BLOOMBERG, STEINBERG & BADER

521 FIFTH AVENUE

30TH FLOOR

NEw

YOnx,

NY

10175

(212) 233-6255

FAx: (212) 587-3375

SEW

D. BADER' _WERSITE: WWW.BADERLAWFtRM.COht 433 Hackensack Avenue

2nct Floor

MARGO E. HADEM* HaclCensack. NJ 07601

(201) 968-1414

NELLIE RIVERA 3anuarY 9. 2020 Fax (201) 908-9399

PAltAI.EtlAt.

Reply to New York City

NYSECF

SYSTEM

&

TELECOPLER: 212-401-9042

IIon. Marsha I .. Steinhardt

Supreme Court. Kings _County

360 Adams Street. Part 15

Brooklyn.

NY

10001

Re: Pierre v. Sunrise Medical Laboratories, et al.

Index No: 502304/l3

Dear Judge Steinhardt:

I am counsel for the PlaintilTin the above matter.

This case has been stayed to date as a result of the _liling 11)r liquidation _{by Defendant}

IIolden s insurer Oceanus Ins. Co.. in September. 2017.

This will confirm our telephone conversation _today with Mark. that as a result of the

recent Appellate Division heiding in //ala v Orange Regional Aledical t 'enter. 2019 N.Y. App.

Div. LliXIS 7403: 2019

NY

_Slip

_0p

07387: 2019 WI. 5198903 (2"d Dept.. 2019). _{a copy} of

which is provided herewith for your cosiveiiience. _{the stay in this ease has been lifted.} and this

ease has been scheduled for a confereilee before Your IIonor on .Ianuary 15, 2020, at 9:30 a.m.

Thank you li)r your consideration.

Respectfully.

SDB/gma SliTIl D. BADIIR

ce: Carl A. Fomlicola. lisq.. vih NYSI(CF

Hala

v

Orange

Regional

Med.

Ctr.

Supreme

Court of

New

_York, Appellate _Division, Second Department

October _{16, 2019,} Decided

2018-05465

Reporter

2019 N.Y. App. Div.

LEXIS

7403 _*; 2019

NY

_Slip

_Op

07387 _**; 2019

WL

5198903

Core

Terms

[**1] Veronica Hala, et al., plaintiffs- insurer, retention, policyholders, personal

respondents, v

Orke

Regional Medical jurisdiction, permanently, courts, due

Center, defendant- respondent, Barbara process, comity, full faith and credit,

Spreitzer,

FNP,

et _{al., appellants,} et al., Insurance

Law,

liquidation proceedings,

defendant; Terry H. Winter, et al., nonparty- inter aba, proceedings, purports, enjoin,

respondents. (Index No. _3221/14) cause of action, defendants', liquidation,

insurance _{company, coverage,} medical

malpractice, insurance coverage,

summary

judgment, public policy, plaintiffs',

Notice:

THE

LEXIS

PAGINATION

OF

_principles, redress

THIS

DOCUMENT

IS

SUBJECT

TO

CHANGE

PENDING

RELEASE

OF

THE

FINAL

PUBLISHED

VERSION.

THIS

OPINION

IS

UNCORRECTED

Case

Summary

AND

SUBJECT

TO

REVISION

BEFORE

PUBLICATION

IN

THE

OFFICIAL

_Overview

REPORTS.

HOLDINGS:

[1]-The trial court _properly

declined to grant full faith and credit under

U.S. Const. art. IV, S 1, to a South Carolina

order issued pursuant to the Uniform

Prior History:

Hala

v.

Orange

Regional _{Insurers Liquidation Act}

(UILA)

purporting

Med. Ctr., 60 Misc.

3d

274. 76

N.Y

S

3d

to _{permanently stay} a malpractice action

3-69, 2018 N.Y. Misc.

LEXlS

1553 (A pr. 23. _{against defendants, a nurse practitioner and}

2018)

an insolvent insurer as its _{policyholders,}

main

purpose in

mind

of _providing a

because the goals of the

UILA

to provide a uniform system for the _orderly and

uniform method of _processing claims equitable administration of the assets and

against insolvent insurers did not override liabilities of defunct multistate insurers.

A

principles of due process under U.S. Const. sister state that has likewise adopted the

amend.

_XIV,

_{§ 2,} and the right of plaintiffs

UILA

is referred to as a reciprocal _state, and

to seek redress in

New

York

courts for the state in which an insolvent insurer is

wrongs _allegedly done to them in

New

incorporated or organized is referred to as

York, in light of the lack of personal the insolvent insurer's domiciliary state.

jurisdiction of the South Carolina court over Insurance

Law

_{§ 7408[b][4],} [6].

The

UILA

plaintiffs, which

was

undisputed.

Nor

was

recognizes the _authority of the _domiciliary

the order entitled to _comity as it violated state and its receiver over all of the

New

York

public policy. insolvent insurer's _{assets, including} those

located in

New

York. Insurance

Law

_§

7410[b].

Civil

Outcome

.

Procedure

>

Remedies

>

Injunctions

Order affirmed.

Insurance

Law

>

Insurer

Insolvency

>

Liquidations

&

Rehabilitations

LexisNexis® Headnotes

HN2[.i] Remedies, Injunctions

Pursuant to both

New

York's and South

Carolina's enactments of the Uniform

Insurers Liquidation Act _(UILA), a court

Insurance

Law

>

Regulators

>

State hearing liquidation proceedings

may

issue

Insurance Commissioners

&

orders or injunctions to prevent interference

Departments

>

Authorities

&

Powers with the proceedings or dissipation of the

insurer's assets. Insurance

Law

_{§ 7419[b];}

Insurance

Law

>

Insurer S.C.

Code

Ann. § 38-27-70fAlfllfdf). In

Insolvency

>

Liquidations

&

New

York, this provision of the

UILA

Rehabilitations

empowers

the court to enjoin the waste of

the assets of the _insurer, or the

HN1[±]

State Insurance

Commissioners

commencement

or prosecution of _any

&

Departments, Authorities

&

Powers

actions, the _obtaining of _preferences,

New

York

adopted the Uniform Insurers judgments, attachments or other liens, or the

assets or _any part thereof. Insurance

Law

_§ Civil Procedure

>

...

>

In

Rem

&

7419[b].

The

South Carolina counterpart to Personal Jurisdiction

>

In Personam

New

York's _statute, in _contrast, permits the Actions

> Due

Process

court to enjoin proceedings not _only against

the insolvent _insurer, but also against its Constitutional

Law

>

Relations

Among

policyholders. S.C.

Code

Ann. S 38-27- Governments

>

Full Faith

&

Credit

70fAlfllfdl,ffl-lhl).

Civil Procedure

>

...

>

Preclusion of

Judgments

>

Full Faith

&

Civil Procedure

>

...

>

Preclusion of Credit

>

_{Enforcement of Judgments}

Judgments

>

Full Faith

&

_Civil

Credit

>

Enforcement of Judgments _Procedure

_>

_...

_>

_Jurisdiction

_>

_Subject

Matter Jurisdiction

>

Jurisdiction

Over

Insurance

Law

>

_Insurer

. . Actions

Insolvency

>

Liquidations

&

Rehabilitations

RN4[A]

In

Personam

_Actions,

Due

Constitutional

Law

>

_Relations

_Among

hocess

Governments

>

Full Faith

&

Credit _{Pursuant to the Full Faith}

_and

Credit

Clause _of the United States _{Constitution,}

Civil

. U.S. Const. art. IV, S 1, the court of one

Procedure

>

Remedies

>

Injunctions

> P

. .

. state

_may

not disregard the judgment of a

ermanent Injunctions

sister state because it disagrees with the

HN3[±]

Full Faith

&

Credit, reasoning underlying the judgment or

deems

Enforcement

of

Judgments

it to be

wrong

on the merits; indeed, it

may

not conduct _{any inquiry} into the merits of

The

Uniform Insurers Liquidation Act _{the cause of}

action, the logic or consistency

(UILA)

mandates recognition of orders of the _decision, or the _validity of the legal

issued _by liquidation courts in reciprocal _{principles on which the judgment is based.}

states. Insurance

Law

_{§ 7410[b]). Likewise, Nonetheless, a State is not required to afford}

the Full Faith and_Credit Clause of the _{full faith and credit to a judgment rendered}

United States _{Constitution,} U.S. Const. art.

by a court that did not have jurisdiction over

IV, f 1, requires each State to recognize and _{the subject matter or the relevant parties.}

_An

give effect to valid judgments rendered _by

inquiry into jurisdiction includes

the courts of its sister States. Consistent _{considerations of due process.}

with these _mandates, courts of

New

York

recognize the

power

of courts of _domiciliary

states to _permanently enjoin litigation Civil Procedure

>

...

>

In

Rem

against an insurer subject to liquidation Personal Jurisdiction

>

In Personam

Civil Procedure

>

...

>

In

Rem

&

Civil Procedure

>

...

>

In

Rem

&

Personal Jurisdiction

>

In Personam Personal Jurisdiction

>

In Personam

Actions

> Minimum

Contacts Actions

> Minimum

Contacts

H_E_5[1] In

Personam

Actions,

Due

Civil

Process Procedure >...

>

Pleadings

>

Service of

Process

>

Service of

Summons

All assertions of state-court jurisdiction

must be evaluated _according to the _{H_E_7[i]} In

Personam

_Actions,

Due

standards set forth in International Shoe Co. Process

v

Washington and its progeny. That _is, a

State

_may

exercise jurisdiction over an In determining whether a particular exercise

absent defendant _only if the defendant has of state-court jurisdiction is consistent with

certain

minimum

contacts with the forum due process, the inquiry must focus on the

such that the maintenance of the suit does relationship

among

the party, the forum, and

not offend traditional notions of fair _play the litigation.

The

components of personal

and substantial justice. jurisdiction are the service of process, which

implicates due process requirements of

notice and _opportunity to be _heard, and the

Civil Procedure

>

...

>

In

Rem

&

power, or reach, of a court over a party, so

Personal Jurisdiction

>

In Personam as to enforce judicial decrees.

A

court has

Actions

> Due

Process

no power

to grant relief against an entity not

named

as a _party and not _properly

Civil Procedure >...

>

In

Rem

&

_summoned

_{before the court.}

_At

_a

_minimum,

Personal Jurisdiction

>

In Personam _to

satisfy the jurisdictional basis of a court's

Actions

> Minimum

Contacts

power

over a party, independent of service

. of process, there must be a constitutionall

HN6[±]

In

Personam

Actions,

Due

adequate connection between the _defendant,

the State and the action.

Although the parties' relationships with each

other

_may

be significant in _evaluating their

Civil Procedure

>

...

>

Preclusion of

ties to the _forum, the requirements of

Judgments

>

Full Faith

&

International Shoe must be

met

as to each

defendant over

whom

a state court exercises Credit

>

Enforcement of Judgments

personal jurisdiction.

Civil Procedure

>

Judgments

>

Relief

From

Judgments

> Void

Judgments

Civil Procedure

>

...

>

In

Rem

&

H_E8[1]

Fun

Faith

&

Credit,

Personal Jurisdiction

>

In Personam

Enforcement

of

Judgments

Actions

> Due

Process

process is void in the _rendering State and is Civil Procedure

>

...

>

In

Rem

&

not entitled to full faith and credit Personal Jurisdiction

>

In Personam

elsewhere. Actions

> Due

Process

Insurance

Law

>

Insurer

Civil Procedure

>

...

>

In

Rem

&

Insolvency

>

Liquidations

&

Personal Jurisdiction

>

In Personam Rehabilitations

Actions

>

Challenges

HN11[1]

In

Personam

Actions,

Due

Evidence

>

Burdens of Process

Proof

>

Allocation

The

Supreme Court of

New

_York, Appellate

ENN9[±] In

Personam

Actions, Division, Second Department, rejects the

Challenges contention that the goal of Uniform Insurers

Liquidation Act

(UILA)-to

provide a

The

parties _asserting personal jurisdiction _uniform

_method

_for

processing claims

have the burden of proof on that issue. _{against and}

distributing the assets of

distressed insurance companies with assets

and policyholders in multiple jurisdictions

Constitutional

Law

>

...

>

Fundamental

in the United States (Insurance

Law

_§

Rights

>

Procedural

Due

7415)-and

the need for reciprocal

Process

>

Scope of Protection

recognition of the

UILA

_among

the states

compels the conclusion _that, on _balance, the

Insurance

Law

>

Insurer _{. . . .}

Insolvency

>

Liquidations

&

requirement of personal jurisdiction is

Rehabilitations subordinate to these goals.

HN1#[A]

Procedural

Due

_Process, Scope

of Protection Civil Procedure

>

...

>

In

Rem

&

Personal Jurisdiction

>

In Personam

The

Supreme Court of

New

York, Appellate Actions

> Due

Process

Division, Second Department, rejects the

contention that a liquidation procedure Insurance

Law

>

Insurer

wherein insolvent insurance policyholders Insolvency

>

Liquidations

&

and persons with claims against the Rehabilitations

policyholders could file proof of their

Constitutional

Law

>

...

>

Fundamental

claims within the context of a liquidation

Rights

>

Procedural

Due

proceedings

somehow

comports with the

Process

>

Scope of Protection

traditional notions of fair _play and

substantial justice inherent in the _{Civil Procedure}

>

_...

>

_In

_Rem

_&

requirements of due process. _{Personal Jurisdiction}

>

_{In Personam}

HN12[A]

In

Personam

Actions,

Due

Governments

>

Courts

>

Judicial _Comity Process

Governments

>

State

&

Territorial

The

contention that the Uniform Insurers Governments

>

Relations With

Liquidation Act

_(UILA)

creates a special Governments

exception to the requirements of due

.

. .

HN14[A]

Courts, Authority to

process and personal junsdiction for

insurance liquidation proceedings is without Adjudicate

merit.

The

Supreme

Court of

New

_York,

Comity does not of its

own

force compel a

Appellate _Division, Second Department,

particular course of action. _Rather, it is an

joins the courts of Indiana and _Kentucky in

expression of one State's _{entirely voluntary}

rejecting an attempt to carve a special _{decision to defer to the}

policy of another.

exception into due process jurisprudence for

state-regulated insurance rehabilitation

proceedings.

The

UILA

cannot confer

Governments

>

Courts

>

_Authority to

jurisdiction without contacts and

Adjudicate

jurisdiction cannot be extended beyond due

process limits.

The

United States Governments

>

Courts

>

Judicial _Comity

Constitution's due process _clause, U.S.

Const. amend.

_XIV,

_{§ 2,}

was

not adopted to Governments

>

State

&

Territorial

further the convenience of the states but

was

Governments

>

Relations With

adopted to ensure that no state

would

Governments

attempt to enter _{a binding} judgment against

HN15[A]

Courts, Authority to

a party with

whom

the state has

no

_contacts,

Adjudicate

relations, or ties.

Comity will not yield to the acts of other

states where _doing so

would

do violence to

Governments

>

Courts

>

_Authority to

_some

strong public policy of the State.

Adjudicate

HN13[±]

Courts, Authority to Adjudicate

. Counsel: _{[*1] Feldman, Kleidman, Coffey,}

A

court has

power

to protect its jurisdiction

Sappe

&

Regenbaum,

LLP,

Fishkill,

NY

and to prevent devices which will have the

(Marsha S. Weiss of _counsel), and Vogrin

purpose alone of _frustrating a final

&

_Frimet,

LLP,

New

York,

NY

(Francine L. determination.

Semaya

of _counsel), for appellants (one brief filed).

Governments

>

Courts

>

_Authority to

LLP,

New

York,

NY

(Kathleen P. Kettles of

Supreme

[*2] Court properly declined to

counsel), for plaintiffs-respondents. 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),

Judges:

WILLIAM

F.

_MASTRO,

_J.P.,

entered September _21, 2017 (hereinafter the

COLLEEN

D.

_DUFFY,

HECTOR

D.

South Carolina _order), pursuant to the

LASALLE,

ANGELA

G.

IANNACCI,

JJ.

Uniform Insurers Liquidation Act

MASTRO,

J.P.,

LASALLE

and _{(hereinafter the}

UILA), which provides a

IANNACCI,

JJ., concur. _{uniform system for the equitable}

distribution of assets and liabilities of

defunct multistate insurers.

The

South

Opinion by:

COLLEEN

D.

DUFFY

Carolina order, inter alia, purports to

permanently stay this and other actions by

New

York

plaintiffs against defendants

who

are policyholders of insurance _liability

Opinion coverage provided by the Oceanus

Insurance

_Company,

RPG

(hereinafter

Oceanus). Oceanus is a risk retention _group

APPEAL

_by the defendants Barbara _{created pursuant to the federalLiabilitvRisk}

Spreitzer,

FNP,

and Horizon Medical _{Retention Act (hereinafter}

_LRRAL

_{(see 1}

Group, P.C., in an action, inter alia, to

USC

₄ 3901 et _seq.), and organized and

recover damages for medical _{malpractice, licensed in South Carolina. Both}

_New

_York

from an order of the

Supreme

Court (Lewis _{and South Carolina have adopted versions}

J. Lubell, J.), dated April 23, 2018, and of the

UILA.

entered in Orange County.

The

_order,

insofar as appealed _from, denied the motion

The

defendants Barbara Spreitzer,

FNP,

and

of the defendants Barbara Spreitzer,

FNP,

Horizon Medical Group, P.C. (hereinafter

and Horizon Medical _{Group, P.C.,} to grant Horizon, and hereinafter together the

full faith and credit to an order of the South appellants),

moved

in the

Supreme

Court,

Carolina Court of

Common

Pleas, Fifth asking it to accord full faith and credit and

Judicial Circuit (L. _{Casey Manning, J.),} interstate comity to the South Carolina

entered September _{21, 2017, which,} inter order [*3] and to permanently stay this

alia, purports to permanently stay this and action. In the order appealed from, dated

other actions _pending in the courts of

New

April 23, 2018, the

Supreme

Court, inter

York

State. alia, denied the

appellants'

motion.

DUFFY,

J. Notwithstanding the goals of the

UILA,

for

OPINION

&

ORDER

the reasons set forth _herein, the principles of

due process and the right of the plaintiffs to

wrongs _they allege occurred in

New

York

informed consent and medical malpractice

mandate that the South Carolina order is not as to the plaintiffs _{January 9, 2012,} visit to

entitled to full faith and credit or _{comity by} those defendants.

The

_summary

judgment

the courts in

New

York

in this and the order also granted those branches of the

related actions.

We

therefore affirm the appellants' motion which were for

_summary

order insofar as appealed from. judgment _dismissing the cause of action

asserted against Horizon _alleging negligent

Background ofthis Action . .

hinng and supervision and the cause of

In April _2014, the plaintiff Veronica

H

action asserted against Spreitzer and

(hereinafter the _plaintiff) and her husband Horizon pertaining to Spreitzer's treatment

Keith _{H_ajg} (hereinafter together the of the plaintiff for Fifth's Disease.

The

plaintiffs)

commenced

this action in the

Supreme

Court denied that branch of the

Supreme

_Court, Orange _County, against the motion of Racanelli and Orange which

was

appellants and the defendants

Orange

for

summary

judgment dismissing [*5] the

Regional Medical Center (hereinafter cause of action alleging medical malpractice

Orange) and Joseph L. Racanelli insofar as asserted against them with respect

(hereinafter _collectively the _defendants), to interpreting the plaintiffs January 9,

seeking damages for injuries the plaintiffs 2012, ultrasound, and denied those branches

allege arose from medical malpractice of the

appellants'

motion which were for

committed _by the defendants in _failing to

summary

judgment _dismissing the cause of

timely diagnose the plaintiffs breast cancer. action alleging that they failed to refer the

In _{January 2017,} after the completion of plaintiffto a breast surgeon.1

discovery, the plaintiffs filed a note [*4] of

A

pretrial conference

was

held in August

issue. _During the course of _discovery, the

defendants _{Racanelli, Spreitzer,} and 2017 and jury

selection

was

scheduled for

Horizon disclosed that _they were insured _by January

2 8.

_ShoMy

aâer pretrial

conference,

m

connection with a hquidation

Oceanus. Orange is insured _by a different .

medical malpractice insurance company. proceeding in South Carolina

commenced

m

, August 2017 by the South Carolina

Neither Oceanus nor Orange s insurance

. . Department of Insurance against _Oceanus,

provider _{is a party} to this action. .

discussed _below, the appellants

moved

Thereafter, Orange and Racanelli moved, before the Supreme Court, inter alia, to

and the appellants _{separately moved,} for _{permanently stay} this action based on the

summary

judgment.

By

order dated August South Carolina order issued

by

the South

2, 2017 (hereinafter the

summary

judgment Carolina court in that liquidation

order), the

Supreme

Court granted those proceeding. In the order appealed from,

branches of the motion of Orange and dated April _23, 2018 (see

Hala

v

Orange

Racanelli which were for

_summary

judgment _dismissing the causes of action

asserted against them _alleging lack of I The defede RacanelH and Orange separately filed notices of

appeal with respect to the Supreme Court's summary pdgmst order.

Regional Med. Ctr., 60 Misc

3d

_274, 76 its _assets, or its policyholders"' and the

N.Y.S.3d 369 ISuo Ct.

Orange

County/; injunction is both " permanent'" and "

hereinafter the April 2018 _order), the applicable to all persons _[*7] and

Supreme

_Court, inter _alia, denied the proceedings'" (Hala v

Orange

Regional

motion. Med. Ctr., 60 Misc

3d

at 277-278, _quoting

the South Carolina order)2 .

The

appellants

Thereafter, the appellants

moved

in this

contend that the South Carolina order

Court, inter alia, to stay all proceedings in

should be given full faith and credit _by the

the action _{pending hearing} and

courts in

New

York

such that this action and

determination of the appeal.

_By

decision

the April 2018 order must be _permanently

and order on motion dated June _{15, 2018,}

stayed.

this Court granted that branch _[*6] of the

appellants'

motion.

The

Oceanus Cases in

New

York

The

South Carolina Proceedings

As

noted _above, Oceanus is the risk

retention _group that provided insurance

Oceanus

was

formed in 2004 as a risk

coverage to _{Spreitzer, Horizon,} and

retention _group domiciled in South Carolina

Racanelli. _Currently, there are 15 other

and _conducting business in numerous states, _actions

pending against certain

including

New

York.

On

August 29, 2017, _{policyholders of Oceanus}

liability insurance

the Director of the South Carolina

coverage in the Ninth Judicial District of

Department of Insurance

commenced

New

York.

The

parties acknowledge that

liquidation proceedings against Oceanus in

the South Carolina order purports to affect

the South Carolina court _and,

on

September

not _only this case but also those 15 other

21, 2017, the South Carolina court issued

pending cases.

To

ensure consistent

the South Carolina order which purports to

disposition of those matters in light of

permanently stay all proceedings against _{Oceanus's liquidation and the South}

both Oceanus and its _{policyholders,}

Carolina order _purporting to _stay actions

including this action and other similar _{against its policyholders, a special part}

was

actions in

New

York

wherein defendants are

created in the Ninth Judicial District to

policyholders of Oceanus insurance

_manage

matters _pertaining to and _arising

coverage. Specifically, the South Carolina _{from the South Carolina order.}

_To

_{the extent}

order provides that Oceanus is " _officially

that the South Carolina court lacks personal

declared insolvent'" and that it is " _jurisdiction

over the plaintiffs in those

dissolved.'"

It _enjoins, inter _alia, " [t]he

pending actions, this Court's determination

institution or further prosecution of _any

actions or proceedings,'" " [t]he _obtaining of

. _{21n an order dated February 8, 2018, the South Carolina court issued}

preferences, [**2] judgments, attachments, _{a "clariñcation} order"

expressly confirming that the South Carolina

garnishments, or liens against the _insurer, itS order contains an automatic _stay permanently ejoir':; the

assets, or its policyholders"' and " [t]he institution actions or -n n or ru e proceedni.ss

levying . . . of execution against the insurer, insureds or oceanus (see nata v orange Regional

Md

Or.. 60

in this case is also applicable to those cases. _{H_N_2[T]} Pursuant to both

New

York's and

South Carolina's enactments of the UILA, a

The

Uniform Insurance _[*8] Liquidation . .

court _hearing hquidation proceedings

_may

Act

issue orders or injunctions to prevent

M[T]

"New

York

adopted the

UILA

in interference with the proceedings or

1940 with the main purpose in

mind

of dissipation of the insurer's assets (see

providing a uniform system for the orderly Insurance

Law

§ 7419[b];

SC

Code

Ann

f

and equitable administration of the assets 38-27-70fA J f1 J fd(). In

New

York, this

and liabilities of defunct multistate provision of the

UILA

empowers

the court

insurers'"

(Matter

_of

Levin v National to enjoin the "waste of the assets of the

Colonial Ins. _Co., 1

NY3d

350, 356,

806

N.E.2d 473. 774 N.Y.S.2d _{465, quoting}

-

G. . . .

ad-ed

that risk retention groups situated m those respecuve C.

Mulphy

Co. v Reserve Ins. Co.. 54

NY2d

_{states fall within the ambit and protection of the respective UILA in}

69, 77. 429 N.E.2d 111, 444 N.Y.S.2d _592; each of those states (see e.g. Givens v Kingsbridge Hgts. Care Ctr.,

Inc., 171 AD3d at 570; Hula v Orange Regional Med. Ctr.. 60 Misc

see

Ambassador

Ins. Co. v Allied ProgramS _{3d at 276). Here, South Carolina's version of the UILA, not the New}

Corp.. 165

AD2d

806. 807. 564 N.Y.S.2d York UILA, is at issue. Accordingly, to the extent that we are asked

5.4).

A

sister state that has likewise adopted to extend fun faith and credh to the South CaroHna order, which

treats Oceanus, a risk retention group, as protected by the provisions

the

UILA

is referred to as a "reciprocal of South Carolina's UILA, for the purposes of detaining this

state,"

and the state in which an insolvent appeal, we do not treat Oceanus as outside the protection of the

, South Carolina UILA and, instead, decide the appeal on the

inSurer iS incorporated or organized IS _{principles of full faith and credit, and comity (see Hala v Orange}

referred to as the insolvent insurer's Revional Med Ctr.. 60 Misc 3d at 276: 15 USC 6 3901(al{4|(C( fi J;

. . _{Insurance Law § 5902[n]; 5904 et seq.).}

domiciliary

state'

(see Insurance

Law

_§

7408[b][4], [6]).

The

UILA

"recognizes the The Court of Appeals' recent determination in Nadkos, Inc. v

authority of the domiciliary state and its

6™"

'°'"" '"' ""°" "'°""

""

™

" ³

2019 NY Slip on 04641 _{12019 f/ that the timely} disclaimer

receiver over all of the insolvent insurer's requirements of New York Insurance Law _{§ 3420(d)(2)} are

assets, including those located in

NeW

inapplicable to a :::d::!:!!!2-y risk scicñ:iêñ group charted in

n . . Montana and doing business in New York also does not frame the

York

(Matter ofLevin v National Colomal _{issues decided herein. In Nadkos, the Court noted that New York's}

Ins. _Co., 1

NY3d

at _357; see Insurance

Law

Legislature pmmwawad article 59 of New York's Insurance Law " to

§ 7410[b]).3

regulate the formation and/or operation in this state of risk retention

groups' _{(Insurance Law}

§ 5901)" and that nundemiciliary risk

retention groups _doing business in New York _comply with

provisions set forth in section 2601 and any regulations promulgated

3The First Department _recently d:t:-·.ined that risk retention ±~a=nder (Nadkos, Inc. v Prethrred Contrs. Ins. Co. Risk Retention

groups, unlike traditicñal insurance mmnanies, are outside the ambit Grouo LLC. 34 NY3d at , 2019 NY Slin On 04641. *3J. The Court

of the UILA (see Cairnares v Erickson. 173 AD3d 417. 103 N.Y.S 3d of Appeals expressly noted that its dctcrmination in Nadkos does

½; Givens v Kingsbridge Hgts. Care Ctr., Inc., 171 AD3d S69, 570, "not decide the outer limits of our state's regulation of

98 N.Y.S.3d 176), and, in this case, the Supreme Court determined ±±i!!a*y RRGs" (3_NY3d at n 4. 2019 NY Slin On 0464),

that Oceanus, as a risk retention group, is not an insurance company *3 n 4). Here, this appeal does not reach the issue of the applicabuity

for the purposes of the UILA (see Hala v Orange Regional Med. _{of any particular provision of New York Insurance Law to Oceanus}

Ctr.. 60 Misc 3d at 282-283). We also note that !nsr= ce Law § and the other nondemiciliary risk retention groups that provided

5906 indicates that risk •·etent!:: groups cannot be licensed or medical malpractice insurance coverage to the def=dra in this and

chartered in New York and, among other things, in effect, treats risk the related actions. Instead, this appeal addresses the question of

mtention groups as outside the ambit of the UILA. Notably, whether, assuming that Oceanus (as representative of the other risk

Insurance Law _{§ 5906} precludes risk retention groups from retention groups in the related actions) falls within the ambit of

participating in medical malpractice insurance in New York. In South Carolina's Ulld, full faith and credit and/or comity should be

insurer, or the

commencement

or courts of domiciliary states to permanently

prosecution of _{any actions,} the _obtaining of enjoin litigation against an insurer subject to

preferences, judgments, attachments or liquidation proceedings (see A.J.

Pegno

other _liens, or the

_making

of _{any levy} Constr. Coro. v Highlands Ins. Co., 39

against the _insurer, its assets _[*9] or _any

AD3d

273. 274. 834 N.Y.S.2d 109: Matter _of

part thereof" (Insurance

Law

_{§ 7419[b];} see Levin v National Colonial Ins. Co..

296

Matter

_of

Frontier Ins. Co..

57

AD3d

1302.

AD2d

at _355;

Ambassador

Ins. Co. v Allied

1304,

870

N.Y.S.2d 144;

Lac

D'Amiante du Programs Coro.. 165

AD2d

at 807; G. C.

Quebec, Ltee v American

Home

Assur. Co.. NJurphy Co. v Reserve Ins. Co.. 74

AD2d

864

F2d

1033. 1040 T3rd CirD.

The

South 235, 239,

427

N.Y.S.2d 800.

mod

54

NY2d

Carolina counterpart to

New

York's _statute, 69, 429 N.E.2d 111. 444 N.Y.S.2d 592).

in _contrast, permits the court to enjoin

proceedings not _only against the insolvent

HN4[¥]

Pursuant to the Full Faith

and

insurer, but also against its policyholders Credit Clause, the court of one state

may

(see

SC

Code

Ann

S 38-27-70IAlfl IIdl,

&

not disregard the judgment of a sister state

fAD, and the court in South Carolina "because it disagrees with the reasoning

exercised that _authority in its order (see underlying the judgment or

deems

it to be

Hala

v

Orange

Regional Med. Ctr.. 60

wrong

on the merits"; indeed, it

may

not

Misc

3d

at 278). conduct

"

any inquiry into the merits of the

cause of _action, the logic or _consistency of

HN3[T]

The

UILA

mandates recognition of the _decision, or the _validity of the legal

orders issued _by liquidation courts in principles on which the judgment is based'"

reciprocal states (see G. C.

Murphy

Co. v (V.L. _{v E.L.,}

_{_}

U.S. at _{__,} 136 S Ct at _1020,

Reserve Ins. Co..

54

NY2d

at 77: Matter _{of quoting} Milliken v Meyer, 311 U.S. 457,

Levin v National Colonial Ins. Co.,

296

462. 61 S. Ct. 339. 85 L. Ed. _278; see

_Feng

AD2d

354. 355. 745 N.Y.S.2d 28, affd 1 Li v Peng. 161

AD3d

823. 826. 76 N.Y.S.3d

NY3d

350. 806 N.E.2d 473. 774 N.Y.S.2d Ll0L.

465;

Ambassador

Ins. Co. v Allied

ograms

_Corp

165

AD2d

at _807; Nonetheless, a "State is not required . .

Insurance

Law

7410[b]). _Likewise, the . [*10] to afford full faith and credit to a

Full Faith

and

Credit Clause of the United judgment rendered by a court that did not

States Constitution "requires each State to have jurisdiction over the subject matter or

recognize and give effect to valid judgments the relevant

parties'"

(V.L. _{v E.L.,_} U.S. at

rendered _by the courts of its sister States" -, 136 S Ct at 1020, quoting Underwriters

(V.L. v E.L.. U.S. . . 136

S

Ct 1017, Nat'l Assurance Co. v. North Carolina Life

1020, 194 L. Ed.

2d

_92; see

US

Const. art

&

Accident

&

Health Ins. Guaranty Ass'n.

455

U

S. 691. 705 102 S. Ct. 1357. 71

L

IV, 4 1; Matter of

Luna

v Dobson,

97

NY2d

178. 182. 763 N.E.2d 1146. 738

N.Y

S.2d 5).. Ed.

2d

558).

An

inquiry into jurisdiction

includes considerations of due process (see

Consistent with these _mandates, courts of Flore v Oalavood Plaza Shoooine Ctr.,

R

N.Y.S.2d 115;

Feng

Li v Peng. 161

AD3d

at

Due

Process and Personal Jurisdiction

8.26).

As

noted _below, the lack of personal

jurisdiction of the South Carolina court over In 1980, the United States

Supreme

Court,

the plaintiffs is undisputed and is dispositive in

two

companion decisions, World-Wide

to this _[**3] Court's determination herein.4 Volkswagen Coro. v

Woodson

(444 U.S.

286. 291. 100 S. Ct. 559. 62 L. Ed.

2d

_49.01

The

April 2018 Order _and Rush v Savchuk (444 U.S. 320,

330-331. 100 S. Ct. 571. 62 L. Ed.

2d

_51161,

In its April 2018 order, inter alia, denying

articulated its

modern

view of the limits of a

the defendants' motion to _{permanently stay}

State's judicial jurisdictional

power

and

this _action, the Supreme Court noted _that, in

declared unconstitutional prior

New

York

order to honor the _stay provisions of the

State jurisprudence on the issue (and the

South Carolina _order, the South Carolina

jurisprudence of other states to the extent

order must be recognized _by

New

York

they mirrored

New

York's approach5 [see

pursuant to the

UILA,

which has been

e.g. Seider v Roth. 17

NY2d

111,

216

N.E.2d

adopted _by both

New

York

(see Insurance

312, 269 N.Y.S.2d 99 _{(overturned)])} as

Law

_{§ 7408 et seq.)} and South Carolina (see

violative of due process (see Rush v

SC

Code

Ann

_{§ 38-27-10} et _seg..), the Full

Savchuk. 444 U.S. at 332-333; World-Wide

Faith

and

Credit Clause of the United

Volkswagen Corp. v Woodson. 444 U.S. at

States Constitution (see

US

_Const, art _{IV, Q}

195). _{Specifically,} the United States

1; see also

Hala

v

Orange

Regional Med.

_Supreme

Court held that _{H_t{5[T]} " all

Ctr..

60

Misc

3d

at 280-281), and the

assertions of state-court jurisdiction must be

principles of interstate _comity (see e.g.

evaluated _according to the standards set

Morrison v Budget Rent

A

Car

Svs.,

230

forth in [International Shoe Co. v

AD2d

253. 265.

657

N.Y.S.2d _{72); Century}

Washington (326 U.S. 310. 316, 66 S. Ct.

Indem. Co. v Brooklyn Union

Gas

_Co., 2003

154, 90 L. Ed. 95) l and its progeny'" (Rush

WL

25788108 _[Sup Ct,

NY

County]).

The

v Savehuk, 444 U.S. at 327, quoting Shaffer

Supreme

Court _concluded, inter _alia, that

v Heitner. 433 U.S. _186, 204.

97

S. Ct.

Oceanus, as a risk retention group, is not an

2569, 53 L. Ed.

2d

683; see World-Wide

insurance

_company

entitled to the

Volkswagen Corp. v Woodson, 444 U.S. a_t

protections of the

U1LA,

and that the South

291). "That _is, a State

_may

exercise

Carolina court lacked personal jurisdiction

jurisdiction over an absent defendant _only if

over the

New

York

plaintiffs. Accordingly,

the defendant has certain

minimum

contacts

the

Supreme

Court denied the defendants'

with [the _forum] such that the maintenance

motion _seeking to _permanently enjoin the

of the suit does not offend traditional

plaintiffs _[*11] from _prosecuting their case

in

New

York

(see

Hala

v

Orange

Regional

Med. _Ctr., 60 Misc

3d

at 285). 5The States of Minnesct: and New H=p:±ire adhered to the

rationale articulated in Seider until it was overturned _{by the United}

States Suprerne Court in 1979 in World-Wide Volkswagen _Corµ v

Woodson (444 ( :.S. 286. 291, 100 S. Ct. 559. 62 L Ed. 2d 490) and

4 The :;;:!!sets do not contend that South Carolina could exercise Ruslt v Savehuk (444 U.S. 320, 325-326, 100 S. Ct. 5?1, 62 L Ed. 2d

notions of fair _play and substantial justice'" _doing business in

New

York

as the "real

(Rush v Savchuk, 444 U.S. at 327, quoting party in

interest"

and the nonresident

International Shoe Co. v Washington,

326

insured defendant

was

_simply a conduit

who

U.S. at _316; see World-Wide Volkswagen

was

named

as a defendant in order to

C_orp. v Woodson. 444 U.S. at 295). provide a conceptual basis to obtain

jurisdiction over the insurer (Minichiello v

Prior

New

York

Jurisprudence

Rosenbere. 410

F2d

106. 109 _[attributing

The

arguments _by the defendants about the the insurer's forum contacts to the defendant

scope and reach of the South Carolina court by treating the attachment procedure as the

through its South Carolina order necessitate functional [*13] equivalent of a direct

a brief review of Seider v Roth (17

NY2d

action against the insured and considering

111.

216

N.E.2d 312. 269 N.Y.S.2d _99), the insured a "nominal [**4]

defendant"

to

which is the case that established

New

York

obtain jurisdiction over the insurer]).

precedent on the issue of personal _[*12]

In _Rush, the United States

Supreme

Court

jurisdiction until it

was

_expressly

debunked that concept as violative of the

overturned _by the United States Supreme

Constitution of the United States and held

Court in World-Wide Volkswagen Corp. v

that the cognizable legal fictions upon

Woodson

(444 U.S. at 291) and Rush v

which Seider relied to exercise jurisdiction

Savehuk (444 U.S. at 330-331).

over the defendant-to _wit, that _debt, as a

The

Court of Appeals decided Seider v Roth form of property partakes of the situs of the

in _{1966, holding} that

New

York

could debtor, and a corporation is to be found

exercise jurisdiction over a defendant wherever it does business-fell short of due

through quasi in

rem

jurisdiction even process

when

no

more

was

present in the

though the defendant's _only contact with forum than the liability insurer of the

New

York

was

the contractual obligation of alleged tortfeasor and its obligation to

the defendant's insurance

_company

(licensed defend and indemnify (see

Rush

v Savchuk.

to do business in

New

_York) to defend and 444 U.S. at 331-333

[HN6[T]

although the

indemnify the defendant in connection with

parties'

relationships with each other

_may

be

the lawsuit (see Seider v Roth. 17

NY2d

11.1 significant in evaluating their ties to the

216 N.E.2d 312,

269

N.Y.S.2d 99). In _1978, forum, the requirements of International

in O'Connor v Lee-Hv Paving Corp. (579 Shoe must be

met

as to each defendant over

F2d

194 (2d Cir(), the United States Court

whom

a state court exercises jurisdiction];

of Appeals for the Second Circuit see also

Gager

v White, 53

NY2d

475, 486,

effectively reaffirmed the jurisdictional 425 N.E.2d 851, 442 N.Y.S.2d 463).

principles articulated in Seider. In

Current

Law

on Personal Jurisdiction

O'Connor, the Second Circuit determined

that

New

York's exercise of jurisdiction in

_HN7[T]

_"In

determining whether a

Seider

was

not violative of due process particular exercise of state-court jurisdiction

because _Seider, in _effect, treated an insurer _{is consistent with due process, the}

must focus on the _relationship

_among

the World-Wide Volkswagen that "

_HNB[¥]

_[a]

[party], the forum, and the litigation"' (Rush judgment rendered in violation of due

v Savchuk, 444 U.S. at _{327, quoting} Shaffer process is void in the _rendering State and is

v Heitner, 433 U.S. at 204).

As

is relevant not entitled to full faith and credit

to the issues _{here, [*14]} the components of elsewhere'" (Gager v White, 53

NY2d

at

personal jurisdiction are the "service of _{4.82, quoting} World-Wide Volkswagen Corp.

process, which implicates due process v Woodson. 444 U.S. at 291; see also 4

requirements of notice and _opportunity to be Carmody-Wait _2d,

NY

_{Prac, § 25:3} at 4).

heard,"

and "the _power, or _reach, of a court

. South Carolina Lacks Personal Jurisdiction

over a _party, so as to enforce judicial

decrees"

(Keane v Kamin, 94

NY2d

263. over the Plaintiffs

265. 723 N.E.2d 553, 701 N.Y.S.2d 698).

"A

Here, Oceanus is not a party to this action

court has no

power

to grant relief against an

or _[*15] to the 15 other actions _pending in

entity not

named

as a party and not properly _{the Ninth Judicial District.}

_More

summoned

before the court" (Riverside

importantly, the plaintiffs here and the

C_apital Advisors. Inc. v First _Secured

plaintiffs in those other _pending actions

Capital Corp.,

28

AD3d

457. 460.

814

were not and _likely could not be

named

as

N.Y.S.2d _646; see Ebsarv

Gypsum

Co. v

parties in the South Carolina liquidation

Rubv. 256

NY

406. 411. 176 N.E. _820;

proceeding, were given no notice of those

Charles H. Greenthal

&

Co. v 301 East 21st

proceedings, and were given no _opportunity

St. Tenants' Ass'n. 91

AD2d

934. 935.

457

_{to be heard}

regarding the injunction which

N.Y.S.2d 826).

At

a

minimum,

to _satisfy the

purports to _permanently enjoin them from

jurisdictional basis of a court's

power

over a

litigating their case in

New

York. Indeed,

party, independent of service of process, _the

HN9[V]

defendants, who, as the parties

"there must be a _{constitutionally} adequate

asserting personal jurisdiction, have the

connection between the _defendant, the State

burden of proof

on

that issue (see Leuthner

and the action" (Keane v Kamin. 94

NY2d

at _v

_Homewood

Suites by Hilton. 151

AD3d

26.¶; see Burger King Corp. v Rudzewicz _{1042. 1043.}

₅₈

_{N.Y.S.3d 437; Castillo v Star}

471 U.S. 462. 465. 105 S. Ct.

2174

85 L·

Leasine Co.. 69

AD3d

551. 551. 893

Ed.

2d

_528; World-Wide Volkswagen Coro.

_N.Y

S.2d 123; _Ying Jun

Chen

v Lei Shi. 19

v

Woodson

444 U.S. at _291; International

_AD3d

407. 407. 796 N.Y.S.2d 126), have not

Shoe Co. v Washington,

326

U.S. at

315-pointed to _any connection between the State

3_J_6).

of South Carolina and the plaintiffs or the

. plaintiffs' _{medical malpractice claims.}

The

Court of _Appeals,

m

the aftermath of

World-Wide Volkswagen Corp. v

Woodson

Although the defendants _correctly posit _that,

(444 U.S. at ₂₉₁₎ and

Rush

v Savchuk (444

pursuant to

_UILA,

South _Carolina, as

US.

at _330-331), revisited its jurisprudence

Oceanus's _domiciliary state, has authority

on the issue of personal jurisdiction _and, as

over Oceanus's _{assets, they} importune this

is relevant to this _case, emphasized the

Court to ignore the fact that Oceanus is not

a _party to this action and that South

As

an initial _matter, the language of the

Carolina cannot exercise personal South Carolina order that gives rise to this

jurisdiction over the plaintiffs. _Instead, the immediate dispute is not language that

defendants contend that the South Carolina mirrors

New

York's

UILA.

_Rather, it is the

Department of Insurance can serve in a South Carolina court's extension of its

parens patriae _{capacity representing} the

power

to purport to _stay proceedings

interests of those _individuals, such as against _[*17] Oceanus

policyholders-the _{[*16] plaintiffs,}

who

cannot be brought those individuals

whose

_only connection

into the South Carolina court through with the State of South Carolina

_may

be that

traditional notions of personal jurisdiction. _they purchased this insurance _liability

HN10[Tj

We

reject their contention that a coverage from Oceanus, a

company

with its

liquidation procedure wherein Oceanus situs there-that frames the dispute before

policyholders and persons such as the this Court.

The

issue is _strikingly similar to

plaintiffs here with claims against the the Seider analysis evaluated and rejected

policyholders _[**5] could file proof of _by the United States

Supreme

Court in

their claims within the context of the M/orld-Wide Volkswasren Corp. v

Woodson

liquidation proceedings6

somehow

comports (444 U.S. at ₂₉₁₎ and

Rush

v Savchuk (444

with the traditional notions of fair _play and U.S. at 330-331).

More

_{significantly,} even if

substantial justice inherent in the the reciprocal adoption of comparable

requirements of due process (see Wright v provisions of the

UILA

_by

New

York

and

Sullivan

Pavne

Co.. 839

SW2d

250, 255 South Carolina could address the issue that

/Kv/ ). South Carolina's reach can extend to

policyholders of Oceanus's insurance

HN11[¥]

We

also reject the defendants'

coverage, such analysis

would

reach only to

contention that the goal of

UILA-to

those claims of the policyholders and not to

provide a uniform

method

for _processing

those claims of the plaintiffs _here,

who

have

claims against and _distributing the assets of

asserted claims not against Oceanus but

distressed insurance companies with assets

rather against defendants

who

are

and policyholders in multiple jurisdictions

policyholders of Oceanus insurance.

in the United States? (see Insurance

Law

_§

7415)-and

the need for reciprocal

To

hold that the South Carolina order can

recognition of the

UILA

_among

the states extend to the plaintiffs' claims would violate

compels the conclusion _that, on _balance, the _{their right to due process and place}

on

them

requirement of personal jurisdiction is an undue burden.

_They

would

face _having

subordinate to these goals. to either litigate their medical malpractice

causes of action within the context of a

6The defendants contend that such claims then would be paid in a liquidation proceeding in South Carolina or

manner similar to the payment of claims against a debtor in be forever _[*18] barred from _seeking

bankruptcy.

redress for the alleged wrongs committed _by

71n fact, allowing the plaintim to proceed on their causes of action

the defendants. In contrast, a refusal to

in New York will have no practical effect on the priority ofjudgment

Carolina order _means, as a practical matter, Gunther,

278

Ill

_App

3d

1108, 1112. 663

that the defendants Spreitzer and Horizon N.E.2d _1139, 215 1/1. Dec. _625; see Wright v

absorb, at least initially, the cost of Sullivan Payne Co.. 839

SW2d

at 254).

As

defending themselves in this

New

York

noted by the Kentucky Supreme Court, the

litigation. Such a result is

more

appropriate

UILA

cannot confer "jurisdiction without

than _precluding the plaintiffs from _pursuing contacts" and jurisdiction cannot "be

their _claims, as those defendants have the extended beyond due process limits"

option of _turning to the court in South (Wright v Sullivan Pavne Co.. 839

SW2d

at

Carolina to seek redress for

some

or all of 2.5.5). "The United States Constitution's due

such costs _they

_may

expend in defense of process clause . . .

was

not adopted to

themselves and for _{any monetary} award further the convenience of the states but

was

against them. _Indeed, since the defendants adopted to ensure that

no

state _[**6] would

have argued that risk retention groups were attempt to enter _{a binding} judgment against

enacted for "the _salutary purpose of _{a party} with

whom

the state has no _contacts,

decreasing insurance rates and increasing relations, or ties"

(Mahan

y Gunther, 278 Ill

the _availability of coverage" _(citing

_App

3d

at 1112).

Preferred Physicians Mut. Risk Retention

Grono

v Pataki. 85

F3d

913 914 [2d Cir _{f ),}

HNI3[V]

"[A] court has

power

to protect its

as a matter of public policy, the parties

who

jurisdiction and to prevent devices which

sought out that less expensive but

more

will have the purpose alone of frustrating a

available coverage are the entities that final

determination"

(Matter of Ohrbach v

should bear the _primary risk of not _being Kirkebv. 3

AD2d

269. 272. 161 N.Y.S.2st

made

whole-not

the plaintiffs

who

had

no

3-7ü. Thus,

we

decline to recognize the

role in the selection of the defendants' South Carolina order to the extent that it

insurance coverage (see Caimares v attempts to prohibit the courts of

New

York

Ericksond 73

AD3d

417. 103 N.Y.S.3d_3_6).8 from trying and resolving actions over

which these courts have proper jurisdiction

The

defendants'

_HN12[T]

contention that (see

Mahan

v Gunther. 278 lil

Avo

3d

at

the

UILA

creates a special exception to the 1116-1117;

Fuhrman

v United America

requirements of due process and _[*19] Insurors, 269

NW2d

842.

847

_[MinnJ1, and

personal jurisdiction for insurance South Carolina does not.

liquidation proceedings is without merit _{. .}

(see Id.).

We

join the courts of Indiana and Prior Case

Law

is Inapposite

Kentucky in rejecting this attempt to "carve

The

Fourth Department's decision in

a special exception into due process _{Beecher v Lewis Press Co. (238}

_AD2d

₉₂₇

jurisprudence for state-regulated insurance _{661 N.Y.S.2d 116) and this Court's decision}

rehabilitation proceedings" (M_ahan v _in

_Dambrot

_v

_REJ

Long

Beach,

LLC

(39

AD3d

797,

836

N.Y

S.2d _194), are

8To the extent that the plaintitis, if successful in their action, would inappOSite and do not dictate a

have to look beyond the defendants to Oceanus to obtain payment of

any damages, they already could be negatively impacted by the

Fourth Department recognized a

Rhode

not of its

own

force compel a particular

Island order that _temporarily stayed actions course of action. _Rather, it is an expression

against policyholders of an insolvent of one State's _{entirely voluntary} decision to

insurer. In _Dambrot, the question presented defer to the _policy of another'" (Debra H. v

to this Court

was

not whether a permanent Janice R.. 14

NY3d

576. 600. 930 N.E.2_d

stay of an action against a policyholder of 184. 904 N.Y.S.2d 263, abrogated on other

an insolvent insurer

would

be recognized in grounds _by Matter of Brooke S.B. v

New

York, but rather whether the Supreme Elizabeth A.C.C.,

28

NY3d

1, 39 N.Y.S.3d

Court had erred in _ruling on a motion 89. 61 N.E.3d _{488, quoting} Ehrlich-Bober

without _permitting the appellant to file

&

Co. v University of Houston. 49

NY2d

opposition papers and at a time

when

a 574, 580. 404 N.E.2d 726, 427 N.Y.S.2d

Pennsylvania court had stayed actions _{6_004; see} Boudreaux v State of La.. Deot. of

against policyholders of an insurer subject Transv.. 11

NY3d

321, 326.

897

N.E.2d

to liquidation proceedings in that state (see 1056.

868

N.Y.S.2d 575).

Dambrot

v

REJ

_Long

Beach, LLC, 39

AD3d

at 799). _Thus, the question before this Court Although

New

York's adoption of the

UILA

in this case

was

neither posed nor answered embodies this State's public policy in favor

in Beecher or Dambrot. of

"

providing a uniform system for the

orderly and equitable administration of the

Indeed, the decisions in Beecher and assets and liabilities of defunct multistate

Dambrot

underscore the _key distinction insurers'" _{(Matter of Levin} v National

between those cases and this one. Although Colonial Ins. _Co., 1

NY3d

at _{35á, quoting}

the jurisprudence of this State, the public G. C.

Murphy

Co. v Reserve Ins. Co., 54

policy expressed in

New

York's adoption of

NY2d

at 77), and _{affording comity} to the

the

_UILA,

and the principles of _comity South Carolina order

_may

" _encourag[e]

could, in the case of a temporary order of

harmony

among

participants in a system of

another _state, weigh in favor of recognition co-operative federalism'" (Debra H. v

and enforcement of such order _by this Court _{Janice R..} 14

NY3d

at 600, quoting

Ehrlich-(see Beecher v Lewis Press Co.,

238

AD2d

Bober

&

Co. v University _of Houston, 49

at _927-928), no such result occurs with

_NY2d

_{at 580ì,}

_HN15[¥]

_comity will not

respect to the South Carolina order at issue yield to the acts of other states where _doing

here, since it purports to permanently [*21] so

would

" do violence to

some

_strong

enjoin the plaintiffs' _ability to prosecute _public

policy of this

State'"

(Sune Hiran

their claims. Principles of _Comity

Do

Not

_{Co., Ltd. v Rite}

Aid

Corp., 7

NY3d

78, 82,

Yield a Different Conclusion 850 N.E.2d 647,

817

N.J.S.2d 600, quoting

Greschler v Greschler. 51

NY2d

368.

376

The

lack of personal jurisdiction of the

414 N.E.2d 694, 434

N.Y

S.2d _194; see

South Carolina court over the plaintiffs is

Intercontinental Hotels Corp. (Puerto Rico _J

also the reason to _deny recognition of the

v Golden. 15

NY2d

9, 13, 203 N.E.2d 210.

South Carolina order on the basis of

254 N.Y.S.2d 527). Since the South Carolina

interstate comity.

_HN14[T]

_Comity " does

plaintiffs'

ability to [*22] prosecute their

MASTRO,

J.P.,

LASALLE

and

claims in

New

_York, it is in stark conflict

_IANNACCI,

_JJ., concur.

with

New

York's public _policy of _protecting

ORDERED

that the order is affirmed _[*23]

tort victims and _mandating free access to the

insofar as appealed _from, with costs.

courts for the redress of wrongs and

protecting the

plaintiffs'

due process rights

(see

Board

_of Educ. of Farmingdale Union neur¤ocumen'

Free School Dist. v Farmingdale Classroom

Teachers Assn.. Local 1889.

AFT

AFL-CIO.

38

NY2d

397, 404, 343 N.E.2d 278. 380

N.Y.S.2d 635; Matter of Marion C.W. [Lisa

K.(, 135

AD3d

777. 779,

24

N.Y.S.3d 665;

Dimerv

v Ulster Sav. Bank. 82

AD3d

1034,

1035. 920 N.Y.S.2d _144;

Deshpande

v

Medisvs Health Network, inc., 70

AD3d

760, 763.

896

N.Y.S.2d _103; see also

Caimares v Erickson. 173

AD3d

_417, 103

N.Y.S.3d 36). _{Affording comity} to the South

Carolina order would deprive the plaintiffs

of their _ability to seek redress in courts in

New

_York, despite the fact that _they had no

say in the selection of Oceanus as the

defendants'

insurer and _simply because the

defendants chose a South Carolina risk

retention _group as their insurer.

Where

an

insurer such as Oceanus _fails, the risks and

consequences of that failed coverage are

more

_properly borne _by the defendants

who

chose such _insurer, rather than the plaintiffs

who

had no _say in that choice. Accordingly,

the

same

reasons that preclude recognition

of the South Carolina order under the

principles of full faith and credit also

preclude _{extending comity} to it.

In light of the _foregoing,

we

need not reach

the parties' _remaining contentions.

Accordingly, the order dated April 23, 2018,