Court: Appellate Division of the Supreme Court of the State of New York; March 29, 1998; New York; State Appellate Court
In the case concerning additional premium recovery under liability, workers’ compensation, and umbrella liability policies, Utica Mutual Insurance Co. appealed two orders from the Supreme Court, Suffolk County. The first order, dated March 11, 1997, denied Utica Mutual's motion to intervene as a defendant and to vacate a default judgment against the defendants, Northwest Associates, Inc., New World Drywall, Inc., and Interboro Interiors, Inc., which had resulted from their failure to appear in court. The second order, dated September 23, 1997, denied Utica Mutual's motion for leave to reargue.
The appeal from the September order was dismissed since no appeal lies from an order denying reargument. The March order was affirmed, and the respondent was awarded costs.
Hanover Insurance Company sued the Northwest defendants for $422,852 in unpaid premiums after they failed to provide discovery, discharged their attorneys, and ceased operations, leading to a default judgment against them. Utica Mutual, which had issued a bond to cover any amounts owed to Hanover up to $325,000, sought to intervene and vacate the judgment to obtain discovery on the unpaid premiums.
The court ruled that Utica Mutual could not intervene because the default judgment did not have res judicata effect against it as the surety. Instead, the judgment served only as prima facie evidence of the bond's obligation. Utica Mutual retains the right to contest this presumption in a separate action regarding the bond, as it has adequate remedies available. Consequently, the court properly denied the intervention request.
