David v. Bauman

• Decision Date: 03 February 1960
• Docket Number: No. 2,No. 1,1,2
• Parties: Preston DAVID and Zelda David, Plaintiffs, v. Robert BAUMAN, Defendant. Action Marilyn R. MESSINA, Philip J. Messina, Frank Gebert, Caroline Gebert and Caroline M. Bauman, Plaintiffs, v. Robert P. BAUMAN and Preston David, Defendants. . Supreme Court, Special Term, Nassau County, Part I
• Court: New York Supreme Court

Page 746

196 N.Y.S.2d 746

24 Misc.2d 67

Preston DAVID and Zelda David, Plaintiffs, v. Robert BAUMAN, Defendant.

Action No. 1.

Marilyn R. MESSINA, Philip J. Messina, Frank Gebert, Caroline Gebert and Caroline M. Bauman, Plaintiffs, v. Robert P. BAUMAN and Preston David, Defendants.

Action No. 2. Supreme Court, Queens County.

Supreme Court, Special Term, Nassau County, Part I.

Feb. 3, 1960.

Emile Z. Berman, for plaintiffs in Action No. 1.

Max Tacouni, Flushing, for plaintiffs in Action No. 2. Nathan Grossgold, Flushing, of counsel.

Lawless & Lynch, New York City, for defendant Bauman.

Casper B. Ughetta, New York City, for defendant David in Action No. 2.

BERNARD S. MEYER, Justice.

The question presented by this omnibus motion is whether after plaintiffs in this action (Action No. 1) have been granted summary judgment and a date has been set for assessment of damages, the plaintiffs in another action (Action No. 2) against a common defendant growing out of the same accident should be permitted to intervene, or a joint trial or consolidation of the two cases be ordered, or the Court's equity powers used to stay the assessment until the other action has been brought to judgment. Movants are the plaintiffs in Action No. 2. Their motion for summary judgment in that action is presently pending. With commendable frankness they knowledge that the present motion is prompted by the fact that the common defendant has no assets and is protected by a liability policy, the limits of which are $10,000 and $20,000, which may well be exhausted by the judgment in Action No. 1. The motion is in all respects denied. The contest of multiple plaintiffs for the limited assets of a common defendant is one which the common law has generally solved in terms of chronological priority. Phrases such as 'race of diligence' and 'first in time, first in right' are thus common in commercial matters. Exceptions are made only when the prior right is obtained fraudulently (e. g.--Debtor and Creditor Law, Article 10) or in violation of the Bankruptcy Act's prohibition against preferences within four months of bankruptcy. Unless some legislative policy otherwise requires, there is no reason to threat the contest of multiple tort plaintiffs differently; while their claims originate differently, the ultimate goal of each is to be classed as a creditor in order to proceed against assets of the defendant.

Movants suggest that the legislative declaration of policy set forth in the Financial Security Act (Vehicle and Traffic Law, § 93) that 'motorists shall be financially able to respond in damages for their negligent acts, so that innocent victims of motor vehicle accidents may be recompensed for the injury and financial loss inflicted upon them' and the right given by Insurance Law, § 167(7) to one who has obtained a judgment in an automobile accident case to proceed against defendant's liability insurer somehow add up to such a legislative policy. Much has been said in movants' argument about the effect of the March, 1959 amendment to Rules of Civil Procedure, Rule 113, making possible summary judgment in negligence actions, and the intent behind that amendment. Clearly, the promulgation pursuant to Judiciary Law, § 83 by the Justices of the four Appellate Divisions of the March, 1959 revision of Rules of Civil Procedure, Rule 113 could not alter a legislative policy if one existed. But movants readily admit 'that there is no pro-rating statute applicable to liability coverage' except as Vehicle and Traffic Law, § 17 requires such apportionment with respect to vehicles for hire. Case law going back to 1935 in New York and even earlier elsewhere makes clear that the right granted by Insurance Law, § 167(7) does not alter the 'first in time, first in right' principle whether the priority is by way of judgment or by way of settlement. Stolove v. Fidelity & Casualty Co. of New York, 157 Misc. 106, 282 N.Y.S. 263; Pisciotta v. Preston, 170 Misc. 376, 10 N.Y.S.2d 44; O'Dwyer v. Grove Service Corp., 15 Misc.2d 154, 181 N.Y.S.2d 338; Bartlett v. Travelers' Insurance Co., 117 Conn. 147, 167 A. 180; Turk v. Goldberg, 91 N.J.Eq. 283, 109 A. 732; Bruyette v. Sandini, 291 Mass. 373, 197 N.E. 29; cf. Pasher v. Reisenberg, Sup., 87 N.Y.S.2d 872, n. o. r. Were the rule otherwise, an insurer could protect itself against being required to pay more than its policy limits only by refusing any payment until an equity action had been brought for the purpose of ratable apportionment among judgment creditors. Bleimeyer v. Public Service Mut. Casualty Ins. Corp., 250 N.Y. 264, 165 N.E. 286; Frank v. Hartford Accident & Indemnity Co., 136 Misc. 186 239 N.Y.S. 397, affirmed without opinion 231 App.Div. 707, 245 N.Y.S. 777. Such a result would greatly impede realization of the legislative purpose set forth in Vehicle and Traffic Law, § 93. It would also have catastrophic effects upon court calendars, already heavily congested despite the fact that less than ten percent of all automobile accident claims actually reach trial. Movants acknowledge the existence of the case law referred to but argue that it does not apply to their situation because neither plaintiff has yet obtained judgment. The distinction is, however, one without a difference, for it means, at most, that Insurance Law, § 167(7) is not yet applicable and, therefore, that not even the suggestion of legislative policy which movant seeks to distill from its provisions exists to alter the 'first in time, first in right' rule. Actually, no such legislative policy, nor even the adumbration of such a policy exists. Quite to the contrary, the declaration of such a policy with respect to for-hire vehicles (which originated in Laws of 1922, Chap. 612, Vehicle and Traffic Law, § 17, subd. 4) and the failure to modify Insurance Law, § 167(7) despite the long existence of the case law referred to can only be read as a legislative refusal to make proration applicable generally. For this Court to require apportionment would be for it either to rewrite defendant's insurance policy or to engage in judicial legislation. While the discrepancy between the policy limits of the liability insurance required by law and present day verdicts in automobile cases indicates the necessity for further legislative study of the problem, it may...