PERSONAL SERVICE INSURANCE COMPANY v. Kenneth Smith, respondent. (2026)

DECISION & ORDER

In an action for a judgment declaring that the plaintiff is not obligated to defend or indemnify the defendant Jeffrey Rothauser in a certain underlying action, the plaintiff appeals from (1) an order of the Supreme Court, Kings County (Saul A. Stein, J.), dated February 25, 2025, and (2) an order of the same court (Richard Velasquez, J.) dated April 2, 2025.  The order dated February 25, 2025, denied the plaintiff's motion for leave to renew its prior motion for leave to enter a default judgment against the defendants Jeffrey Rothauser, Richard Rogers, and Cynthia Brown and for summary judgment on the complaint insofar as asserted against the defendant Kenneth Smith, which had been denied in an order of the same court (Saul A. Stein, J.) dated March 12, 2024.  The order dated April 2, 2025, insofar as appealed from, sua sponte, directed dismissal of the complaint as abandoned pursuant to CPLR 3215(c).

ORDERED that on the Court's own motion, the notice of appeal from so much of the order dated April 2, 2025, as, sua sponte, directed dismissal of the complaint as abandoned pursuant to CPLR 3215(c) is deemed to be an application for leave to appeal from that portion of the order, and leave to appeal is granted (see CPLR 5701[c] );  and it is further,

ORDERED that the order dated April 2, 2025, is modified, on the law, by deleting the provision thereof, sua sponte, directing dismissal of the complaint insofar as asserted against the defendant Kenneth Smith;  as so modified, the order dated April 2, 2025, is affirmed insofar as appealed from, without costs or disbursements;  and it is further,

ORDERED that the order dated February 25, 2025, is affirmed, without costs or disbursements.

The plaintiff issued a car insurance policy to the defendant Jeffrey Rothauser with a policy period beginning in September 2019 and ending in September 2020.  On October 4, 2019, Rothauser allegedly removed a 2006 Nissan sedan (hereinafter the subject vehicle) from the policy.  On November 25, 2019, the subject vehicle, which at the time allegedly was registered to the defendant Richard Rogers, allegedly was involved in a three-car collision with a vehicle operated by the defendant Kenneth Smith and a parked vehicle owned by the defendant Cynthia Brown.  In May 2020, Smith commenced an action to recover damages for injuries he allegedly sustained in the accident against, among others, Rothauser (hereinafter the underlying action).

In July 2022, the plaintiff commenced this action against the defendants for a judgment declaring that it is not obligated to defend or indemnify Rothauser in the underlying action.  Among other things, the plaintiff alleged that Rothauser had removed the subject vehicle from the insurance policy prior to the accident.  Smith interposed an answer to the complaint.  The plaintiff alleged that Rothauser, Rogers, and Brown failed to appear or answer the complaint.

On November 16, 2023, the plaintiff moved for leave to enter a default judgment against Rothauser, Rogers, and Brown and for summary judgment on the complaint insofar as asserted against Smith (hereinafter the first default judgment motion).  In an order dated March 12, 2024, the Supreme Court denied the motion because the plaintiff failed to appear.

On September 26, 2024, the plaintiff again moved for leave to enter a default judgment against Rothauser, Rogers, and Brown and for summary judgment on the complaint insofar as asserted against Smith (hereinafter the second default judgment motion).  Smith opposed the motion, contending, inter alia, that the plaintiff failed to take proceedings for the entry of default judgment within one year after the other defendants' defaults and failed to provide an explanation for its delay.  The plaintiff submitted a reply affirmation from its attorney in further support of the motion.

On October 29, 2024, the plaintiff moved for leave to renew the first default judgment motion.  Smith opposed the motion for leave to renew.

In an order dated February 25, 2025, the Supreme Court denied the motion for leave to renew.  In an order dated April 2, 2025, the court, among other things, sua sponte, directed dismissal of the complaint pursuant to CPLR 3215(c) as abandoned.  The plaintiff appeals from the orders dated February 25, 2025, and April 2, 2025.

Pursuant to CPLR 3215(c), “[i]f the plaintiff fails to take proceedings for the entry of judgment within one year after the default, the court shall not enter judgment but shall dismiss the complaint as abandoned ․ unless sufficient cause is shown why the complaint should not be dismissed.”  “ ‘The language of CPLR 3215(c) is not, in the first instance, discretionary, but mandatory, inasmuch as the courts “shall” dismiss claims (CPLR 3215[c] ) for which default judgments are not sought within the requisite one-year period, as those claims are then deemed abandoned’ ” (Noteworthy Foreclosure, LLC v. Rodney–Ross, 220 A.D.3d 676, 677, 197 N.Y.S.3d 295 [alteration omitted], quoting Giglio v. NTIMP, Inc., 86 A.D.3d 301, 307–308, 926 N.Y.S.2d 546).  “The mandatory language of the statute is subject to the exception that dismissal is not warranted where there is ‘sufficient cause shown’ as to why the complaint should not be dismissed” (Citibank, N.A. v. Kerszko, 203 A.D.3d 42, 49, 161 N.Y.S.3d 232).  “ ‘This Court has interpreted this language as requiring both a reasonable excuse for the delay in timely moving for a default judgment, plus a demonstration that the cause of action is potentially meritorious’ ” (U.S. Bank N.A. v. Dickerson, 223 A.D.3d 930, 932, 205 N.Y.S.3d 100, quoting Giglio v. NTIMP, Inc., 86 A.D.3d at 308, 926 N.Y.S.2d 546).

Here, the Supreme Court should not have, sua sponte, directed dismissal of the complaint insofar as asserted against Smith as abandoned pursuant to CPLR 3215(c).  CPLR 3215(c) is not applicable to Smith under the circumstances of this case, as he appeared in the action by answer (see Bank of Am., N.A. v. Sofer, 192 A.D.3d 652, 653, 139 N.Y.S.3d 895;  US Bank N.A. v. Juliano, 184 A.D.3d 597, 600, 125 N.Y.S.3d 126).

Regarding Rothauser, Rogers, and Brown, in its main brief on appeal, the plaintiff did not argue that it took proceedings for the entry of a default judgment within one year of those defendants' defaults and failed to articulate a reasonable excuse for its delay (see Weiner v. Anzaroot, 241 A.D.3d 1394, 1396, 241 N.Y.S.3d 486).  Moreover, the plaintiff had the opportunity in its reply papers in support of its second default judgment motion to raise those arguments but did not do so.  To the extent the plaintiff raises those arguments for the first time in its reply brief on appeal, those arguments are not properly before this Court (see Waldorf v. Maher, 221 A.D.3d 1052, 1052, 201 N.Y.S.3d 147;  Metwally v. City of New York, 215 A.D.3d 820, 825, 187 N.Y.S.3d 719).

Likewise, in its main brief, the plaintiff did not raise an issue regarding the denial of its motion for leave to renew the first default judgment motion.  “ ‘Thus, the plaintiff abandoned whatever argument [it] may have had with respect to the Supreme Court's denial of [its]” motion for leave to renew (Farah v. City of New York, 241 A.D.3d 1435, 1438–1439, 243 N.Y.S.3d 80, quoting Shaw v. Bluepers Family Billiards, 94 A.D.3d 858, 860, 941 N.Y.S.2d 691).

The plaintiff's contention that the Supreme Court erred in denying the first default judgment motion is not properly before this Court, as the plaintiff did not file a notice of appeal from the order dated March 12, 2024 (see CPLR 5515[1];  Kelsey v. Anonymous # 2, 241 A.D.3d 896, 897, 238 N.Y.S.3d 706;  U.S. Bank N.A. v. Seepersaud, 207 A.D.3d 499, 501, 169 N.Y.S.3d 536).

CONNOLLY, J.P., WARHIT, VOUTSINAS and GOLIA, JJ., concur.