GEICO Ins. Co. v Manage Transi Corp. (2024 NY Slip Op 51308(U))

Recitation in accordance with CPLR 2219 (a) of the papers considered on the notice of motion filed on September 28, 2023, under motion sequence number four, by defendant MV Contract Transportation Inc. (hereinafter MV Contract), for an order pursuant to CPLR 3215, granting a default judgment on the cross-claims that MV Contract has asserted against codefendants, Manage Transit Corp. (hereinafter MTC) and James J. Boynton, (hereinafter collectively the codefendants). The motion is unopposed.

Exhibits A-O

On October 2, 2020, GEICO Insurance Company (hereinafter GEICO or plaintiff) commenced the instant action against MV Contract, MTC and James J. Boynton by filing a summons and verified complaint with the Kings County Clerk’s office (KCCO). On January 11, 2021, the plaintiff filed an amended summons and verified complaint, changing the name of defendant from Manage Transport Corp. to Manage Transit Corp.

The amended verified complaint alleges the following salient facts. The plaintiff is a corporation authorized to engage in and carry out on an insurance business. Cletus J. Belfon, is the owner of a 2014 Jeep, bearing New York license plate GRG6773. Plaintiff insured the 2014 Jeep under policy number XXXXX,^[FN1] and the policy was in full force and effect on October 6, 2017. Defendant MTC leased a 2016 Ford Bus bearing New York Plate 30455BB from defendant MV Contract. On October 6, 2017, defendant James J. Boynton was operating this 2016 Ford Bus with permission and consent of defendant MTC.

On October 6, 2017, James J. Boynton was traveling westbound on Linden Blvd in the middle lane at or near its intersection with Berriman Street, Kings County, New York, when he changed lanes to the far left and struck the 2014 Jeep driven by Cletus J. Belfon on the front end and front passenger side. The collision was caused by the negligence of the defendants MV Contract, MTC, and James J. Boyton in the maintenance, operation, and control of the aforesaid bus. As a result of the accident, Cletus J. Belfon sustained serious personal injuries as defined by Insurance Law § 5102 (d) for which he received first party no fault benefits from the plaintiff. To date, plaintiff has issued $34,223.54 in no-fault payments on behalf of plaintiff’s Cletus J. Belfon. Plaintiff also alleges a cause of action for property damages in the amount of $5,629.42.

Defendants MTC and James J. Boton have neither answered the complaint nor appeared in the action.

On April 15, 2021, MV Contract filed a verified answer with cross-claims with the KCCO. The answer contains twelve affirmative defenses and four cross-claims asserted against codefendants MTC and James J. Boyton. The first cross-claim is for contribution; the second cross-claim is for common law indemnification; the third cross-claim is for contractual indemnification; and the fourth cross-claim is for breach of contract. The answer with cross-claims filed by MV Contract did not contain a demand for an answer to the cross-claims within the pleading.^[FN2]

MV Contract has moved pursuant to CPLR 3215 for leave to enter a default judgment against codefendants MTC and James J. Boyton based on their failure to appear or interpose an answer to the cross-claims MV Contract asserted against them.

CPLR 3215 provides in pertinent part as follows:

“(a) Default and entry. When a defendant has failed to appear, plead or proceed to trial of an action reached and called for trial, or when the court orders a dismissal for any other [*2]neglect to proceed, the plaintiff may seek a default judgment against him . . .

(f) Proof. On any application for judgment by default, the applicant shall file proof of service of the summons and the complaint . . . and proof of the facts constituting the claim, the default and the amount due by affidavit made by the party . . . Where a verified complaint has been served, it may be used as the affidavit of the facts constituting the claim and the amount due; in such case, an affidavit as to the default shall be made by the party or the party’s attorney.”

“On a motion for leave to enter a default judgment pursuant to CPLR 3215, the movant is required to submit proof of service of the summons and complaint, proof of the facts constituting its claim, and proof of the defaulting party’s default in answering or appearing” (Atlantic Cas. Ins. Co. v RJNJ Services, Inc., 89 AD3d 649, 651 [2d Dept 2011], citing CPLR 3215 [f]; Allstate Ins. Co. v Austin, 48 AD3d 720, 720 [2008]). “CPLR 3215 (f) states, among other things, that upon any application for a judgment by default, proof of the facts constituting the claim . . . are to be set forth in an affidavit ‘made by the party’ (HSBC Bank USA, N.A. v Betts, 67 AD3d 735, 736, [2d Dept 2009]; CPLR 3215 [f]).

“While counterclaims are not specifically mentioned anywhere in CPLR 3215, the statute’s legislative history reveals that it was intended to apply to claims asserted as counterclaims, cross claims, and third-party claims, in addition to those set forth in complaints” (Giglio v NTIMP, Inc., 86 AD3d 301, 307 [2d Dept 2011], citing 5 NY Adv. Comm. Rep. A-476 [Advance Draft 1961]; 7 Weinstein-Korn-Miller, Civ. Prac. § 3215.08).

To obtain a default judgment against a party for not answering a pleading, the movant must demonstrate that the alleged defaulting party had an obligation to respond to the movant’s pleading and failed to do so. CPLR 3011 sets forth what pleadings there shall be and what they shall be called in an action. The general rule is that every pleading under the CPLR that contains a cause of action must, labels notwithstanding, be responded to with an answer or, in the case of a counterclaim, with a reply (see CPLR 3011).

A special rule exists for cross-claims. In 1977, CPLR 3011 was amended to its present form in which it calls for an answer to a cross-claim only if it is demanded in the cross-claim itself (see Patrick M. Connors, Practice Commentaries, McKinney’s Cons Laws of NY, C3011:8). Absent such a demand, the allegations of the cross-claim are deemed denied or avoided (id.). Furthermore, the denial that is deemed made under CPLR 3011 will prevent the party serving the cross-claim from obtaining a default judgment (see CPLR 3011; Connors, Practice Commentaries, C3011:8; see also Giglio v NTIMP, Inc., 86 AD3d 301 [2d Dept 2011]).

Here, MV Contract communicated to MTC and James J. Boyton that it was demanding an answer to the cross-claims that it had asserted against them. However, the demand for an answer was not made within the cross-claim itself, but rather, in a separate correspondence. Such a method would be ineffective to trigger an obligation to respond to the cross-claims.

Moreover, to support its application for a default judgment MV Contract was required to show that it properly served MTC and James J. Boyton with the cross-claims.

CPLR 3012 (a) provides that if a defendant has not appeared in the action, then any subsequent pleading must be served upon it in the same manner as a summons and complaint (CPLR 3012 [a]). However, if the party has already appeared, a pleading can be served in the manner provided for service of papers generally (id.). Papers may be served upon a party through their attorney of record via regular mail (CPLR 2103 [b]). This is the method through which interlocutory papers, all litigation papers beyond initial service of process, are served (see [*3]CPLR 2103; see Wachovia Mtge., FSB v Coleman, 170 AD3d 1244, 1245 [2d Dept 2019]).

A “defendant appears by serving an answer or a notice of appearance, or by making a motion which has the effect of extending the time to answer” (CPLR 320 [a]). Here, there is no claim or evidence that codefendants MTC and James J. Boyton appeared in the main action commenced by GEICO against them. Under these circumstances MV Contract’s answer with cross-claims was required to be served upon codefendants MTC and James J. Boyton in the manner of a summons and complaint. (see CPLR 3012, Connors, Prac Commentaries, C3012:7). James J. Boyton should have been served with the answer with cross-claims pursuant to CPLR 308. MV Contract had many options to serve process on MTC, including service on the New York State Secretary of State pursuant to Business Corporation Law § 306 (b) (1); another option was service pursuant to CPLR 311 (a) (1).

On April 15, 2021, MV Contract filed its answer with cross-claims with the KCCO under NYSCEF document number six. Although this method of service would have been proper pursuant to CPLR 2103 if the codefendants had appeared in the main action, it was improper under these circumstances. MV Contract also mailed its answer with cross-claims upon the codefendants in an effort to comply with CPLR 3215 (g). However, neither the filing of its answer with cross-claims with the KCCO nor the mailing of the pleadings to the codefendants satisfied the statutory requirement of effectuating service in the manner of a summons and complaint. MV Contract never properly effectuated service upon MTC and James J. Boyton and therefore their obligation to respond had never been triggered.

The motion by MV Contract Transportation Inc. for an order pursuant to CPLR 3215 granting a default judgment on the cross-claims asserted against codefendants, Manage Transit Corp. and James J. Boynton is denied.

The foregoing constitutes the decision and order of this Court.