AMERICAN TRANSIT INSURANCE COMPANY v. Paul Desriusseaux, et al., Defendants-Appellants. (1997)

Judgment, Supreme Court, New York County (Norman Ryp, J.), entered October 21, 1996, declaring in plaintiff insurer's favor that it has no obligation to defend or indemnify defendants vehicle owner and driver in a negligence action in which defendants-appellants are plaintiffs, unanimously affirmed, without costs.

Plaintiff has no obligation to defend or indemnify defendants owner and driver, it being undisputed that any insurance coverage was terminated at least two and a half months before the accident.   The prior proceeding, which resulted in a finding that the offending vehicle was insured by plaintiff at the time of the accident (see, Desriusseaux v. Val-Roc Truck Corp., 230 A.D.2d 704, 646 N.Y.S.2d 161), does not collaterally estop plaintiff from asserting otherwise herein, the prior finding of coverage having been made on default in a proceeding that involved a potential financial exposure inconsequential compared to the damages sought in the negligence action (see, Matter of Halyalkar v. Board of Regents, 72 N.Y.2d 261, 532 N.Y.S.2d 85, 527 N.E.2d 1222).

MEMORANDUM DECISION.