Defaults – required military affidavit (Maybe OCA can do something?)

Gantt v North Shore-LIJ Health Sys., 2016 NY Slip Op 04316 (1st Dept. 2016)

“We note, contrary to the motion court, that any irregularity in the affidavit of nonmilitary service submitted on plaintiff’s motion for a default judgment did not rise to the level of a jurisdictional defect, since defendant Hilerio never made any pretense of either being on active military duty or being a military dependent at the time of her default (see Department of Hous. Preserv. & Dev. of City of N.Y. v West 129th St. Realty Corp., 9 Misc 3d 61 [App Term, 1st Dept 2005]).”

Many judges (especially in Supreme New York) and the New York County Clerk require detailed military searches before entering a default judgment.  I would love to see OCA fund a study as to the percentage of default judgments entered in this state against active duty members, since I suspect the number is less than 1%.  Also, perhaps OCA can formulate rules as to what is required in a non-military affidavit similar to what they have done on the issue of what is necessary to enter a clerk’s judgment on a credit-card non-payment case.

Second, I also believe the New York County Clerk’s refusal to enter judgments based upon orders that Judges sign due to the failure to provide updated (or any) non-military affidavit of service is improper.  OCA should address this also.


IDS Prop. Cas. Ins. Co. v Metro Health Prods., Inc., 2016 NY Slip Op 50089(U)(App. Term 1st Dept. 2016)

“We find no cause to disturb the motion court’s discretionary determination to vacate respondent’s default in this special proceeding pursuant to CPLR 7511(b). Respondent demonstrated a reasonable excuse for its delay in answering the petition through the affidavit of its principal detailing respondent’s regular mail-receipt procedures, and asserting that the petition was not received by respondent”

What was the underlying controversy about?  Some of the cases certain firms appeal continue to boggle my mind.

Failure to enter a default excused

Linden Equip., Inc. v Praetorian Ins. Co., 2015 NY Slip Op 51545(U)(App. Term 1st Dept. 2015)

“Although plaintiff failed to move for entry of a default judgment within one year (see CPLR 3215[a]), the court exercised its discretion providently by denying defendant’s motion to dismiss the complaint as abandoned pursuant to CPLR 3215(c). Plaintiff demonstrated a meritorious cause of action for assigned first-party no-fault benefits, which defendant does not dispute and, although the particular law office failure excuse proffered by plaintiff is less than compelling, there is no indication in the record that defendant was in any way prejudiced by plaintiff’s delay”

This does not occur often: A failure to enter a default is excused.   Yet, as readers of this blog over the last many years will know, defaults are harder to come by in the First Department as opposed to the Second Department.  The hurdles you leap through to vacate a default in the Second Department are half as high in Manhattan or Bronx.  In my estimation, this is a Uniform Court System that is anything but uniform.  Now that I am off topic, did anyone read the recent report on attorney discipline in this State?  Assume the offense of misappropriation of escrow funds with no prior disciplinary history.  Upstate: Suspension that is suspended pending some type of counseling.  Second Department: 3 years suspension.  First Department: Disbarment (7 year suspension).  Perhaps a uniform court system that uniformly decides issues, i.e., attorney discipline, vacatur of defaults, Unitrin issues really needs to be looked at.

My personal opinion: We should not be as strict in opening defaults.  Matters really should be heard on the merits unless someone willfully abandons the case.

Entering judgment on a settlement – not what you thought

HSBC Bank USA, N.A. v Wielgus, 2015 NY Slip Op 06494 (2d Dept. 2015)

The role of the clerk’s judgment diminished a tad bit.  I was leery of posting this because it is somewhat groundbreaking, well hidden and something you would have to dig up.  Yet, after some thought, I figured that it should not be too easy to enter defaults following non-payment of settlement stipulations.

“However, the Kings County Clerk did not have authority to enter a clerk’s judgment against Wielgus pursuant to CPLR 3215(i)(1). This statute states, in relevant part, that “[w]here . . . a stipulation of settlement is made, providing, in the event of failure to comply with the stipulation, for entry without further notice of a judgment in a specified amount, . . . the clerk shall enter judgment on the stipulation and an affidavit as to the failure to comply with the terms thereof, together with a complaint or a concise statement of the facts on which the claim was based” (CPLR 3215[i][1] [emphasis added]). Although the stipulation provided that HSBC could enter a money judgment against Wielgus in the event of a default, it permitted entry of such a judgment only “upon ten (10) days notice” to Wielgus. Thus, the stipulation was not one which provided for entry of a judgment upon default “without further notice.” Moreover, the stipulation did not provide for entry of a judgment “in a specified amount.” Rather, it provided that the judgment to be entered upon Wielgus’s default would be calculated so as to “credit [Wielgus] for all payments made on account.” The stipulation thus did not specify the exact principal sum of the judgment that HSBC would have the right to enter based on a default by Wielgus under the stipulation; rather, it provided for a formula that required reference to extrinsic proof as to exactly how much Wielgus might have already paid to HSBC prior to the default, or prior to the judgment. Accordingly, the entry of a clerk’s judgment was not authorized by CPLR 3215(i)(1).”

Default judgment upheld

State Farm Mut. Auto. Ins. Co. v Anikeyeva, 2015 NY Slip Op 06329 (2d Dept. 2015)

“In a so-ordered stipulation dated November 20, 2012 (hereinafter the conditional order), the Supreme Court directed that the defendants’ answer was “conditionally stricken unless” the defendants complied with the plaintiff’s discovery demands on or before January 7, 2013. It is undisputed that the defendants failed to comply with the conditional order. The Supreme Court granted the plaintiff’s motion to strike the defendants’ answer for failure to comply with the conditional order and for leave to enter a default judgment pursuant to CPLR 3215. The court then entered judgment upon the order declaring that the plaintiff was not obligated to pay certain insurance claims submitted to it by the defendants.”

“To avoid the adverse impact resulting from the conditional order becoming absolute, the defendants were required to demonstrate a reasonable excuse for their default in complying with the terms of the conditional order and a meritorious defense to the complaint (see Estate of Alston v Ramseur, 124 AD3d 713; Pugliese v Mondello, 67 AD3d at 881; Grinage v City of New York,45 AD3d 729, 730; Lee v Arellano, 18 AD3d at 621; Johnson v Heavy Realty Corp., 191 AD2d 538; see also Karalis v New Dimensions [*2]HR, Inc., 105 AD3d 707, 708). The defendants did neither.”

I hope Anikeyeva has filed for bankruptcy.

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.