JOSEPH ONORATO v. BRUCK (2026)

DECISION & ORDER

In an action, inter alia, to recover damages for unjust enrichment and for declaratory relief, the defendants Elena Maydan, Rebecca Chusid, and Carolyn A. Willis appeal from (1) an order of the Supreme Court, Nassau County (Vito M. DeStefano, J.), entered May 7, 2020, and (2) a judgment of the same court entered June 26, 2020.  The order, insofar as appealed from, granted those branches of the plaintiff's motion which were for summary judgment on the first and third causes of action insofar as asserted against the defendants Elena Maydan, Rebecca Chusid, and Carolyn A. Willis and denied those branches of the cross-motion of the defendants Elena Maydan, Rebecca Chusid, and Carolyn A. Willis which were for summary judgment dismissing the first and third causes of action insofar as asserted against them and, in effect, declaring that the plaintiff is not entitled to those defendants' proceeds from Medical Liability Mutual Insurance Company's conversion from a mutual insurance company to a stock insurance company.  The judgment, insofar as appealed from, upon the order, is in favor of the plaintiff and against the defendant Elena Maydan in the principal sum of $197,069.65, in favor of the plaintiff and against the defendant Rebecca Chusid in the principal sum of $43,557.97, and in favor of the plaintiff and against the defendant Carolyn A. Willis in the principal sum of $57,961.69.

By order to show cause dated June 29, 2022, the parties to the appeals were directed to show cause before this Court why an order should or should not be made and entered dismissing the appeal from the order on the ground that the right of direct appeal therefrom terminated upon the entry in the above-entitled action of the judgment.  By decision and order on motion of this Court dated September 2, 2022, the motion was held in abeyance and referred to the panel of Justices hearing the appeals for determination upon the argument or submission thereof.

Upon the order to show cause and the papers filed in response thereto, and upon the argument of the appeals, it is

ORDERED that the motion to dismiss the appeal from the order is granted;  and it is further,

ORDERED that the appeal from the order is dismissed;  and it is further,

ORDERED that the judgment is reversed insofar as appealed from, those branches of the plaintiff's motion which were for summary judgment on the first and third causes of action insofar as asserted against the defendants Elena Maydan, Rebecca Chusid, and Carolyn A. Willis are denied, those branches of the cross-motion of the defendants Elena Maydan, Rebecca Chusid, and Carolyn A. Willis which were for summary judgment dismissing those causes of action insofar as asserted against them and, in effect, declaring that the plaintiff is not entitled to those defendants' proceeds from Medical Liability Mutual Insurance Company's conversion from a mutual insurance company to a stock insurance company are granted, the order is modified accordingly, and the matter is remitted to the Supreme Court, Nassau County, for the entry of an amended judgment in accordance herewith;  and it is further,

ORDERED that one bill of costs is awarded to the defendants Elena Maydan, Rebecca Chusid, and Carolyn A. Willis.

The appeal from the order must be dismissed because the right of direct appeal therefrom terminated with the entry of the judgment in the action (see Matter of Aho, 39 N.Y.2d 241, 248).  The issues raised on the appeal from the order are brought up for review and have been considered on the appeal from the judgment (see CPLR 5501[a][1];  Matter of Aho, 39 N.Y.2d at 248).

The defendants Elena Maydan, Rebecca Chusid, and Carolyn A. Willis (hereinafter collectively the defendants) were physicians employed by the plaintiff.  Pursuant to the defendants' employment agreements, the plaintiff paid the premiums for the defendants' professional liability insurance policies issued by Medical Liability Mutual Insurance Company (hereinafter MLMIC).

The plaintiff commenced this action, inter alia, to recover damages for unjust enrichment (first cause of action) and for a judgment declaring that the plaintiff is entitled to the defendants' proceeds from MLMIC's conversion from a mutual insurance company to a stock insurance company (third cause of action).  The plaintiff moved, among other things, for summary judgment on the first and third causes of action insofar as asserted against the defendants.  The defendants cross-moved, inter alia, for summary judgment dismissing the plaintiff's first and third causes of action and, in effect, declaring that the plaintiff is not entitled to the defendants' proceeds from MLMIC's conversion from a mutual insurance company to a stock insurance company.  In an order entered May 7, 2020, the Supreme Court, among other things, granted those branches of the plaintiff's motion and denied those branches of the defendants' cross-motion.  On June 26, 2020, the court entered a judgment, inter alia, in favor of the plaintiff and against Maydan in the principal sum of $197,069.65, in favor of the plaintiff and against Chusid in the principal sum of $43,557.97, and in favor of the plaintiff and against Willis in the principal sum of $57,961.69.  The defendants appeal.

“[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 policy holder is entitled to the proceeds from the demutualization” (Columbia Mem. Hosp. v. Hinds, 38 NY3d 253, 276–277).

“On any motion for summary judgment, the moving party bears the burden of establishing, through admissible evidence, a prima facie entitlement to judgment in its favor as a matter of law” (HSBC Bank USA, N.A. v. St. Hillaire, ––– AD3d ––––, ––––, 2026 N.Y. Slip Op 00353, *1;  see Alvarez v. Prospect Hosp., 68 N.Y.2d 320, 324).  “Only if the prima facie burden is met does the burden shift to the party opposing summary judgment to raise an issue of fact requiring a trial” (HSBC Bank USA, N.A. v. St. Hillaire, ––– AD3d at ––––, 2026 N.Y. Slip Op 00353, *1;  see Zuckerman v. City of New York, 49 N.Y.2d 557, 562).

Here, where it is not disputed that the defendants were the policyholders, the plaintiff failed to establish its prima facie entitlement to judgment as a matter of law.  The plaintiff failed to establish that the defendants assigned their rights to the proceeds from MLMIC's demutualization to the plaintiff (see Columbia Mem. Hosp. v. Hinds, 38 NY3d at 276–277;  Wyckoff Imaging Servs., P.C. v. Blutreich, 228 AD3d 990, 991).  Moreover, the plaintiff failed to establish, prima facie, that the defendants would be unjustly enriched by their receipt of the cash consideration for their ownership interests as members of MLMIC (see Columbia Mem. Hosp. v. Hinds, 38 NY3d at 275–276;  Wyckoff Imaging Servs., P.C. v. Blutreich, 228 AD3d at 991).  Accordingly, those branches of the plaintiff's motion which were for summary judgment on the first and third causes of action insofar as asserted against the defendants should have been denied regardless of the sufficiency of the defendants' opposition papers (see Winegrad v. New York Univ. Med. Ctr., 64 N.Y.2d 851, 853).

Furthermore, since the defendants were the policyholders and did not assign their rights to the demutualization proceeds to the plaintiff, the defendants established their prima facie entitlement to judgment as a matter of law dismissing the first and third causes of action insofar as asserted against them and, in effect, declaring that the plaintiff is not entitled to the defendants' proceeds from MLMIC's conversion from a mutual insurance company to a stock insurance company (see Columbia Mem. Hosp. v. Hinds, 38 NY3d at 276–277;  Wyckoff Hgts. Med. Ctr. v. Olivier, 244 AD3d 792, 793–794).  In opposition, the plaintiff failed to raise a triable issue of fact (see Alvarez v. Prospect Hosp., 68 N.Y.2d at 326–327).  Accordingly, the Supreme Court should have granted those branches of the defendants' cross-motion which were for summary judgment dismissing the first and third causes of action insofar as asserted against them and, in effect, declaring that the plaintiff is not entitled to the defendants' proceeds from MLMIC's conversion from a mutual insurance company to a stock insurance company.

Since this is, in part, a declaratory judgment action, we remit the matter to the Supreme Court for the entry of an amended judgment, among other things, declaring that the plaintiff is not entitled to the defendants' proceeds from MLMIC's conversion from a mutual insurance company to a stock insurance company (see Lanza v. Wagner, 11 N.Y.2d 317, 334).

LASALLE, P.J., CHRISTOPHER, LANDICINO and MCCORMACK, JJ., concur.