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.

Default – First Department reverses vacatur of the judgment

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.

The Civil Kings briefing schedule

Brand Med. Supply, Inc. v Praetorian Ins. Co., 2016 NY Slip Op 50961(U)(App. Term 2d Dept. 2016)

“Although the stipulation required that plaintiff’s opposition was to be served on or before March 18, 2012, plaintiff served its opposition papers on March 29, 2012. By order entered May 18, 2012, the Civil Court (Carolyn E. Wade, J.) granted, on default, defendant’s motion for summary judgment, declining to consider plaintiff’s late opposition to the motion.”

“Upon the record presented, we find that the explanation proffered by plaintiff’s attorney was insufficient to establish a reasonable excusable for plaintiff’s failure to timely oppose defendant’s summary judgment motion (see Starakis v Baker, 121 AD3d 669 [2014]; Dokaj v Ruxton Tower Ltd. Partnership, 91 AD3d 812 [2012]). Moreover, plaintiff’s attorney offered no reason for waiting 10 months before moving to vacate the default order

This case is a prime example of why mechanistic adherence to the “briefing schedule” is insane.  Papers were 11 days late, argument was 6 weeks later and the Court declined to consider the papers.  I think that is wrong.  There was no prejudice and another game of “i gotcha” occurred.

That all being said, I can’t help but think that if Plaintiff moved ASAP after it got hit with the briefing schedule loss, the Appellate Term would have reversed.

I just don’t see the prejudice if the papers are served in accordance with the CPLR.

Defaults – required military affidavit (Maybe OCA can do something?)

Gantt v North Shore-LIJ Health Sys., 2016 NY Slip Op 04316 (1st Dept. 2016)

“We note, contrary to the motion court, that any irregularity in the affidavit of nonmilitary service submitted on plaintiff’s motion for a default judgment did not rise to the level of a jurisdictional defect, since defendant Hilerio never made any pretense of either being on active military duty or being a military dependent at the time of her default (see Department of Hous. Preserv. & Dev. of City of N.Y. v West 129th St. Realty Corp., 9 Misc 3d 61 [App Term, 1st Dept 2005]).”

Many judges (especially in Supreme New York) and the New York County Clerk require detailed military searches before entering a default judgment.  I would love to see OCA fund a study as to the percentage of default judgments entered in this state against active duty members, since I suspect the number is less than 1%.  Also, perhaps OCA can formulate rules as to what is required in a non-military affidavit similar to what they have done on the issue of what is necessary to enter a clerk’s judgment on a credit-card non-payment case.

Second, I also believe the New York County Clerk’s refusal to enter judgments based upon orders that Judges sign due to the failure to provide updated (or any) non-military affidavit of service is improper.  OCA should address this also.


IDS Prop. Cas. Ins. Co. v Metro Health Prods., Inc., 2016 NY Slip Op 50089(U)(App. Term 1st Dept. 2016)

“We find no cause to disturb the motion court’s discretionary determination to vacate respondent’s default in this special proceeding pursuant to CPLR 7511(b). Respondent demonstrated a reasonable excuse for its delay in answering the petition through the affidavit of its principal detailing respondent’s regular mail-receipt procedures, and asserting that the petition was not received by respondent”

What was the underlying controversy about?  Some of the cases certain firms appeal continue to boggle my mind.

Failure to enter a default excused

Linden Equip., Inc. v Praetorian Ins. Co., 2015 NY Slip Op 51545(U)(App. Term 1st Dept. 2015)

“Although plaintiff failed to move for entry of a default judgment within one year (see CPLR 3215[a]), the court exercised its discretion providently by denying defendant’s motion to dismiss the complaint as abandoned pursuant to CPLR 3215(c). Plaintiff demonstrated a meritorious cause of action for assigned first-party no-fault benefits, which defendant does not dispute and, although the particular law office failure excuse proffered by plaintiff is less than compelling, there is no indication in the record that defendant was in any way prejudiced by plaintiff’s delay”

This does not occur often: A failure to enter a default is excused.   Yet, as readers of this blog over the last many years will know, defaults are harder to come by in the First Department as opposed to the Second Department.  The hurdles you leap through to vacate a default in the Second Department are half as high in Manhattan or Bronx.  In my estimation, this is a Uniform Court System that is anything but uniform.  Now that I am off topic, did anyone read the recent report on attorney discipline in this State?  Assume the offense of misappropriation of escrow funds with no prior disciplinary history.  Upstate: Suspension that is suspended pending some type of counseling.  Second Department: 3 years suspension.  First Department: Disbarment (7 year suspension).  Perhaps a uniform court system that uniformly decides issues, i.e., attorney discipline, vacatur of defaults, Unitrin issues really needs to be looked at.

My personal opinion: We should not be as strict in opening defaults.  Matters really should be heard on the merits unless someone willfully abandons the case.

Entering judgment on a settlement – not what you thought

HSBC Bank USA, N.A. v Wielgus, 2015 NY Slip Op 06494 (2d Dept. 2015)

The role of the clerk’s judgment diminished a tad bit.  I was leery of posting this because it is somewhat groundbreaking, well hidden and something you would have to dig up.  Yet, after some thought, I figured that it should not be too easy to enter defaults following non-payment of settlement stipulations.

“However, the Kings County Clerk did not have authority to enter a clerk’s judgment against Wielgus pursuant to CPLR 3215(i)(1). This statute states, in relevant part, that “[w]here . . . a stipulation of settlement is made, providing, in the event of failure to comply with the stipulation, for entry without further notice of a judgment in a specified amount, . . . the clerk shall enter judgment on the stipulation and an affidavit as to the failure to comply with the terms thereof, together with a complaint or a concise statement of the facts on which the claim was based” (CPLR 3215[i][1] [emphasis added]). Although the stipulation provided that HSBC could enter a money judgment against Wielgus in the event of a default, it permitted entry of such a judgment only “upon ten (10) days notice” to Wielgus. Thus, the stipulation was not one which provided for entry of a judgment upon default “without further notice.” Moreover, the stipulation did not provide for entry of a judgment “in a specified amount.” Rather, it provided that the judgment to be entered upon Wielgus’s default would be calculated so as to “credit [Wielgus] for all payments made on account.” The stipulation thus did not specify the exact principal sum of the judgment that HSBC would have the right to enter based on a default by Wielgus under the stipulation; rather, it provided for a formula that required reference to extrinsic proof as to exactly how much Wielgus might have already paid to HSBC prior to the default, or prior to the judgment. Accordingly, the entry of a clerk’s judgment was not authorized by CPLR 3215(i)(1).”

Default judgment upheld

State Farm Mut. Auto. Ins. Co. v Anikeyeva, 2015 NY Slip Op 06329 (2d Dept. 2015)

“In a so-ordered stipulation dated November 20, 2012 (hereinafter the conditional order), the Supreme Court directed that the defendants’ answer was “conditionally stricken unless” the defendants complied with the plaintiff’s discovery demands on or before January 7, 2013. It is undisputed that the defendants failed to comply with the conditional order. The Supreme Court granted the plaintiff’s motion to strike the defendants’ answer for failure to comply with the conditional order and for leave to enter a default judgment pursuant to CPLR 3215. The court then entered judgment upon the order declaring that the plaintiff was not obligated to pay certain insurance claims submitted to it by the defendants.”

“To avoid the adverse impact resulting from the conditional order becoming absolute, the defendants were required to demonstrate a reasonable excuse for their default in complying with the terms of the conditional order and a meritorious defense to the complaint (see Estate of Alston v Ramseur, 124 AD3d 713; Pugliese v Mondello, 67 AD3d at 881; Grinage v City of New York,45 AD3d 729, 730; Lee v Arellano, 18 AD3d at 621; Johnson v Heavy Realty Corp., 191 AD2d 538; see also Karalis v New Dimensions [*2]HR, Inc., 105 AD3d 707, 708). The defendants did neither.”

I hope Anikeyeva has filed for bankruptcy.