B.Z. Chiropractic, P.C. v. Allstate Ins. Co.

• Decision Date: 21 July 2021
• Docket Number: 2019–04454, 2019–04456,Index No. 719878/18
• Citation: 152 N.Y.S.3d 46,197 A.D.3d 144
• Parties: In the Matter of B.Z. CHIROPRACTIC, P.C., respondent, v. ALLSTATE INSURANCE COMPANY, appellant.
• Court: New York Supreme Court — Appellate Division

197 A.D.3d 144

152 N.Y.S.3d 46

In the Matter of B.Z. CHIROPRACTIC, P.C., respondent,

v.ALLSTATE INSURANCE COMPANY, appellant.

2019–04454, 2019–04456

Index No. 719878/18

Supreme Court, Appellate Division, Second Department, New York.

Argued—September 21, 2020

July 21, 2021

Peter C. Merani, P.C., New York, N.Y. (Adam Waknine of counsel), for appellant.

Amos Weinberg (Lynn Gartner Dunne, LLP, Mineola, N.Y. [Kenneth L. Gartner ] of counsel), for respondent.

MARK C. DILLON, J.P., BETSY BARROS, FRANCESCA E. CONNOLLY, LINDA CHRISTOPHER, JJ.

OPINION & ORDER

DILLON, J.

This action invites us to address whether an advisory opinion or dicta in an order by a court qualifies under res judicata, collateral estoppel, or the law of the case doctrines to preclude a court in a later proceeding from considering the same issue. We hold that a court's dicta is not subject to the preclusive effect of the doctrines of res judicata, collateral estoppel, or law of the case.

I. Relevant Facts

The underlying facts of this matter exhibit the signs of age and follow a somewhat unusual path, but are not particularly complex.

In 2000, B.Z. Chiropractic, P.C. (hereinafter BZ), commenced an action in the Civil Court, Queens County, against Allstate Insurance Company (hereinafter Allstate) to recover assigned first-party no-fault benefits (hereinafter the Civil Court action). On November 15, 2001, judgment was entered in favor of BZ and against Allstate in the amount of $8,847.49, which included both the amount of compensatory damages plus prejudgment interest, costs, and disbursements (hereinafter the 2001 judgment).

BZ did not seek to enforce the 2001 judgment until 2015. In 2015, counsel for BZ sent Allstate a letter demanding $229,981.66, reflecting the amount of the 2001 judgment plus compound postjudgment interest computed at 2% per month. Thereafter, Allstate paid BZ $8,842.49, and moved in the Civil Court for an order, inter alia, tolling the accrual of all postjudgment interest. The court, in an order dated November 16, 2015, held that BZ unreasonably allowed the accrual of compound interest for almost 15 years and that interest should not accrue for the period of November 1, 2005, through June 19, 2015. The result of the court's order was to leave BZ entitled to only the amount of the original judgment plus interest accruing before and after the judicially-imposed tolling period.

With the interest that accrued before November 1, 2005, and after June 19, 2015, Allstate paid, inclusive of the original judgment, $22,999.70. Allstate then filed another motion in the Civil Court seeking, among other things, to compel BZ to file a satisfaction of judgment for the amount that was due and that Allstate had paid. In an order entered July 7, 2016, the court, among other things, directed the clerk to enter a satisfaction of judgment for the stated sum (see B.Z. Chiropractic, P.C. v. Allstate Ins. Co., 56 Misc.3d 139[A], 65 N.Y.S.3d 490, 2017 N.Y. Slip Op. 51091[U] [App. Term, 2d Dept., 11th & 13th Jud. Dists] ).

BZ appealed both of the Civil Court orders to the Appellate Term for the 2nd, 11th, and 13th Judicial Districts. The only issues on appeal before the Appellate Term were whether interest should have been judicially tolled between November 1, 2005, and June 19, 2015, and whether a satisfaction of judgment should have been entered, as those were the issues that had been decided by the Civil Court in the orders appealed from. Apparently not placed before the Civil Court or the Appellate Term was any issue about the rate at which any such interest should be calculated, though in its submission, BZ incidentally mentioned that the rate was 2% per month as mandated by Insurance Law § 5106 and former 11 NYCRR 65.15(h).

By decision and order dated August 18, 2017, the Appellate Term held that the Civil Court had erred in tolling the accrual of interest on the 2001 judgment on the ground that there was no evidence of any actions or conduct by BZ which prevented Allstate from timely paying the judgment (see B.Z. Chiropractic, P.C. v. Allstate Ins. Co., 56 Misc.3d 139[A], 65 N.Y.S.3d 490, 2017 N.Y. Slip Op. 51091[U], *2 ). That portion of the Appellate Term's decision is not at issue here. However, the Appellate Term also "note[d] that, contrary to [BZ's] position, postjudgment interest should be calculated pursuant to CPLR 5004 and not at the two percent per month rate provided for in 11 NYCRR 65–3.9(a)" ( 56 Misc.3d 139[A], 65 N.Y.S.3d 490, 2017 N.Y. Slip Op. 51091[U], *2 ). The Appellate Term therefore, among other things, modified the Civil Court order entered July 7, 2016, to the extent of directing that the filed satisfaction of judgment be a mere partial satisfaction toward the new total amount due to BZ (see 56 Misc.3d 139[A], 65 N.Y.S.3d 490, 2017 N.Y. Slip Op. 51091[U], *2 ). The language of the Appellate Term's decision, and the difference between the legal rate of interest under CPLR 5004 and the 2% per month rate of interest under Insurance Law § 5106 and 11 NYCRR 65–3.9(a), are at the heart of the controversy that followed.

Thereafter, BZ moved in the Appellate Term for a clarification of its August 18, 2017 decision and order insofar as the interest rate language was concerned, and for leave to appeal to this Court. By decision and order on motion dated December 14, 2017, the Appellate Term granted BZ's motion to the extent of clarifying that "it was this court's intention to note that interest be awarded at the rate of nine percent per year as set forth in CPLR 5004." In the same order, the Appellate Term denied leave to appeal to this Court because the portion of its August 18, 2017 decision and order which BZ sought to appeal was "advisory" and not appealable as of right or by permission. In other words, by its own description, the Appellate Term's mention that interest be calculated at the 9% rate of CPLR 5004 was not a determination rendered on the merits.

BZ, perhaps frustrated that it was denied an appellate remedy on the issue of the proper rate of interest on the judgment, filed a separate motion with this Court, for leave to appeal the Appellate Term's orders. By decision and order on motion dated March 2, 2018, this Court denied BZ's motion for leave to appeal. While this Court did not explain its reason for denying leave to appeal, it would make sense for our Court to have denied leave because "advisory opinions" outside the scope of the litigated issues are not appealable as of right or by permission (see Bennett v. State Farm Fire & Cas. Co., 189 A.D.3d 748, 133 N.Y.S.3d 473 ; Thornhill v. Degen, 185 A.D.3d 982, 983, 125 N.Y.S.3d 885 ).

By notice of petition dated May 18, 2018 (hereinafter the First Petition), BZ commenced a hybrid turnover proceeding pursuant to CPLR 5225 against Allstate in the Supreme Court, Queens County, seeking the turnover of monies from Allstate's bank account maintained outside New York in such sum sufficient to satisfy the 2001 judgment, and action for a judgment declaring that the 2001 judgment accrued interest at the rate of 2% per month compounded. By order entered November 16, 2018, the Supreme Court dismissed the First Petition for improper service of process.

Thereafter, BZ commenced the instant hybrid turnover proceeding pursuant to CPLR 5225 and action for declaratory relief against Allstate in the Supreme Court, Queens County, seeking the same relief that BZ had sought with the First Petition. The petition/complaint in the instant proceeding/action was specifically denominated as seeking a declaratory judgment and order that Allstate pay the underlying judgment at an interest rate of 2% per month, compounded (see CPLR 3001 ). In effect, BZ's turnover proceeding/action sought to ignore the Appellate Term's "advisory opinion" that interest be computed at the 9% annual rate of CPLR 5004, by instead calculating interest upon the higher rate of 2% per month as defined by Insurance Law § 5106 and former 11 NYCRR 65.15(h). Allstate cross-petitioned for, inter alia, dismissal of the proceeding/action on the grounds of res judicata and collateral estoppel based upon the Appellate Term's earlier determinations that interest should be calculated at the 9% rate. The cross petition also sought to impose monetary sanctions against BZ pursuant to 22 NYCRR 130–1.1 for having commenced a frivolous proceeding/action otherwise barred by the doctrines of res judicata and collateral estoppel.

By order entered March 8, 2019, the Supreme Court denied that branch of BZ's petition/complaint which was to turn over monies in Allstate's bank account because the bank was not a party as required by CPLR 5225(b). However, to the extent the hybrid proceeding/declaratory judgment action sought a judgment declaring the proper rate of postjudgment interest, which did not involve the nonparty bank, the court granted that branch of the petition/complaint, holding that BZ was entitled to a judgment declaring that the 2001 judgment accrued interest at the rate of 2% per month compounded. The court denied Allstate's cross petition.

Allstate moved for leave to renew and reargue its cross petition. In support of that branch of its motion which was for leave to renew, Allstate contended that BZ had sought the same relief in the First Petition, which had been dismissed for improper service of process. Allstate argued, in support of that branch of its motion which was for leave to reargue, that BZ's proceeding/action was barred by res judicata, collateral estoppel, and, for the first time during the various litigations, the doctrine of law of the case.

In an order entered April 22, 2019, the Supreme Court denied that branch of Allstate's motion which was for leave to renew. It determined that Allstate's stated basis for that branch of its motion, regarding the earlier procedural dismissal, did not involve new evidence or a change in the law, citing Delvecchio v. Bayside Chrysler Plymouth Jeep Eagle, 271 A.D.2d 636, 706 N.Y.S.2d 724. The...