An insurer sat on its coverage case for more than a year and lost most of it - but an appeals court kept one claim alive.
Personal Service Insurance Company issued a car policy to a New York driver that ran from September 2019 to September 2020. On October 4, 2019, the policyholder allegedly took a 2006 Nissan sedan off the policy, according to a decision handed down August 19, 2026.
Weeks later, on November 25, 2019, that same Nissan - by then allegedly registered to another man - was allegedly involved in a three-car collision, hitting a car driven by another motorist and a parked vehicle. The motorist sued over his injuries in May 2020, naming the policyholder among the defendants.
That injury suit set up the coverage fight. In July 2022, Personal Service asked a court to declare that it owed the policyholder no defense and no coverage, arguing he had dropped the Nissan from the policy before the crash. The injured motorist answered. The policyholder and two other defendants never appeared.
The insurer's own timing then cost it much of the case. It first moved for a default judgment against the non-appearing defendants - and for summary judgment against the motorist who had answered - in November 2023. A judge denied that motion in March 2024 because the insurer failed to appear. The insurer tried again in September 2024 and moved to renew the earlier motion that October.
By then part of the case was lost. A judge refused to renew, and in April 2025 the court dismissed the whole complaint as abandoned under CPLR 3215(c), which forces dismissal when a plaintiff waits more than a year to pursue a default judgment. The statute says a court "shall not enter judgment but shall dismiss the complaint as abandoned . . . unless sufficient cause is shown why the complaint should not be dismissed."
The Appellate Division, Second Department, split the outcome. It affirmed dismissal against the three defendants who never appeared, faulting the insurer for not showing it moved within a year or offering a reasonable excuse. But it removed the dismissal against the motorist who had answered, holding the abandonment rule does not apply to a defendant who appears in the case.
That distinction decided what survived: the rule is mandatory against defaulting parties, but never reached the defendant who had filed an answer.
