ONE YEAR TO MOVE TO DISMISS COUNTERCLAIM IN ACCIDENT CASE OR ELSE IT'S DEEMED ABANDONED

Case: Giglio v. NTIMP, Inc., doing business as Napper Tandy's Pub

Court: Supreme Court, Appellate Division, Second Department, New York.

Date: June 14, 2011

From: New York attorney Gary E. Rosenberg (personal injury and accident attorney and lawyer; serving Brooklyn Queens Bronx; Brooklyn Queens accident injury attorney).　

Comment: When someone being sued (a defendant) wants to make a claim against the party suing, the defendant serves a document called an "Answer" and includes a "Counterclaim."

DILLON, J.P. These appeals provide an occasion to clarify for the bar issues of timeliness and procedure related to default judgments sought against plaintiffs who fail to reply to defendants' counterclaims.

The facts underlying this appeal are tragic. On April 11, 2006, Robert A. Giglio, Sr. (hereinafter Robert Sr.), his 19-year old son, Robert A. Giglio, Jr. (hereinafter Robert Jr.), and Robert Sr.'s brother, Shawn P. Giglio (hereinafter Shawn), consumed alcoholic beverages at a pub owned by the defendant, NTIMP, Inc., doing business as Napper Tandy's Pub (hereinafter Napper Tandy), on County Road 83 in the Town of Brookhaven. Shawn thereafter drove from the pub in a vehicle owned by the defendant Kathleen P. D'Agostino, in which Robert Jr. was a passenger. The vehicle crashed into a tree and, as a result, Shawn and Robert Jr. were killed. The Chief Medical Examiner of the County of Suffolk determined that Shawn and Robert Jr.'s brain alcohol levels were .12% and .08%, respectively. On January 29, 2007, the plaintiff Susanne Giglio (hereinafter Susanne), Robert Jr.'s mother, was appointed as administrator of Robert Jr.'s estate.

Susanne, suing individually and in her capacity as administrator of the estate of Robert Jr., commenced this action together with Robert Sr. to recover damages against Napper Tandy and D'Agostino for this accident. The plaintiffs asserted causes of action against Napper Tandy alleging, inter alia, violations of General Obligations Law § 11-100 for the unlawful sale of alcoholic beverages to Robert Jr., who was a minor, and General Obligations Law § 11-101 for the unlawful sale of alcoholic beverages to Shawn at a time when Shawn was visibly intoxicated. The plaintiffs asserted a cause of action against D'Agostino, among other things, in her capacity as the owner of the motor vehicle operated by Shawn with her alleged knowledge and consent.

Napper Tandy interposed an answer dated May 2, 2007, denying the material allegations of the complaint, asserting 20 affirmative defenses, and interposing a cross claim against D'Agostino and a counterclaim against the plaintiff Robert Sr. Specifically, the counterclaim alleged that any injuries sustained by Robert Jr. In the accident were caused in whole or in part by the negligent acts of Robert Sr., which presumably allude to Robert Sr.'s acquiescence to the consumption of alcohol by Shawn and Robert Jr., and to Shawn's subsequent operation of D'Agostino's automobile. An affidavit of service evidences service of Napper Tandy's answer upon the plaintiffs' counsel on May 2, 2007, via regular mail.

Approximately 11 months later, D'Agostino and Shawn's estate settled with the plaintiffs for the combined sum of $50,000. In furtherance of that partial settlement, the settling parties executed a notarized general release, releasing D'Agostino and Shawn's estate, and their heirs, executors, administrators, successors, and assigns, from "all actions, causes of action, suits, debts, dues, sums of money ... damages, judgments, extants, executions, claims, and demands whatsoever." The release cited the sum of $50,000 as the consideration received and acknowledged by the plaintiffs, and there is no dispute that this $50,000 was, in fact, paid. In a decree dated August 20, 2008, the Surrogate's Court, Suffolk County, approved the settlement on behalf of Robert Jr.'s estate. Payment of the $50,000 settlement was then made by D'Agostino's insurer, Progressive Insurance Company, via three checks issued on or about August 27, 2008, payable to Robert Sr., to the plaintiffs' counsel, and to a funeral home, respectively.

Thereafter, Napper Tandy impleaded Dawn McNeil, as administrator of the estate of Shawn P. Giglio, by the filing and service of a third-party summons and complaint dated April 30, 2009. Issue was joined in the third-party action by service of an answer, which pleaded, as an affirmative defense, inter alia, the release provisions of General Obligations Law § 15-108.

Independent of the partial settlement and the third-party action, Napper Tandy moved, among other things, for a default judgment on its counterclaim against Robert Sr., based upon his failure to serve a reply to the counterclaim that had been asserted against him. The notice of motion was dated June 5, 2008, approximately 13 months after the service, on May 2, 2007, of the answer containing the counterclaim.

By notice dated June 23, 2008, the plaintiffs cross-moved to dismiss the counterclaim asserted against Robert Sr. or, alternatively, for leave to serve a late reply. The plaintiffs argued that more than one year had elapsed from the date upon which a reply to the counterclaim had become due and that, accordingly, the counterclaim should be dismissed as abandoned pursuant to CPLR 3215.

Napper Tandy opposed that branch of the cross motion which was to dismiss its counterclaim, arguing that it had timely moved for a default judgment against Robert Sr. by serving its notice of motion and supporting papers within one year of his default. Napper Tandy contended that Robert Sr.'s default did not occur until the lapse of more than 35 days after it had served the answer containing the counterclaim upon Robert Sr.'s attorney. Specifically, Napper Tandy argued that, by virtue of CPLR 303, Robert Sr.'s time for service of a reply to the counterclaim was 30 days rather than 20 days, because Robert Sr. had designated his attorney as his agent for service, and that when that 30-day period of time was added to the 5-day extension provided by CPLR 2103(b)(2) to account for the service by mail of the answer containing the counterclaim, Robert Sr. had a total of 35 days to reply to the counterclaim. By Napper Tandy's calculation, the additional 10 days afforded by CPLR 303 for the service of the reply meant that Robert Sr. was not in default unless he failed to serve a reply within 35 days after May 2, 2007, i.e., by June 6, 2007, that Robert Sr. was in default as of June 7, 2007, and that its motion for a default judgment against Robert Sr.--served on June 5, 2008, or less than one year after the default--was timely.

By separate notice of motion dated September 1, 2009, McNeil, as the administrator of Shawn's estate, moved pursuant to CPLR 3211(a)(5) to dismiss the third-party complaint on the ground that Shawn's estate was released from any and all liability by operation of the $50,000 settlement, the general release that was executed in furtherance of the settlement, and General Obligations Law § 15-108. Napper Tandy opposed the separate motion, arguing that the Surrogate Court's decree dated August 20, 2008, was limited to the release of D'Agostino, and that the $50,000 payment was made by D'Agostino's insurer solely on her behalf. Accordingly, Napper Tandy maintained that the written release did not bar its cause of action for contribution from Shawn's estate, and that, in any event, the Surrogate's Court never approved any settlement as to Shawn's estate.

The motions and cross motion were resolved by the Supreme Court in an order dated November 30, 2008. In that order, the Supreme Court, inter alia, granted that branch of the plaintiffs' cross motion which was pursuant to CPLR 3215(c) to dismiss Napper Tandy's counterclaim as abandoned, concluding that its motion for a default judgment against Robert Sr. was not made within one year of his default, as mandated by the statute. Additionally, the Supreme Court denied McNeil's motion pursuant to CPLR 3211(a)(5) to dismiss the third-party complaint, determining that, under the circumstances of the case, General Obligations Law § 15-108 did not preclude Napper Tandy's third-party cause of action for contribution.

McNeil appeals from so much of the order as denied her motion pursuant to CPLR 3211(a)(5) to dismiss the third-party complaint on the ground of release, and Napper Tandy separately appeals from so much of the same order as granted that branch of the plaintiffs' cross motion which was to dismiss its counterclaim against Robert Sr.

II. Dismisssal of the Counterclaim as Abandoned

The Supreme Court properly granted that branch of the plaintiffs' cross motion which was pursuant to CPLR 3215(c) to dismiss Napper Tandy's counterclaim against Robert Sr. CPLR 3215(c) provides that:

Here, Napper Tandy's motion for a default judgment on the counterclaim was untimely. CPLR 3012(a) requires that service of an answer or reply shall be made within 20 days after service of the pleading to which it responds. The affidavit of service for Napper Tandy's answer, containing the counterclaim against Robert Sr., evidences its service by regular mail on May 2, 2007. A reply to the counterclaim was, therefore, due 25 days later by virtue of the 5-day extension that is applicable since the reply would have been responsive to a pleading served by mail; thus, the reply was required to be served no later than May 27, 2007 (see CPLR 2103[b][2]; Carp v. Marcus, 105 A.D.2d 584, 585), after which Robert Sr. was in default. Since Robert Sr. did not serve a reply by that date, he was in default as of May 28, 2007. Napper Tandy admittedly did not serve its motion for a default judgment until June 5, 2008, more than one year after the date of default.

The papers submitted by Napper Tandy in support of its motion for a default judgment on the counterclaim failed to set forth any argument addressing the issue of whether it had a reasonable excuse for its failure to seek a default judgment against Robert Sr. within the requisite one-year period after his default. Rather, Napper Tandy merely argued that its motion was timely, an argument that is without merit. Where, as here, a party moving for a default judgment beyond one year from the date of default fails to address any reasonable excuse for its untimeliness, courts may not excuse the lateness and "shall" dismiss the claim pursuant to CPLR 3215.

Napper Tandy's contention on its appeal, that any violation of the one-year deadline of CPLR 3215(c) was due to excusable law office failure is unavailing. A "bald and unsubstantiated claim of law office failure" is insufficient to explain a delay in meeting the one-year deadline of CPLR 3215.

III. The Release of the Third-Party Defendant by Partial Settlement Under

The Supreme Court should have granted the third-party defendant's motion pursuant to CPLR 3211(a)(5) to dismiss the third-party complaint on the ground of release.

Here, the language of the release is neither vague nor ambiguous and it provides that the plaintiffs release Shawn's estate from, among other things, "all actions, causes of action [and] suits" in exchange for consideration of $50,000, "receipt whereof is hereby acknowledged." It is undisputed that the plaintiffs received monetary consideration of greater than one dollar as part of the agreement (see General Obligations Law § 15-108[d] [1] ), and that the release was delivered prior to the entry of judgment. Accordingly, Shawn's estate has no potential liability for contribution to Napper Tandy. Napper Tandy's contention, in essence, that the failure of Shawn's estate to specifically contribute to the $50,000 of consideration paid by D'Agostino's insurer takes the release outside the scope of General Obligations Law § 15-108(a), is unavailing. Here, the plain language of the release cites that consideration in the sum of $50,000 was exchanged for the release of both D'Agostino and Shawn's estate, and it is undisputed that the payment was, in fact, made.

QUEENS COUNTY COMMUNITIES

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