Opinion
152076/2017
08-14-2018
AMERIPRISE INSURANCE COMPANY, Plaintiff, v. Latanya HAMPTON, John T. Bunn, Cheryl Armour, Lillian Spooner, Safiyah Souza, Shakeya Witherspoon, Nakia McCrae, Audrey Johnson, (the individual, defendants) and Avalon Radiology, P.C., Avanguard Medical Group, PLLC., B.S.A Chiropractic, P.C., East Coast Medical Diagnostic, P.C., East Coast Metropolitan Medical, P.C., Harden Street Medical, P.C., Keystone Rehabilitations Systems, Laurus Acupuncture, P.C., Metropolitan Medical & Surgical, P.C., One to One Rehab, PT, P.C., Psychological Adaptation Services, P.C., Selena Apelis, D.C. and Vivid Acupuncture, P.C., (the healthcare provider defendants), Defendants.
BRUNO, GERBINO & SORIANO, LLP, 45 Broad Hollow Road, Suite 220, Melville, New York 1174, By: VANESSA HELEN HLINKA, Esq., Attorney for Plaintiffs KOPELEVICH & FELDSHEROVA PC 241 37th St, Ste 615, Brooklyn, NY 11232, By: DAVID MICHAEL LANDFAIR, Esq., Attorney for Defendants: B.S.A. Chiropractic, P.C.; East Coast Metropolitan Medical, P.C.; Laurus Acupuncture, P.C.; One to One Rehab, PT, P.C., and Psychological Adaptation Services, P.C. No appearance, Attorney for remaining Defendants
BRUNO, GERBINO & SORIANO, LLP, 45 Broad Hollow Road, Suite 220, Melville, New York 1174, By: VANESSA HELEN HLINKA, Esq., Attorney for Plaintiffs
KOPELEVICH & FELDSHEROVA PC 241 37th St, Ste 615, Brooklyn, NY 11232, By: DAVID MICHAEL LANDFAIR, Esq., Attorney for Defendants: B.S.A. Chiropractic, P.C.; East Coast Metropolitan Medical, P.C.; Laurus Acupuncture, P.C.; One to One Rehab, PT, P.C., and Psychological Adaptation Services, P.C.
No appearance, Attorney for remaining Defendants
Robert R. Reed, J.
Motion sequences 001, 002, and 003 are consolidated for disposition. In this declaratory judgment action, plaintiff Ameriprise Insurance Company moves for an order for a preliminary injunction, pursuant to CPLR 6301, and / or a stay, pursuant to CPLR 2201, of all pending and future lawsuits for uninsured / underinsured no-fault insurance benefits to defendants (motion sequence 001); an order of default judgment declaring that defendants Latanya (Dawn) Hampton (Hampton), John T. Bunn (Bunn), Cheryl Armour (Armour), Safiyah Souza (Souza), Shakeya Witherspoon (Witherspoon), Nakia McCrae (McCrae), Audrey Johnson (Johnson), Avalon Radiology, P.C., Avanguard Medical Group, PLLC, East Coast Medical Diagnostic, P.C., Harden Street Medical, P.C., Metropolitan Medical & Surgical, P.C., Selena Apelis, D.C. and Vivid Acupuncture, P.C. are in default (motion sequence (002); and, pursuant to CPLR 3211 (a) (6), to dismiss the counterclaim because it was improperly interposed and /or pursuant to CPLR 3211 (a) (7), because the counterclaim fails to state a cause of action as against defendants BSA Chiropractic, Eastcoast Metropolitan Medical, P.C., Laurus Acupuncture, P.C., One to One Rehab PT, P.C., and Psychological Adaptation Services P.C. (motion sequence 003).
BACKGROUND
This litigation arises from an alleged motor vehicle accident (the incident) on July 22, 2013 involving a vehicle insured by John T. Bunn and another vehicle owned by Lillian Spooner and operated by Safiyah Souza in Brooklyn, New York. At the time of the incident, Bunn's vehicle allegedly contained passengers Hampton, Armour, Witherspoon, McCrae and Johnson. Upon receipt of notification of the incident, plaintiff assigned the incident claim number 1673052. Then, plaintiff began receiving bills for medical treatment from several of the defendants, including Hampton, Armour, Witherspoon, McCrae, and Johnson.
Examination Under Oath (EUO) of Defendant John T. Bunn
Bunn testified that he lives at 1060 Hendricks Street, Brooklyn, New York (Bunn tr at 9). On the date of the incident, he was leasing a 2012 Honda Accord (id. at 19). He testified that he purchased the vehicle one year ago, but that he does not remember what address he gave plaintiff when he purchased the insurance policy (id. at 21-22). He lived at 99 Metropolitan in the Bronx when he first purchased the vehicle, and was paying $250 per month (id. ).
He testified that, before the incident, he had driven from around the corner, at his mother's house, to the location of the incident (id. at 26). After leaving his mother's house, he saw Armour, who got into his vehicle at Bergen Street, where the incident occurred (id. at 18-22, 31). He testified that he and Armour did not go anywhere prior to the incident, and that he could not remember going out to eat prior to the incident (id. at 29). After Armour got into his vehicle, he told her to sit in the vehicle while he ran upstairs, because he had parked the vehicle in front of a fire hydrant (id. at 28, 32). Armour was the only person in his vehicle when he left the vehicle, and he left the key in the ignition (id. at 28, 32). He was going to 654 Kingsborough 6th Walk, to an apartment on the sixth floor, to visit the son of his childhood friend, Hampton (id. at 30-31).
He testified that he received a phone call from Armour when the incident occurred, and that when he came back down Armour's friends were in his vehicle (id. at 34). He was unsure as to whether all of Armour's friends were in the vehicle (id. at 35). He testified that Hampton was also in the vehicle, and he has known Hampton all his life (id. at 34, 36). He was told that Armour's scratch under her eye was caused by a female driver in the other vehicle involved in the incident who tried to attack her (id. at 49).
EUO of Defendant Cheryl Armour
Armour testified that, at the time of the alleged incident, she was seated in the driver's seat of Bunn's vehicle (Armour tr at 21). Prior to the incident, Bunn had taken her and several other people, except for Johnson, to Dunkin Donuts (id. at 16). After they went to Dunkin Donuts, Bunn parked his vehicle in front of a fire hydrant so that he could go inside to drop something off for a friend's mother named Lorraine (id. at 20, 97). Bunn told her to sit in the driver's seat in case she had to move the car to avoid getting a ticket (id. at 21). She testified that the other vehicle reversed into Bunn's parked vehicle twice, with the second hit pushing Bunn's vehicle up onto a curb and into the fire hydrant (id. at 21-22, 92). As a result of the incident, she was bleeding underneath her left eye (id. at 22). She testified that she, McCrae, Witherspoon, and Johnson all went to the same medical facility that she found out about through Hampton's sister, Robin (id. at 38). She further testified that people approached her at the scene of the incident to offer her legal services, but she did not take any of their business cards (id. at 32-33).
EUO of Defendant Shakeya Witherspoon
Witherspoon testified that at the time of the incident, she was a passenger in Bunn's vehicle sitting in the middle of the backseat (Witherspoon tr at 19, 27). Armour was in the driver's seat, Johnson was in the front passenger seat, Hampton was in the backseat on the right side, and McCrae was seated with her child in the backseat on the left side (id. at 21-25). At the time of the incident the vehicle was not moving (id. at 20, 27). She first got into the vehicle when she, Armour, Bunn, McCrae, McCrae's child and Johnson went to the Dunkin Donuts, 20 to 30 minutes prior to the incident (id. at 29). Prior to going to Dunkin Donuts, she Armour, McCrae and Johnson were on Bergen Street when Bunn pulled up to them to take them to Dunkin Donuts (id. at 29, 31). She later testified that Johnson was not in the vehicle when they went to Dunkin Donuts (id. at 34). When they returned to Bergen Street, they parked in front of a fire hydrant and Bunn got out of the car because he had to take something to his godmother (id. at 39). Everyone else stayed in the car because they were discussing what they planned to do next (id. at 41). Bunn's vehicle hit the fire hydrant after the other vehicle backed into Bunn's vehicle twice (id. at 45). After the incident, strangers attempted to give them business cards for legal services but they did not take them (id. at 59).
She testified that she received medical treatment at a facility on Flatlands Avenue from a referral from Armour, and that someone from the facility transported her to and from the facility (id. at 59-60). She found out about her attorney through Armour and Armour's friend dealt with the attorney (id. at 87).
EUO of Defendant Nakia McCrae
McCrae testified that at the time of the incident Armour was in the driver's seat of Bunn's vehicle, she was sitting behind the driver's seat, Johnson was in the front passenger's seat, Witherspoon was in the middle seat next to her, and Hampton was seated next to Witherspoon (McCrae tr at 18-19). It was drizzling on the day of the incident and she went outside to Bergen Street and met up with Witherspoon, Armour, Johnson and Hampton to watch their kids play and talk with each other while they had coffee (id. at 20-21). Bunn arrived by himself and at that point everyone decided to go to Dunkin Donuts because she had a Dunkin Donuts gift card (id. at 22). Bunn drove them to Dunkin Donuts (id. at 23). After Dunkin Donuts, they returned to Bergen Street and Bunn parked the vehicle, took the keys with him, and left everyone else in the car while he went to visit his godmother (id. at 28-29). The other vehicle backed into Bunn's vehicle twice pushing Bunn's vehicle onto the sidewalk, but she did not believe Bunn's vehicle hit the fire hydrant (id. at 32, 34). Armour's face was bleeding but she was not sure if Armour and the driver of the other vehicle got into a physical altercation (id. at 36-37).
She testified that people came to the hospital to give them business cards for attorneys and medical facilities but they did not take any of the cards (id. at 46). The next day she went to Harden Street Medical PC, a facility on Flatbush Avenue, for medical treatment (id. at 47-48). She found out about the facility through Armour and Witherspoon, and was transported there by drivers hired by the facility (id. at 49, 84). She found her attorney though friends, and Witherspoon told her they were going to do everything with Armour (id. at 84-85).
EUO of Defendant Audrey Johnson
Johnson testified that at the time of the incident Armour was in the driver's seat, she was in the front passenger seat, Hampton was behind her and McCrae was next to Witherspoon behind Armour (Johnson tr at 18-20). It was drizzling on the day of the incident and she was coming out of a building when she saw Armour, Witherspoon, and McCrae parked so she went over to talk to Armour and got in Bunn's vehicle (id. at 21-22). As she was talking, the other vehicle backed into Bunn's vehicle, and Bunn's vehicle hit the fire hydrant (id. at 24). Bunn's vehicle was parked when it was hit (id. at 18-19). At the scene of the incident, people came up to them to give them business cards for medical and legal services but no one took the cards (id. at 35).
She testified that the next day she began receiving medical treatment at a facility on Flatlands and Avenue D in Brooklyn (id. at 30). Armour learned about the facility through friends, and referred her to the facility (id. ). Armour's friend drove she and Armour to the facility (id. at 35). She presently goes to the facility three times a week and the facility provides a car service (id. at 63). Armour also referred her to her attorney, but she does not know how Armour learned of the attorney (id. at 62).
EUO of Defendant Latanya Hampton
Hampton testified that, at the time of the incident, she was a passenger in Bunn's vehicle (Hampton tr at 11). She was in the back rear right-side seat, Johnson was in the passenger front seat, and Armour was in the driver's seat (id. at 16-17, 19). Witherspoon was sitting in the middle seat and McCrae was in the left seat behind the driver's seat with her son (id. at 19, 23). She testified that there was Dunkin Donuts in the vehicle (id. at 25). Before the incident, her youngest child came over and asked them to move Bunn's vehicle in order to get water from the fire hydrant (id. at 17). They moved Bunn's vehicle about five feet, so the vehicle was then about five feet away from the fire hydrant (id. ). The first impact occurred when they moved Bunn's vehicle up, which then moved Bunn's vehicle into the fire hydrant (id. at 41). She testified that she did not see anyone bleeding after the incident (id. at 26). She also did not know of anyone giving business cards for medical or legal services (id. at 29, 34). Her current attorney referred her to the facility where she is receiving medical treatment (id. ).
After notification of the incident, plaintiff investigated the legitimacy of the incident. Plaintiff found the following during the investigation:
(1) When procuring the insurance policy, Bunn utilized a residential address of 118 Thielman Road, Hudson, NY 12534, but Bunn actually resided at 1060 Hendrix Street, Brooklyn, NY 11207 (plaintiff order to show cause, Hlinka affirmation [Hlinka Affirm.], exhibit E);
(2) The driver of Bunn's vehicle at the time of the incident was not a listed driver on the insurance policy, and Bunn was not in the vehicle at the time of the incident;
(3) The police report stated that the vehicle was moving before the incident occurred, but Bunn contacted plaintiff several times to ensure that plaintiff's notes stated that he was not at fault, because his vehicle was parked (Hlinka Affirm., exhibit G);
(4) There was a discrepancy between Bunn's EUO and Armour's EUO in terms of who was in the vehicle at the time of the incident;
(5) Except for Hampton, all of the alleged passengers in Bunn's vehicle started receiving nearly identical treatment at the same multi-disciplinary medical facility, which included acupuncture, chiropractic treatment, and physical therapy;
(6) Plaintiff received billing for Armour, McCrae, Johnson, and Witherspoon from defendant Harden Street Medical PC as well as various sub-providers affiliated with the facility the day after the incident.
On March 3, 2017, plaintiff commenced the action by filing a summons and complaint. Plaintiff seeks a declaratory judgment that the vehicle in the incident was not a product of a covered event as it was the result of an intentional and / or staged occurrence. Defendants BSA Chiropractic, Eastcoast Metropolitan Medical, P.C., Laurus Acupuncture, P.C., One to One Rehab PT, P.C., and Psychological Adaptation Services P.C. (Answering defendants) oppose the motion.
DISCUSSION
Plaintiff seeks, by order to show cause, an order for a preliminary injunction, pursuant to CPLR 6301, and/or a stay, pursuant to CPLR 2201, of all pending and future lawsuits for uninsured/underinsured no-fault insurance benefits to the defendants pending determination of this declaratory judgment action.
CPLR 2201 states "[e]xcept where otherwise prescribed by law, the court in which an action is pending may grant a stay of proceedings in a proper case, upon such terms as may be just." This court may issue a stay of an action pending before it, but "it lacks statutory authority to stay actions pending in the Civil Court or District Court. [Therefore], plaintiff's motion for a ‘stay’ of the pending lower court actions is in fact one for a preliminary injunction" ( St. Paul Travelers Ins. Co. v. Nandi , 15 Misc 3d 1145 [A], 2007 NY Slip Op 51154 [U] *7 [Sup Ct, Queens County 2007] [internal citations omitted] ).
CPLR 6301 provides the following:
"A preliminary injunction may be granted in any action where it appears that the defendant threatens or is about to do, or is doing or procuring or suffering to be done, an act in violation of the plaintiff's rights respecting the subject of the action, and tending to render the judgment ineffectual, or in any action where the plaintiff has demanded and would be entitled to a judgment restraining the defendant from the commission or continuance of an act, which, if committed or continued during the pendency of the action, would produce injury to the plaintiff. A temporary restraining order may be granted pending a hearing for a preliminary injunction where it appears that immediate and irreparable injury, loss or damage will result unless the defendant is restrained before the hearing can be had."
"Preliminary injunctive relief is a drastic remedy that will not be granted unless a clear right to it is established under the law and upon undisputed facts found in the moving papers, and the burden of showing an undisputed right rests upon the movant" ( Zanghi v. State , 204 AD2d 313, 314 [2d Dept 1994] [internal quotation marks and citations omitted] ). The moving party has the burden of demonstrating "(1) a likelihood of ultimate success on the merits; (2) the prospect of irreparable injury if the provisional relief is withheld; and (3) a balance of equities tipping in the moving party's favor" ( Doe v. Axelrod , 73 NY2d 748, 750 [1988] ). "The decision to grant or deny provisional relief, which requires the court to weigh a variety of factors, is a matter ordinarily committed to the sound discretion of the [ ] court[ ]" (id. ).
Plaintiff contends that it is entitled to a preliminary injunction because it has demonstrated a likelihood of success on the merits. Plaintiff argues that it is not obligated to indemnify, defend against, or pay benefits for the incident because the incident was a result of intentional actions by the individual defendants. "An accident has been defined as an event which ... is unusual and unexpected by the person to whom it happens. Thus, the rule in [New York] and in other jurisdictions is that [w]hether or not a certain result is accidental is usually determined by looking at the casualty from the point of view of the insured to see whether or not from his point of view the event was unexpected, unusual and unforeseen" ( Nallan v. Union Labor Life Ins. Co. , 42 NY2d 884, 885 [1977] [internal quotation marks and citations omitted] ).
A motor vehicle collision that is the result of intentional actions is not an accident (see Matter of Eagle Ins. Co. v. Gueye , 26 AD3d 192, 193 [1st Dept 2006] ; Matter of Travelers Indem. Co. v. Morales , 188 AD2d 350, 351 [1st Dept 1992] ; see also Matter of Fuscaldo v. Motor Vehicle Acc. Indemnification Corp. , 24 AD2d 744, [1st Dept 1965] ).
Here, plaintiff has presented sufficient evidence to support its determination that the incident was not an accident. The verified complaint, affidavit of plaintiff's Special Investigative Unit Senior Special Investigator James Glampe, and the EUOs of the individual defendants contain sufficient non-conclusory factual allegations for plaintiff to conclude that the incident was intentional and not eligible for no-fault coverage. Furthermore, the Answering defendants have not presented any factual evidence to contradict such a finding. Contrary to Answering defendants' argument, the unsigned EUO transcripts of the individual defendants are admissible. "In order to use a transcript that is not signed by the witness, if the witness is a nonparty, or, if a party and the transcript is not signed by the witness or certified, it is the burden of the party wanting to use the deposition transcript to show that the transcript was sent to the witness to be reviewed for any corrections, and that sufficient time to do so has passed" ( Palumbo v. Innovative Communications Concepts, Inc. , 175 Misc 2d 156, 157-158 [Sup Ct, NY County 1997], affd , 251 AD2d 246 [1st Dept 1998] ). Plaintiff has provided copies of correspondence with its moving papers demonstrating that it requested individual defendants to review and execute the EUO, and gave each of them a proper amount of time to comply (see Hlinka Affirm., exhibits F, H, L, M, N, O). Likewise, contrary to Answering defendants' contention, Glampe's affidavit is also admissible given his personal knowledge and expertise in accident investigation (see Matter of Travelers Indem. Co. v. Morales , 188 AD2d 350, 351 [1st Dept 1992] [ finding that "the officers'[ ] statements concerning the intentional nature of the incident were correctly considered by the court since the officers were trained experts in accident investigation"] ).
Moreover, to the extent that Answering defendants' argue that prior summary judgment motions in related cases determined that there are questions of fact, that is of no moment as questions of fact do not defeat a motion for preliminary injunction. (see CPLR 6312 [c] ). "Provided that the elements required for the issuance of a preliminary injunction are demonstrated in the plaintiff's papers, the presentation by the defendant of evidence sufficient to raise an issue of fact as to any of such elements shall not in itself be grounds for denial of the motion" (id. ).
Answering defendants' contention that plaintiff's allegations of fraud are inapplicable to Answering defendants because they are innocent third-parties is unavailing. Answering defendants are not innocent third-parties as they all obtained assignments of individual defendants' no-fault benefits, thus they are subject to the same defenses as their assignors ( A.B. Med. Servs. PLLC v. Commercial Mut. Ins. Co. , 12 Misc 3d 8, 11 [App Term, 2d Dept 2006] ["hold[ing] that only innocent third parties who are injured are protected, and not a health care provider who deals with the assignor-insured at its peril in accepting an assignment of the insured's no-fault benefits"] [internal citation omitted] ).
Plaintiff argues that it is entitled to a preliminary injunction because it will suffer irreparable harm if it must defend against several pending actions, as well as any actions that may be initiated in the future. Plaintiff further argues that it should not have to bear the unreasonable costs of defending against multiple actions when there is a declaratory judgment action that would resolve the issue of coverage and liability for all pending actions. In addition, plaintiff argues that the possibility of inconsistent decisions in the pending actions could cause an undue burden on plaintiff. "Irreparable injury, for purposes of equity, has been held to mean any injury for which money damages are insufficient" ( McLaughlin, Piven, Vogel v. W.J. Nolan & Co. , 114 AD2d 165, 174, [2d Dept 1986] [internal citation omitted] ). "Where ... a litigant can fully be recompensed by a monetary award, a preliminary injunction will not issue" ( Price Paper & Twine Co. v. Miller , 182 AD2d 748, 750 [2d Dept 1992] ). "[T]he ‘balancing of the equities' usually simply requires the court to look to the relative prejudice to each party accruing from a grant or a denial of the requested relief’ " ( Ma v. Xuan T. Lien , 198 AD2d 186, 186-187 [1st Dept 1993] ). A plaintiff demonstrates irreparable harm and a balancing of the equities in its favor when injunctive relief would minimize repetitive litigation with the same claims, defense, and inconsistent judicial or arbitral decisions ( St. Paul Travelers Ins. Co. v. Nandi , 15 Misc 3d 1145 [A], 2007 NY Slip Op 51154 [U] at *7 [Sup Ct, Queens County 2007] ). "Rather than require insurers to wait to be sued so as to assert the affirmative defense of fraud, New York courts routinely permit insurers to proactively seek injunctive relief against any current and future actions and arbitration proceedings brought by, or on behalf of, the insured while the Court considers the merits of the alleged fraud." ( Liberty Mut. Ins. Co. v. Colot , 2012 NY Slip Op 33500[U], *1 [Sup Ct, NY County 2012] ).
In the instant matter, plaintiff has demonstrated irreparable harm and a balancing of the equities in its favor. Preliminary injunction would not only be beneficial to plaintiff but also to Answering defendants in reducing legal costs and attorneys' fees, and none of the parties would be subject to varying inconsistent court orders or arbitration awards.
Answering defendants argue that if plaintiff is granted a preliminary injunction, plaintiff must post a bond or undertaking pursuant to CPLR 6312(b) and CPLR 6315. Plaintiff does not oppose this, stating in its affirmation in reply that "[p]laintiff has no issue in posting of a bond in the event that the [c]ourt grants the injunction" (plaintiff's order to show cause, reply affirmation at 8). The court has considered the remaining arguments and finds them unavailing. Therefore, plaintiff's order to show cause is granted.
Plaintiff moves, pursuant to CPLR 3215, declaring that defendants Latanya Hampton, John T. Bunn, Cheryl Armour, Safiyah Souza, Shakeya Witherspoon, Nakia McCrae, Audrey Johnson, Avalon Radiology, P.C., Avanguard Medical Group, PLLC, East Coast Medical Diagnostic, P.C., Harden Street Medical, P.C., Metropolitan Medical & Surgical, P.C., Selena Apelis, D.C. and Vivid Acupuncture, P.C. are in default in appearing or answering the summons and complaint. The aforementioned defendants have not opposed the motion; therefore, it is granted.
Plaintiff moves, pursuant to CPLR 3211 (a) (6), to dismiss Answering defendants' counterclaim, because it was improperly interposed, and/or pursuant to CPRL 3211 (a) (7), because the counterclaim fails to state a cause of action.
Pursuant to CPLR 3211(a) (6), dismissal is permitted where, "with respect to a counterclaim, it may not properly be interposed in the action." "This ground for dismissal applies where a counterclaim may not be interposed in a particular action such as when a fiduciary brings an action and a counterclaim has been improperly interposed against him or her in his or her personal capacity and not in the capacity in which he or she has sued" ( MCC Funding LLC v. Diamond Point Enterprises, LLC , 36 Misc 3d 1206[A], 2012 NY Slip Op 51212 [U] *5 [Sup Ct, Kings County 2012] ). Although plaintiff cites to CPLR 3211 (a) (6) as a grounds for dismissal of Answering defendants' counterclaims, plaintiff has not offered any grounds which would support dismissal on this basis.
Under CPLR 3211 (a) (7), a pleading may be dismissed for failing to state a cause of action. Under this section, "a motion to dismiss a pleading will fail, if, from its four corners, factual allegations are discerned which taken together manifest any cause of action cognizable at law" ( Tenzer, Greenblatt, Fallon & Kaplan v. Ellenberg , 199 AD2d 45, 45 [1st Dept 1993] (upholding denial of plaintiff's motion to dismiss defendant's counterclaim for failure to state a cause of action pursuant to CPLR 3211 [a] [7] ). Answering defendants have failed to state a cause of action in their counterclaim. Answering defendants' counterclaim seeks a payment of attorneys' fees if they should succeed in alleging entitlement under assignments of no-fault benefits executed by plaintiff's insured. However, plaintiff does not owe Answering defendants a duty to defend, as there is no recovery for attorneys' fees in declaratory judgment actions to facilities that submit claims to the insurer on behalf of a non-insured parties (see Hertz Vehs., LLC v. Cepeda , 156 AD3d 440, 441[1st Dept 2017] [holding no duty to defend where defendant is not an insured to which plaintiff owes a duty to defend because "[a]lthough [defendant] was assigned the claimants' rights for reimbursement of no-fault benefits, the claimants were only passengers in the insured vehicle at the time of the accident, and were not parties to whom [plaintiff] owed a duty to defend"]; see also Fiduciary Ins. Co. of Am. v. Med. Diagnostic Serv., P.C. , 150 AD3d 498 [1st Dept 2017] ).
Answering defendants' reliance on Insurance law § 5106 entitled "Fair claims settlement" is unavailing, as there is nothing in the statute indicating that it applies to declaratory judgment actions. Section 5106 (a) states in part, "Payments of first party benefits and additional first party benefits shall be made as the loss is incurred .... If a valid claim or portion was overdue, the claimant shall also be entitled to recover his attorney's reasonable fee, for services necessarily performed in connection with securing payment of the overdue claim, subject to limitations promulgated by the superintendent in regulations" ( Insurance Law § 5106 [a] ). Section 5102 (b) defines first party benefits as "payments to reimburse a person for basic economic loss on account of personal injury arising out of the use or operation of a motor vehicle ..." ( Insurance Law § 5102 [b] ). There is nothing in section 5106 (a) or the definition of first party benefits in section 5102 (b) that supports application to declaratory judgment actions. Moreover, although section 5106 permits a claimant "to recover his attorney's reasonable fee, for services necessarily performed in connection with securing payment of the overdue claims, subject to limitations promulgated by the superintendent in regulations," there is nothing in the referenced regulations to support application to declaratory judgment actions ( Insurance Law § 5106 [a] ); see 11 NYCRR 65-4.6 ).
Answering defendants' reliance on Mighty Midgets v. Centennial Ins. Co. (47 NY2d 12 [1979] ), and U.S. Underwriters Ins. Co. v. City Club Hotel , LLC (3 NY3d 592 [2004] ) is misplaced because those cases specifically dealt with indemnification of an insured. Here, the Answering defendants are not the insured parties but rather "assignee[s] of the rights of the no-fault claimants in the underlying automobile accident to whom [they] provided medical treatment" ( Hertz Vehs , 156 AD3d at 441 ). The insured parties in Mighty Midgets and U.S. Underwriters Ins. were able to recover attorneys' fees because "an insurer's duty to defend an insured extends to the defense of any action arising out of the occurrence, including a defense against an insurer's declaratory judgment action" ( U.S. Underwriters , 3 NY3d at 597-598 ). However, an insurer's duty to defend does not extend to assignees of the rights of no-fault claimants, here the answering defendants ( Hertz Vehs. , 156 AD3d at 441 ). The court need not address plaintiff's and Answering defendants' remaining contentions.
CONCLUSION
Accordingly, it is hereby
ORDERED that plaintiff's order to show cause for a preliminary injunction is granted (motion sequence 001); and it is further
ORDERED that plaintiff and BSA Chiropractic, Eastcoast Metropolitan Medical, P.C., Laurus Acupuncture, P.C., One to One Rehab PT, P.C., and Psychological Adaptation Services P.C. submit affidavits on the proper amount of plaintiff's undertaking within 14 days of entry of this order; and it is further
ORDERED that plaintiff's motion for default judgment against defendants Latanya Hampton, John T. Bunn, Cheryl Armour, Safiyah Souza, Shakeya Witherspoon, Nakia McCrae, Audrey Johnson, Avalon Radiology, P.C., Avanguard Medical Group, PLLC, East Coast Medical Diagnostic, P.C., Harden Street Medical, P.C., Metropolitan Medical & Surgical, P.C., Selena Apelis, D.C. and Vivid Acupuncture, P.C. is granted (motion sequence 002); and it is further
ORDERED that plaintiff's motion to dismiss the counterclaim of BSA Chiropractic, Eastcoast Metropolitan Medical, P.C., Laurus Acupuncture, P.C., One to One Rehab PT, P.C., and Psychological Adaptation Services P.C. is granted (motion sequence 003).