Colony Ins. Co. v Danica Group, LLC

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Colony Ins. Co. v Danica Group, LLC 2013 NY Slip Op 32296(U) September 26, 2013 Supreme Court, New York County Docket Number: 116200/2010 Judge: Donna M. Mills Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various state and local government websites. These include the New York State Unified Court System's E-Courts Service, and the Bronx County Clerk's office. This opinion is uncorrected and not selected for official publication. SCANNED ON 912712013 [* 1] [* 2] I C SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: IAS PART 58 ____________________-_---_--------_-----_ X COLONY INSURANCE COMPANY, Plaintiff , Index No. 116200/2010 - againstDANICA GROUP, LLC, Defendant, -and- DECISION AND ORDER ZURICH AMERICAN INSURANCE COMPANY and PAV-LAK INDUSTRIES, INC., Defendants-Intervenors, DONNA MILLS, J.S.C.: COUNTY CLERK'S O F F ~ ~ ~ Defendant Danica Group, LLC (Danica) moves to vacaPEW YORK e Its default in answering the complaint, pursuant to CPLR 5015 (a) (1) * Danica also moves, pursuant to CPLR 3211 (a) (7), for an order dismissing the complaint on the ground that it fails to state a cause of action for recission, and for an order dismissing the complaint pursuant to CPLR 3211 (a) (lo), for failure to join a necessary party. In support of its motion, Danica submits the affidavit of Helen Andreadakis, the office manager for Danica, asserting that Danica had paid $907,383 in premiums to Colony Insurance Company (Colony), which Colony retained; that Colony and Danica were engaged in settlement discussions between September 2010 and 1 [* 3] April 2012; that Danica helped Colony settle personal injury claims during and after that period of time, and that Colony lulled Danica into not responding to the complaint. This is the only evidentiary submission by Danica on this motion. Danica s failure to make an evidentiary showing of a meritorious defense to the verified complaint is fatal to its motion to vacate its default. The standard is well settled, as stated by the Appellate Division, First Department: in order to vacate its default pursuant to CPLR 5015 a defendant must demonstrate both a reasonable excuse for the failure to appear and a meritorious defense ( Y o u n i G e m s Corp. v Bassco C r e a t i o n s I n c . , 70 AD3d 454, 455 [ I s t Dept 20101 ) . The Appellate Division, First Department, has also stated: [plursuant to [CPLR] 5015 . . . , a court may relieve a party from an excusable default upon such terms as may be j u s t . . . . We have held this to mean that a party who seeks to excuse a default must state facts explaining the default and must also furnish an affidavit showing that there is merit to his substantive position [internal quotations marks and citation omitted] (Adam v H i l t o n Hotels Corp., 91 AD2d 884, 885 [ l s tDept 19831). [C]onclusory allegations unsupported by facts will not suffice ( D a v i d Sanders, P . C . v Harris A . S a n d e r s , A r c h i t e c t s , 140 AD2d 787, 789 [3d Dept 19881). While a movant is required only to make a prima facie showing of the existence of a possibly meritorious defense ( T a t 2 [* 4] . S a n g Kwong v Budge-Wood Laundry Serv., 97 AD2d 691, 692 [ l s tDept 1983]), [tlhere must be a sufficient factual showing to support such claims (Mandell v Stein, 183 AD2d 488, 488 [ I s t Dept 19921 ) . [a] defendant in default does not establish a right to relief merely by presenting a proposed answer, containing denials and affirmatory defenses alleged principally in conclusory form. In addition, he must show that there is support in fact for his denials and defenses (Investment Corp. of Philadelphia v Spector, 12 AD2d 911, 911 [ I s t Dept 19611 ) . According to the verified complaint, in 2005, Danica s predecessor entity entered into a consent order with the Department of Buildings in which it agreed not to engage in business activities as a licensed plumbing company (verified complaint, ¶ 7). The complaint alleges that Danica represented to Colony in its application that its business was 100% plumbing, that it only subcontracted out 12% of its work, and that all of its subcontracts contained indemnity provisions in favor of Danica (id., ¶ 24). The complaint alleges that each of these representations is false, and constitutes grounds for recission. Danica has not submitted any evidence demonstrating a defense to the allegations of the complaint that Danica made material misrepresentations in its application. Even if the conclusory allegation in the Andreadakis affidavit that Danica 3 [* 5] . was lulled into not responding to the complaint could be considered a sufficient excuse for not answering the complaint, the affidavit does not make a prima facie showing of a defense to the complaint. While the Andreadakis affidavit contains evidence that plaintiff has not returned the premiums as is required for recission, it falls far short of making a prima facie showing of a defense to the complaint, and plaintiff has submitted a December 6, 2010 letter from its counsel to Danica, stating , "[pllease let us know if Danica is willing to accept the return of premiums in exchange for the recission of the Colony policies" (ex. 3 to Zigelman aff). Danica also submits an attorney's affirmation that states: "Danica demonstrates meritorious defenses to Colony's recission claims, i.e., failure to state a cause of action for recission of insurance policies and failure to join a necessary party," (DeCapua affirmation, ¶ 37). Even if an attorney's affirmation not based on personal knowledge were admissible as evidence, these bare conclusions would fall far short of the required evidentiary showing of a meritorious defense to the complaint. The motion is denied in its entirety. Because Danica has not made an evidentiary showing of merit in support of its motion to vacate its default, the motion to vacate the default is insufficient as a matter of law. Therefore, Danica remains in 4 [* 6] default and has no standing to move to dismiss the complaint for failure to state a cause of action or for failure to join a necessary party. Accordingly, it is ORDERED that the motion of defendant Danica Group, LLC pursuant to CPLR 5015 (a) (1) for an order vacating the default judgment entered against it on June 28, 2013, is denied, with costs and disbursements as taxed by the Clerk of the Court, upon presentment of an appropriate bill of costs; and it is further ORDERED that the motion by defendant Danica Group LLC to dismiss the complaint pursuant to CPLR 3211 (a) (7) and CPLR 3211 (a) (lo), is dismissed. Dated: FILED E N T E R SEP 27 2013 : COUNTY CLERKS OFFICE NEW YORK 5

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