Category: CPLR

A party seeking to vacate a default judgment must demonstrate a
reasonable excuse for the default and a 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]; Jackson-Cutler v Long, 2 AD3d 590 [2003]; Titan Realty Corp. v Schlem,
283 AD2d 568 [2001]). Here, the record indicates that there are two
addresses for defendant in the court's file, one in Detroit and the
other in New York City. Defendant denied receiving the notices to
appear, and it is not clear from the record whether the notices were
sent to defendant at the Detroit or New York City address. Under the
circumstances, the court below did not improvidently exercise its
discretion in finding that defendant's default was not willful.

Furthermore, defendant set forth in his verified answer (see CPLR 105 [u]) a potentially meritorious defense (see Montgomery v Cranes, Inc., 50 AD3d 981 [2008]; Hodges v Sidial,
48 AD3d 633 [2008]) that the vehicle driven by plaintiff's subrogor
struck his vehicle. In view of the public policy which favors
resolution of cases on the merits (see Stuart v Kushner, 39 AD3d 535 [2007]; Bell v Toothsavers, Inc., 213 AD2d
199 [1995]), the court below properly granted defendant's motion to vacate the default judgment, and the order is affirmed.

In this civil forfeiture action, we are asked to determine whether
service of process pursuant to CPLR 313 on defendants in a foreign
country is sufficient to confer personal jurisdiction or whether one
must additionally satisfy the service requirements of that foreign
locale. Because compliance with CPLR 313 alone constitutes proper
service upon foreign [*2]defendants
where, as here, no treaties or international agreements supplant New
York's service requirements, and because principles of international
comity do not mandate a different result, service was sufficient.
Plaintiffs were not compelled to serve defendants in accordance with
the service requirements of the foreign nation, Brazil, via letters
rogatory.

…

Where there exists a treaty requiring a specific form of service of
process such as the Hague Service Convention, that treaty, of course,
is the supreme law of the land and its service requirements are
mandatory (see US Const, art VI, § 2; Volkswagenwerk v Schlunk,
486 US 694 [1988]). But the Hague Service Convention is not implicated
in connection with service on the Brazilian nationals because Brazil is
not a signatory to that convention.

Both the United States and Brazil are signatories to the Inter-American [*7]Convention
on Letters Rogatory (28 USCA § 1781). Article II of that treaty does
not mandate, however, that letters rogatory be the exclusive means of
service on a party in Brazil. As stated in Kreimerman v Casa Veerkamp S.A. de C.V. (22 F3d 634, 640 [5th Cir 1994]):

"nothing in the language of the Convention expressly reflects an
intention to supplant all alternative methods of service. Rather, the
Convention appears solely to govern the delivery of letters rogatory
among the signatory States . . . [T]he text of the Convention strongly
indicates, not that the Convention preempts other conceivable methods
of service, but that it merely provides a mechanism for transmitting
and delivering letters rogatory when and if parties elect to use that
mechanism" (id. at 640-642).
Consequently, the Letters Rogatory Convention allows for service of process pursuant to a state statute (see Laino v Cuprum S.A de C.V, 235 AD2d 25, 29 [2d Dept 1977])^[FN10]. Here, that statute is CPLR 313.

Since a New York plaintiff need not comply with foreign law
absent a treaty, we must lastly consider whether defendants were
properly served under New York law. Individual defendants were served
in Brazil under CPLR 313 and 308 (1), or they were served through their
lawyers under alternative service pursuant to CPLR 308 (5). Plaintiff
served corporate defendants by personal delivery to an authorized
representative in Brazil under CPLR 311 (a) (1), or through their
lawyers under the alternate service order pursuant to CPLR 311 (B)^[FN11].
We thus conclude that all due process requirements were met and proper
service upon defendants, save the four served pursuant to CPLR 303 (2)
and (4), was effected. Consequently, that portion of the Appellate
Division decision that affirmed Supreme Court's dismissal of the
forfeiture action should be reversed.

Tomorrow's Law Jounal (online today), has a great article on CPLR § 5701(a), the provision of the CPLR that sets forth those appeals to the appellate division that are available as of right.  The authors, Thomas R. Newman and Steven J. Ahmuty Jr. focus their article, not on the grounds available, but the limitations of those grounds. 

Classes of Orders

CPLR §5701(b) sets forth the following three classes of orders not
appealable as of right: an order which (1) is made in an Article 78
proceeding against a body or officer; (2) requires or refuses to
require a more definite statement in a pleading; or (3) orders or
refuses to order that scandalous or prejudicial matter be stricken from
a pleading.

Even where an order is not appealable as of right, CPLR §5701(c) grants
the would-be appellant the right to seek permission to appeal from the
judge who made the order or from a justice of the appellate division in
the department to which the appeal could be taken, upon refusal by the
judge who made the order or upon direct application:

There are, however, some significant limitations on the right of appeal which practitioners should be aware of.

No appeal lies from an evidentiary ruling made during the course of
trial or from an order on a motion in limine adjudicating in advance of
trial the admissibility of evidence;²
one can argue, without success, that such an order "affects a
substantial right" of the litigant to present his or her best case or
to hamper the adversary from doing so. This is so, even where the
motion is made on papers and the court enters a written order to
provide the aggrieved party with an appealable paper as "a vehicle for
appeal."³ The ruling "constitutes, at best, an advisory opinion which is neither appealable as of right nor by permission."⁴
The provisions of CPLR §5701(c) for obtaining permission to appeal from
an order not appealable as of right "were not intended to permit
intermediate appeals from evidentiary rulings during trial," as to
allow such appeals "would interfere with and impede the trial process."⁵
Moreover, the ultimate rulings during the trial may well depend on the
status of the record at the time the particular evidence is offered.
Therefore, evidentiary rulings, whether made before or during trial,
are only reviewable after trial on an appeal from the final judgment.⁶

Similarly, where an unsuccessful motion for a mistrial is made during
the course of the trial, it is not appealable, even if the ruling is
embodied in a written order. It can only be reviewed on an appeal from
the ensuing judgment entered after trial.⁷
Other nonappealable orders include an order denying a motion to
preclude a plaintiffs' expert witnesses from testifying at trial or,
alternatively, to subject them to a Daubert hearing.⁸ This is, in effect, an evidentiary ruling and, as such, neither appealable as of right nor by permission.⁹
A ruling by the court prior to trial as to what factors the jury should
consider on the issue of comparative negligence would be an advance
ruling on the court's charge and, at best, a nonappealable advisory
opinion.¹⁰

The record establishes that defendants executed a promissory note and
mortgage in August 1986 pursuant to which they agreed to make monthly
payments to plaintiff's predecessor. Defendants failed to make the
requisite monthly payments beginning in June 2000, however, and
plaintiff's predecessor commenced a foreclosure action in November
2000. The mortgage was assigned to a third party and thereafter was
assigned to plaintiff, in November 2002. Plaintiff commenced this
action pursuant to CPLR 3213 in June 2006, and the court denied
plaintiff's motion for summary judgment in lieu of complaint in August
2006. Plaintiff made a second [*2]motion
for summary judgment in lieu of complaint in March 2007, and defendants
cross-moved to dismiss the action contending, inter alia, that the
action was time-barred and that plaintiff failed to comply with RPAPL
1301. The court denied plaintiff's second motion and granted
defendants' cross motions to dismiss on the ground that plaintiff's
second motion was made after the six-year statute of limitations had
expired (see CPLR 213 [4]). That was error. When a court denies
a motion for summary judgment in lieu of complaint, "the moving and
answering papers shall be deemed the complaint and answer,
respectively, unless the court orders otherwise" (CPLR 3213). Although
"the court's authority to order otherwise' include[s] discretion to
dismiss [the action]" (Schulz v Barrows, 94 NY2d 624, 626), the
court took no such action here with respect to plaintiff's June 2006
motion. Instead, by its August 2006 order, the court merely denied
plaintiff's motion. Thus, plaintiff's June 2006 motion papers were
converted to a complaint pursuant to the express terms ofCPLR 3213, and
the March 2007 motion should have been treated as a motion for summary
judgment within the existing June 2006 action, which was timely
commenced (see generally Schulz v Barrows, 263 AD2d 565, 571, affd 94 NY2d 624).

In Monday's New York Law Journal (and the online version now), Thomas F. Gleason discusses the recent amendments to CPLR § 3001 and § 3420 of the Insurance Law in his article, Loosening the Standing Barriers to Declaratory Relief.  Effective January 17th, 2009 CPLR § 3001 will allow a personal injury plaintiff to "confirm that there is a fund to pay the judgment before, not after, slogging through the underlying litigation," by initiating a declaratory judgment action against the insurance company that disclaims coverage.  He eventually concludes that "restricting declaratory relief to lack of notice disclaimers seems unfair"; that it is "contrary to the basic purpose of declaratory relief."  And  ultimately, that the amendment "did not go far enough."

Below you'll find some excerpts from the article.  I've moved some of the paragraphs around because it makes more sense to me this way.  If you want to read the article in its entirety and in the right order, please click on the link above or pick up the Law Journal on Monday.

This amendment, in part, overturns the standing impediment to such
declaratory relief established by the Court of Appeals in 2004 in Lang v. Hanover Insurance Co.

The change is significant because disclaimers for lack of notice are
common under liability insurance policies. Sometimes they result from
the insured mistakenly assuming no claim will be forthcoming, or
perhaps because the insured is reluctant to communicate information
that could result in increased premiums. In either event, the insured
is courting disaster, because a failure to give the insurer notice "as
soon as practicable" of an "occurrence" that might result in liability,
is a common "condition" of coverage. The consequences of noncompliance
are severe, for both the personal injury plaintiff and the defendant.

To some extent the Lang holding is paradoxical, because the
standing requirement has been recognized to prevent courts from
transgressing upon the legislative or executive realms, or rendering
advisory opinions.  Such defects in the "case and
controversy," requirement of CPLR 3001 destroy subject matter
jurisdiction. But if the insurer has disclaimed, and the defendant is
not sufficiently wealthy to pay the entire anticipated judgment, the
highly motivated tort plaintiff may be the only party in the position
to challenge the validity of the disclaimer. The Lang case
had established that the tort plaintiff has no standing to do so, but
the legislative granting of limited relief from the standing stricture
gives us pause to wonder: Why was CPLR 3001 so limited in the first
place?

At its core, the "case and controversy" requirement is constitutional
in nature, because it confines the proper exercise of judicial powers.
Perhaps then it may reasonably be argued that cases aggressively
limiting access to the court on grounds of standing may have overshot
the mark, while the amendment to fix the Lang problem
undershoots it. Why not let all tort plaintiffs interested enough in a
contract fight with an institutional adversary have a go at it? What is
to be gained by shutting the courthouse door? There seems to be little
risk of generalized pronouncements that affect nonparties to the
declaratory judgment litigation, as would be the case with true
advisory opinions.

The Court of Appeals in Lang noted that the carrier should
weigh the risk of the disclaimer carefully, because of a much higher
possible default liability if the disclaimer is tossed out after the
case proceeds to judgment. This should induce the insurer not to
disclaim unless they are very sure of the right to do so, but will not
address the problem of a fairly debatable disclaimer. If
there is a good reason to restrict a broader right to declaratory
relief, it does not seem to depend on the particular ground for the
disclaimer, or the assumptions by the insurer alone as to how sound
their disclaimer is.

Mr. Gleason briefly takes the reader through the legislative history of the the amendment:

As with most things legislative, this expansion of declaratory relief
under CPLR 3001 is a compromise, and the compromise bears directly on
that formerly harsh rule. In return for the partial removal of the
standing limitation recognized in Lang, the Legislature has tempered the previously clear right for a liability insurer to refuse coverage for lack of timely notice. Starting in January, the insurance company must support the disclaimer by proof that the delay was prejudicial.⁸

8. 

L 2008, ch 388 §4. The insurer will have the burden to prove prejudice
if the notice was provided    within two years of when required under the
policy. After two years, the burden shifts to the insured, and
prejudice is conclusively presumed after a liability determination or
settlement.

"CPLR 1004, the exception to the real party in interest rule,
provides that an insured person who has executed a subrogation receipt
or other similar agreement may sue without joining the person for whose
interest the action is brought" (CNA Ins. Co. v Carl R. Cacioppo Elec. Contrs., 206
AD2d 399, 400). While an insurer also has the right to commence an
action on behalf of its insured even where there is a subrogation
agreement between the parties, "[n]either the case law nor the statute
require that the insurance company be substituted as the plaintiff
under such circumstances" (id. at 400; see generally Krieger v Insurance Co. of N. Am., 66 AD2d 1025; Point Tennis Co. v Urban Inds. Corp., 63 AD2d 967).

Here, pursuant to the release and trust agreement (hereinafter the release) executed [*2]by
the plaintiff upon receipt of the underinsured motorist benefits paid
to him by the nonparty-appellant (hereinafter the insurer), the
plaintiff agreed, inter alia, to "hold any moneys received as a result
of settlement or judgment in trust for the [insurer] to be paid to said
[insurer] immediately upon recovery thereof provided that any sum
received in excess of the amount paid by the [insurer] . . . shall be
retained by the [plaintiff]." "The meaning and coverage of a general
release necessarily depends upon the controversy being settled and upon
the purpose for which the release was given. A release may not be read
to cover matters which the parties did not intend to cover" (Gale v Citicorp, 278 AD2d 197; see generally Kaminsky v Gamache, 298 AD2d 361, 361-362).

The purpose of the release in this case was to protect the
insurer's subrogation claim while also protecting the right of the
plaintiff to retain any recovery in excess of the insurer's subrogation
claim. Thus, where, as here, the plaintiff seeks damages in excess of
the insurer's subrogation claim, the release cannot be interpreted to
require the substitutions requested by the insurer (cf. Faraino v Centennial Ins. Co., 103 AD2d 790; Skinner v Klein, 24 AD2d 433, 434).