Friday, July 19, 2013

Default Judgment in New York Supreme Court

SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF WESTCHESTER

[CAPTION]

The following papers numbered 1 to 12 were read on this unopposed motion by Plaintiff [] for an order pursuant to CPLR 2221 [e] to renew Plaintiffs motion for an order granting Plaintiff a Judgment as demanded in the Summons and Motion for Summary Judgment in Lieu of Complaint, on the grounds that Defendants [] (hereinafter "Defendants"), have defaulted by failing to appear or answer, and the time to do so has expired.

Notice of Motion – Affirmation - Memorandum of Law – Exhibits A-G - Affirmation of Service - Affirmation of Service Pursuant to CPLR 3215[g] 1-12

Upon the foregoing papers, it is determined that the unopposed motion is decided as follows:

Plaintiff and Defendants began their business relationship in May of 2007, whereby Plaintiff sold hardware and other goods to the Defendants. [Defendant #2] signed a credit application and a personal guaranty for the hardware sold by Plaintiff to Defendants. On or about August of 2010, Defendants' account with Plaintiff became delinquent for goods sold between May and July of2010. At that time, Plaintiff demanded payment, but Defendants failed to satisfy their obligations.

Plaintiff commenced the instant action to enforce [Defendant #1]’s obligation to it pursuant to a credit application and operating agreement, dated May 22, 2007, and to enforce [Defendant #2]’s obligation to it pursuant to an individual personal guaranty, dated March 22, 2007. At the time these documents were executed, [Defendant #2] was President of [Defendant #1].

Plaintiff also commenced the instant action in order to recover: (1) an unpaid Judgment against [Defendants #1 & 2] for $11,393.05, plus post-judgment interest at 10% per annum from date of entry until paid, pursuant to Tenn. Code 47-14-121, and court costs of $182.50; and (2) an unpaid Judgment against [Defendants #2 & 3] for $8,544.79, plus post-judgment interest at 10% per annum from date of entry until paid, pursuant to Tenn. Code 47-14-121, and court costs of $182.50 (hereinafter the "Tennessee Judgment").

Procedural History

In November of 2010, Plaintiff filed suit with the Shelby County General Sessions Court in Tennessee pursuant to the terms of the credit application and personal guaranty between the parties, which provided for any suits to be commenced in Shelby County, Tennessee.

The Summons and Warrant of the Shelby County Court were served upon [Defendant #1] on December 6, 2010, upon [Defendant #2] on April 7, 2011, and upon [Defendant #3] on June 20,2011. Service upon each Defendant was effectuated in New York State by the Westchester County Sheriff's Office.

On July 21, 2011, the Tennessee Judgment was entered against Defendants in Shelby County Tennessee Court in Plaintiff's favor. Defendants did not seek relief from the Tennessee Judgment, and the time period to seek relief therefrom has expired.

On December 12, 2011, the instant matter was commenced before this Court, pursuant to CPLR 3213, with the filing of a Summons and Motion for Summary Judgment in Lieu of Complaint. When an action is based upon an instrument for the payment of money only or upon any judgment, the plaintiff may serve with the summons a notice of motion for summary judgment and the supporting papers in lieu of a complaint (see CPLR 3213).

On February 28, 2012, this Court (Tolbert, J.), denied Plaintiff's application for summary judgment without prejudice (see Decision and Order, a copy is annexed to the Order to Show Cause as Exhibit D). Thereafter, this matter was scheduled for a Preliminary Conference on May 22, 2012, where Defendants failed to appear. Defendants also failed to appear at a subsequent conference on July 2, 2012, in which this Court issued a Discovery Motion Briefing Schedule, directing the Plaintiff to file and serve the instant application on or before July 23, 2012.

On August 21, 2012, by Decision and Order, this Court (Lefkowitz, J.), denied Plaintiff's motion for a default judgment finding that Plaintiff failed to submit affidavits demonstrating additional notice was given to the Defendants pursuant to CPLR 3215[g][3][i] and CPLR 3215[g][4][i]. Plaintiff renews its motion for a default judgment against the Defendants on the grounds that Defendants have defaulted by failing to appear or answer, and the time to do so has expired. Furthermore, Plaintiff seeks to enforce the Judgment as demanded in the Summons and Motion for Summary Judgment in Lieu of Complaint.

When a defendant has failed to appear ... , the plaintiff may seek a default judgment against him (CPLR 3215[a]). A defendant who has failed to appear or answer the complaint must provide a reasonable excuse for the default and demonstrate a meritorious defense to the action to avoid the entering of a default judgment or to extend the time to answer (see Ennis v Lema, 305 AD2d 632, 633 [2d Dept 2003]; see also Grinagev City of NY, 45 AD3d 729, 730 [2d Dept 2007]). [T]he determination of what constitutes a reasonable excuse lies within the sound discretion of the Supreme Court (id.). Here, none of the Defendants answered the Summons and Motion for Summary Judgment in Lieu of Complaint, or moved with respect thereto, and the time to do so has expired. Also, the Defendants: (1) failed to appear at any mandatory court conferences, and (2) failed to provide any reasonable excuse for the default or demonstrate the existence of a meritorious defense to the instant action.

While all Defendants failed to appear in this action, Plaintiff is still required to show proof of judgment by default (CPLR3215[f]). On any application for judgment by default, the applicant shall file proof of service of the summons and complaint, or a summons and notice served pursuant to CPLR 305[b] or CPLR 316[a], and proof of the facts constituting the claim, the default and the amount due by affidavit made by the party (id.).

Here, Plaintiff establishes the default in answering on the part of all of the Defendants. Accordingly, the defaults of all Defendants are fixed and determined. In support of the motion, Plaintiff submits proof of service of the Summons and Motion for Summary Judgment in Lieu of Complaint. Plaintiff also shows proof of the facts constituting the underlying claim, the default, and the amount due by submitting a copy of the Summons and Motion for Summary Judgment in Lieu of Complaint, an affidavit by [Plaintiff’s Representative], an attorney affirmation as to the default, a memorandum of law, an affidavit of service, the credit application and operating agreement, and the State of Tennessee Judgment against the Defendants totaling $20,302.84 (including costs).

Additionally, when a default judgment based upon nonappearance is sought against a natural person in an action based upon nonpayment of a contractual obligation, an affidavit shall be submitted that additional notice has been given by or on behalf of the plaintiff at least twenty (20) days before the entry of such judgment, by mailing a copy of the summons by first-class mail to the defendant at his place of residence in an envelope bearing the legend "personal and confidential" and not indicating on the outside of the envelope that the communication is from an attorney or concerns an alleged debt (CPLR 3215[g][3][i]). In the event such mailing is returned as undeliverable by the post office before the entry of a default judgment, or if the place of residence of the defendant is unknown, a copy of the summons shall then be mailed in the same manner to the defendant at the defendant's place of employment if known; if neither the place of residence nor the place of employment of the defendant is known, then the mailing shall be to the defendant at his last known residence.

In support of Plaintiffs renewal of its motion for a default judgment, Plaintiff submits an affidavit of service demonstrating additional notice was given to the Defendants pursuant to CPLR 3215[g][3][i] and CPLR 3215[g][4][i] *1

Here, said affidavit of service satisfies CPLR 2221 [e]'s requirement of "new or additional facts, not offered on the original application, that would change the prior determination" because this affidavit was not available nor presented to the Court at the time of Plaintiff's prior application for default judgment. *2

In view of the foregoing, the branch of the Plaintiff's motion seeking to renew its motion for a default judgment is granted. Upon renewal, Plaintiff's motion for a default judgment is granted in light of Defendants' failure to answer, appear at court conferences, and oppose the present motion (CPLR 3215; Uniform Rules for Trial Cts [22 NYCRR] 202.27[a]). Plaintiff has established that there is due and owing from Defendants the sum of$19,937.84, together with post-judgment interest at 10% per annum from July 21, 2011, as well as court costs and disbursements totaling $365.00.

Accordingly, it is

ORDERED that Plaintiff's motion to renew its motion for a default judgment against Defendants [], is granted, and upon renewal, Plaintiff is granted a default judgment against the Defendants in the sum certain of$19,937.84, together with post-judgment interest at 10% per annum from July 21, 2011, as well as court costs and disbursements totaling $365.00; and it is further

ORDERED that Plaintiff shall serve a copy of this Order with notice of entry upon Defendants within ten (10) days of entry.

This constitutes the Decision and Order of this Court.

Dated: White Plains, New York
January 14, 2013

/S/ JUSTICE OF THE SUPREME COURT

*1 CPLR 3215[g][4] provides a similar requirement as CPLR 3215[g][3][i], where a motion for default judgment is based on the nonappearance of a domestic corporation. In the case of a domestic corporation, the additional service of the summons must be mailed to the defendant at his last known address (CPLR 3215[g][4][J]).

*2 A motion for leave to renew must be based upon new or additional facts, not offered on the original application, that would change the prior determination (CPLR 2221 [e]; Bowe v NYCPD, 85 AD3d 1001 [2d Dept 2011]; Cole-Hatchard v GrandUnion, 270 AD2d 447 [2d Dept 2000]). The new or additional facts must have either not been known to the party seeking renewal or may, in the Supreme Court's discretion, be based on facts known to the party seeking renewal at the time of the original motion (see Bowe v NYCPD, 85 AD3d 1001 [2d Dept 2011]).

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