Matter of Motor Vehicle Accident Indemnification Corporation v. Marrero, 17 N.Y.2d 342 (1966)
When a party explicitly consents to an order, a failure to provide formal notice of the petition underlying the order is a procedural irregularity that does not oust the court of jurisdiction, and any right to contest the notice requirement may be waived by undue delay in raising the objection.
Summary
This case addresses whether the failure to provide formal notice to the Motor Vehicle Accident Indemnification Corporation (MVAIC) of a petition for settlement approval, as required by Insurance Law § 613, invalidates the settlement order. The Court of Appeals held that because MVAIC explicitly consented to the settlement and the subsequent court order, the lack of formal notice was a procedural irregularity, not a jurisdictional defect. Furthermore, MVAIC waived its right to contest the notice requirement by waiting over five months after receiving the order to raise the objection. The decision emphasizes the importance of timely objections and the effect of explicit consent in legal proceedings.
Facts
An infant, Marrero, was injured by an uninsured motor vehicle on June 13, 1960. Marrero filed a claim with MVAIC, which was accepted. After negotiations, Marrero accepted MVAIC’s settlement offer of $8,000 on September 11, 1963. MVAIC then forwarded assignments required by Section 613 of the Insurance Law and sent a “consent to settle” letter subject to court approval. Marrero filed a petition with the court for approval of the settlement without providing formal notice of the petition to MVAIC. The court approved the settlement, finding it just and reasonable.
Procedural History
After more than five months, MVAIC moved to vacate the settlement order, arguing it had not been served with the petition. Special Term granted the motion and vacated its prior order. The Appellate Division, Second Department, affirmed the Special Term’s decision. Marrero appealed to the Court of Appeals.
Issue(s)
Whether the failure to provide formal notice to MVAIC of the petition for settlement approval, as required by Insurance Law § 613, invalidated the settlement order when MVAIC had consented to the settlement and the subsequent order.
Holding
No, because formal notice to the corporation was not a defect ousting the court of jurisdiction, and MVAIC waived any right to contest the notice requirement by waiting more than five months after receiving the order before seeking to have it vacated.
Court’s Reasoning
The Court of Appeals reasoned that the lack of formal notice was, at most, a procedural irregularity and not a jurisdictional defect, particularly since MVAIC had fully consented to the procedure adopted by Marrero. The court emphasized that absent MVAIC’s consent and recommendation, the settlement could not have taken place. MVAIC’s letters to Marrero, conditioning settlement only on court approval, justified Marrero’s actions. The court pointed to CPLR 2001, indicating that the absence of formal notice was a mere procedural irregularity and should be disregarded. The court stated, “It is clear that MVAIC had fully consented to the procedure adopted by the claimant. Absent such consent and `a recommendation of the corporation’, settlement could not have taken place.” Furthermore, the court held that MVAIC waived any right to contest the notice requirement by waiting more than five months after receiving the order before moving to vacate it. This delay was deemed unreasonable, further supporting the reinstatement of the original settlement order. The court thus reversed the Appellate Division’s order and reinstated the Special Term’s settlement order.