Default Judgment Motions

Publication Source: New York Law Journal

Your client makes a loan and, in return, receives a mortgage note, which reflects the real property upon which the mortgage securing the note will be recorded. Shortly after the loan is made, the borrower fails to repay the amount due. Although the mortgage that was intended to secure the note was never prepared or recorded, you bring an action to enforce the note, with the filing of a verified complaint containing various alternative causes of action, to collect the amount due.

The defendant-borrower fails to appear in the action within the time to respond. You move for a default judgment, relying upon the verified complaint. Default judgment easily granted, correct? Not so simple, as shown in graphic detail by a new, well-reasoned decision by the Nassau Supreme Court Justice Leonard Austin of the Commercial Part.

In Bales v. Pfeifer (NYLJ, April 26), the plaintiff alleged that he lent $300,000 to defendant and, in return, defendant signed a mortgage note reciting certain real property upon which a mortgage was to be filed to secure payment of the amount due. Although the note contained a certain rate of interest, for some unknown reason the plaintiff alleged in his verified complaint that the sum of $340,000 was to be repaid on the $300,000 loan within just 45 days of the date the note was signed.

In the verified complaint, the first three causes of action attempted to allege claims for fraud, seeking the principal and alleged interest due under the note, respectively, while the fourth cause of action sought recovery of the principal and interest under the note itself. Although four separate defendants were named in the action, only one defendant had been served with process, so the motion for a default judgment was directed against this sole defendant.

CPLR 3215(f) provides in relevant part:

On any application for judgment by default, the applicant shall file proof of service of the summons and the complaint, or a summons and notice served pursuant to subdivision (b) of rule 305 or subdivision (a) of rule 316, and proof by affidavit made by the party of the facts constituting the claim, the default and the amount due. Where a verified complaint has been served it may be used as the affidavit of the facts constituting the claim and the amount due; in such case, an affidavit as to the default shall be made by the party or his attorney.

Read the full article in the attached PDF.

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Kevin Schlosser is a Shareholder at Meyer, Suozzi, English & Klein, P.C., where he is Chair of the Litigation and Alternative Dispute Resolution Department which has a full roster of available private judges from virtually all disciplines of law. Mr. Schlosser also authors the popular blog, “New York Fraud Claims,” which analyzes the latest developments concerning civil fraud claims under New York law.

Reprinted with permission by the New York Law Journal.