Originally from Dispute Resolution Journal

NO-FAULT—ASSIGNMENT—RES JUDICATA

The arbitration decision in a case brought by the injured party, which held that the insurance policy covering the vehicle in which she had been injured bad been cancelled prior to the accident, was not res judicata on a separate arbitration brought by the assignee of the injured person. Shortly after she sustained her injuries, Bernice Dingle assigned to the hospital her claim for hospitalization expenses under the car's no-fault policy. The hospital, in turn, advised the insurer of the assignment and requested payment of Its bills for treatment of Dingle. Subsequently, Dingle herself brought a separate claim for other no-fault benefits. The insurer denied both claims on the ground that the policy covering the automobile in which Dingle had been riding had been effectively cancelled prior to the accident. Dingle demanded arbitration of the controversy, but failed to appear at the scheduled arbitration hearing. Based on the evidence produced by the insurer at the ex parte hearing, the arbitrator ruled that the cancellation of the policy had been valid. The hospital, too, demanded arbitration of its dispute with the insurer. By the time the hearing on the hospital's claim took place, the arbitrator's decision on the Dingle claim had been rendered. Although the insurer contended that the hospital's claim was barred by the decision in the Dingle case, it participated in the first arbitration hearing. Prior to the next hearing, the insurer successfully moved in the Supreme Court, Special Term, for a stay of the arbitration, maintaining that the issue of the cancellation of the policy was res judicata. The Appellate Division reversed, holding that "[s]ince [the insurer] participated in the arbitration hearing it was not entitled to relief under CPLR 7503 (subd. [b])." Neither res judicata nor collateral estoppel was applicable to the hospital's claim, because the hospital, "as assignee, was not bound by the results of the Dingle arbitration, to which it was not a party. . . ."

Lakeside Hospital v. Government Employees Insurance Co., 417 N.Y.S.2d 16 (App. Div., 2d Dept. 1979).