December 15, 2015

Promed Orthocare Supply, Inc. v AIG Advantage Ins. Co. (2015 NY Slip Op 51886(U))

https://www.beynensonlaw.com/case-law/promed-orthocare-supply-inc-v-aig-advantage-ins-co-2015-ny-slip-op51886u/

Court: Appellate Term, Second Department
Decided: December 15, 2015
Citation: 2015 NY Slip Op 51886(U)
Posture: Summary judgment
Outcome: Provider prevailed
Later treatment: Distinguished in 2 and followed in 2 later decisions (see Cited by)
Issues: Declaratory judgment, res judicata
Legal questions: Effect of insurer's declaratory judgment (see the maps)

Cite as

Promed Orthocare Supply, Inc. v AIG Advantage Ins. Co., 2015 NY Slip Op 51886(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.

An order authorizing entry of a declaratory judgment has no preclusive effect if it does not declare the parties' rights. After the provider moved for summary judgment in its benefits action, the insurer obtained a default order granting entry of a declaratory judgment in a separate coverage action. The insurer relied on that order to seek dismissal through res judicata and collateral estoppel. Because the order contained no declaration of rights, it was not a conclusive final determination and could not preclude the provider's claims. The Appellate Term, Second Department, affirmed the order, insofar as appealed from, denying the insurer's cross motion for summary judgment.

Reported in New York Official Reports at Promed Orthocare Supply, Inc. v AIG Advantage Ins. Co. (2015 NY Slip Op 51886(U))

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

Promed Orthocare Supply, Inc. as Assignee of Edriss Noel, Respondent,
against
AIG Advantage Ins. Co., Appellant.

Appeal from an order of the Civil Court of the City of New York, Queens County (Carmen R. Velasquez, J.), entered July 30, 2013. The order, insofar as appealed from, denied defendant’s cross motion for summary judgment dismissing the complaint.

ORDERED that the order, insofar as appealed from, is affirmed, without costs. In this action to recover assigned first-party no-fault benefits, after plaintiff moved for summary judgment, defendant commenced a declaratory judgment action in the Supreme Court, Nassau County, against, among others, various medical providers, including plaintiff herein, seeking a declaration that defendant had no duty to provide coverage with respect to the accident from which the claims at issue in this action arose. By order dated March 15, 2010, the Supreme Court granted, on default, defendant’s motion for the entry of a declaratory judgment. Defendant subsequently cross-moved for summary judgment dismissing the complaint in the case at bar on the ground that this action is barred by the doctrines of res judicata and collateral estoppel by virtue of the March 2010 Supreme Court order in the declaratory judgment action. By order entered July 30, 2013, the Civil Court, among other things, denied defendant’s cross motion.

Upon a review of the record, we find that since the March 2010 Supreme Court order in the declaratory judgment action merely granted the entry of a declaratory judgment, but failed to make a statement declaring the rights of the parties involved (see Hirsch v Lindor Realty Corp., 63 NY2d 878, 881 [1984]; Suburban Bindery Equip. Corp. v Boston Old Colony Ins. Co., 150 AD2d 767 [1989]; Metro Health Prods., Inc. v Nationwide Ins., 48 Misc 3d 85 [App Term, 2d, 11th & 13th Jud Dists 2015]), the Supreme Court order cannot be considered a conclusive final determination and, thus, can have no preclusive effect in the instant no-fault action (see Metro Health Prods., Inc. v Nationwide Ins , 48 Misc 3d 85; cf. 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]).

Accordingly, the order entered July 30, 2013, insofar as appealed from, is affirmed.

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

Decision Date: December 15, 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: No preclusion because the DJ does not conclusively decide these claims or cannot operate on them

Held the default order had no preclusive effect because it merely granted entry of a declaratory judgment without declaring the parties' rights, so it was not a conclusive final determination.

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

Of the 164 decisions on this question in the Second Department courts and the Court of Appeals, 27 (this one included) are in the same category.

Cited in this decision

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

Metro Health Prods., Inc. v Nationwide Ins. (2015 NY Slip Op 25203) FollowedA declaratory judgment order granting a default motion without declaring the parties' rights does not preclude a no-fault action.
Vital Meridian Acupuncture, P.C. v Republic W. Ins. Co. (2015 NY Slip Op 50222(U)) Contrasted (cf., but see)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) Contrasted (cf., but see)An unvacated default declaratory judgment has res judicata effect in a provider's pending no-fault action.

Cited by

A label shows how the later decision treated this one.

Kerisli Chiropractic, P.C. v American Tr. Ins. Co. (2018 NY Slip Op 28325) DistinguishedA default declaratory order specifying the parties' rights has res judicata effect when it remains unvacated.
Parisien v ZipCar c/o Corp. Serv. Co. (2026 NY Slip Op 26130) DistinguishedA default declaratory order expressly determining no-fault coverage can preclude a provider's claims even without entry of a final judgment.
Jamaica Wellness Med., P.C. v Mercury Cas. Co. (2018 NY Slip Op 51128(U)) FollowedA default judgment against an assignor does not preclude a provider's action when the order does not determine the provider's rights.
Active Chiropractic, P.C. v 21st Century Ins. Co. (2018 NY Slip Op 50200(U)) FollowedAn order granting entry of a default judgment without declaring the parties' rights has no preclusive effect in a no-fault action.

Similar decisions

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.
Great Health Care Chiropractic, P.C. v Progressive Ins. Co. (2015 NY Slip Op 51077(U))The provider's no-fault action was barred by res judicata under an unvacated default declaratory judgment denying benefits from the accident.
Healthway Med. Care, P.C. v American Tr. Ins. Co. (2016 NY Slip Op 51786(U))The provider's claims were barred by res judicata because a prior declaration resolved coverage for the same accident between the same parties.
Promed Durable Equip., Inc. v GEICO Ins. (2014 NY Slip Op 51262(U))The insurer's unrebutted peer reviews established that the supplies lacked medical necessity, supporting summary judgment dismissal.