Monday, December 20, 2010

Summary Judgment Denied to Hospital -- Insurer Permitted to Conduct Discovery on its Intoxication & Felony Act Defenses

Westchester Med. Ctr. v. New York Cent. Mut. Fire Ins. Co.

(Sup. Ct., Nassau Co., decided 12/17/2010)

New York CPLR Rule 3212(f) provides:
(f) Facts unavailable to opposing party.  Should it appear from affidavits submitted in opposition to the motion that facts essential to justify opposition may exist but cannot then be stated, the court may deny the motion or may order a continuance to permit affidavits to be obtained or disclosure to be had and may make such other order as may be just.
After receiving requested verification from plaintiff hospital, NYCM timely denied plaintiff's billing on the grounds that plaintiff's assignor was intoxicated at the time of the accident or was injured while committing an act that would constitute a felony, both excluded conduct under the PIP endorsement of NYCM's policy.  Plaintiff sued and moved for summary judgment.  NYCM opposed that motion and cross-moved for a stay of trial pending the outcome of criminal proceedings against the plaintiff's assignor and for an opportunity to conduct discovery relative to its intoxication-based defenses.

NYCM supported its cross motion with only an affidavit of the office manager of its defense counsel's law firm.  Plaintiff argued in response that NYCM was required but failed to lay bare its proof in support of its coverage defenses.

Finding that NYCM had presented sufficient reason for the court to invoke CPLR 3212(f), Nassau County Supreme Court Justice Daniel Palmieri denied plaintiff's motion and granted NYCM's cross motion to the limited extent of ordering that a preliminary conference be conducted to schedule discovery on its intoxication-based defenses:

The Court finds that there is a basis for applying CPLR 3212(f). This section provides that if it appears from affidavits submitted in opposition that facts essential to justify opposition may exist but cannot then be stated, a court may deny the motion, order a continuance to permit needed disclosure to be undertaken, or "make such other order as may be just."

A party who raises a defense that has not yet been fully developed, but appears to exist, must be able to make some showing that such facts do in fact exist for CPLR 3212(f) to apply; mere hope that discovery may reveal those facts is insufficient. Companion Life Ins. Co. v All State Abstract Co., 35 AD3d 519 (2d Dept. 2006). Nor can mere speculation serve to defeat the motion. Pluhar v Town of Southhampton, 29 AD3d 975 (2d Dept. 2006); Ciccone v Bedford Cent. School Dist., 21 AD3d 437 (2d Dept. 2005). However, denial of the motion on the ground that necessary disclosure is lacking is appropriate if there is some basis in the record for finding that evidence sufficient to defeat the motion may exist, [*3]especially where the facts appear to lie within the knowledge of the opposing party and discovery is in its early stages. See, Adler v City of New York, 52 AD3d 549 (2d Dept. 2008); Baron v Incorporated Vil. of Freeport, 143AD2d 792 (2d Dept. 1988).

The Court finds that this is the case here. There is no direct proof of intoxication submitted, or that such intoxication caused the accident. However, the defendant presents the affidavit of the office manager of defendant's law firm, Christopher Roselli, who states that the police report revealed that plaintiff's assignor, Luis Vargas, was arrested at the accident scene on charges of driving while intoxicated. He further states that he spoke to Orange County Assistant District Attorney Steven Goldberg, who informed him that Vargas was indicted on 34 charges, including two counts of driving while intoxicated. A formal request for a copy of the indictment was made, and the results of that request, a copy of the indictment, is annexed to defendant's reply papers. Among other things, the indictment contains not only a charge of driving while intoxicated, but also of vehicular manslaughter in the first degree, as a passenger in Vargas's vehicle was ejected and killed as a result of his operation of the vehicle under the influence of alcohol. Other felony counts are based on injuries to other passengers. Thus, in addition to allegedly driving while intoxicated, his operation of the vehicle may have resulted in his having been injured while committing a felony.

While the foregoing clearly is in part hearsay, the indictment does verify the key information referred to by Roselli.  For purposes of plaintiff's motion, it is sufficient for the Court to find that evidence sufficient to defeat the motion may exist, and that disclosure should be permitted. See, Westchester Med. Ctr. v Progressive Cas. Ins. Co., 51 AD3d 1014 (2d Dept. 2008). This is especially so where information regarding the alleged intoxication, and its role in causing the injury-producing accident, lies in part within the knowledge of plaintiff's assignor, and this action is in its early stages. The Court understands that Vargas may not be available for a deposition, or may choose to invoke his Fifth Amendment rights, which will of necessity slow discovery here. Further, the criminal case also appears to be in its early stages. However, possible difficulties in moving the present civil case forward is not a reason to prejudice the defendant's ability to defend itself given the factors described in this decision.

The record here also distinguishes this matter from Westchester Med. Ctr. v Government Employees Ins. Co., 77 AD3d 737, supra, as in that case "the defendant failed to submit any evidence whatsoever from which the circumstances of the accident could be ascertained, the nature of the accident is unknown, and, thus, the defendant's evidence... was insufficient by itself to raise a triable issue of fact as to whether the plaintiff's assignor was "injured as a result of operating a motor vehicle while in an intoxicated condition." (Emphasis in original). Here, the nature of the accident is known, and there is some evidence that discovery may reveal that plaintiff's assignor was injured as a result of operating a vehicle in an intoxicated condition.

Accordingly, the plaintiff's motion is denied pursuant to CPLR 3212(f), but may be renewed upon the completion of discovery.

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