CPLR R. 5015

Potentially meritorious defense [CPLR 5015]

Lai v Montes, 2020 NY Slip Op 02134 [3d Dept. 2020]

Moreover, defendants have proffered several defenses that are potentially meritorious based upon their verified answer and affidavits in support of the motion to vacate the default judgment (see Global Liberty Ins. Co. v Shahid Mian, M.D., P.C., 172 AD3d 1332, 1333 [2019]; Luderowski v Sexton, 152 AD3d 918, 918 [2017]). “To establish the existence of a potentially meritorious defense, defendants needed only to make a prima facie showing of legal merit, as the quantum of proof needed to prevail on a CPLR 5015 (a) (1) motion is less than that required when opposing a summary judgment motion” (Luderowski v Sexton, 152 AD3d at 920 [internal quotation marks and citations omitted]). Defendants’ affidavits of merit indicate that plaintiffs breached the contract by misrepresenting that the dog was an “AKC [registerable] purebred English bulldog . . . that would be suitable for breeding or showing” when it is not suitable for same due to certain genetic defects. As a result, defendants claim that they were not unjustly enriched, as alleged in the complaint. Defendants also assert that the allegedly defamatory statements are true, an “absolute defense” provided they are “substantially true” (Hope v Hadley-Luzerne Pub. Lib., 169 AD3d 1276, 1277 [2019] [internal quotation marks and citations omitted]; see Cusimano v United Health Servs. Hosps., Inc., 91 AD3d 1149, 1151 [2012], lv denied 19 NY3d 801 [2012]). Further, defendants served an answer with numerous affirmative defenses and participated in depositions,^[FN3] “indicat[ing] that they had no intention of abandoning their defense[s]” (Luderowski v Sexton, 152 AD3d at 920-921).

While these defenses may ultimately prove to be unsuccessful, we find that they are potentially meritorious so as to satisfy CPLR 5015 (a) (1), in that they “suffice to make the requisite prima facie showing of merit” (Luderowski v Sexton, 152 AD3d at 921; see Matter of Santander Consumer USA, Inc. v Kobi Auto Collision & Paint Ctr., Inc., 166 AD3d at 1366; Passeri v Tomlins, 141 AD3d 816, 818-819 [2016]). “Under these circumstances, and considering the strong public policy favoring the resolution of cases upon their merits” (Matter of Walker v Buttermann, 164 AD3d 1081, 1082-1083 [2018] [citations omitted]), we find that defendants’ motion to vacate the default judgment should have been granted. Accordingly, the final order issued following the inquest must be reversed and defendants’ remaining contentions addressed to the inquest have been rendered academic.

Bold is mine.

5015(a)(1)(2)(3)

M&T Bank v Crespo, 2020 NY Slip Op 01608 [2d Dept. 2020]

“CPLR 5015(a) authorizes a court to relieve a party from an order or judgment, on motion, based on the existence of specified grounds[, including]: . . . newly discovered evidence (see CPLR 5015[a][2]); [and] fraud, misrepresentation, or other misconduct of an adverse party (see CPLR 5015[a][3])” (Bank of N.Y. Mellon Trust Co., N.A. v Thonfeld, 172 AD3d 665, 666). “A party seeking to vacate a judgment pursuant to CPLR 5015(a)(2) must establish, inter alia, that the newly discovered evidence probably would have produced a different result” (OneWest Bank, FSB v Galloway, 148 AD3d 818, 819; see Wall St. Mtge. Bankers, Ltd. v Rodgers, 148 AD3d 1088, 1089; Meltzer v Meltzer, 140 AD3d 716, 717).

Here, we agree with the Supreme Court’s determination granting the plaintiff’s motion for a judgment of foreclosure and sale and denying the defendant’s cross motion. The defendant failed to demonstrate that the newly discovered evidence probably would have produced a different result (see Wall St. Mtge. Bankers, Ltd. v Rodgers, 148 AD3d at 1089; OneWest Bank, FSB v Galloway, 148 AD3d at 819; Meltzer v Meltzer, 140 AD3d at 717). Further, the defendant failed to establish that the plaintiff engaged in any fraud, misrepresentation, or other misconduct warranting vacatur of the judgment pursuant to CPLR 5015(a)(3) (see Deutsche Bank Natl. Trust Co. v Conway, 169 AD3d 641, 642; Kondaur Capital Corp. v Stewart, 166 AD3d 748, 750; Bank of N.Y. Mellon Trust Co., N.A. v Sukhu, 163 AD3d 748, 751).

Maruf v E.B. Mgt. Props., LLC, 2020 NY Slip Op 01610 [2d Dept. 2020]

A party seeking to vacate an order entered upon his or her default in opposing a motion must demonstrate both a reasonable excuse for the default and a potentially meritorious [*2]opposition to the motion (see CPLR 5015[a][1]; Seaman v New York Univ., 175 AD3d 1578, 1579). Law office failure may qualify as a reasonable excuse for a party’s default if the claim of such failure is supported by a credible explanation of the default (see Singh v Sukhu, ___ AD3d ___, 2020 NY Slip Op 01105 [2d Dept 2020]). Nevertheless, ” [w]hile CPLR 2005 allows courts to excuse a default due to law office failure, it was not the Legislature’s intent to routinely excuse such defaults, and mere neglect will not be accepted as a reasonable excuse'” (Ortega v Bisogno & Meyerson, 38 AD3d 510, 511, quoting Incorporated Vil. of Hempstead v Jablonsky, 283 AD2d 553, 553-554; see Bank of N.Y. Mellon Trust Co., N.A. v Talukder, 176 AD3d 772, 774; Seaman v New York Univ., 175 AD3d at 1579).

Here, the plaintiff’s counsel asserted that they failed to oppose the defendant’s motion because they had the action marked in their calendaring system as “stayed.” However, the plaintiff’s counsel made no effort to explain if or why the action remained marked as stayed after having entered into the January 10, 2017, stipulation lifting the stay on motion practice. Further, the plaintiff’s counsel appeared on the return date of the motion to strike the complaint, despite allegedly believing that motion practice was stayed, and the matter was adjourned so as to allow the plaintiff additional time to oppose the motion. Notwithstanding the adjournment, the plaintiff failed to file opposition papers. The plaintiff also did not offer any excuse for the nine-month delay in moving to vacate the default (see Nanas v Govas, 176 AD3d 956, 957). Under these circumstances, the plaintiff failed to offer a reasonable excuse for his default.

In any event, the plaintiff failed to demonstrate a potentially meritorious defense to the motion to strike the complaint. Before a court invokes the drastic remedy of striking a pleading, there must be a clear showing that the failure to comply with discovery was willful and contumacious (see Harris v City of New York, 117 AD3d 790; Almonte v Pichardo, 105 AD3d 687, 688). Willful and contumacious conduct may be inferred from a party’s repeated failure to comply with discovery, coupled with inadequate explanations for those failures, or a failure to comply with discovery over an extended period of time (see Teitelbaum v Maimonides Med. Ctr., 144 AD3d 1013; Orgel v Stewart Tit. Ins. Co., 91 AD3d 922, 923). Here, on his motion to vacate, the plaintiff did not provide an explanation for his failure to comply with discovery over the course of one year, despite four stipulations requiring the disclosure (see Orgel v Stewart Tit. Ins. Co., 91 AD3d at 924).

5015 and mere neglect

Campbell v TPK Heating, Ltd., 2020 NY Slip Op 01595 [2d Dept. 2020]

“The court has discretion to accept law office failure as a reasonable excuse (see CPLR 2005) where the claim is supported by a detailed and credible explanation of the default” (Option One Mtge. Corp. v Rose, 164 AD3d at 1252; see Seaman v New York Univ., 175 AD3d 1578; Soto v Chelsea W26, LLC, 166 AD3d 1048, 1049). “However, mere neglect is not a reasonable excuse” (Seaman v New York Univ., 175 AD3d at 1579). Where a claim of law office failure is conclusory and unsubstantiated or lacking in credibility, it should be rejected (see Kondrotas-Williams v Westbridge Enters., Inc., 170 AD3d 983, 985; Lefcort v Samowitz, 165 AD3d 772, 773).

Here, the plaintiff’s unsubstantiated allegation of law office failure was insufficient to demonstrate a reasonable excuse for its default in appearing at the calendar call on March 6, 2017 (see Option One Mtge. Corp. v Rose, 164 AD3d at 1252). Moreover, the plaintiff proffers no excuse for his more than one-year delay in moving to vacate the order directing dismissal of the action and in taking any steps to ascertain the status of the case (see Diamond Truck Leasing Corp. v Cross Country Ins. Brokerage, Inc., 62 AD3d 745; Edwards v Feliz, 28 AD3d 512, 513).

Insurer related delay

Bank of N.Y. Mellon v Van Roten, 2020 NY Slip Op 01471 [2d Dept. 2020]

“To extend the time to answer the complaint and to compel the plaintiff to accept an untimely answer as timely, a defendant must provide a reasonable excuse for the delay and demonstrate a potentially meritorious defense to the action” (Bank of N.Y. Mellon v Tedesco, 174 AD3d 490, 491; see Aurora Loan Servs., LLC v Movtady, 165 AD3d 1025, 1027). Here, the defendant’s allegations of an insurer-related delay, without more, were insufficient to establish a reasonable excuse for his default (see Hamilton v Adriatic Dev. Corp., 150 AD3d 835, 836; Blythe v BJ’s Wholesale Club, Inc., 123 AD3d 1073, 1073; Gartner v Unified Windows, Doors & Siding, Inc., 71 AD3d 631, 632). Accordingly, we need not address whether he has a potentially meritorious defense to the action (see New Century Mtge. Corp. v Corriette, 117 AD3d 1011).

” On a motion for leave to enter a default judgment against a defendant based on the failure to answer or appear, a plaintiff must submit proof of service of the summons and complaint, proof of the facts constituting the cause of action, and proof of the defendant’s default”‘ (U.S. Bank N.A. v Gilchrist, 172 AD3d 1425, 1427, quoting L & Z Masonry Corp. v Mose, 167 AD3d 728, 729; see CPLR 3215[f]). “Given that in default proceedings the defendant has failed to appear and the plaintiff does not have the benefit of discovery,” the plaintiff’s proof “need only allege enough facts to enable a court to determine that a viable cause of action exists” (Woodson v Mendon Leasing Corp., 100 NY2d 62, 70-71; see L & Z Masonry Corp. v Mose, 167 AD3d at 729).

Inherent authority to vacate

Braunstein v Hodges, 2020 NY Slip Op 00842 [2d Dept 2020]

Although the court retains inherent discretionary power to relieve a party from a judgment or order for sufficient reason and in the interest of substantial justice, “[a] court’s inherent power to exercise control over its judgment is not plenary, and should be resorted to only to relieve a party from judgments taken through [fraud,] mistake, inadvertence, surprise or excusable neglect” (Matter of McKenna v County of Nassau, Off. of County Attorney, 61 NY2d 739, 742 [internal quotation marks omitted]; see Citimortgage, Inc. v Maldonado, 171 AD3d 1007, 1008). Further, “[t]his discretion is reserved for unique or unusual’ circumstances that warrant such action” (Cox v Marshall, 161 AD3d 1140, 1142, quoting Katz v Marra, 74 AD3d 888, 891).

Under the circumstances of this case, we agree with the Supreme Court’s determination denying the plaintiffs’ motion (see Torres v Rely On Us, Inc., 165 AD3d 731, 734; Kleynerman v MJGC Home Care, 153 AD3d 1246, 1247). The plaintiffs failed to show the existence of any actual conflict of interest, impropriety, or bias with respect to the March 2016 order (see Matter of Serkez v Serkez, 34 AD3d 592, 592; see also People v Smith, 63 NY2d 41, 68).

CPLR 317

Bookman v 816 Belmont Realty, LLC, 2020 NY Slip Op 01318 [2d Dept. 2020]

Pursuant to CPLR 317, a defaulting defendant who was served with a summons other than by personal delivery may be permitted 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 potentially meritorious defense (see Eugene Di Lorenzo, Inc. v A.C. Dutton Lbr. Co., 67 NY2d 138, 141; Dove v 143 Sch. St. Realty Corp., 172 AD3d 1315, 1316). Here, the defendant was not entitled to vacatur of its default pursuant to CPLR 317. The record reflects that, since September 2011, the defendant [*2]had not filed, with the Secretary of State, the required biennial form that would have apprised the Secretary of State of its current address (see Limited Liability Company Law § 301[e]), thus raising an inference that the defendant deliberately attempted to avoid notice of actions commenced against it (see Cruz v Keter Residence, LLC, 115 AD3d 700, 701; see also Santiago v Sansue Realty Corp., 243 AD2d 622, 622-623).

5015 in the Second Department

The Second Department is usually way more strict than the First (“not particular compelling”). This seems to be a change.

P&H Painting, Inc. v Flintlock Constr. Servs., LLC, 2020 NY Slip Op 00603 [2d Dept. 2020]

Although the general rule is that in order to vacate a default, a party must demonstrate a reasonable excuse for the default and a potentially meritorious defense (see CPLR 5015[a][1]), the sufficiency of an excuse is not as significant where the default is only a short period (see Vallario v 25 W. 24th St. Flatiron, LLC, 149 AD3d 791, 792-793; Chakmakian v Maroney, 78 AD3d 1103, 1104).

Default in opposing a motion

Singh v Sukhu, 2020 NY Slip Op 01105 [2d Dept. 2020]

A party seeking to vacate an order entered upon his or her default in opposing a motion must demonstrate both a reasonable excuse for the default and a potentially meritorious opposition to the motion (see CPLR 5015[a][1]; Credit Bur. of N.Y., Inc. v Rapid Realty 95, Inc., 137 AD3d 841, 841; J & J Alarcon Realty Corp. v Plantains Rest., Inc., 123 AD3d 886, 887; Bhuiyan v New York City Health & Hosps. Corp., 120 AD3d 1284, 1284; Schenk v Staten Is. Univ. Hosp., 108 AD3d 661, 662). “The determination of what constitutes a reasonable excuse lies within the trial court’s discretion” (Stewart v Berger, 137 AD3d 1103, 1105 [internal quotation marks omitted]). Law office failure may qualify as a reasonable excuse for a party’s default if the claim of such failure is supported by a detailed and credible explanation of the default (see Strunk v Revenge Cab Corp., 98 AD3d 1029, 1030.

Here, the plaintiff demonstrated a reasonable excuse for her default. The affirmation of her attorney explained that the plaintiff’s default was reasonable and inadvertent due to the fact that the attorney’s “calender service” never communicated the briefing schedule to counsel’s office and that counsel first learned of the August 19, 2016, date when it attempted to file the opposition papers only six days later (see Bank of N.Y. Mellon v Faragalla, 174 AD3d 677). The plaintiff also demonstrated a potentially meritorious defense to the DNJC defendants’ motion based upon the argument that the DNJC defendants were vicariously liable for Lopez’s negligence (see Galasso, Langione & Botter, LLP v Galasso, 176 AD3d 1176). Accordingly, the Supreme Court providently exercised its discretion in granting that branch of the plaintiff’s motion which was to vacate the prior order entered upon her default (see Advanced Remodeling of Long Is., Inc. v Monahan, 175 AD3d 1361; Credit Bur. of N.Y., Inc. v Rapid Realty 95, Inc., 137 AD3d at 841; Rocco v Family Foot Ctr., 94 AD3d 1077, 1079; Simpson v Tommy Hilfiger U.S.A., Inc., 48 AD3d 389, 392).

Vacatur

CVM Partners 1, LLC v Adams, 173 AD3d 971 [2d Dept. 2019]

No appeal lies from an order or judgment granted upon the default of the appealing party (see CPLR 5511; HSBC Bank USA, N.A. v Gervais, 168 AD3d 692, 693 [2019]; HSBC Bank USA, N.A. v Simms, 163 AD3d 930, 932 [2018]; Adotey v British Airways, PLC, 145 AD3d 748, 749 [2016]). Although “an appeal from such a judgment brings up for review those matters which were the subject of contest before the Supreme Court” (Geffner v Mercy Med. Ctr., 167 AD3d 571, 572 [2018] [internal quotation marks omitted]; see Bottini v Bottini, 164 AD3d 556, 558 [2018]; Alam v Alam, 123 AD3d 1066, 1067 [2014]), the defendant here defaulted at every stage of the proceedings, beginning with his failure to appear or answer the complaint, continuing with his failure to appear on the return dates of his two motions, brought on by orders to show cause, one of which sought to vacate his default in failing to appear at a scheduled court conference, and ending with his failure to oppose the motions that led to the amended judgment of foreclosure and sale appealed from. Accordingly, since there were no “matters which were the subject of contest before the Supreme Court” (Geffner v Mercy Med. Ctr., 167 AD3d at 572 [internal quotation marks omitted]), the appeal must be dismissed in its entirety.

Equity Inv. & Mtge. Co. v Smith, 173 AD3d 690 [2d Dept. 2019]

Although courts have discretionary power to relieve a party from a judgment or order “for sufficient reason and in the interest[ ] of substantial justice” (Woodson v Mendon Leasing Corp., 100 NY2d 62, 68 [2003]; see Katz v Marra, 74 AD3d 888, 890 [2010]), “[a] court’s inherent power to exercise control over its judgment[ ] is not plenary, and should be resorted to only to relieve a party from judgments taken through [fraud,] mistake, inadvertence, surprise or excusable neglect” (Matter of McKenna v County of Nassau, Off. of County Attorney, 61 NY2d 739, 742 [1984] [internal quotation marks omitted]; see HSBC Bank USA v Josephs-Byrd, 148 AD3d 788, 790 [2017]). Here, the arguments advanced by the City in support of its motion did not constitute grounds for relief, either under CPLR 5015 (a) or pursuant to the Supreme Court’s inherent discretionary power to vacate the judgment for sufficient reason and in the interest of substantial justice (see Matter of McKenna v County of Nassau, Off. of County Attorney, 61 NY2d at 742; HSBC Bank USA v Josephs-Byrd, 148 AD3d at 790; Alexander v New York City Tr. Auth., 35 AD3d 772 [2006]).

Diamond v Leone, 173 AD3d 686 [2d Dept. 2019]

The Supreme Court improvidently exercised its discretion in finding that the plaintiff did not demonstrate a reasonable excuse for her failure to appear on November 28, 2017. In an affirmation in support of the motion, the plaintiff’s attorney submitted a detailed and credible explanation of the law office failure which caused the default in appearing. The plaintiff’s attorney affirmed that an entry in the “Comments” field for the subject appearance date on the “eLaw” website had created confusion as to whether the scheduled appearance had been adjourned from November 28 to November 30, and that the attorney’s law office had repeatedly attempted to contact the Part Clerk on November 27 and November 28 for clarification and had left a voicemail message. The attorney affirmed that when his law office finally communicated directly with the Part Clerk at approximately 11:30 a.m. on November 28, his law office was advised that the case had been dismissed due to the plaintiff’s failure to appear. The attorney’s affirmation was supported by, among other things, printouts from the “eLaw” website. Therefore, the plaintiff provided a reasonable excuse for failing to appear (see 555 Prospect Assoc., LLC v Greenwich Design & Dev. Group Corp., 154 AD3d 909 [2017]; Hobbins v North Star Orthopedics, PLLC, 148 AD3d 784 [2017]; Polsky v Simon, 145 AD3d 693 [2016]). The plaintiff also demonstrated a potentially meritorious cause of action (see 555 Prospect Assoc., LLC v Greenwich Design & Dev. Group Corp., 154 AD3d at 910). Accordingly, the court should have granted the plaintiff’s motion to vacate the “order on default” dated November 28, 2017, and to restore the action to the trial calendar.

Bank of N.Y. Mellon v Ruci, 168 AD3d 799 [2d Dept. 2019]

The appellant’s vague and unsubstantiated claim of law office failure by an unidentified attorney was insufficient to establish a reasonable excuse for her default (see LaSalle Bank, N.A. v LoRusso, 155 AD3d 706, 707 [2017]; U.S. Bank N.A. v Barr, 139 AD3d 937, 938 [2016]; M & T Bank v Morris, 138 AD3d 939 [2016]). Since the appellant failed to establish a reasonable excuse for her default, it is not necessary to determine whether she demonstrated a potentially meritorious defense to the action (see LaSalle Bank, N.A. v LoRusso, 155 AD3d at 706; Bank of N.Y. Mellon v Colucci, 138 AD3d 1047, 1048 [2016]; M & T Bank v Morris, 138 AD3d at 940).

EMC Mtge. Corp. v Walker, 2019 NY Slip Op 06474 [2d Dept. 2019]

Here, when the plaintiff moved, in effect, to vacate the May 2013 order and to restore the action to the calendar, it failed to proffer a reasonable excuse for its default in appearing at the scheduled court conference, and merely alleged that “there was no missed appearance, and as such 22 NYCRR 202.27 does not apply.” Moreover, the plaintiff failed to articulate any basis for the more than 2½-year delay in moving to vacate the order of dismissal (see id. at 1252; Wright v City of Poughkeepsie, 136 AD3d 809). In light of the lack of a reasonable excuse, it is unnecessary to determine whether the plaintiff demonstrated the existence of a potentially meritorious cause of action (see Wright v City of Poughkeepsie, 136 AD3d at 809; Selechnik v Law Off. of Howard R. Birnbach, 120 AD3d 1220). Thus, we disagree with the Supreme Court’s decision to hold a traverse hearing on June 22, 2016, and its subsequent determination granting the plaintiff’s motion, in effect, pursuant to CPLR 5015(a)(1) to vacate the May 2013 order and to restore the action to the calendar, and that branch of the plaintiff’s separate motion which was to extend the time to serve Walker in the interest of justice.

LaSalle Bank, N.A. v Delice, 2019 NY Slip Op 06485 [2d Dept. 2019]

Most importantly, the plaintiff did not provide any explanation as to why it delayed more than five years before filing its motion to vacate, apart from the vague assertion that it hired new counsel because, at some point, the law firm that represented the plaintiff at the time of the January 2011 order subsequently closed. The plaintiff’s contention that the delay was justified because its subsequent counsel expended extensive efforts to comply with Administrative Orders 548/10 and 431/11 of the Chief Administrative Judge of the Courts is raised for the first time on appeal and not properly before us (cf. U.S. Bank N.A. v Ahmed, 137 AD3d 1106, 1108-1109). The plaintiff’s lengthy delay in moving to vacate, failure to adequately explain the delay, and failure to pursue other available avenues of relief support the court’s determination not to exercise its discretion to vacate the dismissal order in the interests of substantial justice (seeHSBC Bank USA v Josephs-Byrd, 148 AD3d at 790; cf. U.S. Bank N.A. v Ahmed, 137 AD3d at 1108-1109).

A judgment without jurisdiction is void

Board of Mgrs. of 50 W. 127th St. Condominium v Kidd, 2019 NY Slip Op 00973 [1st Dept. 2019]

Defendant did not waive the defense of lack of jurisdiction. Before her incoming counsel filed a notice of appearance without mentioning the defense, she had already presented an order to show cause seeking to vacate the judgment based on lack of personal jurisdiction, and she moved to vacate based on improper service shortly after new counsel appeared. In contrast, in the cases relied on by plaintiff and City West, the defendant’s counsel filed a notice of appearance without preserving any objection to jurisdiction after the time to move or answer had elapsed, and did not move to vacate for years afterwards, indicating an intentional abandonment of the defense (see e.g. Wilmington Sav. Fund Socy., FSB v Zimmerman, 157 AD3d 846, 846-847 [2d Dept 2018], lv denied 31 NY3d 1135 [2018]; Capital One Bank, N.A. v Farraco, 149 AD3d 590, 590 [1st Dept 2017]). Defendant’s communications with plaintiff’s managing agent in which she arranged to pay her arrears, cannot be construed as an appearance in the action, much less a waiver of her defense of lack of jurisdiction.
Because the judgment was entered without jurisdiction over defendant, City West is not entitled to restitution as an alternative remedy to vacatur of the foreclosure sale, as “[a] judgment rendered without jurisdiction is void” and “a deed [] issued in execution upon such a void judgment . . . is similarly void” (U.S. Bank, N.A. v Bernhardt, 88 AD3d 871, 872 [2d Dept 2011]).