Liberty Mutual Insurance v. Excel Imaging, P.C.
879 F. Supp. 2d 243
E.D.N.Y2012Background
- Liberty Mutual seeks to recover no-fault payments to Excel Imaging, alleging fraudulent ownership/operation by non-physicians.
- Excel was nominally owned by physicians but controlled by Management Defendants via contracts, signatures, and management/billing arrangements.
- No-fault law requires licensed physician ownership/control to qualify for reimbursement; violations render provider ineligible.
- Scheme traces to Kings Highway and Dr. Ginde, with multiple Nominal Owner Defendants over time and shifting ownership to mask control.
- Plaintiffs allege fraud, unjust enrichment, and RICO; defendants seek dismissal and arbitration; court denied dismissal and stayed arbitration for unpaid claims pending case outcome.
- Arbitration proceedings are stayed for unpaid claims; dispute over discovery, tolling, and whether equitable tolling applies remains for jury determination.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Statute of limitations on claims | Plaintiffs were not on notice earlier; concealment tolled time. | Plaintiffs had early notice via 2004/2003 filings and disciplinary records. | Genuine issues of material fact preclude summary judgment on limitations. |
| Right to arbitration under NY no-fault law | Arbitration under §5106(b) applies to unpaid claims and should be compelled. | Right to arbitration applies only to unpaid claims not already litigated; waiver may apply. | Defendants may compel arbitration for unpaid claims not yet litigated; paid claims and claims already sued are not arbitrable; arbitration stayed for unresolved unpaid claims. |
| State-law fraud and unjust enrichment claims viability | Fraud and unjust enrichment theories viable post-regulation, with proper pleading. | Statutory/regulatory regime limits recovery and pleading deficiencies. | Claims adequately pled; no-fault regulatory framework supports recoveries for payments after regulation; equitable tolling issues remain for trial. |
Key Cases Cited
- Gaidon v. Guardian Life Ins. Co. of Am., 96 N.Y.2d 201 (N.Y. 2001) (whether CPLR 214(2) applies to statutory liabilities created by statute)
- Nelson, 501 N.Y.S.2d 313 (N.Y. 1986) (no-fault first-party benefits are statutory, not common-law, liability)
- Motor Vehicle Acc. Indemn. Corp. v. Aetna Cas. & Sur. Co., 652 N.Y.S.2d 584 (N.Y. 1996) (CPLR 214(2) applies to no-fault recovery actions governed by statute)
- Mallela, 4 N.Y.3d 313 (N.Y. 2005) (insurer can recover payments after regulation date for fraud/ unjust enrichment against fraudulently incorporated providers)
- Cortelle, 378 N.Y.S.2d 654 (N.Y. App. Div. 1975) (statutory remedies may not create new liabilities but provide remedies for existing fraud)