PRELIMINARY STATEMENT

Transcription

1 SHORT FORM ORDER SUPREME COURT: STATE OF NEW YORK COUNTY OF NASSAU PRESENT: HON. IRA B. WARSHAWSKY, Justice. TRIAL/IAS PART 7 OCEAN SIDE INSTITUTIONAL INDUSTIES, INC. -against - Plaintiff BAYONNE MEDICAL CENTER, INC. Defendant. INDEX NO. : /2010 MOTION DATE: 2/23/2011 SEQUENCE NO. : 2 The following documents were read on this motion: Order to Show Cause, Motion to Vacate, Affirmation in Support... Affirmation in Opposition to Motion to Vacate... PRELIMINARY STATEMENT Defendant Bayonne Medical Center, Inc. (hereinafter "BMC" or "Defendant"), seeks an order vacating the Januar order granting default against the Defendant pursuant to CPLR CPLR 5015 (a)(l) and staying all proceedings until the motion has been decided pursuant to The Defendant argues that the case was in a "jursdictional limbo" and he was unable to answer the initial complaint until the Federal Cour had ruled on the motion to remove. Plaintiff Ocean Side Institutional Industries (hereinafter "Oceanside" or "Plaintiff' ) opposes the

2 granting of the order arguing that the Defendant is in default and consciously chose to serve its Answer long after the time to do so had expired. BACKGROUND Ocean Side fied a complaint alleging that BMC breached a 2008 agreement to provide linen services by failing to retur all linens provided by Ocean Side and by failng to account for those linens. The complaint further alleges that BMC breached a compromise agreement under which the amount owed to Ocean Side was reduced in order for an extension of the term of the linen services agreement. The nature of the instant motion requires a break down of the tortured procedural history ofthe case. Ocean Side served the complaint on BMC on July by personal service. Under CPLR ~ 320, the answer was due to be served on or before August On August, 2010, BMC filed a notice of removal to Federal Cour based on diversity of citizenship. This extended the date for BMC to fie its answer until August , now in federal cour. Furher investigation by defendant revealed that the case was not properly one of federal diversity and BMC indicated its intent to remand the case back to state cour on August correspondence between counsel for both paries occured mentioning an extension of time of two weeks for BMC to answer. This case was stil in federal cour. BMC subsequently fied a motion to voluntarily remand on August Defendant expected a speedy response to this unopposed application but it did not happen. On September , after defendant had inquired of the federal cour of the status of its application, the Federal Cour served, via Electronic Case Filng , an order granting BMC' s motion to voluntarily remand back to State Cour. On September 30, 2010, Ocean Side served its motion for default judgment by regular mail. On October BMC advised Ocean Side, via , that it would be responding to the complaint on Monday October On October 5, 2010, BMC served its answer to the complaint. On Januar , the Cour entered a Short Form Order dated Januar granting Ocean Side s Motion for Default Judgment. This was entered by the Nassau County Clerk' Office on Januar and served on Ocean Side on Januar 18, 2011.

3 The Plaintiff argues that there is no excuse for the Defendant to not have served or filed an answer in Federal Court while the motion to remand was pending. The Plaintiff points to FRCP 81 (c )(2) and points out that the Defendant improperly initiated the removal to begin with. The Defendant argues that this Cour lacked the jurisdiction to enter a default when the motion to remand was stil pending in the Federal Court. Defendant fuher argues that it was clear that the Federal Cour lacked subject matter jurisdiction and, as such, has no authority to take any action with respect to the case such as accepting an answer or any other responsive pleading. In the alternative, Defendant argues that it has established a meritorious defense and a reasonable excuse waranting the vacating ofthe default under CPLR (a)(i). DISCUSSION CPLR 9320 (a) provides a defendant with thirty days to serve an answer or notice of appearance or to file a motion that would toll the statutory period. Federal Rule of Civil Procedure 81 (c )(2)( c) provides that a defendant has seven days after notice of removal is fied to answer the initial complaint. Less clear is when the time the Defendant has to answer expires in the situation curently before the Cour. There is a dearh of case law on the time to file an answer upon remand. BMC relies on this fact and argues that it served its Answer to the complaint four working days after electronic service of the order granting the motion to remand and prior to its receipt of the motion for default judgment. The one case that is somewhat on topic deals with a par that would have been in default no matter what period of time the Cour decided it would have had to answer after remand since the answer was filed some five months after the remand. (North Country Communications Corp. v. Verizon New York Inc. 196 Misc.2d 149, (Sup Ct, Albany County 2003)). There is no question here that the Defendant' s delay in filing an answer was not that long. The most helpful thing gleaned from North Country is the inference that there is little controllng authority on point. (id). However, it does appear to the Court that the Defendant has played both the system and the Plaintiff. BMC has obtained numerous extensions of time to fie its answer and it also

4 removed the case to federal cour before itself initiating remand a mere few days later. Throughout this entire period, no answer was fied. There was nothing stopping the Defendant from fiing an answer in federal cour while the motion for remand was stil pending. At the very least, a broad across the board denial which could later have been amended, should have been fied. It is hard to envision the Federal Cour not accepting it. The lack of any response begets the questions of whether BMC is stallng and, if so, why? CPLR (a)(l) provides for relief from a part' s default when it can show proof of a meritorious claim or defense and a reasonable excuse for the default. (See also Abdul Hirschfield 71 A.D.3d 707, 708 (2d Dept 2010)). The decision to vacate a prior order or judgment is wholly within discretion of the cour. (Epps v. LaSalle Bus, Inc. 271 A.D.2d (2d Dept 2000). It appears that there are several worthy and meritorious defenses contained in the Paulosky affidavit. That being established, the Cour must determine whether there is a reasonable excuse for the default. This is not a case where the par held in default has offered no excuse at all. (See Bekker v. Fleischman 35 A.D.3d (2d Dept 2006)). Nor is it a case where the par is claiming it did not receive service of the summons or complaint. (See Gartner v. Unifed Windows, Doors and Siding, Inc. 71 A. 3d 631, (2d Dept 2010)). The Defendant was truly operating in a realm where jurisdiction was uncertain and an area without clear-cut guidance, Given the confusion regarding the time to file an answer upon remand, the Cour must, in the interest of fairness, put aside its concerns as to the Defendant' s stallng tactics and accept this as a reasonable excuse. Consequently, it is immaterial that the Paulosky affdavit was not submitted until the instant motion because Defendant believed that the answer was timely served. The motion by the Defendant is granted and the order entering default set aside. The previously served answer is to be accepted by plaintiff. To the extent that requested relief is not granted, it is denied.

5 ,,. Order directing an inquest set down for March 11, 2011 is vacated. The paries shall appear on March 11, 2011 for a preliminar conference. The paries are directed to continue with previously ordered mediation. This constitutes the Decision and Order of the Cour. Dated: March 2, 2011 ls. ENTf;REO MAR NASSAU COUNTY COUNTY CLERK' SOFF'CE