October 16, 2012

EBM Med. Health Care, P.C. v Republic W. Ins. (2012 NY Slip Op 22300)

https://www.beynensonlaw.com/case-law/ebm-med-health-care-p-c-v-republic-w-ins-2012-ny-slip-op-22300/

Court: Appellate Term, Second Department
Decided: October 16, 2012
Citation: 2012 NY Slip Op 22300 · 38 Misc 3d 1
Posture: Summary judgment
Outcome: Insurer prevailed
Later treatment: Contrasted (cf., but see) in 4 and followed in 30 later decisions (see Cited by)
Issues: Declaratory judgment, res judicata
Legal questions: Effect of insurer's declaratory judgment (see the maps)

Cite as

EBM Med. Health Care, P.C. v Republic W. Ins., 38 Misc 3d 1 (App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012)

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 declaratory judgment has res judicata effect in a provider's pending no-fault action. While the benefits action was pending, the insurer obtained a default declaration that the provider was improperly licensed under Business Corporation Law §§ 1507 and 1508 and Education Law § 6507 (4) (c), and that no benefits were payable in any current or future proceeding. The provider's action fell within the judgment's unambiguous reference to current proceedings. The default did not prevent the declaration from constituting a conclusive final determination, and a contrary judgment could impair rights it established. The Appellate Term, Second Department, reversed the order and granted the insurer summary judgment dismissing the complaint.

Reported in New York Official Reports at EBM Med. Health Care, P.C. v Republic W. Ins. (2012 NY Slip Op 22300)

EBM Med. Health Care, P.C. v Republic W. Ins.

2012 NY Slip Op 22300 [38 Misc 3d 1]

Accepted for Miscellaneous Reports Publication

AT2

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

As corrected through Wednesday, January 16, 2013

[*1]

EBM Medical Health Care, P.C., as Assignee of Jemel McDaniel, Respondent,
v
Republic Western Insurance, Appellant.

Supreme Court, Appellate Term, Second Department, 2d, 11th and 13th Judicial Districts, October 16, 2012

APPEARANCES OF COUNSEL

Rubin, Fiorella & Friedman LLP, New York City (Jason W. Moussourakis and Joseph R. Federici of counsel), for appellant. Law Offices of Bruce Newborough, P.C., Brooklyn (Damin J. Toell of counsel), for respondent.

{**38 Misc 3d at 2} OPINION OF THE COURT

Memorandum.

Ordered that the order is reversed, with $10 costs, and defendant’s motion for summary judgment dismissing the complaint is granted.

EBM Medical Health Care, P.C. commenced this action to recover assigned first-party no-fault benefits for medical services provided to its assignor as a result of injuries sustained in an automobile accident. While this no-fault action was pending, Republic Western Insurance commenced a declaratory judgment action in Supreme Court, New York County, against EBM, alleging that EBM was not properly licensed under Business{**38 Misc 3d at 3} Corporation Law §§ 1507 and 1508 and Education Law § 6507 (4) (c), and therefore was not eligible to recover no-fault benefits. A judgment was entered, on default, in the declaratory judgment action, declaring “that EBM Medical Health Care, P.C. is not properly licensed under Business Corporation Law 1507 and 1508 and Education Law 6507 (4) (c)” and that Republic had no duty to pay no-fault benefits to EBM “arising out of any current or future proceeding.” After the judgment in the declaratory judgment action had been entered, Republic moved in this no-fault action for summary judgment dismissing EBM’s complaint, contending that this action was barred by virtue of the declaratory judgment. The Civil Court denied Republic’s motion, finding, among other things, that Republic had not established that the term “current” proceeding, as used in the declaratory judgment, applied to the instant action.

Based upon the declaratory judgment, the instant action is barred under the doctrine of res judicata (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]; SZ Med., P.C. v Erie Ins. Co., 24 Misc 3d 126[A], 2009 NY Slip Op 51221[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2009]). To hold otherwise could result in a judgment in the instant action which would destroy or impair rights established by the judgment of the Supreme Court in the declaratory judgment action (see Schuylkill Fuel Corp. v Nieberg Realty Corp., 250 NY 304, 306-307 [1929]). [*2]Contrary to EBM’s contention, the declaratory judgment is a conclusive final determination, notwithstanding that it was entered on default, since res judicata applies to a 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 [2006]; Matter of Eagle Ins. Co. v Facey, 272 AD2d 399 [2000]). The instant no-fault action was pending at the time the declaratory judgment was entered, and therefore, pursuant to the unambiguous language used in the judgment, this action falls within the ambit of the declaratory judgment as a “current” proceeding. Accordingly, the order of the Civil Court is reversed and Republic’s motion for summary judgment dismissing the complaint is granted.

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

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 unvacated default declaratory judgment that the provider was improperly licensed and owed nothing in any current or future proceeding barred the pending action by res judicata, as it was a current proceeding.

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, 101 (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.
SZ Med., P.C. v Erie Ins. Co. (2009 NY Slip Op 51221(U)) FollowedThe providers' no-fault action was barred by res judicata because a prior declaratory judgment resolved coverage for the same accident.

Cited by (49)

A label shows how the later decision treated this one.

Metro Health Prods., Inc. v Nationwide Ins. (2015 NY Slip Op 25203) Contrasted (cf., but see)A declaratory judgment order granting a default motion without declaring the parties' rights does not preclude a no-fault action.
Promed Orthocare Supply, Inc. v AIG Advantage Ins. Co. (2015 NY Slip Op 51886(U)) Contrasted (cf., but see)An order authorizing entry of a declaratory judgment has no preclusive effect if it does not declare the parties' rights.
Jamaica Wellness Med., P.C. v Mercury Cas. Co. (2018 NY Slip Op 51128(U)) Contrasted (cf., but see)A 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)) Contrasted (cf., but see)An order granting entry of a default judgment without declaring the parties' rights has no preclusive effect in a no-fault action.
Flushing Traditional Acupuncture, P.C. v Kemper Ins. Co. (2014 NY Slip Op 50052(U)) FollowedThe provider's no-fault action was barred by res judicata because a default declaratory judgment denied its right to benefits.
Vital Meridian Acupuncture, P.C. v Republic W. Ins. Co. (2015 NY Slip Op 50222(U)) FollowedA default declaratory judgment conclusively determining no obligation to pay no-fault benefits bars a contrary recovery under res judicata.
Healing Art Acupuncture, P.C. v 21st Century Ins. Co. (2018 NY Slip Op 50583(U)) FollowedA declaratory judgment barring coverage precluded the provider's no-fault recovery under res judicata and collateral estoppel.
Metro Health Prods., Inc. v Nationwide Ins. (2016 NY Slip Op 51122(U)) FollowedAn unpleaded res judicata defense may support summary judgment when it causes no surprise or prejudice to the opposing party.
Renelique v State-Wide Ins. Co. (2016 NY Slip Op 50095(U)) FollowedA default declaratory judgment precludes a no-fault recovery that would impair the rights established by that judgment.
K.O. Med., P.C. v Mercury Cas. Co. (2017 NY Slip Op 51614(U)) FollowedA default declaratory judgment denying no-fault coverage barred the provider's action under res judicata.

Show all 49 citing decisions

Similar decisions

Kerisli Chiropractic, P.C. v American Tr. Ins. Co. (2018 NY Slip Op 28325)A default declaratory order specifying the parties' rights has res judicata effect when it remains unvacated.
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.