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Creinis v. Hanover Insurance Co.

February 3, 2009

PAULINA CREINIS, RESPONDENT,
v.
HANOVER INSURANCE COMPANY, APPELLANT.



In an action pursuant to Insurance Law § 3420(a)(2) to recover an unsatisfied judgment against the defendant's insured, the defendant appeals from (1) so much of an order of the Supreme Court, Kings County (Schmidt, J.), dated January 3, 2006, as denied its motion pursuant to CPLR 3124 and 3126 to compel certain discovery or, in the alternative, to preclude the plaintiff from adducing certain evidence at trial, (2) an order of the same court dated March 2, 2006, which granted the plaintiff's motion for summary judgment on the complaint and, in effect, denied its cross motion for summary judgment dismissing the complaint, and (3) a judgment of the same court dated April 14, 2006, which, upon the order dated March 2, 2006, is in favor of the plaintiff and against it in the principal sum of $800,000.

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and subject to revision before publication in the Official Reports.

WILLIAM F. MASTRO, J.P., FRED T. SANTUCCI, ANITA R. FLORIO, EDWARD D. CARNI, JJ.

(Index No. 22069/05)

DECISION & ORDER

ORDERED that the appeals from the orders dated January 3, 2006, and March 2, 2006, are dismissed, without costs or disbursements; and it is further,

ORDERED that the judgment is modified, on the law, by deleting the provision thereof which is in favor of the plaintiff and against the defendant in the principal sum of $800,000, and substituting therefor a provision which is in favor of the plaintiff and against the defendant in the principal sum of $25,000; as so modified, the judgment is affirmed, without costs or disbursements, and the matter is remitted to the Supreme Court, Kings County, for the entry of an appropriate amended judgment.

The appeals from the intermediate orders must be dismissed because the right of direct appeal therefrom terminated with the entry of judgment in the action (see Matter of Aho, 39 NY2d 241, 248). The issues raised on the appeals from the orders are brought up for review and have been considered on the appeal from the judgment (see CPLR 5501[a][1]).

On January 16, 2000, the plaintiff, while driving her own vehicle, was struck and injured by a vehicle (hereinafter the Fashina vehicle) operated by Olatoyin Fashina and owned by Olatoyin Fashina, Inc. (hereinafter together the Fashinas). The plaintiff demanded an uninsured motorist arbitration against her own insurer, but that insurer petitioned to stay the arbitration on the ground that the Fashinas and the Fashina vehicle were insured by the defendant, Hanover Insurance Company (hereinafter Hanover). The petition relied upon the facts that the police accident report pertaining to the collision listed an insurance code corresponding to Hanover as the insurer of the Fashina vehicle, and that an "Accident Information Exchange Report" also identified Hanover as the insurer. Hanover was joined as a named respondent in the proceeding to stay arbitration and was duly served with the notice of petition and petition, but failed to appear or answer. Accordingly, in an order dated November 8, 2002, entered upon Hanover's default, the Supreme Court, Kings County (Dabiri, J.) permanently stayed the arbitration, finding in part that, "based on the evidence submitted to the Court, the vehicle operated by Olatoyin M. Fashina and owned by Olatoyin Fashina, Inc. was insured by [Hanover]."

Thereafter, Hanover moved to vacate the order entered upon its default, claiming, inter alia, that it never insured the Fashinas or the Fashina vehicle. In an order dated July 9, 2003, the court granted the motion, vacated the default, and referred the matter to a Judicial Hearing Officer to determine the issue of coverage. However, on the appeal by the plaintiff's insurer, this Court, in a decision and order dated June 7, 2004, reversed the order dated July 9, 2003, and reinstated the order dated November 8, 2002, entered on Hanover's default, finding that Hanover "failed to demonstrate a reasonable excuse for its default" (Matter of Hartford Ins. Co. of Midwest v Creinis, 8 AD3d 381).

Meanwhile, by the filing of a summons and complaint on December 30, 2002, the plaintiff commenced an action to recover damages for her personal injuries against the Fashinas. Notwithstanding letters sent by the plaintiff's counsel to the attorneys representing Hanover on the appeal from the order dated July 9, 2003, Hanover did not provide legal counsel to defend the Fashinas, who failed to appear in the action. Accordingly, the plaintiff moved for leave to enter a default judgment on the issue of liability against the individual operator, Olatoyin Fashina. In an order dated June 25, 2004, the Supreme Court, Kings County (M. Garson, J.), granted the motion, and an inquest to assess damages was scheduled for October 28, 2004. The inquest did not take place until February 22, 2005, well after this Court reinstated the order dated November 8, 2002, which both stayed arbitration and determined that Hanover was the insurer of the Fashina vehicle. Nevertheless, and notwithstanding the provision of notice of the inquest to Hanover, once again no one appeared on behalf of Olatoyin Fashina, who again defaulted. The inquest culminated in a judgment dated May 13, 2005, in favor of the plaintiff and against Olatoyin Fashina in the principal sum of $800,000. The judgment with notice of entry was served upon Hanover, but was not paid.

On or about July 12, 2005, the plaintiff commenced this action pursuant to Insurance Law § 3420(a)(2) against Hanover to recover the amount of the unsatisfied judgment. Hanover answered the complaint and asserted, as an affirmative defense, inter alia, that it never issued a policy of insurance to the Fashinas. Following some preliminary motion practice, the plaintiff moved for summary judgment on the complaint and Hanover cross-moved for summary judgment dismissing the complaint. The Supreme Court, Kings County (Schmidt, J.), granted the plaintiff's motion in an order dated March 2, 2006. A judgment dated April 14, 2006, in the principal sum of $800,000 was entered in favor of the plaintiff and against Hanover, and Hanover appeals.

Contrary to Hanover's contention, the Supreme Court properly imposed liability against it. "Insurance Law § 3420 grants an injured plaintiff the right to sue a tortfeasor's insurance company to satisfy a judgment obtained against the tortfeasor" (Lang v Hanover Ins. Co., 3 NY3d 350, 352). The action may be maintained following a 30-day waiting period after service upon the insurer of the judgment with notice of entry, assuming the insurer does not satisfy the judgment in the interim (see Insurance Law § 3420[a][2]). "Once the statutory prerequisites are met, the injured party steps into the shoes of the tortfeasor and can assert any right of the tortfeasor-insured against the insurance company" (Lang v Hanover Ins. Co., 3 NY3d at 355).

Here, the plaintiff made a prima facie showing of entitlement to judgment as a matter of law under Insurance Law ยง 3420(a)(2) (see generally Alvarez v Prospect Hosp., 68 NY2d 320). Certainly she proved the existence of an unsatisfied judgment in her favor in the underlying action to recover damages for personal injuries (see Lang v Hanover Ins. Co., 3 NY3d 350). However, Hanover contends that it never issued a policy to Olatoyin Fashina, Inc., and never covered the vehicle which struck the plaintiff. Therefore, Hanover reasons that the plaintiff is barred from any recovery because she cannot make the requisite showing that, "at the time of the accident, there was in full force and effect an agreement of insurance between the insurer and the judgment debtor covering the latter for the liability merged in the judgment" (Holmes v ...


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