Most often a lawsuit begins with the filing of a summons and complaint or summons with notice. CPLR 304. Once the lawsuit is commenced, the plaintiff is required to serve the defendant(s) with process – the event by which the court obtains personal jurisdiction over the defendant(s). [This Blog has written about service of process, see, e.g., [here], [here], [here] and [here].] There are numerous ways in which service of process may be effectuated on a natural person (CPLR 308) and the CPLR also provides for service of process on, inter alia, different types of business and governmental entities (CPLR 307 (State), 308, 309 (infant, incompetent or conservatee), 310 (partnership), 310-a (limited partnership), 311 (corporation or governmental subdivision), 311-a (limited liability company) and 312 (court, board or commission).
Once service of process is effectuated, the defendant has a certain amount of time to appear in the action depending on the manner in which service is made. A defendant can appear by making a formal appearance, which can be done by “serving an answer or a notice of appearance, or by making a motion which has the effect of extending the time to answer.” CPLR 320. Defendants can also make informal appearances, which can have serious implications in litigation. [This Blog has written about informal appearances, see, e.g., [here] and [here].]
If a defendant is served with process, but fails to appear, a plaintiff can seek judgment by default against the non-appearing defendant. CPLR 3215. If plaintiff’s claim is “for a sum certain or for a sum which can by computation be made certain,” a plaintiff can seek a default judgment from the Clerk of the Court if the application is made within 1 year of the default. See CPLR 3215(a). A clerk’s judgment requires no inquest. A “sum certain” in the context of CPLR 3215 “contemplates a situation in which, once liability has been established, there can be no dispute as to the amount due, as in actions on money judgments and negotiable instruments.” Reynolds Securities, Inc. v. Underwriters Bank & Trust Co., 44 N.Y.2d 568, 573 (1978); see also Freeport Plaza Realty, LLC v. Freeport Moon, Inc., 205 A.D.3d 685, 687 (2nd Dep’t 2022). Thus, if extrinsic evidence is necessary to calculate damages, a clerk’s judgment is unavailable. Id. If the plaintiff does not take proceedings for the entry of default within a year, the court “must” dismiss the action against the non-appearing defendant unless “sufficient cause” is shown for the failure to do so. CPLR 3215(c); see also U.S. Bank, N.A. v. Onuoha, 162 A.D.3d 1094, 1095 -96. [This Blog has written about CPLR 3215(c), see, e.g., [here], [here], [here] and [here].]
The vacatur of a clerk’s judgment is the subject of today’s article. There are numerous grounds upon which a judgment may be vacated. See, e.g., CPLR 5015. [This Blog has written about CPLR 5015, see, e.g., [here], [here] and [here].] In order to “vacate a judgment, including a clerk’s judgment, entered upon [a defendant’s] default in appearing and answering the complaint [under CPLR 5015(a)(1), a defendant] must demonstrate a reasonable excuse for its delay in appearing and answering, and a meritorious defense to the action.” Verde Elec. Corp.v. Federal Ins. Co., 50 A.D.3d 672, 672-73 (2nd Dep’t 2008); see also Barnett v. Diamond Finance Co., Inc., 202 A.D.3d 651(2nd Dep’t 2022).
In Fidelity Nat. Title Ins. Co. v. Valtech Research, Inc., 73 A.D.3d 686 (2nd Dep’t 2010), a negligence action, the plaintiff obtained a clerk’s judgment. The Court found, among other things, that the defendant was not permitted to vacate the default under CPLR 5015 because it “failed to establish a reasonable excuse for that default.” Id. at 687. However, the Court also found that plaintiff was not seeking a “sum certain” and, therefore, the clerk lacked authority to enter judgment in Plaintiff’s favor. Id. Thus, the Court remitted the matter “for an inquest and the entry thereafter of an appropriate judgment.” Id.
On September 13, 2023, the Appellate Division, Second Department, decided Pizzarotti, LLC v. Cabgram Developer, LLC, a case involving the vacatur of a clerk’s judgment. The plaintiff in Pizzarotti obtained a clerk’s judgment exceeding $2,300,000 based on the defendant’s failure to appear or answer the complaint. The defendant’s motion to vacate the judgment was granted and the plaintiff appealed. The Second Department in affirming the motion court’s order and noting the short length of the default, stated:
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]), the sufficiency of an excuse is not as significant where the default is only a short period. Here, the less than seven-week delay between when the defendant’s time to answer expired and when the defendant moved to vacate the clerk’s judgment is brief, and there is no evidence that the defendant’s default was intentional or part of a pattern of neglect. Moreover, in light of the lack of prejudice to the plaintiff resulting from the defendant’s short delay in appearing and seeking to answer the complaint, the existence of a potentially meritorious defense, and the strong public policy favoring resolution of cases on the merits, the Supreme Court providently exercised its discretion in granting the defendant’s motion to vacate the clerk’s judgment entered upon its default. [Citations omitted.]