January 27, 2009

Westchester Med. Ctr. v Hartford Cas. Ins. Co. (2009 NY Slip Op 00528)

https://www.beynensonlaw.com/case-law/westchester-med-ctr-v-hartford-cas-ins-co-2009-ny-slip-op-00528/

Court: Appellate Division, Second Department
Decided: January 27, 2009
Citation: 2009 NY Slip Op 00528 · 58 AD3d 832
Posture: Default or vacatur
Outcome: Insurer prevailed
Later treatment: Followed in 1 later decision (see Cited by)
Issues: Defaults and vacatur Policy issues
Legal questions: Vacating a default: excuse and defense (see the maps)

Cite as

Westchester Med. Ctr. v Hartford Cas. Ins. Co., 58 AD3d 832 (2d Dept 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 insurers showed an excusable default and a potentially meritorious defense based on partial exhaustion of policy limits. The Appellate Division, Second Department, affirmed the order vacating the provider's default judgment. Under CPLR 5015 (a) (1), vacatur required a reasonable excuse and a meritorious defense. The insurers' employee reasonably believed the action had been discontinued after advising the provider's counsel's office that benefits were exhausted, excusing the short delay in appearing or answering. Payments for prior services established partial exhaustion and a potentially meritorious defense under 11 NYCRR 65-3.15. The provider demonstrated no prejudice from the short delay, and the policy favoring resolution on the merits supported the discretionary vacatur.

Reported in New York Official Reports at Westchester Med. Ctr. v Hartford Cas. Ins. Co. (2009 NY Slip Op 00528)

Westchester Med. Ctr. v Hartford Cas. Ins. Co.

2009 NY Slip Op 00528 [58 AD3d 832]

January 27, 2009

Appellate Division, Second Department

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

As corrected through Wednesday, March 11, 2009

Westchester Medical Center, as Assignee of Diedre Walsh, Appellant,
v
Hartford Casualty Insurance Company et al., Respondents.

—[*1] Joseph Henig, P.C., Bellmore, N.Y., for appellant.

Stewart H. Friedman (John T. Ryan and Robert F. Horvat of counsel), for respondents.

In an action to recover no-fault insurance benefits, the plaintiff appeals from an order of the Supreme Court, Nassau County (Martin, J.), dated August 5, 2008, which granted the defendants’ motion, inter alia, to vacate a judgment of the same court entered April 10, 2008, upon the defendants’ default in appearing and answering the complaint, in favor of the plaintiff and against the defendants in the principal sum of $16,571.91.

Ordered that the order is affirmed, with costs.

A defendant seeking to vacate a judgment entered upon its default in appearing and answering the complaint must demonstrate a reasonable excuse for its delay in appearing and answering, as well as a meritorious defense to the action (see CPLR 5015 [a] [1]; Verde Elec. Corp. v Federal Ins. Co., 50 AD3d 672, 672-673 [2008]). Here, the defendants established that their employee reasonably believed that the action had been discontinued after she advised the plaintiff’s counsel’s office that no-fault benefits had been exhausted, thereby demonstrating a reasonable excuse for the short period of time in which they failed either to appear or to answer the complaint (see New York Univ. Hosp. Tisch Inst. v Merchants Mut. Ins. Co., 15 AD3d 554, 554-555 [2005]). In addition, the defendants established that the policy limits had been partially exhausted through the payment of claims for prior services (see 11 NYCRR 65-3.15; Nyack [*2]Hosp. v General Motors Acceptance Corp., 8 NY3d 294, 301 [2007]; Montefiore Med. Ctr. v Government Empls. Ins. Co., 34 AD3d 771, 772 [2006]; New York & Presbyt. Hosp. v Allstate Ins. Co., 28 AD3d 528, 528-529 [2006]), thereby demonstrating the existence of a potentially meritorious defense to the action. Finally, the plaintiff did not demonstrate prejudice from the defendants’ relatively short delay in appearing and answering, and public policy favors the resolution of cases on the merits (see Verde Elec. Corp. v Federal Ins. Co., 50 AD3d at 673). Under these circumstances, the Supreme Court providently exercised its discretion in granting that branch of the defendants’ motion which was to vacate the judgment (see St. Vincent’s Hosp. & Med. Ctr. v Allstate Ins. Co., 42 AD3d 525 [2007]; New York & Presbyt. Hosp. v American Home Assur. Co., 28 AD3d 442, 443 [2006]; New York Univ. Hosp. Tisch Inst. v Merchants Mut. Ins. Co., 15 AD3d at 555; cf. New York Univ. Hosp. Rusk Inst. v Illinois Natl. Ins. Co., 31 AD3d 511 [2006]).

The plaintiff’s remaining contentions are without merit. Spolzino, J.P., Covello, McCarthy and Belen, JJ., concur.

Legal questions

A question of no-fault law this decision rules on, from our Legal Questions pages. Bars count the decisions on the question by year and court, coloured by category; circles are this decision and the decisions on the question it cites or that cite it. Point at a bar or circle for details. The categories and summaries are Beynenson Law’s classification, made by a language model and checked by a second reading.

Vacating a default: excuse and defense

Open the full map

Did the defaulting party show a reasonable excuse (or lack of notice) and a potentially meritorious defense or claim?

This decision: Excuse (or lack of actual notice under CPLR 317) and potentially meritorious defense or claim shown; default vacated or late answer allowed

Held vacatur properly granted because the insurer's employee reasonably believed the action was discontinued after telling plaintiff's counsel benefits were exhausted, the short delay caused no prejudice, and partial exhaustion of the policy limits was a potentially meritorious defense.

Default excusedNo reasonable excuseNo meritorious defenseNeither shownHearing or remittalThis decisionCites it or cited by itCited or followedDistinguished or limited

Of the 170 decisions on this question in the Second Department courts and the Court of Appeals, 67 (this one included) are in the same category.

Cited in this decision

A label shows how this decision treated the case it cites.

New York Univ. Hosp. Tisch Inst. v Merchants Mut. Ins. Co. (2005 NY Slip Op 01332) FollowedThe insurer established a reasonable excuse for its default and a meritorious defense of exhausted no-fault benefits.
Montefiore Med. Ctr. v Government Empls. Ins. Co. (2006 NY Slip Op 08953) FollowedAn insurer's additional verification request following an N-F5 submission need not use a prescribed form to toll the payment deadline.
New York & Presbyt. Hosp. v Allstate Ins. Co. (2006 NY Slip Op 02731) FollowedThe insurer proved exhaustion of policy limits before it became obligated to pay the provider's claim.
St. Vincent’s Hosp. & Med. Ctr. v Allstate Ins. Co. (2007 NY Slip Op 06227)The insurer's motion to vacate its default was granted upon a showing of a reasonable excuse and a potentially meritorious defense.
New York & Presbyt. Hosp. v American Home Assur. Co. (2006 NY Slip Op 02510)The insurer established grounds to vacate its default through an excuse tied to a misspelled insured's name and a meritorious coverage defense.
New York Univ. Hosp. Rusk Inst. v Illinois Natl. Ins. Co. (2006 NY Slip Op 05601) Contrasted (cf., but see)The insurers established a reasonable excuse for their default and potentially meritorious verification and policy-exhaustion defenses.

Cited by

A label shows how the later decision treated this one.

Mount Sinai Hosp. v Country Wide Ins. Co. (2011 NY Slip Op 05680) FollowedThe insurer raised factual issues about policy exhaustion during a verification toll and payment with overdue interest before suit.
St. Barnabas Hosp. v Allstate Ins. Co. (2009 NY Slip Op 07824)The insurer failed to establish a meritorious defense because its timely denial misstated the claim amount and gave an invalid reason.
Parisien v Allstate Ins. Co. (2022 NY Slip Op 22262)The insurer established grounds to vacate its default through counsel's prompt action and an undisputed lack-of-coverage defense.

Similar decisions

New York Hosp. Med. Ctr. of Queens v Nationwide Mut. Ins. Co. (2014 NY Slip Op 06188)The insurer's clerical-oversight affidavit and potentially meritorious defense justified vacating its default judgment.
Westchester Med. Ctr. v Philadelphia Indem. Ins. Co. (2010 NY Slip Op 00138)The insurer failed to justify vacating its default because its affidavit established neither a reasonable excuse nor a meritorious defense.
VE Med. Care, P.C. v Travelers Cas. Co. of Conn. (2015 NY Slip Op 50909(U))The provider failed to offer a reasonable excuse for defaulting in opposition to the insurer's summary judgment motion.
New York & Presbyt. Hosp. v Auto One Ins. Co. (2006 NY Slip Op 02509)The insurer showed a reasonable excuse for its brief answering delay and potentially meritorious defenses, warranting default vacatur.
Wyckoff Hgts. Med. Ctr. v Merchants Ins. Co. of N.H. (2003 NY Slip Op 19994)The insurer's intentional default was not excusable because it sought vacatur only after the provider moved for contempt.