The affidavits of non-receipt just did not cut itJanuary 9, 2010

In Westchester Med. Ctr. v Philadelphia Indem. Ins. Co., 2010 NY Slip Op 00138 (2d Dept. 2010), the Appellate Division held that an entered clerk’s judgment should not have been vacated.  Here is the breakdown of that case – it fits a good story line.

1) Defendant failed to demonstrate the existence of a reasonable excuse for being in default.

“The affidavit of a senior claims examiner employed in the defendant’s Texas office averred that there was no record of the summons and complaint in the defendant’s computer system, but failed to demonstrate any knowledge of the office procedures employed in the handling of a summons and complaint received at the defendant’s Pennsylvania office. Thus, that affidavit was insufficient to show that the failure to timely appear and answer was due to a clerical error which caused the summons and complaint to be overlooked”

2) Defendant failed to offer a meritorious defense to the action, i.e., lack of receipt prior to commencement of the action.

“In response, the defendant offered only the same aforementioned affidavit, which also averred that there was no record of the bill in question in the defendant’s computer system. This was insufficient for a similar reason; that is, the affiant failed to show any knowledge of the office procedures employed in the handling of billing forms received at the defendant’s Pennsylvania office”

3) “[t]he order is reversed insofar as appealed from, on the law, on the facts, and in the exercise of discretion, with costs[.]”

What we see here is that in order to demonstrate lack of receipt, whether it be a summons and complaint or a bill, the insurance carrier needs to set forth a detailed procedure as to the incoming mail, which would be sufficient to raise the inference that the incoming item was not received.  This is the opposite of the usual issue, i.e., proving that outgoing mail reached the post office within the prescribed time limits.

Also, why didn’t Defendant move to vacate in accordance with CPLR 317?  I am just curious.  The result would have been the same since a meritorious defense was not found to have existed.

One Response

  1. CPLR 317 is almost always overlooked. And when it isn’t, the moving papers usually overlook a critical element. I don’t know why. Every month there are decisions that mention that 317 was available, but not used. You’d figure someone would pick up on that.

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