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July 13, 2016

Metro Health Prods., Inc. v Nationwide Ins. (2016 NY Slip Op 51122(U))

https://www.beynensonlaw.com/case-law/metro-health-prods-inc-v-nationwide-ins-2016-ny-slip-op51122u/

Court
Appellate Term, Second Department
Decided
July 13, 2016
Citation
2016 NY Slip Op 51122(U)
Posture
Summary judgment
Outcome
Insurer prevailed
Later treatment
Followed in 1 later decision (see Cited by)
Issues
Declaratory judgment, res judicata
Legal questions
Effect of insurer's declaratory judgment (see the maps)
Cite as
Metro Health Prods., Inc. v Nationwide Ins., 2016 NY Slip Op 51122(U) (App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2016)

Posture, outcome, issues and treatment by other decisions are Beynenson Law’s classification. Treatment labels are assigned by a language model reading the citing decision; negative and appeal-history labels are checked by a second reader.

Summary

Editorial summary by Beynenson Law, not part of the court’s decision.

An unpleaded res judicata defense may support summary judgment when it causes no surprise or prejudice to the opposing party. After answering the provider's no-fault action, the insurer obtained a default declaratory judgment of noncoverage based on the provider's failure to appear for EUOs. The provider argued that the insurer waived preclusion defenses by omitting them from its answer. The Appellate Term, Second Department, affirmed summary judgment dismissing the complaint for the insurer. The answer could be deemed amended, and CPLR 3211 (e) did not require waiver because the later judgment supplied the defense and the record showed no surprise or prejudice. Recovery would impair rights established by the declaratory judgment and was barred by res judicata.

Reported in New York Official Reports at Metro Health Prods., Inc. v Nationwide Ins. (2016 NY Slip Op 51122(U))

SUPREME COURT, APPELLATE TERM, SECOND DEPARTMENT, 2d, 11th and 13th JUDICIAL DISTRICTS

Metro Health Products, Inc., as Assignee of ARTHUR LOUIS, Appellant,

against

Nationwide Ins., Respondent.

Appeal from an order of the Civil Court of the City of New York, Kings County (Carol Ruth Feinman, J.), entered September 8, 2014. The order granted defendant’s motion for summary judgment dismissing the complaint.

ORDERED that the order is affirmed, with $25 costs.

Plaintiff commenced this action on January 12, 2012 to recover first-party no-fault benefits for medical supplies provided to its assignor, who allegedly sustained injuries in a motor vehicle accident on July 3, 2011. Defendant (Nationwide) answered the complaint in February 2012. On July 27, 2012, Nationwide commenced a declaratory judgment action in Supreme Court, Nassau County, against plaintiff herein, seeking a declaration that Nationwide was under no obligation to pay any of plaintiff’s claims arising from the accident at issue, since plaintiff had failed to comply with a condition precedent to reimbursement of first-party no-fault benefits by failing to appear for duly scheduled examinations under oath. Plaintiff did not appear or serve an answer in the Supreme Court declaratory judgment action. By judgment entered January 28, 2013, the Supreme Court granted Nationwide a declaratory judgment on default, and, on April 1, 2013, the default judgment was served with notice of entry on plaintiff. On December 6, 2013, Nationwide moved in the Civil Court for summary judgment dismissing the complaint on the ground that, in essence, plaintiff’s action is barred by virtue of the declaratory judgment. Plaintiff opposed the motion only on the ground that the declaratory judgment had no preclusive effect on the present action.

Thereafter, in a post-motion brief, plaintiff’s attorney argued that Nationwide had waived the defenses of res judicata and collateral estoppel by failing to raise those defenses in its answer or in a motion to dismiss the complaint, and that Nationwide had not moved to amend its answer to include those defenses. Plaintiff’s counsel contended that, even if Nationwide’s motion were treated as implicitly seeking leave to amend its answer, plaintiff was prejudiced by Nationwide’s unexplained delay in making the motion. Defense counsel argued in her post-motion brief that, even if res judicata and collateral estoppel are not asserted in an answer, such defenses may be raised in a motion for summary judgment where, as here, there is an absence of prejudice and surprise to the other side. Defense counsel noted that, in any event, the declaratory judgment had not been entered until after plaintiff had commenced its action in the Civil Court and after Nationwide had answered the complaint. Plaintiff appeals from an order of the Civil Court, [*2]entered September 8, 2014, which granted Nationwide’s motion.

Nationwide had no basis to assert the defenses of collateral estoppel and res judicata before January 28, 2013, when the declaratory judgment was entered in the Supreme Court (see Renelique v State-Wide Ins. Co., 50 Misc 3d 137[A], 2016 NY Slip Op 50096[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2016]). While plaintiff contended in the Civil Court that Nationwide had failed to move to amend its answer, the answer may be deemed amended to include the affirmative defenses of collateral estoppel and res judicata (see Barrett v Kasco Constr. Co., 84 AD2d 555 [1981], affd 56 NY2d 830 [1982]), and a waiver of such defenses (see CPLR 3211 [e]) will not result where, as here, the defendant’s failure to assert the defenses in its answer did not take the plaintiff by surprise (see Renelique, 50 Misc 3d 137[A], 2016 NY Slip Op 50096[U]; see e.g. Olean Urban Renewal Agency v Herman, 101 AD2d 712, 713 [1984]; see also Rogoff v San Juan Racing Assn., 77 AD2d 831 [1980], affd 54 NY2d 883 [1981]). We note that, notwithstanding plaintiff’s conclusory assertion of prejudice, an examination of the record reveals none. “Indeed, an unpleaded defense may serve as the basis for granting summary judgment in the absence of surprise or prejudice to the opposing party’ (Sullivan v American Airlines, Inc., 80 AD3d 600, 602 [2011]; see also Lerwick v Kelsey, 24 AD3d 918, 919 [2005]; Allen v Matthews, 266 AD2d 782 [1999])” (Renelique, 50 Misc 3d 137[A], 2016 NY Slip Op 50096[U], *1).

Consequently, in light of the Supreme Court’s declaratory judgment, the Civil Court properly granted Nationwide’s motion for summary judgment under the doctrine of res judicata (see EBM Med. Health Care, P.C. v Republic W. Ins., 38 Misc 3d 1 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012]), as any judgment in favor of plaintiff in this action would destroy or impair rights or interests established by the judgment in the declaratory judgment action (see Schuylkill Fuel Corp. v Nieberg Realty Corp., 250 NY 304, 306-307 [1929]; Flushing Traditional Acupuncture, P.C. v Kemper Ins. Co., 42 Misc 3d 133[A], 2014 NY Slip Op 50052[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2014]; EBM Med. Health Care, P.C., 38 Misc 3d at 2).

Accordingly, the order is affirmed.

Pesce, P.J., Solomon and Elliot, JJ., concur.


Decision Date: July 13, 2016

Legal questions

A question of no-fault law this decision rules on, from our Legal Questions pages. Bars count the decisions on the question by year and court, coloured by category; circles are this decision and the decisions on the question it cites or that cite it. Point at a bar or circle for details. The categories and summaries are Beynenson Law’s classification, made by a language model and checked by a second reading.

Effect of insurer's declaratory judgment

Open the full map

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

This decision: The DJ is given preclusive effect and bars every claim in the action that the court considered

Held the provider's action barred by res judicata by a default Supreme Court declaratory judgment of no obligation to pay, deeming the answer amended because the defense arose after it and caused no surprise.

  • Appellate DivisionApp Div 4
  • Appellate TermApp Term 132
  • Trial courtsTrial 28
2021, Appellate Division: 1 decision (1 Stayed pending DJ)2016, Appellate Division: 1 decision (1 Stayed pending DJ)2015, Appellate Division: 1 decision (1 Stay denied)2025, Appellate Division: 1 decision (1 Barred by DJ)2023, Appellate Term: 7 decisions (5 Barred by DJ, 1 Not bound: parties, 1 DJ does not reach)2022, Appellate Term: 11 decisions (9 Barred by DJ, 1 DJ does not reach, 1 Stay denied)2021, Appellate Term: 11 decisions (8 Barred by DJ, 2 Not bound: parties, 1 DJ does not reach)2020, Appellate Term: 12 decisions (9 Barred by DJ, 1 Not bound: parties, 2 DJ does not reach)2019, Appellate Term: 15 decisions (7 Barred by DJ, 3 Not bound: parties, 1 DJ does not reach, 4 Stay denied)2018, Appellate Term: 11 decisions (7 Barred by DJ, 2 Not bound: parties, 2 DJ does not reach)2017, Appellate Term: 5 decisions (3 Barred by DJ, 2 DJ does not reach)2016, Appellate Term: 15 decisions (13 Barred by DJ, 1 Not bound: parties, 1 DJ does not reach)2015, Appellate Term: 14 decisions (11 Barred by DJ, 1 Not bound: parties, 2 DJ does not reach)2014, Appellate Term: 4 decisions (4 Barred by DJ)2013, Appellate Term: 3 decisions (1 Barred by DJ, 1 DJ does not reach, 1 Stayed pending DJ)2012, Appellate Term: 3 decisions (2 Barred by DJ, 1 Not bound: parties)2011, Appellate Term: 2 decisions (1 Barred by DJ, 1 DJ does not reach)2010, Appellate Term: 2 decisions (1 Not bound: parties, 1 Stayed pending DJ)2009, Appellate Term: 1 decision (1 Barred by DJ)2008, Appellate Term: 1 decision (1 Not bound: parties)2024, Appellate Term: 3 decisions (1 Not bound: parties, 2 DJ does not reach)2025, Appellate Term: 11 decisions (1 Barred by DJ, 1 Barred in part, 1 Not bound: parties, 8 DJ does not reach)2026, Appellate Term: 1 decision (1 Not bound: parties)2023, Trial courts: 1 decision (1 DJ does not reach)2022, Trial courts: 3 decisions (2 Barred by DJ, 1 Not bound: parties)2021, Trial courts: 4 decisions (4 Barred by DJ)2020, Trial courts: 1 decision (1 Barred by DJ)2019, Trial courts: 1 decision (1 Barred by DJ)2018, Trial courts: 1 decision (1 Barred by DJ)2013, Trial courts: 2 decisions (2 Barred by DJ)2011, Trial courts: 2 decisions (1 Barred by DJ, 1 Stayed pending DJ)2009, Trial courts: 1 decision (1 Stayed pending DJ)2008, Trial courts: 1 decision (1 Not bound: parties)2007, Trial courts: 2 decisions (1 Barred by DJ, 1 Stayed pending DJ)2006, Trial courts: 1 decision (1 Not bound: parties)2024, Trial courts: 2 decisions (1 Barred by DJ, 1 DJ does not reach)2026, Trial courts: 5 decisions (4 Barred by DJ, 1 Stay denied)2012, Trial courts: 1 decision (1 Stay denied)This decision
2010201520202025
Barred by DJBarred in partNot bound: partiesDJ does not reachStayed pending DJStay deniedThis decisionCites it or cited by itCited or followed

Of the 164 decisions on this question in the Second Department courts and the Court of Appeals, 101 (this one included) are in the same category.

Cited in this decision

A label shows how this decision treated the case it cites.

  • Renelique v State-Wide Ins. Co. (2016 NY Slip Op 50096(U)) FollowedAn unpleaded res judicata defense may support summary judgment absent surprise or prejudice to the opposing party.
  • EBM Med. Health Care, P.C. v Republic W. Ins. (2012 NY Slip Op 22300) FollowedAn unvacated default declaratory judgment has res judicata effect in a provider's pending no-fault action.
  • Flushing Traditional Acupuncture, P.C. v Kemper Ins. Co. (2014 NY Slip Op 50052(U))The provider's no-fault action was barred by res judicata because a default declaratory judgment denied its right to benefits.

Cited by

A label shows how the later decision treated this one.

  • Laga v Unitrin Auto & Home Ins. Co. (2022 NY Slip Op 50906(U)) FollowedThe provider's benefits action was barred by collateral estoppel because a declaratory judgment had decided its entitlement to coverage.
  • Parisien v Kemper Ins. Co. (2022 NY Slip Op 22260)Collateral estoppel does not require privity between the insurer invoking it and a party to the prior declaratory judgment action.
  • Active Chiropractic, P.C. v Allstate Ins. (2018 NY Slip Op 50201(U))An unpleaded res judicata defense may support summary judgment absent surprise or prejudice to the opposing party.
  • Atlantic Chiropractic, P.C. v Utica Mut. Ins. Co. (2019 NY Slip Op 50173(U))The insurer did not waive res judicata by answering before entry of the declaratory judgment on which that defense depended.
  • Charles Deng Acupuncture, P.C. v Allstate Ins. Co. (2019 NY Slip Op 51358(U))The provider's no-fault action was barred by a prior declaratory order establishing that the insurer had no liability for a staged accident.
  • Sutter Pharmacy v State Farm Mut. Auto. Ins. Co. (2021 NY Slip Op 50610(U))The insurer's late, successive summary judgment motion was granted based on a subsequent declaratory judgment barring coverage.

Similar decisions

  • Allay Med. Servs., P.C. v Nationwide Ins. (2021 NY Slip Op 50086(U))The provider's action was barred by res judicata because the prior declaratory judgment covered the same claim and accident.
  • Nationwide Affinity Ins. Co. of Am. v Jamaica Wellness Med., P.C. (2020 NY Slip Op 00971)The insurers' successive summary judgment motion was entertained because an intervening appeal clarified the proof required for EUO nonappearance.
  • Medical Supply of NY Corp. v Nationwide Ins. Co. (2022 NY Slip Op 51253(U))The provider's claims were barred by res judicata because the insurer established that they concerned the accident covered by a prior declaration.
  • Healthwise Med. Assoc., P.C. v Nationwide Ins. (2022 NY Slip Op 51251(U))The provider's claims were barred by a prior no-coverage declaration obtained by the appearing insurer, which proved it was the proper insurer.
  • J.K.M. Med. Care, P.C. v Liberty Mut. Fire Ins. Co. (2016 NY Slip Op 51071(U))The insurer's answer was deemed amended to assert res judicata because the provider alleged no surprise or prejudice from that defense.
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