Category Archives: Default Judgments

Putting collateral estoppel to use, but without success

Written on October 31, 2009 by Dave Gottlieb
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State Farm Ins. Co. v Frias, 2009 NY Slip Op 07825 (App. Div., 2nd, 2009)

Of the 10 defendants named in this action, only 3, Luccme, Urena, and Pedro Fernandez, answered the complaint, and the Supreme Court granted State Farm’s motion for leave to enter a default judgment against the other defendants. State Farm was directed to submit a proposed judgment on notice. Luccme and Urena were served with the proposed judgment, and did not object to its terms or submit a proposed counter-judgment of their own. On October 25, 2006, the Supreme Court entered a judgment against the defaulting defendants. The judgment declared that State Farm was not required to provide insurance coverage to the defaulting defendants because the incident of January 24, 2002, resulted from an intentional act; that, by reason of no coverage and the failure of State Farm’s insured to cooperate, State Farm was not obligated to defend or indemnify Frias or Abreu in any current or future proceeding, including the underlying action; and that State Farm was not required to pay any damages, awards, or benefits to any of the other defaulting defendants in any current or future proceedings, including the underlying action.

State Farm subsequently moved for summary judgment against the three nondefaulting defendants, including Luccme and Urena, based on those parts of the default judgment which declared that the January 24, 2002, collision resulted from an intentional act, and that State Farm was not obligated to defend or indemnify its insureds or to provide any coverage. State Farm argued that, because the three nondefaulting defendants had not proposed a counter-judgment, had not opposed State Farm’s proposed judgment, had not moved for leave to renew or reargue, had not moved to vacate the judgment, and had not appealed from the judgment, they were estopped from challenging the declarations contained in it. Luccme and Urena opposed State Farm’s motion and, in an order entered April 10, 2008, the Supreme Court granted the motion based on the failure of the nondefaulting defendants to oppose the proposed judgment. Luccme and Urena appeal from the resulting judgment. We reverse.

Inasmuch as State Farm initially moved for leave to enter a default judgment against the defaulting defendants only, the resulting judgment binds only those defendants, and may not be given preclusive effect to deprive Luccme and Urena, who appeared in the action, of their right to litigate the issues pertaining to coverage (see American Motorists Ins. Co. v North Country Motors, 57 AD2d 158, 160). Accordingly, we reverse the order insofar as appealed from.

Defendant obtained a default on some of the parties, then tried to use that default as collateral estoppel against the appearing parties.   Sneaky Sneaky.

Yes, this is what I do with my Saturday nights.  I read cases and blog.  I actually made coffee for this, because I was tired but wanted to blog.

Initially I said that Malcom Gladwell’s new book, What The Dog Saw, wasn’t that good; that it was far worse than his other books.  I was wrong.  It isn’t far worse.  More like slightly less than mostly worse.  It isn’t even really a book; it’s a collection of articles he’s written.  One of my favorite articles was, The Art of Failure: Why Some People Choke and Others Panic.  I hope that isn’t telling.  I probably should have found an article on success stories.  Anyway, his distinction between choking and panicking was interesting.  After reading the article, I noticed things that I would have otherwise missed.

There are about 20 articles in the book.  I liked about 8 of them.  Wait for this to come out in paperback.  Next up on the reading list is Superfreakonomics.  If you haven’t read Freakonomics, you should.  I’m almost done with that book on religious freedom.  And I’m still reading everything I said I was reading before.

While you’re here…

Here are some things I’ve found around the interweb that you might find interesting.  Money and Cognitive Bias, from Crime & Federalism.  Monster Energy Drink’s Monstery Conduct, from New York Personal Injury Law Blog.  7 Must Read Productivity Steps to Finally Getting Things Done, from Dumb Little Man.  Big ideas…, from Seth Godin’s Blog.  The Best Decline Letter of All-Time, from The Blog of Author Tim Ferriss.

Finally, I’m still working on the look and feel of this blog.  WordPress is more difficult to figure out that blogger and I don’t have as much time to work on it as I’d like.  Eventually I may have to break down and hire someone to fix it up.  So yeah, I’m working on it.




Tags: , Appellate Division, Collateral Estopptel, Declaratory Judgment, Default Judgments
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A bad denial

Written on October 30, 2009 by Dave Gottlieb
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St. Barnabas Hosp. v Allstate Ins. Co., 2009 NY Slip Op 07824 (App. Div., 2nd, 2009)

“A proper denial of [a] claim [for no-fault benefits] must include the information called for in the prescribed denial of claim form (see 11 NYCRR 65-3.4[c][11]) and must promptly apprise the claimant with a high degree of specificity of the ground or grounds on which the disclaimer is predicated’” (Nyack Hosp. v State Farm Mut. Auto Ins. Co., 11 AD3d 664, 664, quoting General Acc. Ins. Group v Cirucci, 46 NY2d 862, 864). However, a timely denial of a no-fault insurance medical claim alone does not avoid preclusion where said denial is factually insufficient, conclusory, vague, or otherwise involves a defense which has no merit as a matter of law (see Nyack Hosp. v Metropolitan Prop. & Cas. Ins. Co., 16 AD3d 564, 565).

The defendant insurer, Allstate Insurance Company (hereinafter Allstate), issued a timely denial of claim within 30 days of its receipt of the completed hospital facility form (NYS Form N-F 5) from the plaintiff St. Barnabas Hospital, as assignee of Patrick Bateman (hereinafter the plaintiff) (see 11 NYCRR 65-3.5[g], 65-3.8[c]). Contrary to Allstate’s contention, however, the Supreme Court properly determined that the denial of claim, which incorrectly stated the amount of the claim and gave an invalid reason for the denial (see 11 NYCRR 65-3.3[d], 65-3.5[g]; see also Westchester Med. Ctr. v Lincoln [*2]Gen. Ins. Co., 60 AD3d 1045, 1046; Nyack Hosp. v Encompass Ins. Co., 23 AD3d 535, 536), was fatally defective (see Nyack Hosp. v Metropolitan Prop. & Cas. Ins. Co., 16 AD3d at 565; Nyack Hosp. v State Farm Mut. Auto. Ins. Co., 11 AD3d at 665; Presbyterian Hosp. in City of N.Y. v Maryland Cas. Co., 226 AD2d 613, 614). Thus, Allstate failed to demonstrate the existence of a meritorious defense (see CPLR 5015[a][1]).

A.M. Med. Servs., P.C. v Avis Rent A Car, 2009 NY Slip Op 52177(U) (App. Term, 2nd, 2009)

In order to vacate the order granting plaintiff’s unopposed motion for summary judgment and the judgment entered pursuant thereto, defendant was required to establish both a reasonable excuse for its default and a meritorious defense (see CPLR 5015 [a] [1]; Eugene Di Lorenzo, Inc. v Dutton Lbr. Co., 67 NY2d 138, 141 [1986]). The affidavits submitted by defendant in support of its motion suffice to establish that defendant had a reasonable excuse for its failure to oppose plaintiff’s motion for summary judgment.

Defendant also demonstrated that it has a meritorious defense and raised a triable issue of fact. The affidavit submitted by defendant sufficiently established that the denial of claim forms were timely mailed in accordance with defendant’s standard office practice and procedure (see Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679 [2001]; Delta Diagnostic Radiology, P.C. v Chubb Group of Ins., 17 Misc 3d 16 [App Term, 2d & 11th Jud Dists 2007]). Furthermore, defendant submitted two affirmed peer review reports, each explaining why the services billed for were not medically necessary (see A. Khodadadi Radiology, P.C. v NY Cent. Mut. Fire Ins. Co., 16 Misc 3d 131[A], 2007 NY Slip Op 51342[U] [App Term, 2d & 11th Jud Dists 2007]).

Appellate Division, Default Judgments, Denials
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A Default Denied

Written on October 3, 2009 by Dave Gottlieb
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I’m pretty sure I’m recycling even my non-obvious titles.

Lincoln Gen. Ins. Co. v Alev Med. Supply Inc, 2009 NY Slip Op 29389 (Dist Ct Nassau County, First Dist)

Lincoln commenced this action seeking to recover the money it paid to Alev on the claim.

Alev has defaulted in the action. Lincoln now moves for leave to enter a default judgment.

***

Lincoln could have denied the claim on the grounds it was fraudulent. Fair Price Medical Supply Corp. v. Travelers Indemnity Co., supra . Lincoln did not. It paid the claim in part and denied the claim in part

***

Permitting Lincoln to recover in this action would allow an insurer to avoid or evade the time restrictions of the no fault law and regulations by paying and then investigating a claim and suing to recover the previously paid benefits if the investigation reveals the claim was fraudulent. To permit this would subvert the entire no-fault system which establishes strict time limits by which an insurer must process, dispute and pay a claim.

The no-fault law and regulations require insurers to promptly investigate and pay claims. The regulations provide insurers with the verification process in order to obtain additional information designed to ferret out illegitimate or fraudulent claims.

While the 30 day period plus any applicable tolls for paying or denying a claim may be “…too short of a time frame in which to detect billing fraud, any change is up to the Legislature.” Fair Price Medical Supply Corp. v. Travelers Indemnity Co., supra at 565.

All bases that an in insurer has for denying a no fault claim, except for specific and limited exceptions, must be raised in a timely denial.[FN2] The only way an insurer can avoid paying a fraudulent no fault claim is to deny the claim as fraudulent in a timely denial and to assert and prove the defense at trial. Id.; and Lenox Hill Radiology and MIA, P.C. v. Global Liberty Ins. Co. of New York, 24 Misc 3d 1225(A) (NY Civil Ct. 2009).

One of the elements of an application for leave to enter a default judgment is proof a cause of action against the defendant.. Francisco v. Soto, 286 AD2d 573 (1st Dept. 2001); and Joosten v. Gale, 129 AD2d 531 (1st Dept. 1987); and Siegel, New York Practice 4th §295. Lincoln complaint fails to state a claim upon which relief can be granted.

Nothing in this decision precludes Lincoln from reporting this apparent insurance fraud (Penal Law Article 176) to the appropriate law enforcement authorities or from obtaining restitution should Alev be prosecuted and found guilty of insurance fraud in connection with this claim. Penal Law §60.27.

For the foregoing reasons, plaintiff’s motion for leave to enter a default judgment is denied. The action is dismissed.

This decision follows the reasoning in Cornell Med., P.C. v Mercury Cas. Co., 2009 NY Slip Op 29228 (App. Term, 2nd), though the Court does not cite the decision.

Roy Mura, over at CoverageCounsel, believes that the outcome should have been different.

Default Judgments, Fraud, progressive
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New From the Appellate Division

Written on September 17, 2009 by Dave Gottlieb
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Mercury Cas. Co. v Surgical Ctr. at Milburn, LLC, 2009 NY Slip Op 06516 (App. Div., 2nd 2009)

For some background on the case, head over to No Fault Law – A Defense Attorney’s Perspective.  The Appellate Division’s decision won’t give you any insight, so you might as well click the link.

Tags: , , Coverage, Declaratory Judgment, Default Judgments, Policy Issues
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FIRST DECISIONS OF THE NEW YEAR

Written on January 2, 2009 by Dave Gottlieb
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While the first decision deals almost entirely with class certification, it also makes it clear that “documented costs” is not part of a plaintiff’s prima facie case.

Globe Surgical Supply v GEICO Ins. Co., 2008 NY Slip Op 10583 (App. Div., 2nd)

These appeals require us to address whether it is appropriate to certify a class action challenging the validity, under regulations in effect prior to October 6, 2004, of a no-fault insurer’s use of the prevailing geographic rate or the reasonable and customary rate for health care services in calculating first-party benefits due to a claimant or health-care provider. In 2004 the plaintiff, Globe Surgical Supply (hereinafter Globe), as assignee of Remy Gallant, commenced the instant class action alleging, inter alia, that the defendant, GEICO Insurance Company (hereinafter GEICO), violated the regulations promulgated by the New York State Insurance Department (hereinafter the Insurance Department) pursuant to the no-fault provisions of the Insurance Law, by systematically reducing its reimbursement for medical equipment and supplies, specifically, durable medical equipment (hereinafter DME), based on what it deemed to be “the prevailing rate in the geographic location of the provider,” or “the reasonable and customary rate for the item billed.” Specifically, Globe alleges that GEICO wrongfully adjusted or reduced reimbursement payments of claims for DME subject to former Part E of the 23rd Amendment to Insurance Department Regulation 83 (11 NYCRR 68 Appendix 17-C, former Part E) (hereinafter former Part E), to an amount less than the amount charged in the proof of claim.

…

The Litigation

In a complaint dated July 19, 2004, Globe alleged that GEICO “[a]t some point in time . . . ceased paying claims in accordance with the terms of the [No Fault] regulations and . . . instituted a systematic pattern and practice of reviewing claims for reimbursement against what it deemed to be the prevailing rate in the geographic location of the provider,’ the reasonable and customary rate for [the] item billed,’ or similar rationales . . . There is nothing in [former] Part E which permits an insurer to reduce reimbursements for [DME] by such factors as reasonable and customary charges or geographically prevailing rates. Yet, that is precisely what defendant GEICO is doing and has been doing.”

Specifically, Globe alleged that its assignor, Remy Gallant, was injured in an accident on February 10, 2001, with a GEICO policyholder. According to the complaint, Gallant purchased a transcutaneous electric nerve stimulator (hereinafter the TENS Unit) from Globe, which cost $340. Globe submitted the claim to GEICO, as assignee of Gallant, in the amount of $510 (representing [*3]150% of the actual cost). On May 23, 2001, GEICO denied the claim for that amount and only reimbursed Globe in the amount of $200. As noted on Gallant’s claim form, GEICO partially denied the claim because the cost submitted was “far in excess of the industry average which is $107.82 . . . Based on this, a reasonable reimbursement is 150% over this amount which is $161.73. However, in consideration of the potential range, $200.00 will be reimbursed.”

Globe sought injunctive relief and asserted four causes of action sounding in (1) violation of the No-Fault Law, (2) breach of contract, (3) violation of General Business Law § 349, and (4) unjust enrichment. The Supreme Court granted that branch of GEICO’s motion which was to dismiss the first cause of action for failure to state a cause of action, and those branches of GEICO’s motion which were to dismiss the third and fourth causes of action for lack of standing. In denying that branch of GEICO’s motion which was to dismiss the second cause of action alleging breach of contract, the Supreme Court noted that the “plaintiff’s claim is based upon Insurance Department Regulations, which are part of the policy as a matter of law (see Insurance Law § 5103[h]) and which are specifically set forth in plaintiff’s complaint . . . Insurance policies covering other members of the proposed class need not be identified at this stage of the action.”

Globe purportedly commenced this action on behalf of itself and all members of a class “consisting of all persons who had reimbursement payments of claims for medical equipment and supplies subject to [former] Part E of the Twenty-Third Amendment to Regulation No. 83 (11 NYCRR 68) ( Part E Reimbursements’) adjusted or reduced by Geico.”

…

Class Certification: Burden of Proof and Liberal Construction

Article 9 of the CPLR is to be “liberally construed” (Beller v William Penn Life Ins. Co. of N.Y., 37 AD3d 747, 748; Wilder v May Dept. Stores Co., 23 AD3d 646, 649; Jacobs v Macy’s E, Inc., 17 AD3d 318, 319; Kidd v Delta Funding Corp., 289 AD2d 203; Friar v Vanguard Holding Corp., 78 AD2d 83, 91; see generally 3 Weinstein Korn & Miller, New York Civil Practice CPLR, Lexis-Nexis (MB)(2008) at 901.04, 901.05, and 901.20) in favor of the granting of class certification if all of the prerequisites of CPLR 901(a)(1)-(5) (see Matter of Colt Indus. Shareholder Litig., 77 NY2d 185, 194; Klein v Robert’s Am. Gourmet Food, Inc., 28 AD3d 63, 69; Ackerman v Price Waterhouse, 252 AD2d 179, 191; Friar v Vanguard Holding Corp., 78 AD2d at 90-91) and CPLR [*5]902(1)-(5) (see Ackerman v Price Waterhouse, 252 AD2d at 191) are met.

The prerequisites articulated in CPLR 901(a) include proof that the proposed class is so numerous that joinder of all members is impracticable, that common questions of law and fact applicable to the class predominate over questions affecting only individual members, that claims or defenses of the representative parties are typical of the claims or defenses of the class, and that the class action is superior to other available methods for the fair and efficient adjudication of the controversy.

Read the entire decision to see how it turns out. I’ll edit it down further later on today.

Montefiore Med. Ctr. v Auto One Ins. Co., 2008 NY Slip Op 10596 (App. Div., 2nd)

The Supreme Court providently exercised its discretion in denying the defendant’s motion pursuant to CPLR 5015(a)(1) to vacate a judgment entered upon its default in appearing or answering the complaint since it failed to demonstrate a reasonable excuse for the default (see Eugene Di Lorenzo, Inc. v A.C. Dutton Lbr. Co., 67 NY2d 138, 141; Giovanelli v Rivera, 23 AD3d 616). The plaintiffs established that they effectuated service upon the defendant through delivery of the summons and complaint upon the Assistant Deputy Superintendent and Chief of Insurance (see Insurance Law § 1212; Hospital for Joint Diseases v Lincoln Gen. Ins. Co., 55 AD3d 543; New York & Presbyt. Hosp. v Allstate Ins. Co., 29 AD3d 968; Kaperonis v Aetna Cas. & Sur. Co., 254 AD2d 334; see also CPLR 311[a][1]). The defendant did not contend that the address on file with the Superintendent of Insurance was incorrect, and the mere denial of receipt of the summons and complaint was insufficient to rebut the presumption of proper service created by the affidavit of service (see Commissioners of State Ins. Fund v Nobre, Inc., 29 AD3d 511; [*2]Carrenard v Mass, 11 AD3d 501; Truscello v Olympia Constr., 294 AD2d 350, 351). Even if the defendant’s motion were treated as one made pursuant to CPLR 317 (see Eugene Di Lorenzo, Inc. v A.C. Dutton Lbr. Co., 67 NY2d 138, 143; Mann-Tell Realty Corp. v Cappadora Realty Corp., 184 AD2d 497, 498), the defendant failed to meet its burden of showing that it did not receive actual notice of the summons in time to defend the action (see General Motors Acceptance Corp. v Grade A Auto Body, Inc., 21 AD3d 447; cf. Hospital for Joint Diseases v Lincoln Gen. Ins. Co., 55 AD3d 543).

Class Action, Default Judgments
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FRESH NEW DECISIONS

Written on August 8, 2008 by Dave Gottlieb
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Alpha Chiropractic, P.C. v State Farm Mut. Auto Ins. Co., 2008 NY Slip Op 51678(U) (App. Term, 2d)

In this action by a provider to recover assigned first-party no-fault benefits, the court below awarded plaintiff attorney’s fees upon each of the eight claims submitted for medical services provided to plaintiff’s assignor rather than upon the aggregate sum of the eight claims. The instant appeal by defendant ensued.

For the reasons stated in Fortune Med., P.C. v New York Cent. Mut. Fire Ins. Co. ( Misc 3d , 2008 NY Slip Op 28218 [App Term, 2d & 11th Jud Dists 2008]), the judgment is affirmed.

Ave T MPC Corp. v Chubb Indem. Ins. Co., 2008 NY Slip Op 51681(U) (App. Term, 2d)

It is well settled that in order to vacate a default judgment, the defaulting party
must demonstrate both a reasonable excuse for its default and a meritorious defense to the action (see Titan Realty Corp. v Schlem, 283 AD2d 568 [2001]; Matter of Gambardella v Ortov Light., 278 AD2d 494 [2000]). A court may, in the exercise of discretion, accept a claim of law office failure as an excuse (see CPLR 2005). However, counsel “must submit supporting facts in evidentiary form sufficient to justify the default” (Incorporated Vil. of Hempstead v Jablonsky, 283 AD2d 553, 554 [2001]) and include “a detailed explanation of [the] oversights” (Hospital for Joint Diseases v ELRAC, Inc., 11 AD3d 432, 433 [2004]; see also Grezinsky v Mount Hebron Cemetery, 305 AD2d 542 [2003]; Morris v Metropolitan Transp. Auth., 191 AD2d 682, 683 [1993]). In the case at bar, defendant’s attorney merely stated that law office failure constitutes a reasonable excuse for defaulting but did not elaborate as to why her office failed to serve a timely answer. Although defense counsel stated in her affirmation that the insurance carrier delayed in forwarding the summons and complaint to her office and made general statements regarding the summons and complaint having been “lost in the shuffle” by the insurance company, as well as [*2]lost or misplaced in the mail, her affirmation was not based on personal knowledge and therefore, has no probative value (see Zuckerman v City of New York, 49 NY2d 557 [1980]). Consequently, defendant failed to establish a reasonable excuse for its default.

Midborough Acupuncture, P.C. v State Farm Ins. Co., 2008 NY Slip Op 28291 (App. Term, 2nd)

To the extent the discovery demands concern matters relating to defenses which defendant is precluded from raising, they are palpably improper notwithstanding the fact that plaintiff did not specifically object thereto (see A.B. Med. Servs. PLLC v Utica Mut. Ins. Co., 11 Misc 3d 71 [2006], supra). However, the record reveals that defendant set forth detailed and specific reasons for believing that plaintiff may be ineligible to recover no-fault benefits as a fraudulently incorporated professional service corporation (see State Farm Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313 [2005]), a defense which is not precluded. By obtaining discovery of, among other things, plaintiff’s certificate of incorporation, management agreements, and the names of plaintiff’s shareholders, defendant will be able to ascertain whether plaintiff is ineligible for reimbursement of no-fault benefits (see e.g. Preferred Med. Imaging, P.C. v Liberty Mut. Ins. Co., 11 Misc 3d 1069[A], 2006 NY Slip Op 50437[U] [Suffolk Dist Ct 2006]). As a result, in addition to the discovery previously ordered by the Civil Court, which portion of the order we do not review since it is not the subject of this appeal, defendant is also entitled to production of plaintiff’s certificate of incorporation as well as responses to interrogatories numbered 1, 15, and 16 and responses to the supplemental interrogatories numbered 1, 15, 31, 38-40 and 44-46 since said items were not palpably improper or privileged.

We further note that special circumstances exist which warrant the disclosure of plaintiff’s corporate income tax returns (see CPLR 3101 [a]; Statewide Med. Servs., P.C. v Travelers Ins. Co., 13 Misc 3d 134[A], 2006 NY Slip Op 52014[U] [App Term, 1st Dept 2006], revg 9 Misc 3d 1124[A], 2005 NY Slip Op 51773[U] [Civ Ct, Bronx County 2005]; Preferred Med. Imaging, P.C. v Liberty Mut. Ins. Co., 11 Misc 3d 1069[A], 2006 NY Slip Op 50437[U] [2006], supra; see also Dore v Allstate Indem. Co., 264 AD2d 804 [1999]; cf. Benfeld v Fleming Props., LLC, 44 AD3d 599, 600 [2007]; Altidor v State-Wide Ins. Co., 22 AD3d 435 [2005]). Accordingly, defendant is also entitled to the information demanded in defendant’s supplemental interrogatory number 37.

Defendant’s contention that the court erred in denying the branch of its motion which sought to compel plaintiff to produce its owner, Valentina Anikeyeva, for an examination before trial is without merit. The notice of examination before trial served by defendant sought to require Anikeyeva to appear for an examination before trial at defendant’s counsel’s office in “Lake Success, New York 11042.” However, as noted by plaintiff, since Anikeyeva is “an [*3]officer, director, member or employee” of plaintiff, defendant improperly noticed the deposition for a location outside New York City (see CPLR 3110). Consequently, the court did not err insofar as it declined to compel plaintiff to produce Anikeyeva for an examination before trial at the location sought (see e.g. Mamunes v Szczepanski, 70 AD2d 684 [1979]).

Defendant’s argument that the court should have denied the branch of plaintiff’s cross motion which resulted in a protective order as to Anikeyeva’s “personal documents” lacks merit. “It is well settled that tax returns are generally not discoverable in the absence of a strong showing that the information is indispensable to the claim and cannot be obtained from other sources” (Altidor, 22 AD3d at 435-436 [citations and internal quotation marks omitted]; see also Benfeld, 44 AD3d at 600). At this juncture, defendant failed to meet its burden of establishing that Anikeyeva’s personal tax returns and personal bank account records are needed, particularly where, as here, defendant is entitled to disclosure of plaintiff’s tax returns and the requested financial information with respect to said corporation. Thus, based upon the record before it, the court did not improvidently exercise its discretion in issuing its protective order.

Horton Med., P.C. v New York Cent. Mut. Fire Ins. Co., 2008 NY Slip Op 51682(U) (App. Term, 2d)

Defendant’s cross motion for summary judgment is predicated upon defendant’s timely requests for verification. Inasmuch as the affidavit executed by defendant’s no-fault litigation examiner failed to establish that defendant timely mailed its verification requests based upon its standard office practice or procedure designed to ensure that items are properly addressed and mailed (see New York & Presbyt. Hosp. v Allstate Ins. Co., 29 AD3d 547 [2006]; Residential Holding Corp. v Scottsdale Ins. Co., 286 AD2d 679 [2001]; cf. Delta Diagnostic Radiology, P.C. v Chubb Group of Ins., 17 Misc 3d 16 [App Term, 2d & 11th Jud Dists 2007]), defendant is not entitled to summary judgment upon its cross motion with respect to the seven causes of action on NF-3 claim forms.

Since the issue is not raised, we do not pass on whether the eighth cause of action, seeking attorney’s fees, constitutes a separate cause of action for pleading purposes under the No-Fault Law or whether it is merely an element of the damages recoverable on the substantive causes of action (see generally Rocanova v Equitable Life Assur. Socy. of U.S., 83 NY2d 603, 616 [1994]). We note, however, that even were we to find that it is not a separate cause of action for pleading purposes, we would, upon dismissing said “cause of action,” deem the complaint amended to demand attorney’s fees as part of the damages sought in each of the remaining causes of action (see Bunker v Bunker, 73 AD2d 530 [1979]).

Uniondale Chiropractic Off. v State Farm Mut. Auto. Ins. Co., 2008 NY Slip Op 51687(U) (Dist Ct Nassau County, First Dist)

Long decision. I’ll try to pare it down later.

Attorney fees, Default Judgments, Discovery, Mailing
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NEW DECISIONS

Written on June 19, 2008 by Dave Gottlieb
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NYU-The Hospital For Joint Diseases v Progressive Casualty Insurnce Co., 2008 NY Slip Op 31643(U)(Sup Ct, Nassau County)

The defendant moves for an order pursuant to CPLR 317 and 50 15 (a) (1) vacating the default judgment entered here against the defendant, and allowing the defendant’s answer and discovery demands to be deemed timely served.

The defense attorney states, in a supporting affirmation dated February 6 2008, as shown in the affidavit dated February 6, 2008 of Angel Boyer, the defendant’s no-fault litigation representative, the circumstances surrounding the earliest notice received by the defendant of the existence of the lawsuit was on November 30, 2007, when the defendant received a copy of a service of process transmittal letter from its agent, CT Corporation dated November 28 2007, enclosing a copy of the Insurance Department transmittal letter of October 23, 2007. The defense attorney points out, as shown -in the Boyer affidavit, no copy of the summons and complaint was sent by CT Corporation at that time nor received from anyone by the defendant until it requested it from the plaintiff s lawyer on November, 2007. The defense attorney asserts Boyer was informed, immediately telephoned the office of the plaintiff’s lawyer, and asked for a copy of the summons and complaint while learning a default judgment had been entered against the defendant.

The defense attorney contends the default was unintentional and excusable, and the instant motion is timely. The defense attorney points out the defendant’s agent was served with a copy of the judgment with notice on December 12, 2007. The defense attorney remarks the defendant first received actual notice of the entry of the judgment on November 30, 2007, after the time to answer had expired. The defense attorney asserts the defendant failed to receive notice of the action in time to defend it, and the defendant was not served by personal delivery to the corporation, to wit hand delivery nor to a CPLR 318 agent. The defense attorney opines the defendant is entitled to vacatur of the default without the need to establish a reasonable excuse for the delay in answering or appearing. The defense attorney states, even if a reasonable excuse for the default were required, the defendant has established it.

The defense counsel opines the Nassau County Clerk entered judgment here pursuant to CPLR 3215 , however to constitute a sum certain, that statute contemplates a situation, once liabilty has been established, there can be no dispute as to the amount due as in actions on money judgments and negotiable instruments. The defense counsel states there was reliance on extrinsic proof for this default judgment, so the judgment is a nullity.

The plaintiffs attorney states, in an opposing affirmation dated March 18, 2008, the Superintendent of Insurance acknowledged service of the summons and complaint as effective as of October 22, 2007, and a copy of those papers was mailed to the defendant on October 23 2007. The plaintiffs attorney contends the defendant’s mere denial of receipt of process is insufficient to rebut the presumption of receipt created by the Superintendent’s acknowledgment. The plaintiffs attorney asserts the defendant’ s application for vacatur defective since neither the defendant’ s representative nor the defense attorney has personal knowledge of the facts. The plaintiff s attorney points out the plaintiff entered a judgment against the defendant on December 4, 2007, and a copy of the judgment was served upon the defendant by regular and certified mail on December 12, 2007. The plaintiffs attorney notes the defendant did not respond to the default judgment, and on January 21, 2008, an information subpoena, which required a response within seven days, was served by regular and certified mail upon the defendant, who did not respond to the information subpoena. The plaintiffs attorney avers the defendant’ s counsel exhibited a pattern of neglect even after the default, and the default was inexcusable. The plaintiff s attorney contends the defendant has failed to provide a reasonable excuse for the default.

The plaintiff s attorney also contends the existence of a meritorious defense irrelevant, and points to the first cause of action. The plaintiffs attorney points out the defendant’s representative claims exhaustion of policy limits, however Angel Boyer affidavit is based upon a review of the file, and that person s affidavit is hearsay. The plaintiff s attorney opines the Boyer affidavit cannot create a foundation for the alleged breakdown of payments; the breakdown is not sworn to and is not in admissible form. The plaintiff s attorney notes the breakdown of payments has handwritten notations, to wit alterations which further nullify the form. The plaintiffs attorney submits the form does not comply with 11 NYCRR 65-3.15 which requires listing the dates in the order in which each service was rendered.

In order to restore a case to the trial calendar after default, the defendant must establish: (1) a meritorious defense of the case, (2) a reasonable excuse for the delay, (3) the absence of -a intent to abandon the matter, and (4) the lack of prejudice to the nonmoving party if the case is restored to the calendar (see, Rudy v Chasky, 260 AD2d 625; Iazzetta v Vicenzi, 243 AD2d 540). The defendant here has not made that showing, in the supporting sworn statements, and the other supporting papers to this motion.

Default Judgments
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