Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Allstate Insurance Co. v. A & F Medical P.C.

United States District Court, E.D. New York

May 30, 2017

ALLSTATE INSURANCE COMPANY, et al., Plaintiffs,
v.
A & F MEDICAL P.C., et al., Defendants. ALLSTATE INSURANCE COMPANY, et al., Plaintiffs,
v.
ART OF HEALING MEDICINE, P.C., et al., Defendants.

          MEMORANDUM AND ORDER

          ROANNE L. MANN, CHIEF UNITED STATES MAGISTRATE JUDGE

         Currently pending before the Court, in these actions[1] brought pursuant to the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1961 et seq., is a motion filed by defendants Art of Healing Medicine, P.C., Alexander Pinkusovich M.D. and Svetlana Pinkusovich M.D. (collectively, the “AOH defendants”) to disqualify counsel for plaintiffs Allstate Insurance Company, Allstate Indemnity Company, Allstate Property & Casualty Insurance Company and Allstate Fire & Casualty Insurance Company (collectively, “plaintiffs” or “Allstate”). See Motion to Disqualify Counsel Stern & Montana, LLP and for a Protective Order and Temporary Stay (Nov. 14, 2016) (“Mot. to Disqualify”), DE #331. The motion to disqualify, which is opposed by plaintiffs, see Response in Opposition (Nov. 15, 2016) (“Allstate's Opp.”), DE #332, has been referred to the undersigned magistrate judge by the Honorable Jack B. Weinstein. See Order referring motion to Magistrate Judge (Mar. 17, 2017), DE #395. By Electronic Order dated May 25, 2017, this Court denied the motion to disqualify, with an opinion to follow. This opinion sets forth the Court's reasons for denying the AOH defendants' motion.

         BACKGROUND

         On November 18, 2014, Allstate commenced this action against the above-named defendants, among many other entity and individual medical providers, alleging that they had engaged in a scheme to defraud Allstate through their involvement in the submission of false and/or fraudulent insurance claims on behalf of injured persons allegedly covered by New York's Comprehensive Motor Vehicle Insurance Reparations Act, N.Y. Ins. Law ' 5101 et seq. See Complaint (Nov. 18, 2014) (“Compl.”), DE #1. The Complaint alleges that the AOH defendants purportedly performed Voltage Actuated Sensory Nerve Conduction Threshold Testing (“VsNCT Testing”) on patients, to diagnose peripheral neuropathies. See id. ¶¶ 93, 95, 119, 191. Utilizing VsNCT Testing, the service provider purports to selectively deliver an electrical current to the patient's sensory nerves through an electrode placed on the surface of the skin, thereby measuring the electrical response of a specific nerve fiber known as the AA-Delta." See id. ¶¶ 6-10, 200. According to plaintiffs, it is impossible for the VsNCT Testing purportedly performed by the AOH defendants to selectively stimulate and measure the A-Delta fiber. See id. ¶¶ 11, 13, 209. In addition, plaintiffs allege that the AOH defendants fraudulently billed Allstate for VsNCT Testing using Current Procedural Terminology (ACPT") Code 95904, when in fact such testing is not reimbursable pursuant to CPT Code 95904, and was medically unnecessary and of no diagnostic value. See id. ¶¶ 17-18, 36-40, 93, 193, 194.

         On July 28, 2016, the AOH defendants filed a separate action (the AAOH Action") against Allstate, alleging violations of RICO. See Complaint (July 28, 2016) (the AAOH Compl."), DE #1 in 16-cv-4208 (E.D.N.Y.). In that complaint, the AOH defendants (proceeding as plaintiffs) allege that Allstate engaged in a scheme to avoid paying no-fault insurance claims submitted by the AOH defendants. See id. 7. According to the AOH defendants, Allstate fraudulently paid each no-fault claim for VsNCT Testing within 30 days of their submission, thereby lulling the AOH defendants into believing that such claims were proper. See id. ¶¶ 15, 20. Then, once the claims reached a significant amount in the aggregate, Allstate sued the AOH defendants under RICO, in order to recover the payments made to the AOH defendants, obtain treble damages, and prevent the AOH defendants from submitting new no-fault claims. See id. ¶¶ 23, 24, 31. The AOH defendants further allege that they believed, inter alia, that VsNCT Testing is objective and that billing for VsNCT Testing using CPT Code 95904 was proper. See AOH Compl. 13 & n.3.

         By order dated February 21, 2017, Judge Weinstein denied without prejudice Allstate's motion to dismiss the AOH Action and stayed all discovery therein pending the resolution of the instant action against the AOH defendants. See Order (Feb. 21, 2017), DE #46 in 16-cv-4208.

         DISCUSSION

         In the pending motion, the AOH defendants cite four grounds for disqualification of plaintiffs' counsel. First, they contend that attorney Robin Pass of the law firm of Stern & Montana, LLP (“Stern & Montana”), which represented plaintiffs until it ceased operations as of December 28, 2016, see Motion for Extension of Time (Dec. 27, 2016) at 1, DE #352, [2]endeavored to alter the deposition transcript of defendant Alexander Pinkusovich (“Dr. Pinkusovich”) by directing the stenographer to change a word in the transcript outside the presence of the AOH defendants' then-counsel. Second, the AOH defendants argue that Stern & Montana has a conflict of interest because the firm represented Allstate at the “collections-defense level, " and Allstate may invoke the advice-of-counsel defense in the AOH Action. Third, the AOH defendants contend that Stern & Montana served as originators of and advisors with respect to Allstate's fraud prevention plan, and the AOH defendants therefore intend to call Stern & Montana attorneys as witnesses regarding Allstate's alleged scheme to manufacture RICO claims by fraudulently inducing the AOH defendants and other medical providers to bill under CPT Code 95904. Finally, the AOH defendants argue that plaintiffs' counsel has created the appearance of impropriety due to their false responses to inquiries as to when plaintiffs first discovered the fraud claimed to have been committed by the AOH defendants. See generally Mot. to Disqualify.

         1. Alteration of Transcript

         The AOH defendants argue that Stern & Montana's attorneys are material witnesses because defendant Alexander Pinkusovich was informed by his former counsel, Galina Feldsherova, that she had inadvertently obtained a tape-recorded conversation between plaintiffs' counsel, Robin Pass, and the stenographer at Dr. Pinkusovich's deposition, concerning altering one word in the transcript from “Trump” to “tramp.” See Mot. to Disqualify at 1-2. Ms. Feldsherova had reportedly been recording the deposition on a tape recorder and mistakenly left the recorder on after the deposition ended. During the examination of Dr. Pinkusovich, he had made a comment to Ms. Pass that she is like “Trump, ” “who wants to get involved in everything and objects to everything.” Id. at 2 & Ex. B (DE #331-2) at 172. According to the AOH defendants, Ms. Pass attempted to have the stenographer change the word “Trump” to “tramp” “to negatively affect both the Court's perception of Dr. Pinkusovich and his credibility, and that of any jury.” Mot. to Disqualify at 2. When Dr. Pinkusovich first raised this issue with the Court, see Letter to Court from Alexander Pinkusovich dated August 12, 2016 (Aug. 17, 2016), DE #304, Allstate responded that it would consent to change the transcript to Dr. Pinkusovich's preferred wording, see Letter in Response to Art of Healing/Pinkusovich Correspondence (Aug. 21, 2016) at 1, DE #306. Not content with the proffered remedy, the AOH defendants seek to disqualify all of plaintiffs' attorneys of record from representing Allstate in this litigation.

         Although not cited in the AOH defendants' motion to disqualify, their charge that plaintiffs' counsel are “material witnesses” is predicated on the witness-advocate rule embodied in Rule 3.7 of the New York Rules of Professional Conduct. Subsection (a) of the Rule provides that "[a] lawyer shall not act as advocate before a tribunal in a matter in which the lawyer is likely to be a witness on a significant issue of fact . . . ." N.Y. R. Prof'l Conduct ' 3.7(a). Subsection (b), which addresses imputation, has somewhat broader application: “A lawyer may not act as an advocate before a tribunal in a matter if . . . another lawyer in the lawyer's firm is likely to be called as a witness on a significant issue other than on behalf of the client, and it is apparent that the testimony may be prejudicial to the client.” Id. ' 3.7(b).

         Recognizing that Rule 3.7 "lends itself to opportunistic abuse[, ]" Murray v. Metropolitan Life Ins. Co., 583 F.3d 173, 179 (2d Cir. 2009), the Second Circuit has held that motions to disqualify under the witness-advocate rule should be subject to “fairly strict scrutiny.” Id. The movant "'bears the burden of demonstrating specifically how and as to what issues in the case the prejudice may occur and that the likelihood of prejudice occurring to the witness-advocate's client is substantial.'" Id. (quoting Lamborn v. Dittmer, 873 F.2d 522, 531 (2d Cir. 1989)). "Prejudice" refers to testimony "that is 'sufficiently adverse to the factual assertions or account of events offered on behalf of the client, such that the bar or the client might have an interest in the lawyer's independence in discrediting that testimony.'" Id. (quoting Lamborn, 873 F.2d at 531). Disqualification is “required only when it is likely that the testimony to be given by [counsel] is necessary.” Purgess v. Sharrock, 33 F.3d 134, 144 (2d Cir. 1994) (internal quotation marks and citation omitted; alteration by court in Purgess).

         Disqualification under subsection (a) applies only when the attorney-witness actually serves as trial counsel. See Murray, 583 F.3d at 179; Finkel v. Frattarelli Bros., Inc., 740 F.Supp.2d 368, 373 (E.D.N.Y. 2010). Based on her infrequent participation in the court proceedings in this case, it is unlikely that, to the extent that Ms. Pass will even serve as a member of the trial team, she will act as an advocate before the jury. See Murray, 583 F.3d at 179 (reversing order disqualifying law firm, even though four of its attorneys were likely to be called to testify at trial: “Three of them are transactional lawyers who are not and will not be trial advocates; the fourth, a litigator, is a member of the trial team, but will not act as an advocate before the jury.”). Accordingly, the witness-advocate rule embodied in Rule 3.7(a) does not apply here.

         Nor is disqualification warranted under Rule 3.7(b) based on imputation. Disqualification under subsection (b) "should be ordered sparingly . . . and only when the concerns motivating the rule are at their most acute." Murray, 583 F.3d at 178 (citation omitted). Consequently, "a law firm can be disqualified by imputation only if the movant proves by clear and convincing evidence that [A] the witness will provide testimony ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.