Part XXXIX Motions To Vacate Default Judgments Continued Motions To Vacate Default Judgments Continued

• Jurisdiction: New York

Part XXXIX — Motions to Vacate Default Judgments Continued

In the last issue, the Legal Writer discussed motions to vacate default judgments. Specifically, the Legal Writer discussed when a party might default. It also discussed the overlap between CPLR 317 and 5015(a) in moving to vacate a default. The Legal Writer discussed the first ground under 5015(a) — excusable default — to moving to vacate a default judgment. We continue with excusable default and the remaining grounds under CPLR 5015(a).

The CPLR 5015(a) grounds are not exhaustive: “In addition to the grounds set forth in section 5015(a), a court may vacate its own judgment for sufficient reason and in the interests of substantial justice.”¹⁷⁷⁴

Grounds to Vacate a Default Judgment Under CPLR 5015(a) Continued

Excusable Default: CPLR 5015(a)(1)

In the last issue, the Legal Writer explained that a court has the discretion in vacating a default to consider a party’s default for law-office failure.

If the basis of your motion to vacate is law-office failure, don’t be “conclusory and perfunctory” in your motion papers.¹⁷⁷⁵ Explain in detail how your law-office failure led to the default.¹⁷⁷⁶

A court won’t be persuaded by your law-office excuse if you allege that you overbooked court cases or didn’t keep track of your court appearances.¹⁷⁷⁷ Also, a court won’t be persuaded if you allege only that an associate left your firm and didn’t tell you about the adjourned date of your case.¹⁷⁷⁸

If counsel’s law-office failure “was, in fact, a dilatory tactic as part of a pattern of willful default and neglect . . . . the default is not excusable under CPLR 5015(a)(1).”¹⁷⁷⁹ A court will likely deny your motion if you’ve waited too long to move to vacate after you knew about your default and did nothing about it.¹⁷⁸⁰

A court might find an excusable default “if the default was inadvertently due to clerical errors made by the court or defendant.”¹⁷⁸¹

Courts have found that an insurance carrier’s office failure may be “akin to ‘law office failure’ and may constitute an excusable default to support the vacatur of a default judgment.”¹⁷⁸²

A party’s or a party’s attorney’s disability or hospitalization might be a valid excuse to vacate a default.¹⁷⁸³ But the party or attorney must have had “insufficient warning of the disability’s onset.”¹⁷⁸⁴

A court will consider the length of the defaulting party’s delay. The court measures the length of the delay between (1) the defendant’s default (the act that constitutes the default) and the entry of the default judgment and (2) the entry of judgment and the defendant’s motion to vacate the default judgment.¹⁷⁸⁵ If the plaintiff enters judgment quickly¹⁷⁸⁶ or if the defendant moves quickly to vacate the default,¹⁷⁸⁷ a court will consider that in vacating the default.¹⁷⁸⁸

In determining whether a reasonable excuse for the default exists, a court will consider several factors, “including the extent of the delay, whether there has been prejudice to the opposing party, whether there has been willfulness, and the strong public policy in favor of resolving cases on the merits.”¹⁷⁸⁹

Newly Discovered Evidence: CPLR 5015(a)(2)

You may move to vacate a default judgment under 5015(a)(2) if you have “newly-discovered evidence which, if introduced at the trial, would probably have produced a different result and which could not have been discovered in time to move for a new trial under section 4404.”

The key word, according to one scholar, is “probably.”¹⁷⁹⁰ You must persuade the court that the new evidence would probably change the result; “[a] mere showing of possibility is insufficient.”¹⁷⁹¹ Also insufficient is “a showing that the new evidence is merely cumulative, or relevant only to a witness’s credibility.”¹⁷⁹²

You may move under CPLR 5015(a)(2) if a key witness to the event who appears post-judgment was “unknown-of or unlocatable earlier in spite of [your] diligent effort.”¹⁷⁹³

No time limit arises if you’re moving under CPLR 5015(a)(2): “The law implies a reasonable time, and what is reasonable is determined sui generis.”¹⁷⁹⁴

The newly discovered evidence must be competent evidence, “although occasionally even incompetent evidence may be allowed to do it if it tends ‘dramatically’ to undermine the original judgment.”¹⁷⁹⁵ Some judges might disagree and not consider incompetent evidence on your motion to vacate.

An additional requirement under CPLR 5015(a)(2) is that the newly discovered evidence could not have been discovered in time to move for a new trial under CPLR 4404. A motion under CPLR 4404 must be made within 15 days after the decision or verdict.¹⁷⁹⁶ If you discover the evidence within 15 days of the decision or verdict, move under CPLR 4404, not CPLR 5015(a)(2). The 15-day period under CPLR 4404 is not a statute of limitations and is thus “presumably subject to discretionary extension by the court.”¹⁷⁹⁷ A court might treat a CPLR 5015(a)(2) motion as an excusably late CPLR 4404 motion.¹⁷⁹⁸ If the evidence you discover is really late — months, or even years, after the entry of a default judgment — move under CPLR 5015(a)(2).

In your motion papers, give the court proof that the evidence was “‘in existence and hidden at the time of the judgment.’”¹⁷⁹⁹

Be diligent: You must show that even after exercising due diligence, you couldn’t have discovered the new evidence before the default judgment was entered.¹⁸⁰⁰

Fraud, Misrepresentation, or Other Misconduct:
CPLR 5015(a)(3)

If your adversary engaged in fraud, misrepresentation, or other misconduct, you may move under CPLR 5015(a)(3).¹⁸⁰¹

Persuade the court, in your motion papers, that the adverse party’s conduct “could have affected the outcome” of the case.¹⁸⁰²

Fraud may be extrinsic or intrinsic. Determining whether the fraud is extrinsic or intrinsic is difficult. Extrinsic fraud is “conduct which deprives a party of a full trial, or has the effect of preventing a party from fully presenting [the party’s] case.”¹⁸⁰³ Intrinsic fraud is fraud that leads to “[a] judgment based on a fraudulent instrument . . . or perjured testimony, or any other item presented to and acted on by the court, whatever its fraudulent component.”¹⁸⁰⁴ As one scholar explains, “conduct which in effect denies a hearing is extrinsic while conduct that injects fraud into the hearing is intrinsic.”¹⁸⁰⁵

If the fraud is intrinsic, you may act on it “only by direct attack, which means on direct appeal or by a motion to vacate the judgment made to the court that rendered it.”¹⁸⁰⁶

If the fraud is extrinsic, you may act on it by direct attack or by collateral attack, meaning that you may bring “a separate action to enjoin its enforcement, or a refusal by some other court to recognize the judgment when its validity arises in some context before that court.”¹⁸⁰⁷

If a party or a party’s counsel obtained a default judgment through extrinsic fraud, you needn’t show, in your motion to vacate under CPLR 5015(a)(3), that you have a meritorious defense or cause of action.¹⁸⁰⁸

CPLR 5015(a)(3) applies whether the plaintiff or the plaintiff’s counsel commits the fraud, misrepresentation, or misconduct.¹⁸⁰⁹

No fraud, misrepresentation, or misconduct exists if the “proof against non-defaulting defendants at trial differs somewhat from the proof offered by way of an affidavit or verified complaint at the beginning of litigation offered in support of an order of default against the defaulting party.”¹⁸¹⁰

No statutory time limit exists if you’re moving under CPLR 5015(a)(3). The court will determine only whether you brought your motion within a reasonable time. The “court determin[es] reasonableness on a sui generis basis.”¹⁸¹¹

A court has “inherent power to vacate orders and judgments obtained by misrepresentation or fraud.”¹⁸¹²

Lack of Jurisdiction: CPLR 5015(a)(4)

Move to vacate a default judgment under CPLR 5015(a)(4) if subject-matter or personal jurisdiction is absent.

You needn’t show a meritorious defense if you’re moving under CPLR 5015(a)(4).¹⁸¹³ A default judgment obtained without jurisdiction is a “‘nullity, irrespective of the question of merit.’”¹⁸¹⁴

You never waive the defense of subject-matter jurisdiction.¹⁸¹⁵

No time limit exists if you’re moving under CPLR 5015(a)(4).¹⁸¹⁶

If the court didn’t have jurisdiction when it “rendered the default judgment, the court must unconditionally grant defendant’s motion to vacate.”¹⁸¹⁷

Move under CPLR 5015(a)(4) if the court didn’t have personal jurisdiction over the defendant when it rendered the default judgment. Move under 5015(a)(4) to vacate the default judgment if you were never properly served with the summons and complaint.¹⁸¹⁸ Move to vacate under this ground if “the default judgment was a nullity due to insufficient proof or notice.”¹⁸¹⁹ Move to vacate under this ground if the “judgment was granted for relief beyond what [plaintiff] sought in the [default] application.”¹⁸²⁰

If a court vacates a judgment under CPLR 5015(a)(4), it must do so without imposing terms or conditions on the vacatur.¹⁸²¹

You waive personal jurisdiction if you move to vacate but fail to raise the personal-jurisdiction ground under 5015(a)(4).¹⁸²² You waive personal jurisdiction if you make payments on the judgment “for a considerable time after it[] [was] rend[ered.”¹⁸²³

If you believe that jurisdiction is lacking, move to vacate a default for lack of jurisdiction. At the same time, move to dismiss the action on that basis.¹⁸²⁴

You may also move under alternative grounds. Move to vacate the default for lack of jurisdiction and also to dismiss the action. Alternatively, move to vacate the default and defend the action on the merits if the court finds that jurisdiction exists.¹⁸²⁵ For more information, see “Overlap of Rules,” below. Even though you needn’t allege a meritorious defense if you’re moving under 5015(a)(4), it’s a good practice to do so if you’re moving under alternative grounds.¹⁸²⁶ “Thus, in the event the court finds jurisdiction, the court may still vacate the default and permit...