Friday, June 24, 2016

Vacatur of a default judgment denied.

Practice point:  The Appellate Division reversed, and denied the motion to vacate. For one thing, defendants failed to demonstrate a reasonable excuse for their default. Defendants' counsel never substantiated or explained the nature of the "serious family matter" that purportedly caused the default. At most, counsel had an ex parte communication with the motion court about the facts of the action, and, during that communication, may or may not have revealed the facts surrounding the alleged family matter. This ex parte communication is an insufficient basis upon which to vacate a default judgment, especially where, as here, the details of the communication are not known.

Defendants also failed to explain why their counsel's family matter was so serious that it kept him from either interposing an answer or responding to plaintiff's motion for a default judgment.  The record contains no adequate explanation for why the law firm representing defendants failed to communicate with plaintiff's counsel for nearly five months, even to inform counsel that a family emergency prevented defendants from timely responding to the litigation. In addition, two attorneys, only one of whom was affected by a family emergency, were representing defendants, and defendants do not explain why the other attorney representing them could not have taken the necessary steps to advance the litigation.

For another thing, defendants' assertion that they were entitled to a premium payment because they executed and posted a bail bond does not present a meritorious defense to plaintiff's action. Although execution of the bond is a condition precedent for retaining a premium payment, defendants failed to present any documentary evidence that they had actually executed and posted any bond. Neither did defendants present any evidence that the motion court ever conducted an examination of surety.

Student note:  While there is a strong public policy in favor of disposing of cases on their merits, this policy does not relieve a party moving to vacate a default from satisfying the two-pronged test of showing both (1) a reasonable excuse for the default; and (2) a meritorious defense to the action.

Case:  Johnson-Roberts v. Ira Judelson Bail Bonds, NY Slip Op 04785 (1st Dep't June 16, 2016)

Here is the decision.

Monday's issue:  Res judicata and a judgment of foreclosure and sale.