Wade Clark Mulcahy LLP

To vacate a default in New York, a party must generally establish that they have a valid excuse for not timely appearing and that they have a valid defense to the lawsuit. In All Island Estates Realty Corp. v. Roma Imported Car Center, Inc., the Second Department addressed a situation where the trial court dismissed plaintiff’s lawsuit with prejudice where plaintiff’s attorney defaulted their client by failing to appear for multiple compliance conferences.

In that case, the parties entered into a contract for plaintiff to list and sell the defendants’ property. Defendants tried to get out of the contract and ended up selling the property with a different firm. Plaintiff’s resulting lawsuit was dismissed after their attorney failed to appear at back-to-back compliance conferences and no reasonable excuse was provided. Plaintiff moved to vacate the dismissal order, but the motion was denied on the basis that the “law office failure” excuse was found to be conclusory and unsubstantiated.

The Second Department noted that law office failure can be a reasonable excuse if demonstrated with a detailed, credible explanation for the failure, and where the failure was from an isolated and inadvertent mistake. Should the party moving to vacate an order of default properly demonstrate a reasonable excuse for the default, the court then moves to a determination if there is a demonstrated existence of a potentially meritorious cause of action.

However, the Court did not have to reach the second step as it agreed with the trial court that plaintiff failed to provide a detailed and credible explanation for the plaintiff's failure to appear at the first conference and its claim of law office failure was contradictory and unsubstantiated. Accordingly, the Second Department found that the trial court correctly exercised its discretion in determining that the plaintiff failed to offer a reasonable excuse for its default and affirmed the dismissal.

The case serves as a reminder for law firms to be careful in managing their calendars and to ensure that all scheduled court appearances are covered or adjourned as necessary. Where there is a pattern of failures, the penalty could be dismissal or default being entered against a defendant. Where an inadvertent default occurs, firms should be prepared to submit a detailed affirmation explaining the reason for the non-appearance to establish a proper “law office failure” defense.

Thank you to William Healy for his contribution to this post.