Introduction

In Dagastino v. Crown Container, Inc., the Appellate Division, Second Department, refined the application of CPLR 1015 and 1021 in the context of significant procedural delays caused by an insurer liquidation stay and defense counsel’s inactivity. The decision underscores New York’s strong public policy favoring determinations on the merits and clarifies that even substantial gaps between a party’s death and a substitution motion may be excused where prejudice is not shown and the action appears potentially meritorious. The court also reaffirmed the rule that a verified complaint may serve as an affidavit of merit and that conclusory claims of prejudice based solely on elapsed time are insufficient to defeat substitution.

The plaintiffs were John Dagastino (the “injured plaintiff”), who alleged personal injuries from an April 28, 2011 automobile collision, and his spouse, Suzanne Dagastino (the “surviving plaintiff”), who sued derivatively. After multiple procedural detours—including a vacated note of issue, outstanding discovery, and a years-long stay arising out of Park Insurance Company’s liquidation—the injured plaintiff died on June 21, 2019. The surviving plaintiff eventually obtained limited letters of administration in April 2021 and moved in March 2023 to substitute as administrator, restore the matter to the trial calendar, and refile a note of issue. The Supreme Court, Queens County, denied the motion. On appeal, the Second Department modified, granting substitution but otherwise affirming.

Key Issues

• What constitutes a “reasonable time” to move for substitution under CPLR 1021 following a party’s death when an insurer liquidation stay has halted the case for years?
• What showing of prejudice must defendants make to oppose substitution, and what satisfies the requirement of “potential merit”?
• Whether the case should be restored to the trial calendar and a new note of issue permitted given the procedural history and outstanding discovery.

Parties

• Plaintiffs-Appellants: Suzanne Dagastino (individually and as administrator of the estate of John Dagastino). An appeal purportedly taken by the deceased, John Dagastino, was dismissed.
• Defendants-Respondents: Crown Container, Inc., et al. (insured by Park Insurance Company, which entered liquidation and prompted a stay of actions involving its insureds).

Summary of the Judgment

• The appeal purportedly taken by the deceased, John Dagastino, was dismissed because a deceased person cannot prosecute an appeal.
• The order of the Supreme Court denying substitution, restoration to the calendar, and leave to refile the note of issue was modified:
  • Modified to grant the surviving plaintiff’s motion under CPLR 1015 and 1021 to substitute herself, as administrator of John’s estate, in place of the deceased plaintiff.
  • As modified, the order was otherwise affirmed—meaning restoration to the trial calendar and leave to refile a note of issue remained denied at this stage.
• One bill of costs was awarded to the surviving plaintiff.

Procedural Timeline (Key Milestones)

• April 28, 2011: Motor vehicle collision.
• 2012: Action commenced.
• 2014: Defendants’ summary judgment motion denied; case set for trial.
• January 2015: Defense counsel change; note of issue vacated.
• February 2016: So-ordered stipulation for additional discovery.
• May 2018: Court denies, without prejudice, plaintiffs’ motion to restore due to outstanding discovery; directs a stipulation upon completion of discovery before filing a new note of issue.
• October 19, 2017–at least May 2021: Park Insurance Company liquidation proceeding; stay imposed against actions involving Park and its insureds.
• January/May 2019: Plaintiffs seek to schedule deposition and IME; defense cites liquidation stay and delays.
• June 21, 2019: Injured plaintiff dies.
• April 27, 2021: Surrogate’s Court grants limited letters of administration.
• May 11, 2021: Plaintiffs notify defense of appointment; defense notes the action is stayed “anyway.”
• March 9, 2023: Motion for substitution, restoration, and leave to refile note of issue.
• September 18, 2023: Supreme Court denies motion.
• August 13, 2025: Appellate Division modifies—grants substitution; otherwise affirms.

Analysis

Precedents Cited and Their Role

• Green v Maimonides Med. Ctr., 172 AD3d 824, 825; Aurora Bank FSB v Albright, 137 AD3d 1177, 1178
  • Holding: An appeal taken by a deceased party is jurisdictionally defective and must be dismissed.
  • Application: The Second Department dismissed the appeal “purportedly taken” by the deceased injured plaintiff.
• Reed v Grossi, 59 AD3d 509, 511; White v Diallo, 156 AD3d 664, 665
  • Principle: Motions for substitution must be made within a “reasonable time” (CPLR 1021), but New York maintains a strong policy favoring resolutions on the merits.
  • Application: Guided the court’s balancing of delay, prejudice, and merit in favor of substitution despite substantial time lapses.
• Terpis v Regal Hgts. Rehabilitation & Health Care Ctr., Inc., 108 AD3d 618, 619; Navas v New York Hosp. Med. Ctr. of Queens, 180 AD3d 796, 797–98
  • Principle: “Reasonable time” is assessed by examining diligence, prejudice, and potential merit. Even if the explanation for delay is unsatisfactory, substitution may be granted if there is no prejudice and the claim has potential merit.
  • Application: The court acknowledged a lack of diligence (two-year delay to appointment; two years more to move) but still granted substitution under the Navas/Hemmings rubric.
• Hemmings v Rolling Frito-Lay Sales, LP, 220 AD3d 754, 757
  • Principle: Reaffirms Navas—courts may grant substitution despite an unsatisfactory delay when prejudice is not shown and the claim appears meritorious.
  • Application: Anchored the decision to excuse the delay and permit substitution.
• A & J Concrete Corp. v Arker, 54 NY2d 870, 872; Juseinoski v Board of Educ. of City of N.Y., 15 AD3d 353, 356
  • Principle: A verified complaint can serve in lieu of an affidavit of merit.
  • Application: The injured plaintiff’s verified complaint satisfied the requirement to show “potential merit.”
• Petion v New York City Health & Hosps. Corp., 175 AD3d 519, 520
  • Principle: Conclusory allegations of prejudice grounded solely in the passage of time are insufficient.
  • Application: The defendants’ generalized prejudice arguments were rejected because they lacked specifics beyond elapsed time.
• Maspeth Fed. Sav. & Loan Assn. v Simon-Erdan, 67 AD3d 750, 751
  • Principle: Cited among authorities favoring decisions on the merits and emphasizing that relief may be appropriate absent concrete prejudice.
  • Application: Further supported granting substitution in the exercise of discretion.

Legal Reasoning

The court’s analysis proceeded under CPLR 1015 and 1021. While CPLR 1015 requires substitution upon a party’s death, CPLR 1021 imposes a “reasonable time” requirement. Reasonableness is not a rigid clock; it is a discretionary, multifactor inquiry evaluating diligence, prejudice, and the action’s potential merit.

The court recognized that the plaintiff’s timeline showed “a lack of diligence”: approximately two years elapsed between the injured plaintiff’s death (June 2019) and the surviving plaintiff’s appointment as administrator (April 2021), followed by another roughly two years before moving for substitution (March 2023). Ordinarily, such delay weighs against substitution (Terpis).

Nevertheless, the court invoked the Navas/Hemmings line of cases: even when the explanation for delay is unsatisfactory, substitution may be granted if the defendants cannot show prejudice and the claim has potential merit. The surviving plaintiff met the “potential merit” requirement by submitting the injured plaintiff’s verified complaint (A & J Concrete; Juseinoski). On prejudice, the defense offered only generalized assertions tied to the passage of time. Those assertions, without specifics of lost evidence, unavailable witnesses, or demonstrable impairment of the defense, are insufficient (Petion).

Significantly, the record demonstrated that the case had previously been trial-ready before defense counsel substitution, that the note of issue was vacated due to defense-side changes, and that the action was subsequently subject to a multi-year stay stemming from the liquidation of Park Insurance Company (the defendants’ insurer). Defense counsel’s own correspondence characterized cases involving Park as being “in a state of limbo,” and even after the administrator was appointed, defense counsel stated the case was “stayed anyway.” In the court’s view, both the liquidation stay and defense inaction contributed to any ostensible prejudice, undercutting defendants’ arguments. Against this backdrop, the Second Department held the Supreme Court “improvidently exercised its discretion” by denying substitution.

At the same time, the appellate court did not disturb the trial court’s denial of restoration to the calendar and leave to refile a note of issue. Earlier orders had identified outstanding discovery and set out a framework requiring the parties, once discovery was completed, to stipulate and present the matter to the trial scheduling part for permission to file a new note of issue and set a trial date. The record did not compel a finding that those prerequisites had been met. Calendar control and the supervision of discovery remain matters for the Supreme Court’s discretion; thus, those aspects of the order were affirmed.

What This Decision Adds

• Reaffirms that “reasonableness” under CPLR 1021 is flexibly applied, especially when extrinsic events (e.g., an insurer liquidation stay) and defense conduct materially contribute to delay.
• Reiterates that potential merit can be shown through a verified complaint, a practical and plaintiff-friendly evidentiary route at the substitution stage.
• Clarifies that generalized, time-based prejudice arguments are inadequate; defendants should expect to show concrete, case-specific prejudice if they wish to defeat substitution.
• Separates substitution from calendar restoration: even where substitution is granted, restoration and re-filing of a note of issue may appropriately await completion of court-ordered discovery or compliance with prior scheduling directives.

Impact and Implications

On Substitution Motions Under CPLR 1021

• Litigants facing long delays because of systemic events (e.g., insurer liquidations) have a reinforced pathway to substitution, even if there are significant gaps between death, appointment of a fiduciary, and motion practice.
• Defendants opposing substitution must marshal specific prejudice—such as lost records, deceased or unavailable witnesses, or demonstrable impairment in defending—rather than relying on passage of time.
• Plaintiffs can rely on a verified complaint to establish potential merit, streamlining substitution motions without requiring a separate affidavit of merit.

On Cases Involving Insurer Liquidations and Stays

• When a liquidation proceeding imposes a stay against the insurer’s insureds, time lost under the stay will weigh against a strict view of “diligence” in substitution timing.
• Defense counsel’s communications and responsiveness matter: acknowledgments that cases were in “limbo” and failure to re-engage can blunt later prejudice claims.

On Trial Calendar Management

• Granting substitution does not equate to immediate restoration to the trial calendar. Courts may insist on compliance with outstanding discovery and prior orders requiring stipulations before a new note of issue is filed.
• Parties should document completed discovery and, where required, jointly propose the procedural path to trial readiness consistent with earlier directives.

Complex Concepts Simplified

• CPLR 1015 (Death of a Party): When a party dies, the action cannot proceed against or by that party until a proper representative (e.g., an administrator or executor) is substituted.
• CPLR 1021 (Substitution Procedure): Requires that a motion to substitute the decedent’s representative be made “within a reasonable time.” Courts assess reasonableness by considering diligence, prejudice, and the claim’s potential merit.
• Verified Complaint as Affidavit of Merit: In New York practice, a complaint verified by someone with knowledge (often the plaintiff) may serve as an affidavit of merit for motions, including substitution. This obviates the need for a separate affidavit to show the case has arguable merit.
• Prejudice: To defeat substitution, defendants must show concrete prejudice (e.g., loss of evidence or witnesses) caused by the delay. Mere lapse of time is generally insufficient.
• Insurer Liquidation Stay: When an insurer enters liquidation, courts frequently stay actions against the insurer and its insureds to protect the liquidation process. Delays attributable to such stays often influence courts’ leniency in procedural timelines.
• Note of Issue and Restoration to Calendar: Filing a note of issue certifies that a case is trial-ready and places it on the trial calendar. If a note of issue is vacated, the case usually requires completion of any directed discovery and compliance with court protocols before a new note can be filed and the case restored to the calendar.
• Derivative Claim: A claim by a spouse (or sometimes another family member) for losses derivative of the injured person’s claim (e.g., loss of services and consortium).
• One Bill of Costs: The prevailing appellant (here, the surviving plaintiff) is awarded costs associated with the successful portion of the appeal, but only one “bill” regardless of the number of issues.

Practice Pointers

• Move to substitute promptly after appointment as fiduciary, but if delay occurs, document reasons—especially systemic obstacles like insurer stays—and maintain a record of communications with opposing counsel.
• Attach the verified complaint to your substitution motion to establish potential merit without a separate affidavit.
• Anticipate and rebut prejudice arguments: offer specifics showing preservation of evidence, available witnesses, and the case’s readiness posture.
• Distinguish between substitution and trial readiness: even after substitution is granted, be prepared to comply with all outstanding discovery and prior scheduling orders before seeking restoration and filing a new note of issue.
• Defense counsel should respond proactively during stays and post-stay periods; silence or delay can undermine later claims of prejudice.

Conclusion

Dagastino v. Crown Container, Inc. clarifies that the “reasonable time” requirement for substitution under CPLR 1021 remains a pragmatic, equitable standard. Even substantial delays—here, roughly four years from death to motion—may be excused where (i) the claim’s potential merit is shown (a verified complaint suffices), (ii) defendants cannot demonstrate concrete prejudice, and (iii) external factors like an insurer liquidation stay and defense conduct materially shaped the pace of the litigation. At the same time, the decision confirms that calendar management and trial readiness are distinct; courts may insist on completion of discovery and compliance with prior orders before restoring a case and allowing a new note of issue.

The ruling strengthens the litigants’ ability to preserve meritorious claims despite procedural hurdles created by systemic events and reaffirms New York’s enduring policy that controversies should be resolved on the merits. It also sends a clear signal that defendants must do more than invoke the passage of time to defeat substitution: they must substantiate prejudice with specifics.