Government Employees Insurance Company v. Onyema

CourtDistrict Court, E.D. New York
DecidedJune 19, 2025
Docket1:24-cv-05287
StatusUnknown

This text of Government Employees Insurance Company v. Onyema (Government Employees Insurance Company v. Onyema) is published on Counsel Stack Legal Research, covering District Court, E.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Government Employees Insurance Company v. Onyema, (E.D.N.Y. 2025).

Opinion

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK -------------------------------------------------------------------X GOVERNMENT EMPLOYEES INSURANCE COMPANY, GEICO INDEMNITY COMPANY, GEICO GENERAL INSURANCE COMPANY, and AMENDED REPORT AND GEICO CASUALTY COMPANY, RECOMMENDATION

Plaintiffs, 24-CV-5287 (Chen, J.) v. (Marutollo, M.J.)

DOMINIC EMEKA ONYEMA, M.D., DEO MEDICAL SERVICES, P.C., and HEALTHWISE MEDICAL ASSOCIATES, P.C.

Defendants. -------------------------------------------------------------------X JOSEPH A. MARUTOLLO, United States Magistrate Judge: Plaintiffs Government Employees Insurance Company (“GEICO”), GEICO Indemnity Company, GEICO General Insurance Company, and GEICO Casualty Company (collectively, “Plaintiffs”) filed this breach of contract action against Defendants Dominic Emeka Onyema, M.D., DEO Medical Services, P.C. (“DEO”), and Healthwise Medical Associates, P.C. (“Healthwise”) (collectively, “Defendants”) on July 29, 2024. See generally Dkt. No. 1. Plaintiffs seek entry of judgment in the amount of $456,666.65 against Defendants, jointly and severally, based on Defendants’ purported breach of an April 27, 2023 settlement agreement. Id. at ¶ 1. Currently pending before this Court, on referral from the Honorable Pamela K. Chen, United States District Judge, is Plaintiffs’ Motion for Default Judgment pursuant to Fed R. Civ. P. 55(b)(2). See generally Dkt. No. 25; see also Referral Order dated November 20, 2024. For the reasons set forth below, the undersigned respectfully recommends that Plaintiffs’ motion be GRANTED.1

1 This Amended Report and Recommendation sua sponte amends and supersedes the prior Report and Recommendation entered on May 29, 205 (Dkt. No. 28). Although no objections were made to the May I. Background

A. Factual Background On October 13, 2021, Plaintiffs commenced a lawsuit against Defendants in this district for “fraudulent no-fault insurance charges relating to medically unnecessary, illusory, and otherwise unreimbursable healthcare services[.]” Dkt. No. 1 at ¶¶ 10-11; see also Government Employees Insurance Company, et al. v. Onyema, et al., No. 21-CV-5717 (FB) (VMS) (E.D.N.Y. 2021), Dkt. No. 1 (the “Prior Action”). On April 27, 2023, the parties entered into a settlement agreement (the “Settlement Agreement”) to resolve the claims in the Prior Action. Dkt. No. 1 at ¶ 12. Specifically, Defendants agreed to jointly and severally pay Plaintiffs “the sum of $325,000.00,” divided into a series of payments as delineated in Section 2 of the Settlement Agreement. See Dkt. No. 1 at ¶ 12; Dkt. No. 1-3 at 4.2 Subsection 2.A.i of the Settlement Agreement provided for an initial payment, in that “Defendants shall pay, jointly and severally, to [Plaintiffs] $125,000.00 in the form of a certified check or attorney’s escrow check . . . (the ‘Initial

Payment’).” Dkt. No. 1-3 at 4. Under Subsection 2.A.ii, Defendants agreed to pay, jointly and severally, Plaintiffs “$200,000 in eighteen (18) installments (the ‘Installment Payments’), each

29, 2025 Report and Recommendation, the Court sua sponte amends that Report and Recommendation to address certain typographical errors. See CIT Bank, N.A. v. Williams, No. 17-CV-2135 (DRH) (AKT), 2018 WL 2945612, at *1 (E.D.N.Y. May 24, 2018) (“Subsequent to the issuance of the Report and Recommendation, the Court became aware of several discrepancies in the calculations set forth in that document. The Court addresses these items below and the Report and Recommendation is amended to the limited extent set forth here.”), report and recommendation adopted, 2018 WL 2943663 (E.D.N.Y. June 12, 2018). “Such an amendment is permitted pursuant to Federal Rule of Civil Procedure 60(a), which allows the Court to, by motion or on its own, ‘correct a clerical mistake or a mistake arising from oversight or omission whenever one is found in a judgment, order, or other part of the record.’” Marky’s Martial Arts, Inc. v. FC Online Mktg., Inc., No. 19-CV-3363 (ALC) (VF), 2022 WL 18276016, at *1 (S.D.N.Y. Sept. 16, 2022) (citing Fed. R. Civ P. 60(a)), report and recommendation adopted, 2023 WL 171401 (S.D.N.Y. Jan. 12, 2023). No substantive changes have been made to the May 29, 2025 Report and Recommendation.

2 Page citations are to the ECF-stamped page numbers. installment paid in the form of a certified check or attorney’s escrow check,” beginning in May of 2023 and ending in October of 2024. Id. at 4-5 Under Section 2.B of the Settlement Agreement, if Defendants failed to make any of the payments in the installment plan under Subsection 2.A.ii, then Plaintiffs agreed to advise Defendants of the default in writing. Id. at 5. In the event that Defendants failed to cure the default

within ten business days of receiving the notice (defined as the “Payment Default”), the parties agreed that Plaintiffs “shall be entitled to immediately enter a judgment against the Defendants, for which they will be jointly and severally liable, in the amount of $500,000.00, less any amounts paid through the date of the Payment Default.” Id. (“This sum shall be deemed liquidated damages for the Defendants’ conduct as alleged in the Complaint in the Federal Action and is not penalty. Interest on the default judgment shall accrue at the highest rate allowable by applicable law until fully paid.”). The provision further provided that “[i]nterest on the default judgment shall accrue at the highest rate allowable by applicable law until fully paid,” and further that Plaintiffs “shall be entitled to reimbursement of all reasonable attorneys’ fees, costs and disbursements that

[Plaintiffs] incur[] in connection with any collection activities with respect to the Installment Payments.” Id. Additionally, Section C of the Settlement Agreement required Defendants to execute affidavits of confession of judgment, to be held by Plaintiffs in escrow until all Installment Payments were satisfied as set forth in Section 2.A.ii. Id. at 6. Those affidavits, each signed by Defendants, stipulated to the same terms as described in the Settlement Agreement in the event of Payment Default, including that Defendants would confess judgment “for the sum of $500,000.00 less all the amounts paid pursuant to [Section 2.A.ii] of the [Settlement Agreement] through the date of default.” Dkt. No. 25-3 at 3; Dkt. No. 25-4 at 3. Plaintiffs allege that Defendants made the initial $125,000 payment and the installments in June 2023 and August of 2023, which totaled $43,333.35. Dkt. No. 1 at ¶ 3, 14. Defendants, however, failed to make any additional payments thereafter. Id. at ¶ 3. On February 21, 2024, Plaintiffs “delivered to Defendants written notice of their default in the manner and form required by [the Settlement Agreement] and demanded that the default be cured per the agreement.” Id. at

¶ 15. The Complaint continues that despite being afforded written notice, Defendants “failed to cure their default” within the ten business-day timeframe provided by the Settlement Agreement or at any point thereafter. Id. at ¶¶ 3, 15. B. Procedural History Plaintiffs filed the instant Complaint on July 29, 2024. Dkt. No. 1. Crediting Defendants’ two payment installments in June and August of 2023, totaling to $43,333.35, Plaintiffs claim entitlement in the “amount of $456,666.65, plus interests, costs, expenses, and reasonable legal fees incurred by Plaintiffs in the prosecution of this action” as a result of Defendants’ alleged breach of contract. Id. at ¶ 19.

On July 30, 2024, the Clerk of the Court issued summonses to Defendants (Dkt. No. 4), and the undersigned scheduled an initial conference for September 26, 2024. Dkt. No. 8.

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Government Employees Insurance Company v. Onyema, Counsel Stack Legal Research, https://law.counselstack.com/opinion/government-employees-insurance-company-v-onyema-nyed-2025.