July 7, 2016

Atlantic Chiropractic, P.C. v Liberty Mut. Fire Ins. Co. (2016 NY Slip Op 51072(U))

https://www.beynensonlaw.com/case-law/atlantic-chiropractic-p-c-v-liberty-mut-fire-ins-co-2016-ny-slip-op51072u/

Court: Appellate Term, Second Department
Decided: July 7, 2016
Citation: 2016 NY Slip Op 51072(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

Atlantic Chiropractic, P.C. v Liberty Mut. Fire Ins. Co., 2016 NY Slip Op 51072(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 entered default declaratory judgment barring no-fault coverage has preclusive effect even without service of notice of entry. The insurer obtained a declaration that the assignor's failure to attend duly scheduled EUOs breached a coverage condition and relieved it of payment obligations for the accident. The Civil Court denied the insurer's summary judgment motion because it believed the declaration had not been entered or served with notice of entry. The moving papers established entry, and lack of notice of entry did not defeat the judgment's binding effect. The Appellate Term, Second Department, reversed the provider's judgment, vacated the underlying order, granted the insurer summary judgment on res judicata grounds, and denied the provider's cross motion.

Reported in New York Official Reports at Atlantic Chiropractic, P.C. v Liberty Mut. Fire Ins. Co. (2016 NY Slip Op 51072(U))

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

Atlantic Chiropractic, P.C., as Assignee of CHRISTIAN MOE, Respondent,
against
Liberty Mutual Fire Insurance Co., Appellant.

Appeal from an order of the Civil Court of the City of New York, Kings County (Harriet L. Thompson, J.), entered September 3, 2014, deemed from a judgment of the same court entered October 7, 2014 (see CPLR 5512 [a]). The judgment, entered pursuant to the September 3, 2014 order denying defendant’s motion for summary judgment dismissing the complaint and granting plaintiff’s cross motion for summary judgment, awarded plaintiff the principal sum of $1,800.

ORDERED that the judgment is reversed, with $30 costs, the order entered September 3, 2014 is vacated, defendant’s motion for summary judgment dismissing the complaint is granted, and plaintiff’s cross motion for summary judgment is denied.

In this action by a provider to recover assigned first-party no-fault benefits, defendant moved for summary judgment dismissing the complaint on the ground that the action is barred by virtue of res judicata. Defendant stated that it had been awarded a declaratory judgment on default in the Supreme Court, Bronx County, which judgment declared that defendant has no obligation to pay assigned first-party no-fault claims to plaintiff, among others, with respect to the motor vehicle accident at issue due to the failure of plaintiff’s assignor to appear for duly scheduled examinations under oath (EUOs). Plaintiff cross-moved for summary judgment. By order entered September 3, 2014, the Civil Court denied defendant’s motion and granted plaintiff’s cross motion. Defendant’s appeal from the September 3, 2014 order is deemed to be from the judgment entered pursuant thereto on October 7, 2014 (see CPLR 5512 [a]).

The Supreme Court judgment declared that the failure of plaintiff’s assignor to appear for duly scheduled EUOs constituted a material breach of a condition to coverage and that, as a result, defendant is not obligated to pay first-party no-fault benefits related to the subject accident. The Civil Court denied defendant’s motion on the ground that the default declaratory judgment in the Supreme Court action had not been entered by the Bronx County Clerk and served with notice of entry. However, contrary to the determination of the Civil Court, defendant’s moving papers established that the judgment had been entered on May 21, 2013. Moreover, defendant’s failure to serve the Supreme Court’s judgment with notice of entry is not fatal in view of the binding and conclusive effect of the declaratory judgment (see Great Health Care Chiropractic, P.C. v American Tr. Ins. Co., 44 Misc 3d 143[A], 2014 NY Slip Op 51324[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2014]; All Boro Psychological Servs., P.C. v Travelers Prop. Cas. Co. of Am., 44 Misc 3d 48 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists [*2]2014]). Consequently, in light of the Supreme Court’s declaratory judgment, defendant’s motion for summary judgment should have been granted based on 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 1).

Accordingly, the judgment is reversed, the order entered September 3, 2014 is vacated, defendant’s motion for summary judgment dismissing the complaint is granted, and plaintiff’s cross motion for summary judgment is denied.

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

Decision Date: July 07, 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 because the insurer's default declaratory judgment, shown to have been entered, declared no duty to pay for the accident; failure to serve notice of entry was not fatal.

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.

Great Health Care Chiropractic, P.C. v American Tr. Ins. Co. (2014 NY Slip Op 51324(U)) FollowedThe provider's action was barred by a declaratory judgment relieving the insurer of liability for claims arising from the accident.
All Boro Psychological Servs., P.C. v Travelers Prop. Cas. Co. of Am. (2014 NY Slip Op 24161) FollowedAn order granting summary judgment binds judges of coordinate jurisdiction without service of notice of entry.
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.

Ahava Med. Diagnostic, P.C. v Hertz Co. (2022 NY Slip Op 50298(U)) FollowedA prior no-coverage declaratory judgment retains its binding effect even if notice of entry is served after a provider's default judgment.
Columbus Imaging Ctr. v Country Wide Ins. Co. (2021 NY Slip Op 50851(U))The provider's action was barred by an unvacated default declaratory judgment establishing that the insurer owed no no-fault benefits.
Dos Manos Chiropractic, P.C. v State Farm Ins. Co. (2022 NY Slip Op 50995(U))An unvacated default declaratory judgment precludes a provider's benefits action involving the same parties and accident under res judicata.

Similar decisions

Active Chiropractic, P.C. v 21st Century Ins. Co. (2018 NY Slip Op 50200(U))An order granting entry of a default judgment without declaring the parties' rights has no preclusive effect in a no-fault action.
Infinity Chiropractic Health, P.C. v Republic W. Ins. Co. (2016 NY Slip Op 51564(U))A default declaratory judgment against a provider bars its assigned claims even without service on or a declaration against the assignor.
St. Mark’s Med. Health Care, PLLC v 21st Century Ins. Co. (2020 NY Slip Op 50851(U))An unvacated default declaratory judgment can bar a provider's later no-fault 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.
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.