Painless Medical, P.C.,v. Geico

What happens to the Provider’s No-Fault suit when the sole shareholder of the plaintiff medical corporation dies  Painless Medical, P.C.,v. Geico  (2011 NY Slip Op 21228), decided on July 1, 2011 by Judge Peter Sweeney gives an in depth analysis of this situation and can be considered a “must read” if you are ever faced with this situation. In this case, an attorney, Anna Val, was appointed administrator of the deceased’s Doctor’s Estate. Here the Court denied the dismissal application, however, the actions were not allowed to proceed, “By denying Geico’s motion to dismiss and the cross-motion for substitution, the Court is not suggesting that the actions may proceed. The fact of the matter is that the actions cannot go forward because there is no one who can now act on behalf of the plaintiff corporations in the actions. While it is true that Dr. Collins’ shares in the three professional corporations vested in his estate at the time of his death (see In re Michael Bernfeld, D.D.S.,  A.D.3d, 2011 NY Slip Op. 5071[2nd Dep’t]Fromcheck v. Brentwood Pain & Medical Services, P.C., 254 AD2d 485, 486, 679 N.Y.S.2d 632 [2nd Dep’t 1998]; Ocean Diagnostic Imaging, P.C., 15 Misc 3d at 10) and that the fiduciary of an estate can normally vote the decedent’s shares in a corporation for any purposes (EPTL § 11-1.1[b] [14] ), this is not the case with respect to professional corporations. Only an individual authorized by law to practice in this state a profession in which the professional corporation is authorized to practice may own, direct or control a professional corporation (Business Corporation Law §§ 1507 and 1508). Further, only such individuals may generally come into possession of shares in a professional corporation (Business Corporation Law §§ 1511) . Here, the profession in which the three plaintiff professional corporations are authorized to practice is medicine.”