Zovko v Quittner Realty, LLC, 2018 NY Slip Op 04775 [2d Dept 2018]
A defendant seeking to vacate an order awarding a default must demonstrate both a reasonable excuse for the default and the existence of a potentially meritorious defense (see CPLR 5015[a][1]; Skutelsky v JN Natural Fruit Corp., 138 AD3d 1099, 1100; Orwell Bldg. Corp. v Bessaha, 5 AD3d 573, 574; Quis v Bolden, 298 AD2d 375). The defendant failed to demonstrate a reasonable excuse for its default. The defendant's mistaken belief that its insurer would provide a defense and answer the summons and complaint on its behalf was unreasonable given its insurer's reservation of rights letter and request for a copy of any summons served upon the defendant, and the plaintiffs' motion for leave to enter a default judgment (see Medas v Rochpark Realty, LLC, 150 AD3d 1221, 1223; Spitzer v Landau, 104 AD3d 936, 936-937; Trepel v Greenman-Pedersen, Inc., 99 AD3d 789, 791; Jackson v Professional Transp. Corp., 81 AD3d 602, 603; Lemberger v Congregation Yetev Lev D'Satmar, Inc., 33 AD3d 671, 672). Furthermore, this alleged mistake was not an isolated error, but part of a pattern of "repeated neglect" (Roussodimou v Zafiriadis, 238 AD2d 568, 569; see Wells Fargo Bank, N.A. v Krauss, 128 AD3d 813, 814; Alterbaum v Shubert Org., Inc., 80 AD3d 635, 636; Majestic Clothing Inc. v East Coast Stor., LLC, 18 AD3d 516, 518). In this regard, the defendant was aware of the default order, but took no steps to vacate the default until five months after its insurer disclaimed coverage (see Wells Fargo Bank, N.A. v Krauss, 128 AD3d at 815; Miller v Ateres Shlomo, LLC, 49 AD3d 612, 613; Thompson v Steuben Realty Corp., 18 AD3d 864, 865; Robinson v 1068 Flatbush Realty, Inc., 10 AD3d 716, 716-717). Since the defendant failed to demonstrate a reasonable excuse for its default, we need not reach the issue of whether it demonstrated the existence of a potentially meritorious defense (see Medas v Rochpark Realty, LLC, 150 AD3d at 1223; Jing Shan Chen v R & K 51 Realty, Inc., 148 AD3d 689, 691; Bernstein v Geiss, 111 AD3d 774, 775).
New York Vein Ctr., LLC v Dovlaryan, 2018 NY Slip Op 04744 [2d Dept 2018]
In seeking to vacate their defaults in appearing at a compliance conference and in opposing the plaintiff's motion to strike their answer, the defendants were required to demonstrate both a reasonable excuse for their defaults and a potentially meritorious defense (see CPLR 5015[a][1]; 22 NYCRR 202.27[a]; 555 Prospect Assoc., LLC v Greenwich Design & Dev. Group Corp., 154 AD3d 909; Prudence v White, 144 AD3d 655, 656). The defendants failed to establish a reasonable excuse for their failure to (1) appear at the compliance conference, (2) oppose the plaintiff's motion to strike their answer, (3) respond to their former attorney's motion to withdraw as counsel, and (4) appear at the inquest on the issue of damages. Moreover, the record shows that the defendants took no steps to ascertain the status of this case for a period of more than two years. Furthermore, where, as here, there is a pattern of default and neglect, the negligence of the defendants' former attorney is properly imputed to the client (see Carillon Nursing & Rehabilitation Ctr., LLP v Fox, 118 AD3d 933, 934; Santiago v Santana, 54 AD3d 929, 930; Dave Sandel, Inc. v Specialized Indus. Servs. Corp., 35 AD3d 790, 791; Edwards v Feliz, 28 AD3d 512, 513; MRI Enters. v Amanat, 263 AD2d 530, 531). Since the defendants failed to demonstrate a reasonable excuse for their defaults, we need not reach the issue of whether they demonstrated the existence of a potentially meritorious defense to the action or the plaintiff's motion to strike their answer (see Bernstein v Geiss, 111 AD3d 774, 775).
Lee v Latendorf, 2018 NY Slip Op 04709 [2d Dept. 2018]
In order to vacate a default in appearing at a scheduled court conference, a plaintiff must demonstrate both a reasonable excuse for the default and a potentially meritorious cause of action (see CPLR 5015[a][1]; Stein v Doukas, 157 AD3d 743, 744; One West Bank, FSB v Singer, 153 AD3d 714, 715; Gallery v Messerschmitt, 151 AD3d 940; Wright v City of Poughkeepsie, 136 AD3d 809). "A determination of whether an excuse is reasonable lies within the sound discretion of the Supreme Court" (Stein v Doukas, 157 AD3d 743, 744). Although a court has discretion to accept law office failure as a reasonable excuse (see CPLR 2005), "a pattern of willful default and neglect should not be excused" (Prudence v White, 144 AD3d 655, 656; see Whitestone Constr. Corp. v Nova Cas. Co., 129 AD3d 831, 832). A claim of law office failure must be supported by a detailed and credible explanation of the default at issue, as mere neglect is not a reasonable excuse (see Ki Tae Kim v Bishop, 156 AD3d 776; One West Bank, FSB v Singer, 153 AD3d at 716; Onishenko v Ntansah, 145 AD3d 910).
Here, the Supreme Court providently exercised its discretion in determining that the plaintiffs did not offer a reasonable excuse for their default. The excuse proffered by the plaintiffs' former attorney, that he failed to appear at the May 19, 2015, conference due to a malfunctioning GPS system and that he "got lost," was unreasonable under the circumstances, as it was not a detailed and credible explanation for the claimed law office failure. Moreover, the plaintiffs failed to set forth any excuse, let alone a reasonable one, for their former attorney's failure to appear at the compliance conference scheduled for February 18, 2015, or why he arrived late for the adjourned conference on February 26, 2015.
Since the plaintiffs failed to offer a reasonable excuse for their default, the issue of whether they had a potentially meritorious cause of action need not be addressed (see Stein v Doukas, 157 AD3d 743; Ki Tae Kim v Bishop, 156 AD3d 776).
Chase Manhattan Bank v Nath, 2018 NY Slip Op 04695 [2d Dept 2018]
Moreover, the defendant's contention that the plaintiff fraudulently obtained the judgment of foreclosure and sale by making false allegations in the complaint about its standing and capacity to commence the action and by submitting fraudulent documents to the court amount to an allegation of intrinsic fraud (see PennyMac Corp. v Weiss, 152 AD3d 712, 714; US Bank N.A. v Galloway, 150 AD3d 1174, 1175; U.S. Bank, N.A. v Peters, 127 AD3d 742, 742-743). The defendant failed to provide any evidence of fraud, mistake, inadvertence, surprise, or excusable neglect that would constitute a basis for vacatur of the judgment of foreclosure and sale in the interests of substantial justice (see Wells Fargo Bank Minn., N.A. v Coletta, 153 AD3d 757, 758).
In addition, lack of standing and lack of capacity are not defects that deprive a court of subject matter jurisdiction for purposes of CPLR 5015(a)(4) (see Behringer v 19407 Linden, LLC, 139 AD3d 777, 778; Mortgage Elec. Registration Sys., Inc. v Gifford, 133 AD3d 429, 430-431; Wells Fargo Bank, N.A. v Rooney, 132 AD3d 980, 983; Wells Fargo Bank Minn., N.A. v Mastropaolo, 42 AD3d 239). In any event, the defendant waived these defenses by failing to assert them in his answer or a pre-answer motion to dismiss (see Bank of Am., N.A. v Cudjoe, 157 AD3d 653; Wells Fargo Bank, N.A. v Erobobo, 127 AD3d 1176, 1177; Security Pac. Natl. Bank v Evans, 31 AD3d 278, 280).
Additionally, the defendant failed to demonstrate his entitlement to vacatur pursuant to CPLR 5015(a)(2) based on newly discovered evidence. Even if the evidence proffered was new within the meaning of the statute, the defendant failed to establish that the newly discovered evidence probably would have produced a different result (see Bank of N.Y. v Tobing, 155 AD3d 596, 596; US Bank N.A. v Galloway, 150 AD3d at 1175; IMC Mtge. Co. v Vetere, 142 AD3d 954, 955; Washington Mut. Bank v Wade, 119 AD3d 930, 931).
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