Monday, August 11, 2008

Lost in the Shuffle -- Excuse for Default Found Insufficient

Ave T MPC Corp. a/a/o Airinov Iskolsky v. Chubb Indem. Ins. Co.

(App. Term, 2nd Dept., decided 7/30/2008)

To vacate a default judgment taken against it, a party must demonstrate two things: (1) a reasonable excuse for the default; and (2) a meritorious defense to the action. And it's always best to demonstrate from personal knowledge.

Kings County Civil granted Chubb's motion to vacate a default judgment and compel plaintiff to accept its late answer, and plaintiff appealed.

In REVERSING the lower court's order and reinstating the default judgment, the Appellate Term, Second Department, found that Chubb (or Chubb's defense counsel, to be more precise) had not established a reasonable excuse for its default:
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 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]).

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