December 1, 2015

Stracar Med. Servs. v Nationwide Mut. Ins. Co. (2015 NY Slip Op 51761(U))

Headnote

The court considered the circumstances of an automobile accident and the subsequent assignment of first-party no-fault benefits to the plaintiff. The main issue decided was whether the defendant was entitled to summary judgment dismissing the complaint based on an order from a Virginia court voiding the insurance policy ab initio. The holding of the case was that the plaintiff was not bound by the Virginia court's order because it was not a party to, nor in privity with a party to, the Virginia action. Therefore, the defendant was not entitled to judgment as a matter of law, and the motion for summary judgment dismissing the complaint was denied.

Reported in New York Official Reports at Stracar Med. Servs. v Nationwide Mut. Ins. Co. (2015 NY Slip Op 51761(U))

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

Stracar Medical Services as Assignee of Santerria Macklin, Appellant,
against
Nationwide Mutual Ins. Co., Respondent.

Appeal from an order of the Civil Court of the City of New York, Kings County (Harriet L. Thompson, J.; op 39 Misc 3d 1216[A], 2013 NY Slip Op 50633[U]), entered March 7, 2013. The order granted defendant’s motion for summary judgment dismissing the complaint.

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

On June 28, 2008, plaintiff’s assignor was injured in an automobile accident. On July 14, 2008, plaintiff’s assignor assigned her right to be reimbursed for first-party no-fault benefits to plaintiff. On September 29, 2008, defendant received a claim from plaintiff for services rendered to plaintiff’s assignor between August 13, 2008 and September 9, 2008. By letter dated October 6, 2008, defendant notified plaintiff that the claim was delayed pending an examination under oath (EUO) of plaintiff’s assignor, which had previously been scheduled for October 8, 2008. On October 27, 2008, defendant received another claim from plaintiff for services rendered to plaintiff’s assignor between September 8, 2008 and October 7, 2008. On October 27, 2008, defendant notified plaintiff that the claim was delayed pending an EUO of plaintiff’s assignor scheduled for November 7, 2008. Defendant also requested other documentary verification. By letter dated December 23, 2008, defendant sent a letter to plaintiff’s assignor advising her that defendant had voided ab initio the automobile insurance policy which she had obtained due to her having made material misrepresentations as to where the vehicle would be kept. On December 29, 2008, defendant denied both of the claims which are at issue in this action on the ground there was no coverage because, by the December 23, 2008 letter, defendant had rescinded the policy ab initio. On or about February 17, 2009, defendant commenced an action in Virginia against the assignor to void the insurance policy ab initio due to the assignor’s material misrepresentations. On August 18, 2009, the assignor and defendant agreed to the entry of a “dismissal order” in the Virginia action which voided the insurance policy ab initio.

On July 29, 2010, plaintiff commenced this action to recover assigned first-party no-fault benefits upon the claims which plaintiff had submitted and defendant had received. Subsequently, defendant moved for summary judgment dismissing the complaint based upon the Virginia court’s August 18, 2009 order rescinding plaintiff’s assignor’s underlying automobile insurance policy. By order entered March 7, 2013, the Civil Court granted defendant’s motion.

In support of its motion, defendant submitted, among other things, the February 2009 complaint in the Virginia action and a copy of the “dismissal order” in the Virginia action, dated August 18, 2009, signed by counsel for both parties, which declared the subject insurance policy to be void ab initio.

On appeal, plaintiff argues that the Virginia “dismissal order” should not have been considered by the Civil Court, as the order was not certified. Plaintiff further argues that, in any event, it is not bound by the order, since it was neither a party to, nor in privity with a party to, the Virginia action.

We agree with plaintiff’s contention that, since it was not a party to the Virginia action, it is not bound by the “dismissal order” rendered therein, as it did not have a full and fair opportunity to defend its interests in that action. Although plaintiff’s assignor was a party to the Virginia action, defendant failed to show that plaintiff was in privity with the assignor at the time the Virginia action was commenced (see Gramatan Home Invs. Corp. v Lopez, 46 NY2d 481, 486-487 [1979]; Quality Psychological Servs. v Infinity Prop. & Cas. Co., 47 Misc 3d 142[A], 2015 NY Slip Op 50645[U] [App Term, 1st Dept 2015]; see also Smooth Dental, P.L.L.C. v Preferred Mut. Ins. Co., 37 Misc 3d 67 [App Term, 2d, 11th & 13th Jud Dists 2012]; Magic Recovery Med. & Surgical Supply Inc. v State Farm Mut. Auto. Ins. Co., 27 Misc 3d 67 [App Term, 2d, 11th & 13th Jud Dists 2010]). Consequently, defendant was not entitled to judgment as a matter of law.

We reach no other issue.

Accordingly, the order of the Civil Court is reversed and defendant’s motion for summary judgment dismissing the complaint is denied.

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

Decision Date: December 01, 2015