December 18, 2015

Daily Med. Equip. Distrib. Ctr., Inc. v American Tr. Ins. Co. (2015 NY Slip Op 51897(U))

https://www.beynensonlaw.com/case-law/daily-med-equip-distrib-ctr-inc-v-american-tr-ins-co-2015-ny-slip-op51897u/

Court: Appellate Term, Second Department
Decided: December 18, 2015
Citation: 2015 NY Slip Op 51897(U)
Posture: Summary judgment
Outcome: Insurer prevailed
Issues: Declaratory judgment, res judicata
Legal questions: Effect of insurer's declaratory judgment (see the maps)

Cite as

Daily Med. Equip. Distrib. Ctr., Inc. v American Tr. Ins. Co., 2015 NY Slip Op 51897(U) (App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2015)

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.

A declaratory judgment denying a provider's accident-related no-fault entitlement has preclusive effect even if entered on default. After the provider sued for payment for medical supplies, the insurer obtained a Supreme Court, Bronx County, judgment declaring that the provider and its assignor were not entitled to benefits arising from the accident. That judgment conclusively determined entitlement, and recovery in the pending action could destroy or impair the rights it established. The Appellate Term, Second Department, affirmed the order denying the provider's summary judgment motion and granting the insurer's cross motion dismissing the complaint. The provider's remaining contentions lacked merit or were unpreserved.

Reported in New York Official Reports at Daily Med. Equip. Distrib. Ctr., Inc. v American Tr. Ins. Co. (2015 NY Slip Op 51897(U))

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

Daily Medical Equipment Distribution Center, Inc. as Assignee of Luis Julian, Appellant,
against
American Transit Ins. Co., Respondent.

Appeal from an order of the Civil Court of the City of New York, Queens County (Cheree A. Buggs, J.), entered February 14, 2014. The order denied plaintiff’s motion for summary judgment and granted defendant’s cross motion for summary judgment dismissing 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 medical supplies it provided to its assignor, who had sustained injuries in a motor vehicle accident that had occurred on March 20, 2012. After this action was commenced, defendant commenced a declaratory judgment action in the Supreme Court, Bronx County, against plaintiff and various other medical providers, as well as the allegedly injured assignor. On June 7, 2013, the Supreme Court granted defendant’s motion, “pursuant to CPLR 3215 and CPLR 3212 (b), seeking a default judgment or summary judgment” and found that the medical providers named therein, including plaintiff herein, as well as plaintiff’s assignor, were not entitled to recover no-fault benefits arising out of the motor vehicle accident that had occurred on March 20, 2012, and judgment was entered therein on August 13, 2013. In June 2013, plaintiff moved in the instant case for, among other things, summary judgment. Defendant cross-moved for summary judgment dismissing the complaint on the ground that the action is barred by virtue of the declaratory judgment. By order entered February 14, 2014, the Civil Court denied plaintiff’s motion and granted defendant’s cross motion.

Contrary to plaintiff’s contention, the instant action is barred under the doctrine of res judicata based upon the declaratory judgment (see Vital Meridian Acupuncture, P.C. v Republic W. Ins. Co., 46 Misc 3d 147[A], 2015 NY Slip Op 50222[U] [App Term, 2d, 11th & 13th Jud Dists 2015]; EBM Med. Health Care, P.C. v Republic W. Ins., 38 Misc 3d 1 [App Term, 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 Supreme Court (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] [App Term, 2d, 11th & 13th Jud Dists 2012]). Moreover, the declaratory judgment is a conclusive final determination notwithstanding that it may have been entered on default (see Lazides v P & G Enters., 58 AD3d 607 [2009]; Matter of Allstate Ins. Co. v Williams, 29 AD3d 688, 690 [2006]; Matter of [*2]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 lack merit or are unpreserved for appellate review.

Accordingly, the order is affirmed.

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

Decision Date: December 18, 2015

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 declaratory judgment, entered after the suit began, declared the named provider not entitled to benefits for the accident and was conclusive despite entry on default.

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

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.
EBM Med. Health Care, P.C. v Republic W. Ins. (2012 NY Slip Op 22300)An unvacated default declaratory judgment has res judicata effect in a provider's pending no-fault action.
Ava Acupuncture, P.C. v NY Cent. Mut. Fire Ins. Co. (2012 NY Slip Op 50233(U))An 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 American Tr. Ins. Co. (2016 NY Slip Op 51007(U))An unvacated default order declaring noncoverage is a conclusive final determination that can bar a provider's action under res judicata.
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.
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 Ind. Ins. Co. (2021 NY Slip Op 50639(U))The provider's default judgment motion failed because it did not establish personal jurisdiction over the insurer.
Promed Orthocare Supply, Inc. v AIG Advantage Ins. Co. (2015 NY Slip Op 51886(U))An order authorizing entry of a declaratory judgment has no preclusive effect if it does not declare the parties' rights.