We find the IAS Court's dismissal of the instant proceeding and the vacatur of the court's prior determination deleting an award of punitive damages against petitioners, as abandoned, an improvident exercise of discretion. Although the IAS Court, in its March 31, 1992 decision, had directed settlement of a judgment, thereby requiring that one be submitted within 60 days ( see generally, Martin v. Triborough Bridge Tunnel Auth., 180 A.D.2d 596), and while the more prudent course would have been to settle a judgment, petitioners' failure to do so should have been excused in view of the ongoing settlement negotiations ( see, Bythewood v. 333 E. Broadway Owners Corp., 201 A.D.2d 604), and continuing active litigation of the matter, with petitioners reasonably anticipating that respondent would seek vacatur of the very default that had resulted in the direction that petitioners settle a judgment. Under these circumstances the policy of determining issues on the merits is superior to the interest in finality. Even so, we agree with the IAS Court's denial of respondent's motion to vacate her default in view of her lengthy delay in seeking such relief based upon an excuse essentially amounting to law office failure.
Concur — Rosenberger, J.P., Wallach, Kupferman, Asch and Tom, JJ.