Dolgenkov v Pertsyuk
Annotate this CaseDecided on May 2, 2006
Civil Court, Kings County
Igor Dolgenkov, DIMITRI CHERNECHENKO, and YURITY SIROTIN, Plaintiffs,
against
Denis Pertsyuk, ALEKSANDER PERTSYUK, and NICCLAOU PRODROMAS, Defendants.
41316/00
Delores J. Thomas, J.
In the instant actions, Merchants Insurance Group ("Merchants") moves for an order: (a) quashing, vacating and setting aside the execution with notice to garnishee served on it in this matter; (b) staying the execution of the garnishment of alleged insurance policy proceeds; and (c) for sanctions against plaintiffs' attorney for frivolous abuse of judicial process. Plaintiffs oppose the motion.
Plaintiffs initially commenced this action against defendants alleging they were injured in an automobile accident that occurred on February 4, 1999 while they were passengers in the vehicle owned by defendant Aleksander Pertsyuk ["defendant"] and operated by his permittee, defendant Denis Pertsyuk (Exhibit C, Order to Show Cause ["OSC"]). [*2]
Movant herein, Merchants Insurance Group ["Merchants"] was defendant's
insurance carrier for the subject vehicle at the time of the accident on February 7, 2000. After having received a notice of claim for coverage for the accident, Merchants disclaimed coverage under the policy and issued a letter to defendant of its disclaimer (Exhibit F, OSC).
Subsequently, plaintiffs obtained a default judgment after inquest held on December 11, 2001. Each plaintiff was awarded a $25,000 judgment against only defendant Aleksander Pertsyuk (Exhibit A, OSC; Exhibits A & B, Affirmation In Opposition).
On or about October 27, 2005 plaintiffs commenced suit against Merchants in Supreme Court Kings County, pursuant to New York Insurance Law § 3420 to establish that an automobile liability insurance policy had been issued by Merchants to defendant Aleksander Pertsyuk. Plaintiffs state that the policy was in full force and effect at the time of the accident and that the policy had not been canceled. Merchants served an answer to the complaint denying the allegations.
On January 30, 2006, the parties appeared in Supreme Court for a preliminary conference whereat an order was issued scheduling examinations before trial on April 20, 2006. The order also provided for other discovery matters. It is undisputed that the Supreme Court action has not been resolved.
Subsequent to the preliminary conference, the Erie County Sheriff's Office on February 2, 2006 served Merchants with an execution with notice of garnishment issued by plaintiffs-judgment creditors pursuant to CPLR 5232 (a) for proceeds of an automobile liability insurance policy issued by Merchants to defendant-judgment debtor Aleksander Pertsyuk.
Merchants argues herein that after it received notice of the insurance claim it disclaimed coverage for Aleksander Pertsyuk based on his lack of cooperation in Merchants' investigation of the claim and that therefore, there are no proceeds under the policy and it is not indebted to the judgment debtor, Aleksander Pertsyuk, as claimed by plaintiffs. Merchants further argues that as litigation is pending in the Supreme Court action on the issue of the availability of automobile liability insurance coverage for Aleksander Pertsyuk, and as plaintiffs have not obtained a judgment or order against Merchants finding that Merchants is obligated to indemnify Aleksander Pertsyuk, it is improper for plaintiffs to issue a notice of garnishment against it.
Merchants requests that this Court issue an order quashing, vacating and setting aside the execution with notice to garnishee and staying execution of the garnishment of alleged insurance proceeds. Merchants also asks that sanctions pursuant to 22 NYCRR § 130-1.1 be imposed for issuing the execution with notice while litigation was pending as such action was a frivolous abuse of judicial process.
In opposition, plaintiffs state that after being unable to locate any assets of the judgment debtors they discovered that Merchants had issued an automobile liability insurance policy to defendant Aleksander Pertsyuk and that the policy and its proceeds are personal property of the judgment debtor and are subject to execution and levy against the interest of the judgment debtor. Plaintiff argues that the instant motion is frivolous.
Section 3420 (a) (2) of the New York Insurance Law provides that if judgment against an insured remains unsatisfied for thirty days after service of notice with entry of judgment upon the insured and the insurer, an action may be maintained against the insurer for the amount of the judgment. (Thrasher v U.S. Liability Ins. Co., 19 NY2d 159 [1967].) Plaintiffs had initiated an action based on this statute prior to serving the execution with notice to garnishee upon Merchants [*3]which indicates that they were familiar with the statute's requirements.
The Supreme Court action will determine if Merchants' disclaimer of coverage based on its insured's lack of cooperation relieves the insurer of its coverage obligation and will also determine whether or not plaintiffs are entitled to judgment against Merchants. (Thrasher v U.S. Liability Ins. Co., supra; GEICO v GEICO, 61 Misc 2d 1092 [Sup Ct, Nassau County 1970]; Roth v National Automobile Mut. Casualty Co., 202 AD 667 [1st Dept 1922]; The City of New York v Continental Casualty Co., 27 AD3d 28 [1st Dept 2005].) Until that matter is adjudicated, plaintiffs have no enforceable order or judgment against Merchants.
Merchants has asked that this Court impose sanctions against plaintiffs' attorney pursuant to 22 NYCRR § 130-1.1 for frivolous conduct for needlessly burdening Merchants, the Court, and the Erie County Sheriff's Office by issuing the execution with notice to garnishee while an action plaintiffs Igor Dolgenkov and Yurity Sirotin had initiated against Merchants was pending in Supreme Court.
22 NYCRR §130-1.1 provides that the court in its discretion may impose sanctions for frivolous conduct by any party or attorney in a civil action or proceeding. (Park Health Center v Country-Wide Ins. Co., 2 Misc 3d 737 [Civ Ct, Queens County 2003]; Namdar v L.B. Kaye International Realty Commercial Services, Inc., 10 Misc 3d 1061 [A], 2005 NY Slip Op 52067 [U] [Sup Ct, NY County 2005].)
In view of the above, the motion is granted as follows. The execution with notice to garnishee dated January 27, 2006 and served upon Merchants is vacated and this matter is set down in Room 1102 of this Courthouse on June 20, 2006 at 2:30 PM for a hearing with respect to whether and, if so, to what extent, sanctions shall be imposed against plaintiffs' attorney.
A copy of this order together with notice of entry shall be served by movant upon all parties on or before May15, 2006.
The foregoing shall constitute the decision and order of the Court.
Dated: Brooklyn, New York
May 2, 2006
DELORES J. THOMAS
Judge Civil Court
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