Perfect Dental, PLLC v. Allstate Ins. Co., Slip Copy, 2007 WL 2687664 (E.D.N.Y.)
In this consolidated action, plaintiffs Perfect Dental Care, P.C.; Zodiac Dental, PLLC; and Smooth Dental PLLC (the “Dental PCs”) seek to recover unpaid insurance claims from Allstate Insurance Company and State Farm Mutual Automobile Insurance Company (the “Insurers”). The Insurers have countersued, alleging, inter alia, insurance fraud, and have also initiated a third-party action against various third-party defendants, some of whom have since settled with the Insurers.
[S]ummary judgment for the Insurers is denied in part and granted in part. Because the court cannot find as a matter of law that the dentists who allegedly provided services on behalf of the Dental PCs were “independent contractors” as opposed to “employees,” the Insurers’ request for a declaratory judgment concerning services provided by the dentists is denied. However, the Dental PCs concede that the physical therapists, for whose services they billed the Insurers, were not employees. This court, therefore, grants the Insurers’ motion to the following extent: the court declares that the Dental PCs may not recover for services performed by the aforementioned physical therapists. Finally, because the question of whether the dentists were independent contractors or employees also bears on the fraud and unjust enrichment claims, summary judgment is denied with respect to those claims.
In New York, “the critical inquiry in determining whether an employment relationship exists pertains to the degree of control exercised by the purported
employer over the results produced or the means used to achieve the results.”Bynog v. Cipriani Group, Inc., 1 N.Y.3d 193, 198, 770 N.Y.S.2d 692, 802 N.E.2d 1090 (2003). The Second Circuit, applying New York law, has held the following nonexclusive factors to be relevant to the inquiry:(1) whether the purported employee is engaged in a distinct occupation; (2) whether the work is usually done under direction or by an unsupervised specialist; (3) the skill involved; (4) who provides the instrumentalities and place of performance; (5) the length of employment; (6) whether payment is by the time or by the job; (7) whether the work is part of the employer’s regular business and/or necessary to it; and (8) the intent of the parties creating the relationship.Chaiken v. VV Publ’g Corp., 119 F.3d 1018, 1034 (2d Cir.1997). The New York Court of Appeals has articulated the following additional relevant factors:whether the worker (1) worked at his own convenience, (2) was free to engage in other employment, (3) received fringe benefits, (4) was on the employer’s payroll and (5) was on a fixed schedule. Bynog, 1 N.Y.3d at 198, 770 N.Y.S.2d 692, 802 N.E.2d 1090. Whether the employer and/or the worker represented on federal tax forms that the worker was an employee or an independent contractor is a significant, but not controlling, consideration.FN4FN5See id. at 198-99, 770 N.Y.S.2d 692, 802 N.E.2d 1090;Gagen v. Kipany Prods., Ltd., 27 A.D.3d 1042,1043, 812 N.Y.S.2d 689 (3d Dep’t 2006) (“While the manner in which the [employer-worker] relationship is treated for income tax purposes is certainly a significant consideration, it is generally not singularly dispositive.”); In re Stuckelman, 16 A.D.3d 882, 883, 791 N.Y.S.2d 225 (3d Dep’t 2005) (“The fact that the [employer] considered [the worker] to be an independent contractor and claimant deducted expenses on her federal tax return as if she were self-employed does not compel a contrary result [to that court's finding of an employer-employee relationship].”). In effect, no single factor is determinative; instead, New York courts consider the totality of the circumstances. See id.
Defendants claim that the following facts demonstrate that the Dentists were
independent contractors rather than employees: the Dentists (1) were skilled
individuals possessing advanced educational degrees in dentistry, (2)
understood, upon being hired, that their status with the Dental PCs would be as
independent contractors (3) attested to the fact that they were paid on a 1099
basis without any withholding, (4) were paid a per diem fee ranging from $300 to
$400 per day, and only for the days actually worked, (5) provided their own
malpractice insurance at their cost, (6) worked unsupervised by Dr. Volotsenko
at the clinics where they performed the evaluations, (7) allegedly set their own
schedules and number of days they would work, and (8) worked for other practices
in addition to the Dental PCs. Plaintiffs, on the other hand, allege facts that
reflect the Dentists’ status as employees: the Dentists (1) worked under the
direction of Dr. Volotsenko, who provided training and general supervision to
the Dentists, (2) worked at facilities arranged for by the Dental PCs (3) used
materials and tools provided by the Dental PCs, (3) engaged in work that was a
part of the Dental PCs’ regular business, (4) did not have the right to hire
substitutes without Plaintiffs’ knowledge, and (5) allegedly could not set their
own schedules, nor choose for whom to work, but instead followed Volotsenko’s
direction.
Thanks to David M. Barshay, Esq. for the heads up.