Commercial Division Blog
Default Judgment Should Be Entered Absent Specific Evidence of Lack of Service or Excuse for the Failure to Answer
On November 6, 2013, the Second Department issued a decision in Loaiza v. Guzman, 2013 NY Slip Op. 07159, illustrating that a failure to answer will not be excused without good reason.
The trial court in Loaiza refused to enter a default judgment against defendants who failed timely to answer and instead granted their motion to serve a late answer. The Second Department reversed, holding that the defendants had not justified the relief they had been granted:
The affidavits of the plaintiffs' process server constituted prima facie evidence that the defendant Rene Guzman was validly served pursuant to CPLR 308(1) and that the defendant William Guzman was validly served pursuant to CPLR 308(2). The defendants did not deny receipt of process or swear to detailed and specific facts to rebut the statements in the process server's affidavits. Therefore, the defendants were not entitled to relief pursuant to CPLR 5015(a)(4). Furthermore, to the extent that the defendants are arguing excusable default pursuant to CPLR 5015(a)(1), the defendants did not demonstrate a reasonable excuse for their failures to answer and oppose the plaintiffs' initial motion for a default judgment, and for their delay of more than one year in appearing in this action. Accordingly, the plaintiffs' motion for leave to enter a default judgment on the issue of liability against the defendants should have been granted and the defendants' cross motion pursuant to CPLR 3012(d) for leave to serve a late answer and to compel the plaintiffs to accept service of that answer, should have been denied.
(Internal quotations and citations omitted) (emphasis added).
Loaiza presents a cautionary tale regarding the failure timely to answer a complaint. Courts are generally lenient in excusing a failure timely to answer, but as Loaiza shows, that leniency is not unlimited. The defendant must present the court with concrete and specific reasons for the default and any delay in dealing with it once the defendant became aware of the action.