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Judgments in New York State are often obtained against consumers by default. This happens when the person being sued fails to respond to the summons. In most debt collection cases, the plaintiff does not even have to obtain a judge’s approval to be awarded a default judgment. This is due to the fact that under New York law, a plaintiff can make an application to the court clerk for a default judgment if the claim is for a sum certain or for a sum which can by computation be made certain. Almost all debt collection cases fall into these categories. New York law, however, allows a defendant to vacate a default judgment under certain circumstances.
Contact the law firm of Andrew M. Doktofsky, P.C. at (631) 673-9600 if a default judgment has been entered against you. Call today to determine what your options are for vacating a default judgment throughout the areas of Suffolk County, Nassau County, Brooklyn, Queens and Manhattan, New York.
Whether a consumer can vacate a default judgment will often be determined by the manner in which the summons was served. It is therefore important to understand the methods by which a summons can be served in New York.
In New York, a lawsuit is commenced when a summons and complaint are filed with the clerk of the court. The plaintiff must then serve the defendant with a copy of the summons and complaint. New York law specifies how a defendant must be served in order for the court to obtain jurisdiction over the defendant. This is known as “service of process”. The three most commonly used methods of service are:
One of the most commonly used grounds for vacating a default judgment is known as “lack of jurisdiction”. When a defendant is not properly served with the summons and complaint, the court does not obtain jurisdiction over the defendant and, consequently, the default judgment may be vacated. (New York CPLR Rule 5015(a)(4)).
Here is an example: A creditor serves a defendant with a summons and complaint by leaving the summons on the door of a house. (See above for an explanation of “nail and mail” service). Let’s say that the defendant moved out of the house several months or years earlier. The location where the summons was affixed was therefore not the defendant’s “actual dwelling place”. The defendant does not receive the summons and the plaintiff proceeds to obtain a default judgment. Under this scenario, service would not have been properly effected and the defendant may have the default judgment vacated.
New York law also permits a defendant to vacate a default judgment when the defendant was served by means other than personal delivery and did not receive notice of the summons in time to defend the case and has a meritorious defense to the action. (New York CPLR § 317). To utilize this statute, the motion to vacate the judgment must be made to the court within one year after obtaining knowledge of entry of the judgment, but no more than five years after the judgment was entered.
While the above are the most commonly used provisions for consumers to vacate default judgments in New York, other grounds exist, including excusable default; fraud or other misconduct; and newly discovered evidence.
In order to vacate a default judgment in New York, the defendant must make an application to the court that rendered the judgment. In Nassau and Suffolk counties, this will most likely be either the District Court or the Supreme Court. In Brooklyn, Queens or Manhattan, it will be in the New York City Civil Court or Supreme Court for the borough in which the defendant resides. The New York City Civil Court has jurisdiction of cases in which judgment is sought for $25,000 or less, so the majority of credit card collection cases in New York City are brought in the Civil Court.
An application to vacate a default judgment is made by a procedure known as an “Order to Show Cause”. The order to show cause must contain the legal grounds upon which the defendant seeks to vacate the judgment, and an affidavit (sworn statement) from the defendant that provides the necessary facts to support the defendant’s application. If the order to show cause is prepared by an attorney, it will also contain the legal arguments in support of the request to vacate the judgment.
The order to show cause is presented to a judge who will direct the manner in which the papers are to be served on the plaintiff and the plaintiff’s attorney. Usually, this will be done by certified mail or overnight delivery. The judge will also determine the “return date” of the order to show cause, that is, the date by which the plaintiff must file its reply to the defendant’s request. Certain courts and judges require that the parties appear in court on the return date.
After reviewing the papers submitted, and hearing the testimony (if a traverse hearing is held), the court will make a decision. If the court determines that the summons was not served properly, then the case will be dismissed. The plaintiff would then have to commence a new lawsuit. However, if the statute of limitations had expired during the time that the case was pending, the defendant could raise the statute of limitations as an affirmative defense and successfully defend a new lawsuit.
Alternatively, if the court determines that service was proper, but that the defendant did not actually receive the summons, and has a meritorious defense, the defendant will be permitted to serve an answer and defend the action.
Bankruptcy is often the most efficient and cost-effective response if you have had multiple default judgments entered against you. This is especially true when you do not have any valid legal grounds to vacate the default judgments. Because bankruptcy will discharge your obligation to pay most debts, filing for bankruptcy will usually make it unnecessary to vacate default judgments in the state court.
It is important to keep in mind that bankruptcy will discharge your personal obligation to pay most debts. However, if you own a home or other real property, and a default judgment has been entered against you, a judgment lien will have been placed on your property. These judgment liens can often be voided in bankruptcy. Read more about liens and bankruptcy in New York. Read more about New York bankruptcy.
Office of The Attorney General – The New York Attorney General’s office provides information for consumers about debt collection, examples of harassing tactics, laws regarding illegal debt collection methods, and how to file a complaint about unlawful debt collection practices. Complaints about improper process server tactics can be made to the Attorney General’s office.
N.Y.C.PL.R. 5015 and N.Y.C.P.L.R. 317 – These are the statutes that govern vacating default judgments in New York.
Contact the law firm of Andrew M. Doktofsky, P.C. today for a free consultation about vacating a default judgment in Suffolk County, Nassau County, Brooklyn, Queens and Manhattan, New York. Call (631) 673-9600 if a default judgment has been entered against you in New York.
Contributor: Andrew M. Doktofsky