Mutual Marine Office, Inc. v. Joy Construction Corp.

• Decision Date: 26 April 2007
• Docket Number: 700NB.,700NA.,700N.
• Parties: MUTUAL MARINE OFFICE, INC., et al., Respondents, v. JOY CONSTRUCTION CORPORATION, Appellant.
• Court: New York Supreme Court — Appellate Division

39 A.D.3d 417

835 N.Y.S.2d 88

2007 NY Slip Op 03729

MUTUAL MARINE OFFICE, INC., et al., Respondents, v. JOY CONSTRUCTION CORPORATION, Appellant.

700N.

700NA.

700NB.

Appellate Division of the Supreme Court of the State of New York, First Department.

Decided April 26, 2007.

Judgment, Supreme Court, New York County (Richard B. Lowe, III, J.), entered September 23, 2005, awarding plaintiffs the principal sum of $691,358.08, and order, same court and Justice, entered October 26, 2005, which denied defendant's motion to vacate default, unanimously reversed, on the law, without costs, the motion granted and the judgment vacated. Appeal from order, same court and Justice, entered August 1, 2006, which denied defendant's motion to vacate on the ground of newly discovered evidence on summary judgment, unanimously dismissed as academic, without costs.

Plaintiff Marine Mutual Office (MMO), the managing agent for New York Marine and General (NYM & G), commenced an action in July 2004 to recover premiums, including additional premiums based upon a percentage of defendant's "gross receipts" pursuant to the terms of the insurance policies issued to defendant. The complaint alleged that defendant did not comply with the terms of the policies by refusing to make its books and records available for inspection by this plaintiff's accountants.

In October 2004, plaintiff NYM & G commenced a second action to recover defense costs for seven claims made against defendant. Defendant's answer denied the allegations in both complaints, asserting that all premiums had been paid and no defense costs were due.

At a May 19 compliance conference, the parties set deadlines to complete discovery for the now consolidated actions and provided for dispositive motions to be made no later than 60 days after February 2006. However, by notice of motion dated June 3, 2005, returnable on June 16, MMO moved for summary judgment on the first complaint. This motion was granted on default on June 20, with the direction to settle an order.

On June 21, defendant's counsel wrote a letter to the court requesting an additional 10 days to respond to the motion. In that letter, counsel advised the court that he caused a search to be made of his office for MMO's motion papers after seeing a letter from its counsel dated June 17. The motion papers, counsel averred, were found in a conference room and counsel did not know how they got there. He requested an extension from MMO's counsel but was refused.

MMO's counsel wrote a letter to the court objecting to defendant's request, arguing that the motion had been decided. He also contended that defendant had not demonstrated a reasonable excuse or a meritorious defense.

On June 24, 2005, MMO's counsel offered a proposed order granting for settlement six days hence. On June 29, defendant's counsel filed opposition papers to the summary judgment motion that led to the proposed order. The court did not respond or take any action with respect to the correspondence from counsel or the purported answering papers.

The clerk's office thereafter advised plaintiffs' attorney that the proposed order could not be located, and to resubmit a notice of settlement and proposed order. Defendant's counsel was copied on this correspondence. Plaintiffs submitted the proposed order, but were...