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Default Judgment Moot Without Proper Service (NY)

April 29, 2016

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<p dir="LTR" align="JUSTIFY">In <a href=""><i>Wachovia Bank, N.A. v Greenberg</i></a>, the Appellate Division grappled with an interesting combination of procedural issues, namely -- what happens when a party falls into default for failing to answer a complaint -- but also alleges they were never served with the complaint in the first place?</p>
<p dir="LTR" align="JUSTIFY">Plaintiff filed suit to foreclose on a mortgage after the defendant failed to make the required monthly payments. The plaintiff’s affidavit of service alleged the defendant was served in accordance with the CPLR by serving "Myrna Maldonado", a person of suitable age and discretion at the plaintiff's home.  But Greenberg never answered the complaint, and a judgment of foreclosure and sale was entered. Thereafter, Greenberg moved to vacate the judgment and dismiss the complaint, on the basis that he was never properly served with the foreclosure complaint.</p>
<p dir="LTR" align="JUSTIFY">The Supreme Court, Nassau County, denied Greenberg’s motion to vacate the judgment and on appeal the Appellate Division reversed and found that the Supreme Court prematurely decided the motion without conducting a hearing on the issue of service of the summons and complaint.</p>
<p dir="LTR" align="JUSTIFY">The Court explained that when a defendant rebuts the presumption of proper service with a sworn affidavit, an evidentiary hearing must be conducted. The Court held that the "usual requirement that a party moving to vacate a default judgment must demonstrate the existence of a potentially meritorious defense to the action is inapplicable where the ground for vacatur is lack of jurisdiction over the person of the movant."</p>
<p dir="LTR" align="JUSTIFY">Because Greenberg denied that he knew anyone by the name of Myrna Maldonado and stated that no one by that name lived in or entered his home, the Appellate Division ruled that the correct procedure was to hold a hearing to determine whether the summons and complaint was properly served upon Greenberg.  If service is improper, the default judgment is vacated; if service is proper, then the court can proceed with the usual analysis.</p>
Thanks to George Parpas for his contribution to this post and please write to <a href="mailto:">Mike Bono </a>for more information.

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