| Merchants Ins. Group v Hudson Val. Fire Protection Co., Inc. |
| 2010 NY Slip Op 03084 [72 AD3d 762] |
| April 13, 2010 |
| Appellate Division, Second Department |
| Merchants Insurance Group, Respondent, v Hudson ValleyFire Protection Co., Inc., Appellant. |
—[*1] Albert A. Hatem, P.C., White Plains, N.Y., for respondent.
In a subrogation action to recover amounts paid by the plaintiff to its insured for injury toproperty, the defendant appeals from an order of the Supreme Court, Westchester County,(Lefkowitz, J.) entered October 27, 2009, which granted the plaintiff's motion for leave to enterjudgment upon its default in appearing or answering and denied its application to compel theplaintiff to accept the answer.
Ordered that on the Court's own motion, the defendant's notice of appeal from so much ofthe order as denied its application to compel the plaintiff to accept the answer is treated as anapplication for leave to appeal from that portion of the order, and leave to appeal is granted(see CPLR 5701 [c]); and it is further,
Ordered that the order is reversed, on the facts and in the exercise of discretion, withoutcosts or disbursements, the plaintiff's motion for leave to enter judgment upon the defendant'sdefault in appearing or answering is denied, the defendant's application to compel the plaintiff toaccept the answer is granted, and the answer annexed to the defendant's papers in opposition tothe plaintiff's motion is deemed served upon the plaintiff.
The summons and complaint in this action were served on the defendant pursuant toBusiness Corporation Law § 306 in February 2009, and the plaintiff mailed to thedefendant a notice of default pursuant to CPLR 3215 at approximately the same time. When noanswer was served, the plaintiff moved on August 3, 2009, for leave to enter a default judgment.Although the defendant did not cross-move to vacate the default, it opposed the motion andrequested that the court compel the plaintiff to accept the answer annexed to its oppositionpapers. The Supreme Court granted the plaintiff's motion and denied the defendant's application,finding that the defendant had not shown a meritorious defense or an excusable default. Wereverse.
In opposition to the plaintiff's motion for a default judgment, the defendant's presidentasserted in his affidavit that he forwarded the summons and complaint on March 13, 2009,within two [*2]weeks of the defendant's receipt of the summonsand complaint, to an insurance broker "with the expectation that defense counsel would beassigned" and that he only became aware of the default after receipt of the motion for a defaultjudgment, which motion had an initial return date of September 3, 2009. Approximately fivemonths transpired from the time of the defendant's default for failing to answer the summons andcomplaint in March 2009 and when the defendant became aware of the default upon receivingthe motion for the entry of a default judgment in August 2009.
Under these circumstances, the inadvertent default was explained and the defendant quicklyrequested relief upon becoming aware of that default (see Harcztark v Drive Variety, Inc., 21 AD3d 876 [2005]). Whilethe defendant did not cross-move to vacate the default, it did make an application to compel theplaintiff to accept the answer. The plaintiff failed to allege or show prejudice resulting from thedelay, and the defendant stated a reasonable excuse for the default and a meritorious defense tothe action. In light of these considerations and the strong public policy favoring the resolution ofcases on the merits, the Supreme Court improvidently exercised its discretion in granting theplaintiff's motion for leave to enter a default judgment (see Paramount Transp. Sys., Inc. v Lasertone Corp., 59 AD3d 603[2009]; Scarlett v McCarthy, 2AD3d 623 [2003]; Zolna v Lupino, 251 AD2d 658 [1998]). Accordingly, theplaintiff's motion should have been denied and the defendant's application should have beengranted (see Paramount Transp. Sys.,Inc. v Lasertone Corp., 59 AD3d 603 [2009]; CPLR 3012 [d]). Skelos, J.P., Dillon,Angiolillo, Eng and Sgroi, JJ., concur.