July 10, 2020

St. Mark’s Med. Health Care, PLLC v 21st Century Ins. Co. (2020 NY Slip Op 50851(U))

Headnote

The relevant facts of this case involved St. Mark's Medical Health Care, PLLC commencing an action against 21st Century Insurance Company to recover assigned first-party no-fault benefits for services provided to its assignor, who had been injured in an accident. Prior to the commencement of the action, 21st Century Advantage Insurance Company and 21st Century Security Insurance Company had brought a declaratory judgment action against St. Mark's Medical Health Care's assignor pertaining to the accident. The Supreme Court granted a motion by 21st Century Advantage Insurance Company and 21st Century Security Insurance Company for a default judgment against the provider and assignor, ordering that they had "no duty to provide coverage" for the accident at issue. The main issue decided by the court was whether the Supreme Court's order and judgment had res judicata effect and thus precluded St. Mark's Medical Health Care from relitigating the same claims in the Civil Court. The court held that the default judgment from the Supreme Court had res judicata effect and granted 21st Century Insurance Company's motion for summary judgment dismissing the complaint. Therefore, the holding of the case was that the Civil Court should have granted the defendant's motion for summary judgment dismissing the complaint based on the res judicata effect of the Supreme Court's default judgment.

Reported in New York Official Reports at St. Mark’s Med. Health Care, PLLC v 21st Century Ins. Co. (2020 NY Slip Op 50851(U))

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

St. Mark’s Medical Health Care, PLLC, as Assignee of Dejean, Ludmilla, Respondent,
against
21st Century Insurance Company, Appellant.

Law Offices of Buratti, Rothenberg & Burns (Bryan M. Rothenberg of counsel), for appellant. The Rybak Firm, PLLC (Oleg Rybak, Esq.), for respondent (no brief filed).

Appeal from an order of the Civil Court of the City of New York, Kings County (Robin S. Garson, J.), entered October 15, 2018. The order, insofar as appealed from, denied defendant’s motion for summary judgment dismissing the complaint.

ORDERED, that the order, insofar as appealed from, is reversed, with $30 costs, and defendant’s motion for summary judgment dismissing the complaint is granted.

Plaintiff commenced this action against “21st Century Insurance Company” in the Civil Court on June 22, 2017 to recover assigned first-party no-fault benefits for services that had been provided to its assignor, who had allegedly been injured in an accident on June 7, 2011. Prior to the commencement of this action, 21st Century Advantage Insurance Company and 21st Century Security Insurance Company had brought a declaratory judgment action in the Supreme Court, New York County, against plaintiff and its assignor herein, among other parties, pertaining to the June 7, 2011 accident. By order dated June 3, 2014, the Supreme Court granted, on default, a motion by 21st Century Advantage Insurance Company and 21st Century Security Insurance Company for a default judgment against the provider and assignor herein and “ordered, adjudged and decreed” that 21st Century Advantage Insurance Company and 21st Century Security Insurance Company had “no duty to provide coverage” for the accident at issue (occurring on June 7, 2011); that the applicable insurance policy is null and void with respect to that accident; [*2]and that 21st Century Advantage Insurance Company and 21st Century Security Insurance Company are “not obligated to provide coverage for no-fault reimbursement based upon the failure of the defendants [in the Supreme Court action] to verify their claims.” A Supreme Court judgment, dated July 20, 2017, set forth the same declaration as stated in the June 3, 2014 order. Relying upon the Supreme Court’s order and judgment, defendant moved in the Civil Court for summary judgment dismissing the complaint. Plaintiff opposed the motion on the grounds that there is no collateral estoppel or res judicata effect from the Supreme Court’s order and judgment, and that defendant had failed to establish a prima facie case. Plaintiff also cross-moved for summary judgment. Defendant appeals from so much of an order of the Civil Court, entered October 15, 2018, as denied defendant’s motion.

“Under the doctrine of res judicata, a final adjudication of a claim on the merits precludes relitigation of that claim and all claims arising out of the same transaction or series of transactions by a party or those in privity with a party” (Ciraldo v JP Morgan Chase Bank, N.A., 140 AD3d 912, 913 [2016]; see Matter of Hunter, 4 NY3d 260, 269 [2005]; Schuylkill Fuel Corp. v Nieberg Realty Corp., 250 NY 304, 306-307 [1929]). It is well settled that default judgments, which have not been vacated, can have res judicata effect (see Lazides v P & G Enters., 58 AD3d 607 [2009]; Matter of Allstate Ins. Co. v Williams, 29 AD3d 688, 690 [2006]; Matter of 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] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012]). In light of the Supreme Court declaratory judgment, entered on default, the Civil Court should have granted defendant’s motion for summary judgment dismissing the complaint (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 the present action would destroy or impair rights or interests established by the judgment in the declaratory judgment action (see Schuylkill Fuel Corp., 250 NY 304; 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 order, insofar as appealed from, is reversed and defendant’s motion for summary judgment dismissing the complaint is granted.

ALIOTTA, P.J., WESTON and ELLIOT, JJ., concur.

ENTER:
Paul Kenny
Chief Clerk
Decision Date: July 10, 2020