February 14, 2011

Edison Med. Servs., P.C. v Country-Wide Ins. Co. (2011 NY Slip Op 50193(U))


The court considered a case in which a provider sought to recover assigned first-party no-fault benefits from an insurance company and a default judgment was entered against the insurance company. The insurance company sought to vacate the default judgment, stating that a clerical error had caused the late service of the answer. The main issue was whether the insurance company's reason for the default was reasonable and whether they demonstrated a meritorious defense. The holding was that the insurance company did not provide a reasonable excuse for their default, as the purported document served as an answer listed the wrong assignor and did not properly address the complaint. The court affirmed the denial of the insurance company's motion to vacate the default judgment, as there was no reasonable excuse for the default and therefore, it was unnecessary to consider if a meritorious defense was demonstrated.

Reported in New York Official Reports at Edison Med. Servs., P.C. v Country-Wide Ins. Co. (2011 NY Slip Op 50193(U))

Edison Med. Servs., P.C. v Country-Wide Ins. Co. (2011 NY Slip Op 50193(U)) [*1]
Edison Med. Servs., P.C. v Country-Wide Ins. Co.
2011 NY Slip Op 50193(U) [30 Misc 3d 137(A)]
Decided on February 14, 2011
Appellate Term, Second Department
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
As corrected in part through November 4, 2011; it will not be published in the printed Official Reports.
Decided on February 14, 2011



2009-2175 K C.
Edison Medical Services, P.C. as Assignee of KUMARIE BACHAN, Respondent,


Country-Wide Insurance Company, Appellant.

Appeal from an order of the Civil Court of the City of New York, Kings County (Robin S. Garson, J.), entered May 27, 2009. The order denied defendant’s motion to vacate a default judgment.

ORDERED that the order is affirmed, without costs.

In this action by a provider to recover assigned first-party no-fault benefits, a default judgment was entered against defendant on April 19, 2007. Defendant moved to vacate the default judgment, and the Civil Court denied defendant’s motion. This appeal by defendant ensued.

A defendant seeking to vacate a judgment entered upon its default in answering must demonstrate both a reasonable excuse for the default 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]; Hodges v Sidial, 48 AD3d 633, 634 [2008]; Hageman v Home Depot U.S.A., Inc., 25 AD3d 760 [2006]). The determination of what constitutes a reasonable excuse lies within the sound discretion of the motion court (see Matter of Gambardella v Ortov Light., 278 AD2d 494 [2000]).

In the case at bar, defendant proffered no reasonable excuse as to why it served its answer late. Defendant merely asserted that, due to a clerical error, the caption of the answer it [*2]ultimately served was incorrect. However, the purported document, which listed the wrong assignor, could not properly be characterized as an answer to the complaint. Moreover, the foregoing error did not establish an excuse for the untimely service of the answer. According to a paralegal employed by defendant’s law firm, the answer was served on August 2, 2007, almost four months after the default judgment had been entered. In view of the lack of a reasonable excuse for defendant’s default, it is unnecessary to consider whether defendant sufficiently demonstrated the existence of a meritorious defense (see Levi v Levi, 46 AD3d 519 [2007]). Accordingly, as the Civil Court did not improvidently exercise its discretion in denying defendant’s motion, the order is affirmed.

Pesce, P.J., and Weston, J., concur.

Golia, J., dissents in a separate memorandum.

Golia, J., dissents and votes to reverse the order and grant defendant’s motion to vacate the default judgment in the following memorandum:

Contrary to the holding of the majority, I find that defendant did establish a reasonable excuse for its default, as well as a meritorious defense.

In the first instance, it is clear that defendant, by its paralegal, Tahir Wright, committed law office failure. Ms. Wright’s job was to draft defendant’s answer to the complaint by cutting and pasting computer-generated documents. In this instance, she failed to notice that the computer had generated an incorrect caption due to the input of an incorrect file number and, in addition, failed to timely serve this document.

The answer, which was due on or before March 6, 2007, was apparently served on March 12, 2007. It was dated March 12, 2007, and the affidavit of service was also dated March 12, 2007. Nevertheless, the majority raises and relies on Ms. Wright’s
affidavit, which states that she caused the answer to be served on August 2, 2007. In fact, even plaintiff, which vigorously opposed any vacatur of defendant’s default, did not claim that the proposed answer was served after the default judgment had been entered.

I accept that the answer, which was dated March 12, 2007, as was the affidavit of service, was, in fact, served on March 12, 2007, a mere six days late. I do not give any weight to the incomprehensible statement of Ms. Wright when she asserts that the answer dated March 12, 2007 was not sent until August 2, 2007.

Further, I find that, contrary to the holding of the Civil Court, defendant did raise a meritorious defense. Defendant’s moving papers establish that it sent a timely request for verification and when plaintiff failed to respond, it sent a timely follow-up request. Inasmuch as plaintiff failed to respond to that second request, it appears the instant action is premature.

Additionally, the medical services at issue were allegedly provided prior to July 16, 2003, which may very well raise a valid statute of limitations issue. Here, plaintiff raises no issue of prejudice and, in light of all the facts herein, I find the delay to be de minimis.
Decision Date: February 14, 2011