Upon the foregoing papers the motion by the defendant for an Order vacating the aforesaid judgment entered on May 15,2006, it is ordered that the motion is decided as follows:

The underlying dispute between the parties originated in 2000, when the defendant-landlord Frisben Realty Corp., ("Frisben"), brought a holdover petition against the plaintiff-licensee on or about August 15, 2000. It appears that, as a result of the petition, the housing court found, in a decision and order dated August 22, 2000, that the plaintiff, (respondent in the housing court action), was occupying the subject premises with license from the petitioner (defendant herein), and that he was deprived of its use. The aforesaid order also reserved the balance of the parties' rights in a plenary action. Ultimately, the parties entered into a stipulation of settlement on or about October 3, 2000, whereby the plaintiff/respondent agreed to vacate the premises by November 15, 2000 in exchange for access thereto through that date . Apparently, the instant lawsuit arose as a result of the plaintiff's claim that certain personalty which was stored in the subject premises was retained by the landlord when the latter locked plaintiff out.

There is no dispute as to the fact that the subject action was commenced on or about [*2]January 2, 2001. The defendant also does not dispute that the summons and indorsed complaint in this action was properly served upon it on or about January 30, 2001, by serving its agent, Evelyn Hernandez, as per the process server's affidavit to that effect (see affidavit of Evelyn Hernandez on behalf of defendant Frisben Realty Corp. at p. 2, paragraph 3). Michael Bluth, avers, as President and Principal of defendant Frisben Realty Corp. that his secretary, Evelyn Hernandez, followed his "standing instruction" to forward any summonses and complaints received by his company to Frisben's insurance agent, Robert Schwartz at A.BRS Planning and Brokerage Inc. (see affidavit of Michael Bluth on behalf of defendant Frisben at p. 2., paragraph 4). However, conspicuous by its absence is any documentary evidence to substantiate that claim. On June 16, 2004, apparently in response to a first notice of occurrence by Frisben's insurance broker in the form of a notice of motion for an inquest on June 14, 2004, Claims Administration Corporation on behalf of Frisben's insurance carrier, U.S. Fidelity & Guaranty, ("U S F&G"), issued a disclaimer letter, dated June 16, 2004, denying coverage based upon "untimely notice" of the subject lawsuit- a violation of the subject policy conditions. In response thereto, defendant's insurance broker, Robert D. Schwartz, submitted a copy of a "facsimile transmittal" document, dated August 23, 2004, which was also sent by certified mail, to the defendant's insurance carrier, purportedly containing the summons and complaint in this matter, and requesting that this lawsuit be handled by the carrier (see Exhibit "R" to defendant's moving papers). Defendant's broker also sent a similar transmittal letter, dated October 28, 2005 to its insurance carrier, enclosing a decision granting restoration of this matter to the inquest calendar, and again requesting coverage for the subject claim (see Exhibit "S" to defendant's moving papers). In response thereto, on November 15, 2005, Claims Administration Corporation, on behalf of U SF&G, reiterated its June 16, 2004 disclaimer, and recommended that the defendant retain personal counsel to represent them in the within matter. On February 2, 2006 an inquest was held before Hon. Kevin J. Kerrigan, at which the plaintiff was awarded the sum of $8,000.00 on his first cause of action seeking recovery for the value of his possessions, along with the sum of $24,000.00 in damages based upon the plaintiff's second cause of action seeking damages for the landlord's wrongful lock-out. Judgment thereon was entered by the plaintiff on May 15, 2006. The instant action to vacate the aforesaid judgment was filed on December 26, 2006.

While the Court recognizes that there is a strong public policy in favor of resolving cases on their merits, (see e.g. Hyde Park Motor Co., Inc. v Sucato, 24 AD3d 724 [2d Dept 2005]), it is axiomatic that, under C.P.L.R. §5015, a defaulting party must demonstrate a reasonable excuse for the default and a meritorious defense to the action, as well as an absence of willfulness and a lack of prejudice to the opposing party. (C.P.L.R. §5015 [a]; Bekker v Fleischman, 35AD 3d 334 [2d Dept. 2006]; Vuecom v Century 21, 266 AD2d 454 [2d Dept. 1999]; Kaiser v Delaney, 255 AD2d 362 [2d Dept. 1998]; Ortiz v Delmar, 244 AD2d 392 [2d Dept. 1997]; Goncalves v Stuyvesant Dev. Assocs., 232 AD2d 275 [1st Dept. 1996]; Dimitratos v City of New York, 180 AD2d 414 [1 st Dept. 1992]; Handa v Imperato, 159 AD2d 484 [2d Dept. 1990]; Mothon v ITT Hartford, 301 AD2d 999 [3d Dept. 2003]). The determination of what constitutes a reasonable excuse lies within the sound discretion of the trial court, and while the trial court has discretion to accept law-office failure as a reasonable excuse (see C.P.L.R. §2005; Putney v Pearlman, 203 AD2d 333 [2d Dept. 1994]; Goldstein v Lopresti, 284 AD2d 497 [2d Dept. 2001]), a pattern of wilful default and neglect should not be excused (see Gannon v Johnson Scale Co., 189 AD2d [*3]1052 [3d Dept. 1993]; Ruppell v Hair Plus Beauty, Inc., 288 AD2d 205 [2d Dept. 2001]).

Based upon the foregoing, this Court finds that the defendant has not demonstrated a reasonable excuse for its default, and has engaged in a pattern of default. The record before the Court fails to establish that Frisben took any action to defend the subject action from its inception on January 2, 2001, until it notified its insurance carrier for the first time of the claim on or about June, 2004, a period of over three (3) years. The Court cannot credit the self-serving and conclusory statements of Michael Bluth and Evelyn Hernandez as to their "standard practices" in the absence of any documentary evidence demonstrating that those practices were actually followed in this case, to wit, that legal process was forwarded to its broker and/or insurance carrier for a defense. There was no documentary evidence whatsoever to establish that a tender of defense took place prior to the carrier's disclaimer in 2004. The first evidence in the record of tender consists of broker's transmittals in August, 2004 and October, 2005 respectfully, with no indication of any action taken prior thereto. In addition, following the disclaimer of coverage by its insurance carrier, on June 16, 2004, the record indicates that Frisben took no steps to retain personal counsel to interpose an answer and/or defend the within matter from June 14, 2004 until the judgment was entered against it on May 15, 2006, a period of almost two (2) years. Indeed, even in the face of the insurer's reiteration of its disclaimer and recommendation that the insured retain personal counsel, on November 15, 2005, the defendant failed to do so. In total, from January 2, 2001 until the instant application was filed on December 26, 2006, a period of approximately five (5) years, this Court is constrained to find that, based upon the record before it, defendant Frisben failed to engage its own counsel to defend itself, or to act in a manner which would efficaciously insure that its interests would be protected in this lawsuit. The defendant's claims, while perhaps illustrative of a potential malpractice action against the broker, does not provide them with an excuse for their default, particularly given the fact that Frisben took no action for two (2) years after its insurance carrier denied coverage for the subject lawsuit. The record illustrates an unreasonable failure on the part of the defendant, a sophisticated commercial entity and no stranger to the court system, to further investigate the progress of the underlying action against them. They knew or should have known that the action was pending against them, from having received the summons and indorsed complaint, and they should have taken some steps to retain counsel to interpose a defense on their behalf, particularly after having received the disclaimer from their insurance carrier in 2004. The Court finds defendant's inaction to be unjustifiable and wilful, akin to an intentional default, which is not excusable (see e.g.

Dave Sandel, Inc. v Specialized Indus. Servs. Corp., 35 AD3d 790 [2d Dept. 2006]; Roussodimou v Zafiriadis, 238 AD2d 568, 569 [2d Dept. 1997]).

As to a meritorious defense, the defendant fails to controvert plaintiff's allegations that it deprived the plaintiff of access to the subject premises where his belongings were contained. The housing court found, in the companion suit, that plaintiff was a licensee in the subject premises, and was entitled to possession. The fact that the stipulation between the parties returned possession to Frisben after a date certain does not constitute a defense to this action as claimed by Frisben, (see affidavit of Michael Bluth, at p. 4, paragraph 14), since there has been no denial by the defendant of plaintiff's allegations that Frisben locked the plaintiff out, or that their actions deprived him of his personal property. Thus, there is nothing in the record before this Court that would constitute a legally cognizable defense to the plaintiff's claim, or an [*4]indication that either a legal or an equitable basis exists for the Court to exercise its inherent power to vacate the subject judgment.

Accordingly, the defendants' motion to vacate the default judgment herein is denied in all respects. This constitutes the Decision, Judgment and Order of the Court.

_____________________

Date : Feb 21,2007____________________________________

HON. TIMOTHY J. DUFFICY

Judge, Civil Court