United States District Court, E.D. New York
MEMORANDUM AND ORDER
L. MANN CHIEF UNITED STATES MAGISTRATE JUDGE.
pending before the Court, in these actions brought pursuant
to the Racketeer Influenced and Corrupt Organizations Act
(“RICO”), 18 U.S.C. § 1961 et seq.,
are motions by plaintiffs Allstate Insurance Company,
Allstate Indemnity Company, Allstate Property & Casualty
Insurance Company and Allstate Fire & Casualty Insurance
Company (collectively, “plaintiffs” or
“Allstate”) to strike the proposed amended
answers of defendants Art of Healing Medicine, P.C.
(“AOH”), and Alexander Pinkusovich, MD and
Svetlana Pinkusovich, MD (the “Pinkusoviches”)
(collectively, the “AOH defendants”).
See Motion for Sanctions (May 5, 2017)
(“Motion for Sanctions”), Electronic Case Filing
Docket Entry (“DE”) #433; Letter Motion to Strike (May
15, 2017) (“Motion to Strike”), DE #439. For the
reasons that follow, plaintiffs' Motion to Strike is
denied and their Motion for Sanctions is denied in
Report and Recommendation filed on April 24, 2017, this Court
recommended that the motion filed by the AOH defendants to
amend their answers to add certain affirmative defenses be
largely denied, except for the addition of the affirmative
defense of ratification.See Report and Recommendation
(Apr. 24, 2017) at 25, DE #422. The Court directed the AOH
defendants to serve on plaintiffs, by May 1, 2017, amended
answers that are identical to their current pleadings but for
the addition of the affirmative defense of ratification.
See Id. The Court further afforded plaintiffs an
opportunity to object prior to the filing of the amended
answer as the operative pleading of the AOH defendants.
3, 2017, after the Honorable Jack B. Weinstein granted the
motion of the AOH defendants' third consecutive counsel
of record to withdraw from the case, see Order (Apr.
18, 2017), DE #417, the Court received an “Amended
Answer and Affirmative Defense by Defendants Art of Healing
Medicine, P.C., ” sent by mail on May 1, 2017. It is
not clear to the Court on whose behalf the document was
submitted. The proposed pleading states that it was submitted
on behalf of “Defendants ART OF HEALING, P.C.
(hereinafter, “Defendant”, “AOH”) by
Alexander Pinkusovich, M.D. and Svetlana Pinkusovich, M.D.
individual defendants in the above captioned matter acting
pro se . . . .” In any event, since it
appeared that the proposed amended answer had not been served
on plaintiffs prior to its submission to the Court, this
Court extended plaintiffs' time to object and noted that
the proposed amended answer would not be
docketed. See Order (May 5, 2017), DE #431.
letter-motion filed on May 5, 2017, plaintiffs seek an order:
that Art of Healing Medicine, P.C. be precluded from filing a
proposed amended answer because it failed to follow the
Court's directions; that a notation of default be entered
against it because an entity is not permitted to proceed in
federal court without counsel; that the individual defendants
be precluded from asserting any defenses that are not
contained in their operative answer (DE #297) because of
their failure to timely serve a proposed amended answer in
accordance with this Court's orders; and that the Court
award plaintiffs their attorneys' fees. See
Motion for Sanctions (May 5, 2017), DE #433.
thereafter, on May 11, 2017, the Court received a proposed
amended answer on behalf of the two individual defendants,
Alexander Pinkusovich, MD and Svetlana Pinkusovich, M.D.
See Letter attaching proposed amended answer (May
11, 2017), DE #435. By electronic order dated May 11, 2017,
this Court recognized that, once again, this latest proposed
amended answer had not been sent to plaintiffs in advance of
its submission to the Court. See Electronic Order
(May 11, 2017). Accordingly, the Court ordered plaintiffs to
review that pleading and, by May 15, 2017, to set forth their
view on whether the Pinkusoviches' proposed amended
answer complied with the Court's substantive directions
contained in the Report and Recommendation. See id.
On May 15, 2017, plaintiffs moved to strike
“non-compliant portions” of the
Pinkusoviches' proposed amended answer. See
Motion to Strike. Plaintiffs contend that the
Pinkusoviches' proposed amended answer improperly
references allegations in the AOH Action, which, according to
plaintiffs, this Court has prohibited, and adds new and
irrelevant factual allegations regarding billing matters that
occurred subsequent to the events at issue in this case.
See id. at 2. Plaintiffs request that the Court
strike the non-compliant portions of the Pinkusoviches'
proposed amended answer, preclude any further proposed
amendments as a sanction for defendants' violation of
this Court's orders, and award plaintiffs attorneys'
fees. See id.
letter dated May 15, 2017, the Pinkusoviches responded to
plaintiffs' Motion for Sanctions. See Response
in Opposition (May 18, 2017), DE #443. The Pinkusoviches
generally re-hash their allegations, recited in several
motions already pending before the Court, that this action is
being orchestrated by plaintiffs' counsel, rather than
Allstate, in order to extort money from the AOH defendants.
See id. at 2. The Pinkusoviches also suggest that
their most recently submitted proposed amended answer is a
corrected and edited version of the proposed amended answer
that they had submitted on behalf of AOH.
separate letter dated May 16, 2017, the Pinkusoviches
responded to plaintiffs' Motion to Strike. See
Response in Opposition (May 18, 2017), DE #444. The
Pinkusoviches' response primarily argues that their
ratification defense is colorable and that they would be
prejudiced if the Court granted plaintiffs' Motion to
Strike. See id. at 2-3. Not to be outdone, the
Pinkusoviches cross-move for sanctions against plaintiffs.
See id. at 3.
Proposed Amended Answer
plaintiffs' argument that the Pinkusoviches improperly
included in their proposed amended answer allegations
contained in the complaint filed in the AOH Action misses the
mark. This Court prohibited only the incorporation by
reference of the complaint filed in that action, which
incorporation was contained in the original proposed amended
answers submitted in the instant case by then-counsel for the
AOH defendants (see DE #393, #394). The proposed
amended answer submitted by the Pinkusoviches contains no
reference whatsoever to the AOH Action. To the extent that
some of their allegations in support of the affirmative
defense of ratification are similar to allegations in their
pleading in that action, they have not thereby violated this
the allegations described by the plaintiffs as “new,
irrelevant and inapposite, ” contained in paragraph 32
of the Pinkusoviches' proposed amended answer in support
of the affirmative defense of ratification (see DE
#435), are largely the same allegations that were contained
in paragraph 35 of the Pinkusoviches' original proposed
amended answer interposing the affirmative defense of
ratification. Compare DE #435 ¶ 32
with DE #394 ¶ 35. Since the challenged
allegations were contained in the pleadings that were the
subject of the AOH defendants' motion to amend, and this
Court rejected plaintiffs' (limited) objection to the
ratification defense, the inclusion of those allegations does
not violate the Court's directions. Moreover, to the
extent that plaintiffs seek to re-argue the merits of the
ratification defense, plaintiffs conceded at oral argument
that there are factual disputes that bear upon the viability
of that defense. See Minute Entry (Mar. 31, 2017) at
2, DE #402.
this Court grants the Pinkusoviches leave to file the
proposed amended answer. The Clerk of Court is respectfully
requested to docket as their new operative pleading the
proposed amended answer ...