Robert M. Schneider, M.D., P.C. v. Licciardi, 19-0120

• Decision Date: 17 July 2019
• Docket Number: 19-0120
• Citation: 65 Misc.3d 254,108 N.Y.S.3d 720
• Parties: ROBERT M. SCHNEIDER, M.D., P.C., Plaintiff, v. Salvatore LICCIARDI, Defendant.
• Court: New York Supreme Court

65 Misc.3d 254
108 N.Y.S.3d 720

ROBERT M. SCHNEIDER, M.D., P.C., Plaintiff,
v.
Salvatore LICCIARDI, Defendant.

19-0120

Supreme Court, New York, Greene County.

Decided on July 17, 2019

108 N.Y.S.3d 724

JOHN D. ASPLAND, JR., ESQ., FITZEGERALD MORRIS BAKER FIRTH P.C., PO Box 2017, 68 Warren Street, Glens Falls, NY 12801, Attorney for Plaintiff

PAUL M. FREEMAN, ESQ., FREEMAN HOWARD, P.C., 441 East Allen Street, PO Box 1328, Hudson, New York 12534, Attorney for Defendant

Raymond J. Elliott, III, J.

65 Misc.3d 256

In July 2014, Defendant, currently a Florida-resident, sold his New York-based medical practice, and certain assets associated therewith, to Plaintiff. Defendant continued to work with the practice during the transition and then worked remotely from Florida as an independent contractor. During the time Defendant was an independent contractor, Plaintiff paid Defendant's malpractice premiums. Due to the demutualization of Defendant's malpractice insurance provider, Medical Liability Mutual Insurance Company (hereinafter MLMIC), Defendant received a payment of nearly double the amount of three years' worth of premium payments in exchange for his ownership interest in that company. Plaintiff is suing Defendant, alleging that Defendant has become unjustly enriched through receipt of these proceeds. Plaintiff paid the premiums during part of the relevant period and believes it has an equitable claim to the distribution. Before the Court is Defendant's Motion to Dismiss for lack of personal jurisdiction and Plaintiff's Cross Motion for Summary Judgment based on an alleged agreement between the parties regarding distribution of the funds.

Personal Jurisdiction

Defendant brings a motion to dismiss pursuant to CPLR 3211(a)(8). Defendant asserts that he lives in Florida, has a Florida driver's license and is registered to vote in Florida. Further, he has owned no real property in New York since July 2014, the time of the sale of his practice to Plaintiff. Therefore, Defendant asserts this Court has no personal jurisdiction over him as he is a non-resident and there is an insufficient nexus between his former contacts and the current claim. Plaintiff asserts

108 N.Y.S.3d 725

that Defendant negotiated the sale of his practice while in New York and, even after leaving the State, functioned as a New York licensed physician providing care to New York patients, therefore, Defendant purposefully availed himself of the New York market and protections of its laws and is thus rightfully within the jurisdiction of this Court.

CPLR 3211(a)(8) permits the Court to dismiss an action for lack of personal jurisdiction (see Uzan v. Telsim Mobil Telekomunikasyon Hizmetleri A.S. , 51 A.D.3d 476, 478, 856 N.Y.S.2d 625 [1st Dept. 2008] ; Amodeo v. Star Mfg. Co. , 88 A.D.2d 1081, 1082, 452 N.Y.S.2d 724 [3d Dept. 1982] ). "A plaintiff bears the ultimate burden of proof as the party seeking to assert personal jurisdiction" (

65 Misc.3d 257

Gottlieb v. Merrigan , 170 A.D.3d 1316, 1317, 94 N.Y.S.3d 732 [3d Dept. 2019] [citations omitted], lv denied , 2019 N.Y. Slip Op. 72523, 2019 WL 2457082 [2019] ). "Such burden, however, does not entail making a prima facie showing of personal jurisdiction; rather, plaintiff need only demonstrate that it made a sufficient start to warrant further discovery" ( Bunkoff Gen. Contractors Inc. v. State Auto. Mut. Ins. Co. , 296 A.D.2d 699, 700, 745 N.Y.S.2d 247 [3d Dept. 2002] [internal quotation marks and citations omitted]; see Urfirer v. SB Builders, LLC , 95 A.D.3d 1616, 1618, 946 N.Y.S.2d 266 [3d Dept. 2012] ).

"A court may exercise personal jurisdiction over any non-domiciliary who in person or through an agent ...transacts any business in the state" ( CPLR 302[a][1] ). CPLR 302(a)(1) jurisdiction is proper "even though the defendant never enters New York, so long as the defendant's activities here were purposeful and there is a substantial relationship between the transaction and the claim asserted" ( Deutsche Bank Sec., Inc. v. Montana Bd. of Invs. , 7 N.Y.3d 65, 71, 818 N.Y.S.2d 164, 850 N.E.2d 1140 [2006], quoting Kreutter v. McFadden Oil Corp. , 71 N.Y.2d 460, 467, 527 N.Y.S.2d 195, 522 N.E.2d 40 [1988] ). "In determining whether jurisdiction exists, the court must conduct a twofold inquiry. First, the defendant must have purposefully availed itself of the privilege of conducting activities within the forum state by either transacting business in New York or contracting to supply services in New York and second the claim must arise from that business transaction or from the contract to supply services" ( Gottlieb v. Merrigan, 170 A.D.3d at 1317, 94 N.Y.S.3d 732 [internal quotation marks, brackets, and citations omitted]; see Andrew Greenberg, Inc. v. Sirtech Canada, Ltd. , 79 A.D.3d 1419, 1420, 913 N.Y.S.2d 808 [3d Dept. 2010] ). "As a broad generalization, a nondomiciliary who enters New York's service economy pursuant to a contract is more likely to be deemed to be transacting business in New York than is one who performs services out of State for New York residents on a random basis" ( McLenithan v. Bennington Community Health Plan , 223 A.D.2d 777, 778, 635 N.Y.S.2d 812 [3d Dept. 1996], lv dismissed 88 N.Y.2d 1017, 649 N.Y.S.2d 383, 672 N.E.2d 609 [1996] )

Education Law § 6542 requires that physician assistants perform medical services under the management of supervising physician (see also 10 NYCRR 94.1 [d] [requiring the supervising physician to be New York licensed] ). 10 NYCRR 94.2(f) imposes upon a physician medical responsibility for medical services performed by a licensed physician assistant

65 Misc.3d 258

whom such physician supervises. Similarly, Education Law § 6902 requires nurse practitioners to work with a collaborating physician, though they are independently responsible for the care of their patients. 8 NYCRR 64.5(g)(1)(i) states that a "[c]ollaborative relationships shall mean that a nurse practitioner communicates, in

108 N.Y.S.3d 726

person, by telephone, or through written means including electronically, with a physician who is qualified to collaborate in the specialty involved, or in the case of a hospital, the nurse practitioner communicates with a physician qualified to collaborate in the specialty involved and who has privileges at such hospital, for the purposes of exchanging information, as needed, in order to provide comprehensive patient care and to make referrals, as necessary" (see also 8 NYCRR 65.5 ["Physician shall mean a New York State licensed and registered physician"] ). As further relevant here, supervision of physician assistants and collaborating with nurse practitioners gives rise to potential liability (see Ruggiero v. Miles , 125 A.D.3d 1216, 1217, 4 N.Y.S.3d 648 [3d Dept. 2015] ; Vaccaro v. St. Vincent's Medical Center , 71 A.D.3d 1000, 1002, 898 N.Y.S.2d 163 [2d Dept. 2010] ; Gaspari v. Sadeh , 61 A.D.3d 405, 406, 876 N.Y.S.2d 46 [1st Dept. 2009] ; see also Conrad v. Child's Hosp. , 174 A.D.2d 952, 952, 571 N.Y.S.2d 643 [3d Dept. 1991] ).

Both Insurance Law § 3435 and Regulation 135 (11 NYCRR 153) permit the issuance of group property/casualty insurance only with respect to public and not-for-profit insureds. Thus, under New York law with the limited exception of a risk retention group authorized under Federal law, group property/casualty insurance for physician groups may not be written in New York (see Office of General Counsel, Department of Financial Services, New York Medical Professional Liability Insurance [June 4, 2008] OGC Op No 08-06-02, available at https://www.dfs.ny.gov/insurance/ogco2008/rg080602.htm). Therefore, as a matter of course, medical malpractice insurance must generally be acquired for each provider rather than for a group.

Neither party asserts that Plaintiff and Defendant, from the beginning, had a contract regarding the ownership interest in the mutual insurance policy. It is uncontested that Plaintiff and Defendant contracted with each other for Defendant to provide supervisory/collaborative services in support of physician assistants/nurse practitioners who provided care for patients in New York. It is further uncontested that Defendant was aware that Plaintiff was making payments from New York to MLMIC, a New York malpractice insurance provider.

65 Misc.3d 259

Defendant admits that "[a]s a consulting physician, I reviewed physician assistants' records in patient charts" [Defendant's Affidavit ¶ 9]. Defendant further acknowledges that Plaintiff's payments of his MLMIC premiums were due to this arrangement [Defendant's Affidavit ¶ 13].

In opposition to the Motion to Dismiss, Plaintiff submits the affidavit of Dr. Robert Schneider, President of Plaintiff. Schneider asserts that Defendant was covered under a New York insurance policy for the services he was performing for Plaintiff, sent invoices to New York every two weeks, and was in daily contact with Plaintiff's nurse practitioner regarding care being provided to New York patients.

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