MALIK v. Ultraline Management, Inc. et al., Defendants–Appellants. (2021)

Order, Supreme Court, New York County (Shlomo S. Hagler, J.), entered July 31, 2019, which, insofar as appealed from as limited by the briefs, denied that part of the individual defendants' motion to dismiss the fraudulent misrepresentation and aiding and abetting fraud causes of action as against them, unanimously affirmed, with costs.

Given plaintiffs' detailed description of the Medicaid billing fraud ring, their allegations as to the individuals' participation in that scheme were sufficient, in particular because additional facts were exclusively within defendants' knowledge (see Lanzi v. Brooks, 43 N.Y.2d 778, 780, 402 N.Y.S.2d 384, 373 N.E.2d 278 [1977] ).  Plaintiffs' allegations that the purpose of defendants' offer of a contract for remote medical readings was to obtain plaintiffs' billing credentials could not be dismissed based on a defendants' affidavit that merely contradicted those allegations (Amsterdam Hospitality Group, LLC v. Marshall–Alan Assoc., Inc., 120 A.D.3d 431, 432, 992 N.Y.S.2d 2 [1st Dept. 2014] ).  Nor was this a mere allegation that defendants had a hidden intention not to perform a contract (cf. Orix Credit Alliance v. Hable Co., 256 A.D.2d 114, 115, 682 N.Y.S.2d 160 [1st Dept. 1998] ).  Furthermore, defendants' arguments as to causation raise issues of fact that must be determined at a later phase of the action.

For the same reasons that plaintiffs' allegations with regard to fraud were sufficient, their allegations that each of the individual defendants aided and abetted each other in the fraud were also sufficient.