Court addresses lack of meritorious defense and fails to evaluate reasonable excuse

Hu-Nam-Nam v Allstate Ins. Co., 2017 NY Slip Op 50685(U)(App. Term 2d Dept. 2017)

“Defendant moved by order to show cause in the Civil Court to vacate the default judgment, claiming, as an excuse for the default, that it had no record of receiving the summons and complaint, but if defendant had been served, then defendant’s failure to answer the complaint was the result of clerical error and office failure.”

“In support of its motion to vacate the default judgment, defendant was required to [*2]demonstrate both a reasonable excuse for its default and the existence of a potentially meritorious defense (see CPLR 5015 [a]; Eugene Di Lorenzo, Inc. v A.C. Dutton Lbr. Co., 67 NY2d 138 [1986]; New York Hosp. Med. Ctr. of Queens v Nationwide Mut. Ins. Co., 120 AD3d 1322, 1323 [2014]). While plaintiff’s complaint in the Civil Court asserted that the accident at issue had occurred on June 20, 2010, defendant’s proffered evidence of a staged accident referred to a June 21, 2010 collision. Consequently, defendant failed to demonstrate that the alleged injuries did not arise out of the June 20, 2010 insured incident (see Central Gen. Hosp. v Chubb Group of Ins. Cos., 90 NY2d 195 [1997]). Similarly, the Supreme Court declared that defendant is not obligated to reimburse plaintiff for claims “relating to the June 21, 2010 accident.” Thus, we cannot find that the order in the declaratory judgment action, which relieves defendant of liability for claims relating to a June 21, 2010 accident, is a conclusive determination barring plaintiff’s recovery in the Civil Court for injuries sustained by its assignor in a June 20, 2010 accident. In the absence of an explanation of the discrepancy in the dates of the accident, defendant failed to demonstrate the existence of a potentially meritorious defense to the action. In view of the foregoing, it is unnecessary to consider whether defendant proffered a reasonable excuse for its default.”

Aside from a mix up in dates and Plaintiff prevailing on a case it should not have, the court ducked “reasonable excuse”.  It would be a close call on reasonable excuse because denial of receipt is usually not a reasonable excuse in the Second Department.

Was there opposition to the default motion?

Turner v Owens Funeral Home, Inc., 2017 NY Slip Op 03128 (1st Dept. 2017)

“Because plaintiffs did not submit any opposition to the motions to change venue, and the order granting the motions was entered without consideration of any arguments by plaintiffs, whether oral or written, the order was entered upon plaintiffs’ default, and is not appealable (see CPLR 5511; Liberty Community Assoc., LP v DeClemente, 139 AD3d 532, 532 [1st Dept 2016]; cf. Matter of 144 Stuyvesant, LLC v Goncalves, 119 AD3d 695, 696 [2d Dept 2014] [order was not entered upon the respondent’s default where, among other things, the court addressed the arguments presented by the respondent in her oral opposition to the motion]).”

Interesting decision on insurance carrier fauilure

Gecaj v Gjonaj Realty & Mgt. Corp., 2017 NY Slip Op 03109

“While we concede that, generally, when a defendant provides the summons and complaint to its insurance broker, and the insurer, thereafter, fails to appoint counsel to appear in the action on behalf of defendant, this is considered to be a reasonable excuse (see generally Rodgers, 69 AD3d at 510-511) However, on the facts presented here, defendants did not establish a reasonable excuse for their default. An assertion by a defendant that it believed its insurer “was providing a defense is unsubstantiated and unreasonable in light of [the defendant’s] conceded receipt of the plaintiff’s motion for leave to enter a default judgment,” as receipt of such a motion puts the defendant on notice that the insurer has, in fact, not answered the complaint since the commencement of the action (Trepel v Greenman-Pedersen, Inc., 99 AD3d 789, 791 [2d Dept 2012]; see also Spitzer v Landau, 104 AD3d 936, 937 [2d Dept 2013] [finding that the defendant’s belief that the insurer was providing a defense was “unreasonable given that the defendant was served with the plaintiff’s motion for leave to enter a default judgment”]).”

**It is a very interesting discussion.

It really was not on consent

Healthworx Med., P.C. v Auto One Ins. Co., 2017 NY Slip Op 50559(U)(App. Term 2d Dept. 2017)

The order itself was numbered.  Apparently, after the order was written and given to the judge, the numbers of the papers were crossed out and the order in its body said: “[b]oth sides agreed to the above and will not appeal this order.”  Out of a fit of rage, I appealed because it was not on consent and there was no appeal waiver.  Unless I am taking a plea in a criminal case or settling a civil matter, I never forfeit my right to appeal.  The right to appeal is something I cherish and am not afraid to exercise.  The attorney who appeared told me it was not on consent.  Interestingly, Civil Court (same judge as originally) implicitly saw the lack of logic of consenting to judgment absolute and denied the motion on the lack of reasonable excuse grounds.

The appeal (without costs) was not fruitful.  Just so you know, there was no bill for the Camp conference or appeal on this case.  The case is worth $500.00 and it will die a less than dignified death.  Put an asterisk next to this under the caption “weird things that happen in Civil Kings”.

Defaults 3215(f) – what does it mean?

Geico Ins. v Sullivan, 2017 NY Slip Op 27108 (App. Term 2d Dept. 2017)

This case highlights how disparate the uniform court system is.  Here, Plaintiff clearly did not have sufficient facts to establish a default as to liability.  I get that clearly, i.e., there was no affidavit or verification from the operator of the Subrogor’s vehicle.  But I discuss this case because of what it does not say.  Assume I filed the same subrogation case in Civil Queens and the defendant defaults.  What do I do?

I file a Notice of Inquest with appropriate fees, put on the inquest calendar, bring whatever evidence of damages the assigned judge requires and knock out judgments and license suspensions.  I sense that the District Court Clerk will require a motion for a default, refuses to engage in Civil Court practice and hence this case.  That is why counsel here moved for leave to enter a default in the first instance.

Now it looks like the statute has run and Geico will never recover the $12,069.59.  Brian Sullivan will keep his license and, yet, never knew how close he came to being in a lifetime payment plan or running to Central Islip to file a chapter 7

Reasonable excuse not upheld

Clinton Place Med., P.C. v Allstate Ins. Co., 2017 NY Slip Op 50400(U)(App. Term 2d Dept. 2017)

“The determination [*2]of what constitutes a reasonable excuse for a default generally lies within the sound discretion of the motion court (see Scarlett v McCarthy, 2 AD3d 623 [2003]) and, in the exercise of its discretion, a court can accept a claim of law office failure as such an excuse (see CPLR 2005) if the facts submitted in support thereof are in evidentiary form and are sufficient to justify the default (see Dodge v Commander, 18 AD3d 943, 946 [2005]; Incorporated Vil. of Hempstead v Jablonsky, 283 AD2d 553, 554 [2001]). However, courts do not have to excuse a pattern of neglect which amounts to “a serious lack of concerned attention to the progress of [the] action” (Lauro v Cronin, 184 AD2d 837, 839 [1992]). In the case at bar, the record demonstrates a pattern of neglect which should not be excused (see Incorporated Vil. of Hempstead v Jablonsky, 283 AD2d at 554)”

The Good Hands people cannot be happy.

The famous briefing schedule

Longevity Med. Supply, Inc. v State Farm Fire & Cas. Co., 2017 NY Slip Op 50118(U)(App, Term 2d. Dept. 2017)

I have never been a fan, since where there is no prejudice, what is accomplished through this nonsense?

(1) Plaintiff cross-moved for summary judgment and submitted papers in opposition to defendant’s motion. In an order entered February 20, 2014, the Civil Court granted defendant’s motion, stating that “[d]efendant’s motion is granted as no timely opposition was served. Plaintiff’s cross motion is not being considered because it was untimely. This action is hereby dismissed.” Thereafter, plaintiff moved, among other things, to vacate the February 20, 2014 order. By order entered November 18, 2014, the Civil Court denied plaintiff’s motion, stating that “[t]he opposition [and] cross motion on the underlying motion were untimely served, [and] the court refused to consider those papers based on the parties’ briefing stipulation.”

(2) It is well settled that a party seeking, pursuant to CPLR 5015 (a) (1), to open its default in [*2]opposing a motion must demonstrate a reasonable excuse for the default and a potentially meritorious opposition to the motion (see Suede v Suede, 124 AD3d 869 [2015]; Shkolnik v Beyderman, 43 Misc 3d 143[A], 2013 NY Slip Op 52033[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2013]; see also D & R Med. Supply, Inc. v American Tr. Ins. Co., 35 Misc 3d 136[A], 2012 NY Slip Op 50785[U], *1-2 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012]).

(3) The affirmation of plaintiff’s attorney provided a detailed and credible showing of law office failure, which constituted an adequate excuse for plaintiff’s default in timely opposing defendant’s motion (see Estrada v Selman, 130 AD3d 562, 562-563 [2015])

The end result here is immaterial.


Answer rejected through subsequent motion for default

American Tr. Ins. Co. v Baucage, 2017 NY Slip Op 00015 (1st Dept. 2016)

In a case of first impression, the Appellate Division held that an answer can be rejected through filing a default motion within 15-days after its receipt.  This would mean that sending a proposed clerk’s judgment when one has not been created would also be sufficient to reject an untimely answer.  Therefore, the notion that an untimely answer must be formally “rejected” has been expanded beyond anyone’s wildest dreams.

This is another example of what seems to be the benefits of haphazard practice.

Default granted but summary judgment motion denied

Global Liberty Ins. Co. v W. Joseph Gorum, M.D., P.C., 2016 NY Slip Op 06680 (2d Dept. 2016)

(1) “Here, the Supreme Court found that the plaintiff submitted proof of service of the summons and complaint upon Gorum (seeBusiness Corporation Law § 306[b][i]; CPLR 3215[g][4][i]) and that Gorum had not answered or appeared in this action, thereby admitting all traversable allegations (see Rokina Opt. Co. v Camera King, 63 NY2d 728, 730). However, the court erred in denying that branch of the plaintiff’s motion which was for leave to enter a default judgment against Gorum on the basis that its expert’s affirmation, in the form of a peer review, did not have an original signature (see CPLR 2101[e]; Rechler Equity B-1, LLC v AKR Corp., 98 AD3d 496, 497; Billingy v Blagrove, 84 AD3d 848, 849; Campbell v Johnson, 264 AD2d 461, 461). Further, the plaintiff’s expert’s affirmed peer review demonstrated facts constituting the cause of action asserted against Gorum (see Woodson v Mendon Leasing Corp., 100 NY2d at 71). Thus, the court should have granted the plaintiff leave to enter a default judgment against Gorum.”

The “original signature” is a relic of the 1970s and 1980s.  Certain judges fail to appreciate that a copy or a holographic signature (and electronic signature in the 1st Department or electronic signature with authentication in the Second Department) are sufficient to allow the document to be considered.

(2)  “The peer review reports and medical records submitted in support of this motion failed to demonstrate as a matter of law that the surgery performed by Diwan on Souffront was not medically necessary.”

Admittedly, this is the standard type of peer reports that  the insurance carriers utilize to show lack of medical appropriateness.   It is for this reason that surgery peer reviews necessitate expert testimony.  My hope is one day, the industry will compel the orthopedists to fill in the gaps in the peer reviews so that the can stand on their own two feet.

Failure to check e-mail in e-filed case is a reasonable excuse to a default

Matter of Rivera v New York City Dept. of Sanitation, 2016 NY Slip Op 05837 (1st Dept. 2016)

“At oral argument, respondents essentially conceded that, in this e-filed case, their office failed to regularly check its email and, as a result, was unaware of the motion court’s order that gave rise to the default. Respondents’ excuse was sufficiently particularized and there is no evidence of wilful or contumacious conduct on their part”

The missed email defense works.