Decided on March 5, 2021

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

Law Offices of Buratti, Rothenberg & Burns (Argyria A.N. Kehagias of counsel), for appellant. Law Office of Damin J. Toell, P.C. (Damin J. Toell of counsel), for respondent.

Appeal from an order of the Civil Court of the City of New York, Kings County (John J. Kelley, J.), entered September 12, 2016. The order denied defendant’s motion for summary judgment dismissing the complaint and granted plaintiff’s cross motion for summary judgment.

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

Plaintiff, RX Warehouse Pharmacy, Inc. (RX Warehouse), commenced this action on February 17, 2015 to recover assigned first-party no-fault benefits for services rendered to plaintiff’s assignor, who had allegedly been injured in a motor vehicle accident on December 17, 2009. Defendant 21st Century Insurance Company (21st Century) moved for summary judgment dismissing the complaint on the ground that the issue of whether 21st Century was required to provide no-fault coverage for the claim in dispute had been decided in a Supreme Court, Nassau County, declaratory judgment action, by order entered August 23, 2012 granting 21st Century’s motion for the entry of a default judgment. RX Warehouse opposed the motion in the Civil Court and cross-moved for summary judgment. 21st Century, in further support of its motion in the Civil Court, proffered an order of the Supreme Court, entered May 6, 2015, which had granted 21st Century’s motion for summary judgment, and a judgment entered February 4, 2016 pursuant to the May 6, 2015 order, declaring, insofar as is relevant, that the insurance policy at issue was null and void with respect to the December 17, 2009 collision, and that 21st Century has no duty to defend or indemnify any person under the policy in any action or proceeding brought for damages as a result of the December 17, 2009 collision. RX Warehouse’s attorney argued in an affirmation that the judgment is not applicable to this provider, and that, in any [*2]event, the judgment had not been served on this provider.

By order entered September 12, 2016, the Civil Court denied 21st Century’s motion and granted RX Warehouse’s cross motion, finding that the Supreme Court’s August 23, 2012 order is not a conclusive final determination, as it did not make any declarations determining a lack of coverage. The Civil Court further found that the Supreme Court’s February 4, 2016 judgment had not been served on RX Warehouse’s counsel, and even if the Civil Court considered the judgment, the “judgment does not declare any rights or obligations that pertain to the plaintiff or plaintiff’s claims in this action.”

A defendant’s default admits all the factual allegations of the complaint and all reasonable inferences to be drawn therefrom (see Lamm v Stevenson, 276 AD2d 531 [2000]). Here, by defaulting in the declaratory judgment action, RX Warehouse admitted all the facts alleged in the complaint in that action regarding the staged nature of the accident in question. An order, such as the August 23, 2012 order granting 21st Century’s motion for the entry of a default judgment in the declaratory judgment action, “provides such a ‘judgment’ as will bar relitigation under the doctrines of res judicata or collateral estoppel so long as the requisites of identity of issue and opportunity to contest are present” (Vavolizza v Krieger, 33 NY2d 351, 356 [1974]; see also Slater v American Min. Spirits Co., 33 NY2d 443 [1974]).

Consequently, in light of the August 23, 2012 order, 21st Century’s motion in the Civil Court for summary judgment dismissing the complaint should have been granted under the doctrine of 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 RX Warehouse in the present action would destroy or impair rights or interests established by the order in the declaratory judgment action (see Schuylkill Fuel Corp. v Nieberg Realty Corp., 250 NY 304 [1929]; Healing Art Acupuncture, P.C. v 21st Century Ins. Co., 59 Misc 3d 139[A], 2018 NY Slip Op 50583[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2014]; 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]).

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

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

[*1]

Peter C. Merani, P.C., New York, NY, for appellant.

Gary Tsirelman, P.C., Brooklyn, NY (Stefan Belinfanti and David M. Gottlieb of counsel), for respondent.

Rivkin Radler LLP, Uniondale, NY (Evan H. Krinick, Barry I. Levy, and Henry M. Mascia of counsel), for amici curiae New York Insurance Association, Inc., and another.

In an action to recover no-fault benefits, the defendant appeals, by permission, from an order of the Appellate Term of the Supreme Court for the Second, Eleventh, and Thirteenth Judicial Districts dated March 29, 2017. The order affirmed an order of the Civil Court of the City of New York, Queens County (Terrence C. O’Connor, J.), entered April 1, 2015, denying the defendant’s motion for summary judgment dismissing the complaint.

Ordered that the order dated March 29, 2017, is affirmed, with costs.

In June 2011, the plaintiff commenced the instant action against the defendant in the Civil Court of the City of New York, Queens County, seeking to recover the sum of $4,748.69 for treatment provided to its assignor in April 2011, following a motor vehicle accident that occurred on October 20, 2010. The plaintiff alleged, among other things, that a no-fault claim and verification were sent to the defendant on April 19, 2011, and that the defendant failed to properly deny the claim or request additional verification in compliance with no-fault regulations.

In May 2014, the defendant moved for summary judgment dismissing the complaint, arguing that the benefits under the no-fault policy had been exhausted. The Civil Court denied the defendant’s motion, and the Appellate Term of the Supreme Court for the Second, Eleventh, and Thirteenth Judicial Districts affirmed. The defendant appeals, and we affirm, albeit on different grounds than those relied upon by the Civil Court or the Appellate Term.

“Under the no-fault system, payments of benefits ‘shall be made as the loss is incurred’ ” (Matter of Medical Socy. of State of N.Y. v Serio, 100 NY2d 854, 860 [2003], quoting Insurance Law § 5106 [a]). Under this regulatory scheme, “an insurer shall pay benefits directly to the ‘applicant,’ or, upon assignment by the applicant, ‘shall pay benefits directly to providers of health care services’ ” (East Acupuncture, P.C. v Allstate Ins. Co., 61 AD3d 202, 207 [2009], quoting 11 NYCRR 65-3.11 [a]). In addition, “an insurer is required to either pay or deny a claim for no-fault automobile [*2]insurance benefits within 30 days from the date an applicant supplies proof of claim” (Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 90 NY2d 274, 278 [1997]; see Insurance Law § 5106 [a]). However, “[a]n insurer is not required to pay a claim where the policy limits have been exhausted” (see Hospital for Joint Diseases v State Farm Mut. Auto. Ins. Co., 8 AD3d 533, 534 [2004]) since, where payments made by an insurer meet or exceed the policy limits, “its duties under the contract of insurance cease” (Presbyterian Hosp. in City of N.Y. v Liberty Mut. Ins. Co., 216 AD2d 448, 448 [1995]; see 11 NYCRR 65-3.15).

“[A]n insurer must pay or deny only a verified claim—that is, a claim that has been verified to the extent compliance with section 65-3.5 dictates in the particular case—within 30 calendar days of receipt; and, conversely, is not obligated to pay any claim until it has been so verified” (Nyack Hosp. v General Motors Acceptance Corp., 8 NY3d 294, 299 [2007]). Once claims have been verified they are subject to the priority of payment regulation, 11 NYCRR 65-3.15 (see Nyack Hosp. v General Motors Acceptance Corp., 8 NY3d at 300).

While the defendant submitted records indicating that the subject no-fault policy had been exhausted in 2013, the defendant’s submissions failed to establish its prima facie entitlement to judgment as a matter of law. Although the defendant submitted an affidavit from one of its employees that set forth the defendant’s ordinary business practice of receiving, recording, and denying no-fault claims from medical providers, the affidavit is bereft of any specific information regarding this claim. The defendant failed to submit the no-fault application, verification, any request for verification, or any denial associated with the plaintiff’s claim for payment. “While a witness may read into the record from the contents of a document which has been admitted into evidence, a witness’s description of a document not admitted into evidence is hearsay” (Wells Fargo Bank, N.A. v Sesey, 183 AD3d 780, 783 [2020] [citation and internal quotation marks omitted]). Because “a review of records maintained in the normal course of business does not vest an affiant with personal knowledge” (JPMorgan Chase Bank, N.A. v Grennan, 175 AD3d 1513, 1517 [2019]), the employee’s assertions as to the contents of the no-fault file are inadmissible hearsay (see Wells Fargo Bank, N.A. v Sesey, 183 AD3d at 783; U.S. Bank N.A. v 22 S. Madison, LLC, 170 AD3d 772, 774 [2019]). Accordingly, there are issues of fact remaining as to when the claim was denied, and the basis and efficacy of the denial (see Paulin v Needham, 28 AD3d 531 [2006]).

The parties’ remaining contentions, including those raised by the amici curiae, need not be reached in light of our determination. Chambers, J.P., LaSalle, Barros and Christopher, JJ., concur.

Decided on February 19, 2021

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

Decided on February 19, 2021

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

Decided on February 19, 2021

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

Decided on February 19, 2021

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

Hollander Legal Group , P.C. (Allan S. Hollander of counsel), for appellant. The Rybak Firm, PLLC (Damin J. Toell and Karina Barska of counsel), for respondent.

Appeal from an order of the Civil Court of the City of New York, Kings County (Odessa Kennedy, J.), entered May 31, 2019. The order, insofar as appealed from as limited by the brief, denied defendant’s motion for, in effect, summary judgment dismissing the complaint.

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

Plaintiff Allay Medical Services, P.C. (Allay) commenced this action on June 1, 2016 to recover assigned first-party no-fault benefits for injuries sustained by “Miller, Nichole” in an accident on October 31, 2015, the complaint stating that claim number 363323-GC had been assigned to the matter. Defendant Nationwide Ins. (Nationwide) served an answer and, thereafter, moved to dismiss the complaint pursuant to CPLR 3211 (a) (5), contending that plaintiff’s action was barred, insofar as is relevant, under the doctrine of res judicata, by an order and judgment in a Supreme Court declaratory judgment action. The Supreme Court order and judgment, entered April 25, 2016 upon the default of Allay in opposing a motion by Nationwide, declared that Nationwide was “under no obligation to pay any of the claims identified in Exhibit 1 to the Complaint.” Among other things, Exhibit 1 identified claim number 363323-GC and an accident on October 31, 2015, and listed the eligible injured person as having the initials N.M. Plaintiff opposed defendant’s motion in the Civil Court. As limited by its brief, defendant appeals from so much of an order of the Civil Court entered May 31, 2019 as denied the motion.

For the reasons stated in Allay Med. Servs., as Assignee of Diop, Gregoria v Nationwide Ins. (— Misc 3d &mdash, 2021 NY Slip Op _____ [appeal No. 2019-1180 K C], decided herewith), the order, insofar as appealed from, is reversed, and defendant’s motion for, in effect, summary judgment dismissing the complaint is granted.

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

Hollander Legal Group , P.C. (Allan S. Holllander of counsel), for appellant. The Rybak Firm, PLLC (Damin J. Toell and Karina Barska of counsel), for respondent.

Appeal from an order of the Civil Court of the City of New York, Kings County (Odessa Kennedy, J.), dated May 31, 2019. The order, insofar as appealed from as limited by the brief, denied defendant’s motion for, in effect, summary judgment dismissing the complaint.

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

Plaintiff Allay Medical Services, P.C. (Allay) commenced this action on June 1, 2016 to recover assigned first-party no-fault benefits for injuries sustained by “Diop, Gregoria” in an accident on July 3, 2015, the complaint stating that claim number 859968 had been assigned to the matter. Defendant Nationwide Ins. (Nationwide) served an answer and, thereafter, moved to dismiss the complaint pursuant to CPLR 3211 (a) (5), contending that plaintiff’s action was barred, insofar as is relevant, under the doctrine of res judicata, by an order and judgment in a Supreme Court declaratory judgment action. The Supreme Court order and judgment, entered April 25, 2016 upon the default of Allay in opposing a motion by Nationwide, declared that Nationwide was “under no obligation to pay any of the claims identified in Exhibit 1 to the Complaint.” Among other things, Exhibit 1 identified claim number 859968 and an accident on July 3, 2015, and listed the eligible injured person as having the initials G.D. Plaintiff opposed defendant’s motion in the Civil Court. As limited by the brief, defendant appeals from so much of an order of the Civil Court entered May 31, 2019 as denied the motion.

Initially, we note that, although defendant’s motion was denominated as one to dismiss the complaint pursuant to CPLR 3211 (a) (5), the motion was made after issue was joined (see generally CPLR 3211 [e]). “Whether or not issue has been joined, the court, after adequate notice to the parties, may treat the motion as a motion for summary judgment” (CPLR 3211 [c]). While the Civil Court never notified the parties that it was treating the motion as one for [*2]summary judgment, an exception to the notice requirement is applicable, as defendant’s motion exclusively involved “a purely legal question rather than any issues of fact” (Mihlovan v Grozavu, 72 NY2d 506, 508 [1988]; see Four Seasons Hotels v Vinnik, 127 AD2d 310, 320 [1987]; Renelique v State-Wide Ins. Co., 50 Misc 3d 137[A], 2016 NY Slip Op 50095[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2016]). Consequently, it was proper for the Civil Court to treat defendant’s motion to dismiss as one for summary judgment “without first giving notice of its intention to do so” (Four Seasons Hotels, 127 AD2d at 320).

“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]).

As defendant’s moving papers sufficiently established that the claim number and the date of the subject accident in the action at bar are identical to those in the prior action where there has been a final adjudication of the claim on the merits (see Ciraldo, 140 AD3d at 913), plaintiff’s present action in the Civil Court was precluded under the doctrine of res judicata. Consequently, in light of the Supreme Court’s order and judgment, the Civil Court should have granted defendant’s motion (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 and order in the declaratory judgment action (see Schuylkill Fuel Corp., 250 NY at 306-307; 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 at 2).

Accordingly, the order, insofar as appealed from, is reversed, and defendant’s motion for, in effect, summary judgment dismissing the complaint is granted.

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

Law Office of David O’Connor, P.C. (David O’Connor of counsel), for appellant. Rivkin Radler, LLP (Stuart M. Bodoff and Cheryl F. Korman of counsel), for respondent.

Appeal from an order of the Civil Court of the City of New York, Queens County (Philip Hom, J.), entered February 20, 2019. The order granted the branch of defendant’s motion seeking dismissal of the complaint on the ground that plaintiff’s action is barred by the doctrine of collateral estoppel.

ORDERED that the order is reversed, with $30 costs, the branch of defendant’s motion seeking dismissal of the complaint on the ground that plaintiff’s action is barred by the doctrine of collateral estoppel is denied and the matter is remitted to the Civil Court for a determination of the remaining branches of defendant’s motion.

Plaintiff commenced this action in 2003 to recover first-party no-fault benefits as assignee of the eligible injured person for services provided to its assignor, who was allegedly injured in a motor vehicle accident on August 26, 2002. Thereafter, State Farm commenced a declaratory judgment action in Supreme Court, Nassau County, against the assignor and a number of other individuals. Upon the default of the assignor, among others, in submitting opposition to State Farm’s motion for declaratory relief, the Supreme Court, in a judgment entered on November 22, 2006, declared that the August 26, 2002 collision had been a staged accident; that the insurance policy at issue is null and void with regard to any claim arising out of that collision; and that State Farm has no duty to provide no-fault benefits to the assignor herein and the other individual defendants. Defendant then moved in the Civil Court for an order dismissing the complaint on several grounds, including a lack of coverage due to a staged accident, as previously determined by the Supreme Court. In opposition, plaintiff argued that it did not have a “full and fair” opportunity to litigate the declaratory judgment action. By order entered February 20, 2019, the Civil Court granted defendant’s motion, finding that plaintiff’s claim is barred under the doctrine of collateral estoppel.

“Collateral estoppel precludes a party from relitigating an issue where “the issue in the second action is identical to an issue which was raised, necessarily decided and material in the first action, and the plaintiff had a full and fair opportunity to litigate the issue in the earlier action” (Parker v Blauvelt Volunteer Fire Co., 93 NY2d 343, 349 [1999]; see D’Arata v New York Cent. Mut. Fire Ins. Co., 76 NY2d 659 [1990]; Manko v Gabay, 175 AD3d 484 [2019]). As the declaratory judgment was obtained on default and not actually litigated on the merits in the Supreme Court, there is no identity of issues between the present action and the prior determination in the declaratory judgment action (see Kaufman v Eli Lilly & Co., 65 NY2d 449, 456-457 [1985]; Matter of Hereford Ins. Co. v McKoy, 160 AD3d 734, 736 [2018]; 47 Thames Realty, LLC v Rusconie, 85 AD3d 853, 853 [2011]). Moreover, as plaintiff commenced this action in 2003 as assignee of the eligible injured person, plaintiff and its assignor were not in privity when the declaratory judgment action was commenced in 2005. Consequently, contrary to the determination of the Civil Court, plaintiff’s action is not barred under the doctrine of collateral estoppel.

As the Civil Court did not address the alternate grounds asserted by defendant in its motion seeking dismissal of the complaint, the matter must be remitted to the Civil Court for a determination of those remaining grounds (see Magic Recovery Med. & Surgical Supply Inc. v State Farm Mut. Auto. Ins. Co., 27 Misc 3d 67 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2010]; see also McElroy v Sivasubramaniam, 305 AD2d 944 [2003]).

Accordingly, the order is reversed, the branch of defendant’s motion seeking dismissal of the complaint on the ground that plaintiff’s action is barred by the doctrine of collateral estoppel is denied and the matter is remitted to the Civil Court for a determination of the remaining branches of defendant’s motion.

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