DJ victory

Understanding Declaratory Judgment Strategy in No-Fault Insurance Cases

In no-fault insurance litigation, timing and strategic case management can make the difference between victory and defeat. This case from the Appellate Term, Second Department, illustrates a critical principle: when an insurance carrier successfully obtains a declaratory judgment establishing they have no obligation to pay benefits, that victory can effectively shield them from future related litigation through the doctrine of res judicata.

The ruling in Best Touch PT, P.C. v American Trust Insurance Co. demonstrates the powerful protective effect of declaratory judgment actions in no-fault insurance disputes. Insurance carriers who successfully establish their position through declaratory judgment proceedings can often prevent healthcare providers from pursuing the same claims in subsequent litigation.

Jason Tenenbaum’s Analysis:

Best Touch PT, P.C. v American Tr. Ins. Co.,2015 NY Slip Op 51789(U)(App. Term 2d Dept. 2015)

(1) October 23, 2011 accident. By order dated May 22, 2013, the Supreme Court (Julia I. Rodriguez, J.) granted ATIC’s motion for entry of a declaratory judgment, on default, declaring that ATIC was not obligated to pay any claims for no-fault benefits submitted by the parties named as defendants in the declaratory judgment action.

(2) In August 2013, plaintiff herein moved for summary judgment. Defendant cross-moved for summary judgment dismissing the complaint, contending that this action was barred by virtue of the May 22, 2013 order of the Supreme Court. Plaintiff did not oppose defendant’s cross motion. By order entered April 29, 2014, the Civil Court granted plaintiff’s motion and denied defendant’s cross motion.

(3)Based upon the May 22, 2013 order of the Supreme Court, this action is barred under the doctrine of res judicata

I recall that Judge Feinman said that since this was a First Department DJ, she did not have to follow it. So silly.

Key Takeaway

The Appellate Term’s reversal reinforces that declaratory judgment victories create binding precedent through res judicata, preventing relitigation of the same issues. Healthcare providers cannot simply file new actions after losing declaratory judgment proceedings - the original determination remains conclusive regardless of which court initially ruled.

Related Articles

• Understanding collateral estoppel principles when no-fault arbitrations affect insurance claims
• How declaratory judgment actions can moot underlying civil court proceedings
• When failure to cooperate creates collateral estoppel issues in declaratory judgment cases
• How first-party no-fault IME findings can establish res judicata in third-party litigation
• Understanding the Lobel Effect and how coverage determinations impact personal injury claims