Nyack Hosp. v Allstate Ins. Co. (2006 NY Slip Op 52233(U))

SUPREME COURT OF THE STATE OF NEW YORK

APPELLATE TERM: 9th and 10th JUDICIAL DISTRICTS

Appeal by plaintiff from an order of the District Court of Nassau County, First District (Margaret C. Reilly, J.), dated October 17, 2005. The order granted defendant’s motion to vacate a default judgment.

Order reversed without costs and defendant’s motion to vacate the default judgment denied.

In order to vacate the default judgment entered in this action to recover assigned first-party no-fault benefits, defendant was required to establish, pursuant to CPLR 5015 (a) (1), both a reasonable excuse for the default and a meritorious defense (see Eugene Di Lorenzo, Inc. v Dutton Lbr. Co., 67 NY2d 138, 141 [1986]). A motion to vacate is addressed to the sound discretion of the motion court (see Matter of Gambardella v Ortov Light., 278 AD2d 494 [2000]), and its determination will generally not be disturbed unless it can be shown that the court improvidently exercised its discretion (see Levy Williams Constr. Corp. v United States Fire Ins. Co., 280 AD2d 650 [2001]). Despite the strong public policy in favor of resolution of cases on the merits, upon a review of the record, we are of the opinion that the court below improvidently exercised its discretion in granting defendant’s motion to vacate the default judgment rendered against it. [*2]

Plaintiff adequately established that it effectuated service upon the Superintendent of Insurance pursuant to Insurance Law § 1212. Defendant’s mere denial of receipt of the summons and complaint was insufficient to rebut the presumption of proper service created by plaintiff’s affidavit of service (see Commissioners of State Ins. Fund v Nobre, Inc., 29 AD3d 511 [2006]).

Although defendant’s motion to vacate the default judgment was made pursuant to CPLR 5015 (a) (1), in the instant case, we may treat defendant’s motion as having been made under CPLR 317 as well. A defendant seeking relief under CPLR 317 need not demonstrate a reasonable excuse for its default, as it must under CPLR 5015 (a) (1), but need only show that it did not personally receive notice of the summons in time to defend and that it has a meritorious defense. Defendant herein met its burden of showing that it did not receive actual notice of the commencement of the action in time to defend (see e.g. Franklin v 172 Aububon Corp., 32 AD3d 454 [2006]; New York & Presbyt. Hosp. v Allstate Ins. Co., 29 AD3d 968 [2006]). Nonetheless, defendant failed to proffer a meritorious defense. Defendant admitted receipt of a Hospital Facility Form, and stated that after receipt of that form, it twice requested an Application for Motor Vehicle No-Fault Benefits, which was never submitted to it. Accordingly, it denied the claim, based upon the eligible injured party’s failure to file “a completed and signed application for no-fault benefits.” Defendant’s argument that it was entitled to delay payment of benefits pending its receipt of the Application for Motor Vehicle No-Fault Benefits has already been rejected by the Appellate Division, Second Department, in Nyack Hosp. v Encompass Ins. Co. (23 AD3d 535 [2005]) wherein the court pointed out that 11 NYCRR 65.15 (d) (6) (now 11 NYCRR 65-3.5 [g]) states that “[i]n lieu of a prescribed application for motor vehicle no-fault benefits submitted by an applicant and a verification of hospital treatment (NYS Form N-F 4), an insurer shall accept a completed hospital facility form (NYS Form N-F 5) . . . submitted by a provider of health services with respect to the claim of such provider.” We note that a defendant may not avoid preclusion where its denial “involves a defense which has no merit as a matter of law” (Amaze Med. Supply v Allstate Ins. Co., 3 Misc 3d 43, 44 [App Term, 2d & 11th Jud Dists 2004]). Accordingly, in view of the foregoing, we find that the court below improvidently exercised its discretion in vacating the default judgment, and that defendant’s motion should have been denied.

Rudolph, P.J., McCabe and Tanenbaum, JJ., concur.
Decision Date: October 27, 2006