American Transit v. Mercedes., Index #: 152414/13 (Sup. NY Co. 2013)
This one is notable because the Assignor’s meritoious defense in opposition to the motion for leave to enter a default was that she was not at fault for the accident. The Judge was not too impressed.
Eagle Surgical Supply, Inc. v AIG Indem. Ins. Co., 2013 NY Slip Op 51441(U)(App. Term 2d Dept. 2013)
“the parties entered into a so-ordered stipulation, dated July 25, 2008, pursuant to which defendant was to provide plaintiff with responses to its interrogatories within 60 days or be precluded from offering evidence at trial.”
“In 2009, defendant commenced a declaratory judgment action in Supreme Court, Nassau County, against, among others, plaintiff and its assignor, in regard to a number of accidents, including the July 2007 accident. The Supreme Court issued a stay of all pending and future actions between the parties in February 2009. On June 15, 2010, a default declaratory judgment was entered in the Supreme Court in favor of defendant, finding, among other things, that the policy in connection with plaintiff’s claim is “null and void,” that defendant had no duty to provide coverage for the subject no-fault claim, and that since plaintiff and its assignor had “violated their respective obligation [sic] to appear for an examination under oath . . . [defendant] has no duty to defend or indemnify [plaintiff and its assignor] . . . for any claims of personal injury, no-fault, UM or SUM benefits.”
“In 2011, plaintiff moved, in the Civil Court action, for a final order of preclusion and summary judgment. Defendant cross-moved for summary judgment dismissing the Civil Court complaint on the ground that the June 15, 2010 declaratory judgment had res judicata effect. Thereafter, by order dated September 16, 2011, the Civil Court granted plaintiff’s motion and denied defendant’s cross motion.”
“…It is well settled that default judgments can have res judicata effect (see Lazides v P & G Enters., 58 AD3d 607 ; Ava Acupuncture, P.C. v N Y Cent. Mut. Fire Ins. Co., 34 Misc 3d 149[A], 2012 NY Slip Op 50233[U] [App Term, 2d, 11th & 13th Jud Dists 2012]).”
“Although the conditional preclusion order contained in the July 2008 so-ordered stipulation became absolute upon defendant’s failure to comply therewith (see e.g. Panagiotou v Samaritan Vil., Inc., 66 AD3d 979 ; State Farm Mut. Auto. Ins. Co. v Hertz Corp., 43 AD3d 907, 908 ; Siltan v City of New York, 300 AD2d 298 ; Midisland Med., PLLC v NY Cent. Mut. Ins. Co., 27 Misc 3d 141[A], 2010 NY Slip Op 50993[U] [App Term, 2d, 11th & 13th Jud Dists 2010]; Coleman v Thompson, 5 Misc 3d 136[A], 2004 NY Slip Op 51543[U] [App Term, 2d & 11th Jud Dists 2004]), thereby precluding defendant “from offering evidence at trial,” it did not preclude the Civil Court from giving res judicata effect to the June 10, 2010 declaratory judgment (see e.g. Kingsbrook Jewish Med. Ctr. v Allstate Ins. Co., 61 AD3d 13, 20 ; Ptasznik v Schultz, 47 AD2d 197, 198 ).”
In this case, note that the Court cites to pinpoint citation 61 AD3d 13, 20. Page 20 of Kingsbrook states that a Court must take judicial notice of: “…undisputed court records and files…. Even material derived from official government Web sites may be the subject of judicial notice…”
Eagle Surgical Supply, Inc. v AIG Ins. Co., 2013 NY Slip Op 51449(U)(App. Term 2d Dept. 2013)
“By order dated September 29, 2008, the Civil Court granted plaintiff’s motion, finding that defendant had failed to rebut plaintiff’s prima facie case, and awarded plaintiff the principal sum of $502.63.”
“On June 3, 2010, the Supreme Court awarded defendant a default declaratory judgment which found, among other things, that since plaintiff and its assignor had “violated their respective obligation [sic] to appear for an examination under oath . . . [defendant] has no duty to defend or indemnify the [plaintiff and its assignor] . . . for any claims of personal injury, no-fault, UM or SUM benefits” for motor vehicle accidents occurring on specified dates.”
“The instant Civil Court action was commenced to recover no-fault benefits for services plaintiff had provided to its assignor for injuries the assignor had sustained in a motor vehicle accident on May 31, 2007. The declaratory judgment states that it applies to 28 incidents, and lists the dates of the incidents. However, May 31, 2007 is not included in the declaratory judgment action among the dates set forth therein. Therefore, defendant has not shown that plaintiff, by entering judgment in the Civil Court action, seeks to relitigate claims or causes of action arising out of the same transaction or series of transactions (see Matter of Hunter, 4 AD3d at 269).”
“Res judicata, or claim preclusion, is invoked when a party, or those in privity with the party, seek to relitigate a disposition on the merits of claims or causes of action arising out of the same transaction or series of transactions which were raised or could have been raised in the prior litigation (see Matter of Hunter, 4 NY3d 260, 269 ; Schuylkill Fuel Corp. v Nieberg Realty Corp., 250 NY 304, 306-307 ). The instant Civil [*2]Court action was commenced to recover no-fault benefits for services plaintiff had provided to its assignor for injuries the assignor had sustained in a motor vehicle accident on May 31, 2007. The declaratory judgment states that it applies to 28 incidents, and lists the dates of the incidents. However, May 31, 2007 is not included in the declaratory judgment action among the dates set forth therein. Therefore, defendant has not shown that plaintiff, by entering judgment in the Civil Court action, seeks to relitigate claims or causes of action arising out of the same transaction or series of transactions”
It appears that the subsequently filed declaratory judgment action would have collaterally estopped plaintiff and allowed the vacatur of the Civil Court action had it listed the May 31, 2007 date of loss in its complaint…
Mr. Five Boro took at dive in the IME no-show DJ matter of American Transit Ins. Co. v. Beltre, under Bronx Co. Index #: 310468/11 (Sup. Ct. Bronx Co. 2012 [Suarez, J.S.C.])
Congratulations to my colleague James F. Sullivan, Esq., on this DJ victory in American Transit Ins. Co. v. Toussaint, Index #: 105931/11 (Sup. Ct. NY Co., Rankower, J.). This is a Unitrin based DJ in Supreme, New York. I will digress for a moment.
In the last 18 months, we have recorded some of our favorite oppositions. I will share them with you by our favorite Defendants:
Mr. Five Boro: “you did not prove you mailed it”; “you did not prove he did not attend”; “Unitrin should not be followed”; and the Federal Arbitration Act precludes you from bringing this action.
Mr. Active Care Medical Supply Corporation: Same as above and: “There is no justiciable controversy (even though this fellow admits that he submitted claims in his answer)”; “Encare superseded Unitrin (stretching?)”; and “The life and times of some unknown attorney who presents the same affirmation in each case, with a new caption in each opposition, must result in the denial of your motion.” (a red herring which the former presiding Justice of the Appellate Term, First Department, Hon. Lucindo Suarez was not impressed with in American Transit v. Gibson, et. al. (Index #: 307797/11)(Sup. Ct. Bronx Co. 2012 [Suarez, J.])
Mr. City Care Acupuncture – and this one is great: cross-claims against the Assignor, counterclaims against us and this gentleman puts a notice in accordance with the FDCPA in his papers, I guess to protect himself from a federal lawsuit under 15 USC 1692-1692p.
Back to the post. What makes this case interesting is that the Supreme Court applied NYP v. Countriwide, for the proposition that the failure to attend an IME/EUO voids the assignment and the policy:
“The Policy and NY Insurance Regulation § 68 provide that Plaintiff may request that an eligible injured person submit to an examination under oath when and as often as, the company may reasonably require, as a condition precedent to the disbursement of any benefits under the terms of the Policy, where there is a failure to comply with the terms of the policy, any assignment of benefits becomes worthless. (See, New York and Presbyterian Hosp. v. Country-Wide Ins. Co., 2011 WL 4834479 ). Inasmuch as Toussaint failed to comply with the terms and conditions of the policy by failing to appeal for an examination under oath, Toussaint did not have the right to assign benefits to any medical providers, including Five Boro and Village, because the right to benefits was not triggered in the first place.”
For the life of me, I never understood why somebody would get involved in Supreme Court litigation and not attempt to present tangible proof to oppose the motion. A little footwork goes a long way.
Pomona Med. Diagnostics, P.C. v Metropolitan Cas. Ins. Co., 2010 NY Slip Op 52039(U)(App. Term 1st Dept. 2010)
The opinion in this matter does not disclose what the basis for the declaration of non-coverage from Supreme Court was. Thus, one cannot dispositively opine as to how far the civil courts will go in enforcing declaratory judgments from the Supreme Court that are granted on default. Still, this matter seems to make the case for why a single declaratory judgment action may sometimes be the best route in dealing with certain types of cases.
Matter of AutoOne Ins. Co. v Valentine, 2010 NY Slip Op 03319 (2d Dept. 2010)
There have been many posts, both on Dave Gottlieb’s blog and on Roy Mura’s blog. I am not sure how much more insight I can give on this case, but I will let you know my thoughts on this doozie of a case.
Here are the facts, simplified for easy reading.
- Brainy (that is his real name) insured a vehicle in Pennsylvania with Rugers Casualty Insurance. Brainy really lived in New York.
- Brainy while operating his vehicle in New York got into a car accident with Valentine
- Valentine was insured with Auto One.
- Rugters believed that Brainy insured his vehicle in PA to avoid New York no-fault rates.
- Rutgers commenced a declaratory judgment action in Pennsylvania and seeks to have the policy “void (maybe voided?) ab initio”
- Brainy was named. Valentine was named in an advisory role only. Auto One was never named.
- The Pennsylvania Common Pleas Court finds the policy is void ab initio, and finds that Rutgers does not have to defend or indemnify Brainy.
- The action against Valentine as discontinued without prejudice.
- Valentine now seeks SUM benefits from Auto One, since Rutgers has obtained a successful disclaimer, or so Rugters thought.
- Auto One moved to stay the arbitration and named Valentine and Rutgers as proposed additional parties.
Holding #1: “Here, although the petition to stay arbitration of Valentine’s claim for SUM benefits arises out of the same automobile accident as did the Pennsylvania action, the Pennsylvania court order on which Rutgers Casualty relies was not a final judgment on the merits which would be entitled to res judicata effect in this proceeding.”
Holding #2: Furthermore, the doctrine of collateral estoppel is not applicable here because the issue of whether the tortfeasor’s vehicle was insured at the time of the accident never was litigated and decided in the Pennsylvania action.. The Pennsylvania court order which determined that the tortfeasor’s policy was void ab initio was made on the default of Rodriguez. Thus, the doctrine of collateral estoppel does not preclude the petitioner from litigating that issue in this proceeding.”
(internal citations omitted in all of the holdings).
My observations. First, how did PA have personal jurisdiction over Valentine? Nobody even touches that one. A default judgment is worthless if the court that granted it did not have jurisdiction over the person.
Second, you cannot bind a party if they are not named. We saw that in Five Boro, irrespective of the other holding in Five Boro involving “privity”.
Third, the Court of Appeals had held numerous times that a judgment on default is on the merits as to that issue. I think the issue that bothered the Appellate Division, and rightfully so, was that Rutgers was trying to bind unnamed parties through the default of Rutger’s insured in the underlying DJ action.
Reality check time. After reading Five Boro and this case, let us take a step back. Put aside the procedural nuances that guided these cases, and ask yourself this question: In this case, could have Valentine and Auto One have added in the DJ action? Would these entities have been able to offer evidence to show that Brainy did not make misrepresentations in the procurement of the insurance policy?
In Five Boro, what could Five Boro have added to the underlying DJ action? Could Five Boro have offered evidence that the motor vehicle accidents were not intentional?
Finally, let us assume that insurance carriers cannot bring DJ actions on non coverage cases. Let us further assume that the information regarding the viability of these defenses rests within the assignors/injured persons. We saw in MIA Acupuncture, P.C. v. Mercury Ins. Co., 26 Misc.3d 39 (App. Term 2d Dept. 2009) that one cannot use Article 31 to compel dislosure from the Assignors. We also know that utilizing the subpoena power over Assignors who are sometimes no more than shadow people is an exercise in futility.
Now what? This trend in the law should concern the defense bar greatly. I just wonder how far the courts are going to push this.