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New Rainbow Heaven, LLC et al. v. Wesco Ins. Co., N.Y. Co. Index No. 655648/2016 (NY Sup. Ct. NY Co. 2018)

This case involved plaintiff-insured’s claim for fire damage to its restaurant.  Plaintiff’s counsel sought to withdraw upon the parties’ motions for summary judgment because counsel was ethically prohibited from engaging in conduct involving dishonesty, fraud, deceit, or misrepresentation.  Wesco’s briefing included cell phone location data that contradicted plaintiff’s testimony regarding her whereabouts on the date of the fire.  It also included an affidavit from a police officer attesting to seeing plaintiff’s car in the restaurant’s parking lot on the night of the fire, when plaintiff told investigators that she was over 300 miles away.  The court found there was “compelling” evidence that plaintiff made a material misrepresentation and granted counsel’s motion to withdraw.  The court further ordered plaintiff to appear for a conference on a later date, and advised that her failure to appear would result in dismissal.  When plaintiff failed to appear, the action was dismissed.  Several months later, plaintiff, with new counsel, moved to vacate the dismissal order pursuant to CPLR 5015(a)(1).

To have the action restored, plaintiff was required to establish a reasonable excuse for her failure to appear.  Wesco argued that plaintiff’s motion should be denied because new counsel’s affirmation was insufficient to establish a reasonable excuse, inasmuch as new counsel was not involved at the time of the default and therefore had no first-hand knowledge of why plaintiff failed to appear. Plaintiff also alleged that she was never served with a copy of the requisite court order; however, Wesco pointed out that the mere denial of service by new counsel was not enough to overcome the presumption of service created by prior counsel’s affirmation of service.

The court ultimately denied plaintiff’s motion to restore because new counsel’s affirmation, without more, such as a sworn statement from plaintiff’s principal, was insufficient to establish a reasonable excuse for plaintiff’s failure to appear.

Wesco Insurance Co. was represented by partners Kevin F. Buckley and Daniel M. O’Connell.