Haskins v Allstate Ins.

[*1] Haskins v Allstate Ins. 2004 NY Slip Op 50997(U) Decided on July 1, 2004 Supreme Court, Bronx County 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 July 1, 2004
Supreme Court, Bronx County

MARY HASKINS and CRYSTAL HASKINS, Plaintiffs,

against

ALLSTATE INSURANCE, Defendant



7643/03

George D. Salerno, J.

Plaintiffs move for an order pursuant to Insurance Law 3420(b) granting summary judgment against defendant Allstate Insurance Company (Allstate).

This motion stems from a motor vehicle accident that occurred in the State of Connecticut on February 21, 1998 in which plaintiffs Mary Haskins and Crystal Haskins sustained personal injuries. Both plaintiffs were passengers in the motor vehicle driven by Allstate's insured Dahl Haskins. He is the father of Crystal Haskins and the husband of Mary Haskins. It is undisputed that Dahl Haskins lost control of his vehicle and struck a concrete [mediator] on Interstate 95 in Greenwich Connecticut. The Haskins initially brought an action against Dahl Haskins in the Supreme Court in Bronx County to recover damages for personal injuries sustained as a result of the accident. Dahl Haskin's counsel attempted to interpose an answer which plaintiff rejected as untimely. Defendant, thereafter, moved to compel plaintiffs to accept his answer. By order dated July 7, 2000 defendant's motion was granted without opposition, however by the time this order was granted plaintiffs had already commenced a second personal injury action against Dahl Haskins. This court also observed that defendant's counsel in the first action did not serve a copy of the court's order, vacating the default, until June 15, 2001. [FN1] The court record further reflects that plaintiffs' first action was administratively dismissed as a result of a "clerk's call" on May 29, 2001. Plaintiffs' counsel nevertheless stated that pursuant "to CPLR 3215(c) that action was deemed abandoned" (referring to plaintiffs' first action). [FN2] CPLR 3215(c) refers to a default not entered within one year. Here plaintiffs' counsel points to CPLR 3215(c) as the reason for the commencement of a second action involving the same parties and the same occurrence. The second action was filed under Index No. 21112/99 which obviously means that the second action was commenced prior to the dismissal of the clerks call on May 29, 2001. Consequently, notwithstanding plaintiffs' contention that the first action was deemed abandoned the first action was still pending when the second action was [*2]commenced.

In any event the second action , as previously stated, was commenced on October 1, 1999 and when defendant failed to answer this second action plaintiff Dahl Haskins moved to enter a default judgment. Defendant's Allstate initial argument implies, without sufficient proof, collusion between plaintiffs and Allstate's insured regarding the manner of service utilized by the plaintiff. Plaintiffs' effectuated service (in the second action) of the summons and complaint upon Dahl Haskins by affixing a true copy of the summons and verified complaint on September 30, 1999 at his residence and mailing a copy to Dahl Haskins at his residence. Contrary to Allstate's assertion, the affidavit of service established due diligence to effect personal service and no legal authority is presented requiring a plaintiff to serve a defendant at his place of business when personal service could not be made at the defendant's personal residence.

Allstate also alleges that plaintiffs' judgment, in the second action, was obtained by fraud and misconduct and is therefore subject to collateral attack. In support of this argument, Allstate cites Hernandez v. Am. Transit Ins. Co. 2Ad 3d 584, 768 N.Y.S.2d 362 where the court held that a judgment entered through fraud or other misconduct practiced on the court is a nullity. The court's opinion, however does not set forth the evidence presented that was sufficient "to raise a triable issue of fact as to whether the plaintiff had a basis upon which to enter the judgments." Here defendant has not established misconduct by plaintiffs regarding the commencement of the action against Allstate. At best plaintiffs' actions such as non personal service may seem suspicious but such conduct can not on the record here constitute misconduct. Plaintiffs fully complied with the service requirements set forth in CPLR 308(4). Several cases presented by plaintiffs in support of their contention that service was proper make it clear that three attempts to serve a defendant at his home constitutes due diligence justifying service under CPLR 308 (4).(Dunleavy v. Moya, 237 Ad2d 176, 655 N.Y.S.2d 176; Lara v. 1010 E. Tremont Realty Corporation 205 AD2d 468, 614 N.Y.S.2d 6.) Moreover, Allstate offers no denial that it was served with the summons and complaint and fails to provide an explanation regarding its failure to answer the complaint. The principal argument raised by Allstate is that Mr. Haskins its insured is "cooperating" with the prosecution of this matter and because the parties all reside together this court should infer that the plaintiffs and Dahl Haskins somehow prevented Allstate from either seeking a dismissal after the second action was commenced on the theory that another action was pending or that the parties prevented Allstate from timely serving an answer. This procedural quagmire created, in part, by the plaintiffs could have easily been resolved by service of a timely answer asserting, inter alia, the affirmative defense that another action was pending which had not been dismissed as a result of the Clerk's call.. Moreover, Allstate has not sought, by way of a cross motion seeking affirmative relief, to vacate the default judgment which it now challenges in the face of plaintiffs' motion for summary judgment. Manifestly, this court is empowered to vacate the default judgment provided a showing is made demonstrating excusable neglect, newly discovered evidence, fraud, misrepresentation by an adverse party or lack of jurisdiction (see Woodson v. Mendon Leasing Corporation 100 NY2d 62, 68, 760 N.Y.S.2d 727.) Allstate has not made a prima facie showing regarding any of the categories outlined in Woodson, supra, that could provide a basis to vacate its default. In addition, plaintiffs' reply affirmation includes a letter from plaintiffs attorney directed to Allstate August 2, 1999, which included a copy of the summons and complaint with an affidavit of service, requesting [*3]Allstate to serve an answer on behalf of its insured. Allstate failed to respond. Thereafter, plaintiffs moved to enter a default and notice of this motion was also given to both Dahl Haskins and Allstate. In sum, no evidence is presented by Allstate, by a person having knowledge of the facts, denying receipt of the summons and complaint which its insured stated under oath was personally delivered to Allstate's representative after service was effectuated.

Notice of plaintiffs intention to enter a default against Allstate was also provided to Allstate and when Allstate did not respond, this matter was set down for an inquest and assessment of damages by order dated, March 6, 2000. The inquest was held on April 25, 2000. The court found that both plaintiffs sustained serious personal injuries and awarded Crystal Haskins the sum of $125,000 together with interest costs and disbursements and plaintiff Mary Haskins the sum of $25,000.00. On February 12, 2001, plaintiffs' counsel, pursuant to courts direction at a conference where the defendant was not present, sent a letter to Allstate advising Allstate's counsel that a default judgment was entered against its insured on March 6th 2000 and requested Allstate to proceed in accordance with the court's direction to move to vacate the default which led to the inquest. Allstate without explanation never moved to vacate their injured default and indeed only after plaintiffs moved for summary judgment has Allstate raised a variety of issues in an effort to extract itself from the judgment now sought to be enforced by plaintiff.

Defendant's further contention that the judgment entered was not properly served with notice of entry is without merit. The cases cited by defendant in support of this contention are misplaced. Metropolitan Life Insurance Company v. McRae 157 Misc 2d 452, 596 N.Y.S.2d 653, cited by Allstate, dealt with the issue whether a judgment debtors failure to comply with a prejudgment information subpoena should be held in contempt where the post marking on the envelope indicated that each envelope was unclaimed and returned to the sender. Thus, Metropolitan, supra, does not stand for the proposition that in order for a judgment to be enforced against the insurance carrier, who insured the defendants, proof of service upon both the insured and the uninsured carrier is required. The facts in the case at bar make it abundantly clear that plaintiffs on two occasions, namely, February 12, 2001 and April 26, 2001 notified Allstate that a judgment was obtained against its insured. Moreover, the proof submitted by plaintiffs' attorney [FN3] contains the acknowledgment by Dahl Haskins that he was served with a copy of the judgment.

Defendant Allstate also refers this Court to the holding in State of New York v. International Fidelity Insurance Company, 181 Misc 2d 595, 694 N.Y.S.2d 896. In this case the principal issue presented concerned the penalty to be imposed such as dismissed of the complaint, where a party destroyed relevant evidence. The missing evidence related to whether International's office procedures established proof of mailing by certified mail. Obviously, the issues presented in this case are not relevant to facts presented in the case at bar.

As a matter of fairness, service of the judgment upon a defaulting defendant is desirable but the failure to do so does not violate traditional concepts of due process or vitiate the judgment obtained by the plaintiffs in the case at bar, particularly viewed in the context of plaintiffs' communications to Allstate regarding the default judgment.

Allstate also contends that the liability insurance coverage provided to Dahl Haskins [*4]excluded interspousal liability. In support of this contention defendant, without explanation, did not submit the policy issued to Dahl Haskins; instead Allstate presents a one page affidavit made by a claims examiner

who states that the policy Allstate issued to Dahl Haskins indemnified him up to $50,000.00 for a single claim and $100,000 where more than one party is injured in the same occurrence. According to Allstate, this policy specifically excluded coverage for personal injuries sustained by "the injured spouse".

Manifestly, plaintiffs' judgment exceeds the coverage limits of the policy issued by Allstate. The judgment entered on November 12, 2002 provided that plaintiff recovers the sum of $25,000 with costs and disbursements amounting in all to the sum of $26,473.75 and plaintiff Crystal Haskins recovered $125,000 together with costs and disbursements amounting in all in the sum of $130,192.50. Plaintiffs' reply affirmation recognizing that the total sum of the judgment exceeding the face amount of the policy requested this court to enter a judgment in favor of Mary Haskins in the full amount of $26,473.75 and the sum of $55,192.50, in favor of Crystal Haskins together with interest from November 21, 2002, the date of the underlying judgment with the costs and disbursements of the instant action.

With respect to Allstate's contention that it is exempt from providing coverage to a plaintiff's spouse, several cases are cited by counsel for Allstate which purportedly preclude Mary Haskins the wife of Dahl Haskins from recovering on the policy issued to him. In Suba v. State Farm Fire and Casualty Company 114 AD2d 280, 498 N.Y.S.2d 656, (4th Dept. 1986), [FN4] the court considered whether a homeowner's insurance policy which provided personal liability coverage may exclude coverage for intra family bodily injury claims. The Suba Court reviewed the statutory language contained in Insurance Law §3420(g) [FN5] and held that the express provision excluded liability to the insured spouse. In Schwartz v. Lipkin 76 AD2d 141, 430 N.Y.S.2d 356 2nd Dept. 1980 the court was called upon to determine whether an insurance carrier, which is exempt from providing coverage to a plaintiff's culpable insured spouse may maintain a cross claim for indemnification against the insured spouse.

Other cases cited by Allstate such as Mertz v. Mertz 271 NY 466, 3 N E 2d 597 and Lamb v.Liberty Mutual Insurance Policy 5 Misc 2d 236, 161 N.Y.S.2d 703, aff'd 263 App Div 859 32 NYS2d 788 were decided before the legislature adopted Insurance Law Section 5103(e). The plain language of this section and the regulation set forth in 11 N.Y.C.R.R. 60-1-1(e) support plaintiff's contention that the coverage provided in the State of Connecticut does not bar the injured spouse from instituting an action for personal injury against the culpable insured spouse.

Moreover, the court in American Transit Insurance v. Abdulghany, 80 NY2d 162, 603 [*5]N.E.2d 947 specifically distinguished its prior holding in Matter of Sentry Insurance Co., noting that Sentry did not concern the [FN6] interpretation of Section 5103(e) but a different section (former section 167 [2-a] recodified as §3420[F][2]. Section 5103 provides that every owner's policy of liability insurance issued...shall also provide, when a motor vehicle covered by such policy is used or operated in any other state...insurance coverage for such motor vehicle at least in the minimum amount required by the laws of that state. American Transit Ins. Co., supra, at 168.

It is therefore evident that the legislative scheme embodied in section 5103(e) permits compensation to an injured spouse arising from an automobile accident in which her husband is insured and is the culpable party.

To the extent that plaintiffs have not pleaded the applicability of Connecticut General Statute §46b-36, the complaint served shall be deemed amended to include appropriate allegations asserting the applicability of Connecticut General Statute §466-36. It is axiomatic that leave to amend pleadings may be freely given at any time by leave of court (CPLR 3025[b]) and a pleading may be amended before or after judgment to conform to the evidence (see Murphy v. General Motors Corporation 55 AD2d 486, 391 N.Y.S.2d 24.

Accordingly, plaintiffs' motion is granted.

This constitutes the decision and order of the court.

Dated: July 1, 2004

J.S.C. Footnotes

Footnote 1: ExF, Def.

Footnote 2: Pl.Aff. p3 ¶ 21

Footnote 3: PL Aff. Ex 6

Footnote 4: Ex K, Pl. Reply Affirmation

Footnote 5: Subdivision 3 of section 167 of the Insurance Law (now Insurance Law §3420[g] provides: "No policy or contract shall be deemed to insure against any liability of an insured because of death of or injuries to his or her spouse or because to injury to or destruction of property of his or her spouse unless express provision relating to a specifically thereto is included in the policy. This exclusion shall apply only where the insured spouse, to be entitled to recover, must prove the culpable conduct of the insured spouse".

Footnote 6: Connecticut General Statute §46b-36 states in pertinent part that a spouse "may bring suit in her own name...for torts and may be used for a tort"