July 7, 2015

GBI Acupuncture, P.C. v Nationwide Ins. (2015 NY Slip Op 51048(U))

Headnote

In this case, GBI Acupuncture, P.C. sought to recover first-party no-fault benefits for services provided to its assignor, who was injured in a motor vehicle accident. However, Nationwide Insurance had previously obtained a default judgment from the Supreme Court stating that it was not obligated to provide no-fault benefits to the plaintiff and its assignor. When the case was brought to the Civil Court, Nationwide moved to dismiss the complaint, arguing that the previous Supreme Court order barred the current action under the doctrines of res judicata and collateral estoppel. The Civil Court granted Nationwide's motion to dismiss, holding that the current action was indeed barred by the previous Supreme Court order. The decision was affirmed by the Appellate Term, Second Department on July 7, 2015. The main issue that was decided in this case was whether the current action seeking first-party no-fault benefits was barred by the previous order from the Supreme Court, and the holding was that it was indeed barred under the doctrine of res judicata.

Reported in New York Official Reports at GBI Acupuncture, P.C. v Nationwide Ins. (2015 NY Slip Op 51048(U))

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

GBI Acupuncture, P.C. as Assignee of KARA SHIM BLAKE, Appellant, July 7, 2015
against
Nationwide Ins., Respondent.

Appeal from an order of the Civil Court of the City of New York, Kings County (Genine D. Edwards, J.), entered July 25, 2013. The order granted defendant’s motion to dismiss the complaint.

ORDERED that the order is affirmed, with $25 costs.

In this action to recover assigned first-party no-fault benefits, plaintiff seeks to recover for services it provided to its assignor, who had sustained injuries in a motor vehicle accident that occurred on February 5, 2010. After this action had been commenced in the Civil Court, defendant instituted a declaratory judgment action in the Supreme Court, Onondaga County, against various medical providers and their assignors, including plaintiff herein and its assignor. By order dated April 2, 2012, the Supreme Court granted a motion therein for a default judgment, which order stated that defendant “is not required or obligated to provide no-fault benefits to the defendants SHIM KARA [sic] BLAKE . . . [and] GBI ACUPUNCTURE . . . under NATIONWIDE GENERAL INSURANCE COMPANY policy number 6631 U 001752 . . . resulting from a motor vehicle accident of February 5, 2010.” Nationwide served plaintiff with a copy of the April 2, 2012 Supreme Court order, with notice of entry, in May 2012.

In January 2013, defendant moved to dismiss the Civil Court complaint pursuant to CPLR 3211 (a) (5), on the ground that the April 2, 2012 Supreme Court order in the declaratory judgment action barred the instant action pursuant to the doctrines of res judicata and collateral estoppel. By order entered July 25, 2013, the Civil Court granted defendant’s motion.

Contrary to plaintiff’s contention, the Civil Court correctly determined that the instant action is barred under the doctrine of res judicata by virtue of the April 2, 2012 Supreme Court order (see Ava Acupuncture, P.C. v NY Cent. Mut. Fire Ins. Co., 34 Misc 3d 149[A], 2012 NY Slip Op 50233[U] [App Term, 2d, 11th & 13th Jud Dists 2012]). To hold otherwise could result in a judgment in this action which would destroy or impair rights established by the order rendered by the Supreme Court in the declaratory judgment action (see Schuykill Fuel Corp. v Nieberg Realty Corp., 250 NY 304, 306-307 [1929]; Ava Acupuncture, P.C. v NY Cent. Mut. Fire Ins. Co., 34 Misc 3d 149[A], 2012 NY Slip Op 50233[U]). Moreover, the Supreme Court’s order is a conclusive final determination notwithstanding that it was entered on default, and res [*2]judicata applies to an order or judgment taken by default which has not been vacated (see Lazides v P & G Enters., 58 AD3d 607 [2009]; Matter of Allstate Ins. Co. v Williams, 29 AD3d 688, 690 [2006]; Matter of Eagle Ins. Co. v Facey, 272 AD2d 399 [2000]; Ava Acupuncture, P.C. v NY Cent. Mut. Fire Ins. Co., 34 Misc 3d 149[A], 2012 NY Slip Op 50233[U]).

Accordingly, the order is affirmed.

Aliotta, J.P., Solomon and Elliot, JJ., concur.

Decision Date: July 07, 2015