Vacating a Judgment in New York? Key Case Holdings About Judicial Discretion

For this blog, I pulled out some of the "greatest hits" of case decisions regarding vacating (overturning) judgments in New York. From service of post-judgment notices to defenses in usury, courts have wide "discretion" when weighing the facts and consequences of each case.

Case 1: Court's Inherent Discretionary Power to Vacate Default Judgment After One Year

In an action for breach of contract, the Supreme Court conditionally granted the defendant's motion to vacate a default judgment entered against him for failing to appear at trial, despite the motion being made more than one year after the entry of the default judgment. The Appellate Division affirmed the decision, holding that a court may exercise its inherent discretionary power to vacate a default judgment upon a motion made after one year.

Key Points of Law/Holdings:

1. The one-year period set out in CPLR 5015(a) for vacating a default judgment is not a statute of limitations.
2. A court may exercise its inherent discretionary power to vacate a default judgment upon a motion made after one year.
3. The Appellate Division found that the Supreme Court did not abuse its discretion in granting the defendant's motion to vacate the default judgment based on the facts of the case.

Conclusion: This case demonstrates that courts have the inherent discretionary power to vacate default judgments, even when the motion to vacate is made more than one year after the entry of the default judgment. The one-year period provided in CPLR 5015(a) does not act as a strict statute of limitations, and courts may consider the specific facts of each case in deciding whether to exercise their discretionary power to vacate a default judgment.

Case Citation: Luna Baking Co., Inc. v. Myerwold, 415 N.Y.S.2d 88, 88 (N.Y. App. Div. 2d Dept. 1979).

Case 2: Failure to Update Address with DMV Alone Does Not Estop Defendant from Challenging Service of Process

The Appellate Division, Second Department, addressed whether a defendant's failure to update their address with the Department of Motor Vehicles (DMV), as required by statute, automatically estops the defendant from challenging the propriety of service of process at their former address. The court held that the mere failure to update one's address with the DMV does not, by itself, equate to a deliberate attempt to avoid service and does not warrant estopping the defendant from challenging service at the former address.

Key Points of Law/Holdings:

1. Estoppel may preclude a defendant from challenging the location and propriety of service if the defendant engaged in affirmative conduct that misled the plaintiff into serving process at an incorrect address.
2. A defendant's failure to update their address with the DMV, in appropriate cases, may be a relevant factor in determining whether the defendant deliberately attempted to avoid service, but it is not automatically determinative.
3. The mere failure to update one's address with the DMV, standing alone, does not equate to a deliberate attempt to avoid service and does not warrant estopping the defendant from challenging the propriety of service at a former address.

Conclusion:

This case clarifies that a defendant's failure to update their address with the DMV, as required by statute, does not automatically estop the defendant from challenging service of process at their former address. While such failure may be a relevant factor in determining whether the defendant deliberately attempted to avoid service, it is not conclusive. The decision emphasizes that estoppel is appropriate only when the defendant engages in affirmative conduct designed to mislead the plaintiff or avoid service.

Case Citation: Castillo-Florez v. Charlecius, 197 N.Y.S.3d 514 (N.Y. App. Div. 2d Dept. 2023).

Case 3: Court's Discretionary Power in Accepting Law Office Failure as Reasonable Excuse for Default

In Stango v. Byrnes, the plaintiff appealed an order denying his motion to vacate a previous order granting the defendant's unopposed motion for summary judgment in a personal injury action. The plaintiff allegedly slipped and fell on snow and ice on the exterior steps of the defendant's property.

Key points of law/holdings:

1. A party seeking to vacate an order entered upon default must demonstrate a reasonable excuse for the default and a potentially meritorious opposition to the motion.
2. The court improvidently exercised its discretion in not accepting the plaintiff's excuse of law office failure, considering factors such as the short delay, lack of willfulness or prejudice, and the strong public policy in favor of resolving cases on the merits.
3. Genuine issues of material fact regarding the plaintiff's responsibility for snow and ice removal and whether the defendant had constructive notice of the condition precluded summary judgment.

Conclusion: The Appellate Division held that the Supreme Court should have granted the plaintiff's motion to vacate the order granting summary judgment and thereupon denied the defendant's motion for summary judgment, as the plaintiff demonstrated a reasonable excuse for the default and a potentially meritorious opposition to the motion.

Case Citation: Stango v. Byrnes, 158 N.Y.S.3d 221, 221–24 (N.Y. App. Div. 2d Dept. 2021).

Case 4: Clerk's Authority to Enter Default Judgment Limited to Claims for Sum Certain

The Appellate Division, Second Department, addressed whether a clerk has the authority to enter a default judgment under CPLR 3215(a) when the plaintiff's summons with notice includes both a claim for a sum certain and alternative equitable causes of action. The court held that the clerk lacked the authority to enter a default judgment in such circumstances, as the equitable causes of action were not for a sum certain. However, the court found that vacating the clerk's judgment did not require vacating the underlying default, and remitted the matter for an inquest on damages.

Key Points of Law/Holdings:

1. CPLR 3215(a) permits a clerk to enter a default judgment only when the plaintiff's claim is for a sum certain or for a sum that can be made certain by computation.
2. A clerk lacks the authority to enter a default judgment when the plaintiff's summons with notice includes both a claim for a sum certain and alternative equitable causes of action that are not for a sum certain.
3. Vacating a clerk's judgment due to the clerk's lack of authority does not necessarily require vacating the underlying default; if the defendant fails to establish a reasonable excuse and meritorious defense, the default remains intact, and the matter should be remitted for an inquest on damages.

Conclusion: This case clarifies that a clerk's authority to enter a default judgment is limited to claims for a sum certain and that a clerk may not enter a default judgment when the plaintiff's pleading includes additional causes of action that are not for a sum certain. However, vacating the clerk's judgment on this basis does not automatically vacate the underlying default, and the defendant must still establish grounds for vacating the default under CPLR 5015(a).

Case Citation: Stephan B. Gleich & Associates v. Gritsipis, 927 N.Y.S.2d 349 (N.Y. App. Div. 2d Dept. 2011).

Case 5: Enforceability of Income Execution Against Foreign Corporation Employing Non-Resident Judgment Debtor

In Kaplan v. Supak & Sons Manufacturing Company, the Civil Court of the City of New York addressed whether a judgment creditor could enforce an income execution against a foreign corporation's New York office to reach the wages of a non-resident judgment debtor employed by the corporation outside of New York. The court held that the creditor failed to comply with the notice requirements under CPLR 5231 and could not bypass these requirements by serving the income execution directly on the corporation's New York office.

Key Points of Law/Holdings:

1. CPLR 5231 requires that notice be given to the judgment debtor before an income execution can be levied against the debtor's employer.
2. The court cannot ignore or rewrite the statutory requirements of CPLR 5231, even if the judgment debtor is a non-resident employed outside of New York.
3. CPLR 5226 and 5227 provide alternative procedures for reaching a non-resident judgment debtor's income, which require notice to the debtor and judicial supervision.

Conclusion: The Kaplan case demonstrates that judgment creditors must strictly comply with the notice requirements under CPLR 5231 when seeking to enforce an income execution, even when the judgment debtor is a non-resident employed by a foreign corporation with a New York office. The court cannot disregard these statutory requirements or create new procedures to bypass them.

Case Citation: Kaplan v. Supak & Sons Manufacturing Company, 46 Misc. 2d 574 (Civ. Ct. 1965).

CPLR 5231 Notice Requirements for Non-Resident Judgment Debtors

CPLR 5231 is the New York statute that governs income executions, which is a legal process that allows a judgment creditor to garnish a portion of a judgment debtor's wages to satisfy a judgment. The Kaplan case interprets and applies the requirements of CPLR 5231.

According to CPLR 5231 and the Kaplan decision:

1. The judgment creditor must first deliver the income execution to the sheriff of the county where the judgment debtor resides or, if the debtor is a non-resident, the county where the debtor is employed.
2. The sheriff must then serve the income execution on the judgment debtor, giving the debtor notice of the garnishment and an opportunity to pay voluntarily before the execution is served on the debtor's employer. This notice requirement applies even if the judgment debtor is a non-resident employed outside of New York.
3. Only after the judgment debtor has been served and given the opportunity to pay can the sheriff then serve the income execution on the debtor's employer (the "garnishee"), requiring the employer to withhold a portion of the debtor's wages.
4. If the judgment debtor is a non-resident and not employed in New York, the judgment creditor cannot bypass the notice requirement by serving the income execution directly on the debtor's employer at its New York office. Instead, the creditor must use alternative methods under CPLR 5226 or 5227, which involve seeking a court order and providing notice to the debtor.

The Kaplan court emphasizes that the notice requirement is a crucial part of the statutory scheme and cannot be ignored or circumvented by the courts, even in situations where the judgment debtor is a non-resident employed outside of New York. The legislature designed the statute to ensure that all judgment debtors receive proper notice before their wages are garnished.

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Limitations on NY Sheriffs Serving Income Execution Notices on Non-Resident Debtors Under CPLR 5231

Based on the court's interpretation of CPLR 5231 in Kaplan v. Supak & Sons Manufacturing Company, the income execution must be served on the judgment debtor by the sheriff of the county where the judgment debtor resides or, if the debtor is a non-resident, the county where the debtor is employed.

In situations where the judgment debtor neither resides nor works in New York, the court suggests that the judgment creditor must use alternative methods under CPLR 5226 or 5227 to reach the debtor's income. These methods involve seeking a court order and providing notice to the judgment debtor in the same manner as a summons or by registered or certified mail.

The court in Kaplan does not indicate that a New York sheriff or marshal can satisfy the notice requirement under CPLR 5231 by serving an out-of-state judgment debtor who does not work in New York. The statute appears to contemplate service by the sheriff of the county where the debtor resides or works, and the court emphasizes that this requirement cannot be ignored or circumvented.

Therefore, based on the Kaplan decision, if the judgment debtor neither resides nor works in New York, a New York sheriff or marshal would not be able to satisfy the notice requirement under CPLR 5231. The judgment creditor would need to use the alternative methods provided in CPLR 5226 or 5227, which involve court supervision and provide for service of notice in a manner similar to service of a summons or by registered or certified mail.

Case 6: Service of Income Execution on Non-Resident Judgment Debtor Employed Outside New York

In The Oystermen's Bank & Trust Co. v. Manning, the Supreme Court, New York County, addressed whether an income execution could be served on a judgment debtor who neither resided nor was employed in New York, but whose employer was authorized to do business in the state. The court held that service of the income execution could be made through the sheriff of another state on the non-resident debtor as a preliminary condition to executing on the debtor's employer located in New York.

Key Points of Law/Holdings:

1. Under the Civil Practice Act, a garnishee execution served on an employer who could be reached within the state was jurisdictionally valid and authorized.
2. CPLR 5231(b) and (c) can be adjusted to allow service of an income execution on a non-resident, non-employee judgment debtor through the sheriff of another state, giving the debtor the required notice and opportunity to pay before executing on the employer.
3. CPLR 5240 gives the court latitude to regulate, extend, or modify the use of any enforcement procedure, including substituting an equivalent form of notice to preserve the purposes intended and facilitate the enforcement of the judgment.

Conclusion:

The Oystermen's Bank & Trust Co. v. Manning case establishes that service of an income execution on a non-resident judgment debtor employed outside of New York can be made through the sheriff of another state as a preliminary condition to executing on the debtor's employer located in New York. This holding allows judgment creditors to retain jurisdiction over employers doing business in New York while still providing the necessary notice to the judgment debtor.

Case Citation: The Oystermen's Bank & Trust Co. v. Manning, 59 Misc. 2d 144, 298 N.Y.S.2d 355 (Sup. Ct. 1969).

Case 7: Application of New York Usury Law to Debt Purchased from a National Bank

In Madden v. Midland Funding, LLC, the United States District Court for the Southern District of New York addressed whether New York's usury law applies to debt purchased by a third-party debt collector from a national bank. The plaintiff, a New York resident, alleged that the defendants violated the Fair Debt Collection Practices Act (FDCPA) and New York's usury law by charging interest above the state's 25% cap on her defaulted credit card debt, which the defendants had purchased from a national bank.

Key Points of Law/Holdings:

1. Under New York law, if the agreement governing the debt purports to be governed by the law of a state with no usury cap, applying that state's law would violate New York's fundamental public policy against usury. In such cases, New York's usury law applies.
2. New York's criminal usury cap of 25% applies to prevent a creditor from collecting interest above that rate on defaulted debt, even where the civil usury cap does not apply.
3. Certification of a class action was appropriate for the plaintiff's FDCPA and state law claims, as common questions predominated over individual issues, and a class action was the superior method for adjudicating the controversy.

Conclusion: This case clarifies that when a third-party debt collector purchases debt originated by a national bank, New York's usury law will apply if the original agreement purports to be governed by the law of a state with no usury cap, as applying that state's law would violate New York's fundamental public policy. The court's decision to certify the class action allows the plaintiff to efficiently pursue her claims on behalf of similarly situated New York borrowers.

Case Citation: Madden v. Midland Funding, LLC, 237 F. Supp. 3d 130 (S.D.N.Y. 2017).

Case 8: Unauthorized Filing of UCC-1 Financing Statement to Protect Alleged "Common-Law" Lien

In McDaniel v. 162 Columbia Heights Housing Corporation, the Supreme Court of Kings County, New York, addressed whether the plaintiff had properly filed a UCC-1 financing statement against a residential cooperative unit to protect an alleged "common-law" purchase-money lien. The plaintiff claimed to have advanced substantial sums to the defendant corporation to settle a prior legal action, with the understanding that she would acquire the proprietary lease and shares for the unit.

Key Points of Law/Holdings:

1. The plaintiff did not possess a valid "common-law" purchase-money lien on the proceeds of the sale of the unit that justified filing a UCC-1 financing statement, as her claim was disputed and unliquidated.
2. The plaintiff did not meet the definition of a "secured party" under UCC 9-102(a)(72) and had merely an inchoate, contested claim against the defendant.
3. UCC 9-509 did not authorize or permit the plaintiff to file a UCC-1 financing statement, as there was no authenticated record in which the defendant authorized the filing, and no valid security agreement existed between the parties.

Conclusion: The court held that the plaintiff improperly filed the UCC-1 financing statement and directed her to terminate it by filing a termination statement. The defendant was awarded $500 in statutory damages pursuant to UCC 9-625(e)(3) but failed to demonstrate actual losses warranting additional damages. This case clarifies that a party cannot unilaterally file a UCC-1 financing statement to protect an alleged "common-law" lien without meeting the requirements of UCC Article 9.

Case Citation: McDaniel v. 162 Columbia Heights Hous. Corp., 21 Misc. 3d 244, 863 N.Y.S.2d 346 (Sup. Ct. 2008).

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Case 9: Appellate Court Exercises Equity Power to Vacate Default Judgment of Foreclosure for Non-Payment of Minor Interest Amount

In In re Foreclosure of Tax Liens, the Supreme Court, Appellate Division, Fourth Department, addressed whether a default judgment of foreclosure against a homeowner for alleged non-payment of $24 in interest on overdue property taxes should be vacated. The court held that exercising its equity power to vacate the default judgment was appropriate due to the disproportionately harsh result.

Key points of law/holdings:

1. The Supreme Court erred in determining that it lacked the inherent authority to vacate the default judgment "for sufficient reason and in the interests of substantial justice."
2. The court improvidently exercised its discretion in denying the homeowner's motion to vacate the default judgment.
3. The Appellate Division exercised its broad equity power to vacate the default judgment, as the entry of a default judgment based on the failure to pay a minor amount of interest would result in a disproportionately harsh result.

Conclusion: The Appellate Division reversed the order and vacated the default judgment, emphasizing that courts have the inherent authority to vacate default judgments in the interests of substantial justice. The main takeaway is that courts may exercise their equity power to provide relief from disproportionately harsh default judgments, particularly when the underlying issue involves the non-payment of a minor amount.

Case Citation: In re Foreclosure of Tax Liens, 872 N.Y.S.2d 805, 805–06 (N.Y. App. Div. 4th Dept. 2009).

Case 10: Court Abused Discretion in Vacating Default Judgment Based on Purported Inconsistencies in Plaintiff's Allegations

In Woodson v. Mendon Leasing Corp., the Court of Appeals of New York held that the Supreme Court abused its discretion in vacating a default judgment against a truck driver, which was based on purported inconsistencies between the plaintiff's allegations in her verified complaint and statements made in a later deposition. The plaintiff, whose son was struck by a livery cab after it collided with the truck driver's vehicle, had obtained a default judgment against the truck driver in a personal injury action.

Key points of law/holdings:

1. A court may vacate its own judgment for sufficient reason and in the interests of substantial justice, in addition to the statutory grounds under CPLR 5015(a).
2. A court's decision to vacate a default judgment will be reviewed on appeal for an abuse of discretion.
3. The vacatur of the default judgment was an abuse of discretion, as the plaintiff consistently alleged that both the cab and truck driver were to blame for the collision, even though their relative fault could not be established with certainty absent a trial, and the plaintiff had personal knowledge of the incident.

Conclusion: The Court of Appeals reversed the Appellate Division's order and reinstated the default judgment, emphasizing that courts should not vacate default judgments based on minor inconsistencies in a plaintiff's allegations when the plaintiff has been consistent in asserting the key elements of the claim and had personal knowledge of the incident. The main takeaway is that courts must exercise their discretion to vacate default judgments judiciously and only when there are compelling reasons to do so.

Case Citation: Woodson v. Mendon Leasing Corp., 790 N.E.2d 1156, 1157–62 (N.Y. 2003).

Case 11: Court's Inherent Power to Set Aside Judgments and Allow Intervention by Interested Parties

In Ladd v. Stevenson, the New York Court of Appeals addressed the court's authority to set aside a judgment and permit interested parties to intervene and defend the action. The plaintiff sought specific performance of an alleged agreement to execute a mortgage on real estate, but the property had been subsequently sold to new owners. The court allowed the new owners and the estate of a prior owner to intervene and ultimately dismissed the plaintiff's complaint on the merits.

Key points of law/holdings:

1. The court's power to set aside a judgment and allow new parties to defend is not restricted to the cases of "mistake, inadvertence, surprise, or excusable neglect" mentioned in the Code of Civil Procedure, but it may exercise its inherent power over its own judgments for sufficient reason in the furtherance of justice.
2. Under the Code of Civil Procedure, a subsequent purchaser and their grantees, whose interest in land may be affected by the judgment, must be made a party to the action upon their application.
3. A parol agreement to give a lien on land, without part performance, cannot be specifically enforced.

Conclusion: The Court of Appeals affirmed the order and judgment, emphasizing the court's inherent power to set aside judgments and allow interested parties to intervene when necessary to further justice. The main takeaway is that courts have broad discretion to manage their judgments and ensure that all parties whose rights may be affected have an opportunity to be heard.

Case Citation: Ladd v. Stevenson, 19 N.E. 842 (N.Y. 1889).

Case 12: Elements and Proof Requirements for Account-Stated Claims in New York

In Fleetwood Agency, Inc. v. Verde Electric Corp., the New York Appellate Division, Second Department, addressed the requirements for establishing an account-stated claim and the standards for summary judgment in such cases. The court reviewed a lower court's decision granting summary judgment to Fleetwood Agency on claims including breach of contract, account stated, and unjust enrichment against Verde Electric Corp.

Key Points of Law/Holdings:

1. An account stated is defined as an agreement between parties based on prior transactions concerning the correctness of account items and balance due.
2. An agreement for an account stated can be express or implied from the retention of an account rendered for an unreasonable period without objection and from surrounding circumstances.
3. To defeat a motion for summary judgment on an account-stated claim, the defendant must raise triable issues of fact, such as disputing the amount due, questioning the pricing's compliance with industry standards, or challenging unjust enrichment claims.

Conclusion: The main takeaway from this case is that while plaintiffs can establish a prima facie case for account stated through evidence of rendered invoices and lack of objection, defendants can defeat summary judgment by raising factual disputes about the account's validity or fairness. This ruling emphasizes the importance of thorough documentation and timely communication in business transactions to support or defend against account stated claims.

Case Citation: Fleetwood Agency, Inc. v. Verde Elec. Corp., 925 N.Y.S.2d 576 (N.Y. App. Div. 2d Dept. 2011).

Case 13: Vacating Default Judgments: Balancing Excusable Default and Meritorious Defense

In this case, the Appellate Division reversed a lower court's denial of the defendants' motion to vacate a default judgment. The court found that the defendants had shown some merit to their defense and that their default was excusable given the circumstances. The court emphasized the preference for cases to be decided on their merits rather than by default.

Key Legal Principles:

1. Two crucial factors in motions to open defaults are whether the default is excusable and whether the moving party has shown merit to their substantive position.
2. Courts prefer cases to be decided on their merits rather than by default.
3. The extreme sanction of denying a party the opportunity for adjudication on the merits is not warranted when less severe conditions, such as posting a bond, can sufficiently protect the other party's interests.

Conclusion: The main takeaway is that courts should carefully balance the circumstances of a default against the merits of the case when considering motions to vacate default judgments. Where there is some merit to the defense and the default is not egregious, courts should lean towards allowing the case to proceed on its merits, potentially with protective conditions imposed.

Citation: DFI Communications, Inc v Golden Penn Theatre Ticket Serv, 87 AD2d 778 [1st Dept 1982]

Case 14: Vacating Default Judgments: Court's Inherent Discretionary Power and Substantial Justice

In this case, the Appellate Division affirmed a lower court's decision to partially vacate a default judgment against an individual buyer in a contractual indemnification action. The court upheld the decision to vacate based on the court's inherent discretionary power to ensure substantial justice, particularly when there were significant concerns about the factual basis and validity of the judgment against the individual personally.

Key Legal Principles:

1. Courts retain inherent discretionary power to vacate their own judgments for sufficient reason and in the interests of substantial justice, beyond the grounds explicitly stated in CPLR 5015.
2. The decision to vacate a default judgment lies within the discretion of the trial court and should not be disturbed unless it reflects an improvident exercise of discretion.
3. There is a strong policy preference for resolving issues on the merits rather than through default judgments.

Conclusion: The main takeaway is that courts have broad discretion to vacate default judgments in the interest of substantial justice, particularly when there are significant questions about the factual basis for the judgment. This discretion allows courts to ensure fair outcomes even when traditional grounds for vacating a default judgment may not be met.

Citation: Gurin v Pogge, 112 AD3d 1028 [3d Dept 2013]

Case 15: Excusing Default of Unrepresented Party in Support Modification Proceedings

In this case, Harold J. Conklin's initial application for downward modification of his support obligation was dismissed due to his failure to appear. He later reapplied, explaining that he was unrepresented and unaware of the proper procedure when he missed the hearing. The Family Court vacated the dismissal and heard the new application. The Appellate Division affirmed this decision, finding it within the court's discretion to excuse the default of an unrepresented party under these circumstances.

Key Legal Principles:

1. Courts have discretion to vacate default dismissals, particularly when the defaulting party was unrepresented at the time of default.
2. An application to vacate a default order does not need to be made to the judge who issued the order if it was made upon a default.
3. The circumstances of the default, including the party's lack of representation, are relevant factors in determining whether to vacate a dismissal.

Conclusion: This case underscores the court's willingness to accommodate unrepresented parties who make good-faith efforts to comply with legal procedures. It demonstrates that courts may exercise leniency in vacating default dismissals when the circumstances, particularly lack of representation, justify such action. This approach promotes access to justice for pro se litigants in family court proceedings.

Citation: Conklin v Conklin, 90 AD2d 817 (2d Dept 1982)

Case 16: Vacating Default Judgment in Defamation Case Due to Reasonable Excuse

In this case, the plaintiff appealed the denial of her motion to vacate a dismissal order in her defamation lawsuit against Defendant. The Appellate Division reversed the lower court's decision, finding that Ruiz had demonstrated a reasonable excuse for her failure to oppose the motion to dismiss. The court considered various hardships Ruiz faced, including job loss due to COVID-19, recent childbirth, financial constraints, and abandonment by her counsel.

Key Legal Principles:

1. Courts have discretion to vacate default judgments when the defaulting party demonstrates a reasonable excuse and a potentially meritorious claim.
2. Personal hardships, such as those related to the COVID-19 pandemic, financial difficulties, and abandonment by counsel, can constitute a reasonable excuse for default.
3. A motion to vacate a default judgment must be timely filed within one year of service of the order, as per CPLR 5015(a)(1).

Conclusion: This case highlights the court's willingness to consider extenuating circumstances when evaluating motions to vacate default judgments, particularly in the context of the COVID-19 pandemic and its widespread impacts. It underscores the importance of presenting a comprehensive explanation of hardships and demonstrating a potentially meritorious claim when seeking to vacate a default judgment.

Citation: Ruiz v Laophermsook, 211 AD3d 496 (1st Dept 2022)

Case 17: Vacatur of Default Judgment: Balancing Excusable Default and Meritorious Defenses

In an action involving a disputed stock purchase agreement, the lower court initially granted a default judgment against defendants who failed to appear or answer. The appellate court reversed this decision, finding that vacatur of the default judgment was warranted despite defendants' lack of a fully satisfactory excuse for their default.

Key Legal Principles:

1. Lack of English fluency alone is not a reasonable excuse for default, but may be considered alongside other factors.
2. Courts should consider whether the default was willful, part of a pattern of dilatory behavior, and whether the plaintiff would be prejudiced by vacatur.
3. There is a strong public policy favoring disposition of cases on their merits, which can outweigh deficiencies in the excuse for default.

Conclusion: The main takeaway is that courts should take a holistic approach when considering motions to vacate default judgments, balancing the quality of the excuse, the presence of meritorious defenses, and the overarching policy of resolving disputes on their merits. Even when the excuse for default is weak, vacatur may still be appropriate if other factors strongly favor it.

Citation: Mejia v De La Rosa, 210 AD3d 506 (1st Dept 2022)

Case 18: Vacating Default Judgment in Legal Malpractice Action: Reasonable Excuse and Meritorious Claim

Former clients sought to vacate a default judgment that dismissed their legal malpractice complaint against their attorney. The lower court denied the motion to vacate, but the appellate court reversed, finding that the clients had demonstrated both a reasonable excuse for their default and a potentially meritorious cause of action.

Key Legal Principles:

1. Law office failure, such as miscalendaring a motion, can constitute a reasonable excuse for default under CPLR 5015(a)(1) and 2005.
2. To vacate a default judgment, the moving party must demonstrate both a reasonable excuse for the default and a potentially meritorious cause of action or defense.
3. There is a strong public policy in New York favoring the disposition of cases on their merits, which courts should consider when evaluating motions to vacate default judgments.

Conclusion: The main takeaway is that courts should liberally grant motions to vacate default judgments when the moving party provides a reasonable excuse for the default and demonstrates a potentially meritorious claim, especially in light of the policy favoring resolution of cases on their merits. Even minor law office failures can constitute reasonable excuses when properly documented.

Citation: Cornwall Warehousing, Inc. v Lerner, 171 AD3d 540 (1st Dept 2019)

Case 19: Vacating Default Judgments: CPLR 317 and 5015(a) Standards and Judicial Discretion

A plaintiff sued two companies for breach of contract, serving one company through the Secretary of State. The served company failed to answer due to an outdated address on file, resulting in a default judgment. The company moved to vacate the default judgment. The trial court granted the motion, but the Appellate Division reversed. The Court of Appeals then considered whether the trial court abused its discretion in vacating the default judgment.

Key Legal Principles:

1. Under CPLR 317, a defendant served by means other than personal delivery may seek to vacate a default judgment within one year of learning of it, without showing a "reasonable excuse" for the delay.
2. Courts have discretion to consider a motion under CPLR 5015(a) as also made under CPLR 317, even if the latter is not explicitly cited.
3. While relief under CPLR 317 is not automatic, a defendant meeting its requirements is normally entitled to relief unless there was a deliberate attempt to avoid notice.

Conclusion: The main takeaway is that courts have significant discretion in vacating default judgments, particularly under CPLR 317, which provides a more lenient standard than CPLR 5015(a). When a corporate defendant is served through the Secretary of State and fails to receive actual notice due to an outdated address, courts should consider various factors, including the length of time the address was outdated, before deciding whether to vacate the default judgment.

Citation: Eugene Di Lorenzo, Inc. v A.C. Dutton Lbr. Co., Inc., 67 NY2d 138 (1986)

Case 20: Dismissal for Failure to Comply with CPLR 3216 90-Day Notice

In a personal injury and wrongful death action, the plaintiffs failed to file a note of issue or move to vacate or extend the 90-day notice served under CPLR 3216. The lower court denied the defendant's motion to dismiss and granted plaintiffs' cross-motion to extend time. On appeal, the court reversed, dismissing the complaint and all related claims.

Key Legal Principles:

1. A party served with a 90-day notice under CPLR 3216 must either file a note of issue or move to vacate/extend the notice before the default date.
2. Failing to take either action, the party must demonstrate both a justifiable excuse for non-compliance and a meritorious cause of action.
3. A conclusory affidavit of merit stating defendants were negligent is insufficient to demonstrate a meritorious cause of action.

Conclusion: The main takeaway is that courts will strictly enforce the requirements of CPLR 3216, and plaintiffs must provide specific, non-conclusory evidence of merit to avoid dismissal when they fail to comply with a 90-day notice. Mere assertions of negligence are insufficient.

Citation: Smith v City of New York, 237 AD2d 344 (2d Dept 1997)

Case 21: Vacating Default Judgment in Tax Lien Foreclosure

This case involves a tax lien foreclosure on a commercial property. After a default judgment and foreclosure sale, the property owner sought to vacate the judgment and set aside the sale, claiming lack of notice. The lower court granted the motion conditionally, but the appellate court reversed, denying the property owner's request to vacate the default judgment and set aside the foreclosure sale.

Key Legal Principles:

1. To vacate a default under CPLR 5015(a)(1), a defendant must demonstrate both a reasonable excuse for the default and a potentially meritorious defense.
2. Failure to receive notice due to not updating an address with the Secretary of State does not constitute a reasonable excuse for default.
3. Under CPLR 317, a defendant seeking to vacate a default must show service other than by personal delivery, lack of timely actual notice, and a meritorious defense.

Conclusion: The court's decision emphasizes the importance of maintaining current contact information with the Secretary of State and the difficulty of vacating default judgments in tax lien foreclosure cases. Property owners must be vigilant in monitoring their tax obligations and legal notices to avoid losing their properties through default judgments.

Citation: NYCTL 2015-A Tr. v 731 Bergen, LLC, 172 A.D.3d 1391, 99 N.Y.S.3d 660 (2d Dep't 2019)

Case 22: Denial of Leave to Serve Late Answer in Mortgage Foreclosure Action

In a mortgage foreclosure action, a mortgagee appealed a lower court's decision denying its motion for default judgment and granting the mortgagor's cross-motion for leave to serve a late answer. The appellate court reversed, finding the mortgagor failed to demonstrate a reasonable excuse for the default and that the mortgagee was entitled to a default judgment.

Key Legal Principles:

1. To successfully oppose a motion for default judgment, a defendant must demonstrate both a reasonable excuse for the default and a potentially meritorious defense.
2. Claims of ignorance of the law or lack of understanding of the need to serve an answer do not constitute a reasonable excuse for default.
3. Participation in mandatory foreclosure settlement conferences does not automatically excuse a default in answering the complaint, especially when the first conference occurs after the time to answer has expired.

Conclusion: The court's decision emphasizes the importance of timely responsive pleadings in foreclosure actions and the high bar for excusing defaults. It underscores that participation in settlement conferences or claimed lack of legal knowledge are insufficient to justify late answers without additional compelling circumstances.

Citation: US Bank N.A. v Salvatierra, 205 AD3d 757, 758-759 (2d Dept 2022)

Case 23: County Clerk's Authority to Enter Default Judgment and Excusing Default in Appearance

The Appellate Division addressed whether a county clerk had authority to enter a default judgment in a case involving non-sum certain damages and whether defendants' default in appearing should be excused. The court held that the clerk lacked authority to enter the judgment and that the defendants' default should be excused due to lack of prejudice, potentially meritorious defense, and public policy favoring resolution on the merits.

Key Legal Principles:

1. A county clerk lacks authority to enter default judgment under CPLR 3215(a) when damages are not for a "sum certain" and require extrinsic proof.
2. Courts may excuse a default in appearing or answering when there is no prejudice to the plaintiff, a potentially meritorious defense exists, and public policy favors resolving cases on their merits.
3. CPLR 5015(a)(4) allows for vacating a judgment entered without proper authority.

Conclusion: The main takeaway is that default judgments entered without proper authority can be vacated, and courts have discretion to excuse defaults in appearing when certain factors are met, promoting fair resolution of cases on their merits.

Citation: Vinny Petulla Contr. Corp. v Ranieri, 94 AD3d 751, 941 NYS2d 658 (2d Dept 2012)

Case 24: Vacating Default Judgments and Excusing Delays in Appearing or Answering

The Appellate Division addressed whether a county clerk had authority to enter a default judgment for legal fees and whether defendants' default in appearing or answering should be excused. The court held that the clerk lacked authority to enter the judgment as the claim was not for a "sum certain," and that the defendants' default should be excused due to minimal delay, lack of prejudice, potentially meritorious defenses, and public policy favoring resolution on the merits.

Key Legal Principles:

1. A county clerk lacks authority to enter default judgment under CPLR 3215(a) when the claim is not for a "sum certain."
2. Courts may excuse defaults in appearing or answering when there is minimal delay, no prejudice to the plaintiff, potentially meritorious defenses exist, and public policy favors resolving cases on their merits.
3. CPLR 3012(d) allows courts discretion to extend the time to appear or plead.

Conclusion: The main takeaway is that courts have discretion to vacate improperly entered default judgments and excuse short delays in appearing or answering when justice requires, promoting fair resolution of cases on their merits.

Citation: Zeccola & Selinger, LLC v Horowitz, 88 AD3d 992, 931 NYS2d 536 (2d Dept 2011)

Case 25: Actual Notice Does Not Cure Defective Service in Foreclosure Actions

In a mortgage foreclosure case, a defendant appealed the denial of his motion to vacate a default judgment. The defendant claimed he was not properly served with the summons and complaint. The appellate court reversed the lower court's decision and ordered a hearing to determine if service was properly effected.

Key Legal Principles:

1. Defects in service are not cured by a defendant's subsequent actual notice of the action.
2. When a defendant provides a sworn denial of service, the plaintiff must establish jurisdiction at a hearing by a preponderance of evidence.
3. To warrant a hearing on service issues, a defendant must provide detailed and specific facts rebutting the process server's affidavit.

Conclusion: The main takeaway is that courts must carefully consider challenges to service of process in foreclosure actions, particularly when defendants provide specific sworn statements contradicting the process server's affidavit. In such cases, a hearing may be necessary to determine if proper service was made before proceeding with foreclosure.

Citation: Emigrant Mortg. Co., Inc. v Westervelt, 105 AD3d 896 (2d Dept 2013)

Case 26: Rebutting the Presumption of Proper Service in Foreclosure Actions

In a mortgage foreclosure case, a defendant appealed the denial of her motion to vacate a default judgment, claiming improper service. The appellate court reversed and remitted for a hearing to determine if service was properly effected, based on the defendant's submission of evidence contradicting the process server's affidavit.

Key Legal Principles:

1. The plaintiff bears the burden of proving personal jurisdiction over a defendant.
2. A process server's affidavit establishes a prima facie case of proper service, creating a presumption of proper service.
3. A sworn denial of service rebuts this presumption, requiring the plaintiff to establish jurisdiction at a hearing by a preponderance of evidence.

Conclusion: The main takeaway is that defendants in foreclosure actions can effectively challenge service by providing specific evidence contradicting the process server's affidavit, necessitating a hearing to determine if proper service was made. This emphasizes the importance of proper service in establishing jurisdiction.

Citation: Wells Fargo Bank, NA v Chaplin, 65 AD3d 588, 884 NYS2d 254 (2d Dept 2009)

Case 27: Due Diligence Requirement for "Nail and Mail" Service of Process

In a legal malpractice case, the appellate court reversed a lower court's denial of a defendant attorney's motion to vacate a default judgment. The court held that the plaintiff's attempt at "nail and mail" service was ineffective because it failed to meet the due diligence requirement for personal service attempts before resorting to this alternative method.

Key Legal Principles:

1. Service of process must strictly comply with statutory methods for effecting personal service on a natural person.
2. "Nail and mail" service may only be used when personal service cannot be made with due diligence.
3. Due diligence requires genuine inquiries about the defendant's whereabouts and place of employment, not just multiple attempts at a single location.

Conclusion: The main takeaway is that courts will scrutinize attempts at personal service before allowing "nail and mail" service, requiring process servers to make genuine efforts to locate the defendant and attempt service at both residence and place of business. Failure to meet this due diligence standard can result in service being deemed ineffective and judgments being vacated.

Citation: Estate of Waterman v Jones, 46 AD3d 63, 843 NYS2d 462 (2d Dept 2007)

Case 28: Interpreting "Dwelling Place" and "Last Known Residence" in Substitute Service Requirements

 In a wrongful death and personal injury case, the Court of Appeals addressed the interpretation of CPLR 308(4) regarding substitute service. The court held that affixing a summons to the door of a defendant's last known residence, rather than their actual dwelling place or usual place of abode, was insufficient for proper service, even if the defendant later received actual notice of the suit.

Key Legal Principles:

1. "Dwelling place" and "usual place of abode" in CPLR 308(4) cannot be equated with "last known residence" of the defendant.
2. Actual notice received by means other than those authorized by statute does not cure defects in service.
3. Potential defendants generally have no affirmative duty to keep potential plaintiffs informed of their whereabouts.

Conclusion: The main takeaway is that courts will strictly interpret the requirements for substitute service under CPLR 308(4), distinguishing between a defendant's actual dwelling place and last known residence. Plaintiffs must ensure that the "nailing" portion of substitute service occurs at the defendant's current dwelling place or usual place of abode, not merely their last known address, to effect proper service.

Citation: Feinstein v Bergner, 48 NY2d 234, 397 NE2d 1161 (1979).

Case 29: Debt Buyer's Lawsuit Dismissed Due to Non-Existent Entity and Insufficient Documentation

A debt buyer's motion to amend its complaint was denied and the defendant's motion to dismiss was granted. The court found that the plaintiff, CACH of Colorado, LLC, was a non-existent entity and could not validly commence the litigation. Additionally, the court determined that even if the action had been filed by an existing entity, the documentation provided was insufficient to support a default judgment.

Key Legal Principles:

1. A non-existent entity cannot validly commence litigation, and such an error is not merely ministerial or capable of correction.
2. Debt buyers must provide proper documentation to establish the chain of ownership of the debt, including proof of assignment and notice to the debtor.
3. Affidavits from the debt buyer's employees lacking personal knowledge of the original creditor's record-keeping practices are inadmissible as evidence.

Conclusion: The case highlights the stringent requirements for debt buyers in providing proper documentation and establishing their right to sue. It also emphasizes the importance of accurately identifying the plaintiff entity in debt collection lawsuits. The court's decision suggests a need for more rigorous review of default judgment applications in consumer credit cases.

Citation: Cach of Colorado, LLC v Lazarovwsky, 46 Misc 3d 1201(A), 7 NYS3d 240 (Civ Ct, Richmond County 2014).

See this Blog: Vacating a Default Judgment in New York: 8 Fine Points