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Allstate Insurance Co. v. Otto Fisher

July 10, 2009

ALLSTATE INSURANCE COMPANY, PLAINTIFF-RESPONDENT, AND ALLSTATE INDEMNITY COMPANY, ALLSTATE NEW JERSEY INSURANCE COMPANY, CONTINENTAL INSURANCE COMPANY OF NEW JERSEY AND COMMERCIAL INSURANCE COMPANY OF NEWARK, N.J., PLAINTIFFS,
v.
OTTO FISHER, D.C., DEFENDANT-APPELLANT, AND ANIA FISHER A/K/A ANIA OSCISLAWSKI, DOUGLAS JAY SPIEL, M.D., JAMES PROODIAN, D.C., MICHAEL L. AMOROSO, M.D., ROBERT P. BORSODY, ESQ., JOHN K. BURGER, D.O., SIMON XIOACHONG LEE, M.D., CRAIG SCOTT ANTELL, D.O., FISHER MEDICAL MANAGEMENT, INC., UNIVERSAL MEDICAL MARKETING, INC., KAVITA SINHA, M.D., STANLEY TUTT A/K/A QUADIR K. ALI, INDIVIDUALLY AND D/B/A QKA ENTERPRISES, JOSE (A/K/A JOE) ROLON, ANILHOMME MILIEN A/K/A RUDOLPH HORA, HERVE RENE A/K/A RENE HERVE, SETTY MANAGEMENT CONSULTING, L.L.C., WILLIAMS INJURY CENTER, P.C., A-TECH TESTING CENTER, INC. A/K/A A-TECH DIAGNOSTIC, INC., PENNSAUKEN INJURY CENTER, P.C., FISHER CHIROPRACTIC OF MILLTOWN, P.C., PENNSAUKEN TRAUMA & REHAB CENTER, P.C., PENNSAUKEN TRAUMA & REHAB CLINIC OF NEW JERSEY, P.C., MIDDLESEX MEDICAL & REHABILITATION , P.C., MIDDLESEX MEDICAL & REHABILITATION CENTER OF NEW JERSEY, P.C., PERTH AMBOY MEDICAL & REHABILITATION, P.C., PERTH AMBOY MEDICAL & REHABILITATION CENTER OF NEW JERSEY, P.C., PLAINFIELD MEDICAL & REHABILITATION, P.C., PLAINFIELD MEDICAL & REHABILITATION CENTER OF NEW JERSEY, P.C., N.J. MEDICAL DIAGNOSTIC & REHABILITATION CENTER, P.C., N.J. MEDICAL DIAGNOSTIC & REHABILITATION, P.C., N.Y.C. ELECTRODIAGNOSTIC, P.C., N.Y.C. COMPREHENSIVE MEDICAL AND DIAGNOSTIC, P.C., METRO COMPREHENSIVE MEDICAL DIAGNOSTIC, P.C., NEUROSCIENCE ASSOCIATES, P.C., ABA MEDICAL MANAGEMENT, INC., JUST A TRANSPORT, INC., RAYMOND TUTELA, INDIVIDUALLY AND D/B/A R&L MARKETING, DEFENDANTS, AND AMERICAN ARBITRATION ASSOCIATION, DEFENDANT IN INTEREST.



On appeal from the Superior Court of New Jersey, Law Division, Morris County, Docket No. L-716-02.

The opinion of the court was delivered by: Carchman, P.J.A.D.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

APPROVED FOR PUBLICATION

Argued March 5, 2009

Before Judges Carchman, R. B. Coleman and Sabatino.

This appeal presents the conflict between the entry of an uncontested summary judgment where the motion judge failed to comply with the provisions of Rule 1:7-4 and a defendant who has engaged in a pattern of delay and obfuscation to avoid the adjudication of the matters in dispute. We conclude that the matter must be reversed and remanded to allow defendant to proffer a defense to the motion for summary judgment; however, we grant defendant this opportunity with the condition that he reimburse plaintiffS for reasonable counsel fees consistent with this opinion.

We briefly summarize the immediate procedural posture of this dispute on appeal. Plaintiffs Allstate Insurance Company, Allstate Indemnity Company, Allstate New Jersey Insurance Company, Continental Insurance Company of New Jersey and Commercial Insurance Company of Newark, filed suit against defendant Otto Fisher*fn1 and more than thirty other individuals and corporations alleging claims of insurance fraud and violations of various regulations related to the creation and management of medical corporations. Specifically, plaintiffs alleged that defendant and others conspired to commit insurance fraud through the creation of sham medical corporations that would allow them to refer patients to other companies owned by them in violation of the medical board regulations and the New Jersey Insurance Fraud Prevention Act (NJIFPA), N.J.S.A. 17:33A-1 to -30.

Plaintiffs filed a motion for partial summary judgment against defendant and others on six of the fourteen counts in the complaint. Defendant failed to oppose the motion, and the trial judge issued an order granting plaintiffs' motion and providing for $6,422,969.98 in damages, which was trebled, resulting in a final judgment of $19,235,909.94. The motion judge subsequently certified the order as final, and defendant appealed.

As we have noted, the judgment arises from an uncontested motion for summary judgment. These are the facts before the motion judge as certified to by plaintiffs. Plaintiffs are subsidiaries of Encompass Insurance Company, which issued automobile insurance policies to, and paid claims submitted by, patients of the defendant medical corporations. Defendant is a licensed chiropractor and the owner of the following chiropractic facilities: Williams Injury Center, Pennsauken Injury and Fisher Chiropractic of Milltown. Defendant James Proodian, also a chiropractor, worked for defendant from 1995 through 1998. He left defendant's employ in 1998 to form defendant Setty Management Consulting.

In 1999, defendant met with defendant Robert P. Borsody, an attorney, to discuss the creation and management of medical corporations through separate management companies. Defendant retained Borsody, who prepared incorporation papers creating five medical corporations: Perth Amboy Medical & Rehabilitation, P.C.; Plainfield Medical & Rehabilitation, P.C.; N.J. Medical Diagnostic & Rehabilitation, P.C.; Pennsauken Trauma & Rehab Center, P.C.; and Middlesex Medical & Rehabilitation, P.C. Each corporation identified defendant as the registered agent and director.

Borsody introduced defendant to defendant Douglas Jay Spiel, said to be a medical doctor, to serve as owner of the corporations. Spiel, however, had not yet obtained his medical license in New Jersey. Therefore, Spiel suggested defendant Michael L. Amoroso, also a medical doctor. Amoroso was identified as the owner of these corporations, however, Amoroso submitted a certification stating that he did not exert any control over them. He stated, rather, that defendant Proodian and the Setty entity handled the day-to-day business of the corporations.

In August 1999, following a meeting with defendant, Borsody prepared incorporation papers for five new medical corporations: Perth Amboy Medical & Rehabilitation Center of New Jersey, P.C.; Plainfield Medical & Rehabilitation Center of New Jersey, P.C.; N.J. Medical Diagnostic & Rehabilitation Center, P.C.; Pennsauken Trauma & Rehab Clinic of New Jersey, P.C.; and Middlesex Medical & Rehabilitation Center of New Jersey, P.C.

The incorporation papers for the new entities listed Spiel as the director and Edward Wilkin,*fn2 defendant's accountant, as the registered agent.

Spiel, who had by that time received his New Jersey medical license, was identified as the owner of these new corporations. Spiel stated that he did not exert any authority or control over the operation of these corporations but that defendant and Proodian handled their day-to-day operations.

Deirdrea Colacci, a former employee of defendant, certified that defendant and Proodian had complete control over the billing and finances of the medical corporations. Colacci stated that defendant used ...


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