Doctors Refusal to Disclose His Interest in Other Facilities Leads to Dismissal of Lawsuit.

• Author: Rogak, Lawrence N.
• Position: [COURTSIDE]

Queens-Roosevelt Med. Rehabilitation, P.C. v Response Ins. Co.

In this action by a provider to recover assigned first-party no-fault benefits, defendant appeals from an order of the Civil Court denying defendant's motion to strike the complaint and dismiss the action pursuant to CPLR 3126.

This action, commenced in 2010, involved numerous discovery disputes, during which, among other things, plaintiff's owner, Dr. John McGee, was ordered to appear for a deposition. After that deposition and further discovery, certain of plaintiff's claims were dismissed based on plaintiff's "failure to comply in good faith with defendant's discovery demands." In 2014, Dr. McGee was ordered to appear for a second deposition, this time on the issue of whether plaintiff was in violation of state licensing requirements prohibiting nonphysicians from owning or controlling medical service corporations, i.e. whether Dr. John McGee is plaintiff's bona fide owner & operator (see State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313 [2005]; Andrew Carothers, M.D., P.C. v Progressive Ins. Co., 42 Misc 3d 30, 38 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2013], affd 150 AD3d 192 [2017], lv granted 2017 NY Slip Op 90794[U] [2017]).

At that deposition, Dr. McGee testified that he was plaintiff's owner and sole physician, and that he performed medical and managerial tasks for plaintiff. Over defendant's objection, and on the advice of plaintiff's counsel--based upon her claim that, in essence, the questions were irrelevant--Dr. McGee refused to answer several questions, including those pertaining to other medical service corporations which Dr. McGee either admittedly or allegedly owned or operated during the time plaintiff was in operation, and Dr. McGee's involvement with those corporations, including his hours and duties at those corporations.

Defendant subsequently moved to strike the complaint and dismiss the action, based on Dr. McGee's refusal to answer questions and on plaintiff's alleged spoliation of evidence. The Civil Court denied defendants motion, stating, among other things, that the questions at issue were "outside the scope of the deposition due to the fact that they had nothing to do with the plaintiff corporation."

Contrary to the finding of the Civil Court, the questions at issue were designed to elicit information which was material and necessary to the appellant's defense of this action, as Dr. McGee's involvement in other medical service...