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Default – First Department reverses vacatur of the judgmentJune 27, 2016

ALFA Med. Supplies, Inc. v Allstate Ins. Co., 2016 NY Slip Op 50942(U)(App. Term 1st Dept. 2016)

(1) “Defendant-insurer failed to offer a reasonable excuse to adequately explain its two-year delay in answering the complaint in this action”

(2)”The affidavit of defendant’s claim representative, who was employed in defendant’s office in Hauppauge, New York, averred that there was no record of the summons and complaint in defendant’s computer system.  However, the affiant failed to demonstrate personal knowledge of the office procedures put in place by defendant in connection with the handling of a summons and complaint received at defendant’s office in Lake Success, New York”

It is an infrequent occurrence to see the First Department reverse a vacatur of a default judgment on reasonable excuse grounds.  I cannot help, notwithstanding the Philadelphia Insurance Co. case, that the two year delay in seeking to open the default proved fatal.  CPLR 5015(a)(1) – the period is limited to one year following service with notice of entry of the order.  However, the court has inherent discretion to disregard the one year period contained in the statute.