theCPLRblog

Fun with 5015

CPLR R. 5015 Relief from judgment or order

HSBC Bank USA Natl. Assn. v Nuteh 72 Realty Corp., 2010 NY Slip Op 01617 (App. Div., 2nd, 2010)

"A defendant 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 meritorious defense to the motion and the action" (Newell v Hirsch, 65 AD3d 1108, 1109; see Diamond Truck Leasing Corp. v Cross Country Ins. Brokerage, Inc., 62 AD3d 745; Simpson v Tommy Hilfiger U.S.A., Inc., 48 AD3d 389; Matter of Gambardella v Ortov Light., 278 AD2d 494, 495; Neuman v Greenblatt, 260 AD2d 616, 617). Here, in opposition to the plaintiff's motion for leave to enter a default judgment against the defendants Nuteh 72 Realty Corp. and Nathan Friedman (hereinafter the defendants), and in support of their cross motion, inter alia, to vacate their default in opposing the plaintiff's motion to strike their answer pursuant to CPLR 3126, the defendants succeeded in demonstrating a reasonable excuse for their default (see Evolution Impressions, Inc. v Lewandowski, 59 AD3d 1039, 1040).

However, the defendants failed to demonstrate, through evidence in admissible form, the existence of a meritorious defense, specifically, under the circumstances here, whether they were good faith purchasers of the subject real property for valuable consideration. Friedman's affirmation states only that "NUTEH is a good faith' purchaser for value of the Premises." This conclusory, [*2]self-serving, and bare legal conclusion was insufficient to establish the existence of a meritorious defense (see Diamond Truck Leasing Corp. v Cross Country Ins. Brokerage, Inc., 62 AD3d at 746; Matter of Atkin v Atkin, 55 AD3d 905; cf. Atwater v Mace, 39 AD3d 573, 575). Additionally, in the absence of any foundation, the defendants' submission of a one-page printout of a New York City Department of Finance document entitled "A[utomated] C[ity] R[egister] I[nformation] S[ystem] Search Results By Parcel Identifier" did not constitute evidence in admissible form sufficient to establish the existence of a meritorious defense (see generally Knupfer v Hertz Corp., 35 AD3d 1237, 1238; Triangle Transp., Inc. v Markel Ins. Co., 18 AD3d 229; Matter of Haber v Haber, 306 AD2d 282, 283; Merrill/New York Co. v Celerity Sys., 300 AD2d 206, 207). Accordingly, in the absence of any admissible evidence sufficient to demonstrate the existence of a meritorious defense, the Supreme Court should have granted the plaintiff's motion for leave to enter a default judgment, and denied the defendants' cross motion, inter alia, to vacate their default in opposing the plaintiff's motion to strike their answer.

Gross v Kail, 2010 NY Slip Op 01616 (App. Div., 2nd, 2010)

The Supreme Court erred in denying the plaintiffs' motion for leave to enter judgment against the defendants upon their default in appearing or answering and, in effect, granting the defendants' application, inter alia, to deem the proposed answer to have been served. In support of their motion, the plaintiffs submitted their process server's affidavits of service of the summonses and the complaints, a factually-detailed complaint verified by the plaintiff Gerald P. Gross, and an affirmation from attorney Mitchell J. Rich regarding the defendants' default in appearing and answering (see CPLR 3215[f]).

In opposition to the plaintiffs' motion and in support of their application, inter alia, to deem the proposed answer to have been served, the defendants were required to demonstrate a reasonable excuse for the default and the existence of a meritorious defense (see CPLR 5015[a][1]; Miller v Ateres Shlomo, LLC, 49 AD3d 612, 613; Lipp v Port Auth. of N.Y. & N.J., 34 AD3d 649; [*2]Juseinoski v Board of Educ. of City of N.Y., 15 AD3d 353, 356; Curran v Graf, 13 AD3d 409; Ennis v Lema, 305 AD2d 632, 633). The defendants failed to provide any excuse for their default and failed to demonstrate that they had a meritorious defense to the action. The defendants submitted a proposed answer verified only by their attorney, who had no personal knowledge of the facts (see Baldwin v Mateogarcia, 57 AD3d 594, 595; Bekker v Fleischman, 35 AD3d 334, 335; Pampalone v Giant Bldg. Maintenance, Inc., 17 AD3d 556, 557; Juseinoski v Board of Educ. of City of N.Y., 15 AD3d at 356). Accordingly, the plaintiffs' motion should have been granted and the defendants' application should have been denied.

393 Lefferts Partners, LLC v New York Ave. at Lefferts, LLC, 68 AD3d 976 (App. Div., 2nd, 2009)

A defendant seeking to vacate a default in answering must demonstrate a reasonable excuse for the default and the existence of a meritorious defense (see CPLR 5015 [a] [1]; Eugene Di Lorenzo, Inc. v A.C. Dutton Lbr. Co., 67 NY2d 138, 141 [1986]; Gray v B. R. Trucking Co., 59 NY2d 649, 650 [1983]; Harris v City of New York, 30 AD3d 461, 463-464 [2006]; Orangetown Policemen's Benevolent Assn. v Town of Orangetown, 18 AD3d 841 [2005]). The appellant submitted an affidavit of service that stated that it was served on August 10, 2007, pursuant to Limited Liability Company Law § 303, by service upon the Secretary of State. The appellant also submitted a certificate of service and return receipt showing that the Secretary of State delivered the summons and complaint to the appellant's designated address by certified mail, return receipt requested, but the return receipt was not dated and was signed by a person who was not employed by the appellant. Joseph Artusa, one of the appellant's managing members, stated in an affidavit that he was out of the office "on many days" in August and September of 2007 and did not see the summons and complaint on his desk until late September, when the time to answer it had expired. This statement does not provide a reasonable excuse for the appellant's default. Moreover, the Supreme Court providently exercised its discretion in determining that the appellant was not entitled to relief pursuant to CPLR 317, since it failed to demonstrate that it did not receive actual notice of the summons and complaint in time to defend the action (see CPLR 317; Taieb v Hilton Hotels Corp., 60 NY2d 725 [1983]; Franklin v 172 Aububon Corp., 32 AD3d 454 [2006]; Brockington v Brookfield Dev. Corp., 308 AD2d 498 [2003]). In addition, the appellant failed to demonstrate a meritorious defense to the action.

The bold is mine

CPLR R. 5015 Don't Try This at Home

CPLR R. 5015 Relief from judgment or order
(a) On motion
(1) excusable default...
(2) newly-discovered evidence...
(3) fraud, misrepresentation, or other misconduct of an adverse party
(4) lack of jurisdiction to render the judgment or order
(5) reversal, modification or vacatur of a prior judgment or order upon which it is based

Campbell-Jarvis v Alves, 2009 NY Slip Op 08986 (App. Div., 2nd, 2009)

In order to vacate her default in opposing the defendant's prior motion to dismiss, the plaintiff was required to demonstrate both a reasonable excuse for her default and a meritorious opposition to the motion (see Simpson v Tommy Hilfiger U.S.A., Inc., 48 AD3d 389, 392; Hospital for Joint Diseases v Dollar Rent A Car, 25 AD3d 534; Fekete v Camp Skwere, 16 AD3d 544, 545; Amato v Fast Repair, Inc., 15 AD3d 429, 430; Costanza v Gold, 12 AD3d 551, 552). Although the determination of what constitutes a reasonable excuse lies within the trial court's discretion (see Santiago v New York City Health & Hosps. Corp., 10 AD3d 393, 394; Roussodimou v Zafiriadis, 238 AD2d 568, 569; Grutman v Southgate At Bar Harbor Home Owners' Assn., 207 AD2d 526, 527), and the court has the discretion to accept law office failure as a reasonable excuse (see CPLR 2005), "a pattern of willful default and neglect" should not be excused (Roussodimou v Zafiriadis, 238 AD2d at 569 [internal quotation marks omitted]; see Santiago v New York City Health & Hosps. Corp., 10 AD3d 393; Kolajo v City of New York, 248 AD2d 512; Vierya v Briggs & Stratton Corp., 166 AD2d 645, 645-646; Chery v Anthony, 156 AD2d 414, 417), and the claim of law office failure should be supported by a "detailed and credible" explanation of the default or defaults at issue (Henry v Kuveke, 9 AD3d 476, 479; see Gironda v Katzen, 19 AD3d 644, 645). In this case, the plaintiff's attorney's conclusory, undetailed, and uncorroborated claim of law office failure did not amount to a reasonable excuse (see Forward Door of N.Y., Inc. v Forlader, 41 AD3d 535; Piton v Cribb, 38 AD3d 741; Matter of ELRAC, Inc. v Holder, 31 AD3d 636). In addition, the plaintiff failed to submit an affidavit of merit. Accordingly, the Supreme Court abused its discretion in granting the plaintiff's motion to vacate an order which granted the defendant's motion to dismiss the action upon her default in opposing the motion.

Now, compare that with

Lamar v City of New York, 2009 NY Slip Op 08974 (App. Div., 1st, 2009)

While the City's generalized assertion of law office failure as the excuse for its delay is not particularly compelling, it constitutes "good cause" for the delay (see Spira v New York City Tr. Auth., 49 AD3d 478 [2008]). No prejudice to plaintiff has been shown (see Cirillo v Macy's, Inc., 61 AD3d 538, 540 [2009]), and New York's public policy strongly favors litigating matters on the merits (see Silverio v City of New York, 266 AD2d 129 [1999]). An affidavit of merit is not required where no default order or judgment has been entered (see Cirillo, supra).

Performance Constr. Corp. v Huntington Bldg., LLC, 2009 NY Slip Op 09012 (App. Div., 2nd, 2009).

The Supreme Court providently exercised its discretion in denying that branch of the plaintiff's motion which was for leave to enter a default judgment against the defendant Corcoran Marble & Monument Co., Inc. (hereinafter Corcoran), and in granting Corcoran's cross motion for leave to serve a late answer (see CPLR 3012[d], 5015[a][1]). Considering the lack of any prejudice to the plaintiff as a result of the relatively short 11-day delay in Corcoran's service of an answer, the existence of a potentially meritorious defense, and the public policy favoring the resolution of cases on the merits, the Supreme Court providently excused Corcoran's de minimis delay in answering the complaint (see Klughaupt v Hi-Tower Contrs., Inc., 64 AD3d 545, 546; Schonfeld v Blue & White Food Prods. Corp., 29 AD3d 673, 674; Yonkers Rib House, Inc. v 1789 Cent. Park Corp., 19 AD3d 687, 688). Furthermore, the record reveals that Corcoran was actively engaged in settlement negotiations with the plaintiff's attorney, and that the plaintiff's attorney never mentioned that he would be moving for leave to enter a default judgment (see Armstrong Trading, Ltd. v MBM Enters., 29 AD3d 835, 836; Scarlett v McCarthy, 2 AD3d 623; Lehrman v Lake Katonah Club, 295 AD2d 322). [*2]

Moreover, the Supreme Court properly denied that branch of the plaintiff's motion which was for leave to enter a default judgment against the defendant Tritec Building Co. (hereinafter Tritec). The record reveals that Tritec and the plaintiff entered into a stipulation extending Tritec's time to answer "to and until March 3, 2008." Accordingly, Tritec's service of an answer was timely since the answer was served on March 3, 2008 (see CPLR 320[a]).

The bold is mine.

A Brief CPLR R. 5015 Roundup and CPLR R. 2214(d) Appears For The First Time In this Blog.

CPLR R. 5015 Relief from judgment or order
(a) On motion
(1) excusable default...
(2) newly-discovered evidence...
(3) fraud, misrepresentation, or other misconduct of an adverse party
(4) lack of jurisdiction to render the judgment or order
(5) reversal, modification or vacatur of a prior judgment or order upon which it is based

CPLR R. 2214 Motion papers; service; time
(d) Order to show cause

MBF Leasing, LLC v Sisco, 25 Misc 3d 128(A) (App. Term, 1st, 2009)

Civil Court correctly denied, without a traverse hearing, that branch of defendant's motion seeking vacatur of the default judgment and dismissal of the complaint for lack of personal jurisdiction under CPLR 5015(a)(4) because defendant failed to sufficiently refute the factual averments contained in plaintiff's process server's affidavit of service. Defendant is nonetheless entitled to vacatur of the default judgment and an opportunity to answer the action on the merits. In light of defendant's potentially meritorious defense to the action (see Pludeman v N. Leasing Sys., 10 NY3d 486 [2008]), the absence of any discernable prejudice to plaintiff (which did not oppose defendant's motion and has not filed a respondent's brief on this appeal), defendant's showing that the default was not willful, and our preference for resolving actions on the merits, we vacate the default judgment under our "inherent discretionary power" to relieve defendant of his default "for sufficient reason and in the interests of substantial justice" (Woodson v Mendon Leasing Corp., 100 NY2d 62, 68 [2003]; see Siegel, NY Practice § 426, 725 [4th ed]).

Although the court in its discretionary power may vacate a default even though the party did not satisfy any of the conditions in CPLR R. 5015, I don't understand why the court would say that the defendant was entitled to vacatur.  Going by Webster's definition of entitle, the word hardly seems to fit.  Vacatur was a gift in this case.  Also interesting is that the defendant's motion to vacate was unopposed.  Neither was the appeal.  Unless defendant attached plaintiff's affidavit or service, how was it before the lower court?  Judicial Notice?

Speaking of weird...

Merriwether v Osborne, 2009 NY Slip Op 07602 (App. Div., 2nd, 2009)

By order dated May 22, 2007, the Supreme Court granted, apparently without opposition, the defendants' separate motions for summary judgment dismissing, inter alia, the complaint insofar as asserted against them, and a judgment dismissing the complaint was entered subsequently. Although the plaintiff was duly served with both the order and the judgment with notice of entry, he neither appealed nor moved to vacate. Nearly two years later, the Supreme Court, sua sponte, without explanation, vacated the order dated May 22, 2007, and, in effect, the judgment, and denied the defendants' motions for summary judgment.

On appeal, the defendants contend that the Supreme Court exceeded its authority in, sua [*2]sponte, vacating the order and, in effect, the judgment. We agree.

"A trial court has no revisory or appellate jurisdiction, sua sponte, to vacate its own order or judgment" (Adams v Fellingham, 52 AD3d 443, 444-445; see Armstrong Trading, Ltd. v MBM Enters., 29 AD3d 835, 836; Matter of Owens v Stuart, 292 AD2d 677, 678-679; cf. Liss V Trans Auto Sys., 68 NY2d 15, 20). Here, the court exceeded its powers by its unexplained sua sponte attempt to reconsider the summary judgment motions anew almost two years after the case was dismissed by judgment (see Matter of Owens v Stuart, 292 AD2d at 679).

WTF?

Wells Fargo Bank, N.A. v Leiba, 2009 NY Slip Op 07833 (App. Div., 2nd, 2009)

The Supreme Court properly denied the motion of the defendant Lisa Morris to vacate a judgment of foreclosure and sale dated October 27, 2005, as she failed to serve the order to show cause by which the motion was initiated in the manner specified, and within the time provided (see CPLR 2214[d]; Alden Personnel, Inc. v David, 38 AD3d 697, 698).

A bad employee can be a reasonable excuse.  See below.

Rodriguez v Rodriguez, 2009 NY Slip Op 08150 (App. Div., 1st, 2009)

Defendant's attorney's representation that a former employee had been misdirecting or misplacing mail provides a reasonable excuse for his failure to present such evidence of law office failure on defendant's original motion to vacate the default judgment as well as his failure to appear in court on various dates (see Solowij v Otis Elev. Co., 260 AD2d 226 [1999]). Defendant's affidavit shows a meritorious defense.

The bold is mine.

CPLR R. 5015(a)(4), CPLR § 317, Service is hard to rebut

CPLR R. 5015 Relief from judgment or order
(a) On motion
(1) excusable default...
(2) newly-discovered evidence...
(3) fraud, misrepresentation, or other misconduct of an adverse party
(4) lack of jurisdiction to render the judgment or order
(5) reversal, modification or vacatur of a prior judgment or order upon which it is based

CPLR § 308 Personal service upon a natural person
(2)  by delivering the summons within the state to a person of suitable age and discretion...
(4) where service under paragraphs one and two cannot be made with due diligence, by affixing the summons to the door

CPLR § 317 Defense by person to whom summons not personally delivered

Ogunbemi v New York City Hous. Auth., 2009 NY Slip Op 06637 (App. Div., 1st, 2009)

Plaintiffs failed to demonstrate a reasonable excuse for their default (St. Rose v McMorrow, 43 AD3d 1146 [2007]). Their proffered excuse of inability to obtain the expert engineer's affidavit in a timely manner because he was out of town for an extended period is unpersuasive because plaintiffs concede they received the affidavit six days before the motion's return date. Plaintiffs' excuse that they were unable to obtain their medical expert's signed affirmation due to the doctor's busy schedule is similarly unavailing, even assuming that the delay in obtaining the affirmation was not the result of their own lack of diligence, because the affirmation was not necessary to oppose the motion in light of the engineer's affidavit. Finally, the excuse that they misplaced certain photographs documenting the scene of the accident and the injuries to the child is unconvincing, not only because it was raised at the eleventh hour, three months after the motion was filed, but also because plaintiffs admitted they may have misplaced the photos themselves, proffered no reason for why the photos were even necessary to oppose summary judgment given the child's mother's testimony regarding the layout of the accident scene, and conceded that they had numerous other photos that would have sufficed if indeed they were necessary. Nor did plaintiffs meet their burden of demonstrating a meritorious opposition to the summary judgment motion.

Sturino v Nino Tripicchio & Son Landscaping, 2009 NY Slip Op 06829 (App. Div., 2nd, 2009)

The Supreme Court providently exercised its discretion in denying that branch of the defendants' motion which was, in effect, pursuant to CPLR 5015(a)(4) to vacate a clerk's judgment entered upon their default in appearing or answering the complaint. The process server's affidavits of service constituted prima facie evidence of proper service pursuant to CPLR 308(4) (see Mortgage Elec. Registration Sys., Inc. v Schotter, 50 AD3d 983; Olesniewicz v Khan, 8 AD3d 354, 355). The affidavit of the defendant Nino Tripicchio, submitted on his behalf as well as on behalf of the defendant Nino Tripicchio & Son Landscaping (hereinafter together the Nino Tripicchio defendants), consisted of an unsubstantiated denial of service of the summons and complaint and was insufficient to rebut the presumption of proper service (see Mortgage Elec. Registration Sys., Inc. v Schotter, 50 AD3d at 983; 96 Pierrepont v Mauro, 304 AD2d 631). The defendant Giovanni Tripicchio made no attempt to rebut the presumption of proper service, as he failed to submit an affidavit (see Olesniewicz v Kahn, 8 AD3d at 355).

The Supreme Court providently exercised its discretion in determining that the Nino Tripicchio defendants were not entitled to relief pursuant to CPLR 317. They failed to demonstrate that they did not personally receive notice of the summons and complaint in time to defend the action (see Cavalry Portfolio Servs., LLC v Reisman, 55 AD3d 524, 525; Caruso v Valentin, 54 AD3d 987).

The bold is mine.

Stipulations, Orders, and Defaults: CPLR R. 5015; CPLR § 2005; CPLR R. 3216; CPLR § 2004

CPLR R. 5015 Relief from judgment or order

CPLR § 2005 Excusable delay or default

Davidson v Valentin, 2009 NY Slip Op 06500 (App. Div., 2nd, 2009)

On October 26, 2007, a stipulation was "so-ordered," in which the parties consented to the entry of a judgment in favor of the plaintiffs on their first cause of action, inter alia, to direct the defendants to repair or replace a retaining wall on the defendants' property in compliance with the terms of an access agreement executed by the parties on the same date. The stipulation provided that if the defendants failed to comply with the terms of the judgment, the parties would place the remaining causes of action on the trial calendar. After the defendants failed to timely comply with the terms of the judgment, the plaintiffs placed the remaining causes of action on the trial calendar. Thereafter, the defendants obtained multiple adjournments of the trial date in an effort to comply with the terms of the access agreement. When the defendants' attorney failed to appear for trial on the third adjourned date of January 28, 2008, the court held an inquest on the issue of damages and entered a judgment in favor of the plaintiffs on February 28, 2008. On April 23, 2008, the defendants moved to vacate the judgment.

To vacate their default in appearing at the trial, the defendants were required to demonstrate both a reasonable excuse for the default and a meritorious defense to the action (see CPLR 5015[a][1]; Zaidi v New York Bldg. Contrs., Ltd., 61 AD3d 747; Vasquez v New York City Hous. Auth., 51 AD3d 781, 782; Conserve Elec., Inc. v Tulger Contr. Corp., 36 AD3d 747). Although the court may, in its discretion, accept law office failure as a reasonable excuse (see CPLR 2005; Putney v Pearlman, 203 AD2d 333), "'a pattern of willful default and neglect' should not be excused" (Roussodimou v Zafiriadis, 238 AD2d 568, 569, quoting Gannon v Johnson Scale Co., 189 AD2d 1052, 1052). The statements by the defendants' attorney regarding his personal problems did [*2]not adequately explain the defendants' failure to comply with the time and terms of the court-ordered stipulation, judgment, and access agreement dated October 26, 2007, and to comply with those terms during the subsequent extensions of those deadlines, and defense counsel's failure to appear on the adjourned trial date even though he knew his attempts to further adjourn the trial had been unsuccessful (see Joseph v GMAC Leasing Corp., 44 AD3d 905; Wechsler v First Unum Life Ins. Co., 295 AD2d 340; Foster v Gherardi, 201 AD2d 701). Furthermore, the defendants failed to demonstrate that they have a meritorious defense (see Buchanan v Cardozo, 24 AD2d 620, 621, affd 16 NY2d 1029). Accordingly, the defendants' motion was properly denied. 

The bold is mine.

CPLR R. 3216 Want of prosecution

(b) No dismissal shall be directed under any portion of subdivision (a) of this rule and no court initiative shall be taken or motion made thereunder unless the following conditions precedent have been complied with:

(3) The court or party seeking such relief, as the case may be, shall have served a written demand by registered or certified mail requiring the party against whom such relief is sought to resume prosecution of the action and to serve and file a note of issue within ninety days after receipt of such demand, and further stating that the default by the party upon whom such notice is served in complying with such demand within said ninety day period will serve as a basis for a motion by the party serving said demand for dismissal as against him for unreasonably neglecting to proceed.

CPLR § 2004 Extensions of time generally

Davis v Cardiovascular Consultants of Long Is., P.C., 2009 NY Slip Op 06501 (App. Div., 2nd, 2009)

An order entered November 7, 2007, which warned the plaintiff that the failure to serve and file a note of issue would result in dismissal of the action, had the same effect as a valid 90-day notice pursuant to CPLR 3216 (see Huger v Cushman & Wakefield, Inc., 58 AD3d 682; Benitez v Mutual of Am. Life Ins. Co., 24 AD3d 708; Giannoccoli v One Cent Park W. Assocs., 15 AD3d 348; Betty v City of New York, 12 AD3d 472). Having received a 90-day notice, the plaintiff was required either to file a timely note of issue or to move, before the default date, for an extension of time pursuant to CPLR 2004 (see Benitez v Mutual of Am. Life Ins. Co., 24 AD3d 708; Bokhari v Home Depot U.S.A., 4 AD3d 381; McKinney v Corby, 295 AD2d 580, 581). The plaintiff did neither, and the action was subsequently dismissed pursuant to CPLR 3216.

To vacate the dismissal of an action pursuant to CPLR 3216, a plaintiff must demonstrate both a reasonable excuse for the default in complying with the 90-day notice and a meritorious cause of action (see CPLR 3216[e]; Felix v County of Nassau, 52 AD3d 653; Petersen v Lysaght, Lysaght & Kramer, P.C., 47 AD3d 783). Here, the plaintiff failed to submit any expert medical opinion evidence to demonstrate the merit of his medical malpractice action (see Mosberg v Elahi, 80 NY2d 941, 942; Fiore v Galang, 64 NY2d 999, 1000-1001; Salch v Paratore, 60 NY2d 851, 852; Picot v City of New York, 50 AD3d 757; Burke v Klein, 269 AD2d 348, 348-349; Abelard [*2]v Interfaith Med. Ctr., 202 AD2d 615, 616; Feinblum v Dybner, 197 AD2d 560). Accordingly, that branch of his motion which was, in effect, to vacate the dismissal of the action pursuant to CPLR 3216 should have been denied.

Strange.  Consider CPLR R. 3216(b)(3).  Specifically, the "registered or certified" mail part.

Again, the bold is mine.

CPLR R. 5015 motion treated as motion pursuant to CPLR R. 317

CPLR R. 2221(e) Motion for Leave to Renew

CPLR § 308 Personal service upon a natural person

CPLR R. 5015 Relief from judgment or order

CPLR § 317 Defense by person to whom summons not personally delivered

Gonzalez v City of New York, 2009 NY Slip Op 06163 (App. Div., 2nd, 2009)

The defendants proffered a reasonable justification for the failure to present the affidavit of the defendant Miguel Carvajal in opposition to the plaintiff's prior motion for leave to enter a default judgment against Carvajal and in support of their prior cross motion, inter alia, to vacate Carvajal's default in appearing in the action or answering the complaint based on the Corporation Counsel's delay in obtaining an affidavit from Carvajal (see CPLR 2221[e][2], [3]; Simpson v Tommy Hilfiger U.S.A., Inc., 48 AD3d 389, 392; Miller v Duffy, 162 AD2d 438, 439-440; Matter of Mangialino v White Haven Mem. Park, 132 AD2d 970, 971).

Service upon Carvajal was made, inter alia, by delivery of the summons and complaint to a coworker at Carvajal's actual place of business and by mailing the summons to him at his actual place of business pursuant to CPLR 308(2) (see Anderson v GHI Auto Serv., Inc., 45 AD3d 512, 513). Although the defendants' cross motion was made pursuant to CPLR 5015(a)(1), under the circumstances of this case, it may also be treated as a motion made pursuant to CPLR 317 (see Eugene Di Lorenzo, Inc. v A.C. Dutton Lbr. Co., 67 NY2d 138, 142-143; Hospital for Joint Diseases v Lincoln Gen. Ins. Co., 55 AD3d 543, 544; Mann-Tell Realty Corp. v Cappadora Realty Corp., 184 AD2d 497, 498). Upon renewal, the defendants established that Carvajal did not receive [*2]actual notice of the summons in time to defend, he did not deliberately attempt to avoid service, and he has a meritorious defense to the action (see CPLR 317; Taieb v Hilton Hotels Corp., 60 NY2d 725, 727; Franklin v 172 Aububon Corp., 32 AD3d 454; Brockington v Brookfield Dev. Corp., 308 AD2d 498; Samet v Bedford Flushing Holding Corp., 299 AD2d 404, 405). Accordingly, upon renewal, the plaintiff's prior motion for leave to enter a default judgment against Carvajal was properly denied and the defendants' prior cross motion to vacate Carvajal's default and to compel the plaintiff to accept the amended answer was properly granted.

Wells Fargo Bank, NA v Chaplin, 2009 NY Slip Op 06179 (App. Div., 2nd, 2009)

The burden of proving that personal jurisdiction has been acquired over a defendant in an action rests with the plaintiff (see Bankers Trust Co. of Cal. v Tsoukas, 303 AD2d 343; Bank of Am. Nat. Trust & Sav. Assn. v Herrick, 233 AD2d 351; Frankel v Schilling, 149 AD2d 657, 659). Ordinarily, a process server's affidavit of service establishes a prima facie case as to the method of service and, therefore, gives rise to a presumption of proper service (see Household Fin. Realty Corp. of N.Y. v Brown, 13 AD3d 340; Bankers Trust Co. of Cal. v Tsoukas, 303 AD2d at 344; Frankel v Schilling, 149 AD2d 657, 659; see also New Is. Invs. v Wynne, 251 AD2d 560). However, where there is a sworn denial that a defendant was served with process, the affidavit of service is rebutted, and the plaintiff must establish jurisdiction at a hearing by a preponderance of the evidence (see Mortgage Access Corp. v Webb, 11 AD3d 592, 593; Bankers Trust Co. of Cal. v Tsoukas, 303 AD2d at 344; Kingsland Group v Pose, 296 AD2d 440; Balancio v Santorelli, 267 AD2d 189; New Is. Invs. v Wynne, 251 AD2d 560; Bank of Am. Nat. Trust & Sav. Assn. v Herrick, 233 AD2d at 352). [*2]

Here, the plaintiff allegedly effected service upon the appellant pursuant to CPLR 308(2) on April 23, 2007, by delivering the summons and complaint to a person of suitable age and discretion, who was identified as Marilyn Matheson, at the appellant's residence in Queens. In support of her motion, in effect, to vacate her default in appearing or answering the complaint, the appellant submitted an affidavit from Matheson averring that the summons and complaint had never been delivered to her, and that she was in Pawling, New York, in April 2007. Although Matheson's affidavit did not specify that she was in Pawling on April 23, 2007, when process allegedly was delivered to her in Queens, the appellant submitted additional evidence to substantiate her claim that Matheson was in Pawling that day, including a letter from a physician who treated Matheson for flu symptoms. The appellant's submissions also indicated that Matheson's physical appearance varied significantly from the description set forth in the affidavit of service. Under these circumstances, the appellant is entitled to a hearing on the issue of whether service was properly effected pursuant to CPLR 308(2) (see Zion v Peters, 50 AD3d 894; Mortgage Access Corp. v Webb, 11 AD3d at 593; Bankers Trust Co. of Cal. v Tsoukas, 303 AD2d at 344). Thus, we remit the matter to the Supreme Court, Queens County, for a hearing to determine whether the appellant was properly served and thereafter for a new determination of the motion to vacate.

The appeal from so much of the order dated June 5, 2008, as denied that branch of the appellant's motion which was for leave to reargue must be dismissed, since no appeal lies from an order denying reargument. The appeal from so much of the order dated June 5, 2008, as denied that branch of the appellant's motion which was for leave to renew must be dismissed as academic in light of our determination on the appeal from the order dated December 4, 2007.

The bold is mine.

Reasonbable Excuse and (Potentially?) Meritorious Defense: CPLR R. 5015

CPLR R. 5015 Relief from judgment or order

Kramer v Oil Servs., Inc., 2009 NY Slip Op 06121 (App. Div., 2nd, 2009)

A defendant seeking to vacate its default in appearing or answering the complaint must provide a reasonable excuse for the default and demonstrate the existence of a meritorious defense to the action (see CPLR 5015[a][1]; Lemberger v Congregation Yetev Lev D'Satmar, Inc., 33 AD3d 671, 672; Krieger v Cohan, 18 AD3d 823; Kaplinsky v Mazor, 307 AD2d 916). The only excuse proffered by the appellant for the default in serving a timely answer was the more than one-year delay caused by its insurance carrier in providing a defense which, under the circumstances, was insufficient (see Toland v Young, 60 AD3d 754; Martinez v D'Alessandro Custom Bldrs. & Demolition, Inc., 52 AD3d 786; Canty v Gregory, 37 AD3d 508; Lemberger v Congregation Yetev Lev D'Satmar, Inc., 33 AD3d at 672; Krieger v Cohan, 18 AD3d 823; Hegarty v Ballee, 18 AD3d [*2]706). Accordingly, the Supreme Court providently exercised its discretion in denying the appellant's motion.

Recently I received a comment questioning why some decision require defendant to show a "potentially" meritorious defense and others require them to show meritorious defense.  I suggested that "potentially meritorious" might be a middle ground between an "interests of justice" vacatur and and a normal meritorious defense vacatur.  I know, that sentence is anything but clear.  But I think you get the idea.

So, yeah, I'm still looking into it.  I meant to do it over the weekend, but life got in the way.  And I'm lazy.  Eventually I will get to it, I swear.

The bold is mine.

Post-NOT Discovery; 22 NYCRR 202.21

22 NYCRR 202.21 Note of issue and certificate of readiness

CPLR § 3126 Penalties for refusal to comply with order or to disclose

CPLR R. 5515 Taking an appeal; notice of appeal

1. An appeal shall be taken by serving on the adverse party a notice of appeal and filing it in the office where the judgment or order of the court of original instance is entered except that where an order granting permission to appeal is made, the appeal is taken when such order is entered. A notice shall designate the party taking the appeal, the judgment or order or specific part of the judgment or order appealed from and the court to which the appeal is taken.

Racine v Grant, 2009 NY Slip Op 06127 (App. Div., 2nd, 2009)

The Supreme Court improvidently exercised its discretion in granting the defendants' cross motion pursuant to CPLR 3216 to dismiss the complaint to the extent of directing the plaintiff to comply with a demand for discovery which was annexed to the cross motion papers, as the demand was made more than one year after a note of issue had been filed in the action. The defendants failed to make the requisite showing that "unusual or unanticipated circumstances" had arisen after the filing of the note of issue (22 NYCRR 202.21[d], [e]; see Silverberg v Guzman, 61 AD3d 955; Utica Mut. Ins. Co. v P.M.A. Corp., 34 AD3d 793, 794; Audiovox Corp. v Benyamini, 265 AD2d 135, 138; Marks v Morrison, 275 AD2d 1027), to justify the demanded disclosure at this late stage of the action.

The plaintiff's argument that the Supreme Court should have granted his motion to strike the defendants' answer is not properly before us, as the plaintiff's notice of appeal limited the scope of the appeal to that part of the Supreme Court's order which determined the defendants' cross [*2]motion (see CPLR 5515[1]; Marciano v Ran Oil Co., E., LLC, 63 AD3d 1118).

The bold is mine.

CPLR § 105(u) Use of a verified pleading as an affidavit -- Didn't work this time

CPLR § 105 Definitions

(u) Verified pleading. A “verified pleading” may be utilized as an affidavit whenever the latter is required.

Griffin v 1869 Utica Ave. Corp., 2009 NY Slip Op 51585(U) (App. Term, 2nd, 2009)

CPLR 5015 (a) (1) provides that a court which rendered a judgment may, upon motion, relieve a party from such judgment upon the ground of excusable default. In order to obtain such relief, however, the movant must establish that the default was excusable and that there is a meritorious defense to the action (see e.g. Kaplinsky v Mazor, 307 AD2d 916 [2003]). In the instant case, defendant failed to establish by competent evidence a reasonable excuse for defendant's default in appearing. The affidavit of Mr. Greenbaum's daughter consisted of conclusory allegations regarding the state of her father's health, which were insufficient to constitute a reasonable excuse for the default, particularly in light of the fact that the record demonstrates that defendant was properly served at Mr. Greenbaum's address, the corporate address, as directed by the court.

In view of our determination, we need not address the question of whether defendant established the existence of a meritorious defense. However, we note that although a verified pleading may be accepted in lieu of an affidavit of merit (CPLR 105 [u]), it must contain evidentiary facts from a person with knowledge in order to establish the merits of the defense (see Juseinoski v Board of Educ. of City of NY, 15 AD3d 353 [2005]). The verified answer in the instant case was insufficient as an affidavit of merit.

Finally, we reject defendant's argument that it was improper for the court to deem defendant to be self-represented if it did not secure counsel. A corporate defendant may not obstruct or impede the progress of litigation by refusing to retain counsel (see e.g. Valisa MFG, LLC v 54 Group, Ltd., 19 Misc 3d 1136[A], 2008 NY Slip Op 51017[U] [2008]), and, where a corporate defendant fails to appear by attorney, it is proper for a court to hold said defendant in default (id.; see also World on Columbus, Inc. v L.C.K. Rest. Group, Inc., 260 AD2d 323 [1999]).

The bold is mine.  Most people are unaware of 105(u).  While the provision offered no benefit here, it will in countless cases, should people take advantage of it.  In vacating defaults, CPLR § 317 is another underutilized rule.

CPLR R. 5015(a)(4) Bad Faith Removal Doesn't Divest NY Court of Jurisdiction

CPLR R. 5015 Relief from judgment or order
(a) On motion
(4) lack of jurisdiction to render the judgment or order

Astoria Fed. Sav. & Loan Association/Fidelity N.Y. FSB v Lane, 2009 NY Slip Op 05685 (App. Div., 1st, 2009)

Now, more than 10 years after the properties were sold and without giving any excuse for her extraordinary delay, Lane seeks to undo the foreclosures, oust the current owners from their homes, and vacate the judgments. Lane's motions, presumably brought pursuant to CPLR 5015(a)(4), allege that Supreme Court lacked jurisdiction during the limited time period in 1997 between the filing of the removal petition and the federal court remand. Notably, Lane does not claim, nor could she, that Supreme Court did not have jurisdiction over the matter at any other time during the long history of this case. Lane offers no reason why her removal attempt was proper, nor does she present any viable defense on the merits of the foreclosure actions. And it is undisputed that at the time the properties were sold, the federal court had already remanded the matter to state court.

As a general rule, removal of an action divests the state court of its jurisdiction over the dispute while the removal petition is pending in federal court (Matter of Artists' Representatives Assn. [Haley], 26 AD2d 918 [1966]). While no New York case has addressed the specific issue presented here, a number of other courts have carved out exceptions to the general rule focusing on situations where removal petitions were frivolous, duplicative or abusive. For example, in Motton v Lockheed Martin Corp. (692 So 2d 6 [La App 1997]), after the defendant filed an improper removal petition but before the federal court remanded, the plaintiff filed a notice of appeal. The court denied the defendant's motion to dismiss the appeal, finding that the defendant's removal attempt was made to delay the plaintiff's right to move forward in the case.

...

We find that under the unique circumstances of this case, where the federal court found the removal petition to be frivolous on its face and where it was made in bad faith at the eleventh hour, following an unsuccessful appeal, the motion court was not required, more than a decade later, to vacate the judgments based on a claimed lack of jurisdiction. There is no question that Lane's removal petition was frivolous. In the order summarily remanding the matter to state court, the federal court concluded that the petition showed "no non-frivolous basis for jurisdiction" and that "it clearly appears on the face of the papers submitted that removal should not be permitted." [*3]

Moreover, Lane's removal petition was undeniably untimely. A notice of removal of a civil action must be filed within 30 days after receipt of a copy of the initial pleading (28 USC § 1446[b]). Here, the foreclosure actions were commenced in December 1994 and Lane's answers were struck in February 1996, yet the removal petition was not filed until May 1997. Therefore, in addition to asserting frivolous grounds for removal, the petition was time-barred and could not have caused the state court to lose jurisdiction (see Booth v Stenshoel, 96 Wash App 1019, 1999 WL 438888 [state court had jurisdiction to enter judgment after removal petition was filed on the day of trial and 16 months after the action was commenced]; Miller Block Co. v United States Natl. Bank, 389 Pa Super 461, 567 A2d 695 [1989], lv denied 525 Pa 658, 582 A2d 324 91990] [state court not divested of jurisdiction upon filing of the removal petition where petition was undisputedly untimely]; Ramsey v A.I.U. Ins. Co., 1985 Ohio App LEXIS 8157, 1985 WL 10329 [an untimely removal petition is a nullity and does not divest the state of jurisdiction]).

Lane's bad faith in filing her removal petition is apparent. After an unsuccessful appeal and the lifting of an appellate stay, Lane filed for bankruptcy and, as a result, obtained yet another stay of the foreclosure action, which already had been pending for several years. After the bankruptcy stay was lifted, plaintiff submitted proposed judgments of foreclosure. A week later, instead of taking any action in state court, Lane filed her frivolous removal petition. The only fair reading of the record is that Lane's actions in attempting removal were made in bad faith for the purpose of delaying the imminent foreclosures. Lane's bad faith litigation conduct persists to this day, as evidenced by her inexcusable delay in waiting more than 10 years to challenge the judgments despite being aware of their existence within weeks of their entry.

We recognize that some courts have concluded no exceptions should be created to the general rule and thus have invalidated state court action taken after removal but before remand (see e.g. South Carolina v Moore, 447 F2d 1067 [4th Cir 1971]; State ex rel. Morrison v Price, 285 Kan 389, 172 P3d 561 [2007]; People v Martin-Trigona, 28 Ill App 3d 605, 328 NE2d 362 [1975]). These cases are not binding on us, and in any event, we decline to follow them under the egregious circumstances presented here. With no good reason, Lane waited over a decade before deciding to come back to court to challenge the foreclosures. Her abuse of the legal process, both in filing a bad faith petition and in failing to move to vacate the judgments she unquestionably knew about, cannot be countenanced, particularly in light of the harm that could befall the innocent purchasers of the properties. To hold otherwise would reward Lane for her inexcusable delaying tactics and would be entirely "inconsistent with any notion of fairness and justice" (Farm Credit Bank of St. Paul v Rub, supra, 481 NW2d at 457).

The bold is mine.