WYCKOFF HEIGHTS MEDICAL CENTER v. OLIVIER (2025)

DECISION & ORDER

In an action, inter alia, for declaratory relief, the plaintiff appeals from an order of the Supreme Court, Kings County (Larry D. Martin, J.), dated January 18, 2022.  The order, insofar as appealed from, upon reargument, vacated so much of an undated order of the same court as, in effect, denied that branch of the motion of the defendant Wendy–Ann Michelle Olivier which was for summary judgment, in effect, declaring that the plaintiff is not entitled to receive certain funds on the ground that distribution of the funds to the defendant Wendy–Ann Michelle Olivier would constitute a breach of contract and, thereupon, granted that branch of the motion.

ORDERED that the order dated January 18, 2022, is affirmed insofar as appealed from, with costs, and the matter is remitted to the Supreme Court, Kings County, for the entry of a judgment, inter alia, declaring that the plaintiff is not entitled to receive certain funds on the ground that distribution of the funds to the defendant Wendy–Ann Michelle Olivier would constitute a breach of contract.

The plaintiff is a medical practice in Brooklyn that employed the defendant Wendy–Ann Michelle Olivier as a physician pursuant an employment agreement dated June 8, 2016.  Pursuant to the employment agreement, the plaintiff procured, and paid the premiums for, a professional liability insurance policy for Olivier from the defendant MLMIC Insurance Company (hereinafter MLMIC).  Olivier was named as the insured of the policy, and the plaintiff was named as the policy administrator.

MLMIC subsequently converted from a mutual insurance company to a stock insurance company.  MLMIC's state-approved conversion plan provided that eligible MLMIC policyholders, or their designees, would receive cash consideration in exchange for the extinguishment of the policyholder's membership interest (see generally Insurance Law § 7307[e][3]).

The plaintiff commenced this action, inter alia, for a judgment declaring that it is entitled to receive Olivier's share of the cash consideration due under the conversion plan on the grounds that distribution of the cash consideration to her would constitute a breach of her employment agreement and unjust enrichment.  Olivier moved, among other things, for summary judgment, in effect, declaring that the plaintiff is not entitled to receive Olivier's share of the cash consideration on the ground that distribution of the cash consideration to her would constitute a breach of her employment agreement.  In an undated order, the Supreme Court, inter alia, in effect, denied that branch of Olivier's motion.

Thereafter, Olivier moved, among other things, for leave to reargue that branch of her prior motion which was for summary judgment, in effect, declaring that the plaintiff is not entitled to receive Olivier's share of the cash consideration on the ground that distribution of the cash consideration to her would constitute a breach of her employment agreement.  In an order dated January 18, 2022, the Supreme Court, inter alia, upon reargument, granted that branch of Olivier's prior motion.  The plaintiff appeals.

“[W]hen an employer pays premiums to a mutual insurance company to obtain a policy of which its employee is the policyholder, and the insurance company demutualizes, absent contrary terms in the contract of employment, insurance policy, or separate agreement, the policyholder is entitled to the proceeds from the demutualization” (Columbia Mem. Hosp. v. Hinds, 38 N.Y.3d 253, 276–277, 172 N.Y.S.3d 649, 192 N.E.3d 1128;  see Maple Med., LLP v. Scott, 191 A.D.3d 81, 93, 138 N.Y.S.3d 61, affd sub nom.  Columbia Mem. Hosp. v. Hinds, 38 N.Y.3d 253, 172 N.Y.S.3d 649, 192 N.E.3d 1128).  Here, the conversion plan expressly defined policyholder as the person identified on the declarations page of the policy as the insured, which, here, was Olivier.  Since Olivier was the policyholder and did not assign her rights to the cash consideration to the plaintiff, she was entitled to those funds (see Columbia Mem. Hosp. v. Hinds, 38 N.Y.3d at 276–277, 172 N.Y.S.3d 649, 192 N.E.3d 1128;  Wyckoff Imaging Servs., P.C. v. Blutreich, 228 A.D.3d 990, 991, 214 N.Y.S.3d 440;  Benoit v. Jamaica Anesthesiologist, P.C., 207 A.D.3d 429, 430, 169 N.Y.S.3d 519).

Accordingly, the Supreme Court, upon reargument, properly granted that branch of Olivier's motion which was for summary judgment, in effect, declaring that the plaintiff is not entitled to receive Olivier's share of the cash consideration on the ground that distribution of the cash consideration to her would constitute a breach of her employment agreement.

The parties’ remaining contentions are without merit.

Since this is, in part, a declaratory judgment action, we remit the matter to the Supreme Court, Kings County, for the entry of a judgment, inter alia, declaring that the plaintiff is not entitled to receive Olivier's share of the cash consideration on the ground that distribution of the cash consideration to her would constitute a breach of her employment agreement (see Lanza v. Wagner, 11 N.Y.2d 317, 334, 229 N.Y.S.2d 380, 183 N.E.2d 670).

GENOVESI, J.P., FORD, WAN and MCCORMACK, JJ., concur.