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Current Developments in the Commercial Divisions of the
New York State Courts by Schlam Stone & Dolan LLP
Posted: January 4, 2020

Defendant’s Incarceration Not Reasonable Excuse for Default When Defendant Was Represented by Counsel

On December 19, 2019, the First Department issued a decision in Matter of Wimbledon Fin. Master Fund, Ltd. v. Sage Group Consulting Inc., 2019 NY Slip Op. 09109, holding that a defendant’s incarceration was not a reasonable excuse for a default when the defendant was represented by counsel, explaining:

To vacate a default judgment under CPLR 5015(a), a defendant must demonstrate a reasonable excuse for its delay in appearing and answering the complaint and a meritorious defense to the action.

Respondents failed to establish a reasonable excuse for their default in answering the petition. The incarceration of Parmar, who was represented by counsel at the time, did not provide a reasonable excuse for his default, and certainly not for that of Sage Group Consulting Inc.

(Internal quotations and citations omitted).

If you are served with a complaint and fail timely to answer, the court can enter judgment against you: a default judgment. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client have questions regarding whether you have been properly served or if a default judgment has been entered against you.

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