Key Takeaway
New York court rules on vacating default judgments based on intrinsic fraud - defendant must show reasonable excuse for default under CPLR 5015(a)(3).
A.M. Med. Servs., P.C. v Liberty Mut. Ins. Co., 2010 NY Slip Op 20416 (App. Term 2d Dept. 2010)
“Defendant argued that the default judgment had been obtained through plaintiff’s fraud, misrepresentation or misconduct since the claim forms plaintiff had annexed to its motions contained handwritten notations which were not on the original claim forms included with the complaint and provided to defendant, and the motions were supported by affidavits containing false statements”
By the way, this “intrinsic fraud” was discussed in: P__DG Psychological, P.C. v. State Farm Ins. Co., 9 Misc.3d 172 (Civ. Ct. Queens Co. 2005).
Here is the rule of law: “CPLR 5015 (a) (3) provides that a judgment may be vacated on the ground of “fraud, misrepresentation, or other misconduct of an adverse party.” When a defendant’s CPLR 5015 (a) [*2](3) motion alleges intrinsic fraud – – i.e., that the plaintiff’s allegations are false – – the defendant must also provide a reasonable excuse for its default (see Bank of NY v Stradford, 55 AD3d 765 ; Bank of NY v Lagakos, 27 AD3d 678 ).
In support of its motion, defendant argued that plaintiff had submitted affidavits which contained false statements and that plaintiff had annexed to its motion papers false documentation. Defendant was, thus, alleging that plaintiff had obtained the default judgment through “intrinsic fraud” (Bank of NY v Lagakos, 27 AD3d at 679). Consequently, defendant was required to show a reasonable excuse for its default (see Bank of NY v Stradford, 55 AD3d at 765-766), which defendant failed to do. The affirmation of defendant’s attorney did not show that counsel had personal knowledge of any facts pertaining to the alleged law office failure and, therefore, the affirmation was insufficient to establish an excuse for the default (see Incorporated Vil. of Hempstead v Jablonsky, 285 AD2d 553, 554 ). Further, since defendant’s attorney’s “supplemental” affirmation was, in fact, a reply affirmation, the factual allegations asserted for the first time therein must be disregarded (see McNair v Lee, 24 AD3d 159 ; Juseinoski v Board of Educ. of City of New York, 15 AD3d 353, 355 ).”
There was a dissent that unearthed certain issues regarding what comprised the law office failure. The attorneys named in the dissent are competent and good attorneys, having worked with both of them. As those who practice no-fault or other types of mass collection practices know, the nature and volume of these types of practices sometimes causes things to go awry.
Related Articles
- Understanding CPLR 5015(a)(1) procedures for setting aside default judgments
- When law office failure excuses must be detailed to vacate defaults
- Trial de novo requirements for default judgments in no-fault cases
- Affidavit procedures and default judgment requirements
- New York No-Fault Insurance Law
Legal Update (February 2026): Since this 2010 post, CPLR 5015 motion practice and standards for vacating defaults based on intrinsic fraud may have evolved through subsequent appellate decisions and procedural amendments. Practitioners should verify current case law interpretations regarding the reasonable excuse requirement and documentation standards for fraud-based motions to vacate default judgments.
