The opinion
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
GOVERNMENT EMPLOYEES INSURANCE RAN
COMPANY, GEICO INDEMNITY COMPANY, voc wes2 (Ni coy py
GEICO GENERAL INSURANCE COMPANY, ~ ( ) @®)
GEICO CASUALTY COMPANY,
Plaintiffs,
~against-
LIANA BINNS, N.P., et al.,
Defendants.
NICHOLAS G. GARAUFIS, United States District Judge.
Pending before the court is a motion for default judgment filed
by Government Employees Insurance Company, GEICO Indem-
nity Company, GEICO General Insurance Company, and GEICO
Casualty Company (collectively, “GEICO” or “Plaintiffs”), against
Defendants Marie Lourdes Jean-Francois, N.P., Dorrett Bryan,
N.P., Priscilla Rose Santana, N.P., Shernet Barrett, N.P., and Bar-
bara Kerr, N.P. (collectively the “Defaulting Defendants”),
brought pursuant to Rule 55(b)(2) of the Federal Rules of Civil
Procedure. (See Not. of Mot. (Dkt. 161); Mem. in Supp. of Mot.
(Dkt. 161-10).) The court referred this motion to Magistrate
Judge Peggy Kuo for a report and recommendation (“R&R”). (See
June 29, 2023 Order Referring Mot.) Judge Kuo issued the an-
nexed R&R on March 14, 2024, recommending that the court
grant Plaintiffs’ motion and award GEICO damages and prejudg-
ment interest. (R&R (Dkt. 165) at 13.)
No party has objected to Judge Kuo’s R&R, and the time to do so
has passed. See Fed. R. of Civ. P. 72(b)(2). Therefore, the court
reviews the R&R for clear error. See Velasquez v. Metro Fuel Oil
Corp., 12 F. Supp. 3d 387, 397 (E.D.N.Y. 2014). Having found
none, the court ADOPTS the R&R in full.
The court therefore GRANTS Plaintiffs motion for default judg-
ment, finding that GEICO is not obligated to pay any outstanding
claims submitted by the Defaulting Defendants. The court also
awards GEICO damages in the amount of $112,258.59 and pre-
judgment interest as specified in the annexed R&R. (See R&R at
11-13.)
SO ORDERED.
Dated: Brooklyn, New York
April 4 , 2024
s/NICHOLAS G, GARAUVFIS
NICHOLAS G. GARAUFIS
nited States District Judge
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
en nennennecenennns &
GOVERNMENT EMPLOYEES INSURANCE :
COMPANY, GEICO INDEMNITY :
COMPANY, GEICO GENERAL INSURANCE :
COMPANY, and GEICO CASUALTY
COMPANY, : REPORT AND
: RECOMMENDATION
Plaintiffs, :
: 22-CV-01553 (NGG) PK)
~agains t- :
LIANA BINNS, N_P., et al,
Detendants.
eee eee mnenene X
Peggy Kuo, United States Magistrate Judge:
Government Employees Insurance Company, GEICO Indemnity Company, GEICO
General Insurance Company, and GEICO Casualty Company (collectively, “GEICO” or “Plaintiffs”
brought this action seeking to recover nearly $1 million for allegedly fraudulent no-fault insurance
claims billed by Defendants to GEICO for medical services provided to victims of automobile
accidents. (See Compl, Dkt. 1.) The Complaint alleges 139 causes of action for common law fraud,
unjust enrichment, and civil RICO and civil RICO conspiracy to commit fraud.
GEICO has moved for default judgment against Defendants Marie Lourdes Jean-Francois,
N.P. (“Jean-Francois”), Dorrett Bryan, N.P. (“Bryan”), Priscilla Rose Santana, N.P. (“Santana”),
Shernet Barrett, N.P. (“Barrett”), and Barbara Kerr, N.P. (“Kerr”) (collectively the “Defaulting
Defendants”) pursuant to Rule 55(b)(2) of the Federal Rules of Civil Procedure. (“Motion,” Dkt.
161.) ‘The Honorable Nicholas G. Garaufis referred the Motion to me for a report and
recommendation. For the reasons stated herein, I respectfully recommend that the Motion be granted.
FACTUAL AND PROCEDURAL BACKGROUND
I. Factual Background
The following facts are taken from the Complaint (Dkt.-1), Plaintiffs Memorandum in
Support of Application for Default Judgment (Pl. Mem.,” Dkt. 161-10), and the Declarations of
Joshua D. Smith (“Smith Decl.” Dkt. 161-1; “Second Smith Decl.,” Dkt. 164) and Kathleen Asmus
(“Asmus Decl.,” Dkt. 161-3), and are accepted as true for purposes of the Motion. See Finkel v.
Romanowiex, 577 F.3d 79, 84 2d Cir. 2009) (in light of a defendant’s default, a court is required to
accept all of plaintiff's factual allepations as true and draw all reasonable inferences in its favor).
A, Nature of the Case
New York’s Comprehenstve Automobile Insurance Reparations Act, N.Y. Ins. Law §§ 5101
ef seq. {the “No-Fault law”), requires no-fault insurers, like GEICO, to reimburse patients for up to
$50,000 in personal injury benefits without proof of fault of the other driver. N.Y. Ins. Law §§ 5102,
5103. Insured patients may assign claims for benefits to theit healthcare provider to directly submit
requests for payment to the insurance company. 11 N.Y.C.R.R. § 65-3.11(@). To qualify for
reimbursement payments under the No-Fault law, a healthcare provider must comply with all
applicable licensing requirements for performing covered services. Id. § 65-3.16(a)(12). New York
law prohibits, zafer alia, the ownership or control of a medical practice by unlicensed individuals, fee-
splitting arrangements among licensed and unlicensed individuals for the provision of professional
services, and the payment or solicitation of kickbacks in exchange for patient referrals. See Gov't Hmps.
Ins. Co. » Efmood Park Med. Grp., P.C., No. 21-CV-617 (FB)(RER), 2022 WL 772737, at *2 (E.D.N.Y.
Feb. 23, 2022), Re*R adopted, 2022 WL 768360 (E.D.N.Y. Mar. 14, 2022) (citing N.Y. Educ. Law §§
6509-a, 6512, 6530(11), 6530(18), 6530(19), 6531); Gov't Bumps. Ins. Co. ». Parkway Med. Care, P.C., No.
15-CV-3670 (FB)(VMS), 2017. WL.1133282, at *2 (E.D.N.Y. Feb. 21, 2017), R&*R adopted, 2017 WL
1131901 (E.D.N-Y. Mar. 24, 2017).
Beginning in 2019, Defendants engaged in a scheme in which they submitted thousands of
fraudulent no-fault insurance clairms to GEICO relating to “medically unnecessary, illusory, and
otherwise non-reimbursable healthcare services” allegedly provided to automobile accident victims in
New York (the “Fraudulent Services”), (Compl. { 1; Pl Mem. 3-5; Smith Decl. 16.) Defendants
are (1) unincorporated medical practices, (2) licensed healthcare professionals who falsely purported
to own and control the medical practices, and (3) non-healthcare professionals who unlawfully owned
and controlled the medical practices. (Compl. {/ 4.)
GEICO alleges that the insurance claims submitted by Defendants were ineligible for
reimbursement because they were based on setvices that were not medically necessary, were never
provided in the first instance, ot were exaggerated for the purpose of inflating the charges submitted
to GEICO for reimbursement, é¢., the Fraudulent Services. Ud J 3.) GEICO also alleges that the
healthcare practices through which these insurance claims were billed wete not owned by licensed
healthcate professionals but were instead owned of controlled by unlicensed individuals and entities.
Ud. $f, 2-3.) Moreover, these healthcare practices were allegedly engaged in illegal fee-splitting with
non-medical professionals and illegal referral arrangements in which kickbacks were paid for patient
teferrals. (id 3.) Thus, GEICO allepes these healthcare practices were ineligible for no-fault
reimbursement payments from GEICO under the No-Fault law. (Ud) See also N.Y. Ins. Law §
5102(a)(1); 11 NYCRR § 65-3.16(a) (12).
B. The Defaulting Defendants
Defaulting Defendants Jean-Francois, Bryan, Santana, Barrett, and Kerr are five licensed nurse
practitioners who reside in and are citizens of New York. (Compl. ff 44, 52, 54, 68, 74.)
The Defaulting Defendants each falsely purported to own and control an unincorporated
healthcate practice (Jean-Francois Medical, Bryan Medical, Santana Medical, Barrett Medical, and Kerr
Medical, respectively) that was in actuality owned and controlled by unlicensed non-healthcare
professionals. (Jd. ff] 44-45, 52-55, 68-69, 74-75.) These medical practices were, thus, fraudulently
licensed. (id §] 4.) Through these fraudulently licensed medical practices, Defaulting Defendants
purported to provide many of the Fraudulent Services and knowingly submitted fraudulent claims for
these services to GEICO. (Ud. ff] 3, 5, 44, 52, 54, 68, 74.)
GEICO submitted a “Claim Run” identifying all of the claims submitted to GEICO by
Defaulting Defendants. (Ex. 2 to Asmus Decl, Dkt>161-5.) GEICO alleges that it reimbursed
Defaulting Defendants at least $112,258.59 for fraudulent claims, (Smith Decl. 26.) In support of
this amount, GEICO submitted a Tax Identification Run (“TIN Run”) identifying all of the payments
which GEICO issued to the Defaulting Defendants. (Ex. A to Second Smith Decl., Dkt. 164-1.) Of
the claims GEICO has not yet paid, GEICO alleges at least $136,765.47 of payments ate currently in
legal dispute. (Smith Decl. J 27.) In support of this amount, GEICO submitted a “Litigation and
Arbitration Run” identifying all pending litigations and arbitrations filed against GEICO by Defaulting
Defendants seeking payment. (Asmus Decl. 4] 11; Ex. 3 to Asmus Decl., Dkt. 161-6.)
II. Procedural Background
GEICO filed the Complaint on March 21, 2022. (Dkt. 1.) Proof of service of a summons
and the Complaint was filed with respect to each of the Defaulting Defendants. (kts. 28-30, 79,
112.) None of the Defaulting Defendants answered or appeared in the case. Upon GEICO’s request,
the Clerk of the Court entered Certificates of Default as to each of the Defaulting Defendants. (Dkts.
66, 71, 73, 105, and 121.) Certificates of Default for Kerr, Santana, and Jean-Francois were entered
on May 24, 2022. (Dkts, 66,71, 73.) A Certificate of Default for Bryan was entered on June 14, 2022.
(Dkt. 105.) A Certificate of Default for Barrett was entered on July 18, 2022. (Dkt. 121.) GEICO
filed its first motion for default jadgment on August 4, 2022. (Die.-125,)
1’The TIN Run initially fled by GEICO, attached to the Asmus Declaration as Exhibit 1 (Dkt.- 161-4),
contained incomplete data, (Second Smith Decl. 4.) ‘The Court accordingly relies on the updated 'TIN Run
filed as Exhibit A to the Second Smith Declaration. (Sze Dkt. 164-1.)
On August 17, 2022, Mark Furman, Esq. filed a notice of appearance on behalf of Defaulting
Defendants Jean-Francois, Bryan, Barrett, and Kerr. (Dkts. 126-127.) No notice of appearance was
evet filed on behalf of Defaulting Defendant Santana.
The Court was notified on January 17, 2023 that Mr. Furman, unfortunately, had passed away.
(Dkt. 144.) In response, the Court scheduled a status conference for March 3, 2023 and directed
GEICO to send a copy of the Court’s scheduling order to Mr. Furman’s former clients so that those
clients would be aware of the conference. (January 18, 2023 Minute Entry; Dkt. 145.) Notices of
appearances were thereafter filed on behalf of various of Mr. Furman’s former clients, but no new
attorney entered any notices of appearances on behalf of the Defaulting Defendants. (Dkts. 146, 149.)
The Court scheduled another status conference for April 14, 2023. (March 3, 2023 Minute
Entry.) GEICO mailed a copy of the Court’s scheduling order to all non-appearing Defendants,
including the Defaulting Defendants. (Dkt. 150.) At that status conference, the parties updated the
Court on their efforts to contact non-appearing Defendants formerly represented by Mr. Furman and
confirmed that defense counsel had been provided with the last known contact information for all
such Defendants. (April 14, 2023 Minute Entry.) The Court directed the parties to “continue to
diligently attempt to contact ali previously represented Defendants, including at their places of
tesidence” and granted GEICO permission to file a motion for default judgment against any
Defendants remaining in default as of May 12, 2023. Ud.) Although notices of appearance were filed
on behalf of three additional defendants formerly represented by Mr. Furman, no notices of
appearance were filed on behalf of the Defaulting Defendants. (Dkt. 152.) The Defaulting
Defendants did not file any answer or responsive pleading or motion.
After settling with or voluntarily dismissing claims against various appearing Defendants,
GEICO withdrew its pending motion for default judgment (Dkt. 157), and on June 28, 2023, filed the
Motion, seeking default judgment against the Defaulting Defendants. (Dkt. 161.) GEICO seeks: (1)
a declaration, pursuant to 28 U.S.C: §§ 2201 and 2202, that they ate not obligated to pay the Defaulting
Defendants any of the pending bills for outstanding claims submitted to GEICO (First Cause of
Action); (2) default padgments as to the common law fraud and unjust enrichment claims against the
Defaulting Defendants (the Seventy-Second, Seventy-Third, Eighty-Eighth, Eighty-Ninth, Ninety-
Second, Ninety-Thitd, One Hundred Twentieth, One Hundred Twenty-First, One Hundred Thitty-
Second, and One Hundred Thirty-Third Causes of Action); and (3) damages and prejudgment interest
on the common law fraud and unjust enrichment claitns. GEICO does not seek default judgments
against the Defaulting Defendants with respect to the civil RICO claims or civil RICO conspiracy
claims brought pursuant to 18 U.S.C. §§ 1962(c) and (d).
DISCUSSION
I. Default Judgment Standard
Rule 55 of the Federal Rules of Civil Procedure prescribes a two-step process for entry of a
default judgment. First, when a defendant “has failed to plead or otherwise defend,” the Clerk of
Coutt enters the defendant’s default. Fed. R. Civ. P.55(a). The plaintiff may then move the court for
an entry of default judgment. Fed. R. Civ. P.55(b)(2). “[J]Just because a patty is in default, the plaintiff
is not entitled to a default judgment as a matter of right.” GuideOue Specialty Mut. Ins. Co. », Rock Cnety,
Church, Inc, 696 F. Supp. 2d 203, 208 (E.D.N.Y. 2010). The plaintiff must demonstrate proper service
of the summons and complaint. See ldvanced Capital Commercial Group, Ine. v. Suarez, No. 09-CV-5558
(DRH)(GRB), 2013 WL 5329254, at *2 (E.D.N.Y. Sept. 20, 2013). The plaintiff must also establish
complance with the procedural requirements of Local Civil Rules 7.1 and 55.2.
The court must determine whether Plaintiffs’ “allegations establish [the defendant’s] liability
as a matter of law.” Finkel, 577 F.3d at 84. “[A] party’s default is deemed to constitute a concession
of all well pleaded allegations of liability.” Greyhound Exchibitgroup, Inc. v. EL.ULL. Realty Corp., 973
F.2d 155, 158 (2d Cir. 1992). In considering a motion for default jadgment, a court accepts a plaintifPs
“factual allegations as true and draw[s] all reasonable inferences in [the plaintiffs] favor.” Finkel, 577
at 84. However, a default is “not considered an admission of damages.” Greyhound, 973 F.2d at
158. “The plaintiff bears the burden of presenting proof of damages, which may take the form of
documentary evidence or detailed affidavits.” foe Hand Promotions, Inc. v. Benitez, No. 18-CV-6476
(ARR)(PK), 2020 WL 5519200, at *3 (E.D.N.Y. Aug. 27, 2020), RePR adopted, 2020 WL 5517240
(E.D.N.Y. Sept. 14, 2020).
A court “possesses significant discretion” in granting a motion for default judgment,
“including [determining] whether the grounds for default are clearly established...” Kéderis ». Trattoria
El Greca, No, 10-CV-4288 (JBW)(CLP), 2011 WL 7114003, at #2 (E.D.NLY. Sept. 23, 2011), Re>R
adopted, 2012 WL 273078 (E.D.N_Y. Jan. 30, 2012).
I. Jurisdiction
A, Subject Matter Jurisdiction
Plaintiffs are Nebraska corporations with their principal place of business in Maryland, and all
Defaulting Defendants are citizens of New York. (Compl. ff 10, 44, 52, 54, 68 74.) The matter in
controversy exceeds $75,000. dd. The Court accordingly has diversity jurisdiction over Plaintiffs’
claims pursuant to 28 U.S.C.:§ 1332(a) and supplemental jurisdiction over Plaintiffs’ state law claims
under 28 U.S.C. § 1367.
B. Personal Jurisdiction and Service on Detendants
“{Slerving a summons .., establishes personal jutisdiction over a defendant ... who is subject
to the jurisdiction of a court of general jurisdiction in the state where the district court is located.”
Licei exe re Licei v. Lebanese Canadian Bank, SAL, 673 F.3d 50, 59 (2d Cir. 2012) (quoting Fed. R. Civ.
4()(1)(A).) New York State has general jurisdiction over its residents. See Brown » Lackbeed Martin
Carp., 814 F.3d 619, 622 n.1 (2d Cir. 2016).
All Defaulting Defendants are residents of New York. Plaintiffs properly served the Summons
and Complaint on each of the Defaulting Defendants by leaving a copy of the Summons and
Complaint with a person of suitable age and discretion at their homes and then mailing a copy to their
last known addresses. (Dkts. 28, 29, 30,79, 112.) See Fed: R. Civ. P. d(e); N-Y.C.P.LR. § 308(2).
‘The Court’s personal furisdiction over the Defaulting Defendants 1s, therefore, established.
IiI. Procedural Compliance with Local Civil Rules 7.1 and 55.2
Plaintiffs filed the following in support of the Motion as required by the Local Civil Rules:
Notice of Motion (Dkt. 161); a memorandum of law in support of the Motion (Dkt. 161-10); a
proposed default judgment order (Dkt. 161-8); and proof of mailing the Motion papers to Defendants.
(Dkt. 161-1 at 8.) Plaintiffs have also affirmed that the Defaulting Defendants are not infants, in the
military, or incompetent persons. (Dkts. 161-2.) Thus, compliance with the Local Civil Rules is
satisfied.
IV. Liability
A, Common Law Fraud Claims
GEICO alleges common law fraud against each of the Defaulting Defendants. “To state a
claim for fraud under New York law, a plainuff must allege (1) a material misrepresentation or
omission of fact; (2) which the defendant knew to be false; (3) which the defendant made with the
intent to defraud; (4) upon which the plaintiff reasonably relied; and (5) which caused injury to the
plaintiff.” Parkway, 2017 WL 1133282, at *7 (citing Fix, Guar. Ins. Co. ». Putnam Advisory Co., 7183 F.3d
395, 402 (2d Cir. 2015).
GEICO has alleged that each of the Defaulting Defendants knowingly submitted fraudulent
claims to GEICO for the Fraudulent Services that they purportedly provided through medical
practices that they falsely purported to own and control. (Compl. Jf 5, 4445, 52-53, 54-55, 68-69,
74-75, 286-287.) The Complaint alleges that, in their claims to GEICO for the Fraudulent Services,
the Defaulting Defendants knowingly misrepresented that the billed-for-services were medically
necessary and that their medical practices were properly licensed and eligible to receive no-fault
benefits. (fd. 4] 785, 893, 920, 1109, 1190.) GEICO alleges that the Defaulting Defendants submitted
the fraudulent claims and provided the Fraudulent Services with the intent “solely to financially enrich
the Defendants, rather than to treat or otherwise benefit the [ijinsureds who putportedly were
subjected to them.” (Ud. | 5.) GEICO alleges that it reasonably relied on the fraudulent billing
submitted by the Defaulting Defendants and could not have reasonably discovered the scheme due
to its financial complexity and affirmative steps taken by the Defendants to conceal the scheme. (Id.
288-299.) Finally, GEICO has calculated that it has been injuted in the amount of $112,258.59 in
payments made to the Defaulting Defendants to which they are not entitled. (Smith Decl. {] 26.)
I find that GEICO’s allegations are sufficient to establish common law fraud, (See PL Mem.
at 10-11 (collecting similar cases).) See also Parkway, 2017 WL 1133282, at *7 (collecting cases).
B. Unjust Hatichment Claims
To prevail on a claim of unjust enrichment, a plaintiff must “establish: (1) that the defendant
benefitted, (2) at the plaintiff's expense; and (3) that equity and good conscience requite restitution.”
Td. (citing Kaye ». Grossman, 202 F.3d 611; 616 (2d Cir. 2000).
GEICO alleges that the Defaulting Defendants benefited, in the amount of $112,258.59, at
GEICO’s expense. (Smith Decl. | 26; TIN Run.) As described above, Defaulting Defendants
submitted fraudulent bills seeking reimbursement to which they knew they were not entitled, and
GEICO telied on the “faciaily-valid documents” and paid the bills promptly. (Compl. {[ 298.) Because
Defaulting Defendants were not entitled to that payment, GEICO has adequately pled that the
payment was at its expense. See Parkway, 2017 WL 1133282, at *8 (collecting cases).
Equity and good conscience also require compensation because Defaulting Defendants
recetved $112,258.59 in reimbursements from GEICO as a result of the fraudulent scheme, and “there
is no discernable reason why [Defaulting Defendants] should be rewarded for [their] fraud by being
permitted to retain that windfall.” Id.
Cc. Declaratory Judgment
The Motion seeks entry of a declaratory judginent against Defaulting Defendants, pursuant to
28 U.S.C. §§ 2201 and 2202, which declares that GEICO has no obligation to make, and the Defaulting
Defendants have no tight to receive, payment for any claims submitted to GEICO that are still
pending, because of fraudulent representations made in those claims. A court may exercise its
discretion to issue a declaratory judgment in cases where the patty secking the declaratory judgment
can demonstrate the existence of an actual case or controversy. “Declaratory relief is appropriate (1)
where the judgment will serve a useful purpose in clarifying and settling the legal relations in issue, ot
when it will terminate and afford relief from the uncertainty, insecurity and controversy giving tise
to the proceedings.” Parkway, 2017 WL 1133282, at *9. “Courts within this district have, on numerous
occasions, found these requirements met in actions by insurers seeking declaratory judgments
regarding obligations relating to allegedly fraudulent claims.” Id.
GEICO has established that an actual controversy exists and that a declaratory judgment
would afford specific and conclusive relief with regard to claims submitted by the Defaulting
Defendants which are still pending payment. GEICO has submitted a Litigation and Arbitration Run
reflecting claims currently pending civil court collections litigation and New York State arbitrations
initiated by or on behalf of the Defaulting Defendants against GEICO based on the Fraudulent
Services. (Asmus Decl. ] 7; Litigation and Arbitradon Run.) The Litigation and Arbitration Run
indicates that the total amount of outstanding claims in dispute is at least $136,765.47. (Smith Decl.
4] 27; Asmus Decl. J 12; Litigation and Arbitration Run.)
GEICO has adequately alleged that these pending claims are fraudulent for the reasons stated
above, Accordingly, GEICO has established that there is an actual controversy for which a declaratory
10
judgment would afford specific relief. (See Pl. Mem, at 9 (collecting cases)).
Accordingly, I respecttully recommend that the Court enter a declaratory judgment that
GEICO is not obligated to pay any outstanding clauns submutted by the Defaulting Defendants.
Vv. Damages
Allegations related to damages are not deemed admitted upon entry of a default judgment.
Cement ¢ Concrete Workers Dist. Connal Welfare Fund, Pension Pund, Annuity Fund, Edne, Training Fund
Other Funds v. Metre Found. Contractors Inc, 699 F.3d 230, 234 (2d Civ. 2012), “The plaintiff bears
the burden of presenting proof of damages, which may take the form of documentary evidence or
detailed affidavits.” foe Hand, 2020 WL 5519200, at *3.
A. Common Law Damages
GEICO seeks reimbursement of the amounts that it has paid to Defaulting Defendants in
connection with the fraudulent claims submitted by them. The TIN Run submitted by GEICO shows
each payment GEICO made to Defaulting Defendants from Augnst 5, 2019 to July 22, 2022. The
TIN Run indicates that GEICO paid a total of $112,258.59 to the Defaulting Defendants as follows:
Accordingly, I respectfully recommend that GEICO be awarded $112,258.59 in damages
based on their common Jaw fraud and unjust enrichment claums against Defaulting Defendants.
B. Prejudgment Interest
GEICO also seeks prejudgment interest. Under New York law, an award of pre-judgment
interest on damages awarded for fraud is mandatory. See N-Y.C.P.L.R. § 5001; Manajacturers Hanover
Tr. Co. v. Drysdale See. Corp., 801 F.2d 13, 28 (2d Cir. 1986); Parkway, 2017 WL 1133282, at *17,
Prejadgment interest in New York accmes at the statntosy rate of nine percent per year.
NY.C.P.LR. § 5004. “Where,..damages were incurred at various times, interest shall be computed
tpon each item from the date it was incurred or upon all of the damages from a single reasonable
intermediate date.” Id. § 500Lfb). Courts have “wide discretion in determining a reasonable date from
which to award pre-judgment interest.” Cowmay v. Ieabu ce» Co, 16 F.3d 504, 512 Qd Ci. 1994).
GEICO’s proposed prejadgment interest calculations are set forth at Exhibit C to the Smith
Declaration. (Dkt. 161-7.) For each Detanlting Defendant, GEICO calculates prejadgment mterest
at an annual rate of 9% beginning from January 1 of the year following the year during which GEICO
paid out the fraudulent claims. This methodology has been followed in this district in other no-fault
insurance fraud cases awarding damages on default judgment. See, ¢g., Parkway, 2017 WL 1133282, at
I find that using January | following the year in which GEICO incurred damages as the start
date fox awarding prejudgment interest on those damages is a ceasonable approach. The applicable
interest rates for each Defaniting Defendant are accordingly set forth in the following table:
~Detaulting | Total _ | Claims Paid | Year Claims | □□□ isting Pee. |
pefendany | Cltims Paid | by GEICO | Were Paid by | "7G | Interest
eee by GEICO) by Year | GEICO: □□ vee | Rate
ce PR ee Pe os Interests
Jean-Francois $20,365.91 $13,504.51 2020 anuary 1, 2021
$6,861.40 anuary 1, 2022 | $1.69
Bryan $54,073.26 $29,957.61 2021 amuary 1, 20 $
$24,115.65 amary 2023 | $5.95
$3,334.70 | $3,334.70 2019 anwary 2020 | $0.82
Barrett §27,856,65 $8,399 34 2021 anuary 1, 2022 5
$19,457.31 2032 January 1, 7023 $4.86
$6,628.07 | $6,628.07 2022 anwary 1, 2023
12
Accordingly, I respectfully recommend that GEICO recover prejudgment interest at the daily
rates set forth above.
CONCLUSION
Based on the foregoing, I respectfully recommend that the Motion be granted and that
damages and prejudgment interest be awarded to GEICO as follows:
e Against Defendant Jean-Francois, $20,365.91 in damages plus $3.33 daily interest from
January 1, 2021 through judgment and $1.69 daily interest from January 1, 2022 through
judgment;
e¢ Against Defendant Bryan, $54,073.26 in damages plus $7.39 daily interest from January 1,
2022 through judgment and $5.95 daily interest from January 1, 2023 through judgment;
¢ Against Defendant Santana, $3,334.70 in damages plus $0.82 daily interest from January
1, 2020 through judgment;
¢ Against Defendant Batrett, $27,856.65 in damages plus $2.07 daily interest from January
1, 2022 through judgment and $4.80 daily interest from January 1, 2023 through judgment;
¢ Against Defendant Kerr, $6,628.07 in damages plus $1.63 daily interest from January 1,
2023 through judgment.
Any wtitten objections to this Report and Recommendation must be filed within 14 days of
service of this report. See 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b). Failure to file objections within
the specified time waives the right to appeal any order or judgment entered based on this Report and
Recommendation. Cader v. Onondaga Cty., 517 F.3d 601, 604 (2d Cir. 2008).
Peggy Kuo
PEGGY KUO
United States Magistrate Judge
Dated: Brooklyn, New York
March 14, 2024
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