Legal Questions

Does an insurer’s no-coverage declaratory judgment, or pending declaratory action, bar or stay a no-fault claimant’s action?

Covers decisions that rule on what an insurer's declaratory judgment (DJ) action does to a separate claim for the same benefits: whether a DJ or order declaring that the insurer owes no benefits for an accident, claimant or set of bills precludes (res judicata or collateral estoppel) the provider's (or injured person's) pending or later Civil/District Court action, arbitration, or judgment, in whole or in part; and whether that action should be stayed, enjoined or adjourned while the DJ action is pending. Deciding the question means the court actually applies or refuses to apply the DJ (or the pending DJ action) to the claims before it, for example on a motion for summary judgment, a CPLR 3211 (a) (5) motion, a motion to vacate a default (DJ offered as the meritorious defense), a motion to vacate a judgment or award, or a motion to stay. 'Action' includes no-fault arbitration and UM/SUM arbitration, and enforcement of a judgment already entered. It also covers a claimant's reliance on a ruling made in the insurer's DJ action.

Settled at the Appellate Division, no conflicting department. No Court of Appeals no-fault decision; the courts apply the Court of Appeals' general preclusion rules (Schuylkill Fuel: no second judgment that would destroy or impair rights established by the first; Gramatan: an assignee is bound only if the action against the assignor began before the assignment; Kaufman v Eli Lilly: a default is not 'actually litigated' for collateral estoppel). Both Appellate Terms apply these rules the same way: an unvacated DJ, including a default DJ, that declares no duty to pay a named provider (or its assignor when the assignment came after the DJ action began) bars the provider's action by res judicata; a provider not named, or whose assignment predates the DJ action, is not bound; an order that makes no declaration, or a DJ that does not cover the accident or claims, has no preclusive effect. The Second Department Appellate Division (Hereford v Shelly, 2025) applies res judicata to an unvacated default DJ to stay a later arbitration by claimants who were parties. Decisions differ in outcomes, not in the rule. The one point of internal nuance is collateral estoppel after a default: available only if the provider appeared in the DJ action (Parisien v Kemper, 2022; Nasrinpay, 2024), while res judicata applies to a default DJ regardless.

Leading authorities · Authority map · Decisions by court · Plain-text version (Markdown)

Leading authorities

  • Matter of Hereford Ins. Co. v Shelly (2025 NY Slip Op 05681) Appellate Division, Second Department, 2025Unvacated default DJ is res judicata against claimants who were partiesA default declaratory judgment declaring that the insurer had no duty to pay claims from the accident and was entitled to a permanent stay of arbitrations barred, by res judicata, the claimants' later demand for (uninsured motorist) arbitration; the permanent stay was properly granted.
    The claimants were parties to the 2019 action, which determined, inter alia, that Hereford had no duty to pay the claimants’ claim. Accordingly, the court properly granted that branch of the petition which was to permanently stay arbitration
  • EBM Med. Health Care, P.C. v Republic W. Ins. (2012 NY Slip Op 22300) Appellate Term, Second Department, 2012Default DJ bars the named provider's pending action (res judicata)After the provider sued in Civil Court, the insurer obtained a default DJ declaring the provider not properly licensed and that the insurer owed it no benefits 'arising out of any current or future proceeding'. The pending action was a 'current' proceeding, so it was barred by res judicata; the Civil Court's denial of the insurer's summary judgment motion was reversed.
    Contrary to EBM’s contention, the declaratory judgment is a conclusive final determination, notwithstanding that it was entered on default, since res judicata applies to a judgment taken by default which has not been vacated
  • Magic Recovery Med. & Surgical Supply Inc. v State Farm Mut. Auto. Ins. Co. (2010 NY Slip Op 20130) Appellate Term, Second Department, 2010Provider not named and not in privity is not boundDefault DJs absolving the insurer as to staged incidents did not bind a provider that was not named or served and whose assignments predated the DJ actions; and a default DJ has no collateral estoppel effect because nothing was actually litigated. Golia, J.P., dissented.
    Plaintiff herein was neither named nor served in the declaratory judgment actions nor, at the time, was it in privity with someone who was, and plaintiff otherwise had no full and fair opportunity to appear and defend its interests in those proceedings.
  • Metro Health Prods., Inc. v Nationwide Ins. (2015 NY Slip Op 25203) Appellate Term, Second Department, 2015Order granting default without a declaration has no preclusive effectA Supreme Court order granting the insurer's unopposed default motion and directing it to settle a judgment on notice made no declaration of the parties' rights, so it was not a conclusive final determination and did not bar the provider's action.
    the order cannot be considered a conclusive final determination. Therefore, the Supreme Court order has no preclusive effect on the instant no-fault action
  • Pomona Med. Diagnostics, P.C. v Metropolitan Cas. Ins. Co. (2010 NY Slip Op 52039(U)) Appellate Term, First Department, 2010First Department: default DJ against provider bars its actionA Supreme Court judgment, entered on the provider's default, declaring that the insurer may deny all claims from the assignor's accident barred the provider's actions by res judicata; the insurer's summary judgment motions should have been granted.
    Contrary to plaintiff’s claim, the Supreme Court judgment is a conclusive final determination, notwithstanding that it was entered on the default of plaintiff, since res judicata applies to a judgment taken by default that has not been vacated
  • Compas Med., P.C. v Geico Ins. Co. (2013 NY Slip Op 52016(U)) Appellate Term, Second Department, 2013Civil Court may stay provider action pending insurer's DJ actionThe Civil Court did not improvidently exercise its CPLR 2201 discretion in staying a provider's action pending final determination of the insurer's Supreme Court declaratory judgment action, in which the provider and its assignor were named defendants.
    it was not an improvident exercise of discretion for the Civil Court to grant defendant’s motion to stay this action pending the resolution of the Supreme Court declaratory judgment action
  • Gramatan Home Invs. Corp. v Lopez 46 NY2d 481Assignee is in privity with (and bound by a judgment against) its assignor only if the action against the assignor was commenced before the assignment; basis of the non-party limit.Not in our database.
  • Schuylkill Fuel Corp. v Nieberg Realty Corp. 250 NY 304, 306-307Res judicata applies where a different judgment in the second action would destroy or impair rights established by the first; quoted in nearly every 'barred' decision.Not in our database.
  • Kaufman v Eli Lilly & Co. 65 NY2d 449, 456-457An issue is not actually litigated where there has been a default; limits collateral estoppel (not res judicata) from default DJs.Not in our database.
  • Matter of Hunter 4 NY3d 260, 269General transactional res judicata rule cited by the Appellate Terms.Not in our database.
  • Hirsch v Lindor Realty Corp. 63 NY2d 878, 881A court deciding a DJ action must make a declaration of the parties' rights; basis of the 'no declaration, no preclusion' limit.Not in our database.
  • Lazides v P & G Enters. 58 AD3d 607Res judicata applies to an unvacated default judgment; cited for default DJs.Not in our database.
  • Matter of Eagle Ins. Co. v Facey 272 AD2d 399Default judgment has res judicata effect; cited in EBM and Ava.Not in our database.
  • Chestnut Hill Real Estate v Contractors Cas. & Sur. Co. 280 AD2d 446Relief from a judgment may only be sought from the court that rendered it; why a Supreme Court DJ cannot vacate a Civil Court judgment (Master Cheng, Bronx Med. Diagnostic).Not in our database.
  • Trisingh Enters., Inc. v Kessler 249 AD2d 45First Department authority that res judicata applies to an unvacated default judgment (cited in Pomona).Not in our database.
  • State Farm Mut. Auto. Ins. Co. v Anikeyeva 130 AD3d 1007Affirmed a default DJ that PCs were unlawfully incorporated; not in the database (the 2011 and 2021 Anikeyeva decisions are).Not in our database.

Authority map

Each circle is a decision on this question, placed by court and date; its colour is the position it took. Lines are citations between them. Select a circle (or find a decision by name) to see its links and summary. The same decisions are listed by court below the map.

The DJ is given preclusive effect and bars every claim in the action that the court consideredThe DJ bars some claims in the action but the court holds it does not reach othersNo preclusion because the claimant (or insurer) was not a party or privy to the DJNo preclusion because the DJ does not conclusively decide these claims or cannot operate on themThe claimant's action is stayed, enjoined or adjourned while the DJ action is pendingA stay, injunction or adjournment pending the DJ action is refused or held ineffectiveRing: rules on the question, but another ground decided the caseContrasted, distinguished or limitedDeclined to follow, questioned, overruled or reversedCited
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How the rule was applied, by court

Court Barred by DJ Barred in part Not bound: parties DJ does not reach Stayed pending DJ Stay deniedTotal
Appellate Division, Second Department1000102
Appellate Term, First Department2021005
Appellate Term, Second Department801172413126
Trial courts in the First Department1030105
Trial courts in the Second Department170322024

Decisions (162)

Every decision in our database that rules on this question: highest court first, then by department, newest first. 139 turn on it; the others rule on it alongside a different main ground (marked "also decides"). The one-sentence summaries describe what each court said on this question.

How this page is made: the decisions are those in our case-law database that cite this question's leading cases or were tagged with its subject. A language model read each one in full and recorded whether it rules on the question, the position it took and a one-sentence summary; a second, independent reading checked every entry. Court, department, date and the citation links come from the database. Read the decision before relying on it.