Brito v Allstate Ins. Co.
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Brito v Allstate Ins. Co. 2014 NY Slip Op 31084(U) March 17, 2014 Sup Ct, Bronx County Docket Number: 309362/2011 Judge: Laura G. Douglas Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various state and local government websites. These include the New York State Unified Court System's E-Courts Service, and the Bronx County Clerk's office. This opinion is uncorrected and not selected for official publication. [* 1] · FIU:u Mw 25 2 14 Bronx County Clerk S PREME COURT OF THE STATE OF NEW YORK COUNTY F BRONX ------------- ----------------------------------------------------)( REGOR! BRITO, Plaintiff, Index No.: 309362/2011 -againstINSURANCE COMPANY, Defendant. ------------- ----------------------------------------------------)( ON. LA DOUGLAS: Defe dant Allstate Insurance Company ("Allstate") moves to dismiss this a tion for p aintiffs purported failure to provide discovery. This motion is granted s lely to th extent ordered below, and is otherwise denied. Plaintiff Gregorio Brito (' Brito") c oss-moves under CPLR § 3103 [a] for a protective order precluding llstate fro obtaining certain discovery. The cross-motion is denied. This s an action pursuant to Insurance Law§ 3420 [a] [2], whereby an injured p aintiff m y sue a tortfeasor's insurance company to satisfy a judgment obtained a ainst the ortfeasor. Here, Brito demands that Allstate pay a judgment entered in Brito's fav r against Elba Robles ("Robles"), Allstate's insured. The judgment was o tained o default in July 2011 in an action entitled Gregorio Brito v. Elba Robles, I dex No. 28084/2006, venued in Queens County Supreme Court and seeking onetary amages for personal injuries allegedly sustained in a motor vehicle 1 [* 2] . FILEO Mar 25 2 14 Bronx County Clerk a cident. he judgment amount was $35,883.56. 1 Insu ance Law§ 3420(a)(2) "Liability insurance; standard provisions; right of i jured per on", requires that every insurance policy issued in New York contain a "in case judgment against the insured ... in an action brought to recover dam ges for injury sustained or loss or damage occasioned during the life of the p licy or contract shall remain unsatisfied at the expiration of thirty days from the serving of notice of entry of judgment upon the attorney for the insur d, or upon the insured, and upon the insurer, then an action may ... be mai tained against the insurer under the terms of the policy or contract fort e amount of such judgment not exceeding the amount of the applicable limit of coverage under such policy or contract." [emphasis supplied] stant motion practice involves a discovery dispute, wherein Brito objects Allstate with certain discovery pertaining to Brito' s claim(s) against obles in he underlying personal injury action. Brito has refused to provide nd responses pertaining to the merits of that action, namely, the liability ries allegedly sustained, and has failed to provide certain documents r garding t e default judgment obtained in the Queens Supreme Court. The ourt of Appeals has addressed the issue by holding that, if an insurance ooses to disclaim coverage, and declines to defend or indemnify an i sured in n underlying lawsuit, then, "under those circumstances, having chosen 1 At t e Inquest held on Dec.15, 2008, Plaintiff was awarded the principal s m of$25 000. 2 [* 3] FIL,Ep Mar 25 2 14 Bronx County Clerk n t to partic 'pate in the underlying lawsuit, the insurance carrier may litigate only the v lidity of it disclaimer and cannot challenge the liability or damages determination u derlying he judgment" [emphasis supplied] Lang v. Hanover Ins. Co., 3 NY3d 3 0, 356 (C App 2004). The c ses relied upon by the parties are consistent with this proposition. Brito in okes the case of Rucaj v. Progressive Ins. Co., 19 AD3d 270 (Pt Dept 2005), d cided sho ly after Lang, supra. However, the First Department in Rucaj merely re'terated t at an insurer who "disclaimed its duty to defend its insured in the u derlying ction, ... may not ... raise defenses extending to the merits of plaintiffs cl im again t the insured" [emphasis supplied] Rucaj v. Progressive Ins. Co., 19 3d at 2 3. The pertinent facts in Rucaj include that: "Plaintiffs counsel [had] formed [ efendant insurer] Progressive of the scheduled inquest on damages; h wever, ra her than seek to appear at the inquest or to vacate the default, Progressive allowed the inquest to proceed unopposed, and served a disclaimer of coverage on the g ound of [ ts insured] Garcia's asserted noncooperation" Rucaj v. Progressive Ins. stant matter is materially distinguishable from Rucaj in that it appears did not receive notice of the underlying action until after the default j dgment as entered in the underlying lawsuit. In this regard, Brito concedes in his 3 [* 4] ·Fl~ED M.ar 25 2 14 Bronx County Clerk Bill of Part' culars, that: "Plaintiffs counsel is not aware of any notice by the person [ isbarred ttomey Jose R. Mendez] who was his [Plaintiffs] counsel at the time, a vising Allstate before the inquest that the insured had been served with process." 2 Brito ackn wledges that it was not until after the default judgment was entered on J ly 25, 20 1 in this matter that his attorney allegedly caused a copy of it to be served o Allstate by mail on the following day. Allstate maintains that it never received n tice of th underlying action until December 2011, when it was served with process 1 It ap ears that Allstate did not receive notice of the underlying action until a ter the default judgment was entered. Such is evident from the decision made by t e Appell e Division on the prior appeal had in this matter, wherein the Court ruled t at "Allst te [had] rebutted the presumption that it received a copy of the default j dgment n July 26, 2011, by submitting an affidavit by its claims examiner d tailing is mail-handling and record-keeping procedures and denying that it r ceived a opy of the judgment or indeed of any notice of the underlying action b fore Dec mber 8, 2011, when it was served with process in the instant action (see Jimenezv ew YorkCent. Mut. Firelns. Co., 71AD3d637,639, 897NYS2d 143 [2d 2 (Se Plaintiffs Bill of Particulars, dated Jan. 30, 2013, p. 3, in response to efendant' Demand for a Bill of Particulars, Question 22E). 4 [* 5] ·FILED Mar 25 2 14 Bronx County Clerk ept 2010] "Brito v. Allstate Ins. Co., 102 A.D.3d 477, 478 (l81 Dept2013). Thus, t e First D partment already favorably cited the recent case of Jimenez v. New York ire Ins. Co., 71A.D.3d637 [2d Dept 2010], in reference to the issues p eviously ppealed in this case. enez, which is on point herein, the Court held that where an insurer did n t receive notice of the underlying action until after the entry of judgment against i s insured, it is not collaterally estopped from litigating the merits of the underlying a ti on, an , significantly, is entitled to conduct appropriate discovery thereon. ecificall , the Court stated: "whi e an insurance carrier that knowingly chooses not to participate in an unde lying action "may litigate only the validity of its disclaimer and cannot chall nge the liability or damages determination underlying the judgment" (Lan v Hanover Ins. Co., 3 NY3d 350, 356, 820 NE2d 855, 787 NYS2d 211 [200 ] [emphasis added]; Insurance Law§ 3420 [a] [2]), here,NYCM asserts it di not receive notice of the commencement of the underlying action unti after the entry of judgment against its insured. Under these circ mstances, NYCM is not collaterally estopped from litigating the merits of the underlying action, as it was not provided "a full and fair opp rtunity to contest the decision now said to be controlling" (Tydings v Gree field, Stein & Senior, LLP, 11 NY3d 195, 199, 897 NE2d 1044, 868 NYS2d 563 [2008], quoting Buechel v Bain, 97 NY2d 295, 304, 766 NE2d 914, 740 NYS2d 252 [2001], cert denied 535 US 1096, 122 S Ct 2293, 152 L Ed 2 1051 [2002]). Although summary judgment in favor of the plaintiff shou d have been denied in light of the existence of the triable issues of fact desc ibed above, the award of summary judgment in the plaintiffs favor was pre ature in any event since NYCM is entitled to raise affirmative defenses, rece ve responses to its outstanding discovery requests, and conduct addi ional appropriate discovery relating to the extent of the plaintiffs 5 [* 6]. ·FILED, Mar 25 2 14 Bronx County Clerk f ¢ inju 883 NY 'menez v. ies (see CPLR 3212 (:fJ; Kiernan v DaimlerChrysler Corp., 65 AD3d 614, YS2d 729 [2009]; Desena v City of New York, 65 AD3d 562, 884 2d 138 (2009])." [emphasis supplied] ew York Cent. Mut. Fire Ins. Co., 71 A.D.3d at 640 (2d Dept. 2010). 3 Add'tionally, the instant matter is distinguishable from Rucaj since Brito's a torney in the underlying action was disbarred because, inter alia, according to the ourt, in " litigated matter .... he allegedly engaged in fraudulent conduct by aking fa se representations to the court that his client was entitled to a default dgment and by concealing relevant facts from the court. Mr. Mendez a knowled es his inability to successfully defend himself on the merits against c arges pre icated upon the professional misconduct under investigation" [emphasis after ofMendez, 64 AD3d 263, 264 [2nd Dept 2009]. Coi cidently, this same attorney represented the appellants in a case which a dressed t e fact that a judgment obtained through fraud practiced on the court is a nullity a d is subject to collateral attack. Hernandez v. Am. Transit Ins. Co., 2 3d 584 2nd Dept 2003]. In said case, the Court held that: "Av actio 282 frau lid and enforceable judgment is a condition precedent to maintaining an pursuant to Insurance Law§ 3420 (a) (2) (see Braddy v Allcity Ins. Co., .D.2d 637, 723 N.Y.S.2d 690 (2001]). A judgment entered through , misrepresentation, or other misconduct practiced on the court is a 3 Bri o's present attorney, Linda Ziatz, Esq., was the attorney for esponden sin the case of Jimenez v. New York Cent. Mut. Fire Ins. Co., 71 D3d 637 2nd Dept 2010]. 6 . [* 7] ¢ .. FILED Mar 25 2 14 Bronx County Clerk ' . nulli and is subject to collateral attack (see Sirota v Kloogman, 140 A.D. d 426, 528 N.Y.S.2d 127 [1988]; Shaw v Shaw, 97 A.D.2d 403, 467 N.Y .. 2d 231 [1983]). The evidence presented by the defendant in opposition to th plaintiffs' motion for summary judgment was sufficient to raise a triable issu of fact as to whether the plaintiffs had a basis upon which to enter the judg ents. Accordingly, the plaintiffs' motion for summary judgment was prop rly denied." [emphasis supplied] ernandez v. Am. Transit Ins. Co., 2 AD3d 584, 585 [2nd Dept 2003]. Like ise, the evidence presented in the instant matter is sufficient to raise aterial is ues as to whether Brito' s prior attorney had a basis upon which to enter a default j dgment against Robles. Such evidence includes the above-quoted d" sbarment proceedings wherein the Appellate Division referenced false r presentat ons made to the court by Mr. Mendez that his client was entitled to a d fault jud ment, and in concealing relevant facts from the court. Ace rdingly, Allstate is entitled to the discovery it seeks, including as to the liability, da ages, and the obtaining of the default judgment in the underlying action. llstate sh uld be able to obtain such information so that it may ascertain, for hether there were any irregularities in the underlying proceedings. his Court does not make any rulings as to the admissibility of such e idence a trial, since that will be determined by the trial judge. Ace rdingly, Brito's cross-motion for a protective order is denied in its e tirety. llstate's motion is granted to the extent that Brito shall provide the 7 [* 8] ¢ ?flLEO. Mar 25 2 14 Bronx County Clerk "' . o tstandin discovery, as follows: Wit in twenty (20) days from the date that Plaintiff is served with a copy of ith notice of entry, Plaintiff shall provide the outstanding documentary eluding the responses, documents, and authorizations that Defendant had r quested i its Demand for a Bill of Particulars and in its Discovery Demands4, and t e docum nts that this Court had previously ordered that the Plaintiff provide at the and Compliance Conferences. 5 Cou sel shall appear for a Compliance Conference on June 24, 2014, at 9:30 a m. in Part 11, Room 711, bringing with them a copy of all Court Orders in this case. This constitutes the decision and order of this Court. ated: Ma ch []__, 2014 LAURA DOUG~SC 4 See Mr. Barnett's Letter, dated February 1, 2013, to Plaintiff's Counsel, s. Ziatz, hich summarizes the missing information-which Plaintiff should now mi sh 5 See Preliminary Conference Order dated July 19, 2012 and the Compliance onferenc Order dated November 16~ 2012 8
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