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Defendant Fails to Answer, Plaintiff Fails to Move for Default - What's Next? (NY)

April 10, 2019

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<p style="text-align: justify;">In <a href="https://www.wcmlaw.com/wp-content/uploads/2019/04/White-Oak-v.-Goyal.pdf"><em>White Oak v. Goyal</em></a> the Court of Claims faced a situation where certain defendants were clearly in default, but the plaintiff had failed to move timely for default.</p>
<p style="text-align: justify;">Plaintiff White Oak Commercial Finance initiated an action against Goyal, Yaduvanshi, and Deutshce Bank/Ocwen.  The complaint was served to all defendants in August of 2016, with Yaduvasnhi serving an answer, but Goyal never answering or moving to dismiss, and with Deuthsce Bank/Ocwen moving to dismiss pursuant to CPLR 3211(a)(1),(3), and (7).  With the motion to dismiss pending, plaintiff amended its complaint on October 24, 2017, over one year after initial service, without changing any claims against Goyal and Yaduvanshi.  On October 10, 2018 plaintiff moved for a default under CPLR 3215 against Goyal and Yaduvanshi.  Goyal then cross moved under CPLR 3215(c) for failure to dismiss Goyal’s default within one year.</p>
<p style="text-align: justify;">The law for a default judgment is very straightforward: a party seeking default must show proper service, a failure to respond to the pleading, and various facts to establish a meritorious claim.  This was simple against Goyal, who did not answer either the original August of 2016 complaint or the amended complaint of October of 2017.  Yaduvanshi answered the original complaint, but was in violation for failing to respond to the amended complaint.  As for the cross-motion, the Court ruled that plaintiff had failed to fulfill its obligations under CPLR 3215(c), which require a plaintiff to move for default within one year, which means that the complaint should be dismissed.</p>
<p style="text-align: justify;">The Court focused on the absence of prejudice that the defendants had from the delay, as well as the fact that the action had not been abandoned since it proceeded on its claims against the other defendants.  This is an important lesson for defendants, who can sometimes rely on the complacency of a plaintiff in excusing a late answer or vacating a default, but unless a defendant can show some sort of prejudice from the delay, Courts are hesitant to force plaintiffs to strictly comply with the time requirements of CPLR 3215(c).  Thanks to Chris Gioia for his contribution to this post.  Please email <a href="mailto:bgibbons@wcmlaw.com">Brian Gibbons</a> with any questions.</p>
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