Key Takeaway
New York court establishes when medical providers must be named in declaratory judgment actions for binding non-coverage decisions under res judicata doctrine.
Valdan Acupuncture, P.C. v Nationwide Mut. Fire Ins. Co., 2019 NY Slip Op 51098(U)(App. Term 2d Dept. 2019)
This case answers a question some have properly asked. At what point do the Assignee medical providers not have to be named in the underlying declaratory judgment in order for a declaration of non-coverage to be binding on the that party.
The general rule is the Magic rule, which states that res judicata will not attach to an declaratory judgment when a medical provider is not named in a DJ action. The corollary to this rule is the Astoria v. State Farm rule which says that a fully contested jury trial in a third-party negligence action involving the assignor will be collateral estoppel on the issue of non contact in an assigned first-party action despite the medical provider not having the opportunity to participate in the third-party action.
Now we have the Valdan Acupuncture rule.
” Under the doctrine of res judicata, a final adjudication of a claim on the merits precludes relitigation of that claim and all claims arising out of the same transaction or series of transactions by a party or those in privity with a party” (Ciraldo v JP Morgan Chase Bank, N.A., [*2]140 AD3d 912, 913-914 ; see Matter of Hunter, 4 NY3d 260, 269 ; Schuylkill Fuel Corp. v Nieberg Realty Corp., 250 NY 304, 306-307 ). In the case at bar, as the injured party’s assignment to plaintiff was made on September 21, 2011, after the commencement in August 2011 of the declaratory judgment action, plaintiff is deemed to be in privity with the assignor and “charged with notice that rights to the assignment are subject to the competing claim” (Gramatan Home Invs. Corp. v Lopez, 46 NY2d 481, 487 ). “
And I am unsure if it is irony or serendipity but my good friend Gary T was involved in all three of these cases. I guess he owns all aspects of this issue. Oleg Rybak cannot own every IME/EUO/DJ issue.
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