An odd stipulation case

RCS Recovery Servs., LLC v Mensah, 2018 NY Slip Op 07766 [2d Dept. 2018]

We agree with the Supreme Court’s denial of that branch of the defendant’s motion which was pursuant to CPLR 5015(a)(3) to vacate the judgment. Absent any proof of intrinsic or extrinsic fraud in the procurement of the judgment, the defendant was not entitled to that relief (see LaSalle Bank N.A. v Oberstein, 146 AD3d 945, 945-946; Dunkin Donuts v HWT Assoc., 181 AD2d 713, 714; Central Funding Co. v Kimler, 54 AD2d 748, 748).

However, under the circumstances of this case, the Supreme Court should have granted the alternate branch of the defendant’s motion, which was, in effect, to preclude the plaintiff from enforcing the default provision of the stipulation without affording the defendant a reasonable opportunity to cure his default. “Under almost any given state of facts, where to enforce a stipulation would be unjust or inequitable or permit the other party to gain an unconscionable advantage, courts will afford relief” (Goldstein v Goldsmith, 243 App Div 268, 272; see Weitz v Murphy, 241 AD2d 547, 548; Bank of N.Y. v Forlini, 220 AD2d 377, 378).

Here, the defendant’s default was inadvertent and minor in nature when measured against the harsh result that would be obtained upon literal enforcement of the default provision in the stipulation (see Bank of N.Y. v Forlini, 220 AD2d at 378). Insofar as the plaintiff failed to offer the defendant any opportunity to cure his default before seeking to recover the full amount due under the judgment, the plaintiff’s conduct could be interpreted as an attempt to take advantage of a technical default to obtain payment of the far greater sum which the plaintiff had originally sought, but agreed to forgo as part of the settlement (compare Weitz v Murphy, 241 AD2d at 548-549 and Bank of N.Y. v Forlini, 220 AD2d at 378, with McKenzie v Vintage Hallmark, 302 AD2d 503, 504).

Compare IndyMac Bank, FSB v Izzo, 2018 NY Slip Op 08014 [2d Dept. 2018]

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