Hala v. Orange Reg'l Med. Ctr.
| Decision Date | 16 October 2019 |
| Docket Number | Index No.3221/14,2018–05465 |
| Citation | 113 N.Y.S.3d 212,178 A.D.3d 151 |
| Parties | Veronica HALA, et al., Plaintiffs-Respondents, v. ORANGE REGIONAL MEDICAL CENTER, Defendant-Respondent, Barbara Spreitzer, FNP, et al., Appellants, et al., Defendant; Terry H. Winter, et al., Nonparty-Respondents. |
| Court | New York Supreme Court — Appellate Division |
Feldman, Kleidman, Coffey, Sappe & Regenbaum, LLP, Fishkill, N.Y. (Marsha S. Weiss of counsel), and Vogrin & Frimet, LLP, New York, N.Y. (Francine L. Semaya of counsel), for appellants (one brief filed).
Wingate, Russotti, Shapiro & Halperin, LLP, New York, N.Y. (Kathleen P. Kettles of counsel), for plaintiffs-respondents.
WILLIAM F. MASTRO, J.P. COLLEEN D. DUFFY, HECTOR D. LASALLE, ANGELA G. IANNACCI, JJ.
At issue on this appeal is whether the Supreme Court properly declined to grant full faith and credit to an order of the South Carolina Court of Common Pleas, Fifth Judicial Circuit (L. Casey Manning, J.) (hereinafter the South Carolina court), entered September 21, 2017 (hereinafter the South Carolina order), pursuant to the Uniform Insurers Liquidation Act (hereinafter the UILA), which provides a uniform system for the equitable distribution of assets and liabilities of defunct multistate insurers. The South Carolina order, inter alia, purports to permanently stay this and other actions by New York plaintiffs against defendants who are policyholders of insurance liability coverage provided by the Oceanus Insurance Company, RPG (hereinafter Oceanus). Oceanus is a risk retention group created pursuant to the federal Liability Risk Retention Act (hereinafter LRRA) (see 15 USC § 3901 et seq. ), and organized and licensed in South Carolina.
Both New York and South Carolina have adopted versions of the UILA.
The defendants Barbara Spreitzer, FNP, and Horizon Medical Group, P.C. (hereinafter Horizon, and hereinafter together the appellants), moved in the Supreme Court, asking it to accord full faith and credit and interstate comity to the South Carolina order and to permanently stay this action. In the order appealed from, dated April 23, 2018, the Supreme Court, inter alia, denied the appellants' motion.
Notwithstanding the goals of the UILA, for the reasons set forth herein, the principles of due process and the right of the plaintiffs to seek redress in the courts in New York for wrongs they allege occurred in New York mandate that the South Carolina order is not entitled to full faith and credit or comity by the courts in New York in this and the related actions. We therefore affirm the order insofar as appealed from.
In April 2014, the plaintiff Veronica Hala (hereinafter the plaintiff) and her husband Keith Hala (hereinafter together the plaintiffs) commenced this action in the Supreme Court, Orange County, against the appellants and the defendants Orange Regional Medical Center (hereinafter Orange) and Joseph L. Racanelli (hereinafter collectively the defendants), seeking damages for injuries the plaintiffs allege arose from medical malpractice committed by the defendants in failing to timely diagnose the plaintiff's breast cancer. In January 2017, after the completion of discovery, the plaintiffs filed a note of issue. During the course of discovery, the defendants Racanelli, Spreitzer, and Horizon disclosed that they were insured by Oceanus. Orange is insured by a different medical malpractice insurance company. Neither Oceanus nor Orange's insurance provider is a party to this action.
Thereafter, Orange and Racanelli moved, and the appellants separately moved, for summary judgment. By order dated August 2, 2017 (hereinafter the summary judgment order), the Supreme Court granted those branches of the motion of Orange and Racanelli which were for summary judgment dismissing the causes of action asserted against them alleging lack of informed consent and medical malpractice as to the plaintiff's January 9, 2012, visit to those defendants. The summary judgment order also granted those branches of the appellants' motion which were for summary judgment dismissing the cause of action asserted against Horizon alleging negligent hiring and supervision and the cause of action asserted against Spreitzer and Horizon pertaining to Spreitzer's treatment of the plaintiff for Fifth's Disease. The Supreme Court denied that branch of the motion of Racanelli and Orange which was for summary judgment dismissing the cause of action alleging medical malpractice insofar as asserted against them with respect to interpreting the plaintiff's January 9, 2012, ultrasound, and denied those branches of the appellants' motion which were for summary judgment dismissing the cause of action alleging that they failed to refer the plaintiff to a breast surgeon.1
A pretrial conference was held in August 2017 and jury selection was scheduled for January 2018. Shortly after the pretrial conference, in connection with a liquidation proceeding in South Carolina commenced in August 2017 by the South Carolina Department of Insurance against Oceanus, discussed below, the appellants moved before the Supreme Court, inter alia, to permanently stay this action based on the South Carolina order issued by the South Carolina court in that liquidation proceeding. In the order appealed from, dated April 23, 2018 (see Hala v. Orange Regional Med. Ctr., 60 Misc.3d 274, 76 N.Y.S.3d 369 [Sup. Ct., Orange County] ; hereinafter the April 2018 order ), the Supreme Court, inter alia, denied the motion.
Thereafter, the appellants moved in this Court, inter alia, to stay all proceedings in the action pending hearing and determination of the appeal. By decision and order on motion dated June 15, 2018, this Court granted that branch of the appellants' motion.
Oceanus was formed in 2004 as a risk retention group domiciled in South Carolina and conducting business in numerous states, including New York. On August 29, 2017, the Director of the South Carolina Department of Insurance commenced liquidation proceedings against Oceanus in the South Carolina court and, on September 21, 2017, the South Carolina court issued the South Carolina order which purports to permanently stay all proceedings against both Oceanus and its policyholders, including this action and other similar actions in New York wherein defendants are policyholders of Oceanus insurance coverage. Specifically, the South Carolina order provides that Oceanus is " ‘officially declared insolvent’ " and that it is " ‘dissolved.’ " It enjoins, inter alia, " ‘[t]he institution or further prosecution of any actions or proceedings,’ " " ‘[t]he obtaining of preferences, judgments, attachments, garnishments, or liens against the insurer, its assets, or its policyholders’ " and " ‘[t]he levying ... of execution against the insurer, its assets, or its policyholders’ " and the injunction is both " ‘permanent’ " and " ‘applicable to all persons and proceedings’ " ( Hala v. Orange Regional Med. Ctr., 60 Misc.3d at 277–278, 76 N.Y.S.3d 369, quoting the South Carolina order).2 The appellants contend that the South Carolina order should be given full faith and credit by the courts in New York such that this action and the April 2018 order must be permanently stayed.
As noted above, Oceanus is the risk retention group that provided insurance coverage to Spreitzer, Horizon, and Racanelli. Currently, there are 15 other actions pending against certain policyholders of Oceanus liability insurance coverage in the Ninth Judicial District of New York. The parties acknowledge that the South Carolina order purports to affect not only this case but also those 15 other pending cases. To ensure consistent disposition of those matters in light of Oceanus's liquidation and the South Carolina order purporting to stay actions against its policyholders, a special part was created in the Ninth Judicial District to manage matters pertaining to and arising from the South Carolina order. To the extent that the South Carolina court lacks personal jurisdiction over the plaintiffs in those pending actions, this Court's determination in this case is also applicable to those cases.
"New York adopted the UILA in 1940 ‘with the main purpose in mind of providing a uniform system for the orderly and equitable administration of the assets and liabilities of defunct multistate insurers’ " ( Matter of Levin v. National Colonial Ins. Co., 1 N.Y.3d 350, 356, 774 N.Y.S.2d 465, 806 N.E.2d 473, quoting G.C. Murphy Co. v. Reserve Ins. Co., 54 N.Y.2d 69, 77, 444 N.Y.S.2d 592, 429 N.E.2d 111 ; see Ambassador Ins. Co. v. Allied Programs Corp., 165 A.D.2d 806, 807, 564 N.Y.S.2d 54 ). A sister state that has likewise adopted the UILA is referred to as a "reciprocal state," and the state in which an insolvent insurer is incorporated or organized is referred to as the insolvent insurer's "domiciliary state" (see Insurance Law § 7408[b][4], [6] ). The UILA "recognizes the authority of the domiciliary state and its receiver over all of the insolvent insurer's assets, including those located in New York" ( Matter of Levin v. National Colonial Ins. Co., 1 N.Y.3d at 357, 774 N.Y.S.2d 465, 806 N.E.2d 473 ; see Insurance Law § 7410[b] ).3
Pursuant to both New York's and South Carolina's enactments of the UILA, a court hearing liquidation proceedings may issue orders or injunctions to prevent interference with the proceedings or dissipation of the insurer's assets (see Insurance Law § 7419[b] ; SC Code Ann § 38–27–70 [A][1][d] ). In New York, this provision of the UILA empowers the court to enjoin the "waste of the assets of the insurer, or the commencement or prosecution of any actions, the obtaining of preferences, judgments, attachments or other liens, or the making of any levy against the insurer, its assets or any part thereof" ( Insurance Law § 7419[b] ; se...
To continue reading
Request your trial
-
Unkechaug Indian Nation v. Treadwell
...1067 [10th Cir.] ; AT & T Corp. v. Coeur d'Alene Tribe, 295 F.3d 899, 903 [9th Cir.] ; see generally Hala v. Orange Regional Med. Ctr., 178 A.D.3d 151, 166, 113 N.Y.S.3d 212 ; Matter of Long Is. Forum for Tech. v. New York State Div. of Human Rights, 85 A.D.3d 791, 794, 925 N.Y.S.2d 535 ). ......
-
The City of New York v. All. of Nonprofits for Ins.
...subject to the laws of its chartering state, in this case Vermont (Wadsworth, 748 F.3d at 103; see Hala v Orange Regional Med. Ctr., 178 A.D.3d 151, 153 [2d Dept 2019] [analyzing claim regarding insured of a Risk Retention Group under law of domicile state as well as New York]). Like New Yo......