Tuesday, June 24, 2008

Default of Only 15 Days Not Vacated by Court

NYU-The Hospital For Joint Diseases a/a/o Harrison Snyder v. Progressive Cas. Ins. Co.
(Sup. Ct., Nassau Co., decided 6/4/2008)

Plaintiffs commenced this recovery action against Progressive and sent the summons and complaint to the New York State Superintendent of Insurance for service on Progressive. The Superintendant's Office acknowledged service on October 22, 2007 (making Progessive's answer due within 30 days, or by November 21st) and sent copies of plaintiffs' papers to CT Corporation, Progressive's designated agent for service of process, on October 23, 2007.

Progressive claimed that it first became aware of this lawsuit on November 30, 2007, when it received a notice from CT Corporation dated November 28, 2007, sending a copy of the Superintendent's transmittal letter but no summons and complaint. Progressive's no-fault litigation representative called plaintiffs' counsel on November 30, 2007 to request a copies of the summons and complaint but was told that a default judgment had already been taken against Progressive.

Progressive received copies of the summons and complaint on December 4, 2007 and answered on December 5, 2007. Plaintiffs' counsel rejected and returned Progressive's answer on December 20, 2007. The default judgment was actually entered on December 4, 2007 and served on Progressive on December 12, 2007. Progressive did not immediately respond to the judgment, and plaintiffs' counsel served an information subpoena on Progressive on January 21, 2008. Progressive did not respond to that information subpoena, but made this motion to vacate the default judgment in early February, relying primarily on an affidavit of Progressive's no-fault litigation representative.

In support of its motion, Progressive argued: (1) its default was unintentional and excusable; (2) meritorious defenses to each cause of action existed based on exhaustion of benefits, unsatisfied verification requests, or timely payments; (3) the judgment was a nullity because the Nassau County Clerk improperly relied on extrinsic proof of the amounts allegedly due, contrary to CPLR 3215; and (4) plaintiffs would not be prejudiced by the restoration of the action to the court's calendar.

In opposition to Progressive's motion, plaintiffs' counsel argued: (1) Progressive's mere denial of receipt of process was insufficient to rebut the presumption of receipt created by the Superintendent's acknowledgment of service; (2) Progressive's application for vacatur was defective since neither Progressive's representative nor its defense attorney had personal knowledge of the facts; (3) Progressive's defense counsel exhibited a pattern of neglect even after the default; (4) Progressive failed to provide a reasonable excuse for the default; and (5) Progressive had failed to establish meritorious defenses to the first and second causes of action because the affidavit of Progressive's no-fault litigation representative: was hearsay; did not create a foundation for the alleged breakdown of payments; the breakdown was not sworn; the breakdown was not in admissible form; the breakdown of payments contained handwritten notations or alterations which further nullified the form; the form did not comply with 11 NYCRR § 65-3.15, which requires listing the dates in the order in which each service was rendered; and was insufficient to prove the verification requests were mailed to the plaintiff.

After only having outlined both parties' arguments and submissions in support and opposition to the motion, and without any discussion of in what ways Progressive's submissions were insufficient, Nassau County Supreme Court Justice Antonio Brandveen denied the motion to vacate the default judgment, stating:
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 an intent to abandon the matter, and (4) the lack of prejudice to the nonmoving party if the case is restored to the calendar (citations omitted). The defendant here has not made that showing, in the supporting sworn statements, and the other supporting papers to this motion.
The precedential value of this decision is essentially nil because it does not indicate any specific defects or insufficiencies in Progressive's motion papers. Nonetheless, it does represent a stark example of a court's denial of an insurer's motion to vacate after what would seem to be only a minimal default in pleading.

No comments: