Appeals from orders of the Civil Court of the City of New York, Queens County (Leslie J. Purificacion, J.), entered September 19, 2011 and March 29, 2012, respectively. The order entered September 19, 2011 denied plaintiffs' motion for leave to enter a default judgment. The order entered March 29, 2012, insofar as appealed from, upon reargument, adhered to the prior determination and provided that the answer would be deemed served on plaintiffs upon service of a copy of the order with notice of entry.

ORDERED that the appeal from the order entered September 19, 2011 is dismissed as that order was superseded by the order entered March 29, 2012; and it is further,

ORDERED that the order entered March 29, 2012, insofar as appealed from, is reversed, without costs, and, upon reargument, plaintiffs' motion for leave to enter a default judgment is granted and the provision deeming the answer served on plaintiffs upon service of a copy of the order with notice of entry is stricken.

Plaintiffs commenced this action against defendant insurer, pursuant to Insurance Law § [*2]3420 (a) (2), to recover upon an unsatisfied judgment in their favor entered on January 21, 2011, after an inquest, in an underlying action brought by plaintiffs against defendant's insured. Service of process upon defendant was effectuated on March 1, 2011 by service upon the Superintendent of Insurance, pursuant to Insurance Law § 1212. After defendant failed to appear or answer, plaintiffs moved for leave to enter a default judgment. Defendant opposed the motion and requested that the Civil Court compel plaintiffs to accept defendant's answer, which defendant had attempted to serve on plaintiffs' counsel on May 6, 2011, and that the court deem the answer to have been timely served. The answer, which was verified by defense counsel, asserted, as a first affirmative defense, that defendant had been improperly served and, as a second affirmative defense, that defendant had not received notice of the underlying action until after judgment had been entered against its insured. The opposition papers included an affidavit by the administrative manager of the claims department of defendant's Sheepshead Bay office, which had previously handled the claim against defendant's insured. The manager described that office's procedure for the receipt of mail and indicated that the office had first learned of the instant action on May 3, 2011, when it had received plaintiffs' motion papers, to which the summons and complaint were annexed. The motion papers were immediately forwarded to defense counsel, who, on May 6, 2011, attempted to serve defendant's verified answer upon plaintiffs' counsel, but the answer was rejected as untimely.

By order entered September 19, 2011, the Civil Court denied plaintiffs' motion for leave to enter a default judgment because plaintiffs had failed to demonstrate compliance with the additional mailing provisions of CPLR 3215 (g) (4). Plaintiffs subsequently moved for leave to reargue their prior motion, arguing that CPLR 3215 (g) was not applicable to this action since defendant had been served pursuant to Insurance Law § 1212 and not pursuant to Business Corporation Law § 306. By order entered March 29, 2012, the Civil Court granted reargument, acknowledging that it had erroneously applied the wrong statute, and, upon reargument, denied the branch of plaintiffs' motion seeking leave to enter a default judgment. The court also provided that defendant's answer would be deemed served upon plaintiffs on service of a copy of the order with notice of entry, finding that defendant's failure to timely serve its answer had not been willful, that the delay had been de minimis, and that plaintiffs had not demonstrated any prejudice.

To successfully oppose a motion for leave to enter a default judgment based on the failure to appear or timely serve an answer, a defendant must demonstrate a reasonable excuse for its delay and the existence of a potentially meritorious defense to the action (see CPLR 5015 [a] [1]; Eugene Di Lorenzo, Inc. v A.C. Dutton Lbr. Co., 67 NY2d 138, 141 [1986]). Defendant submitted no documents in opposition to plaintiffs' motion to demonstrate that it had a potentially meritorious defense. Even if we assume the potential merit of the affirmative defenses set forth in defendant's answer, the answer was verified only by defense counsel, and there was no showing that he had personal knowledge of the facts (see Ogman v Mastrantonio Catering, Inc., 82 AD3d 852 [2011]; Baldwin v Mateogarcia, 57 AD3d 594 [2008]). We conclude, therefore, that it was an improvident exercise of discretion for the Civil Court to have denied plaintiffs' motion for leave to enter a default judgment and to have provided that the answer would be deemed served on plaintiffs upon service of a copy of the order with notice of entry. [*3]

In view of the foregoing, we need not reach the issue of whether defendant demonstrated a reasonable excuse for its default.

Accordingly, the order entered March 29, 2012, insofar as appealed from, is reversed and, upon reargument, plaintiffs' motion for leave to enter a default judgment is granted and the provision deeming the answer served on plaintiffs upon service of a copy of the order with notice of entry is stricken.

Pesce and Rios, JJ., concur.

Weston, J.P., concurs in a separate memorandum. [*4]
SUPREME COURT OF THE STATE OF NEW YORK
APPELLATE TERM : 2nd, 11th and 13th JUDICIAL DISTRICTS
PRESENT : WESTON, J.P., PESCE and RIOS, JJ.
MOHAMMED MAQSOOD and EDGAR RAMOS,

Appellants,

-against-

NO. 2012-1356 Q C

DECIDED
ALLSTATE INSURANCE COMPANY,

Respondent.

Weston, J.P., concurs in the following memorandum:

While I concur in the result, I would add that, in addition to failing to demonstrate that it had a potentially meritorious defense, defendant also failed to proffer a reasonable excuse for its default. Plaintiffs established that service of process upon defendant was properly effectuated by delivering the summons and complaint to the Superintendent of Insurance, pursuant to Insurance Law § 1212. Although the administrative manager of defendant's local claims office stated that the office did not receive the summons and complaint until May 3, 2011, defendant "did not contend that the address on file with the Superintendent of Insurance was incorrect" (Montefiore Med. Ctr. v Auto One Ins. Co., 57 AD3d 958, 959 [2008]). Moreover, "the mere denial of receipt of the summons and complaint was insufficient to rebut the presumption of proper service created by the affidavit of service" (id.). In the absence of both a meritorious defense and a reasonable excuse for the default, the Civil Court improvidently exercised its discretion in denying plaintiffs' motion for leave to enter a default judgment and in deeming the answer served on plaintiffs upon service of a copy of the order with notice of entry.
Decision Date: August 08, 2013