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STAY IMPOSED BY A SOUTH CAROLINA COURT AS PART OF THE LIQUIDATION OF A SOUTH CAROLINA MEDICAL MALPRACTICE INSURANCE CARRIER WAS NOT ENTITLED TO FULL FAITH AND CREDIT IN A NEW YORK ACTION AGAINST DEFENDANTS INSURED BY THE INSOLVENT CARRIER (SECOND DEPT).

The Second Department, in a full-fledged opinion by Justice Duffy, determined that the stay imposed by a South Carolina court after the medical malpractice carrier, Oceanus, was declared insolvent and dissolved was not entitled to full faith and credit in the New York actions against parties insured by Oceanus. Oceanus was not a party to the New York actions, and due process trumped the Uniform Insurers Liquidation Act (UILA). The opinion is comprehensive and the reasoning cannot be fairly summarized here:

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. Hala v Orange Regional Med. Ctr., 2019 NY Slip Op 07387, Second Dept 10-16-19

 

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