July 14, 2009

Great Wall Acupuncture, P.C. v State Farm Mut. Auto. Ins. Co. (2009 NY Slip Op 51571(U))

https://www.beynensonlaw.com/case-law/great-wall-acupuncture-p-c-v-state-farm-mut-auto-ins-co-2009-ny-slip-op51571u/

Court
Appellate Term, Second Department
Decided
July 14, 2009
Citation
2009 NY Slip Op 51571(U) · 24 Misc 3d 137(A)
Posture
Default or vacatur
Outcome
Split result
Issues
Defaults and vacatur Fraudulent incorporation (Mallela)
Legal questions
Vacating a default: excuse and defense · Fraudulent incorporation (Mallela) (see the maps)
Cite as
Great Wall Acupuncture, P.C. v State Farm Mut. Auto. Ins. Co., 24 Misc 3d 137(A), 2009 NY Slip Op 51571(U) (App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2009)

Posture, outcome, issues and treatment by other decisions are Beynenson Law’s classification. Treatment labels are assigned by a language model reading the citing decision; negative and appeal-history labels are checked by a second reader.

Summary

Editorial summary by Beynenson Law, not part of the court’s decision.

The insurer established a reasonable excuse for its short answering delay and a potentially meritorious Mallela defense, warranting vacatur. The Appellate Term, Second Department, modified the order to vacate the default judgment, compel acceptance of the late answer, and deem the annexed answer served. Applying CPLR 5015 (a) (1), the court found the claims representatives' affidavits sufficient to excuse the delay; the provider had identified no prejudice. The insurer also made a prima facie showing that the provider might be ineligible for no-fault reimbursement. The court affirmed denial of sanctions against the provider because the record did not support their imposition.

Reported in New York Official Reports at Great Wall Acupuncture, P.C. v State Farm Mut. Auto. Ins. Co. (2009 NY Slip Op 51571(U))

[*1]
Great Wall Acupuncture, P.C. v State Farm Mut. Auto. Ins. Co.
2009 NY Slip Op 51571(U) [24 Misc 3d 137(A)]
Decided on July 14, 2009
Appellate Term, Second Department
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and will not be published in the printed Official Reports.
Decided on July 14, 2009

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 2nd, 11th and 13th JUDICIAL DISTRICTS


PRESENT: : WESTON, J.P., RIOS and STEINHARDT, JJ
2008-622 K C.
Great Wall Acupuncture, P.C. a/a/o GEORGE IASHVILLI, JOSE TAVARES, DAVINE SMITH, EDWARD RABAYEV and JOHNIE FLEMING, Appellant,

against

State Farm Mutual Automobile Insurance Company, Respondent.

Appeal from an order of the Civil Court of the City of New York, Kings County (George J. Silver, J.), dated September 13, 2007. The order denied a motion by defendant seeking to vacate a default judgment and compel plaintiff to accept its late answer, and for sanctions.

Order modified by providing that so much of the motion by defendant as sought to vacate the default judgment and to compel plaintiff to accept its late answer is granted, and the answer annexed to defendant’s moving papers is deemed served upon plaintiff; as so modified, affirmed without costs.

In this action to recover assigned first-party no-fault benefits, defendant moved to vacate the default judgment entered following its failure to answer, to compel plaintiff to accept its late answer, and for sanctions. The Civil Court denied the motion, finding that the affirmation of defendant’s attorney was insufficient to establish a reasonable excuse for the default. The instant appeal by defendant ensued.
A party seeking vacatur of a default judgment must demonstrate both a reasonable excuse for its default in appearing and answering the complaint, and a meritorious defense to the action (see CPLR 5015 [a] [1]; Eugene Di Lorenzo, Inc. v A.C. Dutton Lbr. Co., 67 NY2d 138, 141 [1986]). The affidavits of the claims representatives, which defendant submitted in support of its motion, suffice to establish a reasonable excuse for defendant’s relatively short delay in answering the complaint. Moreover, plaintiff has not indicated that it was prejudiced by the delay. Furthermore, defendant made a prima facie showing of a potentially meritorious defense as to whether plaintiff is ineligible to receive reimbursement of no-fault benefits (see State Farm [*2]Mut. Auto. Ins. Co. v Mallela, 4 NY3d 313 [2005]). Accordingly, the branches of defendant’s motion seeking to vacate the default judgment and to compel plaintiff to accept its late answer are granted.

In our opinion, the record does not support the imposition of sanctions against plaintiff. We thus leave undisturbed the Civil Court’s denial of the branch of defendant’s motion seeking sanctions.

Weston, J.P., Rios and Steinhardt, JJ., concur.
Decision Date: July 14, 2009

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