American Home Assur. Co. v Cathedral Fourth Dev. Corp.

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[*1] American Home Assur. Co. v Cathedral Fourth Dev. Corp. 2006 NY Slip Op 50524(U) [11 Misc 3d 1072(A)] Decided on March 31, 2006 Supreme Court, Nassau County Phelan, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on March 31, 2006
Supreme Court, Nassau County

American Home Assurance Company, Plaintiff(s),

against

Cathedral Fourth Development Corporation, KELLY ROOFING & SIDING CO., INC., d/b/a F&F ROOFING CO., R&D HOME IMPROVEMENTS, RONALD AND DENISE THOMAS, NAUTILUS INSURANCE COMPANY and AMERICAN EQUITY INSURANCE COMPANY, Defendant(s).



15073/05



Cozen O'Connor

Attorneys for Plaintiff American Home Assurance Company

45 Broadway

New York, NY 10006

Dell & Little, LLP

Attn: Joseph Dell, Esq.

Attorneys for Defendants Denise and Ronald Thomas

350 Old Country Road

Garden City, NY 11530

Sledjeski & Tierney, PLLC

Attorneys for Defendant Cathedral Fourth Dev. Corp.

18 First Street

P. O. Box 479

Riverhead, NY 11901

Law Offices of Michael F.X. Manning

Attorneys for Defendant Kelly Roofing & Siding

100 Baylis Road, Suite 300

Melville, NY 11747

Fabiani & Cohen, LLP

Trial Counsel for Defendant Kelly Roofing

570 Lexington Avenue, 4th Floor

New York, NY 10022

Kral Clerkin Redmond Ryan, et al.

Attorneys for Defendant R&D Home Improvements

69 E. Jericho Turnpike

Mineola, NY 11501

Wade, Clark, Mulcahy

Attorneys for Defendant Nautilus Insurance Company

111 Broadway, 9th Floor

New York, NY 10006

Lazare, Potter, Giacovas & Kranjac, LLP

Attorneys for Defendant American Equity Insurance 950 Third Avenue

New York, NY 10022

Thomas P. Phelan, J.

Motion [sequence #1] by defendant Kelly Roofing & Siding Co., Inc., d/b/a F & F Roofing, Co., Inc. (Kelly Roofing), cross-motion [sequence #2] by defendant American Equity Insurance Company (American Equity) and cross-motion [sequence #4] by defendants Ronald Thomas and Denise Thomas, each seeking to dismiss the complaint pursuant to CPLR 3211(a)(5), are granted.

Cross-motion [sequence #3] by plaintiff American Home Assurance Company (American Home) for summary judgment pursuant to CPLR 3212 declaring that plaintiff is not bound by the [*2]finding of this court that defendant Ronald Thomas has suffered a grave injury within the ambit of Workers' Compensation Law § 11 is denied.

This action is brought following a personal injury action titled "Ronald Thomas and Denise Thomas v. Cathedral Fourth Development Corp., et al." (Supreme Court index #2607/03) which, after trial of the liability phase and during trial of the damages phase, resulted in a $6,500,000.00 settlement.

Ronald Thomas, the injured plaintiff in the personal injury action, is the principal owner of R&D Home Improvements (R&D), the named third-party defendant in said prior action. Plaintiff in this action, American Home, is the Workers' Compensation carrier for R&D.

By this action, American Home seeks a judicial declaration that it is not bound by this court's finding in the personal injury action, that Ronald Thomas suffered a grave injury within the meaning of Workers' Compensation Law § 11 when, on February 10, 2003, he fell from the roof of a building owned by Cathedral Fourth Development Corporation (Cathedral) in the course of his employment (Thomas v. Cathedral, short form order dated May 16, 2005 [Phelan, J.].

Despite the obvious nexus to this court, American Home commenced its declaratory judgment action in the Supreme Court, New York County. Recognizing, inter alia, "that Justice Phelan is obviously familiar with the underlying dispute and has first-hand knowledge regarding the extent of American Home's involvement with the motions in [the personal injury] action", Justice Barbara R. Kopnick, by order dated September 12, 2005, sua sponte transferred this action, together with the pending motion and cross-motions, to the Supreme court, Nassau County, for referral to the undersigned.

Plaintiff American Home seeks summary judgment contending that the finding of grave injury in the personal injury action is not entitled to collateral estoppel effect inasmuch as:

1)it was not a party to the underlying action, nor in privity with any party against whom the finding was made;

2)its interests were not represented in the underlying action;

3)it did not have a free and fair opportunity to litigate the issue;

4)the motion by defendants Kelly Roofing and Cathedral in the underlying action was granted on default, not on the merits, as is necessary to warrant imposition of the preclusive effects of collateral estoppel.

While plaintiff American Home maintains that defendants in the underlying Thomas action raised no meaningful opposition to the grave injury claim, the finding of this court in that regard was amply supported by the record including, inter alia, the decisions of Administrative Law [*3]Judge, Joseph Halpern [February 1, 2005] and Workers' Compensation Law Judge Jeff D. Lerner [March 24, 2005] who found respectively that Ronald Thomas had severe cognitive dysfunction and lacked the residual functional capacity to perform even sedentary work; and was permanently disabled as a result of his work related injury. The medical findings of his treating neurologist [Samir Haddad, M.D.] and defendants' examining physician [Brian D. Greenwald, M.D.] substantiated the gravity of Mr. Thomas' brain injury and his mental and physical incapacity.

The record establishes that plaintiff American Home was represented by counsel at oral argument before this court on April 20, 2005 when the grave injury question was argued. Counsel for American Home participated fully. He informed the court that he had been denied access to the defense file and questioned the fact that the only neuropsychological evaluation of Mr. Thomas had been performed by his own expert. Counsel for Mr. Thomas specifically stated in response that Brian Greenwald, M.D., Associated Director of Brain Injury Rehabilitation, Mount Sinai Hospital, hired by defendants in the Thomas action before depositions were conducted, examined Mr. Thomas and found that he suffered a severe traumatic brain injury as a result of which he lacks the capacity to make the daily decisions of life and that further psychological testing would be futile based on his mental status.

Defendants Kelly Roofing, Ronald and Denise Thomas, American Equity and Cathedral all argue that plaintiff is collaterally estopped from challenging the grave injury finding of this court and, accordingly, the complaint must be dismissed. This court agrees.

"Collateral estoppel or issue preclusion, precludes a party from relitigating, in a subsequent action or proceeding, an issue clearly raised in a prior action or proceeding and decided against that party * * * , whether or not the tribunals or cause of action are the same.'" (Parker v Blauvelt Volunteer Fire Co., Inc., 93 NY2d 343, 349 [1999] quoting Ryan v New York Tel. Co., 62 NY2d 494, 500 [1984].) The policies underlying its application are the avoidance of relitigation of an issue and the possibility of an inconsistent result. (D'Avata v New York Cent. Mut. Fire Ins. Co., 76 NY2d 659, 664 [1990].)

The issue of whether a party has had a full and fair opportunity to contest the prior decision requires consideration of the realities of litigation i.e., fairness to the parties, conservation of the resources of the court and the litigants as well as the societal interest in consistent and accurate results. No rigid rules are possible because the relative importance of these factors varies depending on the nature of the proceedings. (Chambers v City of New York, 309 AD2d 81, 85 [2nd Dept. 2003].)

Although generally a person may not be precluded from relitigating issues resolved in an action in which that person was not a party, "this prohibition ... is not unconditional and identity of the parties, as opposed to identity of the issues, is not an absolute." ( Gramatan Home v Lopez, 46 NY2d 481, 486 [1979].) A party invoking the doctrine must show that the critical issue in the instant action was necessarily decided in the prior action and that the party against whom [*4]estoppel is sought has been afforded a full and fair opportunity to contest the issue. The party opposing application of the doctrine must demonstrate the absence of a full and fair opportunity to contest the prior determination. (Buechel v Bain, 97 NY2d 295, 304 [2001], cert den. 535 U.S. 1096 [2002].) The doctrine has been found applicable to give conclusive effect to the quasijudicial determinations of administrative agencies, including the Workers' Compensation Board. (Rigopolous v American Museum of Natural History, 297 AD2d 728, 729 [2nd Dept. 2002].)

As is readily evident, the question of whether Ronald Thomas sustained a grave injury within the ambit of § 11 of the Workers' Compensation Law was squarely addressed and specifically decided by this court in the underlying action. Plaintiff American Home had a full and fair opportunity to contest the issue. Although it failed to timely move to intervene in the underlying action pursuant to CPLR 1012(a)(2) or CPLR 1013, or both, it belatedly moved by Order to Show Cause on April 8, 2005 to "vouch in and/or substitute its choice of counsel to represent its insured, plaintiff's employer R & D". The motion was unopposed by any of the parties in the underlying action. Plaintiff's application, however, as well as its opposition to the cross-motions by defendants Cathedral and Kelly vis a vis the grave injury issue was withdrawn by American Home, after its counsel appeared at, and participated in, oral argument.

Plaintiff American Home was afforded the opportunity to be heard and to fully litigate the grave injury issue. Its attempt to argue otherwise is unpersuasive. Significantly, on September 27, 2005, a settlement was reached between the parties in the total amount of $6,500,000. A representative from American Home was present in the courtroom during the damages trial, as well as during the time that the Stipulation of Settlement was placed on the record. The court specifically noted the presence of plaintiff's representative throughout the proceeding and the discussions had with him regarding the settlement reached. When asked by the court whether there was anything he wished to say on the record, or whether he wished to question any of the attorneys, plaintiff's representative declined replying that he believed everything had been covered. He also acknowledged the full waiver of the Workers' Compensation Lien.

Accordingly, the declaratory judgment action brought by plaintiff American Home is barred by the doctrine of collateral estoppel based on plaintiff's failure to establish the absence of a full and fair opportunity to litigate the grave injury issue in the underlying action. The complaint is hereby dismissed without costs.

This decision constitutes the order of the court. [*5]

Dated: MARCH 31, 2006 THOMAS P. PHELAN

J.S.C.

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