Discover Bank v Anh Nguyen
Annotate this CaseDecided on November 22, 2019
City Court of Middletown, Orange County
Discover Bank, Plaintiff,
against
Anh Nguyen, Defendant.
CV 1161/2017
Attorneys for Plaintiff: Zwicker & Associates, P.C. (by Stephanie Marie Wallace, Esq.)
Anh Nguyen, Defendant pro se
Richard J. Guertin, J.
INTRODUCTION AND PROCEDURAL BACKGROUND
This is a civil action by Discover Bank ("the Plaintiff") against Anh Nguyen ("the Defendant"). The Plaintiff, by Zwicker & Associates, P.C., filed a Summons and unverified Complaint with the Court on November 2, 2017. The Complaint alleged the Defendant owes the Plaintiff $8,405.19 based on the Defendant's failure to pay on a credit card account issued through the Plaintiff. According to an Affidavit of Service filed with the Court on November 8, 2017, the Summons and Complaint were served personally on the Defendant on November 6, 2017. The Plaintiff also submitted (as part of a motion for a default judgment filed August 29, 2019 with the Court ["the Motion"]) an Affirmation of Additional Mailing of Summons dated December 21, 2017 in accordance with CPLR § 3215 (g). Apparently, the Defendant never submitted to the Plaintiff an Answer to the Complaint,[FN1] and the Defendant did not file an Answer with the Court. Pursuant to CPLR § 3215 (g) (3) (i), once twenty days elapse from the date a plaintiff mails the additional summons, the plaintiff can request the entry of a default judgment. In this case, since the Plaintiff allegedly mailed the required notice on December 21, 2017, the Plaintiff could have sought a default judgment against the Defendant on or after January 20, 2018.
Nothing occurred in this case for over one year after the Defendant's default, and the Plaintiff failed to seek a judgment within one year after the Defendant's default as required by CPLR § 3215 (a). On December 31, 2018, the Court, pursuant to CPLR § 3215 (c) and on its own initiative, dismissed the case.[FN2]
On August 29, 2019 (more than one and a half years after the Defendant's default), the Plaintiff filed with the Court the Motion seeking a default judgment against the Defendant in the amount of $8,405.19. The Defendant did not submit any papers in response. The Court rejected the Motion because the Court previously dismissed this case pursuant to CPLR § 3215 (c).
On October 9, 2019, the Plaintiff filed with the Court an Affirmation in Support of Motion for Default Judgment by Stephanie M. Wallace, Esq. ("Wallace Affirmation"). The Wallace Affirmation notes that the Plaintiff, on or about September 3, 2019, received the Court's notice rejecting the Motion and goes on to state the following:
4. Upon the Defendant's failure to submit an answer or other responsive pleading Plaintiff submitted a request for an affidavit attesting to the merits of the action in support of an application for default judgment.5. Plaintiff received an affidavit from the client attesting to the merits of the account on or about November 14, 2018. However upon receipt Plaintiff's counsel misplaced the affidavit.6. A Motion for Default Judgment was promptly filed upon locating the affidavit after a diligent search by Plaintiff's counsel. . . .10. Plaintiff's failure to move for judgment within one year after default is merely the result of a law office failure when Plaintiff's counsel misplaced the affidavit. The delay does not show an intent to abandon the matter as Plaintiff's counsel has taken steps to locate the misplaced affidavit and move for default judgment.The Wallace Affirmation further asserts that the Plaintiff would suffer prejudice if the Motion were denied, the Defendant would not suffer prejudice if the Motion were granted, and (according to paragraph 8 of the Wallace Affirmation) the Plaintiff "should not suffer because of the errors of counsel. . . . [A] law office failure, in the court's discretion, may serve as a responsible excuse for delay."
The cover letter transmitting the Wallace Affirmation to the Court does not show that a copy of the letter was sent to the Defendant. In addition, there is no affidavit of service indicating the Wallace Affirmation was served on the Defendant.
DISCUSSION
CPLR § 3215 (c) provides the following:
Default not entered within one year. If the plaintiff fails to take proceedings for the entry of judgment within one year after the default, the court shall not enter judgment but [*2]shall dismiss the complaint as abandoned, without costs, upon its own initiative or on motion, unless sufficient cause is shown why the complaint should not be dismissed. A motion by the defendant under this subdivision does not constitute an appearance in the action.As noted by the Court in Giglio v NTIMP, Inc., 86 AD3d 301, 307 (2d Dept 2011), "[t]he policy behind CPLR 3215 (c) is to prevent parties who have asserted claims from unreasonably delaying the termination of actions, and to avoid inquests on stale claims [citations omitted]." The Court in Giglio states further, at 307-308, that "[t]he language of CPLR 3215 (c) is not, in the first instance, discretionary, but mandatory, inasmuch as courts 'shall' dismiss claims [CPLR 3215 (c)] for which default judgments are not sought within the requisite one-year period, as those claims are then deemed abandoned [citations omitted]" (see also Bank of New York v Kushnir, 150 AD3d 946, 947-948 [2d Dept 2017], quoting Giglio).
An exception to CPLR § 3215 (c)'s mandate is possible in limited circumstances. To avoid a dismissal of a complaint where a default judgment has not been requested within one year of the default, a plaintiff must "demonstrate both a reasonable excuse for [the] delay in seeking a default judgment and [also must show] that the complaint was meritorious [citations omitted]" in order to satisfy the "sufficient cause" requirement of CPLR § 3215 (c) (Solano v Castro, 72 AD3d 932, 933 [2d Dept 2010]). The Second Department repeatedly has made it clear that "'[s]ufficient cause' requires a showing of a reasonable excuse for the delay in timely moving for leave to enter a default judgment, plus a demonstration that the cause of action is potentially meritorious' [citations omitted];" furthermore, '[t]he determination of whether an excuse is reasonable in any given instance is committed to the sound discretion of the motion court' [citations omitted]. However, 'reversal is warranted if that discretion is improvidently exercised' [citations omitted]" (HSBC Bank USA, National Association v Seidner, 159 AD3d 1035, 1035-1036 [2d Dept 2018]; accord BAC Home Loans Servicing, LP v Broskie, 166 AD3d 842 [2d Dept 2018]; Bank of New York at 948; NYCTL 2009-A Trust v Kings Highway Realty Co., 147 AD3d 866, 867-868 [2d Dept 2017]; DLJ Mortgage Capital, Inc. v United General Title Insurance Company, 128 AD3d 760, 762 [2d Dept 2015]; Giglio at 308; Durr v New York Community Hospital, 43 AD3d 388, 389 [2d Dept 2007]; see also 1 NY Jur 2d, Actions §145 [Nov 2019 update; online version]; Siegel, NY Prac § 294 Time for Default Application [6th ed] [June 2019 update; online version]).
Courts do not lightly accept excuses for delays in seeking a default judgment (see, e.g., HSBC Bank USA, National Association at 1036 ["The plaintiff failed to offer any excuse for its delay of more than two years in seeking a default judgment, other than conclusory and unsubstantiated claims that 'a significant portion' of the delay was caused by 'Hurricane Sandy.' This was insufficient to establish a reasonable excuse (citation omitted)."]; BAC Home Loans Servicing, LP at 843 [the plaintiff claimed "unspecified periods of delay were attributable to compliance with a then newly adopted administrative order;" the plaintiff's assertion was "conclusory and unsubstantiated"]; Bank of New York at 948 [no excuse offered; the plaintiff "belatedly sought to discontinue the action" and "failed to demonstrate that it had a potentially meritorious cause of action"]; NYCTL 2009-A Trust at 868 [the plaintiffs claimed the delay was caused by a new servicer of a tax lien on property and they needed more time to obtain an affidavit of merit; the court found the plaintiffs failed to offer a reasonable excuse for their more than two year delay]; DLJ Mortgage Capital, Inc. at 762 [action to impose equitable mortgage on property; no reasonable excuse offered justifying delay in seeking default judgment]; Giglio [*3]at 308 [action arising out of a fatal car accident; no reasonable excuse offered for delay in seeking a default judgment; application for default judgment submitted approximately one year and two weeks after default]; Durr at 389 [medical malpractice action; "unsubstantiated excuse proffered by the plaintiff's counsel" failed to show a reasonable excuse for the delay in seeking a default judgment]; but see Iorizzo v. Mattikow, 25 AD3d 762, 763-764 [2d Dept 2007] [action on promissory note; almost nine year delay in seeking a judgment after default acceptable based on "evidence of a prolonged and tortured history of settlement discussions . . . (and) elusive offers (that) would materialize only after persistent requests for the resumption of negotiations and repeated threats of continued litigation from the plaintiffs' counsel. . . . In any event, the evidence of ongoing negotiations demonstrated that the plaintiffs had not abandoned the action (citations omitted)"]).
In this case, the Plaintiff offers the Wallace Affirmation to explain why there was over a year and a half delay in submitting the application for a default judgment.[FN3] The Wallace Affirmation, among other things, states the following: "Upon the Defendant's failure to submit an answer or other responsive pleading Plaintiff[FN4] submitted a request for an affidavit attesting to the merits of the action in support of an application for default judgment. [] Plaintiff received an affidavit from the client[FN5] attesting to the merits of the account on or about November 14, 2018. However upon receipt Plaintiff's counsel misplaced the affidavit. [] A Motion for Default Judgment was promptly filed upon locating the affidavit after a diligent search by Plaintiff's counsel. . . . [] Plaintiff's failure to move for judgment within one year after default is merely the result of a law office failure when Plaintiff's counsel misplaced the affidavit. The delay does not show an intent to abandon the matter as Plaintiff's counsel has taken steps to locate the misplaced affidavit and move for default judgment."[FN6]
That is not enough. The explanation contained in the Wallace Affirmation does not appear to be based on Attorney Wallace's personal knowledge but on information that was conveyed by an unknown and unidentified person or persons. There is no specificity or time frame as to when the "Plaintiff submitted a request for an affidavit attesting to the merits of the action," and there is no specificity indicating how the affidavit of merits was misplaced, who conducted the "diligent search" for the affidavit, how it was conducted, when it was conducted, or why the search was conducted in the first place. The explanation is, in essence, hearsay, and as such is nothing better than "conclusory and unsubstantiated claims" (HSBC Bank USA, [*4]National Association at 1036).
More troubling, however, is the fact that although this may be the Plaintiff's case, it was the Plaintiff's attorneys who generated the Summons and unverified Complaint and filed it with the Court. As such, it was the Plaintiff's attorneys' responsibility to keep track of deadlines applicable to this case and to follow up within the statutory time frame to seek a default judgment against the Defendant. By the time the Court dismissed the case and the Plaintiff attempted to submit the Motion, more than one and a half years passed, which means the Plaintiff, and, perhaps, more particularly its attorneys, ignored the case for that length of time.
Ultimately, the Wallace Affirmation is claiming law office failure. Law office failure can serve as a valid excuse for a delay in seeking a default judgment or in otherwise not handling matters in an action in a timely fashion (see CPLR § 2005). As noted by the Second Department in Young Su Hwangbo v. Nastro (153 AD3d 963, 965 [2d Dept 2017]), "'[w]hether a proffered excuse [of law office failure] is "reasonable" is a "sui generis determination to be made by the court based on all relevant 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"' [citations omitted]. 'Documented law office failure may constitute a reasonable excuse' [citations omitted]" (see also LaValle v Astoria Construction & Paving Corp., 266 AD2d 28 [1st Dept 1999]; 7B Carmody-Wait 2d § 44:181 [Misplacement of files, inadvertence, and administrative error] [Nov 2019 update; online version]).
In Servilus v Walcott, another Second Department case (148 AD3d 743, 744 [2d Dept 2017]), the Court noted that "[a] court has the discretion to accept law office failure as a reasonable excuse where that claim is supported by a detailed and credible explanation of the default [citations omitted]." In that case, however, the court found the "undetailed and conclusory assertion of law office failure did not constitute a reasonable excuse for the plaintiff's default [citations omitted]."
In this case, because of the "undetailed and conclusory assertion of law office failure" and the hearsay assertions contained in the Wallace Affirmation, the Plaintiff's law office failure argument does not succeed.[FN7]
The motion papers do suggest the Plaintiff may have a meritorious action and that the Defendant (who apparently did not answer the Complaint) may not be prejudiced by the delay in seeking a default judgment, but in view of the fact that the Plaintiff failed to establish a reasonable excuse for failing to timely submit its application for a default judgment, it is unnecessary to determine whether the Plaintiff has a meritorious action (see Servilus at 744; Solano at 933).
Finally, if the Court were to grant the Plaintiff's application to file a motion for default judgment one and one-half years after the Defendant's default despite the Plaintiff's lack of a reasonable excuse for the delay, that would directly contradict the requirements of CPLR § 3215 (c) and Giglio's determination (at 307-308) that "[t]he language of CPLR 3215 (c) is not, in the first instance, discretionary, but mandatory, inasmuch as courts 'shall' dismiss claims (CPLR [*5]3215 [c]) for which default judgments are not sought within the requisite one-year period, as those claims are then deemed abandoned [citations omitted]."
DECISION AND ORDER
Now, upon reading and considering the Summons and Complaint, the Motion, the Wallace Affirmation, all supporting papers and exhibits, and all prior proceedings, it is
ORDERED, that the Plaintiff's motion to extend the time to submit an application for a default judgment and, thereafter, for a default judgment against the Defendant in the amount of $8,405.19, is denied, without costs.
The foregoing constitutes the Decision and Order of this Court.
Dated: November 22, 2019
Middletown, New York
Hon. Richard J. Guertin, J.C.C. Footnotes
Footnote 1: Accompanying the Motion was an Affirmation of Larry T. Powell, Esq. ("Powell Affirmation") to support the Plaintiff's claim for a default judgment against the Defendant. The Powell Affirmation never states that the Defendant failed to submit an Answer to the Complaint, although the Plaintiff's Memorandum of Law accompanying the Motion alleges the Defendant failed to answer the Complaint and refers to the Powell Affirmation to support that allegation.
Footnote 2: CPLR § 3215 (c), in relevant part, states the following: "Default not entered within one year. If 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, without costs, upon its own initiative or on motion, unless sufficient cause is shown why the complaint should not be dismissed" (emphasis supplied). As of January 20, 2019, the Court still had not received anything from the Plaintiff seeking a default judgment within one year as required under CPLR § 3215 (c).
Footnote 3: Although not specifically requested by the Plaintiff, the Court also will consider the Wallace Affirmation to be an application pursuant to CPLR § 2004 to extend the time for the Plaintiff to make the application for a judgment.
Footnote 4: Presumably the Wallace Affirmation meant to say "Plaintiff's counsel submitted a request for an affidavit . . . ."
Footnote 5: Presumably the Wallace Affirmation meant to say "Plaintiff's counsel received an affidavit from the client . . . ."
Footnote 6: The Wallace Affirmation does not indicate who undertook the "diligent search" or why there were "steps [taken] to locate the misplaced affidavit."
Footnote 7: The Court also notes that the Plaintiff's attorneys did not provide any affidavit of service showing that the Wallace Affirmation was served on the Defendant, and as a result the Defendant appears not to have been given an opportunity to submit any opposition to the Wallace Affirmation.
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