Opinion
December 28, 1970
In a negligence action to recover damages for personal injuries, loss of services, etc., plaintiffs appeal from two orders of the Supreme Court, Dutchess County, the first entered May 11, 1970, which, upon a motion by defendant Rhinebeck Central School District, (1) opened said defendant's default in appearing in the action and answering the complaint and granted it leave to answer, on condition that it pay $250 costs, disbursements and expenses incurred by plaintiffs, and (2) ordered that the interlocutory judgment granted on said default stand as security for such payment, and the second entered September 2, 1970, which, upon subsequent cross motions with respect to said defendant's further default in failing to answer within the time permitted by the first order, extended said defendant's time to serve its answer and demand for a bill of particulars and directed that, in the event said defendant failed to answer within the extended time, plaintiffs were to be granted judgment by default. Order entered May 11, 1970 affirmed. Order entered September 2, 1970 affirmed upon the condition hereinafter set forth. Plaintiffs are awarded $10 costs and disbursements to cover both appeals. The condition of the affirmance herein of the order entered September 2, 1970 is that, within 10 days after service of a copy of the order entered hereon, with notice of entry, Travelers Insurance Company pay to plaintiffs at the office of plaintiffs' attorney the costs and disbursements hereinabove awarded to plaintiffs plus $250 additionally as counsel fees for the prosecution of these appeals. Plaintiffs' attorney served defendant Rhinebeck Central School District with the summons and complaint on February 4, 1969. By letter dated February 19, 1969, the school district's insurance carrier, Travelers Insurance Company, acknowledged receipt of the summons and complaint and requested an extension of time in which to appear until 10 days following plaintiffs' attorney's "demand". On November 6, 1969, plaintiffs' attorney made a demand for such appearance in the action. Nevertheless, the School District failed to answer the complaint and subsequently, on March 3, 1970, plaintiff was granted an interlocutory judgment by default against the School District. The School District has alleged that its failure to answer the complaint resulted because its insurance carrier had sought to have the insurance carrier of the bus company whose bus was involved in the accident with the infant plaintiff take over the defense of the school district in accordance with a contract between the school district and the bus company. In that contract the bus company promised to "hold harmless" the School District from any claims arising from the company's buses. On many occasions the agents of the insurer of the bus company verbally assured the agents of the School District's insurer that it (the bus company's insurer) would take over the defense for the School District in this action, but no firm commitment was ever made and default was taken. While the facts in this case clearly show laxity and indifference to plaintiffs' rights, we nonetheless feel that because of the strong policy of the courts in this State to permit actions to be decided on the merits, and in view of the broad discretion vested in courts of original jurisdiction as to whether the necessary excusable neglect and meritorious defense are shown, the order entered September 2, 1970 should be affirmed, but upon the condition hereinabove set forth ( Becker v. Belfi, 26 A.D.2d 818; Hensey Props. v. Lamagna, 24 A.D.2d 742). Christ, P.J., Munder, Martuscello, Latham and Benjamin, JJ., concur.