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DECLARATORY JUDGMENT DECIDED BY DEFAULT CANNOT SUPPORT THE APPLICATION OF THE DOCTRINE OF COLLATERAL ESTOPPEL, THE ISSUES HAVE NOT BEEN LITIGATED (SECOND DEPT).

The Second Department, reversing Supreme Court, noted that a declaratory judgment decided on default does not support the application of the doctrine of collateral estoppel because the issues were not litigated:

“The party seeking to invoke collateral estoppel has the burden to show the identity of the issues, while the party trying to avoid application of the doctrine must establish the lack of a full and fair opportunity to litigate” … . “If the issue has not been litigated, there is no identity of issues between the present action and the prior determination” … . In this case, since the determination in the declaratory judgment action regarding insurance coverage for the subject van was decided on default and, thus, was not actually litigated … , [the nominal defendants] failed to demonstrate that there was an identity of issues between the present proceeding and the determination in the declaratory judgment action. Matter of Hereford Ins. Co. v McKoy, 2018 NY Slip Op 02466, Second Dept 4-11-18

​CIVIL PROCEDURE (COLLATERAL ESTOPPEL, DECLARATORY JUDGMENT DECIDED BY DEFAULT CANNOT SUPPORT THE APPLICATION OF THE DOCTRINE OF COLLATERAL ESTOPPEL, THE ISSUES HAVE NOT BEEN LITIGATED (SECOND DEPT))/COLLATERAL ESTOPPEL (DECLARATORY JUDGMENT DECIDED BY DEFAULT CANNOT SUPPORT THE APPLICATION OF THE DOCTRINE OF COLLATERAL ESTOPPEL, THE ISSUES HAVE NOT BEEN LITIGATED (SECOND DEPT))/DECLARATORY JUDGMENT (COLLATERAL ESTOPPEL, DECLARATORY JUDGMENT DECIDED BY DEFAULT CANNOT SUPPORT THE APPLICATION OF THE DOCTRINE OF COLLATERAL ESTOPPEL, THE ISSUES HAVE NOT BEEN LITIGATED (SECOND DEPT))/DEFAULT (COLLATERAL ESTOPPEL, DECLARATORY JUDGMENT DECIDED BY DEFAULT CANNOT SUPPORT THE APPLICATION OF THE DOCTRINE OF COLLATERAL ESTOPPEL, THE ISSUES HAVE NOT BEEN LITIGATED (SECOND DEPT))

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THE EXPENSE OF DEFENDING AN ACTION WHICH STEMMED FROM AN ATTORNEY’S MISREPRESENTATION... A PLAINTIFF FACED WITH A MOTION TO DISMISS FOR FAILURE TO STATE A CAUSE OF ACTION...