Notice on Default Motions

Paulus v Christopher Vacirca, Inc.,

128 AD3d 116 [2d Dept., 2015]

I have posted twice on Deutsche Bank v Gavrielova: once on the main issue of notice to appearing defendants who are nonetheless in default of answering, and again on the side issue of marking motions off the motion calendar.

The case noted here is the precedent followed in Deutsche Bank, and re-reading it prompts further thoughts on the rationale for the holding, and to note a departmental conflict on the issue.

The essential question is why the lack of notice to an appearing defendant is a jurisdictional defect, and not a mere error. The significance of that distinction is that a mere error does not leave the default judgment subject to later attack under CPLR 5015 (a)(1). If the defaulting defendant lacks either a reasonable excuse or proof of a meritorious defense, a mere procedural error provides no path to vacating the judgment. A jurisdictional defect renders the judgment a nullity, vulnerable to attack at any time.

As in Deutsche Bank, the defendant here had moved to dismiss under CPLR 3211, thus appearing in the action. The motion was denied, and the court directed the defendant to serve an answer. When the defendant failed to answer, the plaintiff moved for and obtained a default judgment, but without giving the defendant notice of the motion. Jurisdictional defect or mere error? The Second Department contrasted the situation with that where the movant on a default motion has failed to show sufficient proof of the facts constituting the claim, as discussed by the Court of Appeals in Manhattan Telecom. Corp. v H & A Locksmith, Inc. That defect was held to be a mere error, and the subsequent judgment was not vulnerable to later attack. That is, the court’s failure to apprehend the lack of proper proof was certainly erroneous, but did not affect its basic jurisdiction to consider and decide the motion. The failure to give notice of the motion where notice is required, on the other hand, deprives the defendant of his opportunity to defend against the motion and to assert any objections to the motion which may exist. It is therefore deemed to be so basic as to affect the court’s ability to consider the motion at all.

The defendant had no reasonable excuse for his failure to answer, and so was not entitled to vacatur of the judgment pursuant to CPLR 5015 (a)(1). The jurisdictional nature of the failure to give notice required vacatur of the judgment, even without a reasonable excuse. The path to vacatur went through CPLR 5015 (a)(4). The court also noted that the vacatur of the default judgment did not relieve the defendant of the default, or even allow him to renew his motion to be relieved of the default, but only entitled him to notice of the default motion, the assertion of any insufficiency in proof, and to contest damages.

The opinion reviews the decisions of the other Departments, and the most immediate point to be made is that the Third Department has come to the contrary conclusion. That is, it views the lack of notice to be a mere error, and the resulting judgment not to be attackable unless the defaulting defendant has both a reasonable excuse and a meritorious defense. (Fleet Finance Inc., v Nielsen, 234 AD2d 728 [3^rd Dept., 1996]).

The First Department has vacated a default judgment for lack of notice, but without any discussion of the jurisdictional issue. (Walker v Foreman, 104 A.D.3d 460 [1^st Dept., 2013] The defendant there took a different path to default: his answer was stricken for failure to disclose. Whether this entered into the decision is not discussed.

Fourth Department cases have gone both ways. In Leader Fed. Bank for Sav. v. Van Tienhoven, 262 A.D.2d 1078, [4^th Dept., 1999], a foreclosure action, the Fourth Department held that the lack of notice by itself did not warrant vacating the foreclosure judgment, but that lack of notice did warrant vacating the ensuing sale. However, in Dime Savings Bank v Higner, 281 A.D.2d 895 [4th Dept., 2001] the Fourth Department held that the failure to give notice to an appearing foreclosure defendant required vacating both the default judgment and the foreclosure sale. Again, the question of jurisdiction was not specifically raised, and the rationale behind the differing result was not stated.

My own opinion, for what it is worth, is that the Second Department gets it right here in Paulus and in Deutsche Bank. Sliding past an appearing defendant’s right to notice robs him of the opportunity to be heard, as well. Notice and the opportunity to be heard are, of course, the heart of due process. Shoddy and careless practice should not be excused merely by an after-the-fact analysis of the harm done.

One thing leads to another, and the cases involved in this conflict bring up the issue of “informal appearances,” but that is a matter for another post.