December 1, 2015

Stracar Med. Servs. v Nationwide Mut. Ins. Co. (2015 NY Slip Op 51761(U))

https://www.beynensonlaw.com/case-law/stracar-med-servs-v-nationwide-mut-ins-co-2015-ny-slip-op51761u/

Court: Appellate Term, Second Department
Decided: December 1, 2015
Citation: 2015 NY Slip Op 51761(U)
Posture: Summary judgment
Outcome: Provider prevailed
Earlier history: Appeal from Stracar Med. Servs. v Nationwide Mut. Ins. Co. (2013 NY Slip Op 50633(U)) (Reversed)
Issues: Declaratory judgment, res judicata
Legal questions: Effect of insurer's declaratory judgment (see the maps)

Cite as

Stracar Med. Servs. v Nationwide Mut. Ins. Co., 2015 NY Slip Op 51761(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.

The provider was not bound by a Virginia rescission order because it was not a party and privity with the assignor was unproved. The insurer denied two assigned no-fault claims after purporting to rescind the automobile policy for material misrepresentations concerning where the vehicle would be kept. It later obtained an agreed Virginia order voiding the policy ab initio and relied on that order for summary judgment. The provider lacked a full and fair opportunity to defend its interests, and the insurer failed to show privity when the Virginia action commenced. The Appellate Term, Second Department, reversed and denied the insurer's motion. It reached no other issue, including the provider's objection that the Virginia order was uncertified.

Reported in New York Official Reports at Stracar Med. Servs. v Nationwide Mut. Ins. Co. (2015 NY Slip Op 51761(U))

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

Stracar Medical Services as Assignee of Santerria Macklin, Appellant,
against
Nationwide Mutual Ins. Co., Respondent.

Appeal from an order of the Civil Court of the City of New York, Kings County (Harriet L. Thompson, J.; op 39 Misc 3d 1216[A], 2013 NY Slip Op 50633[U]), entered March 7, 2013. The order granted defendant’s motion for summary judgment dismissing the complaint.

ORDERED that the order is reversed, without costs, and defendant’s motion for summary judgment dismissing the complaint is denied.

On June 28, 2008, plaintiff’s assignor was injured in an automobile accident. On July 14, 2008, plaintiff’s assignor assigned her right to be reimbursed for first-party no-fault benefits to plaintiff. On September 29, 2008, defendant received a claim from plaintiff for services rendered to plaintiff’s assignor between August 13, 2008 and September 9, 2008. By letter dated October 6, 2008, defendant notified plaintiff that the claim was delayed pending an examination under oath (EUO) of plaintiff’s assignor, which had previously been scheduled for October 8, 2008. On October 27, 2008, defendant received another claim from plaintiff for services rendered to plaintiff’s assignor between September 8, 2008 and October 7, 2008. On October 27, 2008, defendant notified plaintiff that the claim was delayed pending an EUO of plaintiff’s assignor scheduled for November 7, 2008. Defendant also requested other documentary verification. By letter dated December 23, 2008, defendant sent a letter to plaintiff’s assignor advising her that defendant had voided ab initio the automobile insurance policy which she had obtained due to her having made material misrepresentations as to where the vehicle would be kept. On December 29, 2008, defendant denied both of the claims which are at issue in this action on the ground there was no coverage because, by the December 23, 2008 letter, defendant had rescinded the policy ab initio. On or about February 17, 2009, defendant commenced an action in Virginia against the assignor to void the insurance policy ab initio due to the assignor’s material misrepresentations. On August 18, 2009, the assignor and defendant agreed to the entry of a “dismissal order” in the Virginia action which voided the insurance policy ab initio.

On July 29, 2010, plaintiff commenced this action to recover assigned first-party no-fault benefits upon the claims which plaintiff had submitted and defendant had received. Subsequently, defendant moved for summary judgment dismissing the complaint based upon the Virginia court’s August 18, 2009 order rescinding plaintiff’s assignor’s underlying automobile insurance policy. By order entered March 7, 2013, the Civil Court granted defendant’s motion.

In support of its motion, defendant submitted, among other things, the February 2009 complaint in the Virginia action and a copy of the “dismissal order” in the Virginia action, dated August 18, 2009, signed by counsel for both parties, which declared the subject insurance policy to be void ab initio.

On appeal, plaintiff argues that the Virginia “dismissal order” should not have been considered by the Civil Court, as the order was not certified. Plaintiff further argues that, in any event, it is not bound by the order, since it was neither a party to, nor in privity with a party to, the Virginia action.

We agree with plaintiff’s contention that, since it was not a party to the Virginia action, it is not bound by the “dismissal order” rendered therein, as it did not have a full and fair opportunity to defend its interests in that action. Although plaintiff’s assignor was a party to the Virginia action, defendant failed to show that plaintiff was in privity with the assignor at the time the Virginia action was commenced (see Gramatan Home Invs. Corp. v Lopez, 46 NY2d 481, 486-487 [1979]; Quality Psychological Servs. v Infinity Prop. & Cas. Co., 47 Misc 3d 142[A], 2015 NY Slip Op 50645[U] [App Term, 1st Dept 2015]; see also Smooth Dental, P.L.L.C. v Preferred Mut. Ins. Co., 37 Misc 3d 67 [App Term, 2d, 11th & 13th Jud Dists 2012]; Magic Recovery Med. & Surgical Supply Inc. v State Farm Mut. Auto. Ins. Co., 27 Misc 3d 67 [App Term, 2d, 11th & 13th Jud Dists 2010]). Consequently, defendant was not entitled to judgment as a matter of law.

We reach no other issue.

Accordingly, the order of the Civil Court is reversed and defendant’s motion for summary judgment dismissing the complaint is denied.

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

Decision Date: December 01, 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 claimant (or insurer) was not a party or privy to the DJ

Held the provider not bound by a Virginia order voiding the policy ab initio because it was not a party and the insurer did not show privity with the assignor when that action was commenced.

Barred by DJBarred in partNot bound: partiesDJ does not reachStayed pending DJStay deniedThis decisionCites it or cited by itCited or followedDeclined to follow, questioned, overruled or reversed

Of the 164 decisions on this question in the Second Department courts and the Court of Appeals, 20 (this one included) are in the same category. One decision in other departments that cites or is cited by this one is on the full map.

Cited in this decision

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

Stracar Med. Servs. v Nationwide Mut. Ins. Co. (2013 NY Slip Op 50633(U)) ReversedThe provider's claims were dismissed because a Virginia consent order voided the assignor's policy from inception.
Quality Psychological Servs. v Infinity Prop. & Cas. Co. (2015 NY Slip Op 50645(U))The insurer failed to establish that the assignor lacked innocent-third-party protection under the rescinded Pennsylvania policy.
Smooth Dental, P.L.L.C. v Preferred Mut. Ins. Co. (2012 NY Slip Op 22301)The provider was not bound by a declaratory judgment against its assignor because the assignment preceded that action.
Magic Recovery Med. & Surgical Supply Inc. v State Farm Mut. Auto. Ins. Co. (2010 NY Slip Op 20130)The provider was not collaterally estopped by default declaratory judgments in actions where it was neither a party nor in privity.

Similar decisions

Stracar Med. Servs. v New York Cent. Mut. Ins. Co. (2014 NY Slip Op 50263(U))An assignor's failure to attend requested IMEs permits retroactive denial of all claims to the loss date regardless of denial timeliness.
Stracar Med. Servs., P.C. v State Farm Mut. Auto. Ins. Co. (2011 NY Slip Op 51875(U))The provider's complaint was conditionally subject to dismissal for failure to answer discovery and produce its owner for a deposition.
Stracar Med. Servs., P.C. v Allstate Prop. & Cas. Ins. Co. (2016 NY Slip Op 51431(U))The assignor's attendance at other IMEs raised no factual issue concerning the reasonableness of the orthopedic IME requests at issue.
Valdan Acupuncture, P.C. v Nationwide Mut. Fire Ins. Co. (2019 NY Slip Op 51098(U))The provider's claim was barred by res judicata because its assignment followed commencement of the insurer's declaratory judgment action.
Mid Atl. Med., P.C. v Victoria Select Ins. Co. (2008 NY Slip Op 51758(U))The insurer waived its CPLR 3211 (a) (5) defense, but the Virginia rescission papers raised a triable coverage issue.