Key Takeaway
Learn when declaratory judgments obtain collateral estoppel effect in NY insurance law. Key cases show orders must contain actual declarations, not just settlement directions.
Metro Health Prods., Inc v Nationwide Ins., 2015 NY Slip Op 25203 (App. Term 2d Dept. 2015)
The short-form order:
“’s unopposed motion for a default judgment on this declaratory judgment action pursuant to CPLR 3215 is granted, there being no opposition. Settle judgment on notice.”
The effect of the non-settled judgment
“Since the Supreme Court’s December 5, 2012 order in the declaratory judgment action did not make a declaration determining the rights of the parties involved…, but rather directed the insurer to settle the judgment on notice (which [*2]defendant did not demonstrate that it had done), the order cannot be considered a conclusive final determination. Therefore, the Supreme Court order has no preclusive effect on the instant no-fault action.”
Ultimate Health Prods., Inc. v American Tr. Ins. Co., 2015 NY Slip Op 50906(U)(App. Term 2d Dept. 2015)
“By order dated October 26, 2012, the Supreme Court granted the motion therein for a default judgment, which order stated, among other things, that “his action was brought for a declaration that defendant Hiyomailys Lachapelle, (Lachapelle), and the medical provider … of Lachapelle are not entitled to no-fault coverage with a motor vehicle accident that occurred on November 10, 2010 … motion for default judgment against … is granted.”
…
“he Supreme Court’s order is a conclusive final determination notwithstanding that it was entered on default, and res judicata applies to an order or judgment taken by default which has not been vacated”
As the reader can see, an order that does not set forth any decretal paragraphs is without probative value.
