You are here: / Civil Procedure

DEFENDANT’S EXCUSE WAS NOT REASONABLE; MOTION TO VACATE A DEFAULT JUDGMENT SHOULD NOT HAVE BEEN GRANTED (SECOND DEPT). ​

The Second Department, reversing Supreme Court, determined defendant’s motion to vacate a default judgment should not have been granted. The excuse was not reasonable:

A defendant seeking to vacate a default in answering a complaint must show both a reasonable excuse for the default and the existence of a potentially meritorious defense (see CPLR 5015[a][1] …). Here, the defendant’s proffered excuse that its president failed to open and review the contents of a package following its personal delivery upon him, and that the summons and verified complaint may inadvertently have been discarded thereafter, were insufficient to demonstrate a reasonable excuse for the default … . Elderco, Inc. v Kneski & Sons, Inc., 2020 NY Slip Op 02766, Second Dept 5-13-20

 

,

A DEFENSE WITNESS HELD OUT AS DISINTERESTED AND OBJECTIVE WAS IN FACT EMPLOYED BY THE DEFENDANTS; PLAINTIFFS’ MOTION TO SET ASIDE THE VERDICT SHOULD HAVE BEEN GRANTED (SECOND DEPT). ​

The Second Department, reversing Supreme Court, determined plaintiffs’ motion to set aside the jury verdict in this personal injury case should have been granted. One of the issues in the trial was the identity of the party which left a pipe in a tunnel. Plaintiff alleged he was injured when he tripped over the pipe. Defendants presented a witness, Dudin, who testified the defendants were not responsible for leaving the pipe in the tunnel. Dudin was represented as a disinterested witness when, in fact, he was employed by the defendants:

Pursuant to CPLR 4404(a), a trial court may order a new trial “in the interest of justice.” “A motion pursuant to CPLR 4404 (a) to set aside a verdict and for a new trial in the interest of justice encompasses errors in the trial court’s rulings on the admissibility of evidence, mistakes in the charge, misconduct, newly discovered evidence, and surprise” … . In considering such a motion, “[t]he Trial Judge must decide whether substantial justice has been done, whether it is likely that the verdict has been affected and must look to his [or her] own common sense, experience and sense of fairness rather than to precedents in arriving at a decision'” … .

Here, the record reveals that the defendants affirmatively represented to the jury that Dudin was a disinterested, objective witness, notwithstanding that he was employed by the defendants at the time of trial. During summation, the defendants’ counsel stated that Dudin was “with the construction manager,” and that he was “not on [the defendants’] payroll,” but rather was a representative of the DEP [Department of Environmental Protection]. Additionally, the defendants’ counsel stated that, “you heard from Mr. Dudin, who is with the DEP now, this is not [the defendants’] stuff” in the tunnel. Counsel specifically referred to Dudin as “an objective witness” who “has no dealings with [the defendants],” and stated that he was “there to help the [injured] plaintiff.” Under the circumstances, we find that the jury should have had the opportunity to consider Dudin’s status as an employee of the defendants in assessing his credibility and in determining whether this relationship biased or influenced the witness’s testimony … . D’Amato v WDF Dev., LLC, 2020 NY Slip Op 02761, Second Dept 5-13-20

 

, , ,

ALTHOUGH THE PARTY TWICE FILED FOR BANKRUPTCY WITHOUT LISTING THE MEDICAL MALPRACTICE ACTION AS AN ASSET, THE BANKRUPTCY PROCEEDING WAS SUBSEQUENTLY REOPENED AND THE ACTION WAS ADDED AS AN ASSET; AT THAT POINT THE BANKRUPTCY TRUSTEE BECAME THE PLAINTIFF IN THE MEDICAL MALPRACTICE ACTION AND THE DOCTRINE OF JUDICIAL ESTOPPEL, BASED UPON THE PARTY’S INITIAL FAILURE TO LIST THE ACTION AS AN ASSET, DID NOT APPLY TO THE TRUSTEE (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the defendant’s motion to dismiss the medical malpractice complaint on judicial estoppel grounds should not have been granted. Vormnadiryan commenced a medical malpractice action in 2006. In two bankruptcy proceedings in 2008 and 2016 the medical malpractice action was not listed as an asset by Vormnadiryan. In 2017 Vormnadiryan opened the 2008 bankruptcy action and the medical malpractice action was added as an asset, making the bankruptcy trustee the plaintiff in that action. The Second Department determined Vormandiryan’s initial failure to list the malpractice action as an asset did not subject the bankruptcy trustee, as the plaintiff in the malpractice action, to the judicial estoppel doctrine:

“The integrity of the bankruptcy system depends on full and honest disclosure by debtors of all of their assets. By failing to list causes of action on bankruptcy schedules of assets, the debtor represents that it has no such claims. Thus, the doctrine of judicial estoppel may bar a party from pursuing claims which were not listed in a previous bankruptcy proceeding” … . “Because the doctrine is primarily concerned with protecting the judicial process, relief is granted only when the risk of inconsistent results with its impact on judicial integrity is certain” … . …

Here, the 2008 bankruptcy proceeding was reopened by the Bankruptcy Court so that the 2006 medical malpractice action could be identified as an asset of the bankruptcy estate. Therefore, judicial estoppel cannot be predicated on Vormnadiryan’s failure to list the action as an asset when she originally filed the 2008 bankruptcy petition … . Further, once a bankruptcy proceeding is commenced, all legal or equitable interests of the debtor become part of the bankruptcy estate, including any causes of action (see 11 USC § 541[a][1] … ). The trustee in bankruptcy, as representative of the estate, “has capacity to sue and be sued” … . Pereira v Meisenberg, 2020 NY Slip Op 02815, Second Dept 5-13-20

 

, , ,

BECAUSE THE HOLDER OF A FIRST MORTGAGE WAS A DEFENDANT IN THE TAX FORECLOSURE PROCEEDINGS, THE MORTGAGE HOLDER DID NOT NEED TO FILE ITS OWN FORECLOSURE ACTION TO ENFORCE ITS LIEN ON THE SURPLUS TAX-FORECLOSURE-SALE PROCEEDS (SECOND DEPT).

The Second Department, in a full-fledged opinion by Justice Scheinkman, determined that HPD,  the holder of a first mortgage on property which was the subject of a tax foreclosure, was entitled to the surplus funds from the tax foreclosure sale. The issue was whether HPD’s action seeking the surplus was time-barred because it didn’t enforce the lien on the surplus within six years of the tax foreclosure sale. The Second Department held no further action to enforce the lien was necessary because HPD was a defendant in the tax foreclosure proceedings:

… HPD’s appearance in the tax lien foreclosure action put [the property owner] and anyone else interested in a potential surplus on notice of HPD’s claims. To require HPD to commence a separate foreclosure action, when an action to foreclose the tax lien was already pending, would serve no useful purpose. NYCTL 1997-1 Trust v Stell, 2020 NY Slip Op 02802, Second Dept 5-13-20

 

,

THE PETITION SIGNATURES WERE GATHERED BEFORE THE DEADLINE SET BY THE COVID-19-RELATED EXECUTIVE ORDER BUT THE SIGNATURES WERE WITNESSED AFTER THE DEADLINE; THE SIGNATURES SHOULD NOT HAVE BEEN INVALIDATED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the witnessing of petition signatures need not be done prior to the deadline for gathering the signatures:

These are unusual times occasioned by the onset of the COVID-19 virus. The State has undertaken various measures to protect the health and safety of its residents by limiting the face-to-face contact of persons and thereby minimizing the extent of human transmission of the virus. Some of the State’s measures are set forth in Executive Orders of the Governor, including, as relevant here, Executive Order No. 202.2. Executive Order No. 202.2, dated March 14, 2020, modified article 6 of the Election Law to reduce the number of petition signatures required for placing candidates’ names on ballots, and to suspend the “gathering of signatures” after 5:00 p.m. on March 17, 2020. The Executive Order is consistent with the State’s policy of limiting social and professional interactions and community contact transmissions of COVID-19 (see Executive Order 202.2). …

The language of the Executive Order plainly directs that only the “gathering of signatures” was subject to the deadline of 5:00 p.m. on March 17, 2020. The signatures contained in the appellant’s designating petition were all “gathered” prior to that deadline. The language of the Executive Order provides no truncated deadline for the witnessing of those signatures. Indeed, since the witnessing of signatures is a ministerial task unrelated to the face-to-face interactions that Executive Order No. 202.2 was issued to minimize, there would be no reason for the Governor to have intended, or for the Executive Order itself to provide, that the witnessing of signatures also be suspended as of 5:00 p.m. on March 17, 2020.

Thus, we disagree with the Supreme Court’s determination granting the petition, inter alia, to invalidate the appellant’s designating petition on the ground that the executions of the Statement of Witness on March 19, 2020, violated the signature gathering deadline of Executive Order No. 202.2 … . Matter of Parascando v Monheit, 2020 NY Slip Op 02744, Second Dept 5-7-20

 

THE STANDARD FOR VACATING A DEFAULT JUDGMENT IS A ‘REASONABLE’ EXCUSE, NOT A ‘PLAUSIBLE’ EXCUSE; IF NO REASONABLE EXCUSE IS OFFERED THE MERITS NEED NOT BE CONSIDERED; SUPREME COURT REVERSED (FIRST DEPT).

The First Department, reversing Supreme Court, determined that defendant Swanston’s motion to vacate the default judgment should not have been granted. The excuse was not deemed reasonable and, therefore, the merits of the case need not be considered:

The motion court thought that Swanston’s excuses might not be valid but that they were “plausible.” However, plausibility is not the standard; rather, on a CPLR 5015(a)(1) motion, the movant must show a reasonable excuse for his default … . Swanston’s one-sided understanding that plaintiffs would refrain from prosecuting their lawsuit while defendant JackFromBrooklyn Inc. (JFB) negotiated to sell itself did not constitute a reasonable excuse for failing to answer … .

Given the absence of a reasonable excuse, we “need not determine whether a meritorious defense exists” … . Kowal v JackFromBrooklyn Inc., 2020 NY Slip Op 02715, First Dept 5-7-20

 

, , ,

EXTRINSIC COLLATERAL DOCUMENTARY EVIDENCE SHOULD NOT HAVE BEEN ADMITTED TO IMPEACH DEFENDANT DOCTOR’S CREDIBILITY IN THIS MEDICAL MALPRACTICE TRIAL; DEFENDANT’S MOTION TO SET ASIDE THE $400,000 VERDICT SHOULD HAVE BEEN GRANTED (SECOND DEPT).

The Second Department, reversing Supreme Court in this medical malpractice action, determined the defendant doctor’s motion to set aside the plaintiff’s $400,000 verdict should have been granted. The trial court should not have allowed extrinsic documentary evidence on collateral matters to impeach defendant’s credibility:

“A motion pursuant to CPLR 4404(a) to set aside a verdict and for a new trial in the interest of justice encompasses errors in the trial court’s rulings on the admissibility of evidence, mistakes in the charge, misconduct, newly discovered evidence, and surprise”  … . “In considering such a motion, [t]he Trial Judge must decide whether substantial justice has been done, whether it is likely that the verdict has been affected and must look to his [or her] own common sense, experience and sense of fairness rather than to precedents in arriving at a decision'” … .

Here, the Supreme Court should not have permitted the plaintiff to introduce extrinsic documentary evidence concerning collateral matters solely for the purpose of impeaching the defendant’s credibility … . In view of the importance of the defendant’s testimony and the emphasis given to the improperly admitted credibility evidence by the plaintiff’s counsel during summation, the errors were sufficiently prejudicial to warrant a new trial … . Rudle v Shifrin, 2020 NY Slip Op 02487, Second Dept 4-29-20

 

,

PLAINTIFF DID NOT HAVE AN EXCUSE FOR FAILING TO MOVE FOR A DEFAULT JUDGMENT FOR FOUR YEARS; THE ACTION WAS DISMISSED AS ABANDONED WITH NO NEED TO CONSIDER WHETHER THE ACTION WAS MERITORIOUS (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff’s failure to timely seek a default judgment in this foreclosure action required the action to be dismissed as abandoned. Plaintiff’s failure to offer an adequate excuse mandated dismissal without considering whether plaintiff had a meritorious action:

… [T]he Supreme Court should have granted that branch of the defendant’s cross motion which was pursuant to CPLR 3215(c) to dismiss the complaint insofar as asserted against her as abandoned. CPLR 3215(c) provides, inter alia, that “[i]f the plaintiff fails to take proceedings for the entry of judgment within one year after the default, the court shall not enter judgment but shall dismiss the complaint as abandoned, . . . unless sufficient cause is shown why the complaint should not be dismissed.” “To establish sufficient cause,’ the party opposing dismissal must demonstrate that it had a reasonable excuse for the delay in taking proceedings for entry of a default judgment and that it has a potentially meritorious action” … .

Here, the plaintiff provided no explanation for the almost four-year delay after the defendant defaulted in 2011 before it filed a request for judicial intervention in February 2015 requesting a residential mortgage foreclosure settlement conference. Under such circumstances, the Supreme Court should have found that the plaintiff had not demonstrated a reasonable excuse for its delay in seeking a default judgment … . Since the plaintiff failed to proffer a reasonable excuse, this Court need not consider whether the plaintiff demonstrated a potentially meritorious action … . Flushing Bank v Sabi, 2020 NY Slip Op 02461, Second Dept 4-29-20

 

,

A STIPULATION OF DISCONTINUANCE OF THE 2008 FORECLOSURE ACTION DID NOT MENTION DE-ACCELERATION OF THE DEBT OR THE ACCEPTANCE OF FUTURE INSTALLMENT PAYMENTS; THEREFORE THE DEBT WAS NOT DE-ACCELERATED AND THE SUBSEQUENT FORECLOSURE ACTION WAS TIME-BARRED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined that a stipulation of a discontinuance of the 2008 foreclosure action did not de-accelerate the debt. The foreclosure action was therefore time-barred:

An action to foreclose a mortgage is subject to a six-year statute of limitations (see CPLR 213[4]). With respect to a mortgage payable in installments, separate causes of action accrue for each installment that is not paid and the statute of limitations begins to run on the date each installment becomes due … . Once a mortgage debt is accelerated, however, the statute of limitations begins to run on the entire debt … . “A lender may revoke its election to accelerate the mortgage, but it must do so by an affirmative act of revocation occurring during the six-year statute of limitations period subsequent to the initiation of the prior foreclosure action” … . * * *

Contrary to the plaintiff’s contention, Bank of New York’s execution of the stipulation of discontinuance of the 2008 action did not, by itself, constitute an affirmative act revoking acceleration … . Notably, the stipulation was silent on the issue of acceleration and did not otherwise indicate that the plaintiff would accept installment payments … . Moreover, a notice of de-acceleration must be “clear and unambiguous to be valid and enforceable” … . Here, the notices of intent and 90-day notices which were sent prior to commencement of this action were completely silent as to de-acceleration. Bank of N.Y. Mellon v Yacoob, 2020 NY Slip Op 02451, Second Dept 4-29-20

 

, ,

PLAINTIFF LANDLORD HAD AN ADEQUATE REMEDY AT LAW FOR AN ALLEGED BREACH OF THE LEASE BY THE TENANT; PLAINTIFF’S ALLEGED LOSS OF GOODWILL WAS NOT APPLICABLE; THE BALANCE OF EQUITIES FAVORED THE TENANT; THE PRELIMINARY INJUNCTION WAS NOT WARRANTED (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, over a two-justice dissent, determined a preliminary injunction was not warranted in this dispute over a lease. Defendant store leased space in plaintiff mall. The lease provided the store could terminate the lease before the end of the term if its gross sales were below a threshold. The store sought to terminate the lease on that ground, but the mall alleged the store’s gross sales did not fall below the threshold. The lease included a liquidated damages provision. The majority concluded the liquidated damages provision provided a remedy at law, the loss of goodwill was not applicable and the balance of the equities favored the store, not the mall. So the preliminary injunction should not have been granted:

… [T]he lease contains a liquidated damages provision that entitles plaintiff to certain money damages if defendants prematurely vacate the premises and cease operations. The lease also contains an integration clause stating that the lease is “the entire and only agreement between the parties.” Thus, because the lease specifically provides that plaintiff is entitled to certain money damages in the event that defendants vacate the premises in breach of the agreement—the very injury that serves as the predicate for plaintiff’s action—we conclude that plaintiff has an adequate remedy at law and, moreover, that plaintiff has not suffered irreparable harm because the liquidated damages clause was intended as the sole remedy for such a breach … .

We disagree with our dissenting colleagues that plaintiff established a likelihood of irreparable injury from the loss of goodwill that would occur if defendants were to cease operations by prematurely terminating the lease. The “loss of goodwill and damage to customer relationships, unlike the loss of specific sales, is not easily quantified or remedied by money damages” … and may warrant a finding of irreparable injury in cases such as those involving unfair competition tort claims … , the proposed demolition or alteration of the premises … , or the issuance of a Yellowstone injunction, in which it is a tenant, not the landlord, who seeks to enjoin the termination of a lease … . No such scenario is implicated here and, moreover, as already noted, the specific injury complained of by plaintiff was accounted for by the terms of the lease agreement. …

… [W]we conclude that the harm defendants will suffer if forced to keep their 6,000-square-foot store open against their will is greater than the injury plaintiff will suffer from the loss of one tenant in the mall, especially because plaintiff may still recoup its loss via the liquidated damages provision. Eastview Mall, LLC v Grace Holmes, Inc., 2020 NY Slip Op 02447, Fourth Dept 4-24-20

 

Categories

Sign Up for the Mailing List to Be Notified When the Site Is Updated.

  • This field is for validation purposes and should be left unchanged.

Copyright © 2026 New York Appellate Digest, Inc.
Site by CurlyHost | Privacy Policy