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Zovko v. Quittner Realty, LLC

Supreme Court of New York, Second Department

June 27, 2018

Steven S. Zovko, et al., respondents,
v.
Quittner Realty, LLC, et al., defendants, Folor, Inc., appellant. Index No. 14201/14

         D55793 G/htr

          Argued - February 22, 2018

          Harris Beach, PLLC, White Plains, NY (John J. Phelan of counsel), for appellant.

          Rubenstein & Rynecki, Brooklyn, NY (Harper A. Smith of counsel), for respondents.

          MARK C. DILLON, J.P. CHERYL E. CHAMBERS SYLVIA O. HINDS-RADIX LINDA CHRISTOPHER, JJ.

          DECISION & ORDER

         In an action to recover damages for personal injuries, etc., the defendant Folor, Inc., appeals from an order of the Supreme Court, Queens County (Timothy J. Dufficy, J.), entered October 11, 2016. The order, insofar as appealed from, denied that branch of that defendant's motion which was pursuant to CPLR 5015(a)(1) to vacate an order of the same court entered May 7, 2015, granting that branch of the plaintiffs' unopposed motion which was for leave to enter a default judgment against that defendant on the issue of liability upon its failure to appear or answer the complaint.

         ORDERED that the order entered October 11, 2016, is affirmed insofar as appealed from, with costs.

         On August 21, 2014, the plaintiff Steven S. Zovko (hereinafter the plaintiff) allegedly was injured when he fell off a scaffold at a construction site in Queens. On September 25, 2014, the plaintiff, and his wife suing derivatively, commenced this action, inter alia, to recover damages for personal injuries. The defendant Folor, Inc. (hereinafter the defendant), was served with a summons and complaint on October 8, 2014. After the defendant failed to appear or answer the complaint, by letter dated November 20, 2014, the plaintiffs mailed additional copies of the summons and complaint to the defendant's office address in Yonkers. By letter to the defendant dated January 5, 2015, the third-party administrator of the defendant's insurer reserved the insurer's right to void the defendant's general liability insurance policy ab initio and reminded the defendant to immediately send copies of any summonses or legal papers received in connection with the claim or action.

          In February 2015, the plaintiffs moved, inter alia, for leave to enter a default judgment against the defendant on the issue of liability and to schedule the matter for an inquest on the issue of damages. In an order entered May 7, 2015, the Supreme Court, inter alia, granted that branch of the plaintiffs' unopposed motion which was for leave to enter a default judgment against the defendant (hereinafter the default order). In a letter to the defendant dated October 14, 2015, the defendant's insurer denied coverage on the ground that the defendant first notified the insurer of this action on August 17, 2015, after the default order had been entered. On February 2, 2016, the defendant's attorney filed a notice of appearance in this action with the Queens County clerk. In March 2016, the defendant moved pursuant to CPLR 5015(a)(1) to vacate the default order. The court declined to accept the defendant's motion and the defendant, thereafter, served and filed a second notice of motion dated June 2, 2016, inter alia, pursuant to CPLR 5015(a)(1) to vacate the default order. In the order appealed from, the court, inter alia, denied that branch of the defendant's motion which was to vacate the default order. The defendant appeals.

         A defendant seeking to vacate an order awarding a default must demonstrate both a reasonable excuse for the default and the existence of a potentially meritorious defense (see CPLR 5015[a][1]; Skutelsky v JN Natural Fruit Corp., 138 A.D.3d 1099, 1100; Orwell Bldg. Corp. v Bessaha, 5 A.D.3d 573, 574; Quis v Bolden, 298 A.D.2d 375). The defendant failed to demonstrate a reasonable excuse for its default. The defendant's mistaken belief that its insurer would provide a defense and answer the summons and complaint on its behalf was unreasonable given its insurer's reservation of rights letter and request for a copy of any summons served upon the defendant, and the plaintiffs' motion for leave to enter a default judgment (see Medas v Rochpark Realty, LLC, 150 A.D.3d 1221, 1223; Spitzer v Landau, 104 A.D.3d 936, 936-937; Trepel v Greenman-Pedersen, Inc., 99 A.D.3d 789, 791; Jackson v Professional Transp. Corp., 81 A.D.3d 602, 603; Lemberger v Congregation YetevLevD'Satmar, Inc., 33 A.D.3d 671, 672). Furthermore, this alleged mistake was not an isolated error, but part of a pattern of ''repeated neglect'' (Roussodimou v Zafiriadis, 238 A.D.2d 568, 569; see Wells Fargo Bank, N.A. v Krauss, 128 A.D.3d 813, 814; Alterbaum v Shubert Org., Inc., 80 A.D.3d 635, 636; Majestic Clothing Inc. v East Coast Stor., LLC, 18 A.D.3d 516, 518). In this regard, the defendant was aware of the default order, but took no steps to vacate the default until five months after its insurer disclaimed coverage (see Wells Fargo Bank, N.A. v Krauss, 128 A.D.3d at 815; Miller v Ateres Shlomo, LLC, 49 A.D.3d 612, 613; Thompson v Steuben Realty Corp., 18 A.D.3d 864, 865; Robinson v 1068 Flatbush Realty, Inc., 10 A.D.3d 716, 716-717). Since the defendant failed to demonstrate a reasonable excuse for its default, we need not reach the issue of whether it demonstrated the existence of a potentially meritorious defense (see Medas v Rochpark Realty, LLC, 150 A.D.3d at 1223; Jing Shan Chen v R & K 51 Realty, Inc., 148 A.D.3d 689, 691; Bernstein v Geiss, 111 A.D.3d 774, 775).

         Accordingly, that branch of the defendant's motion which was to vacate the ...


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