Impact of COVID-19 on Healthcare Providers Involved in Litigation

By: Toni-Ann M. Buono, Esq.
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As healthcare providers continue to focus their efforts on battling the COVID-19 pandemic, litigators across New York have welcomed once-thought unconventional modes of conducting depositions, hearings and oral arguments with open arms.  As the courts, for the most part, remain closed to all but court personnel, attorneys and clients alike have opted to utilize video conferencing technology in order to keep their cases active and moving forward.  

Recognizing the concern for litigants, witnesses and others involved in pending litigation who are physicians or medical personnel treating COVID-19 patients, the courts have recently issued orders outlining new protocols for litigation in the COVID-19 era.  

Initially, on May 2, 2020, Chief Administrative Judge  Marks issued Administrative Order 88/20 which stated in part: “The court shall not order or compel, for a deposition or other litigation discovery, the personal attendance of physicians or other medical personnel (including administrative personnel) who perform services at a hospital or other medical facility that is active in the treatment of COVID-19 patients.” 

Subsequently, however, on June 22, 2020, in Administrative Order 129/20, Judge Marks cancelled Administrative Order 88/20 and ordered that litigation discovery should proceed electronically to the extent possible.  Judge Marks also placed the onus on the courts to resolve scheduling issues involving physicians and other medical or administrative personnel who are unavailable for depositions or other discovery due to their treatment of COVID-19 patients.  A copy of Administrative Order 129/20 can be accessed here.

One large concern, however, is the potential prejudice which might result to any litigant required to take part in a court proceeding (for example, a deposition or hearing) without their attorney present in the same room.  While the law continues to evolve on this issue, the statute governing civil practice in New York does allow for remote depositions, but only by stipulation of the parties.  Notwithstanding this provision, another provision in the statute grants courts the authority to issue protective orders “conditioning or regulating the use of any disclosure device.”  This latter provision gives courts authority to order alternate means for parties to discover information relevant to litigation. 

Earlier this month, Justice Baker of the Albany County Supreme Court considered whether a deposition by videoconference results in the witness forfeiting his right to the presence of counsel.  While the decision, in part, focused on the interpretation of now-cancelled Administrative Order 88/20, Justice Baker, relying on both statutory and case law, stated that “requiring depositions to be conducted by remote electronic means is neither novel nor without legal authority, or beyond The Courts authority[.]”  To alleviate any concerns of prejudice, Justice Baker held that, as a prerequisite, counsel was allowed to be physically present in the same room as the witness when the video deposition is conducted.

Also presented with concerns of prejudice as a result of an attorney’s inability to physically sit next to his witness at a deposition, Justice Kalish of the New York County Supreme Court, acknowledged what is considered the “new normal” and stated:

To delay discovery until a vaccine is available or the pandemic has otherwise abated would be unacceptable.  It goes without saying that business as usual is no longer the normal.  The legal profession and its clients are currently coming to grips with the “new normal” brought about by the COVID-19 pandemic.  Among other things, this “new normal” means that it is no longer safe and practical for depositions to be taken in person, as was the default during the “old normal.”

Justice Kalish ultimately exercised the Court’s discretion and ordered that depositions be conducted by remote means, and held that “to the extent the law and social distancing guidance allow”, counsel may be physically present in the same room as his witness.  A copy of the decision can be accessed here.   

To the extent that an attorney and witness are not able to be physically present in the same room with one another during a remote deposition or hearing, the potential prejudice to a litigant is somewhat alleviated through the availability of platforms like Zoom and a host’s ability to create private “breakout rooms”.  In these “breakout rooms”, an attorney and client can “meet” and have a confidential discussion – similar to what would take place during “normal” circumstances during a break in proceedings.

Weiss Zarett continues to monitor all updates from the courts regarding the rights and responsibilities of all parties involved in litigation.  If you are a healthcare provider treating COVID-19 patients and are currently involved in litigation, we encourage you to speak with your attorney regarding the use of remote technology to comply with your discovery obligations. 

Weiss Zarett represents healthcare providers and business owners in a wide variety of litigation matters, including advising clients on current COVID-19 issues.  If you have any litigation-related questions, please email Toni-Ann M. Buono, Esq. at or call us at (516) 627-7000.

Weiss Zarett Brofman Sonnenklar & Levy, P.C. is a Long Island law firm providing a wide array of legal services to the members of the health care industry, including employment, corporate and transactional matters, civil and administrative litigation, healthcare regulatory issues, bankruptcy and creditors’ rights, and commercial real estate transactions.


New Investigations Related To COVID-19

By Mathew J. Levy, Esq. & Zoila Sanchez, J.D., M.P.H.
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On March 16, 2020, the Department of Justice (DOJ) added new prosecutorial tools to its arsenal, directing each U.S. Attorney’s Office to prioritize the detection, investigation, and prosecution of criminal conduct relating to the current pandemic. DOJ has created a COVID-19 Hoarding and Price Gouging Task Force to protect scarce materials including: personal protective equipment (PPE) face masks and shields, PPE gloves, portable ventilators, medical gowns/apparel, and sanitizing and disinfecting products usable in a clinical setting. These materials are designated under the Defense Production Act (DPA) Section 102 and Executive Order “Preventing Hoarding of Health and Medical Resources to Respond to the Spread of COVID-19” which criminalizes hoarding for the purpose of charging exorbitant prices.[1]


The DOJ recently stated that they are “committed to pursuing all manner of fraud in federal health care programs, including violations disclosed by whistleblowers under the False Claims Act, especially during this critical time as our nation responds to the outbreak of COVID-19.” The DOJ is requiring each office to name a Coronavirus Fraud Coordinator to spearhead efforts to investigate and prosecute COVID-19-related crimes and engage in outreach and awareness efforts. New York Attorney General James recently issued press releases warning New Yorkers of Coronavirus-related scams such as medical providers obtaining patient information for COVID-19 testing and then using that information to fraudulently bill for other tests and procedures. Recently, the U.S. Attorney for the Eastern District of New York urged the public to report such suspected fraud schemes by calling the National Center for Disaster Fraud (NCDF) at 1-866-720-5721 or sending an e-mail to As part of the coordinated nationwide response to unlawful COVID-19 related conduct, the NCDF complaints are available to all U.S. Attorneys and DOJs to help identify, investigate and prosecute fraud schemes. Further, the U.S. Department of Health and Human Services (HHS) Office of the Inspector General (OIG) is utilizing data analytics to desk audit monies spent on COVID related activities and materials affecting HHS programs and beneficiaries. OIG is coordinating with law enforcement partners including the Pandemic Response Accountability Committee and federal and state entities. For more information, see the new COVID-19 Portal.


Telehealth is a key area that is expected to draw increased oversight and attention due to its use during the COVID-19 pandemic and relaxation of billing requirements to facilitate access to these services. A report by Fair Health highlights the explosion of services rendered via this route, noting that private insurance telehealth claims grew by 4,347 percent when comparing March 2019 and March 2020 claims data. Providers using telehealth should keep current with HHS provider policies, information about insurance coverage and reimbursement, legal considerations for providing telehealth specifically with respect to privacy and security, informed consent and liability and malpractice and review guidance from the HHS Office for Civil Rights on the use of audio or video communication technology to deliver telehealth services during the public health emergency. Additionally, providers should keep up to date with state-specific telehealth requirements such as those relating to buprenorphine prescribing discussed here as well as telemental health services, which require specific informed consent forms.

HHS-OIG’s recent policy statement notifies providers that during the emergency period they will not be subject to administrative sanctions for reducing or waiving any cost-sharing obligations that federal health care program beneficiaries may owe for telehealth services delivered in accordance with applicable coverage and payment rules. Providers should keep records showing when cost-sharing was waived and document justification for the waiver as they may need it in the future to show eligibility and address potential billing issues.


Another area that is anticipated to see increased oversight is the CARES Act Provider Relief Fund (PRF), which initially reached over 1 million providers. Recently, the PRF expanded its reach to safety net hospitals serving vulnerable uninsured or Medicaid patient populations by $10 billion in funds, and is expected to meet the needs of several hundred thousand additional providers.

PRF provider recipients can take important measures to remain compliant by keeping up to date with requirements and attestation deadlines that HHS regularly updates for providers here. For example, the initial $30 Billion General Distribution requires a “commitment to full compliance with all Terms and Conditions” that were “material to the [HHS] Secretary’s decision to disburse these funds” to the recipient. Also, recipients must use the PRF Attestation Portal to sign an attestation confirming receipt of the funds and agree to the terms and conditions within 90 days of payment. 

As a general rule, health care providers and entities can protect themselves by maintaining documentation that may be requested at a later date. For example, to prevent fraud and fund misuse, HHS instructs PRF recipients to submit documents sufficient to ensure that funds were used for healthcare-related expenses or lost revenue attributable to COVID-19.

[1] HHS Notice of Designation of Scarce Materials or Threatened Materials Subject to COVID-19 Hoarding Prevention Measures Under Executive Order 13910 and Section 102 of the Defense Production Act of 1950, 85 FR 17592 (March 25, 2020).

Mathew J. Levy, Esq. is a Principal of Weiss Zarett Brofman Sonnenklar & Levy, PC. Mr. Levy is nationally recognized as having extensive experience representing healthcare clients in transactional and regulatory matters. Mr. Levy has particular expertise in advising health care clients with respect to contract issues, business transactions, practice formation, regulatory compliance, mergers & acquisitions, professional discipline, criminal law, healthcare fraud & billing fraud, insurance carrier audits, litigation & arbitration, and asset protection-estate planning. You can reach Mathew Levy at 516-926-3320 or

Zoila Sanchez, J.D., M.P.H. joined the firm as a Legal Intern from the U.S. Department of Health and Human Services Office of Counsel to the Inspector General (HHS-OCIG) where she worked as a Legal Clerk with a focus on health care fraud and abuse. Ms. Sanchez holds a Bachelor of Arts degree from Stony Brook University, Master of Public Health from the University of Arizona, and a Juris Doctor degree from the Maurice A. Deane School of Law at Hofstra University where she was awarded the Honorable David A. Paterson Award in Public Service.

Weiss Zarett Brofman Sonnenklar & Levy, P.C. is a Long Island law firm providing a wide array of legal services to the members of the health care industry, including corporate and transactional matters, civil and administrative litigation, healthcare regulatory issues, bankruptcy and creditors’ rights, and commercial real estate transactions.


Force Majeure and Business Interruption in the Age of COVID-19

By Michael D. Brofman, Esq. & Michael J. Spithogiannis, Esq.
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The onset of the COVID-19 pandemic and government’s response was immediate and stunning, but few had time to fully consider and comprehend the long-term effects on their businesses.  The rights and obligations of commercial tenants to pay rent amid the governmental restrictions, and whether an insured can recover for business interruption caused by the government’s response to the pandemic, are questions that clients are asking us to address.  At present, there are no clear answers, but there are steps that should be taken to understand and address the issues.

In a typical commercial landlord and tenant relationship, courts look primarily, if not exclusively, to the parties’ lease to resolve any dispute.  In the immediate future, many tenants and landlords will become familiar with the term, force majeure.  In French, force majeure means superior force.  In the legal sense, it contemplates an event that is neither anticipated nor controlled which prevents performance of an agreed-upon act.  In general, force majeure includes acts of nature, such as earthquakes and hurricanes, and acts of people, such as riots, strikes, and wars.  Although rarely at issue, many contracts include a force-majeure clause to allocate the risk of loss if performance becomes impossible or impracticable due to unforeseen and uncontrollable events.

A recent example illustrates the point.  In response to the pandemic threat, the governor of Illinois issued an executive order directing restaurants to suspend food service for on-premises consumption.  The executive order permitted and encouraged such businesses to sell food and beverages for off-premises consumption through delivery, drive-through and curbside pickup.

On June 2, 2020, the United States Bankruptcy Court, Northern District of Illinois, determined whether a restaurant operator was required to pay the full amount of agreed-upon rent while under the Illinois executive order.  Predictably, the Bankruptcy Court first looked to the parties’ lease which contained the following force-majeure clause:

Landlord and Tenant shall each be excused from performing its obligations or undertakings provided in this Lease, in the event, but only so long as the performance of any of its obligations are prevented or delayed, retarded or hindered by . . . laws, governmental action or inaction, orders of government. . . . Lack of money shall not be grounds for Force Majeure.

Id. (emphasis added).

The Bankruptcy Court observed that a force-majeure clause will only excuse performance if the triggering event was the actual cause of non-performance.  The court determined that the governor’s executive order constituted both governmental action and issuance of an order, which unquestionably hindered the ability of the tenant to pay its rent.  The court observed, however, that the debtor-tenant could still operate by take-out, curbside pick-up, and delivery services.  Consequently, the debtor-tenant was only partially excused from paying rent during the restrictive period, and the rent was only reduced in proportion to its reduced ability to generate revenue.

When a similar case is ultimately considered by a New York court, can we expect the same sort of analysis?  Absent legislative intervention, the parties’ lease will likely control the outcome in New York as well.  New York courts have often recognized that freedom of contract is a deeply-rooted public policy, and a right of constitutional dimension.  Because force-majeure clauses excuse a party’s performance, or limit damages in cases where reasonable expectations and performance have been frustrated by circumstances beyond the parties’ control, New York courts generally apply them narrowly; relieving a party of its contractual obligations only under clear and unambiguous circumstances.  Performance will, therefore, only be excused if the force-majeure clause specifically includes the event that actually prevents compliance.

In response to the COVID-19 crisis, New York Governor Andrew M. Cuomo issued a number of executive orders.  Among them was Executive Order 202.3, issued March 16, 2020, which is similar to the one issued in Illinois.  The likely scenario is that New York courts will look to commercial-tenants’ leases to determine whether the obligation to pay rent can be eliminated or reduced during periods when business operations were restricted.  Each specific force-majeure clause will undoubtedly control how a New York court might determine rent-payment obligations in light of the Executive Order or other governmental action.  It would behoove landlords and tenants alike to examine their leases carefully.  

A corollary issue presented is whether business-interruption insurance provides coverage to either (or both) parties to a lease.  One might expect that a source of relief amidst governmental restrictions arising from COVID-19 – particularly in the restaurant and retail business – would be business-interruption coverage bought and paid for under common all-risk commercial property insurance.  

In a bi-partisan effort, 18 members of the United States House of Representatives wrote to insurance-industry trade groups urging them to recognize financial loss due to COVID-19 as part of business-interruption coverage.  The response was uncompromising: “Standard commercial insurance policies offer coverage and protection against a wide range of risks and threats, and are vetted and approved by state regulators.  Business interruption policies do not, and were not designed to, provide coverage against communicable diseases such as COVID-19.”

In light of the position taken by the insurance industry, on April 9, 2020, in one of the first lawsuits against insurance carriers, two restauranteurs commenced a federal class action lawsuit in the United States in the District Court, Southern District of Florida, asking the court to declare that the standard all-risk commercial property insurance policy provides coverage for business-income losses incurred because of measures taken by governmental authorities to restrict operations in light of COVID-19.  The lawsuit is in its very early stages and will not likely be decided in the immediate future.  We can expect the insurance industry to defend the case vigorously and resist payment of business-interruption claims in general.  Moreover, as policy provisions often differ, class certification may be denied.

Like the force-majeure analysis in the case of commercial leases, the question of coverage will likely come down to the contract between insurer and insured – the insurance policy.  Understanding what an insurance policy provides goes a long way to understanding the likelihood of success when a claim is made and formulating a strategy to pursue the claim once it is rejected.  

Whether a tenant, landlord or insured business owner, knowing your rights will, at minimum, allow you to manage your expectations, negotiate from a position of strength and quite possibly obtain much needed relief.  Getting counsel involved early to help in the analysis and provide guidance is a prudent and cost-effective measure in these highly uncertain times.

Weiss Zarett Brofman Sonnenklar & Levy, P.C. is a Long Island law firm providing a wide array of legal services to the members of the health care industry, including corporate and transactional matters, civil and administrative litigation, healthcare regulatory issues, bankruptcy and creditors’ rights, and commercial real estate transactions.


Third Department Reverses Award of MLMIC Demutualization Proceeds to Employer, Rules Employee-Policyholder is Legally Entitled to Disputed Funds

By Seth A. Nadel, Esq.
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As discussed in a prior article, on April 24, 2020, the Appellate Division, Fourth Department, in the case of Maple-Gate Anesthesiologists v. Nasrin, 182 A.D. 3d 984 (4th Dep’t 2020), unanimously affirmed a decis*ion of the Erie County Supreme Court that a physician-policyholder was entitled to the proceeds resulting from the demutualization of Medical Liability Mutual Insurance Company (“MLMIC”). Notably, in Maple-Gate, the Fourth Department had chosen not to follow the early precedent set by the First Department in Schaffer, Schonholz & Drossman, LLP v. Title, 171 A.D. 3d 465 (1st Dep’t 2019) holding that an employer who paid a policyholder’s malpractice insurance premiums was entitled to the funds under a theory of unjust enrichment. Now, the Third Department, in Albany, has now weighed in and sided with the employees’ position, as reflected in Maple-Gate.

In the Supreme Courts of Saratoga and Broome Counties, respectively, the cases of Schoch v. Lake Champlain OB-GYN, P.C. and Shoback v. Broome Obstetrics and Gynecology, P.C. presented the standard set of facts in a MLMIC dispute. Namely, an employed practitioner was a named MLMIC policyholder, and their employer had agreed to pay their medical malpractice premiums in connection with their employment. Facing motions for summary judgment by the policyholders in both cases to resolve the question as to which party was entitled to demutualization proceeds, the lower courts had deemed themselves constrained to follow the Schaffer decision as binding precedent and denied the policyholders’ motions. Both cases were appealed, and the appeals were heard concurrently by the Third Department during its May 2020 term.

In two decisions issued on June 18, 2020, the Third Department reversed the determinations of the lower courts and held that the employee-policyholders were entitled to summary judgment awarding them the MLMIC demutualization proceeds. In doing so, the Court affirmed that the demutualization was governed by the New York Insurance Law and MLMIC Plan of Conversion, and that a lawful policyholder was entitled to the proceeds absent an assignment of that right. Furthermore, the Court rejected the employer’s argument that it was entitled to the proceeds under a theory of unjust enrichment, explaining that the demutualization proceeds were a “windfall” which neither party anticipated nor bargained for, and thus the employee-policyholder’s receipt of the funds was not unjust when the employer had received everything it had bargained for under the parties’ employment agreement.

With Schoch and Shoback, both the Third and Fourth Departments have now agreed that an employee-policyholder is legally entitled to the proceeds resulting from the demutualization and sale of MLMIC. In the First Department, Schaffer arguably remains controlling precedent, but appeals from subsequent lower court decisions are expected to clarify the scope of its holding. The Second Department, meanwhile, has not had the opportunity to pass on the issue, but pending appeals will afford it the chance to do so in the near future.

A copy of the Third Department’s decisions in Schoch and Shoback may be found here and here, respectively.

Weiss Zarett represents numerous physician-policyholders in MLMIC disputes. If you have any questions about the MLMIC demutualization, please reach out to Seth A. Nadel, Esq. at or 516-627-7000.

Weiss Zarett Brofman Sonnenklar & Levy, P.C. is a Long Island law firm providing a wide array of legal services to the members of the health care industry, including corporate and transactional matters, civil and administrative litigation, healthcare regulatory issues, bankruptcy and creditors’ rights, and commercial real estate transactions.



By Michael J. Spithogiannis, Esq.
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Thorough pre-litigation preparation is essential to any lawsuit, but it is particularly so in a case contesting conduct of those who manage corporations and limited-liability companies.  Such entities can be closely held, meaning their stock or membership interests are not freely traded and are held by relatively few individuals.  In a perfect world, those in charge have the expertise and integrity to manage operations and finances. 

It’s safe to say that some conflict is endemic to most business relationships.  The question is whether the conflict pertains to benign day-to-day decisions, or whether it threatens the very existence of the business.  Lawyers are often retained to litigate over the latter situation, and their preparation begins as soon as they meet a prospective client.

A litigated business dispute is complicated, time-consuming, expensive and messy.  It requires a lawyer’s understanding of the business’s structure and governance, and the nature of the specific conflict at hand.  To achieve that understanding, the lawyer must rely on facts and documents provided by the prospective client.  Ideally, our prospective client has sufficient documentation and information to focus the issues in dispute.  A thorough examination of all formation and organizational documents is indispensable.  

Knowing the business structure and form is essential.  Is the business a corporation, limited liability company, partnership, or joint venture?  Is the business a professional entity, such as a medical practice or law practice?  Each type of business structure presents different hurdles to protecting ownership interests, and affords our prospective client different rights and remedies. 

The rights and obligations of the owners of corporations and limited liability companies (namely, shareholders and members, respectively) are usually embedded within corporate documents.  So too, the powers of those who govern these entities are defined in such documents.  As few of these documents are available to the public, the lawyer must rely on the prospective client for disclosure.  In the case of a corporation, there will be a certificate of incorporation, and likely a shareholder’s agreement, by-laws, and stock ledger.  A limited liability company will have articles of organization, and likely an operating agreement.  These documents typically provide limits on the power of management, voting rights of shareholders or members, and for sale of ownership interests.

We may learn, for example, that the prospective client owns a minority membership interest in a limited liability company.  We may learn further that the problem or dispute is with a business associate who controls the management of the company, and has allegedly been self-dealing, withholding distributions, denying access to the company’s books and records, and misappropriating corporate opportunities.  

Fundamentally, those who manage corporate affairs are fiduciaries, and as such must act for the benefit of the company and its members on all corporate matters.  Identifying the alleged misconduct is one thing.  But how to deal with it is another.  Whether to seek a litigated, rather than a corporate, solution depends on understanding how the company’s management is supposed to work.  Governing documents usually detail the authority and role of management: how long is the term of office, what types of agreements can and cannot be entered into on the company’s behalf, what oversight rights do shareholders and members have, when and under what circumstances must membership approval be sought, and procedure for removal.  

Regrettably, in many instances, even if the company’s governing documents provide a mechanism for taking action, it may not solve the problem.  For example, the governing documents may permit owners to band their corporate interests, call a special meeting, and remove a dishonest director.  The person aggrieved, however, may not have sufficient support to take inter-corporate action.  Litigation may be the only option.

Before commencing litigation, it should be clear that the alleged misconduct is likely to rise to the level of fraud on the company, discrimination against a particular member or members, self-dealing or other serious misconduct, rather than simply poor judgment.  Once the decision to litigate becomes evident, a decision must be made on the type of claim or claims to assert.  Generally, an aggrieved member or shareholder may bring personal claims to vindicate personal rights, or derivative claims on behalf of the company for wrongs committed against the company.  

Identifying a claim as derivative presents another hurdle.  The person bringing a derivative action must first demand that the company’s management initiate the lawsuit.  If the action is brought without making such a demand, the plaintiff must demonstrate that a demand would have been futile.  A demand is only futile, and therefore excusable, when the management is incapable of making any impartial decision, as where each member of the board either has an interest in the challenged transaction or is controlled by a self-interested director.

The most common derivative claim against a dishonest or self-dealing director or manager is a breach-of-fiduciary-duty claim, often based on frauds committed against the company, self-dealing, and misappropriation of corporate assets.  Personal claims include recovering withheld distributions, or enforcing rights or benefits provided to the individual shareholder by law or governing documents.

Disputes of the sort described here are not uncommon.  Aggrieved business owners who have invested in the enterprise are often blind-sided by misdeeds of those in control.  

Providing one’s attorney with as much information about the business and issues in dispute as possible is necessary for thorough and effective representation.  A prudent shareholder or member should, therefore, always keep abreast of corporate activity, insist upon corporate formality, attend meetings, review corporate tax returns, scrutinize the conduct of directors or managers, and if improper or unlawful activity is discovered or suspected, proceed quickly to avoid irreparable harm to the business and to his or her investment.

Weiss Zarett Brofman Sonnenklar & Levy, P.C. is a Long Island law firm providing a wide array of legal services to the members of the health care industry, including corporate and transactional matters, civil and administrative litigation, healthcare regulatory issues, bankruptcy and creditors’ rights, and commercial real estate transactions.