Key Takeaway
Court rules that timing matters in no-fault litigation when declaratory judgment orders conflict with civil court proceedings - first in time, first in right principle applies.
No-fault insurance litigation often involves complex procedural battles between healthcare providers and insurance companies. When multiple court proceedings run simultaneously, questions arise about which court’s orders take precedence and how timing affects the outcome.
A recent Appellate Term decision illustrates a fundamental principle in New York civil practice: when competing court orders exist, timing can be everything. This case involved a healthcare provider pursuing payment from an insurance company in Civil Court while the insurer simultaneously sought a declaratory judgment in Supreme Court to bar the provider’s claims.
The intersection of New York No-Fault Insurance Law with procedural rules like CPLR 3215(c) and 5015(a) creates situations where providers must navigate multiple legal forums to secure payment for services rendered to accident victims.
Jason Tenenbaum’s Analysis:
First in time, first in right
Hand By Hand, PT, P.C. v New York Cent. Mut. Fire Ins. Co., 2022 NY Slip Op 50774(U)(App. Term 2d Dept. 2022)
“In any event, contrary to defendant’s contention in the Civil Court, this action was not barred based upon the April 19, 2018 order in the Supreme Court declaratory judgment action enjoining plaintiff from proceeding in this action, as that order was entered after the default judgment had been entered herein, and terminated upon the entry of the declaratory judgment on May 20, 2019 and there was no disposition against plaintiff in that judgment (see generally DSD Acupuncture, P.C. v Metlife Auto & Home, 49 Misc 3d 153, 2015 NY Slip Op 51778 ). Consequently, we find that the Civil Court improvidently exercised its discretion in granting defendant’s motion to vacate the default judgment.”
Key Takeaway
When an insurance company obtains a Supreme Court order enjoining a provider’s Civil Court action, that order cannot retroactively invalidate a default judgment that was already entered. The temporal sequence of court orders matters significantly in determining their legal effect, protecting providers who have already secured judgments before competing proceedings conclude.
Common Questions
Frequently Asked Questions
What is New York's no-fault insurance system?
New York's no-fault insurance system requires all drivers to carry Personal Injury Protection (PIP) coverage. This pays for medical expenses and lost wages regardless of who caused the accident, up to policy limits. However, you can only sue for additional damages if you meet the 'serious injury' threshold.
