Motion for leave to enter default judgment notice requirements on defendant who appeared in action, but subsequently defaulted

The Second Department has recently ruled a plaintiff’s failure to provide a defendant who has appeared in an action, but subsequently defaulted, with notice of a motion to enter a default judgment, is a jurisdictional defect.

In Paulus v. Christopher Vacirca, Inc., 2015 WL 1542183 (2nd Dept. 2015), the defendant-appellant had filed a pre-answer motion to dismiss the complaint pursuant to CPLR 3211, which resulted in the lower court dismissing five of the six causes of action asserted against the defendant.  The court then directed the defendant to file an answer within 30 days.  When the defendant failed to answer the remaining cause of action as directed, the plaintiffs obtained a default judgment against him.  The defendant then moved to vacate the default, arguing, among other things, that his failure to answer was excusable because he believed that the plaintiffs were required to serve an amended complaint, after which he had 30 days to answer.

In addition, the defendant argued that the default judgment was defective because the plaintiffs had failed to serve his attorney with five days’ notice of their motion for leave to enter a default judgment, as required by CPLR 3215(g)(1).

CPLR 3215(g)(1) provides that a defendant who appears in an action but subsequently defaults “is entitled to at least five days’ notice of the time and place of the motion for leave to enter a default judgment.”  The opinion noted that this requirement is consistent with CPLR 2103(e), which generally requires that any paper served in a litigation must be served on a party who has appeared in the action, regardless of whether or not that party has subsequently defaulted.

Plaintiffs’ counsel argued that they were not required to abide by CPLR 3215 (g)(1) because they gave the defendant notice pursuant to CPLR 3215(g)(3).  That subsection of the statute provides that a default judgment based upon a natural person’s nonappearance in a contractual nonpayment action requires notice by mailing a copy of the summons to his or her place of residence.  The court held that the provision was inapplicable on its face because the subsection pertained to defendants who never appeared in the action.  It also noted that providing the defendant with an additional copy of the summons fails to provide notice of the time and place of the motion for leave to enter a default judgment and, therefore, does not satisfy the notice requirement of CPLR 3215(g)(1).

While the ruling was a matter of first impression for the Second Department, the three other appellate courts had addressed the issue with varying results.

The Third Department concluded that failure to provide notice in accordance with CPLR 3215(g)(3) does not by itself warrant vacatur of a default judgment.  Rather, defendants in default are required to show a valid excuse for the default, a meritorious defense, and the absence of willfulness.  See Fleet Fin. V. Nielsen, 234 A.D.2d 728, 650 N.Y.S.2d 904 (3rd Dept. 1996).

The First Department required that the defaulting defendant be given five days’ notice of an inquest.  See Walker v. Foreman, 104 A.D.3d 460, 963 N.Y.S.2d 625 (1st Dept. 2013).  And the Fourth Department has held that failure to comply with the notice requirement in CPLR 3215(g)(1) deprives the court of jurisdiction to hear the motion to enter default judgment, requiring that the judgment be vacated.  See Dime Sav. Bank of N.Y. v. Higner, 281 A.D.2d 895, 722 N.Y.S.2d 651 (4th Dept. 2001).

The Second Department concluded the Paulus decision by stating that the failure to provide “proper notice of a motion can readily be viewed as a fundamental defect because it deprives the opposing party of a fair opportunity to oppose the motion.  The same rationale applies “with equal force” to a plaintiff’s failure to provide the defendant with notice of a motion to enter a default judgment.

Nevertheless, while improper notice requires vacatur of a default judgment, it does not necessarily mean the defendant will be relieved of the underlying default and allowed to defend the case on the merits.  Rather, the underlying default remains in effect.  The defendant is only entitled to notice of any future motion to enter the default judgment, at which point he may oppose entry by contesting the sufficiency of the proof of facts relied on by the plaintiff or the damages sought.