Aerovias De Mexico, S.A. De C.V. v. Malerba, Downes & Frankel

265 A.D.2d 214, 696 N.Y.S.2d 153, 1999 N.Y. App. Div. LEXIS 10497

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: October 19, 1999
• Status: Published

Opinion

—Order, Supreme Court, New York County (Beverly Cohen, J.), entered June 23, 1998, which, inter alia, granted defendants’ motion to vacate a default, unanimously affirmed, without costs.

Plaintiffs had a lien for medical expenses reimbursed by them to one of their employees, who was represented by defendants in an underlying personal injury action. The parties to the present action entered into negotiations to compromise the lien at 50 percent. After settling the underlying personal injury action, defendants sent plaintiffs a check for 50 percent of the lien, less one-third for its counsel fees in connection with obtaining the 50 percent recovery. Plaintiffs thereupon commenced this litigation alleging, inter alia, conversion of the one-third, fraud and deceit under Judiciary Law § 487, and impairment of plaintiffs’ subrogation rights and lien against the settlement.

On a motion to vacate a default, it is not necessary for a defendant to prove its defense, but only to set forth facts sufficient to make out a prima facie showing of a meritorious defense (Bergen v 791 Park Ave. Corp., 162 AD2d 330). Defendants, by asserting in evidentiary form that the parties had previously agreed to the presently disputed one-third reduction of plaintiffs’ lien recovery, and by adducing arguable support for their contention that the law provides that they may recover in quantum meruit from the lien holder for recovering amounts subject to the lien, have met this burden and the action against them should be litigated on the merits. Concur — Sullivan, J. P., Nardelli, Williams, Mazzarelli and Andrias, JJ.