Opinion
14118/2002.
Decided March 26, 2004.
Amos Weinberg Esq., Great Neck, NY, for Plaintiffs.
Joseph Nohavicka Esq., Jaffe Nohavicka, New York, NY, for Defendant.
Plaintiffs move to reargue their motion for summary judgment on their claims for insurance coverage of medical expenses, N.Y. Ins. Law § 5106(a), which this court denied in a decision filed May 13, 2003. C.P.L.R. § 2221(d). Defendant cross-moves to stay this action based on a Texas court order staying all proceedings against defendant. C.P.L.R. §§ 2201, 2215. For the reasons explained below, the court adheres to its prior decision and denies plaintiffs' motion, but grants defendant's cross-motion.
I. REARGUMENT
A motion for reargument must be based on facts or law that a prior decision overlooked or misapprehended. C.P.L.R. § 2221(d)(2); Johnson v. New York City Commn. on Human Rights, 270 A.D.2d 186, 187-88 (1st Dep't 2000). Reargument is not a vehicle for arguments not raised in the initial motion. Dinstber v. Fludd, 2 A.D.3d 670 (2d Dep't 2003); Pryor v. Commonwealth Land Tit. Ins. Co., 1 A.D.3d 494, 495 (2d Dep't 2003); Frisenda v. X Large Enters., 280 A.D.2d 514, 515 (2d Dep't 2001). See Rubinstein v. Goldman, 225 A.D.2d 328 (1st Dep't 1996); Mariani v. Dyer, 193 A.D.2d 456, 458 (1st Dep't 1993).
Plaintiffs argue that the court's requirement for an authenticated assignment runs afoul of Uniform Commercial Code (U.C.C.) § 9-318(3), which they claim provides: "if requested by the account debtor, the assignee must seasonably furnish reasonable proof that the assignment has been made and unless he does so the account debtor may pay the assignor." Section 9-318 contains no such provision and has no subsection 3. Plaintiffs cite § 9-318 in effect before 2001, when U.C.C. art. 9 was repealed and re-enacted. 2001 N.Y. Laws ch. 84, § 36.
Uniform Commercial Code § 9-406(c), however, currently provides:
Subject to subsection (g), if requested by the account debtor, an assignee shall seasonably furnish reasonable proof that the assignment has been made. Unless the assignee complies, the account debtor may discharge its obligation by paying the assignor, even if the account debtor has received a notification under subsection (a).
Article 9 applies to an assignment to a health care provider of a health care insurance receivable. U.C.C. § 9-109(d)(8). An "account debtor" is a "person obligated on an account." U.C.C. § 9-102(3). An "account" includes a "right to payment of a monetary obligation, whether or not earned by performance, . . . for a policy of insurance issued." U.C.C. § 9-102(2). A "health-care-insurance receivable," in addition to being a subset of the definition of "account," is an "interest in or claim under a policy of insurance which is a right to payment of a monetary obligation for health-care . . . services provided." U.C.C. § 9-102 (a)(46).
While Article 9 governs assignments of health care insurance receivables, U.C.C. § 9-109(d)(8), U.C.C. § 9-406 does not apply to such an assignment to the extent (1) it conflicts with other law," U.C.C. § 9-406(h)(1), or (2) "a right to payment" for health care services, a health care insurance receivable, is not established in the first instance. U.C.C. § 9-102 (a)(46). Even if New York insurance, contracts, or evidence law did not require "a properly executed assignment," 11 NYCRR § 65.15 (j)(2), subscribed by an authentic signature, Acevedo v. Audubon Mgt., 280 A.D.2d 91, 95 (1st Dep't 2001); Fields v. S W Realty Assoc., 301 A.D.2d 625 (2d Dep't 2003), and an unauthenticated assignment constituted "reasonable proof" of the assignment under U.C.C. § 9-406(c), it governs only assignees whom debtors must pay to satisfy a debt. See Capital Factors v. Caldor, Inc., 182 A.D.2d 532 (1st Dep't 1992). Defendant's obligation to pay under an insurance policy issued to plaintiffs' assignor is of course one of the other central elements plaintiffs must establish. E.g., Westchester County Med. Ctr. v. New York Cent. Mut. Fire Ins. Co., 262 A.D.2d 553, 555 (2d Dep't 1999); Bailey v. Allstate Ins. Co., 243 A.D.2d 520, 521 (2d Dep't 1997).
Under these principles, even assuming U.C.C. § 9-406(c)'s applicability in its limited context — determination of whom the debtor is to pay — plaintiffs misapprehend the fundamental import of an assignment that constitutes the basis for a summary judgment motion being in admissible form. To obtain summary judgment, plaintiffs must make a prima facie showing of entitlement to judgment as a matter of law, through admissible evidence eliminating all material issues of fact. C.P.L.R. § 3212(b); Giuffrida v. Citibank Corp., 100 N.Y.2d 72, 81 (2003). This court found that the alleged assignments of insurance benefits to plaintiffs, which were not established because none of the assignments identified the indebted insurer, and only two identified the assignor, were also inadmissible because the assignor's signature was not authenticated. BKS Assocs. v. Kenny, 151 A.D.2d 535 (2d Dep't 1989); A.B. Medical Services PLLC v. Hudson Insurance Co., N.Y.L.J., Feb. 10, 2004, at 20 (Civ.Ct. Kings Co.); Elm Med., P.C. v. American Home Assur. Co., 2003 N.Y. Slip Op 51357, 2003 WL 22471156 at *3 (Civ.Ct. Kings Co. Oct. 28, 2003). See Finova Capital Corp. v. CVS Revco D.S., 269 A.D.2d 265, 266 (1st Dep't 2000). Failure to support a claim with admissible evidence mandates denial of summary judgment on the claim no matter how deficient the opposition. Lesocovich v. 180 Madison Ave. Corp., 81 N.Y.2d 982, 985 (1993); Silverman v. Perlbinder, 307 A.D.2d 230, 231 (1st Dep't 2003); Wasserman v. Carella, 307 A.D.2d 225, 226 (1st Dep't 2003).
Denying summary judgment here thus has nothing to do with the defenses, objections, or other defects defendant must raise within a specified time, e.g., Presbyterian Hosp. in City of N.Y. v. Maryland Cas. Co., 90 N.Y.2d 274, 278, 281-82 (1997); Central Gen. Hosp. v. Chubb Group of Ins. Cos., 90 N.Y.2d 195, 199-200, 202 (1997); Mount Sinai Hosp. v. Triboro Coach, 263 A.D.2d 11, 16-17 (2d Dep't 1999), but with plaintiffs' burden as the party seeking summary judgment. Since plaintiffs have failed to demonstrate that the court overlooked any law applicable to summary judgment on their claims, the court denies reargument.
II. STAY
Defendant cross-moves, without opposition, for a stay of proceedings in this action based on an Agreed Permanent Injunction and Order Appointing Receiver dated November 6, 2003, by the District Court of Travis County, Texas, 53rd Judicial District, in State of Texas v. Highlands Insurance Company, No. GV304537 (Texas Order). Aff. of Kim R. Rasin, Ex. 1. The Texas Order found defendant in "hazardous financial condition," ¶ 1.3, and without sufficient assets to pay all claims against it, ¶ 1.5, and enjoined "persons, associations, corporations, or any other legal entities" from making "any claim, charge or offset, or commencing or prosecuting any action, appeal, or arbitration, including administrative proceedings, or obtaining any preference, judgment, attachment, garnishment, or other lien, or making any levy against Defendant." Id. ¶ 2.5. Thus continued prosecution of this action would violate the Texas Order.
"Except 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." C.P.L.R. § 2201. Defendant has not prejudiced plaintiffs by any delay in seeking a stay, as defendant's cross-motion is timely. C.P.L.R. § 2215. In addition, the stay is supported by the Uniform Insurers Liquidation Act (UILA), which governs proceedings against delinquent insurers, N.Y. Ins. Law §§ 7408-7415, and is intended to foster "the paramount interest of the various States in seeing that insurance companies domiciled within their respective boundaries are liquidated in a uniform, orderly and equitable manner without interference from external tribunals." G.C. Murphy Co. v. Reserve Ins. Co., 54 N.Y.2d 69, 81 (1981). See Levin v. National Colonial Ins. Co., ___ N.Y.2d ___, 2004 WL 303262 n. 1 (Feb. 12, 2004). "During the pendency of delinquency proceedings in this or any reciprocal state no action or proceeding in the nature of an attachment, garnishment, or execution shall be commenced or maintained in the courts of this state against the delinquent insurer or its assets." N.Y. Ins. Law § 7414. Thus, even though Texas has not enacted the UILA, if Texas is a "reciprocal state," N.Y. Ins. Law § 7408 (b)(6), the court must grant defendant a stay to effectuate the Texas delinquency proceeding and its order. N.Y. Ins. Law § 7414; Public Serv. Truck Renting v. Ambassador Ins. Co., 175 A.D.2d 632, 633 (4th Dep't 1991).
To be a "reciprocal state," the state must have insurance laws similar "in substance and effect," but not necessarily identical to the UILA. N.Y. Ins. Law § 7408 (b)(6); Levin v. National Colonial Ins. Co., 2004 WL 303262 n. 1; Public Serv. Truck Renting v. Ambassador Ins. Co., 175 A.D.2d at 633; Twin City Bank v. Mutual Fire Marine Inland Ins. Co., 646 F. Supp. 1139, 1140 (S.D.N.Y. 1986), aff'd, 812 F.2d 713 (2d Cir. 1987). The state's statutes relating to insurer liquidation must provide that: (1) the insurance commissioner serves as receiver; (2) domiciliary receivers may proceed in non-domiciliary states; (3) title to assets vest in a domiciliary receiver; (4) non-domiciliary creditors may opt to proceed with claims before local ancillary receivers; (5) the domiciliary state's laws are uniformly applied to preferences among claims; and (6) non-domiciliary creditors with advance information are not given preference. Kelly v. Overseas Investors, 24 A.D.2d 157, 160 (1st Dep't 1965), rev'd on other grounds, 18 N.Y.2d 622 (1966); Twin City Bank v. Mutual Fire Inland Ins. Co., 646 F. Supp. at 1141, aff'd, 812 F.2d 713.
Texas statutes provide for: appointment of the insurance commissioner as receiver, Tex. Ins. Code § 2(a); vesting title to an insurer's property in the receiver, Tex. Ins. Code § 2(b); uniform application of Texas law regarding preferences; and preventing preferences to non-domiciliary creditors. Tex. Ins. Code §§ 8(a)(2)(D) and (e). The Texas Insurance Code, however, does not allow for a domiciliary receiver to proceed in other jurisdictions, Tex. Ins. Code §§ 4(h), 13, and is silent as to a non-domiciliary's right to proceed before a local ancillary receiver.
Only Louisiana courts have ruled specifically on whether Texas is a "reciprocal state" under the UILA, holding that Texas does not qualify. See Bonura v. United Bankers Life Ins. Co., 552 So. 2d 1248, 1251 (La.Ct.App. 1989); Krueger v. Trabor, 546 So. 2d 1317, 1320 (La.Ct.App. 1989). Bonura v. United Bankers Life Ins. Co., 552 So. 2d at 1251, denied Texas reciprocal state status because Texas had not adopted the UILA, relying on a UILA provision that the UILA "shall be interpreted and construed to effectuate its general purpose to make uniform the law of those states that enact it." See N.Y. Ins. Law § 7415.
Nevertheless, even if this court does not afford Texas reciprocal state status, the court still may extend comity to Texas by enforcing the Texas Order's stay. E.g., Ambassador Ins. Co. v. Allied Programs Corp., 165 A.D.2d 806, 807 (1st Dep't 1990); Twin City Bank v. Mutual Fire Inland Ins. Co., 646 F. Supp. at 1141, aff'd, 812 F.2d 713; Maleski v. Landberg, 1995 WL 10838 at *2 n. 1 (S.D.N.Y. Jan. 12, 1995). The UILA's purpose is to "break down the differentiation among the states which . . . prevented some of them from extending comity to other states in the liquidation of non-domiciliary insurers." Kelly v. Overseas Investors, 24 A.D.2d at 161. See Ambassador Ins. Co. v. Allied Programs Corp., 165 A.D.2d at 807. Therefore the court recognizes the Texas Order and grants defendant's cross-motion for a stay.
III. CONCLUSION
Since plaintiffs failed to demonstrate that the court misapprehended any applicable law that would support summary judgment in their favor, the court denies plaintiffs reargument of their prior motion for that relief. C.P.L.R. §§ 2221(d), 3212(b). Although Texas has not enacted the UILA and is not a "reciprocal state" under that act, N.Y. Ins. Law §§ 7408 (b)(6), 7414, under the undisputed, compelling circumstances here, Texas is entitled to comity. Therefore the court enforces the Texas court's stay of other proceedings against defendant, grants defendant's cross-motion, and stays this action.