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Baker, Sanders, Barshay, Grossman, Fass, Muhlstock & Neuworth, LLC v Comprehensive Mental Assessment & Med. Care, P.C. 2010 NY Slip Op 31624(U) June 21, 2010 Sup Ct, Nassau County Docket Number: 016008/2007 Judge: Ira B. Warshawsky Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication.

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SCAN
SHORT FORM ORDER

SUPREME COURT : STATE OF NEW YORK
COUNTY OF NASSAU

PRESENT: HON. IRA B. WARSHAWSKY, Justice. TRIAL/IAS PART 8
BAKER , SANDERS , BARSHA Y , GROSSMAN
F ASS , MUHLSTOCK & NEUWORTH , LLC

Plaintiff
INDEX NO. : 016008/2007 MOTION DATE: 05/04/2010 MOTION SEQUENCE: 006 , 007
and 008
-against -

COMPREHENSIVE MENTAL ASSESSMENT & MEDICAL CARE , P. , ALL MENTAL CAR MEDICINE , P. , POINTS OF HEALTH ACUPUNCTURE , P. , HORIZON PSYCHOLOGICAL SERVICES , P. , ART OF HEALING MEDICINE , P. and LUBARSKY & TARNOVSKY , P.
Defendants.

The following papers read on this motion:
Notice of Motion , Affirmation & Exhibits Annexed .........................................."""""'"'' Notice of Motion , Affirmation & Exhibits Anexed ......................................................... 2 Notice of Cross-Motion , Affrmation & Exhibits Annexed ............................................... 3 Affirmation of Matthew J. Conroy in Support of Plaintiffs Cross- Motion to Amend and in Opposition to Defendants ' Motion to Dismiss and for Leave to Amend the Answer & Exhibits Anexed .............................................................................................. 4 Affirmation of Edward R. Hopkins in Opposition to Cross-Motion to Amend the Complaint & Exhibit Anexed................................................ ........................................... 5 Affirmation of Roman Popik in Opposition to Plaintiffs Cross- Motion ........................... 6 Affirmation of Edward R. Hopkins in Opposition to Motion to Amend the Answer to Add a Cross- Claim and in Support of the Motion to Dismiss the

Complaint & Exhibits Annexed......................................................................................... 7

............................ ........ ..... ..... ... .................. .... ................ ............ ... ... ...... ....... ........ .................... ...........

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Affirmation of Matthew J. Conroy in Opposition to Defendants ' Motion for Reply Affirmation of Matthew J. Conroy in Furer Support of Plaintiffs Cross- Motion to Amend.................................................................. ...................... Reply Affrmation of Roman Popik in Further Support of Defendants ' Motion for Leave of Court to Renew and Reargue........................... ...... Reply Affirmation of Roman Popik in Furher Support of Defendants ' Motion to Dismiss the Complaint and Amend the Answer & Exhibit Anexed
Renewal and Reargument ......,.. ..............

This motion by the defendants Comprehensive Mental Assessment & Medical Care , P.
All Mental Care Medicine , P.
Services , P.

, Points of Health Acupuncture , P.

, Horizon Psychological

, Ar of Healing Medicine , P. c. (" medical providers ) and Lubarsky & Tarovsky,
8 , 2010 and upon rearguent and renewal ,

, for an order pursuant to CPLR 2221 (d), (e) granting them reargument and for renewal of

this cour' s order dated Januar

an order vacating so

much of that order which required the medical providers to provide certain outstanding
discovery, or an order limiting the production thereofto
only defendant Comprehensive Mental

Assessment & Medical Care , P. C. and to only 2001 through 2005 is granted to the extent
provided herein.

This motion by the defendants Comprehensive Mental Assessment & Medical Care , P.
All Mental Care Medicine , P.
Services , P.

, Points of Health Acupuncture , P.

, Horizon Psychological
, for an order
in the

, Ar of Healing Medicine , P. C. and Lubarsky & Tarovsky, P.

pursuant to CPLR 3211(a)(3) dismissing the complaint for plaintiffs

lack of standing or ,

alternative , an order pursuant to CPLR 3211(a)(1)(7) dismissing the second , third and fourh

cause of action; and , an order pursuant to CPLR 3025(b) granting it leave to amend its Answer

and Counterclaims pursuant to CPLR 100 1 (a) joining Marc Grossman , Esq. , Todd Fass , Esq.
Robert Baker , Esq. , David Barshay, Esq. and Douglas Sanders , Esq. as defendants and to plead

cross claims against co- defendant Lebarsky & Tarovsky is granted as provided herein.

This cross motion by the plaintiff Baker , Sanders , Barshay Grossman , Fass , Muhstock &
Neuwirth , LLC (" LLC law firm ) for an order pursuant to CPLR 2001 , 2101(f), allowing it to
correct the caption " of the complaint , or , in the alternative , an order pursuant to CPLR 3025(b),

3025(c) allowing it to amend the complaint or to conform the pleadings to the proof pursuant to

, '

(p

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CPLR 3017 is determined as provided herein.

Before this action was commenced , the medical providers brought suit against Baker
Sanders , Barshay, Grossman, Fass , Muhlstock & Neuwirth , Esqs. , who the LLC law firm now
alleges was its predecessor , in Brooklyn Supreme Cour seeking to recover for inter alia, legal

malpractice. The medical providers alleged

inter alia

, that Baker , Sanders , Barshay, Grossman

Fass , Muhlstock & Neuwirth , Esqs. entered into clandestine bulk settlements oftheir no- fault

claims after it had been terminated and accordingly without authority and significantly sacrificed

its potential recoveries in doing so. In this action, the LLC law firm seeks to recover legal fees
allegedly owed it. In its amended complaint , the LLC law firm alleges that it represented the
medical providers from 2001 through 2006 in numerous actions in which they sought to recover

from various insurance companies on no- fault claims. It has advanced claims sounding in
declaratory judgment , breach of contract , quantum merut and it seeks to exercise a retaining lien

on the medical providers ' legal files. When these two actions were consolidated by this court

under the LLC caption (Bucaria , J. ), the medical providers ' claims against the LLC law firm
predecessor Baker , Sanders , Barshay, Grossman , Fass , Muhlstock & Neuwirth , Esqs. , were
converted to counterclaims.

The medical providers have established that the LLC law firm lacks standing as it has

never had any relationship with the medical providers. Its complaint is dismissed.
(LJeave to amend a pleading should be freely given (see CPLR 3025(b)), provided that

the amendment is not palpably insufficient , does not prejudice or surrise
is not patently devoid of merit."

the

opposing par, and

Santori v Met Life. 11 AD3d 597 (2 Dept. 2004); citing
Dept. 2003);

Ortego v Bisogno & Meyerson , 2 AD3d 607 (2
Communications Group , 309 AD2d 724 (2

A YW Networks. Inc. v Teleport

Dept. 2003);

lv dism , 1 NY 3d 566 (2003);
Dept. 2001). " Mere

Leszczvnski v Kellv v McGlynn , 281 AD2d 519 (2

lateness is not a barier

to the amendment. It must be lateness coupled with significant prejudice to the other side , the
very elements of the laches doctrine.' " Edenwald Contracting Co.. Inc. v City of New York NY2d 957 (1983), quoting Siegel , Practice Commentaries , McKinney s Cons. Laws ofN.
Book 7B , CPLR 3025:5 ,
p. 477);

see also

Acuri v Romano , 7 AD3d 741 (2
barier which prevents

Dept. 2004). "

fact

)rejudice to the adverse pary is the main

granting a motion to

"'

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amend (a pleading).' "

Acuri v Ramos supra , at p. 472 , quoting

Bernstein v Spatola 122 AD2d

, 100 (2
2002);

Dept. 1986), citing

Schiavone v Victory Memorial Hosp , 300 AD2d 294 (2 Dept.
Dept. 2002).

St. Paul Fire & Marine Ins. Co. v Town of Hempstead 291 AD2d 488 (2

Delay must be coupled with prejudice to defeat a motion to amend.

See. Fahey v County of

Ontario 44 NY2d 934 (1978).

(I)n the absence of prejudice or surrise to the opposing par, leave to amend a
pleading should be freely granted unless the proposed amendment is palpably insufficient or
patently devoid of merit.' "

Lucido v Mancuso , 49 AD3d 220 , 227 (2
Dept. 2007),

Dept. 2008), quoting

Alan Assoc.. Inc. v Lazzari. 44 AD3d 95 (2

affd , 10 NY3d 491 (2008).
not be

Additionally, ' (t)he legal sufficiency or merits of a pleading wil
insuffciency or lack of merit is clear and free from doubt.' "

examined unless the

Lucido v Mancuso. supra. at p.
Dept. 2004); citing,

227 , quoting

Sample v Levada, 8 AD3d 465 , 467- 468 (2
Dept. 2004);

Sleepy s Inc. v

Orzechowski , 7 AD3d 511 , (2
586. " Therefore ,

Zacma Cleaners Corp. v Gimbel , 149 AD2d 585

a (part) seeking leave to amend (its pleading) is not required to establish the
Lucido v Mancuso supra , at p. 227 (2

merit of the proposed amendment in the first instance.
Dept. 2008). " If

the opposing par wishes to test the merits of the proposed added cause of

action or defense , that par may later move for sumar judgment upon a proper showing (see
CPLR 3212). Lucido v Mancuso supra, at p. 239.

The medical providers ' motion for leave to amend its Answer/counterclaim is meritorious
and is therefore granted.

As for the LLC law firm s motion to correct the caption or amend its complaint, while

some of the proposed additional plaintiffs may have been dissolved , pursuant to Business

Corporation Law 9 006(a)( 4), they maintain the right to wind up their affairs by pursuing their
outstanding claims.

See Tedesco v A.P. Green Industries. Inc

, 8 NY3d 243 (2007);

J. Sackaris

& Sons Inc. v Onekey. LLC , 60 AD3d 733 (2

Dept. 2009). Nevertheless ,

the LLC law firm

has failed to submit a copy of the second proposed amended complaint and more importantly, has

not even clearly ariculated how it proposes to change the caption, i. , to identify precisely what

paries it seeks to add and/or substitute. The LLC law firm s motion for leave to correct the
caption and/or amend the complaint is denied , without prejudice to renew within 30 days.
See.

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Ferdinand v Crecca & Blair S AD3d 538 (2

Dept. 2004),

lv den . 3 NY3d 609 (2004), citing

Haller v Lopane , 305 AD2d 370 (2 Dept. 2003). The LLC law firm s motion for leave to

correct the caption and/or amend the complaint is denied, without prejudice to renew within 30
days.

The dismissal of the LLC law firm s complaint does not render its right to discovery moot
as the discovery is relevant to its defense of the medical providers ' counterclaims. Therefore , the
medical providers ' motion pursuant to CPL 2221 survives.

The LLC law firm has sought to defeat the medical providers ' legal malpractice claim
based upon the " Mallela
defense.

See State Far Mutual Ins. Co. v Mellowly , 4 NY3d 313

(2005). In other words , the LLC law firm maintains that the medical providers would not have
recovered on their no- fault claims " but
for "

their alleged negligence because a fraudulently

incorporated medical corporation simply may not recover payments of no- fault claims under any
circumstances.

See State

Far Mutual Ins. Co. v Mellowly

supra ; N. Y. Business Corporation
16(a)(12);

Law 9 1507 , 1508; N. Y. Education Law

6507(4)(c); 11 NYCRR 65, 54 AD3d 738 (2

see also One

Beacon Ins. Group, LLC v Midland Medical Care. P.

Dept. 2008);

Alev

Medical Supply, Inc. v Progressive Ins. Co. , 27 Misc. 3d 1220 (District Cour
2010);

Nassau County

Lenox Hil Radiology and MIA. P. C.. v Global Libert Ins. Co. of New York , 24 Misc. 3d
Manhattan Medical Imaging. P. C. v State Far Mut. Auto.

1225(A) (N. Y. City Civ. Ct. 2009);

Ins. Co. , 20 Misc. 3d 1144(A) (N. Y. City Civ. Ct. 2008);

Eastern Medical P. c.

v Allstate Ins.

Co. , 19 Misc. 3d 775 (District Court Nassau County 2008).

By order dated Januar 8 , 2010 , this cour required the medical providers to produce nine

years of corporate business and financial records including general ledgers , state and federal
corporate tax returns , bank statements , 1099s and W- , lease agreements , and management
agreements to enable the LLC law firm to assess the viability of a

Mallela defense. " Good
One Beacon Ins Group. LLC v Midland Medical

cause " for that discovery is not required.
Group. P.
322;

supra , at p. 740- 741 , citing

State Farm Mut. Auto Ins. Co. v Mellowly supra, at p.
P.

Matter of Andrew Carothers. M. D..

C. v Insurance Companies Represented by Bruo.
City Civ.

Gerbino & Soriano, LLP and Freiberg and Peck. LLP , 13 Misc. 3d 970 , 972- 973 (N. Y.

Ct. 2006). The medical providers continue to contest the LLC law firm s rights to that discovery

' "

,"

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in general and as overbroad.

A motion for reargument pursuant to CPLR 2221 (d)(2) must be " based on matters of fact

or law allegedly overlooked or misapprehended by the cour in determining the prior motion , but
(may) not include matters of fact not offered on the prior motion. Cruz v Masada Auto Sales,

Ltd. , 41 AD3d 417 (2 Dept. 2007), citing CPLR 2221 (d)(2);

Pryor v Commonwealth Land Title

Ins. Co. , 17 AD3d 434 , 435 (2

Dept. 2005);

see also

Giovaniello v Carolina Wholesale Office

Mach. Co.. Inc. , 29 AD3d 737 (2 Dept. 2006). And , reargument may not be obtained based

upon " a new theory of liability not previously advanced. . . . Frisenda v X Large Enterprises,
Inc. , 280 AD2d 514 515 (2 Dept. 2001). To obtain reargument , the movant must establish that

the cour misapprehended or overlooked something.
Dept. 2006). Reargument does not lie absent such a showing.

Hoffman v Debello- Teheney, 27 AD3d 743
Goldman v Rio , 20 Misc. 3d

1131 (A)
2009), citing

(Supreme Cour Nassau Co. 2008),

aff d. in par dism. in par , 62 AD3d 834 (2 Dept.
Dept. 2005).

Barett v Jeanot , 18 AD3d 679 (2

A motion for renewal pursuant to CPLR 2221 (e) must be based upon new facts not

offered on the prior motion which changes the previous determination along with a reasonable

justification for failing to offer those facts sooner , or an operative change in the law.
Rivlab Transp. Corp. , 46 AD3d 759 (2
Dept. 2007). " A

Lardo v

motion for leave to renew ' is not a

second chance freely given to paries who have not exercised due dilgence in makng their first
factual presentation.
Lardo v Rivlab Transp.

Corp. supra, at p. 759 , quoting
app dism. ,
Dept. 2007), 71 NY2d 994 (1988), citing

Matter of Beiny

132 AD2d 190 210 (151 Dept. 1987),

Worrell v Parkway
Renna v
Dept. 2004).

Estates. LLC , 43 AD3d 436 437 (2 Gullo , 19 AD3d 472 , 473 (2

lv dism. , 12 NY3d 892 (2009);

Dept. 2005);

Dell v Caswell , 12 AD3d 492 (2

(T)he movant must demonstrate why facts known at the time of the original motion were not

then presented to the Cour. Goldman v Rio supra , at p. 5Chrsler Plymouth Jeep

, citing

Delvecchio v Bavside

Eagle. Inc. , 271 AD2d 636 (2

Dept. 2000). Therefore , unless the facts

are newly discovered or unavailable to the movant at the time of the prior application the
mandatory language of CPLR 2221 ( e )(3) requires denial of the motion " absent reasonable

justification for a par'

s failure to proffer the facts earlier.

In re Wil of Nigro , 14 Misc3d

1239(A) (Surogate Cour Nassau County 2007), citing Siegel , McKinney 2000 Practice

,"

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Commentar to CPLR 2221 (e)(3), C:2221.9;

see also

Tvson v Tower Ins. Co. of New York , 68

AD3d 977 (2 Dept. 2009).

In seeking reargument and/or renewal , the medical providers note that via depositions they have confirmed that their corporate formation was never of any concern to the LLC law firm

or anyone involved in their representation when they represented them; that none of their nofault claims were ever denied based upon the

Mallela defense; and , that insurance companies in

fact waived that defense when they settled their claims.

These things were considered by the cour when it rendered its decision. Neither the LLC law firm nor its alleged predecessor Baker , Sanders , Barshay, Grossman, Fass

Muhlstock & Neuwirt

, Esqs. waived the

Mallela defense. Their alleged representation of the

medical providers when the medical providers were allegedly not properly licensed does not
equate to a waiver here. Neverteless , both the LLC law firm as well as its alleged predecessor

representation of the medical providers at a time when the medical providers ' legal formation
may have precluded them from collecting no- fault payments , coupled with the possibility that the

LLC law firm and/or its alleged predecessor may have tued

a blind eye to that fact thereby

enabling either or both of them to profit may ultimately preclude the LLC law firm as well as its
alleged predecessor
s reliance on the

Mallela defense in this action. That , however, does not

presently bar discovery by either the LLC law firm - - or the medical providers. Nor does the fact
that the insurance companies waived the

Mallela defense when they entered into settlements

preclude the LLC law firm and/or its alleged predecessor from relying on that defense here. This

cour'

s conclusion that the

Mallela defense is available at this junctue for discovery puroses so

long as it was available to the insurance companies in the cases allegedly mishandled by the LLC law firm or its alleged predecessor remains viable.

This Cour again notes that it is yet to be determined whether the LLC law firm or its
alleged predecessor can avail itself of the

Mallela defense - if there in fact is one. Again , the

LLC law firm and its alleged predecessor s possible unclean hands may bar its assertion of that

defense here. As this cour stated in its decision

(t)he cour is troubled by the possibilty that

(the) plaintiff law firm knew or believed that its client was unlawflly collecting benefits under
the no- fault laws when it assisted in said collection efforts. However , the impact of that ' fact' on

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the malpractice case , or even the main action, will be determined at a later time.

As for the medical providers ' request to limit the discovery they must produce , they have
established that all of their companies ' records are not material and relevant. Discovery thus far
has involved only the propriety of the ownership and control of Comprehensive Mental
Assessment & Medical Care , P.
, All Mental Care Medicine , P. C. and Ar of Healing Medicine

, all of which are owned by Dr. Alexander Pinkusavich. They have also established that
discovery should be limited to the years 2001 through 2006. Only the medical providers

ownership status at the time that no- fault claims were allegedly handled by the LLC law firm
and/or its alleged predecessor are relevant and it appears that neither the LLC law firm nor its
alleged predecessor handled any claims on behalf of the medical providers after that. Therefore

the medical providers are granted reargument and upon reargument , this Cour' s order dated
Januar 8 ,

2010 is modified so as to require only the defendants Comprehensive Mental
, All Mental Care Medicine , P. C. and Ar of Healing Medicine

Assessment & Medical Care , P.

C. to produce the required documents for the years 2001 to 2006.

Dated: June 21 ,

2010

E.N,.eRED
JUN 2 8

t00

NASSAU
COUNT CERK'



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