Opinion
Index No. 153667/2021 Motion Seq. No. 002
09-29-2022
MICHELLE MARKS, Plaintiff, v. NAIL & SPA 72, INC.,1012 LEXINGTON AVENUE CO. LLC, and HUBB NYC PROPERTY MANAGEMENT LLC, Defendants.
Unpublished Opinion
PRESENT: HON. DAVID B. COHEN, Justice
DECISION + ORDER ON MOTION
DAVID B. COHEN, J.S.C.
The following e-filed documents, listed by NYSCEF document number (Motion 002) 30, 31, 32, 33, 34, 36, 37, 38 were read on this motion to/for VACATE - DECISION/ORDER/JUDGMENT/AWARD.
In this premises liability action, defendant Nail & Spa 72, Inc. ("Nail & Spa") moves, pursuant to CPLR 317 and 5015(a)(1), to vacate this Court's prior order granting a default judgment against it and, pursuant to CPLR 3012(d), to compel plaintiff to accept a late answer. Plaintiff opposes the motion. After consideration of the parties' contentions, as well as a review of the relevant statutes and case law, the motion is decided as follows.
Factual and Procedural Background
Plaintiff commenced this action in April 2021 after she was allegedly injured when she slipped and fell inside Nail & Spa's place of business (Doc No. 1 at 10). In November 2021, after Nail & Spa failed to answer or otherwise appear in this action, plaintiff moved for a default judgment against it (Doc No. 12). By order entered January 27, 2022, this Court granted plaintiffs motion for a default judgment against Nail & Spa (Doc No. 21).
Nail & Spa now moves, pursuant to CPLR 317 and 5015(a)(1), for an order vacating the default judgment against it and, pursuant to CPLR 3012(d), to compel plaintiff to accept a late answer (Doc Nos. 30-31, 38). In support of the motion, Nail & Spa argues, among other things, that it has a reasonable excuse for its delay in responding to the complaint, i.e., inaction by its insurance carrier caused its attorney to receive the case file for the first time in late February 2022, almost a month after the default judgment was granted (Doc No. 31 at 4-5; Doc No. 38 at 2-4). It further argues that it has a meritorious defense because it did not create, nor had prior notice of, any alleged wet spot (Doc No. 31 at 5-6; Doc No. 38 at 4-5). Last, it argues that plaintiff must be compelled to accept a late answer from Nail & Spa because it has a reasonable excuse for failing to respond to the complaint and a meritorious defense to plaintiffs claims, accepting a late answer would not prejudice plaintiff, and public policy favors resolving cases on the merits (Doc No. 31 at 6-8). Plaintiff opposes the motion, contending that CPLR 317 is inapplicable and that Nail & Spa's contention that it has a reasonable excuse for the delay and a meritorious defense to the claims is conclusory (Doc No. 36).
Nail & Spa also argues that it has a reasonable excuse for its delay because the COVID-19 pandemic made it difficult to gather information and an interpreter was required for conversations between it and its attorney (Doc No. 38 at 2). However, this Court will not consider those arguments because they were raised for the first time in Nail & Spa's reply papers (see Ormsbee v Time Warner Realty Inc., 203 A.D.3d 630, 631-632 [1st Dept 2022]; Matter of Gonzalez v City of New York, 127 A.D.3d 632, 633 [1st Dept 2015]).
Legal Conclusions
Nail & Spa's Request to Vacate the Default Judgment Pursuant to CPLR 5015(a)
"A party seeking to vacate a judgment entered upon default under CPLR 5015(a)(1) must show a reasonable excuse for the default as well as a potentially meritorious defense" (Perez v Table Run Estates, Inc., 191 A.D.3d 416, 416 [1st Dept 2021] [citations omitted]; accord Soffer v Montanez, 198 A.D.3d 606, 606 [1st Dept 2021]). However, "[a] determination of the sufficiency of the proffered excuse and the statement of merits rests within the sound discretion of the court" (Marquez v 171 Tenants Corp., 161 A.D.3d 646, 647 [1st Dept 2018]; see Rivera v Shypri Realty Corp., 198 A.D.3d 448, 448 [1st Dept 2021]). Although an insurer's failure to timely appoint counsel to appear in an action on behalf of a defendant may be considered a reasonable excuse for a delay (see Schwartz v Port Imperial Ferry Corp., 197 A.D.3d 1057, 1057 [1st Dept 2021]; Gecaj v Gjonaj Realty & Mgt. Corp., 149 A.D.3d 600, 604 [1st Dept 2017]; Triangle Tramp., Inc. v Markel Ins. Co., 18 A.D.3d 229, 229 [1st Dept 2005] [finding reasonable excuse established when defaulting party provided "evidence, in admissible form" that insurance carrier responsible for delay]), "vacatur of a default judgment is not warranted merely because the default was occasioned by lapses on the part of an insurance carrier" (Sanchez v Avuben Realty LLC, 78 A.D.3d 589, 590 [1st Dept 2010]; see Klein v Actors & Directors Lab, 95 A.D.2d 757, 758 [1st Dept 1983], Iv dismissed 60 N.Y.2d 1015 [1983]; Lemberger v Congregation Yetev Lev D 'Satmar, Inc., 33 A.D.3d 671, 672 [2d Dept 2006]). A defendant in default due to an insurer's inaction or delay must still provide sufficient details or facts regarding the delay or inaction (see Lemberger, 33 A.D.3d at 672 [finding no reasonable excuse where insurance carrier alleged that months-long delay in assigning counsel caused by error in case management system]; Gecaj, 149 A.D.3d at 604 [finding no reasonable excuse where defaulting party alleged that it believed insurance carrier already handling matter]).
Here, Nail & Spa fails to set forth any factual allegations to support its assertion that its delay in responding to plaintiffs complaint was caused by the inaction of its insurance carrier. It has not provided any affidavits, from the insurance carrier or otherwise, to substantiate the instant delay (see Lemberger, 33 A.D.3d at 672). Its only attempt to establish a reasonable excuse for the delay is a conclusory statement that there was a delay in the insurance carrier "referring]" the case to counsel (Doc No. 31 at 4; Doc No. 38 at 3-4). Without more specificity regarding facts giving rise to the insurance carrier's actions, Nail & Spa's "general excuse" is insufficient to demonstrate a reasonable excuse for the delay (Lemberger, 33 A.D.3d at 672; see Gecaj, 149 A.D.3d at 604; Triangle Transp., Inc., 18 A.D.3d at 229; Klein, 95 A.D.2d at 758).
Inaction by an insurance carrier has also been viewed as "akin to law office failure" (see Klein, 95 A.D.2d at 758; Parker v I.E.S.I. N Y. Corp., 279 A.D.2d 395, 395 [1st Dept 2001], Iv dismissed 96 N.Y.2d 927 [2001]), and law office failure may amount to a reasonable excuse (see e.g. Heijung Park v Nam Yong Kim, 205 A.D.3d 429, 429-430 [1st Dept 2022]; Cornwall Warehousing, Inc. v Lerner, 171 A.D.3d 540, 540 [1st Dept 2019]). However, "conclusory references to law office failure, . . . without detail or evidentiary support," are insufficient (Urban D.C Inc. v 29 Green St. LLC, 205 A.D.3d 634, 634 [1st Dept 2022] [internal quotation marks omitted]; see Matter of TWU Counseling Ctr. Inc. v New York City Tax Commn., 204 A.D.3d 483, 484 [1st Dept 2022]; Kapoor v Interzan LLC, 172 A.D.3d 519, 520 [1st Dept 2019] [finding reasonable excuse where defaulting party provided documentary evidence of law office failure and affidavit from CEO averring that he expected his corporate counsel to defend matter]).
Even viewing the insurer's inaction as law office failure, Nail & Spa has failed to demonstrate a reasonable excuse for its delay. As noted above, Nail & Spa's moving papers provide only a single, conclusory statement purporting to explain its failure to respond to the complaint (Doc No. 31 at 4; Doc No. 38 at 3-4). It did not submit an affidavit, or any other evidence, from an individual with personal knowledge of the circumstances establishing that the delay was caused by the insurer (cf. Matter of TWU Counseling Ctr. Inc., 204 A.D.3d at 484; Kapoor, 172 A.D.3d at 520). Thus, Nail & Spa fails to demonstrate a reasonable excuse for its delay (see Urban D.C. Inc., 205 A.D.3d at 634 [finding no reasonable excuse where defaulting party failed to provide details or evidentiary support for "conclusory references" to law office failure]; Hereford Ins. Co. v Forest Hills Med., P.C, 172 A.D.3d 567, 568 [1st Dept 2019] [finding no reasonable excuse because defaulting party assertion of law office failure "unsubstantiated"]; cf. Kapoor, 172 A.D.3d at 520).
Because Nail & Spa fails to demonstrate a reasonable excuse, "[this Court] need not consider whether it established a potentially meritorious defense" in connection with its request for relief pursuant to CPLR 5015(a) (Aetna Life Ins. Co. v UTA of KJ Inc, 203 A.D.3d 401, 402 [1st Dept 2022]; see Urban D.C Inc., 205 A.D.3d at 634).
However, even assuming, arguendo, that Nail & Spa successfully demonstrated a reasonable excuse for its default, it has not established a potentially meritorious defense. "[T]o demonstrate a meritorious defense, a party must submit an affidavit from an individual with knowledge of the facts" (Peacock v Kalikow, 239 A.D.2d 188, 190 [1st Dept 1997]; see Young v Richards, 26 A.D.3d 249, 250 [1st Dept 2006]). Conclusory assertions made in an attorney affirmation are insufficient (see Young, 26 A.D.3d at 250; Lopez v Trucking & Stratford, 299 A.D.2d 187, 187 [1st Dept 2002]). In support of its motion, Nail & Spa submits, among other things, an answer verified by its attorney and an attorney affirmation (Doc Nos. 31, 34). However, neither of those submissions constitutes an affidavit of merit from a person with personal knowledge of the facts (see Paez v 1610 St. Nicholas Ave. L.P., 103 A.D.3d 553, 554 [1st Dept 2013]; Young, 26 A.D.3d at 250; Lopez, 299 A.D.2d at 187).
Further, Nail & Spa's attempt to establish its meritorious defense is entirely conclusory. Nail & Spa's sole and general assertion that it "did not create or have notice of the condition which allegedly caused plaintiff to fall" (Doc No. 31 at 5; Doc No. 38 at 5) is insufficient to establish a potentially meritorious defense to plaintiffs premises liability claim (see Lopez, 299 A.D.2d at 187; cf. Figueroa v Relgold, LLC, 178 A.D.3d 425, 426 [1st Dept 2019] [finding meritorious defense established after defaulting party submitted affidavit from principal of defendant property owner and documentary evidence tending to establish absence of liability]).
Nail & Spa's Request to Vacate the Default Judgment Pursuant to CPLR 317
To vacate a default judgment pursuant to CPLR 317, a defendant must "demonstrate that it did not receive notice of the summons in time to defend and that it had a meritorious defense" (Country-Wide Ins. Co. v Power Supply, Inc., 179 A.D.3d 405, 406 [1st Dept 2020]; see Eugene DiLorenzo, Inc. v A.C Button Lbr. Co., 67N.Y.2d 138, 141-142 [1986]).
Contrary to Nail & Spa's contention, it fails to satisfy both of these requirements. First, Nail & Spa does not assert, let alone establish, that it did not personally receive notice of the summons and complaint (see M.R. v 2526 Valentine LLC, 58 A.D.3d 530, 531 ; Metropolitan Steel Indus, v Rosenshein Hub Dev. Corp., 257 A.D.2d 422, 422 [1st Dept 1999]). Indeed, in its moving papers, Nail & Spa provides an affidavit of service of the summons and complaint upon the Secretary of State on April 20, 2021 (Doc No. 33 at 21), which creates a presumption of service (Country-Wide Ins. Co., 179 A.D.3d at 406). However, Nail & Spa fails to set forth any contention that it did not receive such summons and complaint from the Secretary of State (Doc No. 30 at 2-6; Doc No. 38 at 1-5).
Additionally, as discussed above, Nail & Spa has not demonstrated a meritorious defense but rather makes only a bare, conclusory allegation that it did not create, or have prior notice of, any slippery condition (Doc No. 31 at 5; Doc No. 38 at 5). This is insufficient to establish a meritorious defense (see Young, 26 A.D.3d at 250; Lopez, 299 A.D.2d at 187; cf. Figueroa, 178 A.D.3d at 426).
Since Nail & Spa fails to establish that the default judgment against it must be vacated, there is no need to address its contention that plaintiff must be compelled to accept a late answer.
Accordingly, it is hereby:
ORDERED that defendant Nail & Spa 72, Inc.'s motion to vacate its default and compel plaintiff to accept a late answer is denied in its entirety.