EA CHIROPRACTIC DIAGNOSTICS, P.C. a/a/o Kyle Horrobin, EA Chiropractic Diagnostics, P.C. a/a/o Kelicia Wilkey, EA Chiropractic Diagnostics, P.C. a/a/o Charisse Broadus, EA Chiropractic Diagnostics, P.C. a/a/o Mariah Broadus, Plaintiff, v. PROGRESSIVE INSURANCE COMPANY, Defendant.
Recitation, as required by Civil Procedure Law and Rules (CPLR) § 3219(a), of the papers considered on the review of this motion for summary judgment.
Notice of Motion and Annexed Affidavits 1
Notice of Cross-Motion and Annexed Affidavits 2
Plaintiff's Affirmation in Opposition 3
Upon the foregoing cited papers, the Decision/Order on this motion is as follows:
EA Chiropractic Diagnostics, PC (“Plaintiff/Assignee”), appearing by its attorney in this No-Fault proceeding, moves this Court pursuant to CPLR § 3212(a) for an Order granting summary judgment in the amount $5,039.71 on the grounds that Plaintiff established a prima facie case of entitlement to payment of the bills. Progressive Insurance Company (“Defendant/Insurer”) opposes Petitioner's motion and cross-moves for an Order pursuant to CPLR § 3212(g) granting summary judgment and dismissing the complaint pursuant to collateral estoppel and res judicada. Petitioner opposes the Defendant's relief because the declaratory judgment was entered on default and there in no privity between the parties. Plaintiff's motion for summary judgment is DENIED and Defendant's cross-motion for summary judgment is GRANTED.
Plaintiff is a medical service provider that commenced the instant No-Fault action seeking payment for medical services rendered for alleged injuries to assignors Kyle Horrobin (Claim number 183413617, Date of Accident March 10, 2018), Kelicia Wilkey (Claim Number 182417591, Date of Accident, March 3, 2018), Charisse Broadus (Claim Number 182417591, Date of Accident), and Mariah Broadus (Claim Number 182417591, Date of Accident, March 3, 2018).1
Plaintiff incorrectly named “Progressive Insurance Company” as the insurance provider for both claims. Subsequently, on or about April 14, 2017, Defendant commenced a declaratory judgment action against the Plaintiff in Supreme Court in Nassau County (Index Number 2147/2017) seeking an Order that the Plaintiff is not entitled to payment of No-Fault benefits for the claims submitted to Defendant. The verified complaint alleged Plaintiff engaged in a fraudulent scheme that included but was not limited to: unlawful fee-splitting with non-physicians, providing medical services with disregard to medical necessity and fraudulent incorporation. See Defendant's Exhibit C. On or about June 8, 2018, Nassau County Supreme Court granted Defendant's motion for default judgment and “[a]djudged and decreed․the [Defendant] has no obligation to pay any present outstanding and future No-Fault claims” to the Plaintiffs.” See Defendant's Exhibit D. Plaintiff did not file an answer or appeal the declaratory judgment action. On or about November 30, 2018, Defendant served the Plaintiff the declaratory judgment. See Defendant's Exhibit D.
Plaintiff filed a Summons and Verified Complaint dated August 1, 2018 (Index Number 737391/ 2018) seeking first party No-Fault benefits for unpaid medical bills totaling $5,039.71. The claims of assignors Kyle Horrobin, Kelicia Wilkes, Charisse Broadus, and Mariah Broadus were joined since they were based on a common question of law and fact. The Verified Complaint alleged the assignor Kyle Horrobin received medical services from March 16, 2018 to June 8, 2018 for injuries related to an alleged automobile accident that occurred on March 10, 2018; assignor Kelicia Wiley received medical services from March 27, 2018 to June 21, 2018 for injuries related to an alleged automobile accident that occurred on March 3, 2018; assignor Charisse Broadus received medical services from March 30, 2018 to June 13, 2018 for injuries related to an alleged automobile accident that occurred on March 3, 2018; and assignor Mariah Broadus received medical services from March 30, 2018 to June 21, 2018 injuries related to an alleged automobile accident that occurred on March 3, 2018. On or about October 12, 2018, Defendant submitted a general denial of Plaintiff's allegations and asserted counter claims that included lack of personal jurisdiction, improper ownership of a professional corporation and the action is barred by res judicada and/or collateral estoppel. The Plaintiff filed the instant motion for summary judgment on or about March 14, 2019. The Defendant filed the instant cross motion on or about February 13, 2020.
In deciding a motion for summary judgment, the Court's role is solely to determine if any triable issues exist, not to determine the merits of any such issues. Sillman v. Twentieth Century-Fox Film Corp., 3 NY.2d 395 (1957). Summary judgment may only be granted if no genuine triable issue of fact is presented. See Thomas v. New York City Transit Authority, 194 AD2d 663 (2nd Dep't 1993).
The movant must establish the cause of action sufficiently to warrant the Court as a matter of law in directing judgment in the movant's favor and must do so by evidentiary proof in admissible form. See CPLR § 3212(b); Friends of Animals, Inc. v. Associated Fur Mfrs., 46 NY2d 1065 (1979). “The proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to eliminate any material issues of fact from the case.” Winegrad v. New York University Medical Center, 64 NY2d 851, 853 (1986). Once the movant has met its burden, then the burden shifts to the opposing party to establish the existence of material issues of fact that would require a trial of the action. Alvarez v. Prospect Hospital, 68 N.Y.S. 2d 320, 324 (1986).
Once such entitlement has been demonstrated by the movant, then the burden shifts to the party opposing the motion to demonstrate by admissible evidence that existence of a factual issue requiring a trial of the action or tender an acceptable excuse for his failure to do so. Zuckerman v. City of New York, 49 NY2d 557, 560. However, the Court of Appeals has made clear that bare allegations or conclusory assertions are insufficient to create genuine, bona fide issues of fact necessary to defeat such a motion. Rotuba Extruders, Inc. v. Ceppos, 46 NY2d 223, 231 (1978).
New York State Insurance Law and Regulations 11 NYCRR § 65 (“Regulations”) provides that an insurer must pay or deny a claim for No-Fault benefits within thirty days from the receipt of the claim. See Insurance Law § 5106 and Regulation § 65-3.8. Defendant must produce legally sufficient evidence that a denial form was generated and mailed within 30-days of receipt of the claim for No-Fault benefits, or the time was tolled by issuing a proper verification request. Jul Pol Corp. v. State Farm Fire and Casualty Company, 2003 NY Slip 51153 (U) (App. Term, 2nd and 11th Jud. Dists., July 9, 2003.).
Under New York state law, default judgments that have not been vacated are final Orders and can preclude Plaintiff's claims for payment. See Lazides v. P & G Enters., 58 AD3d 607, 871 NYS2d 357 (2nd Dept 2009), revg 2007 WL 6861118 (Sup Ct, Kings County 2007). Courts have reasoned that to hold otherwise would destroy or impair the rights or interests established by default judgment. See Schuylkill Fuel Corp. v. Nieberg Realty Corp., 250 NY 304, 306-307, 165 NE 456 ; Great Health Care Chiropractic, P.C. v. Progressive Ins. Co., 48 Misc 3d 134[A], 18 NYS3d 579, 2015 NY Slip Op 51077[U] [App Term, 2nd Dept, 2d, 11th & 13th Jud. Dists. 2015]. An order specifying the Court's declaratory judgment is a conclusive final determination, notwithstanding that it was entered on default. (Metro Health Prods., Inc. v. Nationwide Ins., 48 Misc 3d 85, 16 NYS3d 366 [App. Term, 2nd Dept, 2d, 11th & 13th Jud. Dists., 2015].
The threshold issue is whether under New York's No-Fault Insurance law, the default judgment that has not been vacated precludes the Plaintiff, from collecting payment for services rendered. As such, this Court need not consider whether Plaintiff met its prima facie showing of entitlement to payment for medical services rendered between March 16, 2018 through June 21, 2018.
Position of the Parties
The Defendant Insurer's cross-motion to dismiss the complaint established that the Nassau County Supreme Court declaratory judgment, issued on default, is a final Order delineating the rights and obligations of the parties, including that the Defendant has no obligation to pay “any present outstanding and future No-Fault claims” to the Plaintiff. See Defendant's Cross-Motion, Exhibit D.
In its reply, Plaintiff relies on federal cases to assert that in general, default judgments do not preclude claims for No-Fault payments. Plaintiff argues that “default judgments lack issue-preclusive effect”. See Plaintiff's reply citing In re Adler, Coleman Clearing Corp., 205 Fed. Appx. 856, 887 (2d Cir. 2006) citing Abrams v. Interco. Inc., 719 F.2d 23, 34 n. 9 (2d Cir. 1983). Plaintiff also argues that “[u]nder New York law, collateral estoppel forecloses only those issues that have been ‘actually litigated and determined in a prior action,’ and ‘[a]n issue is not actually litigated if there has been a default.” Yoon v. Fordham Univ. Faculty & Administrative Retirement Plan, 263 F.3d 196, 202 n.7 (2d. Cir. 2001) citing Pigliavento v. Tyler Equip. Corp., 233 AD2d 810, 811 (3d Dep't 1996). Pursuant to New York state law, default judgments are final Orders and can preclude Plaintiff's claims for payment unless it was vacated. See Lazides v. P & G Enters., 58 AD3d 607, 871 NYS2d 357 (2nd Dept 2009), revg 2007 WL 6861118 (Sup Ct, Kings County 2007).
Plaintiff also argues that named Defendant “Progressive Insurance Company” is not a named plaintiff in the Nassau County Supreme Court declaratory judgment action and lacks privity to claim res judicada or collateral estoppel. See Plaintiff's Affirmation in Opposition, Paragraph 22. Through each assignor's declaration pages and the affidavit of Senior Progressive Medical Representative, Todd Bisallion, Defendant Insurer corrected the Progressive entity related to each assignor: Progressive Max Insurance Company as the underwriter to Kyle Horribin's claims and Progressive Casualty Insurance Company as the underwriter to Kelicia Wilkey, Charisse Broadus, and Mariah Broadus. See Defendant's Cross-Motion, Exhibit B. Both Progressive Max Insurance Company and Progressive Casualty Insurance Company were named Plaintiffs in the Nassau County Supreme Court action. See Defendant's Cross Motion, Exhibit D.
In seeking its No-Fault benefits, Plaintiff improperly relies on cases where the declaratory judgment was entered on default and “there was no actual litigation on the issues, and therefore, no identity of the issues.” See Magic Recovery Med. & Surgical Supply, Inc. v. State Farm Mut. Auto Ins. Co., 901 N.Y.S.2d 774 (NY App. Term 2d, 11th & 13th Jud. Dists., 2010). When “the dismissal was not ‘on the merits’ ” or entered “with prejudice” a new action between the same parties for the same cause of action is not precluded. See also EMA Acupuncture, P.C. v. Lumbermens Mut. Cas. Co., 911 N.Y.S.2d 692 (NY Sup. App. Term 2d, 11th & 13th Jud. Dists., 2010).
Both Magic and EMA are distinguishable from the instant matter. In Magic, the Appellate Term, Second Department reversed a June 21, 2007 Kings County Civil Court Order granting summary judgment pursuant to collateral estoppal as a result of a Nassau County Supreme Court declaratory judgment, granted on default. The Court found the Magic plaintiff was “neither named, nor served in the declaratory actions nor, at the time, was it in privity with someone who was․” and held the plaintiff's defense of privity survived the declaratory judgment and was not collaterally estopped from seeking recovery in the civil court action. See Magic Recovery Med. & Surgical Supply, Inc. v. State Farm Mut. Auto Ins. Co., 901 N.Y.S.2d 774 (NY App. Term 2d, 11th & 13th Jud. Dists., 2010). Here, the Plaintiff was named as a defendant in the Nassau County Supreme Court action and was served with the summons and verified complaint and subsequently with the notice of entry of declaratory judgment. While the named Defendant in this action is “Progressive Insurance Company” and is not named on the Nassau County declaratory judgement as “Progressive Insurance Company,” the Defendant Insurer's correction of the Plaintiff's failure to name the correct insurers Progressive Max Insurance and Progressive Casualty Insurance was unrebutted by Plaintiff.
In EMA, the Appellate Term, Second Department reversed a December 18, 2009 Kings County Civil Court Order that granted the defendant's motion for summary judgment dismissing the complaint based on res judicada grounds holding that the underlying Order did not specifically recite the rights and obligations of the parties. In EMA, plaintiff commenced an action in Queens County Civil Court for payment of first party No-Fault insurance benefits. While the defendant's motion to dismiss was pending in Queens County Civil Court, the plaintiff did not respond and did not appear for a February 4, 2008 return date on the motion to dismiss. Instead on January 23, 2008, plaintiff commenced an action in Kings County Civil Court based on the same cause of action. In Kings County Civil Court, the defendant relying on the Queens County Civil Court Order of dismissal, moved for summary judgment to dismiss the Kings County matter on res judicada grounds. The Court found that the February 4, 2008 Queens County Civil Court Order did not specify whether the dismissal was “on the merits” or “with prejudice” and held that the dismissal Order did not preclude “a new action between the same parties for the same cause of action.” See EMA Acupuncture, P.C. v. Lumbermens Mut. Cas. Co., 911 N.Y.S.2d 692 (NY Sup. App. Term 2d, 11th & 13th Jud. Dists., 2010 citing Greenberg v. De Hart, 4 NY2d 511 (1958). The declaratory judgment in the instant case, clearly recites the requested declaratory relief requested by the Defendant Insurer. Its definitive language left no ambiguity as to the rights and obligations of the parties. See Metro Health Prods., Inc. v. Nationwide Ins., 48 Misc 3d 85, 16 NYS3d 366 (App. Term, 2nd Dept, 2d, 11th & 13th Jud. Dists., 2015); see Defendant's Cross-Motion, Exhibit D.
Plaintiff also improperly relies on Jamaica Wellness Med., P.C. v. Mercury Cas. Co., 483 N.Y.S.2d 196 (2018) to support its position that an Order granting “the default could not be considered a conclusive determination of plaintiff's rights and is not preclusive to this case.” See Plaintiff's Affirmation in Opposition, paragraph 27, Exhibit A. The March 23, 2016 Order in Jamaica is distinguishable from the Order in this case. The Order in Jamaica “merely awarded a default judgment to the [defendant] but did not declare the rights of [defendant] as against Jamaica.” Id. Conversely, in the instant matter, the rights of the defendant insurer are declared by Nassau County Supreme Court Declaratory Judgment. See Defendant's Cross-Motion, Exhibit D.
The Nassau County Supreme Court's declaratory judgment in the instant action is a final conclusive determination, that was not vacated, and has a preclusive effect. Defendant Insurer's cross-motion is granted in its entirety. Plaintiff's motion for summary judgment is denied. It is hereby ordered that the action is dismissed.
This constitutes the Decision and Order of the Court.
1. The instant lawsuit involves two separate automobile accidents. Kyle Korrobin's automobile accident occurred on March 10, 2018 and Progressive Max Insurance is the underwriter for his claims. The automobile accident involving Kelicia Wilkey, Charisse Broadus and Mariah Broadus occurred on March 3, 2018 and their claims are addressed under a single claim number and Progressive Casualty Insurance is the underwriter for these claims.
Patria Frias-Colón, J.
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