PRS Assets v Rodriguez

[*1] PRS Assets v Rodriguez 2006 NY Slip Op 51148(U) [12 Misc 3d 1172(A)] Decided on June 21, 2006 Nassau District Court Knobel, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on June 21, 2006
Nassau District Court

PRS Assets, a/o Jack LaLanne, Plaintiff,

against

Dora Rodriguez, Defendant.



17301/05



Attorney for Plaintiff

Richard A. Guttman, Esq.

Sharinn & Lipshie, P.C.

200 Garden City Plaza, Suite 506

Garden City, NY 11530

(516) 873-6600

Dora Rodriguez, Pro se (Defendant)

Gary F. Knobel, J.

Upon the foregoing papers, the motion by the defendant pro se for an order vacating the default judgment in the amount of $1,392.51 entered against her on September 8, 2005, and permitting this action to proceed on its merits, is granted in the interests of justice (Woodson v. Mendon Leasing Corp. 100 NY2d 62, 68 - 69).

The issue presented in this case is one which has divided courts throughout the state and which was left open by the Court of Appeals three years ago in Woodson v. Mendon Leasing Corp., 100 NY2d 62, 71: does a plaintiff's failure to properly satisfy the proof required for a default judgment pursuant to CPLR 3215(f) constitute a "sufficient reason" to vacate both the defendant's default and that judgment?

CPLR 3215 governs the procedure for the entry of a default judgment due to defendant's failure to appear or answer. The defendant's default does not automatically create a mandatory ministerial duty by the clerk to enter a default judgment against that defendant since the plaintiff is required to demonstrate that he or she has a viable cause of action (see, Resnick v. Lebovitz, , AD3d , 813 NYS 2d 480, 2006 NY Slip Op 2736 [2nd Dept., April 11, 2006]). CPLR 3215(f) requires the plaintiff to establish, in instances where the damages sought are for a sum certain or for a sum which can by computation be made certain, the facts constituting the claim, the default and the amount due. The plaintiff can satisfy this requirement through an affidavit of a party, who possesses personal knowledge of th facts, or with a complaint that is properly verified by a party with personal knowledge (Reynolds Securities, Inc. v. Underwriters Bank and Trust Co., 44 NY2d 568, 572-573; Goodman v. New York City Health and Hosps. Corp., 2 [*2]AD3d 581).

Assuming these criteria are met and a default judgment is entered by the clerk for the amount demanded in the complaint, a defendant may be able to vacate both his or her default as well as that judgment pursuant to either CPLR 317 or by establishing any of the grounds set forth in CPLR 5015(a) - excusable neglect [subdivision 1], newly discovered evidence, fraud [subdivision 2], misrepresentation or other misconduct by an adverse party [subdivision 3], lack of jurisdiction [subdivision 4], or upon the reversal, modification or vacatur of a prior order [subdivision 5]. However, the Court of Appeals in Woodson emphasized that the bases for vacatur are not limited to the reasons listed in CPLR 5015(a). The Court then added a catch-all category: "for sufficient reason and in the interests of justice" (Woodson v. Mendon Leasing Corp. 100 NY2d 62, 68). The Court explained that the drafters of CPLR 5015(a) "intended that courts retain and exercise their inherent discretionary power [to vacate default judgments] in situations that warranted vacatur but which the drafters could not easily foresee [citations omitted]" (Id.).

In applying and interpreting CPLR 5015(a)(1), which is applicable to the case at bar, courts have traditionally required the defendant to demonstrate a meritorious defense as well as a reasonable excuse for their default in order to vacate a default judgment. However, this test has not been applied by appellate courts in the First and Third Departments in instances when those courts concluded that the plaintiff's noncompliance with CPLR 3215(f) divested the trial court of jurisdiction to enter the proposed default judgment and consequently rendered that erroneous judgment a nullity (see, Zelnick v. Biderman Indus. 242 AD2d 227 [1st Dept.]; Joosten v. Gale, 129 AD2d 531 [1st Dept.]; Ayres Memorial Animal Shelter, Inc. v. Montgomery Co. Society for the Prevention of Cruelty to Animals,17 AD3d 904 [3d Dept]). Although in Goodyear v. Weinstein, 224 AD2d 387, the Second Department agreed with the "nullity" position taken by First Department, it overruled Goodyear six years ago and has instead adhered to a contrary analysis that it first expressed in Freccia v. Carullo, 93 AD2d 281, on the effect of noncompliance of CPLR 3215(f). In sum, a "plaintiff's failure to submit an affidavit of the facts or a verified complaint in accordance with CPLR 3215(f), does not render the default judgment a "nullity", or otherwise divest the Supreme Court of jurisdiction to enter a judgment (see, Roberts v. Jacob, 278 AD2d 297; Bass v. Wexler, 277 AD2d 266; Frescia v. Carullo, 93 AD2d 281)" (Coulter v. Town of Highlands, 26 AD3d 456). The plaintiff's "failure to submit such evidence went, at most, only to a procedural element of [the] plaintiff's right to enter a default judgment' and thus the judgment entered upon the defendants' default was not a nullity" (Roberts v. Jacob, 278 AD2d 297, quoting Frescia v. Carullo, 93 AD2d 281, 289). Consequently, the rule now in the Second Department, as set forth in Coulter v. Town of Highlands, 26 AD3d 456, is that a defendant moving to vacate a default judgment under CPLR 5015(a) (1) is required to demonstrate a reasonable excuse and a meritorious defense and cannot rely at all on the fact that the plaintiff did not comply with CPLR 3215(f). Coulter did not mention Woodson and whether the default judgment could be vacated in the interests of justice. Woodson itself left "for another day the issue of whether noncompliance with CPLR 3215(f) renders a default judgment a nullity'" (Woodson v. Mendon Leasing Corp., supra at 71).

Although the defendant in the case at bar did not bring to the Court's attention the defects in the complaint as well as plaintiff's non-compliance with CPLR 3215, those omissions do not [*3]preclude a review of those defects (Joosten v. Gale, 129 AD2d 531, 535).

The complaint, which purports to be verified, states that the defendant is in breach of "an installment loan to the defendant". However, the plaintiff's attorney, in his opposition papers to the motion at bar, characterizes the case as the defendant's default on a gym membership agreement. Furthermore, neither the "loan" or the "gym membership agreement" is annexed to the complaint or the plaintiff's opposition papers. Similarly, the purported assignment by "Jack Lalanne" to the plaintiff was not attached to the complaint or plaintiff's opposition papers. Moreover, the complaint is "verified" by a "legal assistant" for the plaintiff and not, as required by CPLR 3020(d)(1), by an officer of the corporation. Consequently, the complaint is "unverified" and was insufficient by itself to support the entry of a default judgment in accordance with the criteria set forth in CPLR 3215(f) especially since there was no affidavit filed by the plaintiff in pursuit of its default judgment (Reynolds Securities, Inc. v. Underwriters Bank and Trust Co. 44 NY2d 568, 573 [fn 3]; Beaton v. Transit Facility Corp., 14 AD3d 637; Henriquez v. Purina, 245 AD2d 337, 338; Zelnik v. Bidermann Indus., 242 AD2d 227; CPLR 3215(f); see also, Blam v. Netcher, 17 AD3d 495, 496; Goodman v. New York City Health and Hosps. Corp., 2 AD3d 581; Paratta v. McAllister, 283 AD2d 625). In addition, it appears that the plaintiff did not perform an additional mailing as required by CPLR 3215(3)(i) when a default judgment based upon non-appearance is sought against a natural person in an action to recover damages for breach of contract.

The defendant brought the instant motion almost four months after the entry of the subject default judgment and after her bank account was restrained in the amount of $2,785.02. She did not proffer a reasonable excuse for failing to timely answer the complaint. However, the defendant does assert the following defenses to her alleged breach of contract: 1. that she purportedly was told by an unnamed representative of plaintiff's assignor that she could pay her gym membership whenever she would attend in the gym, but if she left the gym, she would not be charged; 2. that the gym facility (whose location was not specified) was inadequate since workout machines were never available whenever she went to the gym; and, 3. that she was injured (and remains unable to physically use the gym) as a result of purportedly being thrown down to the ground by an unidentified person in an aerobics class.

In view of the totality of circumstances presented in this case - the deficiencies in plaintiff's complaint, plaintiff's noncompliance with CPLR 3215(f), the existence of a colorable defense, the absence of any prejudice to the plaintiff, the public policy in favor of resolving cases on their merits - and in light of the prevailing applicable principles of law in the Second Department and the Court of Appeals, the Court in its discretion vacates the judgment in the interests of justice (see, Woodson v. Mendon Leasing Corp., supra; see generally, Goodman v. New York City Health and Hosps. Corp., 2 AD3d 581,582).

The foregoing constitutes the decision and order of this Court.



Dated: June 21, 2006

Gary F. Knobel

District Court Judge

APPEARANCES