| Westchester Med. Ctr. v Philadelphia Indem. Ins. Co. |
| 2010 NY Slip Op 00138 [69 AD3d 613] |
| January 5, 2010 |
| Appellate Division, Second Department |
| Westchester Medical Center, as Assignee of Bernard Porter,Appellant, v Philadelphia Indemnity Insurance Company,Respondent. |
—[*1] Callan, Koster, Brady & Brennan, LLP, Uniondale, N.Y. (Michael P. Kandler and Eric L.Shoikhetman of counsel), for respondent.
In an action to recover no-fault medical benefits under an insurance contract, the plaintiffappeals, as limited by its brief, from so much of an order of the Supreme Court, Nassau County(Iannacci, J.), entered March 6, 2009, as granted the defendant's motion to vacate a clerk'sjudgment of the same court entered September 4, 2008, which, upon the defendant's failure toappear or answer the complaint, was in its favor and against the defendant in the principal sum of$19,325.61 and, in effect, denied, as academic, its motion to hold the defendant in contempt.
Ordered that the order is reversed insofar as appealed from, on the law, on the facts, and inthe exercise of discretion, with costs, the defendant's motion to vacate the clerk's judgment isdenied, and the matter is remitted to the Supreme Court, Nassau County, for a determination onthe merits of the plaintiff's motion to hold the defendant in contempt.
A defendant seeking to vacate a judgment entered upon its default in appearing andanswering the complaint must demonstrate a reasonable excuse for its delay in appearing andanswering, as well as the existence of a meritorious defense to the action (see CPLR5015 [a] [1]; Eugene Di Lorenzo, Inc. v A.C. Dutton Lbr. Co., 67 NY2d 138, 141[1986]; Verde Elec. Corp. v Federal Ins.Co., 50 AD3d 672, 672-673 [2008]). The Special Deputy Superintendent of the State ofNew York Insurance Department acknowledged service upon him of the summons andcomplaint in this matter and notified the defendant, through Debra Sutton at its Pennsylvaniaoffice, of service as effected above (see Insurance Law § 1212; Montefiore Med. Ctr. v Auto One Ins.Co., 57 AD3d 958, 959 [2008]). In response, the defendant failed to meet its burden ofshowing a reasonable excuse for its failure to timely appear or answer the complaint and theexistence of a meritorious defense. The affidavit of a senior claims examiner employed in thedefendant's Texas office averred that there was no record of the summons and complaint in thedefendant's computer system, but failed to demonstrate any knowledge of the office proceduresemployed in the handling of a summons and complaint received at the defendant's Pennsylvaniaoffice. Thus, that affidavit was insufficient to show that the failure to timely appear and answerwas due to a clerical error which caused the summons and complaint to be overlooked (seeMontefiore Med. Ctr. v Auto One Ins. Co., [*2]57 AD3d at959; New York & Presbyt. Hosp. vAllstate Ins. Co., 29 AD3d 968 [2006]; Kaperonis v Aetna Cas. & Sur. Co., 254AD2d 334 [1998]; cf. Hospital for JointDiseases v Lincoln Gen. Ins. Co., 55 AD3d 543, 544 [2008]).
Furthermore, the defendant failed to set forth facts from an individual with personalknowledge sufficient to demonstrate the existence of a meritorious defense. The affidavit of theplaintiff's biller showed that the forms N-F5 and UB-92 relating to this matter were mailed onApril 23, 2008, and signed for by the defendant on April 28, 2008. At that time, according to thedefendant's own records, there were still sufficient funds remaining under the policy to pay thisbill (see 11 NYCRR 65-3.15; Nyack Hosp. v General Motors Acceptance Corp., 8 NY3d 294[2007]). In response, the defendant offered only the same aforementioned affidavit, which alsoaverred that there was no record of the bill in question in the defendant's computer system. Thiswas insufficient for a similar reason; that is, the affiant failed to show any knowledge of theoffice procedures employed in the handling of billing forms received at the defendant'sPennsylvania office (see St. BarnabasHosp. v American Tr. Ins. Co., 57 AD3d 517 [2008]; New York & Presbyt. Hosp. vAllstate Ins. Co., 29 AD3d at 968; see generally New York Hosp. Med. Ctr. of Queens v Insurance Co. ofState of Pa., 16 AD3d 391, 392 [2005]; Peacock v Kalikow, 239 AD2d 188, 190[1997]; cf. St. Vincent's Hosp. ofRichmond v Government Empls. Ins. Co., 50 AD3d 1123 [2008]). Accordingly, thedefendant's motion to vacate the judgment entered upon its failure to appear or answer shouldhave been denied.
The Supreme Court, in effect, denied, as academic, the plaintiff's motion to hold thedefendant in contempt. In light of our determination, we remit the matter to the Supreme Court,Nassau County, for a determination on the merits of the plaintiff's motion. Fisher, J.P., Florio,Angiolillo, Eng and Roman, JJ., concur.