AKOWUAH v. ANCRUM (2019)

Defendant's motion for an order vacating the judgment entered against him, staying execution of the judgment, declaring that defendant has fully performed with respect to the parties' terms of settlement, and sanctioning plaintiff's firm for the improper filing of a judgment pursuant to CPLR 5003-a(e) is denied.

This is an action by plaintiff to recover damages for personal injuries she allegedly sustained as a result of a motor vehicle accident involving defendant's vehicle. On March 20, 2019, defendant's insurer's claims adjuster emailed to plaintiff's counsel a letter tendering the $25,000.00 policy limit, and a release to be signed by plaintiff. In her email, the claims adjuster requested that plaintiff “return stip [sic] and release to our office” (emphasis added). The letterhead on the claims adjuster's tender letter bore a Dallas, Texas post office box address.

On or about March 27, 2019, plaintiff's counsel mailed the release and stipulation of discontinuance to defendant's counsel's office in Yonkers, New York. When plaintiff's counsel did not receive payment within the 21 days prescribed by CPLR 5003-a(a),¹ plaintiff's counsel entered judgment against defendant pursuant to CPLR 5003-a(e).

On April 24, 2019, the claims adjuster, not having received the release, emailed plaintiff's counsel, inquiring as to whether plaintiff's counsel had mailed the release. The next day, plaintiff's counsel filed the proposed judgment. Defendant issued payment on May 2, 2019, and filed the stipulation of discontinuance and this order to show cause on May 14, 2019. Plaintiff filed a partial satisfaction of judgment on June 10, 2019, indicating receipt of settlement proceeds in the amount of the policy limit.

In support of defendant's motion to vacate the judgment, defendant's counsel asserts that the delay in payment was due to plaintiff's failure to forward the release directly to the claims adjuster as purportedly directed, and that defendant's insurer acted promptly to ensure that payment was issued to plaintiff. Defendant's counsel asserts that her office does not have the authority or capacity to issue drafts. Defendant's counsel concedes that “the stipulation and release were received by the Allstate Claims office, but the release never made it to [the claims adjuster's] desk” (Kolodny affirmation at para. 7).

Pursuant to CPLR 5003-a(a), “When an action to recover damages has been settled, any settling defendant shall pay all sums due to any settling plaintiff within twenty-one days of tender, by the settling plaintiff to the settling defendant, of a duly executed release and a stipulation discontinuing [the] action executed on behalf of the settling plaintiff.” “Tender,” for purposes of CPLR 5003-a, means “to personally deliver or to mail, by registered or certified mail, return receipt requested” (CPLR 5003-a[g]). The statute does not specify to whom the tender must be made (e.g. the defendant him- or herself, defendant's counsel, the insurer, etc.). Should a settling defendant fail to timely pay, “plaintiff may enter judgment, without further notice, against such defendant [in] the amount set forth in the release, together with costs and lawful disbursements, and interest on the amount set forth in the release from the date that the release and stipulation discontinuing [the] action were tendered” (CPLR 5003-a[e]).

CPLR 5003-a(a) requires tender “by the settling plaintiff to the settling defendant,” and papers to be served upon a party in a pending action are to be served upon the party's attorney, except where otherwise prescribed by law or order of the court (see CPLR 2103[b]). Defendant does not identify any statute, court order or precedent imposing a requirement that plaintiff tender the stipulation and release to any person or entity other than defendant's counsel.²

“Contrary to defendant's contention, plaintiff satisfied [her] obligation pursuant to CPLR 5003-a by tendering a general release and stipulation of discontinuance to defendant's attorney” (Tencza v. St. Elizabeth Med. Ctr., 87 A.D.3d 1375, 1376, 930 N.Y.S.2d 520 [4th Dept. 2011]). The claims adjuster's email could not unilaterally impose an additional requirement upon plaintiff (see Klee v. Americas Best Bottling Co., Inc., supra), and plaintiff's tender of a release in the form prescribed by defendant's insurer (and consonant with CPLR 5003-a) was sufficient to comply with the prompt-payment statute (see Kumar v. Demasi, 170 A.D.3d 986, 96 N.Y.S.3d 600 [2d Dept. 2019]). Notably, defendant does not assert a defect or deficiency in the form or content of the stipulation of discontinuance or the release that plaintiff signed and returned. That defendant would have preferred that the tender of the papers be made to his insurer's claims adjuster does not, standing alone, alter the manner in which plaintiff could effect the tender under CPLR 5003-a(a) and CPLR 2103(b).

Defendant thus failed to establish that his payment was timely or that his untimely payment should be excused. Because defendant failed to establish that plaintiff's entry of judgment against him was without appropriate basis, sanctions against plaintiff are unwarranted.

Accordingly, it is

ORDERED, that defendant's motion for an order vacating the judgment entered against him, staying execution of the judgment, declaring that defendant has fully performed with respect to the parties' terms of settlement, and sanctioning plaintiff's firm for the improper filing of a judgment pursuant to CPLR 5003-a(e) is denied.

This constitutes the decision and order of the court.

FOOTNOTES

1.   “Where, as here, the release and stipulation of discontinuance are tendered by mail, the 21-day period is measured from receipt of the documents” (Klee v. Americas Best Bottling Co., Inc., 76 A.D.3d 544, 545, 907 N.Y.S.2d 260 [2d Dept. 2010]). Plaintiff's March 27, 2019 correspondence bears a date stamp of April 1, 2019; accordingly, payment was to be made by defendant -- but not necessarily received by plaintiff (see In re Zeeshan v. Brown, 2001 N.Y. Slip Op. 40249[U], 2001 WL 1470332 [App. Term 1st Dept. 2001]) -- by April 22, 2019 (see General Construction Law §§ 20, 25-a[1]).

2.   This decision does not foreclose the possibility that an agreement between the parties or a demonstrated, meaningful course of dealing between the parties could lead to a conclusion different from the one reached by the court. Here, the email from the claims adjuster referring to “our office” was insufficiently specific or clear to convey to plaintiff's counsel that payment — timely or otherwise — required submission of the closing papers directly to the claims adjuster. Additionally, defendant did not identify or establish a pattern of contact or conduct between plaintiff's counsel and defendant's counsel (or claims adjuster) sufficient that plaintiff's submission of closing papers to the claims adjuster should have been expected or presumed.

John R. Higgitt, J.