August 20, 2014

Ultimate Health Prods., Inc. v American Tr. Ins. Co. (2014 NY Slip Op 51321(U))

https://www.beynensonlaw.com/case-law/ultimate-health-prods-inc-v-american-tr-ins-co-2014-ny-slip-op51321u/

Court: Appellate Term, Second Department
Decided: August 20, 2014
Citation: 2014 NY Slip Op 51321(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

Ultimate Health Prods., Inc. v American Tr. Ins. Co., 2014 NY Slip Op 51321(U) (App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2014)

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 default declaratory judgment barred the provider's benefits action under res judicata because recovery would impair the insurer's established rights. While the no-fault action was pending, the Supreme Court, New York County, declared that the assignor was not an eligible injured person and that the insurer owed no benefits on the provider's claims arising from the accident under the policy. The insurer then cross-moved to dismiss under CPLR 3211 (a) (5). The Appellate Term, Second Department, affirmed the order implicitly denying the provider's summary judgment motion and granting the insurer's cross motion. The provider's remaining arguments lacked merit or were unpreserved.

Reported in New York Official Reports at Ultimate Health Prods., Inc. v American Tr. Ins. Co. (2014 NY Slip Op 51321(U))

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

Ultimate Health Products, Inc. as Assignee of CARLOS MARTINEZ, Appellant,
against
American Transit Ins. Co., Respondent.

Appeal from an order of the Civil Court of the City of New York, Queens County (William A. Viscovich, J.), entered January 18, 2013. The order implicitly 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.

Ultimate Health Products, Inc. (Ultimate Health) commenced this action in the Civil Court, Queens County, to recover assigned first-party no-fault benefits for supplies provided to its assignor as a result of injuries sustained in a motor vehicle accident. While this no-fault action was pending, defendant, American Transit Insurance Company (American Transit), commenced a declaratory judgment action in Supreme Court, New York County, against Ultimate Health and its assignor, among others, alleging that the assignor had breached the terms of the insurance policy by failing to appear for duly scheduled examinations under oath and that, as a result, American Transit is not obligated to pay any claims for first-party no-fault benefits submitted by Ultimate Health as assignee of Carlos Martinez arising from the car accident in question. In December of 2011, plaintiff moved in the Civil Court for summary judgment. On May 15, 2012, the Supreme Court awarded American Transit a declaratory judgment on default. American Transit subsequently cross-moved in the Civil Court, pursuant to CPLR 3211 (a) (5), to dismiss plaintiff’s action, contending that this action is barred by virtue of the declaratory judgment. Plaintiff opposed defendant’s cross motion and now appeals from an order of the Civil Court, entered January 18, 2013, which implicitly denied plaintiff’s motion for summary judgment and granted defendant’s cross motion dismissing the complaint.

The Supreme Court determined that Ultimate Health’s assignor was not an eligible injured person entitled to no-fault benefits under the applicable policy, and that American Transit was not obligated to pay claims submitted by Ultimate Health as assignee of Carlos Martinez in any current or future proceedings arising under that policy from the car accident in question. In light of the declaratory judgment, the present action is barred under the doctrine of res judicata (see EBM Med. Health Care, P.C. v Republic W. Ins., 38 Misc 3d 1 [App Term, 2d, 11th & 13th Jud Dists 2012]; 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]; SZ Med., P.C. v Erie Ins. [*2]Co., 24 Misc 3d 126[A], 2009 NY Slip Op 51221[U] [App Term, 2d, 11th & 13th Jud Dists 2009]), as any judgment in favor of plaintiff in this action would destroy or impair rights or interests established by the Supreme Court declaratory judgment (see Schuylkill Fuel Corp. v Nieberg Realty Corp., 250 NY 304, 306-307 [1929]; SZ Med., P.C. v Erie Ins. Co., 24 Misc 3d 126[A], 2009 NY Slip Op 51221[U]). Plaintiff’s remaining arguments lack merit or were not preserved for appeal.

Accordingly, the order is affirmed.

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

Decision Date: August 20, 2014

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 pending action barred by res judicata because a default declaratory judgment found the assignor ineligible and the insurer not obligated to pay the provider's claims in any current or future proceeding from the accident.

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

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.
SZ Med., P.C. v Erie Ins. Co. (2009 NY Slip Op 51221(U))The providers' no-fault action was barred by res judicata because a prior declaratory judgment resolved coverage for the same accident.

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.
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.
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.
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.
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.