State Farm Fire & Cas. Co. v Pettaway

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State Farm Fire & Cas. Co. v Pettaway 2021 NY Slip Op 31882(U) June 4, 2021 Supreme Court, Kings County Docket Number: 507730/18 Judge: Lawrence S. Knipel Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication. [*FILED: 1] KINGS COUNTY CLERK 06/04/2021 12:40 PM NYSCEF DOC. NO. 67 INDEX NO. 507730/2018 RECEIVED NYSCEF: 06/04/2021 At an IAS Term, Part 57 of the Supreme Court of the State of New York, held in and for the County of Kings, at the Courthousef· · t Civic Center, Brooklyn, New York, on the . day of·9:i.t:ater, ~2ocl PRE SENT: · J'uAJL 'V HON. LAWRENCE KNIPEL, Justice. - - -·-·.- - ·- - - - - - - - -· - - - - -. - - - - - - - - - - - - - - - -. -.x· STA TE FARM FIRE AND CASUALTY COMPANY, Plaintift: - against - lhdex No; 507730/18 Individual Defendants DOMINlQUE PETTAWAY, Healthcare Defendants NEW SENSE ACUPUNCTURE P .C., ASPEN MEDICAL CARE, P .C., SCARBOROUGH CHIROPRACTIC P '.C., CLASSIC MEDICAL DIAGNOSTIC REHAB P.C., STARK MEDICAL SUPPLY INC., MORNING STAR PHYSICAL THERAPYP.C., 0RTHOCARE SURGICAL~ MODERN AMERICAN ACUPUNCTURE P.C., COLUMBUS IMAGING CENTERLLC,A.M. PATEL PHYSICAL THERAPY PLLC, METRO PAIN SPECIALISTS PROFESSIONAL CORPORATION,VITRUVIAN REHAB, P. T.P :C., NILE REHAB PHYSICAL THERAPY, P.C. and EDWIN RASKIN, LAC,, Defendants. ~-~-J--------------------------------X The following e,..filed papers read herein: NYSCEF Notice of Motion/Order to Show Cause/ ·.Petition/Cross Motion and Affidavits (Affirmations) Annexed.·_____ Doc: Nos .. 50.;.57 Opposing Affidavits (Affirmations).· _____ Upon the foregoing papers in this action for a declaratory judg1nertt r¢gardiilg nofault insurance coverag(::, defendants Colwnbus 1maghtg Center LLC (Columbu$) and 1 of 6 [*FILED: 2] KINGS COUNTY CLERK 06/04/2021 12:40 PM NYSCEF DOC. NO. 67 INDEX NO. 507730/2018 RECEIVED NYSCEF: 06/04/2021 Metro Pain Specialists Professional Corporation (Metro) move (in motion sequence [mot. seq,] two) for an order, pursuant to CPLR 2005, 3012 (d) and 5015 (a) (1), vacating the November 14, 2019 default judgment issued againstthem and, upon vacatur, compelling plaintiff State Farm Fire and Casualty Company (State Farm) to accept defendants' answer to the complaint. On April 17, 2018, State Farm commenced this action against Columbus, Metro and others by filing a summons and verified complaint seeking ajudg1nent declaring that State Farm is not obligated to provide insurance coverage under the insurance policy in effect on July 20, 2017, the date of the underlying motor vehicle accident. According to the Prnvider Defendants' counsel: ''This action putatively arose out of plaintiffs intentional and willful breach of contract in its failure to timely and properly pay the tirstparty beneficiacyclaitns ofDEFENDANTS' after plaintiff had received DEFENDANTS' timely and properly submitted claims for No-Fault reimbursements. Those claims sought payment for medically necessary services provided by DEFENDANTS to persons entitled to receive benefits under the New York.Insurance Law and the No-Fault Implementing Regulations {·Regulations') promulgated thereunder.'''. * * * '"In the case at bar, plaintiff has erroneously and n1isJeadingly asserted causes of action seeking an advisory declaratory judgment declaring that it has no obligation to reimburse DEFENDANTS under the subject insurance policy~ oh the basis tha,t the. Assignor allegedly engaged in material misrepresentation in both procµring the policy and presenting the ¢lahn in connection with the July 20, 2017 accident.~' · 2 2 of 6 [*FILED: 3] KINGS COUNTY CLERK 06/04/2021 12:40 PM NYSCEF DOC. NO. 67 INDEX NO. 507730/2018 RECEIVED NYSCEF: 06/04/2021 On or about December 5, 2018, State Farm moved for a default judgment against the nonappearing parties, including Columbus and Metro. In a November 14, 2019 order, this court granted State Farrrt a default judgment against Columbus and Metro. Columbus and Metro now move to vacate the November 14, 2019 judgment artd restore the action to the calendar because they have both a reasonable excuse for their default due to law office failure and a meritorious defense to this action. Counsel for Columbus and Metro affirms that their '"delay in appearing in this action was caused by law office failure ... " and "was not willful or intended to prejudice the Plaintiff: but rather [Was] inadvertent'' Defense counsel explains that Metro did not receive the summons and complaint in a timely manner because it was served through the New York Secretary of State and "the Secretary of State has a backlog of Summons and Complaints upon which to serve Defenclants." Defendants submit an affidavit from Carmello Londono, a former paralegal in defense counsel's office, who attests that she contacted the office of the Secretary of State and was informed that it was experiencing a backlog ofpleadings causing a delay in service. Defense counsel explains that Columbus and Metro, upon receiving the summons and complaint, promptly sent it to their counsel. Upon receipt of the pleadings, defense . . counsel drafted and filed an answer on behalfofColumbus and Metro within the 30-day timeframeset forth in CPLR320 (a). However, defense counsel explains that he ''did not learn that Plaiµtiff had filed a Summon$ and Complaint against Defendants until after the 3 3 of 6 [*FILED: 4] KINGS COUNTY CLERK 06/04/2021 12:40 PM NYSCEF DOC. NO. 67 INDEX NO. 507730/2018 RECEIVED NYSCEF: 06/04/2021 Court had rendered a default judgment against Defendants on November 14, 2019-." Defense counsel further affinns that "any additional delay in the drafting and/or filing of Defendants' Answer that occurred was caused by the limited resources of said law tirm." . . Defense counsel asserts that Columbus and Metro "always intended to defend this matter µntil a final decision was reached on the merits, and [their] failure to timely appear was not the result of any attempt to clelay the resolution of this case or otherwise avoid service,,,. Defense counsel asserts that Columbus and Metro have a meritorious defense to this action under New Y ark's Insurance Department Regulations; including 11 NYCRR § 65-3.8, which require an insurer to pay a claim or issue a denial within thirty (30} days of receipt of the proof of claim. Defense counsel explains that "[a]n insurer that fails to comply with the statutory 30-day period is precluded from asserting a defense against . . . payment of the claim." Defense counsel argues that State Farm failed to comply with the timeframes set forth in the foregoing ·Regulations and, consequently, State Fann is precluded from denying defendants' claims. Defense counsel further contends that State Farm's rationale for denying defendants' claims based on an alleged fraud in the procurement of the insurance policy are meritless and based on pure speculation. State Farm, in opposition, asserts that it timely served Metro with the summons and complaint through the New York Secretary of State and that it served Columbus through an authorized agent. In addition to those methods of service, State Farm asserts 4 4 of 6 [*FILED: 5] KINGS COUNTY CLERK 06/04/2021 12:40 PM NYSCEF DOC. NO. 67 INDEX NO. 507730/2018 RECEIVED NYSCEF: 06/04/2021 that defendants "were both served with a Notice• of Service pursuart t to CPLR § 3215 (g) (4) (i). " State Farm's counsel notes that defendants are "silent as to the fact that they were each served with the Motion for Default.Judgment i11.this matter, which gave them notice of this action." State Farm a]so argues that in the absence of an affidavit fronJ defendants their motion to vacate the defaultjudgm ent should be rejectecL State Farm further argues that defendants' motion to vacatetheir default should be denied because they have failed to demonstrate thatthey have a potentially meritorious defense to this action. State Farm contends that it submitted admissible evidence in its motion for a default judgment proving that its insured, Dominique Pettaway, made material misrepresentations at the time she procured the insurance policy. "A party seeking to vacate a default in appearing or answering pursuant to CPLR 5015 (a) (1), and thereupon to serve a. late answer, must demonstrate a reasonable excuse for the default and a potentially meritorious defense to the action" (92-18 149th Street Realty Corp. v Stolzberg, 152 Ab3d 560, 562 [2017] [internal quotations omitted]). Furthetlhore, where a default in appearing results from law office failure, the court may ''exercise its discretion in the interestofjus tice to excuse delay or default ... '' pursuant to CPLR2005 (see JP Morgan Chase Bank, N.A. v Russo, 121 AD3d 1048, 1049 [2014]). Here, defendants Columbus and Metro have demonstrated a reasonable excuse, for their default based on a delay in receiving the summons and complaint from the New York Secretary of State and their counsel's law office failure. In addition, defendants 5 5 of 6 [*FILED: 6] KINGS COUNTY CLERK 06/04/2021 12:40 PM NYSCEF DOC. NO. 67 INDEX NO. 507730/2018 RECEIVED NYSCEF: 06/04/2021 have established a pote11tially meritorious defense to this action based on the New York Insurance Regulations. In the court's discretion, the defendants' motion to vacate their default is granted since it was not willful and it was due to .excusable law office failure. Accordingly; it is ORDERED thatthe defendants' motion (in mot. seq. two) is granted, this court's November 14, 2019 order and judgment is hereby vacated, and State Farm is compelled to accept the defendants' answer to the complaint, This constitutes the decision and order of the court, . . ENTER; ·WRENCE KNIPEL NISTRATIVE JUDGE 6 6 of 6

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