Simpson v YYG Realty, LLC
Annotate this CaseDecided on May 17, 2010
Supreme Court, Kings County
Doreen Simpson and BASIL SIMPSON, Plaintiff(s),
against
YYG Realty, LLC and LUMBER & PLUMBING WHOLESALE LIQUIDATORS, Defendant(s).
11404/08
Donald Scott Kurtz, J.
Defendants move to vacate an order dated October 27, 2008 which granted plaintiffs' default judgment motion and set this matter down for an inquest.
Plaintiffs commenced this action by the filing of a summons and complaint on April 10,
2008. The complaint alleges that on August 20, 2007, plaintiff was caused to trip and fall on the
sidewalk in front of Lumber & Plumbing Wholesale Liquidators, Inc. Plaintiffs served the
summons and complaint on April 19, 2008 and defendants failed to timely interpose an answer.
By letter dated May 19, 2008, plaintiffs advised defendants to send the summons and complaint
to their insurance carrier to avoid a motion for a default judgment. The letter also gave
defendants a ten day extension to serve an answer. The defendants failed to do so and plaintiffs
moved for a default judgment. The motion was granted on October 27, 2008 and an inquest was
scheduled. Defendants now move to vacate the October 27th order.
A defendant moving to vacate a default judgment must
demonstrate both an excusable default and a meritorious defense. See CPLR §5015;
Hazen v. Bottiglieri, 286 AD2d 708(2d Dept2001); Presbyterian Hosp. in City
of New York v. New York Cent. Mut. Ins. Co., 277 AD2d 299, 300 (2d Dept
2000).
In support of their motion to vacate the default judgment, defendants' attorney alleges that the summons and complaint were served on "May ___, 2008" and on May 7, 2008, defendants had their insurance broker send the summons and complaint to their insurer. Defendants' attorney contends that on June 6, 2008, defendants' insurer sent a disclaimer of coverage letter to [*2]defendants. Their insurer allegedly disclaimed coverage because defendants failed to give prompt notice of the incident to the insurer. On June 20, 2008, the insurance broker responded to the insurer's June 6, 2008 letter, stating that the defendants notified the insurer of the "claim" as soon as the complaint was received and demanded that it provide a defense and afford coverage.
On or about May 1, 2009, counsel for plaintiffs sent a letter to defendants notifying them that the inquest had been scheduled for May 27, 2009. The inquest was adjourned. By letter dated May 28, 2009, plaintiffs' counsel notified defendants that the inquest had again been scheduled for July 9, 2009. The inquest was again adjourned on consent of both parties. On or about September 19, 2009, defendants' private counsel sent a letter to their insurer, again demanding that it provide a defense and indemnify their insured. By letter dated October 21, 2009, their insurer reaffirmed its decision to disclaim coverage. On or about November 18, 2009, defendants moved to vacate the default judgment entered on October 27, 2008. Defendants argue that their default in appearing was caused by the negligence of their insurance broker. Additionally, in support of their claim that they have a meritorious defense, defendants submit an affirmation of their employee wherein he states that he inspected the sidewalk at the time of the accident and could not find any defect.
In opposition, plaintiffs argue that defendants failed to offer a reasonable excuse for their failure to timely answer the complaint. Defendants admitted receipt of the summons and complaint and were even given an extension of time to answer. Defendants knew of the their insurer's disclaimer at the time plaintiffs moved for the default judgment, yet failed to submit any opposition to the motion. Therefore, plaintiffs maintain that insurance carrier delay is not a reasonable excuse because defendants had no reason to believe that they would be covered and they should have answered the complaint or at the very least opposed the motion for a default judgment.
The Appellate Division, Second Department has held that insurance carrier delay may be considered an excusable default and a court has discretion to accept an insurer's delay as a reasonable excuse for a defendant's default in answering a complaint. See Harcztark v. Drive Variety, Inc., 21 AD3d 876 (2005); Merchants Ins. Group v. Hudson Valley Fire Protection Co., Inc., — AD3d — (2d Dept 2010), 2010 NY Slip Op. 03084.
However, the Court finds that the circumstances presented herein do not warrant vacature of the default judgment. See Id. Initially, in support of their motion, defendants failed to submit an affidavit from a party with knowledge of the facts with respect to their reasonable excuse for failing to answer the complaint. Instead, only an attorney's affirmation was submitted. The attorney has no personal knowledge of when the summons and complaint were filed or served on the defendants nor when the defendants forwarded the summons and complaint to their broker or insurer. Defendants were served with the summons and complaint over a year and a half before moving to vacate the default judgment. Moreover, they were advised that an inquest was scheduled initially in December 2008, again in May 2009 and yet again in July 2009, yet waited until November 2009 to move to vacate the default judgment, a year after being served with the [*3]order granting the judgment. Defendants clearly knew in June of 2008 that their insurance carrier would not defend them, yet chose to continue writing letters to their insurer instead of answering the summons and complaint or timely moving to either extend their time to answer or to vacate the default judgment entered against them.
Consequently, the motion is denied in its entirety and this matter is set down for an inquest on June 3, 2010.
The foregoing shall constitute the Decision and Order of the Court.
DONALD SCOTT KURTZ
Justice, Supreme Court
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