Cuevas v Everest Denali Ins. Co. (2025 NY Slip Op 52120(U))

“NOTICE OF MOTION BY DEFENDANT TO DISMISS THE COMPLAINT” (NYSCEF Doc 4), dated and filed May 7, 2024, respectively, by Michael J. Rossignol, Esq. (Riker Danzig LLP), counsel for defendant, Everest Denali Insurance Company (“Everest”), seeking an Order “pursuant to CPLR § 3211 dismissing all claims in the Complaint as against Everest [;]” and “NOTICE OF CROSS-MOTION” (NYSCEF Doc 22), dated and filed May 30, 2024, by Jason S. Firestein (Zlotolow & Associates, P.C.), seeking an Order “pursuant to CPLR §3212 granting the plaintiff summary judgment on her Third Cause of Action which seeks a declaration that the claims submitted by the Plaintiff and/or her assignors did in fact arise out of use and operation of a vehicle and in particular, the vehicle insured by the Defendant herein [;]” are consolidated for the purpose of disposition and decided as set forth below.

On December 13, 2023, plaintiff commenced the instant action with the filing of her complaint seeking monetary damages for economic injuries allegedly sustained when defendant disclaimed coverage of No-Fault insurance benefits related to medical bills amounting to $25,000.00 plus interest, resulting from a vehicular accident on September 22, 2021, wherein plaintiff was the passenger of the insured’s vehicle. Plaintiff asserts that defendant has paid no portion of the due payments, having disclaimed coverage on the basis that plaintiff’s injuries did [*2]not arise out of use and occupation of a motor vehicle. Plaintiff’s complaint asserts three causes of action, namely, for monetary damages (First Cause of Action), attorney’s fees (Second Cause of Action), and for a declaratory judgment that Everest’s disclaimer was improper, and that plaintiff’s injuries did arise out of the use and operation of the insured’s vehicle (Third Cause of Action).

Everest now moves, pre-answer, to dismiss plaintiff’s complaint, pursuant to CPLR 3211. In support, movant submits its Memorandum of Law (NYSCEF Doc 5) and Affirmation in Support (NYSCEF Doc 6); and Arbitration Award (NYSCEF Doc 7); Everest’s arbitration papers (NYSCEF Docs 8 — 11); plaintiff’s arbitration papers (NYSCEF Doc 12); and an Affirmation in Opposition to plaintiff’s cross-motion (NYSCEF Doc 31).

Plaintiff cross-moves for a summary judgment granting a declaration that plaintiff’s injuries arose out of the operation and use of the insured’s motor vehicle. In opposition to the motion-in-chief, and in support of her cross motion, plaintiff submits her Affirmation in Opposition (NYSCEF Doc 15); complaint commencing lawsuit by EAN Holdings, LLC. (NYSCEF Doc 16); rental vehicle photographs (NYSCEF Docs 17 and 19); Affidavit of Jason Firestein (NYSCEF Doc 18); Affirmation of Mercedes Espinal (NYSCEF Doc 20); plaintiff’s deposition transcript from 2nd action (NYSCEF Doc 21); Affirmation in Support of Cross-Motion (NYSCEF Doc 23); the Affidavit of the defendant driver (NYSCEF Doc 24); plaintiff’s Examination Under Oath (“EUO”) transcript (NYSCEF Doc 25); Everest’s disclaimer of benefits (NYSCEF Doc 26); EUO transcript letter (NYSCEF Doc 28); and disclaimers to medical providers (NYSCEF Doc 29).

Movant contends, briefly, that the binding decision and award of the American Arbitration Association tribunal (NYSCEF Doc 7) ruled that defendant had sufficiently demonstrated that the accident did not transpire as alleged by plaintiff, and that plaintiff’s action should therefore be dismissed. Movant further asserts that, although plaintiff was not a litigant in the arbitration, plaintiff is nonetheless bound by collateral estoppel because she shares privity with the petitioner in that proceeding.

In opposition, plaintiff argues that she was not a participant in the arbitration proceedings, which were commenced in the absence of critical supporting evidence by then-petitioner Comprehensive MRI. Although plaintiff concedes that she assigned her claim to Comprehensive MRI, she insists that she lacked a full and fair opportunity to litigate that matter; ergo, neither claim preclusion nor collateral estoppel are properly applicable here. Additionally, plaintiff highlights that the defendant in the prior arbitration is listed as Rental Claims Services – ELRAC LLC, which is a different insurer from the defendant in the instant matter; and further, attests that ELRAC denied the claim on the grounds that it was the incorrect insurer for the accident. Plaintiff asserts that defendant’s disclaimer of coverage indicates, vaguely, that coverage was denied based on an EUO, without specifying to which examination it referred. Plaintiff’s own March 15, 2022, EUO testimony (NYSCEF Doc 25) deposed that the offending driver was operating a van when he backed out of the intersection at Trinity Avenue and Westchester Avenue, striking the elderly plaintiff and her companion as they traversed a crosswalk, before leaving the scene of the accident. The police report also provides a similar narrative of events. Although defendant’s Affidavit (NYSCEF Doc 24) states that his vehicle never struck any pedestrians at the time of the accident, plaintiff’s EUO testimony averred that the vehicle lacked a rear-view mirror or rear windows, by which plaintiff’s counsel infers that it is likely that the driver never became aware of his collision with plaintiff.

In support of her cross-motion plaintiff contends, inter alia, that defendant’s disclaimer was untimely, in that it was issued on November 2, 2022, almost eight months subsequent to plaintiff’s March 15, 2022, EUO, and in contravention of (i) Insurance Law §3420(d), which requires that insurers give the claimant written notice of a coverage disclaimer as soon as is reasonably possible; (ii) 11 NYCRR §65-3.8(a)(1), which deems No-Fault benefits to be overdue if not paid within 30 calendar days after receipt of proof of claim, which is deemed received on the date an EUO is conducted; and (iii) 11 NYCRR §65-3.8(c)(1), which requires either payment or the submission of a denial of claim form to the claimant within 30 days, where such claim involves elements of basic or extended economic loss. Plaintiff also posits that the decisional rule that arbitration rulings are binding upon parties in direct privity with the litigants is superseded in this instance by Insurance Law §5106(e), which prevents arbitration decisions from imparting any collateral estoppel effect in an action arising from the same underlying claim seeking damages for bodily injury, pain and suffering, medical care and loss of wages.

In reply, movant argues that plaintiff was not entitled to a detailed disclaimer of coverage because her claim does not fall within the terms of the policy. Everest also asserts that Insurance Law §5106(e) is inapplicable here, since the instant action does not seek damages for bodily injuries caused by one covered person against another covered person, pursuant to Insurance Law §5104, but instead seeks recovery of No-Fault medical benefits payments. Movant states that plaintiff has filed another matter under Bronx County Supreme Court index number 808777/2022E, wherein plaintiff seeks damages for personal injuries caused by the driver’s negligence during the alleged underlying accident. Finally, movant argues that the motion in chief should not be converted into a summary judgment motion without notice to the parties, and further, that outstanding issues of fact, including discrepancies between the driver’s and the plaintiff’s testimonies preclude summary judgment in this instance.

A. Everest’s Motion to Dismiss

This Court turns firstly to movant Everest’s motion to dismiss on the grounds that plaintiff’s cause of action may not be maintained because of collateral estoppel, pursuant to CPLR 3211(a)(5).

The doctrine of collateral estoppel, a narrower species of res judicata, precludes a party from relitigating in a subsequent action or proceeding an issue clearly raised in a prior action or proceeding and decided against that party or those in privity, whether or not the tribunals or causes of action are the same. Ryan v. New York Tel. Co., 62 NY2d 494, 500 (1984). Privity is an amorphous concept that includes those who are successors to a property interest, those who control an action although not formal parties to it, those whose interests are represented by a party to the action, and those who are co-parties to a prior action. See Buechel v. Bain, 97 NY2d 295, 304 (2001). “In addressing privity, courts must carefully analyze whether the party sought to be bound and the party against whom the litigated issue was decided have a relationship that would justify preclusion, and whether preclusion, with its severe consequences, would be fair under the particular circumstances. Doubts should be resolved against imposing preclusion to ensure that the party to be bound can be considered to have had a full and fair opportunity to litigate.” Id. Moreover, collateral estoppel principles apply as well to awards in arbitration as they do to adjudications in judicial proceedings. See Feinberg v. Boros, 99 AD3d 219, 226 (1st Dept. 2012); Am. Ins. Co. v. Messinger, 43 NY2d 184, 189 (1977).

The party seeking to invoke collateral estoppel has the burden to show the identity of the issues, while the party trying to avoid application of the doctrine must establish the lack of a full and fair opportunity to litigate. In re Dunn, 24 NY3d 699, 704 (2015). Once the issue of identity between the prior and pending actions is established, certain factors should be considered to determine whether a full and fair opportunity to litigate the issue at bar existed, including: “the nature of the forum and the importance of the claim in the prior litigation, the incentive and initiative to litigate and the actual extent of litigation, the competence and expertise of counsel, the availability of new evidence, the differences in the applicable law and the foreseeability of future litigation. Clemens v. Apple, 65 NY2d 746, 748 (1985); also see Ryan v. New York Tel. Co., 62 NY2d 494, 501 (1984). For instance, in Dunn, supra, the New York Court of Appeals held that a disciplinary proceeding commenced against an attorney respondent lacked collateral estoppel effect where that proceeding provided no opportunity to call witnesses or conduct cross-examination. In re Dunn, supra at 704. On the other hand, where a litigant knowingly eschewed a fair opportunity to present evidence in a prior proceeding, it cannot later present that evidence as “new evidence” to avoid preclusion by collateral estoppel. See Ryan v. New York Tel. Co., supra at 503.

Upon analysis and review of statutory authority, relevant case law, the papers submitted, and the record, this Court determines that movant has not established that collateral estoppel should bar plaintiff from commencing the instant action. This Court is cognizant that movant has met its burden to show (i) that the issue litigated in the arbitration was identical to that which forms the gravamen of plaintiff’s present suit, namely, whether plaintiff’s medical claims resulted from impact by the vehicle covered under the defendant’s issued policy; and (ii) that by assigning the rights to her claim to medical provider Comprehensive MRI, plaintiff established privity of contract with that entity, who subsequently consented to resolve the claim in arbitration. Nonetheless, plaintiff has sufficiently demonstrated that she lacked a full and fair opportunity to litigate the issue at bar. The decision issued by the American Arbitration Association (NYSCEF Doc 7) following a single hearing held on June 13, 2023, held that the tribunal’s determination rested primarily on the assertion of Steve Turner, the vehicle’s driver, that the covered vehicle had not been involved in an accident (see NYSCEF Doc 24), as well as the inconsistencies in plaintiff’s EUO testimony (NYSCEF Doc 25) as to the identifying features of the driver. The arbitration decision further noted that petitioner Comprehensive MRI had been unable to provide any additional evidence to refute respondent Everest’s contentions. Pertinently, plaintiff’s opposition papers assert that Comprehensive MRI commenced its proceeding without providing notice or invitation to the plaintiff, and without obtaining any of the evidence within her possession that could have established the identity of the covered vehicle. Such evidence includes the testimony of Mercedes Espinal who could have attested to her own involvement in the vehicular accident, as well as the photographs taken by Espinal at the time of the accident, which depict the vehicle and license plate (NYSCEF Doc 19). Additionally, as in Dunn, supra, the plaintiff lacked an opportunity to call or cross-examine witnesses which, pertinently, included the plaintiff herself. In Clemens v. Apple, the Court of Appeals denominated the availability of new evidence as among the factors to be weighed in assessing a party’s opportunity to fully and fairly litigate an issue in a prior action (see Clemens, supra at 748). Of course, new evidence rarely pops spontaneously into existence — rather, previously undiscovered evidence is generally designated as “new” based on its previous non-availability to the litigants in a prior proceeding.

This Court also finds the procedural history of the instant matter to be patently distinguishable from the circumstances presented in the decisional authority, Ryan v. New York Tel. Co., supra. In Ryan, the Court of Appeals held that the plaintiff had been afforded a full and fair opportunity in a prior administrative hearing to litigate the underlying issue of his misconduct and termination, having directly initiated and participated in the proceeding, testifying, and by cross-examining defendant’s witnesses through his union representative; and further, that the evidence later proffered as “new” on appeal had been available to plaintiff during the prior hearing, but was inexplicably not submitted for review. Conversely, here the record indicates that plaintiff had no knowledge of the arbitration proceeding, had been afforded no opportunity to provide evidence to the litigant representing her interests, and did not testify; further the record also shows that no cross-examination of the alleged driver was conducted during the arbitration proceeding. Even were this Court to accept the likely counter-argument that such evidence should have been uncovered by the due diligence of Comprehensive MRI’s counsel, that assertion directly calls into question the competence and expertise of that counsel, as contended in the Affidavit of plaintiff’s own counsel, Jason Firestein (NYSCEF Doc 18), and which also weighs against the application of estoppel here (see Clemens, supra).

This Court is also mindful of the Beuchel Court’s implicit admonition against imposing preclusion where doubts persist as to whether the prior proceeding conferred a full and fair opportunity to the litigant to be precluded (see Buechel v. Bain, supra at 304). As a result, it is determined that sufficient doubts exist as to whether plaintiff was afforded a full and fair opportunity to litigate the central issue in this action to avert her preclusion here, in light of the assignee’s non-possession of probative evidence during the prior arbitration, particularly where the availability of that evidence could have established the identity of the offending vehicle in the absence of plaintiff’s accurate description of the driver, or might have otherwise have permitted a sound rebuttal to the countervailing arguments.

Separately, this Court agrees with movant’s position that Insurance Law §5106(e) does not apply here, where plaintiff is not seeking monetary damages for personal injuries as authorized under Insurance Law §5104. Similarly, Insurance Law §3420(d) does not apply where the claimant is not explicitly covered by the policy (see Zappone v. Home Ins. Co., 55 NY2d 131, 135 [1982]).

Therefore, movant’s motion to dismiss plaintiff’s action as barred by collateral estoppel is DENIED.

We now turn to plaintiff’s cross-motion seeking summary judgment declaring that the claims submitted by plaintiff and her assignees arose through the use and operation of a motor vehicle covered by defendant Everest.

The proponent of a summary judgment motion has the burden of submitting evidence in admissible form demonstrating the absence of any triable issues of fact and establishing entitlement to judgment as a matter of law. Giuffrida v Citibank Corp., 100 NY2d 72 (2003); Alvarez v Prospect Hosp., 68 NY2d 320 (1986); Winegrad v New York University Medical Center, 64 NY2d 851 (1985). The failure to make such prima facie showing requires denial of the motion, regardless of the sufficiency of any opposing papers. Winegrad, supra at 853. “[M]ere conclusions, expressions of hope or unsubstantiated allegations or assertions are [*3]insufficient” to rebut the movant’s claims and establish that triable issues of fact exist. Zuckerman v. City of New York, 49 NY2d 557, 562 (1980). In determining whether summary judgment is appropriate, the motion court should draw all reasonable inferences in favor of the non-moving party and should not pass on issues of credibility. Dauman Displays, Inc. v. Masturzo, 168 AD2d 204, 205 (1990); also see Latif v. Eugene Smilovic Hous. Dev. Fund Co., 147 AD3d 507, 508 (1st Dept. 2017), holding that where a plaintiff’s testimony contains inconsistencies, they are not appropriately resolved on a summary judgment motion.

Here, it is clear that the contradictory testimonies of Steve Turner (NYSCEF Doc 24), plaintiff (NYSCEF Docs 21 and 25), and Mercedes Espinal (NYSCEF Doc 20), highlight the existence of unresolved issues of fact that preclude summary judgment, particularly where the resolution of those questions require comparative assessments of various witness’ credibility (see Dauman Displays, Inc. v. Masturzo, supra at 205). In light of the above, plaintiff’s cross-motion for summary judgment is DENIED.

The Court has considered the additional contentions of the parties not specifically addressed herein. To the extent that any relief requested by the parties was not addressed by the Court, it is hereby denied.

Accordingly, movant’s motion to dismiss plaintiff’s complaint, and plaintiff’s cross-motion for summary judgment, are both DENIED, as stated herein.

Plaintiff is directed to serve a copy of this decision and order with notice of entry, upon all parties within thirty (30) days of entry, and to upload proof of service onto the NYSCEF system.

This constitutes the decision and order of this Court.