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/
- Decided
- July 14, 2009
- Citation
- 2009 NY Slip Op 51571(U) · 24 Misc 3d 137(A)
- Posture
- Default or vacatur
- Outcome
- Split result
- Legal questions
- Vacating a default: excuse and defense · Fraudulent incorporation (Mallela) (see the maps)
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.
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))
| 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| This opinion is uncorrected and will not be published in the printed Official Reports. |
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.
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
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.
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 the claims representatives' affidavits a reasonable excuse for the insurer's relatively short, non-prejudicial delay in answering, and the insurer showed a potentially meritorious Mallela ineligibility defense, so vacatur and the late answer were granted.
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.
On the merits, when may a no-fault insurer withhold payment because unlicensed persons own or control the provider (Mallela)?
This decision: Evidence of unlicensed ownership/control enough to proceed, but not resolved (rules on the question, but another ground decided the case)
Held the insurer made a prima facie showing of a potentially meritorious defense that the provider was ineligible for reimbursement, supporting vacatur of the default judgment.
Of the 61 decisions on this question in the Second Department courts and the Court of Appeals, 19 (this one included) are in the same category.
Cited in this decision
A label shows how this decision treated the case it cites.
- State Farm Mut. Auto. Ins. Co. v Mallela (2005 NY Slip Op 02416) FollowedFraudulently incorporated medical providers are ineligible for no-fault reimbursement under 11 NYCRR 65-3.16 (a) (12).
Similar decisions
- Midwood Acupuncture, P.C. v State Farm Mut. Auto. Ins. Co. (2008 NY Slip Op 51551(U))The insurer established a meritorious defense through an investigator's affidavit raising issues about who operated and controlled the provider.
- Neurology & Acupuncture Serv., P.C. v State Farm Mut. Auto. Ins. Co. (2008 NY Slip Op 51755(U))The insurer failed to establish a reasonable excuse for default because its attorney did not allege personal knowledge of the asserted excuse.
- Yumi Acupuncture, P.C. v Allstate Ins. Co. (2021 NY Slip Op 50432(U))The insurer's motion to vacate its default was denied for failure to show both a reasonable excuse and a meritorious defense.
- AVA Acupuncture, P.C. v State Farm Mut. Auto. Ins. Co. (2007 NY Slip Op 51756(U))The provider's failure to answer discovery or oppose the insurer's motion supported striking its complaint under CPLR 3126 (3).
- Great Wall Acupuncture, P.C. v New York Central Mutual Insurance Company (2009 NY Slip Op 50224(U))The insurer's untimely EUO request failed to toll its time to pay or deny, precluding its defense based on the provider owner's nonappearance.