McCord v Larsen, 132 A.D.3d 1115, 18 N.Y.S.3d 458 [3rd Dept., 2015]
Plaintiff alleged that she was injured in a building owned by the defendant, due to a defective porch railing. She sued, and claimed to have served the summons by deliver-and-mail (CPLR 308 ). The defendant did not answer, and judgment by default was obtained against him.
He now moved to vacate the default judgment on the grounds that he had not received the summons and complaint in time to defend, and to dismiss the action for lack of jurisdiction. Supreme Court denied both branches of the motion.
The first question must be the jurisdictional one, since if there is no personal jurisdiction the judgment is void. The first step in deliver-and-mail service is delivery to a person of suitable age and discretion at the defendant’s actual place of business, dwelling place, or usual place of abode. The delivery in this case was made to the defendant’s ex-wife, at her residence in the Town of Blooming Grove, Orange County. The defendant had moved out long before the delivery, and claimed that he had moved his business from that address as well. However, the plaintiff showed proof that he advertised his business from that address, and had not changed the address with either the Postal Service or DMV. Delivery was therefore held to have been validly made, and jurisdiction properly upheld.
One of the things I love about legal research is the way one issue leads to another. This series of posts started with two cases about motions for default judgments, and the jurisdictional consequences of failing to give notice where it is required. (Deutsche Bank Natl. Trust Co. v Gavrielova, Here and Paulus v Christopher Vacirca, Inc., Here) These discussions have already led to a side issue about marking motions “off calendar.” Here is another side issue, involving “informal appearances,” that is, actions which will be the functional equivalent of an appearance, even though the defendant has not made a formal appearance as specified in CPLR 320. That is, he has not served a formal notice of appearance, an answer, or a motion to dismiss.
Now, in both of our main cases, the defendants made a formal appearance by moving to dismiss under CPLR 3211 (a), but then failed to answer. They were therefore clearly entitled to notice of the motion for default judgments. Whether or not the defendants had appeared was not an issue. Reading some of the cases cited by these decisions, however, we come across fact patterns where the appearance was not so clear.
In some cases, the defendant’s “informal appearance” will entitle him to notice of a default motion. Since our recent cases have held that lack of notice renders the default judgment jurisdictionally defective (at least in the Second Department) a plaintiff who relies on the lack of a formal appearance and moves without notice may be unpleasantly surprised.
In others, it will be the defendant who is unpleasantly surprised, when he finds that his “informal appearance” has been sufficient to waive his objections to personal jurisdiction.
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.
Motorola Credit Corp. v Standard Chartered Bank, 24 N.Y.3d 149, ___ NYS2d ___, 2014 NY Slip Op 07199 
The Court here held that a common-law rule, the “separate entity” rule,
“prevents a judgment creditor from ordering a garnishee bank operating branches in New York to restrain a judgment debtor’s assets held in foreign branches of the bank.”
Rudra v Friedman, ___ AD3d ___, ___ NYS2d ___, 2014 NY Slip Op 09117 [2nd Dept., 2014]
Defendants in this motor vehicle accident action served their answer late, and the plaintiff rejected it. At the same time, plaintiff moved for a default judgment and an inquest on damages. Defendants cross-moved for leave to serve a late answer.
Supreme Court granted the plaintiff’s motion to the extent of granting a default judgment on liability, and granted the defendants’ motion to the extent of allowing them to answer, to assert only those affirmative defenses addressing the issues of serious injury and damages, and to conduct disclosure regarding those issues, and to “fully litigate” them. The trouble is, the court cannot split the difference in this way, and the Appellate Division reversed.
Once Supreme Court had granted the default judgment on liability, it should have directed the inquest without allowing disclosure. Read More