels, summary judgment as to their contention that the provider was not a properly licensed entity under the meaning of State Farm v. Mallela, 4 NY3d 313 (2005), and hence not entitled to no-fault benefits.

Justices Rudolph, McCabe, and Tanenbaum don't see it that way. In their estimation, the evidence proffered by Progressive was insufficient to satisfy Mallela. Of course, they give no guidance as to why the evidence was insufficient or what evidence would actually be sufficient.

Very interestingly, the App. Term does implicitly hold that, if proven, the fact that a provider sold its accounts receivable would constitute a defense to no-fault payment. Compare, Andrew Carothers, M.D., P.C. v GEICO Indem. Co., 13 Misc 3d 549 (Civ. Ct., Kings Cty., 2006; Battaglia, J.). Somehow, though, an executed contract selling said accounts receivable (along with an admission of such contract by provider's counsel, but with a differing interpretation) does not prove same. The App. Term's evidentiary rationale is too weak to suffice as a explanation for their decision; we still live under the rule that allegations made in a motion are deemed admitted unless rebutted. Kuehne & Nagel v. Baiden, 36 NY2d 539 (1975); Schneider Fuel Oil, Inc. v. DeGennaro, 238 A.D.2d 495 (2d Dep't, 1997). It has also been true since at least 1899 that "[i]n a civil action[,] the admissions by a party of any fact material to the issue are always competent evidence against him, wherever, whenever or to whomsoever made." Reed v. McCord, 160 N.Y. 330, 341 (1899). Perhaps the Appellate Term is waiting for an opportunity to physically observe the execution of said contract.

Either way, despite that one glimmer of hope, at this point the rulings do not bode well for the carriers in the ongoing litigation with Dr. Schepp in Supreme Court, Nassau County or the numerous suits involving Andrew Carothers, M.D., P.C. (which was the successor entity to Dr. Schepp's Boston Post Road Medical Imaging, P.C., Preferred Medical Imaging, P.C., and Deajess Medical Imaging, P.C.). Presumably the carriers are hoping that the judges overseeing those matters will not be as gun-shy as the App. Term was in the decisions released today.