Commercial Division Blog

Posted: August 21, 2017 / Categories Commercial, Default Judgment

Court Should Not Have Vacated Default Judgment Where There Was No Reasonable Excuse for Default

On August 16, 2017, the Second Department issued a decision in OneWest Bank, FSB v. Singer, 2017 NY Slip Op. 06184, reversing a trial court decision to vacate a default, holding that no reasonable excuse had been showed for the default.

In OneWest Bank, the trial court dismissed the complaint because of the failure of plaintiff's counsel to appear at two court conferences. The plaintiff's motion to vacate the default was granted, but on appeal, the Second Department reversed the decision vacating the default, explaining:

A plaintiff seeking to vacate a default in appearing at a conference is required to demonstrate both a reasonable excuse for its default and a potentially meritorious cause of action. Although a motion to vacate a default is addressed to the sound discretion of the motion court, the defaulting party must submit evidence in admissible form establishing both a reasonable excuse and a potentially meritorious cause of action or defense.

A court has the discretion to accept law office failure as a reasonable excuse for a party's default. However, it was not the Legislature's intent to routinely excuse such defaults, and mere neglect is not a reasonable excuse.

Contrary to OneWest's contention, it failed to provide a detailed and credible explanation of the default. Rather, counsel's affirmation in support of the motion contained only the conclusory and undetailed allegation of law office confusion after being substituted as counsel for OneWest, which does not constitute a reasonable excuse. No other evidence was submitted to corroborate the allegation. OneWest, therefore, failed to demonstrate a reasonable excuse for its default. Accordingly, the Supreme Court improvidently exercised its discretion in granting OneWest's motion to vacate its default.

(Internal quotations and citations omitted) (emphasis added).

It is only human to not want to admit to a mistake. As this decision shows, however, failing fully to explain why you failed to appear at a court conference can lead to consequences much worse than the embarrassment of admitting a mistake.