Nava v Kramer

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Nava v Kramer 2012 NY Slip Op 31271(U) May 9, 2012 Sup Ct, Suffolk County Docket Number: 21460-2011 Judge: Peter H. Mayer Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. [* 1] SHORT FOI,M O){I.lHR INDEX NO. 21460-2011 SUPREME COURT - STATE OF NEW YORK IAS. PART 17 - SUFFOLK COUNTY PRESENT: I Ion. PETER H. MA YER Justice of the Supreme Court MOTION DATE 9-15-11 ADJ. DATE 9-20-11 Mot. Seq. # DOl - MD: 002 - MG PRELIMINARY CONFERENCE SCHEDULED FOR JUNE 12,2012, 9:30 a-nL ---------------------------------------------------------------X JOSEPH NA VA, O'Brien & O'Brien, LLP Attorneys for Plaintiff 168 Smithtown Boulevard Nesconset, New York 11767 Plainti1T(s), Law Office of Dcidrc Tobin & Associates Attorneys for Defendant Tenke 901 Franklin Avenue Garden City, New York 11530 - against - BRUCE KRAMER and ELIZABETH TENKE, Defendant( s). ---------------------------------------------------------------X Richard T. Lau & Associates Attorneys for Defendant Kramer 300 Jericho Quadrangle East, Suite 260A Jericho, New York 11753-9040 Upon the reading and filing of the following papers in this matter: (I) Notice of Motion by the plaintiff, dated August 23, 2011, and supp01ting papers; (2) Order to Show Cause by the defendant, signed October 17,20]1, and supporting papers; (3) Affirmation in Opposition by the plaintiff, undated, and supporting papers; (4) Reply Affinnation by the defendant Kramer, dated November 28, 2011, and supporting papers; and now UPON DUE DELIBERATION AND CONSlDERA TION BY THE COURT of the loregoing papers, the motion is decided as follows: it is ORDERED that the motion (001) by the plaintiff for a default judgment against defendant Bruce Kramer for failure to timely appear or answer is considered under CPLR §3215 and is hereby denied; and it is further ORDERt-lJ that the application by Order to Show Cause (002), dated October 17,2011, in which the defendant. Bruce Kramer, seeks an order pursuant to CPLR 50 15(a) vacating any default and pursuant to CPLR §3012(d) granting an extension of time to answer the plaintiffs summons and complaint, is hereby granted, and counsellor defendant Kramer shall promptly serve an answer upon counsel for all parties; and it is funher [* 2] .Nava v Kramer I"dex l\'o. 21460-2011 Page 2 ORDERED that counsel h)r defendant Kramer shall promptly serve a copy or this Order upon counsel for elllparties by First Class Mail. and shall promptly thereafter file the aJfidavit(s) of such servICe wlth the County Clerk: and it is further ORDERED that all parties shall appear f~)ra Preliminary Conference on TuesdilY, June 12, 201.2 at 9:30 a.m. before the underslgned III the courtroom located at One Court Street, Room A-257. Part 17, lZiverhead. NevI" York. This action arose from a motor vehicle accident that occurred on October 25, 2010 at the Intersection of Stack yard Drive and Wavecrest Drive in Mastlc Beach, New York. At the time of the accident, the plaintiff was a passenger IJ1 the vehicle operated by defendant, Elizabeth Tenke, when the vehicle operated by Ms. Tenke came into contact with the vehlcle operated by defendant Bruce Kramer. The plaintiff now seeks a dchwlt judgmcnt against defendant Kramer pursuant to CPLR §3215 f~)rfailure to timely answer or otherwise appear in this action. Although plaintiff's counsel would not accept the late answer of defendant Kramer, he did accept the late answer of defendant Tenke pursuant to a stipulation dated September 14,20 J 1. Defendant Kramer cross~m()ves, pursuant to CPI ... 50 15(a), to vacate the default R in answering, and to extcnd his time to answer the complaint pursuant to CPLR §30 12( d). 1 Defendant Kramer was served with the summons and complaint on July 26, 2011 and faxed the papers to State Farm Insurance Company claim representative, Michael Hefferon, on August 8, 2011. According to an affidavit from Michael HetTeron, a claim representative from State Farm, on August 9, 2011 he was assigned to handle the claim. Mr. Hefferon dictated letters that same day referring the summons and complaint to Richard T. Lau & Associates, the law firm assigned to defend Mr. Kramer's interests in the action. In his affidavit, Mr. He1feron states that due to a delay in the word processing depaI1ment, the letters were not completed until August 24, 2011 and the letters and pleadings were sent to Richard Lau & Associates on August 3 L 2011. In SUPP0l1or his motion to vacate his default and extend his time to answer, defendant Kramer submits an affidavit from Sharyn Sa'vvyer,the office manager for Ricahrd T. Lau & Associates. Ms. Sawyer supervises the firm's data entry group, which enters new case assignments into thc computer systcm so attorneys in the on-ice may prepare answers to complaints. be assigned to l{)f the purpose of forwarding the files to an attorney in the office to prepare answers, According to Ms. Sawyer, the firm changed to a new case management system in August 2011. At the time, the firm was the pilot office for rollout of the new system. This nc\v system would eventually be used by all 39 Claims Litigation Counsel oflices. The servers for the new systcm are located in Phoemx, Arizona, and are not controlled by the firm. When the lirm and other offices began using the system, the system had very slow response times and even f311ed operate at all on somc days. During those down times, no new files could be entered into to the system or opened by employees. The problem was exacerbated by the employees having to learn how to usc the new system. According to Ms. Sawyer., on September 9, 2011, the firm reccived the assignment to represent defendant Kramer; however, due to thc backlog and delays caused by the new system, Mr lCInistophcr Citcra WdS also a passcngCt" in the Tenkc vehicle when the accident m;curn:u. Mr. eitera is a plainti ff in a separate but related aClion, Clrl'ls/(lpher Cilill'il v RnlC'I.; Kralllilr (lnd [Jic:ubelh Fe!1ke. under Su ffolk C(lllllty Indcx ii 21461-1011. PlainlilT Citera has also moved for a del~lUlt.illdgment against Kramer in thaI action and Kramer Ins, likewise, cross-ll](lved to vacate the det'<Jultin thaI aClion pursuant to CPLR 5015(a), and to extend his lime to answcr pllr~lIallt to CPLR ~3012(d). [* 3] Nal'(/ v Kramer Index No. 21460-2() 11 Page 3 Kramer's defense rile was not opened until September 26, 2011. Teresa Gmvronski IS employed as a legal secretary 111 data entry department 8.1 defendant's counsel's law finn. Her affidavit 111 the support of defendant's motion confirms, in detail, the problems Kramer's defense counsel experienced vviththe ne\v computer system and the reasons for the delay in answering. In relevant part CPLR 50 15(a)( I) provides that the "coun \vhieh rendered ajudgmenl or order may relieve a party from it upon such terms as may be Just upon the ground of ... excusable default, if such motion IS made within one year after service ora copy of the judgment or order with written noticeof1ts entry upon the moving party ..." A defendant seeking to vacate its default in appearing or answering the complaint must provide a reasonable excuse for the default and demonstrate a meritorious defense to the action (see CPLR 5015 [a] [1]; Gray v B. R. Trucking Co., 59 NY2d 649 [1983]; Weinberger v Judlau Comr" 2 AD3d 631, 763 NYS2d 338 [2d Dept2003]; Kaplinskyv Mazor, 307 AD2d 916, 762 NYS2d 902 [2d Dept 2003], Ii,nnis l' Lema, 305 AD2d 632, 760 NYS2d 197 [2d Oept 2003]; O',,,'hea v Bittro(ff, 302 AD2d 439, 753 NYS2d 737 [2d Dept 2003]). The determination of what constitutes a reasonable excuse lies within the sound discretion of the Supreme Court (Gambardella v Ortov Lighting. Inc., 278 AD2d 494, 717 NYS2d 923 r2d Oep! 2000]). 1n view of the public policy in favor of resolving cases on Ihe merits, the Court may excuse a defendant's failure to timely answer where the delay in answering is relatively short, there is no showing of prejudice to plaintiff, a potential meritorious defense exists, and no willfulness on the part of the defendant has been shown (see, Finkelstein v 5;unshine, 47 AD3d 882; 852 NYS2d 168 [2d Dept 2008]; Jolkovsky v Legeman, 32 AD3d 418,819 NYS2d 561 [2d Dept 2006]; Rottenberg v Preferred Prop. Mgf., Inc .. 22 A03d 826, 803 NYS2d 177 [2d Oep! 2005]; KG;ser v Delaney, 255 AD2d 362, 679 NYS2d 686 [.2d Dept 1998J; Mulder v Rockland Armor & Metal Corp., 140 AD2d 315, 527 NYS2d 550 [2d Dept 1988l: McNeill v, Lasala, 115 AU2d 459; 496 NYS2d 357 [2d Dept 1985J; Stark v ,lviarine Power & Light Co., 99 AD2d 753, 471 NYS2d 668 [2d Dept 1984]; Lindo v Evans, 98 A02d 765,469 NYS2d 481 [2d Dept 1983]; Alpha Executive Planning Cnp. v Alan, 59 AD2d 548, 397 NYS2d 139 [2d Dept 1977]). The court has discretion to accept law office failure as a reasonable excuse pursuant to CPLR 2005 (see, Monle/jore j\1ed. Ctr. v Har(fhrd Ace. & fndem. Co., 37 AD3d 673, 830 NYS2d 336 [2d Dept 2007]). i\ conclusory and unsubstantiated claim onaw office failure WIllnot rise to the level ofa reasonable excuse (Peter.we'll]l 11 Lysaght, Lysaght &- Kramer. r,c., 47 AD3d 783, 851 NYS2d209 [2d Dept 200Sl; Fiton v Cribb, 38 AD3d 741,742,832 NYS2d 274 [2d Dept 200T]; Maller (4BloOTn v Lubow, 45 AD3d 680, 845 NYS2d 439 [2d Dept :2007L LlIgauer v Foresf City Rainer Co., 44 AD3d 829, 843 NYS2d 456 [2d Dcpt 2007]). Pursuant to CPLR ~2004, "the court may ~xtend the time to appear or plead, or compel the acceplance ora pleading ulltimely served, upon such terms as may be.1ust and upon a showing of reasonable excuse for delay or default," Similarly, CPLR §30 12(d) states that upon a motion by a party, "the court may extend the time to appear or plead, or compel the acceptance ofa pleading untimely served, upon sueh terms as may bejust and upon a showing of reasonable excuse fix delay or default" Plall1tires counsel claims that defendant can not allege law ollice failure as his excuse, because the attorneys assigned to de rend this case, Richard Lau & Associates, arc employees of his insurance carrier, Slate Farm Mutual Automobile Insurance Company. According to counsel, "there was no 'law office' failure because Richard T Lau and Associates is not a law office but a department of State Farm, all of whose attomeys and stalTare employees of State Farm." [t is true that a general excuse that a deJalilt was [* 4] lVava v Kramer Iudex No, 21460-201 J Page 4 caused by an Insurance carrier's delay is. by itself lnsunicient to establish a reasonable excuse for the default (see Kaplil1.\-ky " Ma,::()}", 307 AD1d 9l6. 762 NYS2d 902 r2d Oept 2003]; O'Shea v Biflro(lf; 302 AD2d 439,753 NYS2d 737 [2d Dept 2003]: Meggeil II Gibson. 302 ;\D2d 372,754 NYS2d 556 [2d Dept 20031: Cilindre//o v Rayahin. 297 A02d 699, 747 NYS2d 388 f2d Ocpt 2002J;Andl'ade v Rangimva/a. 297 AD2d 691, 747 NYS2d 385 l2d Dep! 20021: Kaclwr l' Berlin, 296 AD2d 479, 745 NYS2d 471 [2d Dep! 2002])_ In this case. however. the defendant has submitted detailed affidavits to explain the delay. FUrlher. plaintiff" s counsel has submitted no authority for the proposition that a law tirm employed by an insurance carrier is not a "la,"v ofticc" for purpose ofa "law office failure" analysis. In fact. New York State Bar Association's Committee on Professional Ethics has opined on this very issue that "[al group of lawyers who are salaried employees of an insurance company and whose practice is exclusively in defense of the company's policy holders may hold themselves out as a law firm ....- (NY St Bar Assn Comm on Prof Ethics Op726 [2000J). When the default is the re:sult of law office failure, and the motion to extend lime satisfies the requirements ofCPLR §3012(d) or §5015(a), "the court shall not, as a matter oflaw, be precluded from exercising its discretion in the interests of justice to excuse delay or default resulting from law office failure" (CPLR §2005). Where, as here, the claim of law office failure is supported by a detailed and credible explanation of the default, the Supreme Court has the discretion to accept law office failure as a reasonable excuse (see Kahn II Kahn" 86 ;\D3d 630, 928 NYS2d 55 [2d Dept 2011]; Remote Mefer Techn()logy(~fN. Y. inc. v Aris Realty Corp., 83 AD3d 1030,922 NYS2d 440 l2d Dept 2011J; Winthrop Univ. Hasp. v. Metropolitan Suburban Bus AUfh., 78 AD3d 685, 910 NYS2d 159 [2d Oept 2010]). With regard to a meritorious defense. defendant Kramer's affidavit reveals that as he was stopped and attempting to see past trees and cars obstructing his view when his vehicle was struck by defendant Eli:t..abethTcnke's vehicle. According to Mr. Kramer, the Tenke vehicle was speeding and traveling too close to the right side of the road when it struck his vehicle. Indeed, the plaintilTnamed Elizabeth Tcnke as a defendant in this action, setting forth the same allegations of negligence against defendant Tcnke as those alleged against defendant Kramer. The statements set forth by Mr. Kramer in his affidavit, coupled with the allegations of negligence in pla1l1tiff's own verified complaint against defendant Tenke constitute a meritorious defense fix purposes of Mr. Krmncr's motion under CPLR 50] 5(a) and 30] 2(d). Finally. plainti rr s counsel claims that the plainliff"would suiTer serious prejudice if a default were not entered." In this regard. it is alleged that "following the Defendant's default. the Plaintiff borrowed money against the judgment for his damages ... I. that1 interest on the loan is substantial. and the Plaintiff took out the loan upon the understanding that the Defendant" s default would shorten the time until the payment of the jlldgmenl.··~ Such understanding. however, ISmisguided and speculative. Even if a default were granted against defendant Kramer. the discovery process would have to proceed as to defendant Tcnke and all proceedings Ill!" cnlry ora judgment or the making of an assessmcnt of damages against Kramer thc as the dcj~lUlting party would be stayed until the time of or following the trial or olher disposition of the action. PursuUl1tto CPLR §3215(d), in an action involving multiple defendants. when '-a defendant has answered and one or more other defendants have failed to appear, plcad, or proceed to trial of an action reached and called for trial ... the eQUItmay entcr an ex parte order directing that' proceedings for the entry uf a judgment or the making of an assessment, the taking or an account or proof ... be conducted at the ~ Pt<lintifrs opposition to defendant Kramer's Illotion to extend hi~ time to answer is accompanied onty by an affirmation from counsel. and is not supported by an atTidaVl1from the party plaintiff. [* 5] Kramer Index No. 2/460-2011 Page 5 lV{ll'a \I time or or following the trial or other disposition of the action against the defendant who has answered.-· Accordingly. any alleged prejudice to the plaintiff would be the result of a sel f-imposed risk assumed by the plaintiff. hy taking out a high-interest loan. based upon speculation that a default judgment \-vould be granted against Kramer. and Ihe misguided understandll1g that damages against Kramer would be assessed immediately. Any such alleged pn.::j dlce is not a "prej udice" for purposes of analysis under CPLR 50 15(a) u or ~3012(d). Based upon the foregoing_ as '\-vell as the strong public policy in favor of resolving cases on the merits, the lack of prejudice to the plaintiflcaused by the defendant's brief delay in answering, and the fact that the defendant's delay was not \villful, the plaintiff's motion for a default is denied and defendant's time to serve an answer is extended (see Henry v Kuveke. 9 AD3d 476; 781 NYS2d 114l2d Ocpt 20041; Burgess \I Brooklyn Jewi.\·h Hosp .. 272 AD2d 285, 707 NYS2d 462 [2d Dcpt 2000]). This constitutes the Order of the Court. ... Dated: May9,2012 , , -), ) .~/l} '" ~ .. i'-I·· -''',,-,, -.'. '-- PETER H. MAYER, J.S.C [I FINAL DISPOSITION ,- .... !,/ / [ X] NON FINAL DISPOSITION ;.

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