Eagle Surgical Supply, Inc. v AIG Indem. Ins. Co. (2013 NY Slip Op 51441(U))

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

Appeal from an order of the Civil Court of the City of New York, Kings County (Genine D. Edwards, J.), entered September 16, 2011. The order granted plaintiff’s motion for summary judgment and denied defendant’s cross motion for summary judgment dismissing the complaint.

ORDERED that the order is reversed, without costs, plaintiff’s motion for summary judgment is denied and defendant’s cross motion for summary judgment dismissing the complaint is granted.

In this action by a provider to recover assigned first-party no-fault benefits for injuries plaintiff’s assignor had sustained in a motor vehicle accident in July 2007, plaintiff moved to compel discovery. Thereafter, the parties entered into a so-ordered stipulation, dated July 25, 2008, pursuant to which defendant was to provide plaintiff with responses to its interrogatories within 60 days “or be precluded from offering evidence at trial.”

In 2009, defendant commenced a declaratory judgment action in Supreme Court, Nassau County, against, among others, plaintiff and its assignor, in regard to a number of accidents, including the July 2007 accident. The Supreme Court issued a stay of all pending and future actions between the parties in February 2009. On June 15, 2010, a default declaratory judgment was entered in the Supreme Court in favor of defendant, finding, among other things, that the policy in connection with plaintiff’s claim is “null and void,” that defendant had no duty to provide coverage for the subject no-fault claim, and that since plaintiff and its assignor had “violated their respective obligation [sic] to appear for an examination under oath . . . [defendant] has no duty to defend or indemnify [plaintiff and its assignor] . . . for any claims of personal injury, no-fault, UM or SUM benefits.”

In 2011, plaintiff moved, in the Civil Court action, for a final order of preclusion and summary judgment. Defendant cross-moved for summary judgment dismissing the Civil Court complaint on the ground that the June 15, 2010 declaratory judgment had res judicata effect. Thereafter, by order dated September 16, 2011, the Civil Court granted plaintiff’s motion and denied defendant’s cross motion.

The doctrines of res judicata and collateral estoppel are designed to put an end to a matter [*2]once it is duly decided (see Siegel, NY Prac § 442, at 747 [4th ed]). Res judicata, or claim preclusion, is invoked when a party, or those in privity with the party, seek to relitigate a disposition on the merits of claims or causes of action arising out of the same transaction or series of transactions which were raised or could have been raised in the prior litigation (see Matter of Hunter, 4 NY3d 260, 269 [2005]; Schuylkill Fuel Corp. v Nieberg Realty Corp., 250 NY 304, 306-307 [1929]). It is well settled that default judgments can have res judicata effect (see Lazides v P & G Enters., 58 AD3d 607 [2009]; Ava Acupuncture, P.C. v N Y Cent. Mut. Fire Ins. Co., 34 Misc 3d 149[A], 2012 NY Slip Op 50233[U] [App Term, 2d, 11th & 13th Jud Dists 2012]).

Although the conditional preclusion order contained in the July 2008 so-ordered stipulation became absolute upon defendant’s failure to comply therewith (see e.g. Panagiotou v Samaritan Vil., Inc., 66 AD3d 979 [2009]; State Farm Mut. Auto. Ins. Co. v Hertz Corp., 43 AD3d 907, 908 [2007]; Siltan v City of New York, 300 AD2d 298 [2002]; Midisland Med., PLLC v NY Cent. Mut. Ins. Co., 27 Misc 3d 141[A], 2010 NY Slip Op 50993[U] [App Term, 2d, 11th & 13th Jud Dists 2010]; Coleman v Thompson, 5 Misc 3d 136[A], 2004 NY Slip Op 51543[U] [App Term, 2d & 11th Jud Dists 2004]), thereby precluding defendant “from offering evidence at trial,” it did not preclude the Civil Court from giving res judicata effect to the June 10, 2010 declaratory judgment (see e.g. Kingsbrook Jewish Med. Ctr. v Allstate Ins. Co., 61 AD3d 13, 20 [2009]; Ptasznik v Schultz, 247 AD2d 197, 198 [1998]).

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

Weston, J.P., Rios and Aliotta, JJ., concur.
Decision Date: August 21, 2013