A two strike rule on Law Office Failure

Bank of N.Y. v Mohammed, 2015 NY Slip Op 06397 (3d Dept. 2015)

“We affirm. In order to vacate a dismissal pursuant to 22 NYCRR 202.27, plaintiff was required to demonstrate a reasonable excuse for its failure to appear and a potentially meritorious cause of action (see 9 Bros. Bldg. Supply Corp. v Buonamicia, 106 AD3d 968, 968 [2013]; Biton v Turco, 88 AD3d 519 [2011]). Here, the excuse proffered by plaintiff for failing to appear at the two conferences — that counsel calendared the conference on the wrong date — is not a reasonable excuse, especially in light of the fact that counsel committed the same error twice”

Default judgment vacated

Cary v Cimino, 2015 NY Slip Op 03965 (4th Dept. 2015)

I understood the recent Court of Appeals case on this issue (I forgot the name) to preclude a review of the merits of the proof of the default when a trial level court enters a default judgment.  Here, the Appellate Division is allowing a challenge to the entry of a default on 3215(f) grounds where a party is opposing the entry of the default.  Parenthetically, this should only encourage more ex-parte applications to the Court where a Clerk’s judgment is inapplicable;  however, local practice for some strange reason requires that the default application be made on notice.  In parts of upstate New York, you actually get in trouble for moving on notice for the entry of a default.

“We agree with defendants that plaintiff failed to establish his entitlement to a default judgment. Plaintiff’s submissions in support of his motion included, inter alia, his own affidavit and the complaint, but his affidavit did not demonstrate personal knowledge of the incident, and the complaint was not verified. We therefore conclude that plaintiff failed to submit adequate “proof of the facts constituting the claim” (CPLR 3215 [f]; see Williams v North Shore LIJ Health Sys., 119 AD3d 937, 938; Atlantic Cas. Ins. Co. v RJNJ Servs., Inc., 89 AD3d 649, 651; see generally Woodson v Mendon Leasing Corp., 100 NY2d 62, 70-71)”

The dismissal should have been without prejudice

GMAC Mtge., LLC v Guccione, 2015 NY Slip Op 03500 (2d Dept. 2015)

“On September 19, 2011, the Supreme Court, on the record, directed the dismissal of the complaint in this mortgage foreclosure action with prejudice, based upon both the plaintiff’s failure to appear at a court conference scheduled for that day and the plaintiff’s repeated failure to appear at prior court conferences (see 22 NYCRR 202.27[b]; Hanscom v Goldman, 109 AD3d 964, 964-965; Wahid v Pour, 89 AD3d 1015, 1015; Feldstein v New York State Dept. of Correctional Servs., 55 AD3d 663, 663; cf. Bank of N.Y. v Castillo, 120 AD3d 598, 599; Feders v Lamprecht, 43 [*2]AD3d 276, 277).”

“However, since dismissal of an action for a default pursuant to 22 NYCRR 202.27 does not constitute a determination on the merits, the dismissal should have been without prejudice

CPLR 308(2) in action – the successful traverse

Washington Mut. Bank v Murphy, 2015 NY Slip Op 03520 (2d Dept. 2015)

(1) “According to the affidavit of service, a copy of the summons and complaint was served at the Noyack property upon ” JOHN DOE’ (NAME REF– USED), CO-TENANT” on May 26, 2007, which was the Saturday of Memorial Day weekend. A separate copy of the summons and complaint was thereafter mailed to Murphy at the Noyack property on May 30, 2007. ”

(2) Since, under the circumstances of this case, the Noyack property, although Murphy’s vacation home, could properly be characterized as his dwelling place or usual place of abode (see Krechmer v Boulakh, 277 AD2d 288, 289), we agree with the Supreme Court that the plaintiff satisfied the first prong of CPLR 308(2) by a fair preponderance of the evidence by serving process upon a person of suitable age and discretion at the Noyack property (see Bank of N.Y. v Espejo, 92 AD3d 707, 708; Roldan v Thorpe, 117 AD2d 790, 791).

(3) However, the plaintiff failed to meet its burden of proof that its mailing of copies of the summons and complaint to that same address satisfied the second prong of CPLR 308(2). The undisputed evidence demonstrated that the plaintiff received notice from Murphy that the Reade Street address was to be used with respect to all notices concerning the Noyack property…

Further, Murphy demonstrated that his driver’s license and his voter registration were based upon the Reade Street address, and that the Noyack property was not claimed as his primary residence for tax purposes. Thus, for the purpose of satisfying the objectives of CPLR 308(2), Murphy’s “last known residence” was not the Noyack property (see Feinstein v Bergner, 48 NY2d at 241; Mangold v Neuman, 87 AD2d 780, affd 57 NY2d 627; cf. Bank of N.Y. v Espejo, 92 AD3d at 708; Melton v Brotman Foot Care Group, 198 AD2d 481, 481;Townsend v Hanks, 140 AD2d 162, 163).

The world of service.  They served his vacation home and mailed to the vacation home.  Part one was correct.  For part two, they should have mailed where he lived.  The best part is that since the SOL ran, the dismissal was with prejudice.

Dismissal for failure to take a default itself failed

Edison Med. Servs., P.C. v Clarendon Natl. Ins. Co., 2015 NY Slip Op 50479(U)(App. Term 2d Dept. 2015)

“CPLR 3215 (c) requires that a plaintiff commence proceedings for the entry of a default judgment within one year after the default. Where a plaintiff has made an application to the court for the entry of a default judgment within that period, the court may not later dismiss the complaint as abandoned pursuant to CPLR 3215 (c) (see U.S. Bank N.A. v Poku, 118 AD3d 980 [2014]; Jones v Fuentes, 103 AD3d 853 [2013]), even where, as here, the application was unsuccessful”

So in this case (as we have seen before), an application for leave to enter a default judgment was taken.  Something happened, more than a year elapsed, and now a motion to dismiss (3215[c]) ensues.  Does not work.

Defaults – the right to notice

Paulus v Christopher Vacirca, Inc.,  2015 NY Slip Op 02944 (2d Dept. 2015)

For the procedural nuts out there, this case holds that notice of the entry of a default judgment must always be on motion to someone who appears in an action.  When is this relevent?  When an answer is stricken; when an answer is not interposed after denial of a pre-answer motion; the failure to reply to a counterclaim, etc.

“For these reasons, we hold that the failure to provide a defendant who has appeared in an action with the notice required by CPLR 3215(g)(1), like the failure to provide proper notice of other kinds of motions, is a jurisdictional defect that deprives the court of the authority to entertain a motion for leave to enter a default judgment. While this defect requires vacatur of the judgment, it does not, standing alone, entitle the appellant to be relieved of the underlying default upon which judgment is sought, and to defend the action on the merits (see Stephan G. Gleich & Assocs. v Gritsipis, 87 AD3d 216, 224-225). Since the appellant has failed to establish a basis to be relieved from his underlying default in failing to answer, that underlying default remains intact. Accordingly, the appellant is entitled only to statutory notice of any future motion for leave to enter a default judgment.”

Misrepresentation based upon failure to serve last known address

Li Xian v Tat Lee Supplies Co., Inc., 2015 NY Slip Op 01751 (1st Dept. 2015)

“Vacatur was also warranted pursuant to CPLR 5015(a)(3), since the default judgment was obtained through misrepresentation or misconduct. Defendant demonstrated that plaintiffs’ motion for a default judgment was granted, in part, based on plaintiffs’ counsel’s incorrect representation that defendant’s old address was the “only known” address for service of the additional summons required by CPLR 3215(g)(4), when, in fact, plaintiffs’ sublease provided another address for service of legal notices on defendant.”

This is a new twist on CPLR 5015(a)(3) jurisprudence.

Excusable neglect not acceptable

A.B. Med., PLLC v Cna Ins. Co., 2015 NY Slip Op 50199(U)(App. Term 2d Dept. 2015)

“Here, plaintiff failed to demonstrate that it had a reasonable excuse for failing to timely submit written opposition to defendant’s prior motion, pursuant to the parties’ stipulation. In support of plaintiff’s motion to vacate the default order, plaintiff’s attorney alleged that her late submission of an affirmation in opposition to defendant’s motion for summary judgment was the result of her heavy workload. Her explanation to justify the default amounted to nothing more than mere neglect, which is not accepted as an excusable default (see Strunk v Revenge Cab Corp., 98 AD3d 1029 [2012]; State Farm Mut. Auto. Ins. Co. v Preferred Trucking Serv. Corp., 42 Misc 3d 88 [App Term, 2d, 11th & 13th Jud Dists 2013]). Moreover, plaintiff’s attorney offered no reason for waiting almost 10 months to move to vacate the default order

Failure to stipulate to an adjournment can be law office failure – sufficient to vacate a summary judgment loss on default

Santiago v Valentin, 2015 NY Slip Op 01159 (1st Dept. 2015)

“Plaintiff provided an attorney’s affirmation describing that the failure to submit opposition was due to a delay in receiving an updated medical report from plaintiff’s treating physician.

Further, plaintiff explained that after defendant denied his third request to stipulate to an adjournment, he believed the only recourse was to wait for a decision and order from the court, and thereafter, make a motion to vacate the default judgment. As such, there is no evidence in the record that plaintiff’s default was due to any deliberate, willful, or contumacious conduct.”

It is not 5015 but 317

Gershman v Midtown Moving & Storrage, Inc., 2014 NY Slip Op 08959 (2d Dept. 2014)

“The defendant did not adequately explain the failure to file with the Secretary of State the current address of the agent designated to receive process on its behalf (see Sussman v Jo-Sta Realty Corp., 99 AD3d 787, 788; Yellow Book of N.Y., Inc. v Weiss, 44 AD3d 755, 756; Franklin v 172 Aububon Corp., 32 AD3d 454[*2]454-455).

Although the defendant did not cite to CPLR 317 in opposition to the plaintiffs’ motion, under the circumstances of this case, this Court may consider CPLR 317 as a basis for vacating the default (see CPLR 2001; Eugene Di Lorenzo, Inc. v A.C. Dutton Lbr. Co., 67 NY2d 138, 142-143; Brickhouse Masonry, LLC v Windward Bldrs., Inc., 101 AD3d 919, 920; Brac Constr. Corp. v Di-Com Corp., 51 AD2d 740, 740). CPLR 317 permits a defendant who has been “served with a summons other than by personal delivery” to defend the action upon a finding by the court that the defendant “did not personally receive notice of the summons in time to defend and has a meritorious defense” (CPLR 317; see Eugene Di Lorenzo, Inc. v A.C. Dutton Lbr. Co., 67 NY2d at 141; Taieb v Hilton Hotels Corp., 60 NY2d 725, 728; Fleisher v Kaba, 78 AD3d 1118, 1119; Reyes v DCH Mgt., Inc., 56 AD3d 644). Here, the record reveals that neither the defendant nor its agent received actual notice of the summons, which was delivered to the Secretary of State, in time to defend itself against this action (see Fleisher v Kaba, 78 AD3d at 1119;Calderon v 163 Ocean Tenants Corp., 27 AD3d 410, 411). There is no basis in the record upon which to conclude that the defendant was deliberately attempting to avoid service of process, especially since the plaintiffs had knowledge of the defendant’s actual business address (see Samet v Bedford Flushing Holding Corp., 299 AD2d 404, 405; Stein v A. Matarasso & Co., 143 AD2d 825, 826). In addition, the defendant met its burden of demonstrating the existence of a potentially meritorious defense (see Blake v United States of Am., 109 AD3d at 505).”

I like this case because it one of those rare times where the Second Department explicitly held that while a reasonable excuse was not satisfied, relief in accordance with 317 was appropriate.  I have not seen too many successful 317 challenges, which made this case interesting.