June 23, 2016

Vital Meridian Acupuncture, P.C. v American Tr. Ins. Co. (2016 NY Slip Op 51007(U))

https://www.beynensonlaw.com/case-law/vital-meridian-acupuncture-p-c-v-american-tr-ins-co-2016-ny-slip-op51007u/

Court: Appellate Term, Second Department
Decided: June 23, 2016
Citation: 2016 NY Slip Op 51007(U)
Posture: Motion to dismiss (CPLR 3211)
Outcome: Insurer prevailed
Issues: Declaratory judgment, res judicata
Legal questions: Effect of insurer's declaratory judgment (see the maps)

Cite as

Vital Meridian Acupuncture, P.C. v American Tr. Ins. Co., 2016 NY Slip Op 51007(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 unvacated default order declaring noncoverage is a conclusive final determination that can bar a provider's action under res judicata. Before the no-fault action began, the insurer instituted a declaratory judgment action against the assignor and providers, including the plaintiff. The resulting default order declared the assignor ineligible for benefits and relieved the insurer of obligations on the identified claims. The Appellate Term, Second Department, affirmed denial of the provider's summary judgment motion and grant of the insurer's cross motion to dismiss. A contrary judgment would destroy or impair rights established by the declaratory order, and its default status did not defeat preclusion. The remaining arguments lacked merit or were unpreserved.

Reported in New York Official Reports at Vital Meridian Acupuncture, P.C. v American Tr. Ins. Co. (2016 NY Slip Op 51007(U))

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

Vital Meridian Acupuncture, P.C., as Assignee of Jose Fernandez Perez, Appellant,
against
American Transit Ins. Co., Respondent.

Appeal from an order of the Civil Court of the City of New York, Kings County (Robin S. Garson, J.), entered May 2, 2013. The order denied plaintiff’s motion for summary judgment and granted defendant’s cross motion to dismiss the complaint.

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

In this action to recover assigned first-party no-fault benefits, plaintiff seeks to recover for services it rendered to its assignor for injuries he had sustained in a motor vehicle accident on April 25, 2012. Prior to the commencement of this action, defendant instituted a declaratory judgment action in the Supreme Court, New York County, against plaintiff’s assignor and various medical providers, including plaintiff herein. By order dated December 4, 2012, the Supreme Court granted, on default, the motion therein for a declaratory judgment, which order stated, among other things, that it is “ORDERED, ADJUDGED and DECLARED that Jose Ramon Fernandez Perez is not an eligible injured person to no-fault benefits under American Transit . . . policy CAP 612795, Claim No. 76337-03 . . . . American Transit is not required to provide, pay or honor or reimburse any claims . . . seeking to recover no-fault benefits arising under . . . policy CAP 612795, Claim No. 76337-03 from the alleged accident of April 25, 2011 involving . . . Jose Ramon Fernandez Perez.”

In October 2012, plaintiff moved for summary judgment in the instant action and defendant cross-moved to dismiss the complaint on the ground that the December 4, 2012 Supreme Court order in the declaratory judgment action barred the instant action pursuant to the doctrines of res judicata and collateral estoppel. By order entered May 2, 2013, the Civil Court denied plaintiff’s motion and granted defendant’s cross motion.

Contrary to plaintiff’s contention, the Civil Court correctly determined that the instant action is barred under the doctrine of res judicata by virtue of the Supreme Court order dated December 4, 2012 (see Ava Acupuncture, P.C. v NY Cent. Mut. Fire Ins. Co., 34 Misc 3d 149[A], 2012 NY Slip Op 50233[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012]). To hold otherwise could result in a judgment in this action which would destroy or impair rights established by the order rendered by the Supreme Court in the declaratory judgment action (see Schuykill Fuel Corp. v Nieberg Realty Corp., 250 NY 304, 306-307 [1929]; Ava Acupuncture, P.C. v NY Cent. Mut. Fire Ins. Co., 34 Misc 3d 149[A], 2012 NY Slip Op 50233[U]). The [*2]Supreme Court’s order is a conclusive final determination notwithstanding that it was entered on default, and res judicata applies to an order or judgment taken by default which has not been vacated (see Lazides v P & G Enters., 58 AD3d 607 [2009]; Matter of Allstate Ins. Co. v Williams, 29 AD3d 688, 690 [2000]; Matter of Eagle Ins. Co. v Facey, 272 AD2d 399 [2000]; Ava Acupuncture, P.C. v NY Cent. Mut. Fire Ins. Co., 34 Misc 3d 149[A], 2012 NY Slip Op 50233[U]). Plaintiff’s remaining contentions either lack merit or are unpreserved for appellate review.

Accordingly, the order is affirmed.

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

Decision Date: June 23, 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 action barred by res judicata because the unvacated default order in the insurer's declaratory judgment action, naming the provider, declared the assignor ineligible and the insurer not required to pay claims under the policy.

Barred by DJBarred in partNot bound: partiesDJ does not reachStayed pending DJStay deniedThis decisionCites it or cited by itCited or followed

Of the 163 decisions on this question in the Second Department courts and the Court of Appeals, 100 (this one included) are in the same category.

Cited in this decision

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

Ava Acupuncture, P.C. v NY Cent. Mut. Fire Ins. Co. (2012 NY Slip Op 50233(U)) FollowedAn unvacated default declaratory order barring no-fault benefits is a final determination that can preclude a provider's action under res judicata.

Similar decisions

Vital Meridian Acupuncture, P.C. v Republic W. Ins. Co. (2015 NY Slip Op 50222(U))A default declaratory judgment conclusively determining no obligation to pay no-fault benefits bars a contrary recovery under res judicata.
Best Touch PT, P.C. v American Tr. Ins. Co. (2015 NY Slip Op 51789(U))A default declaratory judgment barring no-fault payment is a conclusive final determination for res judicata purposes.
Ultimate Health Prods., Inc. v American Tr. Ins. Co. (2015 NY Slip Op 50906(U))The provider's benefits action was barred by res judicata under an unvacated default declaratory order denying no-fault coverage.
Daily Med. Equip. Distrib. Ctr., Inc. v American Tr. Ins. Co. (2015 NY Slip Op 51897(U))A declaratory judgment denying a provider's accident-related no-fault entitlement has preclusive effect even if entered on default.
Active Care Med. Supply Corp. v American Commerce Ins. Co. (2016 NY Slip Op 51813(U))An unvacated default declaratory judgment order can bar a provider's no-fault action under res judicata without a notice of entry.