Clarendon Natl. Ins. Co. v Gonzalez

[*1] Clarendon Natl. Ins. Co. v Gonzalez 2005 NY Slip Op 51978(U) [10 Misc 3d 1056(A)] Decided on December 6, 2005 Supreme Court, Nassau County Winslow, J. 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 6, 2005
Supreme Court, Nassau County

Clarendon National Insurance Company, Plaintiff,

against

Maidel Gonzalez, JOSE DEJESUS and WALTER J. SCEVIOUR, Defendants.



04-006651

F. Dana Winslow, J.

Plaintiff moves, pursuant to CPLR §2221, to reargue the decision and Order of the Court dated May 17, 2005 and entered in the records of the County Clerk on June 29, 2005 (the "Prior Order"), in which this Court denied plaintiff's motion for a default judgment as against defendants MAIDEL GONZALEZ ("GONZALEZ") and JOSE DeJESUS ("DeJESUS").

This is a declaratory judgment action in which plaintiff CLARENDON NATIONAL INSURANCE COMPANY ("CLARENDON") seeks a declaration that it is not obligated to provide a defense or indemnification to defendants GONZALEZ, DeJESUS or WALTER SCEVIOUR ("SCEVIOUR") in any current or future proceedings, including the personal injury action entitled Walter Sceviour v. Joseph DeJesus and Maidel Gonzalez, pending in the Supreme Court, County of Bronx, Index No. 26243/00 (the "Underlying Action"). The Court refers to the Prior Order for a recitation of the facts and procedural history that give rise to the instant motion.

In the Prior Order, the Court found that CLARENDON had failed to substantiate its claim that it did not insure the vehicle in question at the time of the accident, and thus failed to establish a prima facie case for declaratory relief. Further, the Court found that evidence on the record contravened CLARENDON's claim, insofar as the police accident report designated GONZALEZ as the Owner and CLARENDON as the insurer of the vehicle. The Court held that [*2]a police accident report bearing an insurance code is prima facie proof that the vehicle was insured by the designated insurer. The Court reasoned that the insurance information is presumably taken from the vehicle registration, and proof of insurance must be shown in order to obtain the registration.

CLARENDON now moves to reargue on grounds that the above holding misapprehends the law. In CLARENDON's view, although it may be assumed that the insurance information is taken from the vehicle registration, there are other explanations for the designation of a particular insurer on a police accident report. For example, the driver could have tendered the insurance card for a different vehicle, or a fraudulent insurance card. Thus, the insurance code does not necessarily reflect coverage by the designated insurer.

In support of this motion, CLARENDON also offers the affidavit of Robert Ruryk ("Ruryk"), the Program Manager for CLARENDON's third-party administrator, who states that, after a thorough search of all applicable databases, no policy insuring GONZALEZ with respect to the subject vehicle was found. Further, Ruryk states that the subject vehicle was never added to the policy of insurance covering a different vehicle owned by GONZALEZ, nor did GONZALEZ ever request that the subject vehicle be added. Ruryk adds that records obtained from the New York State Department of Motor Vehicles reflect that GONZALEZ did not take title to the subject vehicle until over two weeks after the accident. Documents substantiating Ruryk's assertions are attached as exhibits to the moving papers.

This motion, characterized as a motion to reargue, appears to have been filed approximately four days late. See CPLR §2221(d)(3). The opposition has not raised this defect, however, and the Court has discretion to disregard it. See CPLR §2001, CPLR §2004. The Court finds that CLARENDON has articulated a proper basis for reargument insofar as it claims a misapprehension of law regarding the significance of the police accident report. CPLR §2221(d)(2). Accordingly, leave to reargue is granted.

Upon reargument, the Court notes that CLARENDON offers no authority to contradict the proposition that the insurance designation on the police accident report creates a presumption of coverage by the designated insurer. Instead, CLARENDON essentially tries to rebut the presumption with speculative scenarios in which the police accident report could be incorrect. The Court adheres to the principle that the insurance code designation is prima facie proof of coverage by that insurer. The Court notes, however, that the above principle was not essential to the Court's determination in the Prior Order. Regardless of whether the insurance code designation created a presumption of coverage or was merely some evidence of coverage by the designated insurer, the initial burden of proof belonged to CLARENDON, to make a prima facie showing of non-coverage. The Court found that the unsubstantiated allegations asserted in the prior motion were insufficient to establish, prima facie, CLARENDON's right to declaratory relief. See Merchants Insurance Company of New Hampshire Inc. v. Long Island Pet Cemetery, 206 AD2d 827; Joosten v. Gale, 129 AD2d 531. [*3]

CLARENDON now offers additional proof that it did not insure the subject vehicle on the date of the accident. In the context of reargument, however, the Court cannot consider matters of fact not offered on the prior motion. CPLR §2221(d)(2). Without such evidence, the reargument fails.

In order for CLARENDON to prevail, the Court must find that this motion, although denominated as a motion to reargue, is essentially a motion to renew. See Petsako v. Zweig, 8 AD3d 355; Mejia v. Nanni, 307 AD2d 870. The question then becomes whether the Court may consider the new evidence offered in that context.

Pursuant to CPLR §2221(e), motions for leave to renew (i) must be based upon new facts not offered on the prior motion, and (ii) must offer a reasonable excuse for the failure to present such facts on the prior motion. Prior to the adoption of CPLR §2221(e) in 1999, which was intended to clarify the case law on renewal, Courts generally interpreted the rule requiring newly discovered facts as a flexible one, and upheld the Court's discretion to act in the interests of justice. There were a number of cases in which leave to renew was granted even though the movant knew the additional facts at the time of the original motion and offered no reasonable excuse for not timely submitting them. See, e.g., Karlin v. Bridges, 172 AD2d 644; Weisse v. Kamhi, 129 AD2d 698; Sciascia v. Nevins, 130 AD2d 649.

Since the 1999 revisions, however, the Courts have tended to interpret the rule more strictly, generally adhering to the requirement, codified in CPLR §2221(e)(3), that a reasonable justification be offered for the failure to submit the additional facts on the original motion. See, e.g., Petsako, 8 AD3d 355; Mollin v. County of Nassau, 2 AD3d 600; Bloom v. Primus Automotive Financial Services, Inc., 292 AD2d 410. Where no valid excuse was offered, the Courts generally have denied the motion, reasoning that "[r]enewal is not available as a 'second chance' for parties who have not exercised due diligence in making their first factual presentation." Chelsea Piers Mgmt. v. Forest Electric Corp., 281 AD2d 252. See also Pisciotto v. Dries, 306 AD2d 262; Carota v. Wu, 284 AD2d 614.

In this case, CLARENDON offers no excuse for not submitting the Ruryk affidavit and accompanying documentary evidence on the original motion. Presumably, this is because CLARENDON adheres to its position that the motion is one for reargument, notwithstanding SCEVIOUR's arguments to the contrary. As the requirements of CPLR 2221(e) have not been met, the Court is inclined to deny renewal. The new evidence, however, is of such substance and materiality that, in the interests of justice, it cannot be ignored. The Court finds that the new evidence substantiates the claims asserted on the prior motion, and is sufficient, both to establish a prima facie right to relief, and to overcome any presumption of coverage arising by virtue of the insurance code designation on the police accident report.

In these unusual circumstances, the Court looks to a recent holding of the First Department which, diverting from the current trend, appears to have revived the concept of judicial flexibility. "Although renewal motions generally should be based on newly discovered [*4]facts that could not be offered on the prior motion (see CPLR 2221[e]), courts have discretion to relax this requirement and to grant such a motion in the interest of justice." Mejia, 307 AD2d at 871 (granting renewal notwithstanding the absence of an excuse).

The Court, accordingly, grants renewal in the interests of justice. The Court believes that CLARENDON misjudged the level of proof required on the original motion, providing the minimum dictated by CPLR §3215 in a perfunctory and conclusory manner. This, in the Court's view, is akin to inadvertent error, which the Court may excuse in its discretion. See BBY Diamonds Corp. v. Five Star Designs, Inc., 6 AD3d 263. The Court believes that it would be unfair, in these circumstances, to obligate CLARENDON to provide insurance coverage where it never existed in the first instance. Upon the newly submitted evidence, which demonstrates to the Court's satisfaction that CLARENDON never insured the subject vehicle, the Court grants the motion for a declaratory judgment. Fairness mandates, however, that CLARENDON compensate SCEVIOUR for the additional expenses incurred in connection with this motion, which was necessitated by CLARENDON's prior laxity.

Based upon the foregoing, it is

ORDERED, that the motion for reargument, deemed here a motion for renewal, is granted, and upon renewal, the motion for a default judgment against GONZALEZ and DeJESUS, is granted, insofar as it is declared that CLARENDON is not obligated to defend or indemnify GONZALEZ or DeJESUS in the Underlying Action. It is further

ORDERED, that, upon SCEVIOUR's submission to CLARENDON of an itemized invoice, CLARENDON shall pay to SCEVIOUR the costs of the instant motion to reargue/renew, including reasonable legal fees and disbursements.

This constitutes the Order of the Court. CLARENDON shall serve a copy of this Order with Notice of Entry on all parties, forthwith upon receipt from any source.

ENTER:

Dated: December 6, 2005_____________________________

J.S.C.