Judgment in declaratory judgment action does not need to rendered against Assignor to be effective

Infinity Chiropractic Health, P.C. v Republic W. Ins. Co., 2016 NY Slip Op 51564(U)(App. Term 2d Dept. 2016)

The eventual order and/or judgment does not need to be entered against assignor directly.

(1)  “However, insofar as is relevant to this appeal, the Civil Court denied the branches of defendant’s unopposed motion seeking summary judgment dismissing the fifth through eighth causes of action, which causes of action related to services that plaintiff had rendered to assignor Lawrence Jones, on the ground that the order in the declaratory judgment action had not been granted as against Lawrence Jones, individually. Defendant appeals from so much of the order as denied the branches of its motion seeking summary judgment dismissing the fifth through eighth causes of action.”

(2) “Plaintiff was named and served in the declaratory judgment and ultimately defaulted therein. As plaintiff’s right to recover as an assignee of Lawrence Jones was fully litigated in the Supreme Court action, notwithstanding defendant’s admitted failure to serve Lawrence Jones individually in that action, and notwithstanding that the declaratory judgment made no determination as against Lawrence Jones, individually, the order in the declaratory judgment action was a conclusive final determination barring plaintiff from recovering for any services it rendered to Lawrence Jones arising from the July 16, 2010 accident.”

Unpleaded affirmative defense is sufficient

Metro Health Prods., Inc. v Nationwide Ins., 2016 NY Slip Op 51122(U)(App. Term 2d Dept. 2016)

“Nationwide had no basis to assert the defenses of collateral estoppel and res judicata before January 28, 2013, when the declaratory judgment was entered in the Supreme Court (see Renelique v State-Wide Ins. Co., 50 Misc 3d 137[A], 2016 NY Slip Op 50096[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2016]). While plaintiff contended in the Civil Court that Nationwide had failed to move to amend its answer, the answer may be deemed amended to include the affirmative defenses of collateral estoppel and res judicata (see Barrett v Kasco Constr. Co., 84 AD2d 555 [1981], affd 56 NY2d 830 [1982]), and a waiver of such defenses (see CPLR 3211 [e]) will not result where, as here, the defendant’s failure to assert the defenses in its answer did not take the plaintiff by surprise (see Renelique, 50 Misc 3d 137[A], 2016 NY Slip Op 50096[U]; see e.g. Olean Urban Renewal Agency v Herman, 101 AD2d 712, 713 [1984]; see also Rogoff v San Juan Racing Assn., 77 AD2d 831 [1980], affd 54 NY2d 883 [1981]). We note that, notwithstanding plaintiff’s conclusory assertion of prejudice, an examination of the record reveals none. “Indeed, an unpleaded defense may serve as the basis for granting summary judgment in the absence of surprise or prejudice to the opposing party’ (Sullivan v American Airlines, Inc., 80 AD3d 600, 602 [2011]; see also Lerwick v Kelsey, 24 AD3d 918, 919 [2005]; Allen v Matthews, 266 AD2d 782 [1999])” (Renelique, 50 Misc 3d 137[A], 2016 NY Slip Op 50096[U], *1).

Consequently, in light of the Supreme Court’s declaratory judgment, the Civil Court properly granted Nationwide’s motion for summary judgment under the doctrine of res judicata (see EBM Med. Health Care, P.C. v Republic W. Ins., 38 Misc 3d 1 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012]), as any judgment in favor of plaintiff in this action would destroy or impair rights or interests established by the judgment in the declaratory judgment action (see Schuylkill Fuel Corp. v Nieberg Realty Corp., 250 NY 304, 306-307 [1929]; Flushing Traditional Acupuncture, P.C. v Kemper Ins. Co., 42 Misc 3d 133[A], 2014 NY Slip Op 50052[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2014]; EBM Med. Health Care, P.C., 38 Misc 3d at 2)”

We have seem this before.  And we will see it again.

Supplemental affirmation on a DJ case acceptable and res judicata mandates dismissal of complaint

Great Health Care Chiropractic, P.C. v American Tr. Ins. Co., 2014 NY Slip Op 51324(U)(App. Term 2d Dept. 2014)

This was proudly mine and another example of why it pays to put up a good fight as well as to be proceduraly savvy.

“Great Health Care Chiropractic, P.C. (Great Health) commenced this action on February 14, 2012 to recover assigned first-party no-fault benefits for services provided to its assignor as a result of injuries sustained in a motor vehicle accident on December 10, 2010. After issue had been joined, plaintiff moved for summary judgment, and defendant opposed the motion on the ground that plaintiff had failed to establish its prima facie case. While this no-fault action was pending, defendant, American Transit Insurance Company (American Transit), commenced a declaratory judgment action in Supreme Court, New York County, against Great Health and its assignor, among others, alleging that the assignor had breached the terms of the insurance policy by failing to appear for duly scheduled examinations under oath (EUOs) and that, as a result, American Transit is not obligated to pay any claims for first-party no-fault benefits submitted by Great Health as assignee of Kareem Lindsay arising out of the December 10, 2010 accident. Great Health asserted in its answer in Supreme Court that American Transit did not demonstrate good cause for requesting an EUO. The Supreme Court initially denied a motion by American Transit for, among other things, summary judgment but, upon reargument, granted the motion, finding that American Transit had demonstrated that it had timely mailed EUO scheduling letters to Great Health’s assignor; that the assignor had failed to appear for scheduled EUOs; and that Great Health had failed to raise a triable issue of fact in opposition to the motion. The Supreme Court awarded American Transit a declaratory judgment, dated January 25, 2013.

After being awarded the declaratory judgment, American Transit submitted, in this action, a supplemental affirmation by its counsel, in opposition to plaintiff’s motion for summary judgment, in which he argued that plaintiff’s action is barred by res judicata. By order entered February 28, 2013, the Civil Court denied plaintiff’s motion for summary judgment and, upon a search of the record, granted defendant summary judgment dismissing the complaint with prejudice. This appeal by plaintiff ensued.

 “(1) Plaintiff’s moving papers failed to establish either that defendant had failed to pay or deny the claims within the requisite 30-day period (see Viviane Etienne Med. Care, P.C. v Country-Wide Ins. Co., 114 AD3d 33 [2013]), or that defendant had issued a timely denial of claim that was conclusory, vague or without merit as a matter of law (see Insurance Law § 5106 [a]; Westchester Med. Ctr. v Nationwide Mut. Ins. Co., 78 AD3d 1168 [2010]). Consequently, plaintiff failed to establish its prima facie entitlement to summary judgment.”

(2) “Moreover, the Civil Court properly determined that the action is barred under the doctrine of res judicata (see EBM Med. Health Care, P.C. v Republic W. Ins., 38 Misc 3d 1 [App Term, 2d, 11th & 13th Jud Dists 2012]; Ava Acupuncture, P.C. v NY Cent. Mut. Fire Ins. Co., 34 Misc 3d 149[A], 2012 NY Slip Op 50233[U] [App Term, 2d, 11th & 13th Jud Dists 2012]; SZ Med., P.C. v Erie Ins. Co., 24 Misc 3d 126[A], 2009 NY Slip Op 51221[U] [App Term, 2d, 11th & 13th Jud Dists 2009]), as any judgment in favor of plaintiff in this action would destroy or impair rights or interests established by the Supreme Court declaratory judgment (see Schuylkill Fuel Corp. v Nieberg Realty Corp., 250 NY 304, 306-307 [1929]; SZ Med., P.C. v Erie Ins. Co., 24 Misc 3d 126[A], 2009 NY Slip Op 51221[U]).”

(3) Defendant’s failure to serve the Supreme Court’s order upon plaintiff with notice of entry is not fatal, in view of the binding and conclusive effect of the order (see All Boro Psychological Servs., P.C. v Travelers Prop. Cas. Co., ___ Misc 3d ___, 2014 NY Slip Op 24161 [App Term, 2d, 11th & 13th Jud Dists 2014]).

(4) While plaintiff argues that the Civil Court improvidently exercised its discretion in considering defendant’s untimely supplemental affirmation in opposition to plaintiff’s summary judgment motion, we reject this contention in view of the justification shown for the delay and plaintiff’s failure to demonstrate any prejudice arising therefrom (see Lawrence v Celtic Holdings, LLC, 85 AD3d 874 [2011]; cfMosheyeva v Distefano, 288 AD2d 448 [2001]; Risucci v Zeal Mgt. Corp., 258 AD2d 512 [1999]). In view of the foregoing, we decline to disturb so much of the order as, upon a search of the record, granted defendant summary judgment dismissing the complaint with prejudice.”

Every time Rybak appeals, he just digs that hole a little deeper and a little wider.

 

Back when DJ’s roamed the earth

Ultimate Health Prods., Inc. v American Tr. Ins. Co., 2014 NY Slip Op 51321(U)(App. Term 2d Dept. 2014)

Good job to my colleague and friend James Sullivan on this one.

“Ultimate Health Products, Inc. (Ultimate Health) commenced this action in the Civil Court, Queens County, to recover assigned first-party no-fault benefits for supplies provided to its assignor as a result of injuries sustained in a motor vehicle accident. While this no-fault action was pending, defendant, American Transit Insurance Company (American Transit), commenced a declaratory judgment action in Supreme Court, New York County, against Ultimate Health and its assignor, among others, alleging that the assignor had breached the terms of the insurance policy by failing to appear for duly scheduled examinations under oath and that, as a result, American Transit is not obligated to pay any claims for first-party no-fault benefits submitted by Ultimate Health as assignee of Carlos Martinez arising from the car accident in question. In December of 2011, plaintiff moved in the Civil Court for summary judgment. On May 15, 2012, the Supreme Court awarded American Transit a declaratory judgment on default. American Transit subsequently cross-moved in the Civil Court, pursuant to CPLR 3211 (a) (5), to dismiss plaintiff’s action, contending that this action is barred by virtue of the declaratory judgment. Plaintiff opposed defendant’s cross motion and now appeals from an order of the Civil Court, entered January 18, 2013, which implicitly denied plaintiff’s motion for summary judgment and granted defendant’s cross motion dismissing the complaint.

The Supreme Court determined that Ultimate Health’s assignor was not an eligible injured person entitled to no-fault benefits under the applicable policy, and that American Transit was not obligated to pay claims submitted by Ultimate Health as assignee of Carlos Martinez in any current or future proceedings arising under that policy from the car accident in question. In light of the declaratory judgment, the present action is barred under the doctrine of res judicata (see EBM Med. Health Care, P.C. v Republic W. Ins., 38 Misc 3d 1 [App Term, 2d, 11th & 13th Jud Dists 2012]; Ava Acupuncture, P.C. v NY Cent. Mut. Fire Ins. Co., 34 Misc 3d 149[A], 2012 NY Slip Op 50233[U] [App Term, 2d, 11th & 13th Jud Dists 2012]; SZ Med., P.C. v Erie Ins. [*2]Co., 24 Misc 3d 126[A], 2009 NY Slip Op 51221[U] [App Term, 2d, 11th & 13th Jud Dists 2009]), as any judgment in favor of plaintiff in this action would destroy or impair rights or interests established by the Supreme Court declaratory judgment (see Schuylkill Fuel Corp. v Nieberg Realty Corp., 250 NY 304, 306-307 [1929]; SZ Med., P.C. v Erie Ins. Co., 24 Misc 3d 126[A], 2009 NY Slip Op 51221[U]). Plaintiff’s remaining arguments lack merit or were not preserved for appeal.”

This is from back when the good guys had the stage and providers had to earn their money.

Failure to settle declaratiory judgment not fatal to summary judgment motion in underlying Civil Court action

New Milennium Medical Imagine, P.C. v. American Transit Ins. Co., Index #: 4588/13 (Civ. Ct. Kings Co. 2013)

The Appellate Term held this month that a Notice of Entry is not a necessary to enforce a judgment under a theory of collateral estoppel.  Of course, the next question to be asked is what happens when you obtain summary judgment in a declaratory judgment action, yet fail to enter a judgment on the underlying judgment?

Certain Plaintiff’s argue that the declaratory judgment is not enforceable.  Not surprisingly, certain judge’s followed that logic.  Enter Justice Ottley, who blew through the smoke and mirrors and held

“Plaintiff argues that due to defendant’s failure to demonstrate tha tit cimplied with the declaratory judgment order to settle judgment, defendant’s motion for a default judgment in the Supreme Court matter should be considered abandoned and result in the declaratory judgment order being deemed moot.  Contrary to plaintiff’s argument, the court finds that defendant’s failure to settle judgment within 60 days as proscribed, did not amount to defendant’s abandonment of the declaratory action.  Rather, defendant is entitled to settle judgment non pro tunc.  See, Elliott Zaretsky v. ok Hui Kin, et. al., 17 AD3d 455 (2d Dept. 2005)

Notice of Entry is not what some think it means

All Boro Psychological Servs., P.C. v Travelers Prop. Cas. Co. of Am., 2014 NY Slip Op 24161 (App. Term 2d Dept. 2014)

(1) In this action by a provider to recover assigned first-party no-fault benefits, the Civil Court (Devin P. Cohen, J.), on November 12, 2010, granted defendant’s motion for summary judgment dismissing the complaint. Nevertheless, the action subsequently proceeded to trial before Judge Johnny Lee Baynes. At the nonjury trial, defendant’s counsel advised the court of the existence of the summary judgment order and that the order had been issued in open court following oral argument. However, the court ruled that the order was not binding because it had not been served with notice of entry on plaintiff’s counsel. Following the trial, judgment was entered in favor of plaintiff in the principal sum of $1,061.63.

(2) (And for this, Justice Baynes was elevated to Supreme Court.  Yet, how many Supreme Court orders granting declarations of non-coverage [always out of Kings] have been nullified  due to the Civil Kings rule that the failure to serve an order with notice of entry means it never happened.  I shake my head when I see some of these short form orders, but then I say to myself, it is Civil Kings, nothing should surprise me)

(3) “A grant of summary judgment is the procedural equivalent of a trial (see Falk v Goodman, 7 NY2d 87, 91 [1959]; News Am. Mktg., Inc. v Lepage Bakeries, Inc., 16 AD3d 146 [2005]), and an order granting such relief is as final and as conclusively determinative of all issues in an action as is a judgment after trial (see Engel v Aponte, 51 AD2d 989 [1976]; Riley v Southern Transp. Co., 278 App Div 605 [1951]). Thus, since the grant of summary judgment operates as a final determination on the merits of the claims in question, once a court has granted such a motion based on the facts adduced before it, the doctrine of res judicata applies (see Buckley & Co. v City of New York, 121 AD2d 933 [1986]; Cebron v McBride Dev. Corp., 93 AD2d 876 [1983]; Eidelberg v Zellermayer, 5 AD2d 658 [1958], affd 6 NY2d 815 [1959]), as does the doctrine of law of the case. Therefore, an order granting summary judgment is binding on all other judges of coordinate jurisdiction (see Carbon Capital Mgt., LLC v American Express Co., 88 AD3d 933 [2011]), and the conclusive effect of such an order may not be fatally [*2]undermined, as it was here, by allowing the party whose action was dismissed a second chance to litigate the matter

(4) “We note in passing that, under the circumstances presented, even if the trial court thought that the order granting summary judgment was not enforceable at the time of trial, the better practice would have been to exercise its discretion and grant defendant’s counsel’s request for an adjournment so as to afford defendant an opportunity to take any steps necessary to render the order enforceable instead of wasting scarce judicial resources conducting a trial after summary judgment had already been granted to defendant.”

 

Collateral estoppel again

Clark v Farmers New Century Ins. Co., 2014 NY Slip Op 03311 (3d Dept 2014)

The equitable doctrine of collateral estoppel precludes a party from relitigating an issue when it was clearly raised in a prior action or proceeding and decided against that party in a final judgment on the merits after a full and fair opportunity to be heard (see Matter of Feldman v Planning Bd. of the Town of Rochester, 99 AD3d 1161, 1162-1163 [2012]; Beneficial Homeowner Serv. Corp. v Mason, 95 AD3d 1428, 1429 [2012]; Gadani v DeBrino Caulking Assoc., Inc., 86 AD3d 689, 691 [2011]). Thus, “‘once a claim is brought to a final conclusion, all other claims arising out of the same transaction or series of transactions are barred, even if based upon different theories or if seeking a different remedy’” (Matter of Feldman v Planning Bd. of the Town of Rochester, 99 AD3d at 1163, quoting O’Brien v City of Syracuse, 54 NY2d 353, 357 [1981]; see O’Connor v Demarest, 74 AD3d 1522, 1523-1524 [2010]). In the Basco action, Supreme Court found that plaintiff failed to proffer objective medical evidence to demonstrate that she suffered any causally-related serious injury within the meaning of Insurance Law § 5102 (d), and this Court affirmed that order. As proof of a serious injury is a condition precedent to maintaining a SUM action for noneconomic loss (see Raffellini v State Farm Mut. Auto. Ins. Co., 9 NY3d 196, 205 [2007]; see also 11 NYCRR 60-2.3 [f]), Supreme Court properly awarded defendant summary judgment based upon collateral estoppel with regard to plaintiff’s claim for noneconomic damages. As plaintiff argues, recovery of damages for economic loss in excess of basic economic loss does not require proof of a serious injury

I am curious how Huntington v. Travelers can remain good law when the court holds that once a claim is brought to a final conclusion, it is over.  Here, Defendant proved lack of serious injury and Plaintiff failed to raise an issue of fact.  If the waxing and waning of pain is sufficient to defeat a medical necessity motion, then this 4 judge panel in Albany cannot with a straight face preclude a subsequent challenge to a serious injury findings.  What if Ms. Clark had a bad a few bad days after she got non-suited.  Shouldn’t she have the right to do what Huntington Regional Chiro does and file another suit or an SUM arbitration for later pain a nd suffering?  The Appellate Term, Second Department would have us think that.  If I wax, I can beat collateral estoppel.

 

 

How Huntington/Travelers can play out

Huntington Med. Plaza, P.C. v Travelers Indem. Company

This was previously discussed on here.  Many of us believe this was a half baked decision.

Some claims manager wanted me to put this question out here.  I am seeking comments.  You represent an insurance carrier and Huntington Regional, OrthoCare, Station Medical or some other entity bombards you with many cases in different courts and through arbitration involving the same assignor, accident and types of service.

How do you efficiently defend these cases?

First, you can file a DJ action, join all of these actions and have one trial.  That is the most efficient way to handle these case; yet, can be problematic at times due to internal issues involving assignment of files, etc., and Ins Law 5106 (when these cases are in arbitration) giving the Claimant the right to chose arbitration as the dispute resolution process.

Assume option number one is not practical and you need to take a “verdict” or something like that after a trial on Huntington Regional (or something similar), like Travelers did, knowing that many other cases are following behind.

The Court in Huntington/Travelers phrased the order at the bench trial (which was not given collateral estoppel effect) solely as a medical necessity issue, and the order probably read something like this: Defendant proved that further services lacked medical appropriateness and Plaintiff did not provide persuasive evidence as to the continued treatment’s medical appropriateness.  Judgment to be entered for Defendant.   I am just guessing what was in the order at the bench trial.

Here is my thought.  Is it possible for an insurance carrier at a trial to demand special interrogatories be answered by the finder of fact.  I think this is possible and this is what I am thinking:

Question #1: Did Defendant prove through a fair preponderance of the evidence that on (Date of IME), there was no further disability?

Answer this question “yes” or “no”.

Question #2: Did Defendant prove through a fair preponderance of the evidence that services following the IME were not medically necessary?

Answer this question “yes” or “no”.

(Only reach question #3 if 5 out of 6 jurors answered question #1  and/or question #2 in the affirmative.  If both question #1 and question #2 are answered in the negative, then proceed to question #4)

(3) Did Plaintiff prove through a fair preponderance of the evidence that the services rendered after the IME dated (Date of IME) were medically necessary?

(Only reach question #4 if 5 out of 6 jurors answered question #3 in the affirmative)

(4) How much do you award Plaintiff in unpaid no-fault benefits?

Under this construct, a finding as to question number #1 in the affirmative and question number 3 in the negative would be collateral estoppel because a finder of fact has now found as a matter of fact that on a given date there was no further disability.  This would more or less fall in line with Matin v. Geico and Lobel v. Allstate which gives collateral estoppel effect to judgments and awards finding that further benefits are inappropriate.

Answering #1 in the negative and number #2 in the affirmative, with #3 in the negative would still be a win for the carrier, but allow the rest of the medical providers’ cases to remain active since there is no affirmative finding that a disability ceased and the “wax and wane” of the pain may play out on another day.

Of course answering question #3 in the affirmative or answering questions #1 and #2 in the negative is a win for the provider.  This would be collateral estoppel against the provider.

This one is wrong

Huntington Med. Plaza, P.C. v Travelers Indem. Company, 2014 NY Slip Op 50527(U)(App. Term 2d Dept. 2014)

What is going on at the Appellate Term?  Is anyone researching these issues before their opine?  I just feel like this Court has been shooting from the hip lately.

“The two prior cases, involving treatments rendered from July 2008 to February 2009, went to a joint trial, at which defendant’s IME doctors testified as to their conclusions that the assignor’s injuries had resolved and that the assignor needed no further treatment. Plaintiffs put on no rebuttal witnesses in that case. After the trial, according to a decision on the record submitted by defendant in support of its motion, the court found in favor of defendant, but made no specific factual findings.”

“Based on the foregoing, defendant argued, plaintiffs were collaterally estopped from contending that the September 2009 to December 2009 treatments at issue in this case were medically necessary.”

“The decision in the prior actions was presumably based on a finding that the treatments at issue in those cases were not medically necessary. However, the court in those cases did not find that no post-IME complaints or disability could be attributable to the accident in question (compare Barnett v Ives, 265 AD2d 865 [1999]), or that the assignor’s condition could not have worsened either after the IME or after the treatments at issue therein, nor were such findings necessary to the court’s decision.”

If you read the Trial Court decision in Martin v. Geico, a case where Plaintiff sought further medical benefits following a loss in arbitration, the Court said: “After a hearing, the arbitrator affirmed the denial by Geico for no-fault benefits on the basis that plaintiff had failed to sustain her burden of proof.” (Martin v. Geico, 2005 WL 6052968 [Sup. Ct. Queens Co. 2005], affd, 31 AD3d 505 [2d Dept. 2006]).

So, if the plaintiff failed to meet its burden, it may never come back to court.  Yet, our Appellate Term sees it either otherwise.

 

Case dismissed through DJ

Flushing Traditional Acupuncture, P.C. v Kemper Ins. Co., 2014 NY Slip Op 50052(U)(App. Term 2d Dept. 2014)

“defendant Kemper Insurance Company (Kemper) commenced a declaratory judgment action in the Supreme Court, New York County, against plaintiff, 12 other providers and the injured assignor, alleging that the providers had breached the terms of the insurance policy by failing to appear for scheduled examinations under oath.  On September 4, 2009, several months after the declaratory judgment action had been filed, plaintiff commenced the present action in the Civil Court. In a judgment entered on default on June 22, 2010, the Supreme Court declared that plaintiff and the other named providers were not entitled to recover no-fault benefits arising out of the accident in question. Kemper thereafter moved in the Civil Court to dismiss plaintiff’s complaint, contending that the instant action is barred by virtue of the declaratory judgment”

“In light of the declaratory judgment, the present action is barred under the doctrine of res judicata.”

I think you have seen this before.