Opinion
TS 00348/04.
Decided June 23, 2011.
Attorney for plaintiff: Adam B. Feder, Esq. Law Office of Feder Rodney, PLLC, Brooklyn, NY.
Attorney for defendant: Lowell B. Davis, Esq., Carle Place, NY.
Recitation, as required by CPLR § 2219(a), of the papers considered in the review of this motion:
Papers Numbered Defendants' Order to Show Cause and Affidavits/Affirmations Annexed Answering Affidavits Affirmations Reply Affidavits/Affirmations Memoranda of Law Other
.....................................1-2 ...................................3-4 .........................................5 ...................................................... .................................................................Upon the forgoing cited papers and after oral argument, the Decision/Order on defendants' motion to vacate a default judgment is decided as follows:
Introduction
Defendants, a sole proprietor and his bakery, moved pursuant to CPLR 5015 (a) (1), (3), (4), and (5), and CPLR 3215 (g), to vacate a default judgment in the amount of $3 million ($2 million general and $1 million punitive damages) entered on July 15, 2008. Plaintiff opposed the motion and argued the judgment should stand since the inquest court allegedly waived notice under 3215 (g), and defendants had sufficient time to defend the matter but failed to do so. The Court grants defendants' motion for the reasons set forth below.
Statement of Facts
Defendant Frederick Pereira ("Pereira") and plaintiff allegedly played a game of Russian roulette at Pereira's bakery on December 31, 1999. Pereira allegedly put a gun in plaintiff's mouth and pulled the trigger, causing plaintiff to suffer loss of teeth and the lodging of a bullet in his neck, among other injuries. Pereira was arrested and convicted of first degree assault, a felony, and criminal possession of a weapon. Pereira was sentenced to five years imprisonment on February 21, 2001.
In or about March 2000, plaintiff commenced this lawsuit in Supreme Court seeking monetary damages for "negligent, reckless and/or careless acts . . . [from which] Plaintiff was caused to suffer severe and serious personal injuries to his face, head, mind and body, some of which . . . are believed to be of a permanent and disfiguring nature . . ." (Arneaud complaint at 9). Issue was joined in June 2000, when defendants served their answer. At all times, and through the present date, Lowell B. Davis, Esq. has represented the defendants in this matter. The case was transferred to Civil Court on or about September 2, 2004, pursuant to CPLR 325 (d). Subsequently, the case appeared on the civil court calendar on April 6, 2005, June 17, 2005 and September 30, 2005. Each time defendants failed to appear. The case was scheduled for trial on October 28, 2005. A default was taken on October 28, 2005, after defendants failed to appear for trial.
On February 15, 2006, the case was transferred to Part 12 for an inquest hearing. The case was adjourned two more times with a notation "service only." The inquest hearing was held on March 30, 2006. On July 15, 2008, a default judgment was entered by the Clerk of the Court in the amount of $3 million damages and $407 costs. Defendants now move to vacate the judgment on the ground that no notice was served pursuant to CPLR 3215 (g) prior to entry of the judgment.
At the motion hearing held before me on May 23, 2011, plaintiff's counsel admitted no notice of entry was served and no prior notice of the application for default, inquest, or for entry of a judgment was made pursuant to 3215 (g). However, he averred defendants would have known of the court dates had they acted with due diligence. He further averred that defendants cannot demonstrate meritorious defenses since Pereira was found guilty of criminal assault and illegal possession of a gun. Plaintiff's counsel also argued the court waived notice under 3215 (g). When questioned, counsel admitted he affirmed compliance with 3215 (g) in his application for entry of the judgment. Inspection of the document revealed plaintiff's counsel, Adam Feder, Esq., affirmed compliance with CPLR 3215 (g) in his Application for Judgment, dated April 30, 2007.
Defendants asserted the affirmation was false when made, and at the very least constituted fraud and misrepresentations, which divested the court of jurisdiction to enter the judgment. Defendants also asserted excusable default therefor, as well as no other notice of proceedings until receipt of the marshal's notice seeking to execute the judgment on December 28, 2010 (affidavit of defendant at 4). The marshal thereby notified defendants of his intent to levy and sell their property at an auction scheduled to be held at 2:00 p.m. on February 14, 2011 (defendants' exhibit A).
Defendants argued that they have meritorious defenses and should be permitted to inform a civil jury of the actual circumstances (i.e., plaintiff's participation) in mitigation of damages. Defendants also averred that, "Had counsel for the plaintiff provided defendant[s] with the requisite notice to [ sic] CPLR 3215 (g) (1) there never would have been a default" (affirmation of Lowell B. Davis, Esq. at 8). Defendant Pereira noted that he was incarcerated from July 15, 2002 through at least October 28, 2005, the date default was taken (affidavit of defendant at 8, 9, 10, 12).
Discussion and Analysis
CPLR 3215 (g) (1), provides as follows:
Except as otherwise provided with respect to specific actions, whenever application is made to the court or clerk, any defendant who has appeared is entitled to at least five days' notice of the time and place of an application, and if more than one year has elapsed since the default any defendant who has not appeared is entitled to the same notice unless the court orders otherwise. The court may dispense with the requirement of notice when a defendant who has appeared has failed to proceed to trial of an action reached and called for trial ( emphasis added).
Here, defendants initially appeared by counsel in Supreme Court. The case was transferred to Civil Court on September 2, 2004, and subsequently adjourned a number of times. Plaintiff admittedly did not provide defendants notice of the application for default or inquest. An inquest was held on March 30, 2006. Thereafter, plaintiff's counsel submitted the Application for Judgment, dated April 30, 2007, to the Clerk of the Court, in which he affirmed compliance with CPLR 3215 (g). A judgment was entered by the Clerk of the Court on July 15, 2008.
By plaintiff's own admission, no notice of entry was ever served and filed, and no notice was ever provided to defendants in compliance with CPLR 3215 (g). On these facts and in light of the lack of any record proof or evidence thereof, it cannot be stated that the court waived service of notice pursuant to 3215 (g). A review of the court file also fails to substantiate this contention as there are no notes indicating a waiver. Moreover, plaintiff is unable to establish this was the intention of the court. To the contrary, the case was adjourned numerous times with a marking "service only," which appears to indicate a suspected problem with the service. Further credence is given to defendants' contention in this regard since plaintiff's attorney also affirmed his compliance with CPLR 3215 (g) prior to entry of the judgment, and such alleged compliance is now admitted to be an error or misrepresentation. Accordingly, the Court finds plaintiff failed to comply with CPLR 3215 (g).
Contrary to defendants' position, failure to provide notice pursuant to CPLR 3215 (g), as a general rule, does not constitute a jurisdictional defect requiring dismissal of the case. Therefore, relief pursuant to CPLR 5015 (a) (4) cannot be presumed. Rather, such failure simply prevents entry of a default judgment ( Palais Partners v Vollenweider, 173 Misc 2d 8, 12, 1997 NY Slip Op 97313 [Civ Ct, New York County 1997]; Regency Towers v Landou , 10 Misc 3d 994 , 996, 2006 NY Slip Op 26008 [Civ Ct, New York County 2006]; 342 Madison Ave. Assoc. Ltd. Partnership v Suzuki Assoc., 187 Misc 2d 488, 490, 2001 NY Slip Op 21133 [Supreme Court New York 2001]; Rothschild v Finkelstein, 248 AD2d 701, 701-02 [2d Dept 1998]). This is especially true where defendants, as here, answered and interposed a challenge to service of the summons and complaint, but failed to timely seek dismissal (CPLR 3211 [e]).
Although the court may ultimately vacate entry of a judgment in these circumstances, typically the moving party must establish additional grounds when seeking to have the judgment vacated ( 342 Madison Ave. Assoc., 187 Misc 2d at 490-91).
The relevant statute, CPLR 5015 (a), provides:
The court which rendered a judgment or order may relieve a party from it upon such terms as may be just, on motion of any interested persons with such notice as the court may direct, upon the ground of:
(1) excusable default, if such motion is made within one year after service of a copy of the judgment or order with written notice of its entry upon the moving party, or, if the moving party has entered the judgment or order, within one year after such entry; or
(2) newly discovered evidence . . . ; or
(3) fraud, misrepresentation, or other misconduct of an adverseparty; or
(4) lack of jurisdiction to render the judgment or order; or
(5) reversal, modification or vacatur of a prior judgment or order upon which it is based.
Here, plaintiff acknowledged no notice of entry was caused to be served on the defendants or their attorney, and no notice was provided to defendants prior to inquest or entry of the default judgment in compliance with CPLR 3215 (g), despite the affirmation of counsel which indicates otherwise. Accordingly, the Court finds the instant motion was reasonably made after discovery of the default judgment when defendants received the notice of levy from the marshal (CPLR 5015 [a] [3]).
Further, where as here, the entry of judgment was obtained by plaintiff attorney's misrepresentation or other improper conduct by affirming that 3215 (g) notice was given, when no such notice was provided at any time, the judgment should be vacated pursuant to CPLR 5015 (a) (3) ( Shaw v Shaw, 97 AD2d 403, 403 [2d Dept 1983]). Despite the representations made by counsel in his Application for Judgment, counsel unquestionably failed to provide defendants any notice of the impending default judgment and entry thereof ( see Shaw, 97 AD2d at 404). As the court noted in Shaw, "from a policy point of view, there is little if any difference between a default judgment obtained by sewer service' and one obtained where the defendant might be properly served, but then, through some device, trick, or deceit, is led to believe that he or she need not defend the suit. Both are frauds on the court and the defendant" ( Id. [citation omitted]).
In Shaw, the Appellate Division described this conduct as "extrinsic" fraud which it defined as "a fraud practiced in obtaining a judgment such that a party may have been prevented from fully and fairly litigating the matter" ( Shaw, 97 AD2d at 403 [citations omitted]). The court indicated such circumstances do not require proof of excusable default and a meritorious defense since the judgment is deemed a nullity because "the courts will have no part in enforcing a judgment which was procured by a fraud practiced on it" ( Id. at 404 [citation omitted]). Accordingly, the Court finds in this case that the misrepresentations made in the attorney's affirmation, and related conduct, concerning the required notice under CPLR 3215 (g) warrant the same result.
Further, the Court has considered plaintiff's argument that defendants failed to exercise diligence in monitoring the status of the case. Such lack of diligence pales in comparison to plaintiff's misrepresentations, and other conduct. Accordingly, the Court finds there was no waiver of defendants' right to challenge the judgment ( See Shaw, 97 AD2d at 405; see also Oppenheimer v Westcott, 47 NY2d 595, 603-04; see also Miller v Weyerhaeuser Co., 179 Misc 2d 471, 477 [Sup Ct, New York 1999]; see also Marco v Sachs, 10 NY2d 542, 550-51). Nonetheless, if defendants' counsel had properly monitored the case, these circumstances may have been prevented.
Conclusion
Therefore, the notice of entry and judgment should be vacated pursuant to CPLR 5015 (a) (3) on the grounds of misrepresentation and other conduct. To the extent plaintiff alleges defendants cannot demonstrate a meritorious defense or excusable default, such proof is not required ( Shaw, 97 AD2d at 404). At trial, defendants are entitled to raise the defenses of comparative negligence and assumption of the risk, as preserved in their answer.
The remaining relief sought by defendants in their papers is denied as moot. To the extent defendants' motion to vacate the judgment, pursuant to CPLR 5015 (a) (4), is premised on plaintiff's alleged failure to properly serve the summons and complaint, as asserted in defendants' answer, traverse is deemed waived for failure to move within sixty days after service of the initial pleading (CPLR 3211 [e]).
Accordingly, the notice of entry and default judgment are vacated, and this matter is restored to the Civil Court calendar for a trial on the merits. The parties are directed to appear ready for trial on October 31, 2011, at 9:30 a.m., in room 306 at 141 Livingston Street, Brooklyn, New York.
This constitutes the Decision and Order of the Court.