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.

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.