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December 22, 2023

Art of Healing Medicine, P.C. v Allstate Ins. Co. (2023 NY Slip Op 51471(U))

https://www.beynensonlaw.com/case-law/art-of-healing-medicine-p-c-v-allstate-ins-co-2023-ny-slip-op-51471u/

Court
Appellate Term, Second Department
Decided
December 22, 2023
Citation
2023 NY Slip Op 51471(U)
Posture
Default or vacatur
Outcome
Provider prevailed
Issues
Defaults and vacatur
Legal questions
Vacating a default: excuse and defense · Service and jurisdiction over the insurer (see the maps)
Cite as
Art of Healing Medicine, P.C. v Allstate Ins. Co., 2023 NY Slip Op 51471(U) (App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2023)

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 failed to establish a reasonable excuse for its default based on nonreceipt of process or pandemic-related staffing reductions. The Appellate Term, Second Department, reversed the order granting vacatur and denied the insurer's motion to vacate the default judgment and compel acceptance of its answer under CPLR 5015 (a) (1) and 3012 (d). The absence of an electronic receipt record was insufficient without an affidavit from the employee identified as accepting service or an explanation for its omission. The claim that reduced staffing caused a processing failure was conclusory and unsubstantiated. Because relief required both a reasonable excuse and a potentially meritorious defense, the court did not reach whether the insurer established a defense.

Reported in New York Official Reports at Art of Healing Medicine, P.C. v Allstate Ins. Co. (2023 NY Slip Op 51471(U))

[*1]
Art of Healing Medicine, P.C. v Allstate Ins. Co.
2023 NY Slip Op 51471(U)
Decided on December 22, 2023
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This opinion is uncorrected and will not be published in the printed Official Reports.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 December 22, 2023
SUPREME COURT, APPELLATE TERM, SECOND DEPARTMENT, 2d, 11th and 13th JUDICIAL DISTRICTS

PRESENT: : PHILLIP HOM, J.P., WAVNY TOUSSAINT, CHEREÉ A. BUGGS, JJ
2023-513 K C

Art of Healing Medicine, P.C., as Assignee of Ketevan Ramishvili and Henadz Viliant, Appellant,

against

Allstate Insurance Company, Respondent.


Petre and Associates, P.C. (Mark Petre of counsel), for appellant. The Law Office of John Trop (Jeff G. Winston of counsel), for respondent.

Appeal from an order of the Civil Court of the City of New York, Kings County (Keisha M. Alleyne, J.), dated March 8, 2023. The order granted defendant’s motion to vacate a judgment of that court entered May 3, 2022 upon defendant’s failure to appear or answer the complaint and to compel plaintiff to accept defendant’s answer.

ORDERED that the order is reversed, with $30 costs, and defendant’s motion to vacate the default judgment entered May 3, 2022 and to compel plaintiff to accept defendant’s answer is denied.

In this action by a provider to recover assigned first-party no-fault benefits, a judgment was entered on May 3, 2022 upon defendant’s failure to appear or answer the complaint. According to the affidavit of service, the summons and complaint were served upon a named individual known by the process server to be an employee of defendant authorized to accept service of process. Defendant subsequently moved to vacate the default judgment pursuant to CPLR 5015 (a) (1) and to compel plaintiff to accept defendant’s answer pursuant to CPLR 3012 (d). Plaintiff opposed the motion. By order dated March 8, 2023, the Civil Court granted defendant’s motion. On appeal, plaintiff argues that defendant provided neither a reasonable excuse for its default nor a potentially meritorious defense to the action.

“A defendant seeking to vacate a default in answering a complaint pursuant to CPLR 5015 (a) (1) and to compel the plaintiff to accept an untimely answer pursuant to CPLR 3012 (d) [*2]must show both a reasonable excuse for the default and the existence of a potentially meritorious defense (see Deutsche Bank Natl. Trust Co. v Abrahim, 183 AD3d 698 [2020]; US Bank N.A. v Dedomenico, 162 AD3d 962, 964 [2018])” (JE & MB Homes, LLC v U.S. Bank N.A., 189 AD3d 1195, 1196 [2020]).

In support of its contention that it possessed a reasonable excuse for its default, defendant submitted an affidavit from a claims representative who averred that either the summons and complaint were not received, based on the absence of a record documenting the receipt of this document in defendant’s electronic system, or that the summons and complaint were not processed due to a reduction in the number of personnel in defendant’s office, where service allegedly occurred, due to the COVID-19 pandemic. Defendant’s claim of lack of receipt is insufficient to constitute a reasonable excuse, as defendant neither submitted an affidavit from the individual who had been named in the process server’s affidavit of service as having received service nor explained why such affidavit could not be provided (see Renelique v Allstate Ins. Co., 67 Misc 3d 128[A], 2020 NY Slip Op 50401[U], *2 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2020]; Pierre J. Renelique Physician, P.C. v Allstate Ins. Co., 64 Misc 3d 98, 100 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2019]; Aminov v Allstate Ins. Co., 62 Misc 3d 139[A], 2019 NY Slip Op 50056[U], *2 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2019]). Further, defendant’s assertion that a COVID-19-related staff reduction may have resulted in the failure to process the summons and complaint was conclusory and unsubstantiated, and, therefore, is also insufficient to qualify as a reasonable excuse (see V. v Leo, 219 AD3d 961, 962 [2023]; Wells Fargo Bank, N.A. v Krauss, 128 AD3d 813, 814 [2015]; Ahava Med. Diagnostic, P.C. v Hertz Co., 72 Misc 3d 138[A], 2021 NY Slip Op 50772[U], *1 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2021]). In light of the foregoing, it is unnecessary to consider whether defendant demonstrated a potentially meritorious defense to the action (see Hingorani v Venus Enters. 11 Corp., 208 AD3d 1229, 1230 [2022]; Ahava Med. Diagnostic, P.C. v Hertz Co., 2021 NY Slip Op 50772[U], *1).

Accordingly, the order is reversed and defendant’s motion to vacate the default judgment entered May 3, 2022 and to compel plaintiff to accept defendant’s answer is denied.

HOM, J.P., TOUSSAINT and BUGGS, JJ., concur.

ENTER:
Paul Kenny
Chief Clerk
Decision Date: December 22, 2023

Legal questions (2)

Questions 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: Relief denied because no reasonable excuse (or, under CPLR 317, no lack of actual notice) was shown; meritorious defense accepted or not reached

Held the insurer showed no reasonable excuse because its claim of nonreceipt lacked an affidavit from the employee named as served, and its COVID-19 staff-reduction explanation was conclusory, so the meritorious defense was not reached.

  • Appellate DivisionApp Div 34
  • Appellate TermApp Term 127
  • Trial courtsTrial 9
2022, Appellate Division: 1 decision (1 No reasonable excuse)2019, Appellate Division: 2 decisions (1 Default excused, 1 No reasonable excuse)2018, Appellate Division: 1 decision (1 Default excused)2017, Appellate Division: 1 decision (1 No meritorious defense)2014, Appellate Division: 1 decision (1 Default excused)2012, Appellate Division: 1 decision (1 Default excused)2011, Appellate Division: 1 decision (1 Default excused)2010, Appellate Division: 1 decision (1 Neither shown)2009, Appellate Division: 3 decisions (2 Default excused, 1 No meritorious defense)2008, Appellate Division: 2 decisions (1 Default excused, 1 No reasonable excuse)2007, Appellate Division: 3 decisions (3 Default excused)2006, Appellate Division: 7 decisions (7 Default excused)2005, Appellate Division: 3 decisions (1 Default excused, 1 No meritorious defense, 1 Neither shown)2004, Appellate Division: 4 decisions (2 Default excused, 1 No reasonable excuse, 1 Neither shown)2003, Appellate Division: 1 decision (1 No reasonable excuse)2026, Appellate Division: 1 decision (1 No reasonable excuse)2015, Appellate Division: 1 decision (1 Neither shown)2023, Appellate Term: 2 decisions (1 Default excused, 1 No reasonable excuse)2022, Appellate Term: 4 decisions (3 Default excused, 1 No reasonable excuse)2021, Appellate Term: 6 decisions (3 Default excused, 2 No reasonable excuse, 1 Neither shown)2020, Appellate Term: 10 decisions (2 Default excused, 7 No reasonable excuse, 1 Hearing or remittal)2019, Appellate Term: 18 decisions (5 Default excused, 11 No reasonable excuse, 2 No meritorious defense)2018, Appellate Term: 4 decisions (1 Default excused, 1 No reasonable excuse, 2 Neither shown)2017, Appellate Term: 14 decisions (5 Default excused, 6 No reasonable excuse, 2 No meritorious defense, 1 Neither shown)2016, Appellate Term: 5 decisions (2 Default excused, 2 No reasonable excuse, 1 Neither shown)2015, Appellate Term: 3 decisions (1 No reasonable excuse, 2 Neither shown)2014, Appellate Term: 2 decisions (1 No reasonable excuse, 1 No meritorious defense)2013, Appellate Term: 1 decision (1 No meritorious defense)2012, Appellate Term: 8 decisions (2 Default excused, 5 No reasonable excuse, 1 Neither shown)2011, Appellate Term: 5 decisions (1 Default excused, 2 No reasonable excuse, 1 No meritorious defense, 1 Neither shown)2010, Appellate Term: 12 decisions (4 Default excused, 4 No reasonable excuse, 1 No meritorious defense, 3 Neither shown)2009, Appellate Term: 5 decisions (2 Default excused, 2 No reasonable excuse, 1 No meritorious defense)2008, Appellate Term: 7 decisions (1 Default excused, 4 No reasonable excuse, 1 No meritorious defense, 1 Neither shown)2007, Appellate Term: 1 decision (1 No reasonable excuse)2006, Appellate Term: 5 decisions (3 Default excused, 1 No meritorious defense, 1 Neither shown)2005, Appellate Term: 2 decisions (2 Default excused)2004, Appellate Term: 4 decisions (1 No reasonable excuse, 2 No meritorious defense, 1 Neither shown)2024, Appellate Term: 2 decisions (1 Default excused, 1 No reasonable excuse)2025, Appellate Term: 3 decisions (3 Default excused)2026, Appellate Term: 3 decisions (3 No reasonable excuse)2003, Appellate Term: 1 decision (1 Neither shown)2023, Trial courts: 1 decision (1 No reasonable excuse)2011, Trial courts: 1 decision (1 No reasonable excuse)2009, Trial courts: 1 decision (1 Default excused)2007, Trial courts: 1 decision (1 Default excused)2004, Trial courts: 1 decision (1 No meritorious defense)2026, Trial courts: 1 decision (1 Default excused)2006, Trial courts: 2 decisions (1 Default excused, 1 Neither shown)2024, Trial courts: 1 decision (1 Default excused)This decision
20052010201520202025
Default excusedNo reasonable excuseNo meritorious defenseNeither shownHearing or remittalThis decisionCites it or cited by itCited or followed

Of the 170 decisions on this question in the Second Department courts and the Court of Appeals, 64 (this one included) are in the same category.

Service and jurisdiction over the insurer

Open the full map

Was the insurer validly served with process, and does the court have personal jurisdiction over it?

This decision: Insurer validly served and subject to the court's jurisdiction, or service defect cured/excused (rules on the question, but another ground decided the case)

Held the insurer's no-record claim of nonreceipt did not rebut the process server's affidavit of delivery to an authorized employee, absent an affidavit from that employee or an explanation for its absence.

  • Appellate DivisionApp Div 6
  • Appellate TermApp Term 108
  • Trial courtsTrial 15
2013, Appellate Division: 1 decision (1 Objection waived/not required)2010, Appellate Division: 1 decision (1 Jurisdiction upheld)2008, Appellate Division: 2 decisions (2 Jurisdiction upheld)2006, Appellate Division: 1 decision (1 Jurisdiction upheld)2003, Appellate Division: 1 decision (1 Jurisdiction upheld)2022, Appellate Term: 7 decisions (1 Jurisdiction upheld, 5 Service defective, 1 No jurisdiction over insurer)2021, Appellate Term: 4 decisions (2 Service defective, 1 No jurisdiction over insurer, 1 Hearing or discovery needed)2020, Appellate Term: 8 decisions (2 Jurisdiction upheld, 4 Service defective, 1 No jurisdiction over insurer, 1 Objection waived/not required)2019, Appellate Term: 53 decisions (4 Jurisdiction upheld, 6 Service defective, 42 No jurisdiction over insurer, 1 Objection waived/not required)2018, Appellate Term: 1 decision (1 No jurisdiction over insurer)2017, Appellate Term: 2 decisions (1 Jurisdiction upheld, 1 Service defective)2016, Appellate Term: 1 decision (1 Jurisdiction upheld)2015, Appellate Term: 2 decisions (1 Service defective, 1 No jurisdiction over insurer)2014, Appellate Term: 4 decisions (1 Jurisdiction upheld, 3 No jurisdiction over insurer)2013, Appellate Term: 4 decisions (1 Jurisdiction upheld, 1 Service defective, 1 No jurisdiction over insurer, 1 Objection waived/not required)2011, Appellate Term: 3 decisions (3 Service defective)2010, Appellate Term: 5 decisions (2 Jurisdiction upheld, 3 No jurisdiction over insurer)2009, Appellate Term: 2 decisions (2 Jurisdiction upheld)2007, Appellate Term: 2 decisions (2 Service defective)2006, Appellate Term: 1 decision (1 Jurisdiction upheld)2004, Appellate Term: 2 decisions (1 Jurisdiction upheld, 1 No jurisdiction over insurer)2023, Appellate Term: 1 decision (1 Jurisdiction upheld)2025, Appellate Term: 2 decisions (2 Hearing or discovery needed)2026, Appellate Term: 2 decisions (2 Jurisdiction upheld)2005, Appellate Term: 1 decision (1 Service defective)2024, Appellate Term: 1 decision (1 Jurisdiction upheld)2023, Trial courts: 1 decision (1 Jurisdiction upheld)2021, Trial courts: 1 decision (1 Service defective)2012, Trial courts: 1 decision (1 Jurisdiction upheld)2009, Trial courts: 1 decision (1 Jurisdiction upheld)2008, Trial courts: 2 decisions (2 Service defective)2005, Trial courts: 2 decisions (1 Service defective, 1 No jurisdiction over insurer)2004, Trial courts: 1 decision (1 Jurisdiction upheld)2003, Trial courts: 1 decision (1 Service defective)2026, Trial courts: 4 decisions (1 Jurisdiction upheld, 2 Service defective, 1 No jurisdiction over insurer)2025, Trial courts: 1 decision (1 Service defective)This decision
20052010201520202025
Jurisdiction upheldService defectiveNo jurisdiction over insurerHearing or discovery neededObjection waived/not requiredThis decisionCites it or cited by itCited or followed

Of the 129 decisions on this question in the Second Department courts and the Court of Appeals, 31 (this one included) are in the same category.

Cited in this decision

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

  • Renelique v Allstate Ins. Co. (2020 NY Slip Op 50401(U)) FollowedThe insurer failed to establish a reasonable excuse for default by asserting only that it had no record of receiving process.
  • Pierre J. Renelique Physician, P.C. v Allstate Ins. Co. (2019 NY Slip Op 29225) FollowedThe insurer failed to establish a reasonable excuse for default by citing the absence of a record of receiving process.
  • Aminov v Allstate Ins. Co. (2019 NY Slip Op 50056(U)) FollowedThe insurer's conclusory denial of service failed to rebut the process server's affidavit or excuse its default.
  • Ahava Med. Diagnostic, P.C. v Hertz Co. (2021 NY Slip Op 50772(U)) FollowedThe defendant failed to provide a sufficiently detailed explanation of the office failure offered to excuse its default.

Cited by

  • Jacobson v State Farm Fire & Cas. Co. (2024 NY Slip Op 51540(U))The insurer's conclusory claim of a clerical email error did not establish a reasonable excuse for its default in answering.
  • Shamayim Chiropractic, P.C. v Permanent Gen. Assur. Corp. (2026 NY Slip Op 50791(U))The insurer failed to show a reasonable excuse for default because its denial of receipt did not specifically contradict the affidavit of service.

Similar decisions

  • Art of Healing Medicine, P.C. v Global Liberty Ins. Co. of N.Y. (2020 NY Slip Op 51433(U))The insurer's high claims volume did not reasonably excuse a six-month failure to review a summons and complaint.
  • Hand By Hand, PT, P.C. v New York Cent. Mut. Fire Ins. Co. (2022 NY Slip Op 50774(U))The insurer failed to establish a reasonable excuse for default because it did not explain mailing both answers to counsel's prior address.
  • Medical Supply of NY Corp. v Berkshire Hathaway Homestate Ins. Co. (2025 NY Slip Op 50504(U))The insurer obtained default vacatur under CPLR 317 based on delayed actual notice and a potential workers' compensation defense.
  • Premier Surgical Servs., P.C. v Allstate Ins. Co. (2018 NY Slip Op 50273(U))The insurer's conclusory claim of law office failure did not establish a reasonable excuse for its default in appearing or answering.
  • Cautious Care Med., P.C. v 21st Century Ins. Co. (2021 NY Slip Op 50785(U))The insurer established a reasonable excuse for default through process-receipt procedures and records showing no record of the lawsuit.
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