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Insurer loses most coverage bid after year-long delay
An appeals court kept one claim alive, because New York’s case-abandonment rule did not apply to the motorist who answered the lawsuit.
Personal Service Insurance Company sought a ruling that it owed no defense or coverage for a New York auto claim tied to a three-car collision in November 2019, but a prolonged litigation delay undermined most of its coverage case, according to Insurance Business.
The insurer argued the policyholder had removed a 2006 Nissan sedan from his policy before the crash, after which the injury lawsuit against the policyholder was filed in May 2020. Personal Service did not successfully pursue its default and summary-judgment efforts on the non-appearing defendants until far later, with motions first denied when it failed to appear.
In April 2025, the trial court dismissed the insurer’s complaint as abandoned under New York’s CPLR 3215(c), which requires dismissal when a plaintiff waits more than a year to pursue a default judgment absent sufficient cause. The Appellate Division, Second Department, split the outcome, affirming dismissal as to the three defendants who never appeared due to the insurer’s failure to move within a year or show a reasonable excuse.
However, the appellate court removed dismissal against the motorist who answered the lawsuit, ruling the abandonment rule does not apply to an appearing defendant. That distinction determined what survived of the insurer’s coverage fight.