Opinion
Index No. 650451/2020 Motion Seq. No. 002
01-03-2024
HEREFORD INSURANCE COMPANY, Plaintiff, v. ALFORD A. SMITH M.D., P.C., BLISS ACUPUNCTURE P.C., ENS MEDICAL, P.C., FAAN MED a/k/a FAAN MEDICAL SERVICES, P.C., GENTLE TOUCH CHIROPRACTIC, P.C., HYUN PHYSICAL THERAPY, P.C., JIMENEZ JOSEPH DEVEREAU, JOSEPH A. RAIA M.D. P.C., JULES F. PARISIEN, MEDICAL SUPPLY DEPOT GROUP CORP, MG CHIROPRACTIC, P.C., NEMAAN GHUMAN, PRISCILLA ROSE SANTANA, N.P., and BRENDA WHITE, Defendants.
Unpublished Opinion
PRESENT: HON. VERNA L. SAUNDERS, JSC Justice
DECISION + ORDER ON MOTION
HON. VERNA L. SAUNDERS, JSC
The following e-filed documents, listed by NYSCEF document number (Motion 002) 10, 21,33, 47, 49, 50, 51, 52, 53, 54, 55, 56, 57, 58, 59, 60 were read on this motion to/for _VACATE.
On June 6, 2019, defendant Brenda White ("claimant") was a passenger in a livery vehicle which was involved in a motor vehicle collision. The vehicle was insured by plaintiff Hereford Insurance Company ("Hereford"). Non-party Jhonny Ortiz, the insured, was driving.The claimant alleged that she sustained significant injuries as a result, and she allegedly sought treatment from defendants Alford A. Smith M.D., P.C., Bliss Acupuncture P.C., ENS Medical, P.C. ("ENS"), Faan Med a/k/a Faan Medical Services, P.C., Gentle Touch Chiropractic, P.C., Hyun Physical Therapy, P.C., Jimenez Joseph Devereau, Joseph A. Raia M.D. P.C., Jules F. Parisien, Medical Supply Depot Group Corp. ("Medical Supply"), MG Chiropractic, P.C., Nemaan Ghuman, and Priscilla Rose Santana, N.P. ("medical providers"). More specifically, at her examination before trial, the claimant alleged that she sustained injuries to her left hip, her left knee, her left shoulder, and her neck (NYSCEF Doc. No. 35, p 16 lines 22-23, 25).
The allegations are taken from Hereford's complaint (NYSCEF Doc. No. 51).
As is relevant here, Medical Supply submitted claims for medical equipment (see NYSCEF Doc. No. 55, *9-33) totaling $3,171.88 (NYSCEF Doc. No. 56, *8-11 [complaint in Medical Supply's lawsuit against Hereford in Kings Civil Court, annexed to Hereford's motion for summary judgment]). The claimant signed for receipt of the massager, cervical traction set, and other equipment (see NYSCEF Doc. No. 55, *9-33). At her examination before trial, she indicated that she used most of the items on a regular basis (NYSCEF Doc. No. 35, p 76 line 20 -p 82 line 13).
Hereford commenced this action against the medical providers and the claimant by fling a summons and complaint on January 20, 2020. In connection with the summons and complaint, Hereford submitted affidavits of service on the defendants. As is relevant here, the affidavit of service for Medical Supply indicates that plaintiff served the complaint by service with the Secretary of State on February 4, 2020 (NYSCEF Doc. No. 10). As a first cause of action, Hereford alleges that it "maintains a founded belief' that any injuries and treatment were not causally related to the June 6, 2019, collision or other insured event and, therefore, that it has no obligation to pay the claims (NYSCEF Doc. No. 51, ¶ 37). Accordingly, it seeks a declaratory judgment stating that it has no duty to pay the claims relating to the June 6, 2019, collision.
The second cause of action, which alleges that the claimant materially misrepresented the facts surrounding the accident and her alleged injuries at her examination under oath, has been discontinued (see NYSCEF Doc. No. 50, ¶ 2 [citing NYSCEF Doc. No. 33, ¶ 3 n 2]).
On April 27, 2020, Hereford discontinued the action as against Joseph Devereau Jiminez (NYSCEF Doc. No. 21). On May 4, 2021, this court issued an order granting Hereford's unopposed motion for a default judgment against Alford A. Smith M.D., P.C., Bliss Acupuncture P.C., Faan Med a/k/a Faan Medical Services, P.C., Gentle Touch Chiropractic, P.C., Hyun Physical Therapy, P.C., Joseph A. Raia M.D., P.C., Jules F. Parisien, Medical Supply Depot Group Corp, MG Chiropractic, P.C., and Priscilla Rose Santana, N.P. (NYSCEF Doc. No. 53, order with notice of entry). On March 30, 2021, Hereford had served the motion papers on Medical Supply by mail to its place of business, 101 Avenue U, Room 3, Brooklyn, New York, 11223 (id.) Hereford served a copy of the court's order with notice of entry on defendants on May 25, 2021, at the same address. On October 27. 2021, Hereford discontinued the action as against defendants ENS and the claimant, essentially resolving the case against virtually all defendants, and the court marked the case "disposed" (see NYSCEF Doc. No. 47).
There was only one outstanding defendant, Nemaan Ghuman, at the time. In support of its motion, Hereford stated that Ghuman "has not yet been located for service and will be dealt with in a separate motion" (NYSCEF Doc. No. 33, *2 n 1). Hereford has not made a further motion or served Ghuman.
Meanwhile, on January 17, 2020, Medical Supply had filed an action against Hereford in Kings County Civil Court in which it sought to compel payment of the $3,171.88 it had submitted as claims (NYSCEF Doc. No. 56 [Hereford's papers in Medical Supply Depot Group Corp., AAO Brenda White v Hereford Ins. Co., Civ Ct, Kings County, Index No. CV-704026-20/KI (Medical Supply, the Kings County Action)]). On February 7, 2022, Hereford filed a motion for summary judgment dismissing the case (id.). It argued that the March 30, 2021, order of this court, which granted default judgment against Medical Supply, mandated dismissal based on res judicata.
In response, Medical Supply opposed the motion, pointing out that it had moved to vacate the default judgment in this action, and asking that a ruling in the Kings County action be held in abeyance pending the resolution of the motion (Medical Supply, NYSCEF Doc. No. 4). It is the motion to vacate the default judgment order against it and compel Hereford to accept its answer that is currently before the court (NYSCEF Doc. No. 49, notice of motion). Hereford opposes the motion to vacate. For the reasons below, the court denies the motion.
For the purpose of clarity, the court takes judicial notice of Medical Supply's opposition papers in the Kings County Action.
In support of its motion, Medical Supply contends that the motion is timely under CPLR 5015 (a) (1), as it was made one year from service of the default order with notice of entry. In addition, Medical Supply argues that the motion is timely under CPLR 317, which allows an entity that did not receive notice of the summons in a timely fashion to move to vacate the default within one to five years.
Medical Supply contends that it has a reasonable excuse for the default. It submits the affidavit of Nicolay Malinin, its owner, in support (NYSCEF Doc. No. 55). Malinin states that he personally opens all mail that comes into the office. He further asserts that copies of legal papers are mailed to Medical Supply's attorney for review, and that the company retains the originals. He denies receipt of the pleadings on the basis that "the files do not contain a copy of the Summons and Complaint for this case and the relevant patient files do not contain a note regarding receipt of the Summons and Complaint" (id., ¶ 7). Additionally, Medical Supply argues that it only learned of the default judgment on February 7, 2022, when Hereford moved for summary judgment in the Kings County action. Medical Supply states that when it received the Kings County motion, its attorneys informed it of the motion and of the default judgment (id.,¶8).
In addition, Medical Supply argues that Hereford did not comply with the mailing requirement under CPLR 3215(g)(4)(i), According to Medical Supply, the inclusion of the phrase "last known address," as opposed to "address for service of process," requires a plaintiff to mail the pleadings to any additional address that the defendant has used during the parties' business relationship. It notes that the bills it submitted to plaintiff used the billing address as "P.O. Box 290632, Brooklyn, NY, 11229" (NYSCEF Doc. No. 55, **13, 17, 21, 26, 30, Health Insurance Claim Forms, annexed to Nicolay Malinin Aff of Merit). Further, because Hereford mailed its requests for verification and its denials of coverage to Medical Supply to this postbox address, Medical Supply contends that service of the subsequent mailing should have been made to that address as well.
In opposition, Hereford states that it properly served Medical Supply through the Secretary of State, and that under Business Corporation Law § 306, this is sufficient. It states that in support of its right to relief under both CPLR 5015 and 317, Medical Supply primarily relies on its assertion in the Malinin affidavit that it did not receive a copy of the pleadings. Hereford argues that a party's denial of receipt of the pleadings is insufficient to show either lack of notice under CPLR 317 or a reasonable excuse under CPLR 5015 (NYSCEF Doc. No. 60, ¶¶ 29-32). Hereford emphasizes that it served the default judgment order with notice of entry on Medical Supply at 101 Avenue U, Room 3, Brooklyn, New York, 11223, the address on file with the Secretary of State, and Malinin acknowledges that this is the correct address (id., ¶ 39 [referring to NYSCEF Doc. No. 55, ¶ 1]). It argues that it was not required to mail the default judgment order to Medical Supply's post office box address, especially as the business address was listed as the proper one for service of process. Finally, it asserts that Medical Supply took "nearly four months" after it learned of the default judgment against it to make the current motion and it suggests that this "belated response" is a further reason for denial of this motion (NYSCEF Doc. No. 60, ¶¶ 39, 44).
As part of its opposition, Hereford argues that Medical Supply's failure to submit a certificate of compliance with 22 NYCRR § 202.8-b mandates denial of the motion. The court rejects this position. The cited failure is a ministerial error and is not dispositive (see Young v City of New York, 164 A.D.3d 711, 713 [2d Dept 2018]).
To prevail under CPLR 5015(a), the moving party must show a reasonable excuse for the default and a meritorious defense (Marquez v 171 Tenants Corp., 161 A.D.3d 646, 647 [1st Dept 2018]). The court has the discretion to evaluate the sufficiency of the excuse (see id.). Under a CPLR 317 motion, the moving party does not have to provide a reasonable excuse (Olivaria v Lin &Son Realty Corp., 84 A.D.3d 423, 425 [1st Dept 2011]). However, CPLR 317 expressly requires "a finding of the court that [the movant] did not personally receive notice of the summons in time to defend."
As stated, Medical Supply relies on its purported failure to receive the summons and complaint as its right to relief under CPLR 317. Medical Supply has not submitted sufficient evidence in support of this contention. Hereford's service on the Secretary of State, which mailed the pleadings to defendant's correct address, creates a presumption of service (see Country-Wide Ins. Co. v Power Supply, Inc., 179 A.D.3d 405, 406 [1st Dept 2020] [Country-Wide]). Further, service was complete once Hereford served the Secretary of State (see Fisher v Lewis Constr. NYC Inc., 179 A.D.3d 407, 408 [1st Dept 2020]). As Hereford notes, to successfully show lack of receipt. Medical Supply had to aver more than a mere denial. Here, Medical Supply relies solely on its owner's self-serving affidavit, which states that the company's files do not contain a copy of the pleadings for this case or any acknowledgment of receipt of the pleadings, both of which it normally would retain in its business records (see NYSCEF Doc. No. 55, ¶ 7). This affidavit, which is little more than a conclusory denial, is insufficient (see Franpo Realty, LLC v Power Furniture Inc., 213 A.D.3d 604, 604 [1st Dept 2023]; compare Gomez v Karyes Realty Corp., 211 A.D.3d 576, 576-577 [1st Dept 2022] [affidavit by principal, which acknowledged receipt of a preliminary notice of the accident but denied receipt of the complaint, which was sent to registered agent; and by registered agent, which stated that it never received the pleadings so it could not have forwarded them to the principal, were deemed sufficient]). This is especially true as Medical Supply acknowledges that the pleadings were sent to the correct address (see Country-Wide, 179 A.D.3d at 406).
For the same reasons as above, Medical Supply cannot rely on its purported failure to receive the complaint as a reasonable excuse for default under CPLR 5015(a). In addition, Medical Supply's other arguments in support of vacatur fail. It suggests that the default judgment should be vacated because the motion papers were mailed to its place of business rather than to its box office address. However, Medical Supply does not state that it did not receive the papers or otherwise show that service of the motion papers or of the default judgment order with notice of entry was defective (see Marquez, 161 A.D.3d at 647). In addition, although not dispositive, the fact that Medical Supply waited approximately three-and-a-half months before it made this motion militates in favor of denial of the motion (see Aetna Life Ins. Co. v UTA of KJ Inc., 203 A.D.3d 401,401-402 [1st Dept 2022] [delay of three weeks led court to find there was not a reasonable excuse for delay]).
Further, the court notes that Medical Supply's interpretation of CPLR 3215(g)(4)(i)'s service requirement lacks merit. Rather than requiring service of the default judgment order to multiple addresses, as Medical Supply suggests, the statute provides that a party shall perform "an additional service of the summons by first class mail" (emphasis supplied). Thus, only one mailing is necessary. Further, Hereford mailed the order to Medical Supply's current place of business, and thus it complied with the requirement that service be made to the defendant's last known address (see id.). Further, Hereford's alleged "noncompliance [with this provision] does not warrant vacatur of the default judgment absent a showing of a reasonable excuse for the default and a meritorious defense" (Gourvitch v 92nd &3rd Rest Corp., 146 A.D.3d 431, 431 [1st Dept 2017]).
"Notwithstanding the preference for deciding cases on the merits, this preference will not justify vacating a default judgment where the moving party has failed to satisfy its burden of establishing a reasonable excuse for the default or a meritorious case" (Liparulo v New York City Health & Hosps. Corp., 193 A.D.3d 593, 594 [1st Dept 2021]). As the court finds that Medical Supply has not shown a reasonable excuse for its default or lack of receipt of the complaint, the court does not reach the issue of meritorious defense (see Davis v Blev Realty LLC, 217 A.D.3d 563, 564 [1st Dept 2023]). Accordingly, it is
ORDERED that the motion is denied; and it is further
ORDERED that, within twenty (20) days after this decision and order is uploaded to NYSCEF, counsel for plaintiff shall serve a copy of this decision and order, with notice of entry, upon plaintiffs.
This constitutes the decision and order of this court.