Fernicola v. NEW YORK STATE INSURANCE FUND

• Decision Date: 11 April 2002
• Court: New York Supreme Court — Appellate Division
• Parties: ROBERT FERNICOLA et al., Appellants,<BR>v.<BR>NEW YORK STATE INSURANCE FUND et al., Respondents.

293 A.D.2d 844

741 N.Y.S.2d 139

ROBERT FERNICOLA et al., Appellants,

v.NEW YORK STATE INSURANCE FUND et al., Respondents.

Peters, J.

Decided April 11, 2002.

Mercure, J.P., Spain, Carpinello and Mugglin, JJ., concur.

Peters, J.

Plaintiffs commenced this action against defendants New York State Insurance Fund (hereinafter NYSIF) and defendant Governor seeking damages in the amount of $32 million, plus interest.^[1] Defendants' motion to dismiss the complaint for failure to state a cause of action was granted by Supreme Court concluding, inter alia, that the factual allegations of the complaint were inherently incredible. Recognizing that plaintiffs have raised several grounds challenging the determination rendered, we need only review Supreme Court's dismissal pursuant to CPLR 3211 (a) (7).

In determining a motion of this type, a court must "liberally construe the pleadings in plaintiff's favor, accept the facts alleged as true, and determine whether the facts alleged fit within any cognizable theory * * *. However, [even with this broad standard,] a court need not accept as true legal conclusions or factual allegations that are either inherently incredible or flatly contradicted by documentary evidence * * *" (Ozdemir v Caithness Corp., 285 AD2d 961, 963, lv denied 97 NY2d 605 [citations omitted]; see, McNeary v Niagara Mohawk Power Corp., 286 AD2d 522, 523-524). Reviewing the allegations in plaintiffs' complaint and their affidavit in opposition to defendants' motion, it appears that they assert that, during their litigation of a medical malpractice action, two of the original defendants, along with their insurance carrier, commenced an insurance subrogation proceeding/cross claim against the original codefendants, their representing insurance carriers and the Secretary of State. There it was alleged, inter alia, that the State knowingly, intentionally, and deliberately used falsified medical records of plaintiff Robert Fernicola to correct an "open cardiac care deficiency" which arose from the care that Fernicola received while in the defendant hospital. Plaintiffs contend that the cross claims were heard by Supreme Court in April 1996 without notice to them, that Supreme Court ultimately determined that they were entitled to $32 million and that the Secretary of State thereafter deposited this money in trust for them in the NYSIF. Their complaint further avers that Robert Lahm, the fourth attorney that represented plaintiffs during this medical malpractice action, concealed information concerning the commencement and outcome of the subrogation proceeding because of his relationship with the Governor. Recounting various improprieties and illegal agreements by the Governor, pursued for the sole purpose of exerting undue influence on Lahm to undermine his duty of zealous advocacy to plaintiffs, plaintiffs allege, in addition to a continuing course of corruption by the Governor, the Secretary of State and others to fraudulently convey, transfer and interchange public taxpayer funds with their $32 million, yet a further fraudulent scheme involving Oneida County, the defendant...