JOAN A. MADDEN, J.S.C.
In these three actions arising out of defendants' treatment and care of plaintiffs for urinary tract/prostate issues, defendants David B. Samadi, M.D. ("Dr. Samadi") and David B. Samadi, M.D., P.C. (together "the Samadi defendants") move for an order dismissing (I) the fraud claims asserted by all the plaintiffs, the claims for negligence, prima facie tort and assault claims asserted by plaintiffs George Markelson, as Executor of the Estate of Stephen Markelson ("Markelson"), and Michael J. Pino ("Pino"), and the claims by Angelos Markotos and Linda Markotos (together "the Markatos plaintiffs") for violations of General Business Law (GBL") §§ 349 and 350 and for loss of consortium related to the fraud; (ii) the medical malpractice claim asserted by Markelson; and (iii) plaintiffs' request for punitive damages. Lenox Hill Hospital ("Lenox Hill") and Northwell Health, Inc. ("Northwell")(together "the Hospital defendants") separately move to dismiss the claims against them on the same grounds and also seek an order striking certain allegations as scandalous and prejudicial pursuant to CPLR 3042(b).
Plaintiffs oppose the dismissal of their fraud claims, Markelson opposes the dismissal of his medical malpractice claim, while the Markatos plaintiffs oppose the dismissal of their claims asserting violations of GBL §§ 349 and 350, and for loss consortium related to the fraud. Plaintiffs also oppose the motions to strike/dismiss their requests for punitive damages and the Hospital defendants' motion to strike certain allegations as scandalous and prejudicial. However, plaintiffs Markelson and Pino do not oppose the motions to dismiss their assault, prima facie tort and negligence claims.
Markelson and Pino each cross move for leave to amend their amended complaints to add claims for violations of General Business Law §§ 349 and 350, and defendants oppose the cross motions.
Plaintiff George Markelson's decedent Stephen Markelson ("Mr. Markelson" or "decedent"),
It is alleged, inter alia, that plaintiffs' surgeries, which occurred in operating room 21 ("O.R. 21"), were not performed by Dr. Samadi but by unsupervised resident(s), and that during these surgeries, Dr. Samadi was simultaneously/concurrently performing robotic assisted laparoscopic prostatectomy surgeries ("RALP") in operating room 25 ("O.R. 25"). It is further alleged that defendants intentionally concealed that Dr. Samadi was not performing plaintiffs' surgeries through false statements on consent forms, operative reports, and progress notes, and by unnecessarily using general anesthesia.
Defendant Northwell Health, Inc. ("Northwell") is a corporate health care network that owns and operates Lenox Hill. Dr. Samadi is authorized to provide care and treatment, and is employed by Lenox Hill and/or Northwell. Lenox Hill and Northwell employed the Operating Room (O.R.) schedulers, O.R. administrators, O.R. supervisory staff, medical billers, and O.R. personnel (e.g., O.R. nurses, anesthesiologists, residents, etc.) for the surgeries and related medical services performed at the Lenox Hill by Dr. Samadi.
The complaint/amended complaints
Motions to Dismiss Fraud Claims
The complaints allege that there was "conspiracy to defraud" engaged in among Dr. Samadi and the corporate executives and administrators and non-medical defendants employed by the Hospital defendants, the purpose of which was to increase and inflate the volumes for urologic surgeries, inpatient admissions, anesthesia services and medical services to inflate billing revenue, health system profits, and physician income and compensation. The alleged conspiracy involved (1) fraudulently billing patients, including plaintiffs, for urologic surgeries performed on plaintiffs by unsupervised residents where Dr. Samadi was not present for "critical or key portions of the surgeries' and/or "the entire viewing" during endoscopic/laparoscopic surgery performed in O.R. 21 as Dr. Samadi was simultaneously or concurrently performing robotic assisted laparoscopic prostatectomy surgeries ("RALP") in O.R. 25; (2) fraudulently placing patients, including plaintiffs, under general anesthesia without medically necessity and for excessively prolonged periods of time, including for the purpose of concealing the fraud, and billing such patients for general anesthesia services that were medically unjustifiable and excessively prolonged; (3) defrauding patients, including plaintiffs, for surgeries, anesthesia services, related medical treatment and hospitalization that occurred without proper consent; (4) defrauding patients, including plaintiffs, for surgeries, anesthesia services and related medical treatment through the preparation of fraudulent medical records (e.g., operative reports, anesthesia records, operative case records, etc.) that falsely indicated that Dr. Samadi either performed the surgery or was present during the surgery, including for the purpose of concealing the fraud; (5) defrauding patients, including plaintiffs, by publicizing that Dr. Samadi as purportedly "world reknown" prostate expert, "Best Prostate Surgeon in the World" and "NY's Best Prostate Surgeon" to attract numerous patients, increase surgical volume and hospital admissions and, consequently, inflate revenue, profits and physician compensation.
As for the Hospital defendants, the complaints allege that these defendants, including through their specifically named executives, administrators, medical directors and O.R. schedulers and O.R. supervisory staff, "authorized, approved, permitted, allowed, ratified, enabled, equipped, supported, assisted, encouraged, and promoted" the fraud scheme, including Dr. Samadi's simultaneous surgeries, the fraudulent billing practices, the use of medically unnecessary anesthesia, the improperly obtained consents and the falsified medical records.
As for damages, the following harm is alleged as a result of the fraudulent scheme: (1) plaintiffs' rights to receive ethical medical treatment were knowingly, intentionally and willfully violated; (2) plaintiffs' rights to receive a proper informed consent were violated and they underwent surgery without giving a full, proper, knowledgeable and informed consent for the operation; (3) plaintiffs underwent surgery, general anesthesia, and hospitalization under false pretenses; (4) plaintiffs were subjected to surgery by an unsupervised inexperienced resident without his knowledge; (5) plaintiffs were subjected to medically unjustifiable, unnecessary and excessively risky general anesthesia; (6) plaintiffs sustained serious physical injuries; (7) plaintiffs sustained a breach of trust and confidence in the honesty and integrity of the medical profession and health care system; (8) plaintiffs paid for false bills generated under fraudulent pretenses; and (9) plaintiffs were defrauded in multiple ways.
With respect to the fraudulent billing practices, it is alleged that defendants defrauded patients by billing them excess amounts (I) for surgeon's fees, copayments and account balances related to the "concurrent" and "simultaneous" non-RALP urologic surgeries and operative procedures performed by unsupervised residents in O.R. 21; (ii) for co-payments and account balances related to medically unjustifiable and unnecessary general anesthesia services and excessively prolonged general anesthesia services related to the "concurrent" and "simultaneous" non-RALP urologic surgeries and operative procedures performed by unsupervised residents in O.R. 21; (iii) for co-payments and account balances for medical treatment that lacked a legal and proper consent related to the "concurrent" and "simultaneous" non-RALP urologic surgeries and operative procedures performed by unsupervised residents in O.R. 21. As a result of such fraudulent billing practices, it is alleged that plaintiffs were damaged as they were billed, and paid, for excessive amounts for the subject surgeries.
Defendants' Motions to Dismiss the Fraud Claims
Defendants argue that the fraud claims must be dismissed as they are duplicative of, and seek the same damages as, the medical malpractice claims, citing, inter alia,
The Hospital defendants additionally argue that they cannot be held liable for intentional misrepresentations outside the scope of Dr. Samadi's employment. Moreover, they argue that the consent forms which are part of the record belie plaintiffs' allegations that they were unaware that a resident would be involved in the medical procedure and that, in any event, fraud by omission requires a fiduciary duty which was not pleaded and does not exist between the Hospital defendants and the plaintiffs.
In opposition, plaintiffs argue that the damages for the fraud claims are separate and apart from those related to the medical malpractice, including the costs of the surgeries that plaintiffs would not have consented to if they had known that the surgeries were going to be performed by an unsupervised resident, as opposed to Dr. Samadi, citing
On a motion to dismiss for failure to state a cause of action under CPLR 3211(a)(7), the court "accept[s] the facts as alleged in the complaint as true, accord plaintiff the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory."
To maintain a cause of action for fraud, a plaintiff must allege a representation of a material existing fact, falsity, scienter, justifiable reliance and damages.
To plead a viable cause of action for fraud in connection with claims of medical malpractice, the allegations must include "knowledge on the part of the physician of the fact of his malpractice and of his patient's injury in consequence thereof, coupled with a subsequent intentional, material misrepresentation by him to his patient known by him to be false at the time it was made, and on which the patient relied to his damage."
Here, even assuming arguendo that the fraud claims are adequately pleaded, such claims are insufficient as they are based on the same conduct underlying medical malpractice claims, that is the use of unsupervised residents to conduct simultaneous/concurrent surgeries, and the administration of unnecessary anesthesia and false statements to conceal the alleged conduct underlying the malpractice.
The fraud claims also fail as the damages alleged in connection with these claims are not "separate and distinct from those flowing from the original malpractice."
Next, the damages related to the allegedly fraudulent billing practices arise from payments made in connection with the surgeries and treatment underlying the malpractice claims, and therefore are not distinct and separate from the damages arising from such claims.
Moreover, contrary to plaintiff's argument, the holding in
In this case, while plaintiffs allege that certain aspects of their treatment were unnecessary and the defendants misled them as to the identity of the physician performing the surgeries, unlike in
Defendants' Motions to Dismiss Markelson's Medical Malpractice Claim as Time-Barred
"An action for medical [or dental] malpractice must be commenced within two years and six months of the date of accrual."
Defendants argue that since the Amended Complaint alleges that Mr. Markelson was treated by Samadi defendants from on or about October 19, 2013 to November 5, 2013, and by the Hospital defendants from on or about October 7, 2013 to November 30, 2013, even assuming continuous treatment, the two and half year statute of limitations expired as to the claims against the Samadi defendants on May 5, 2016, and as to those against the Hospital defendants on May 30, 2016. Defendants assert that as this action was not commenced until December 22, 2016, it is time-barred.
In opposition, Markelson does not deny that the action was filed after the expiration of the applicable statute of limitations, However, he argues that the doctrine of equitable estoppel precludes defendants from asserting the statute of limitations as a defense since defendants concealed their fraud and malpractice, including by making false statements before the surgery that Dr. Samadi was "personally" performing the surgery, unnecessarily using general anesthesia, preparing false operative reports and generating false and excessive bills showing that Dr. Samadi performed the surgery, and that the Amended Complaint alleges that it was only after investigation that the fraud and malpractice were discovered.
"[T]he doctrine of equitable estoppel is to be invoked sparingly and only under exceptional circumstances."
Under this standard, at least at this juncture, Markelson has satisfied his burden of alleging that intentional acts of concealment by Samadi defendants and the Hospital defendants prevented Markelson from timely bringing an action for medical malpractice. Notably, the gravamen of his medical malpractice claim is that defendants deviated from the standard of care by permitting an unsupervised resident to perform his surgery and by failing to inform Mr. Markelson as to who would perform the surgery, and that the surgery performed on him was part of a fraudulent scheme involving concurrent/and medically unnecessary surgeries in order to economically benefit the defendants. In this connection, allegations that subsequent to the surgery defendants misrepresented that Dr. Samadi performed the surgery, including by falsifying operative reports and billing records in effort to conceal the malpractice, and that investigation of plaintiff's attorney revealed the fraud and malpractice shortly before the Markelson action was filed are sufficient to plead facts that, if proven, would establish equitable estoppel.
Accordingly, as equitable estoppel potentially applies to preclude defendants from asserting that statute of limitations defense, defendants' motions to dismiss Markelson's medical malpractice claim as time-barred is denied.
Hospital Defendants' Motion to Strike Allegedly Scandalous Allegations
The Hospital defendants move to strike (I) paragraphs 129 and 163 in the Markelson Amended Complaint, (ii) paragraphs 124 and 158 in the Markatos Complaint, and (iii) paragraphs 123 and 157 in the Pinto Amended Complaint, all of which specifically name certain hospital executives/administrators who are not defendants in this action, as redundant of paragraphs which contain the same allegations without naming the hospital executives/administrators.
Plaintiffs oppose the motion, arguing that the allegations are relevant to the fraud claim against the corporate defendants insofar as they seek to recover based on theories of vicarious liability and allegations of a conspiracy to defraud. Plaintiffs' opposition is unavailing as the fraud claims have been dismissed, so there are no grounds upon which to seek recovery based on vicarious liability and, in any event, the names of individual executives and administrators, who have not been named as defendants in this action, are irrelevant to plaintiffs' claims.
Accordingly, the motions to strike are granted to the extent of striking paragraphs paragraphs 129 and 163 in the Markelson Amended Complaint; paragraphs 124, 158 in the Markatos Complaint; and paragraphs 123 and 157 in the Pinto Amended Complaint.
Defendants' Motions to Dismiss/Strike Request for Punitive Damages
Defendants move to dismiss/strike plaintiffs' requests for punitive damages in the three actions. Plaintiffs oppose the motions.
Punitive damages may be recovered in a medical malpractice action where a defendant's conduct amounts to "willful or wanton negligence or recklessness that evinces a gross indifference to patient care."
Defendants argue that the requests for punitive damages must be stricken as the gravamen of this action is for medical malpractice and an award of punitive damages is a rarity in such cases, and that the allegations in the complaints do not rise to the level of punitive damages. The Hospital defendants also argue that they cannot be held liable for punitive damages based on their employees' intentional conduct.
This argument is without merit. Here, plaintiffs' allegations that defendants misled them by stating that Dr. Samadi would be performing their surgeries when, in fact, the surgeries were performed by a resident, and that defendants concealed the identity of the surgeon, including by administering unnecessary general anesthesia and making false statements on consent forms and operative reports, provide a sufficient basis for plaintiffs' request for punitive damages as the allegations evince "a gross indifference to patient care."
As for the Hospital defendants' argument that they cannot be held liable for punitive damages attributable to the intentional conduct of their employees, such argument in unavailing as there are allegations that the Hospital defendants knew about, and were complicit in, the conduct providing the basis for the punitive damages request.
Accordingly, the motions to strike the punitive damages requests are denied.
Viability of Claims Under General Business Law §§ 349 and 350
At issue is the cross motions by Markelson and Pino for permission to file second amended complaints to include claims for violations of General Business Law ("GBL") §§ 349 and 350, and defendants' motion to dismiss these claims in the Markotos complaint.
The GBL §§ 349 and 350 claims and proposed claims are grounded in the facts alleged in connection with the fraud claims, including that defendants engaged in a scheme to defraud plaintiffs, and over a 1,000 other patients, when they were misled that Dr. Samadi would be performing their surgeries, and that the scheme involved the performance of plaintiffs' surgery by unsupervised interns, while Dr. Samadi was simultaneously/concurrently performing RALP in another operating room, and the concealment of these facts through the unnecessary use of general anesthesia, and false statements on consent forms and operative reports with the purpose of increasing profits.
In this connection, it is alleged that the Hospital defendants "heavily advertise[d]" Dr. Samadi's services and spent "approximately $70,000 primarily for internet advertising related to [Dr. Samadi's] services." It is further alleged that "`the department of urology' on Lenox Hill's website directs [the user] to a page that touts only defendant [Dr. Samadi's] services, [and provides] the contact information for [Dr. Samadi's] private urology practice [as well as] various links directed to `Lenox Hill Prostate Cancer Center' and `Robotic Oncology.com'.... [which] also exclusively advertise [Dr. Samadi's] services and similarly provide the contact information for [Dr. Samadi's] private urology practice."
In further support of their GBL claims, plaintiffs submit, inter alia, printouts of internet advertisements regarding Dr. Samadi's services, which identify him as the Chairman of Urology and Chief of Robotic Surgery at Lenox Hill, and news reports of Dr. Samadi's conduct, and its widespread effects on patients he treated.
The GBL § 349 claims allege that defendants engaged in a "pervasive pattern" of fraudulent conduct related to circumstances under which the surgeries were performed and the anesthesia services and admission related to the surgery and the concealment of material facts relating the surgeries, and that they acted with "utter disregard for honesty and truthfulness" and the safety of the plaintiffs. It is further alleged that defendants made false statements and material misrepresentations of fact to plaintiffs that were known to be false and that this pattern of fraudulent conduct was a substantial factor in causing harm to plaintiffs. It is also alleged that the defendants, which held themselves out to the public as offering health care services and as health care providers engaged in consumer oriented business practices, activities and operations had a broad impact on the public, patients and medical consumers including plaintiffs.
As for claims under GBL § 350, it is alleged that defendants held themselves out as offering health care services and as health care providers to the public, patients and medical consumers, including in advertisements, which included statements, representations, assertions and claims to the effect that Dr. Samadi performed the "entire" surgery, procedure and operation on his patients and that this was a reason to choose him to be their doctor and surgeon statements, and that Dr. Samadi was a professor of urology at Hofstra School of Medicine, and that such statements were false, fraudulent and materially misleading, and that as a result of the false advertisements by defendants caused material harm and injuries.
In their opposition to the cross motions to amend, defendants argue that plaintiffs provided no excuse for not including the claims in their initial complaints, and that the proposed claims are without merit. Defendants also argue that the GBL claims are without merit as they do not allege consumer oriented or materially deceptive conduct, or an injury resulting from allegedly deceptive conduct. With regard to the GBL § 350 claims, the Samadi defendants additionally argue that the claims are insufficient as the false advertisements on which they are based are at best "puffery" as to Dr. Samadi's credentials, and do not promise any specific results. As for allegations that the website was misleading since it stated that Dr. Samadi would perform the entire surgery, defendants assert that the website deals with robotic prostate surgeries also known as RALP, and is irrelevant to the non-robotic surgeries performed on plaintiffs.
The Hospital defendants argue that they did not engage in any consumer oriented conducted directed at public, including through advertising, and that any advertising was done by the Samadi defendants and not the Hospital defendants.
In addition, with respect to Markelson's proposed the GBL §§ 349 and 350 claims, defendants argue that such claims are untimely as they were asserted after the expiration of the applicable three year statute of limitations for statutory claims provided under CPLR 214(2), citing
With regard to the cross motions to amend, the court notes that "[l]eave to amend a pleading should be `freely given' (CPLR 3025[b]) as a matter of discretion in the absence of prejudice or surprise."
As a preliminary matter, it cannot be said that any delay in seeking to add the proposed claims caused prejudice or surprise of the kind warranting the denial of the cross motion to amend as discovery has not begun and the facts underlying the proposed claims are the same as those underlying previously asserted fraud claims.
With respect to the merit of plaintiffs' proposed GBL § 349 claims, it is well settled that "providers of medical services are potentially subject to liability under GBL § 349.
To state a claim under GBL § 349, a plaintiff must allege that the defendant engaged "in an act or practice that is deceptive or misleading in a material way and that plaintiff has been injured by reason thereof."
Contrary to defendants' position, the proposed GBL § 349 claims in Markelson's and Pino's proposed Second Amended Complaints, and those asserted in the Markatos Complaint, adequately allege that defendants engaged in consumer oriented conduct based on allegations that defendants marketed the professional services provided by Dr. Samadi to the public, including through the dissemination of information through website advertisements. Indeed, the web pages advertising Dr. Samadi's services refer to "media highlights" such as appearances by Dr. Samadi regarding his treatments on the Today Show and Late Show with David Letterman.
Next, with respect to the requirement that the act is misleading in a material way, the test is whether the allegedly deceptive practice is "likely to mislead a reasonable consumer acting reasonably under the circumstances."
As for defendants' argument that Markelson's proposed GBL claims are untimely, the court notes that, as defendants argue, these claims are subject to a three-year statute of limitations under CPLR 214(2) which accrues on the date of injury.
As for GBL § 350, to state a claim under this section, which proscribes "[f]alse advertising in the conduct of any business, trade or commerce," a plaintiff must allege that the advertisement "(1) had an impact on consumers at large, (2) was deceptive or misleading in a material way, and (3) resulted in injury."
Here, for the reasons above, the advertisements had an impact on the public at large. However, the cross motions to amend to add the claims under GBL § 350 must be denied, and the defendants' motion to dismiss the Markatos plaintiffs' GBL § 350 claim must be granted. First, the alleged misrepresentations in the relevant advertisement that Dr. Samadi would perform the "entire surgery" would not mislead a reasonable consumer, including plaintiffs, since, as noted by defendants, the reference to the entire surgery clearly pertains to the RALP as opposed to the type of surgery performed on plaintiffs. As for the other alleged misrepresentation regarding Dr. Samadi's position as a professor at Hofstra, such misrepresentation is not material to plaintiffs' belief as to whether Dr. Samadi was performing plaintiffs' surgery.
In view of the above, it is
ORDERED that with respect to the Markelson and Pino actions, the motions to dismiss are granted to the extent of dismissing the first causes of action for fraud, and the second causes of action for negligence, assault and prima facie tort; and it is further
ORDERED that with respect to the Markotos action, the motions to dismiss are granted to the extent of dismissing the first cause of action for fraud, the fifth cause of action for violations of GBL § 350, and that part of the sixth cause of action for loss of services and consortium to the extent is based on the fraud claim; and it is further
ORDERED that the Hospital defendants' motions to strike (I) paragraphs 129 and 163 in the Markelson Amended Complaint, (ii) paragraphs 124 and 158 in the Markatos Complaint, and (iii) paragraphs 123 and 157 in the Pino Amended Complaint are granted, and these paragraphs shall not be included in any amended pleading without further leave of the court; and it is further
ORDERED that defendants' motions to strike/dismiss plaintiffs' request for punitive damages are denied; and it is further
ORDERED that the cross motions to amend by Markelson and Pino are granted, except to the extent they seek leave to add a claim under GBL § 350; and it is further
ORDERED that within 30 days of efiling this order plaintiffs Markelson and Pino shall serve second amended complaints consistent with this decision and order; and it is further
ORDERED that a preliminary conference shall be held in the three actions in Part 11. Room 351, 60 Centre Street, New York, NY on December 12, 2019 at 11:30 am.