By: Robert J. Nahoum
THE PROBLEM:
You were recently surprised to find that your bank account was frozen or your wages were garnisheed. You learned that a debt collector had been awarded a default judgment against you.  You went to court to file an “Order to Show Cause†to vacate the default judgment but have now just been told that you motion was denied.
THE RULES:
According to New York State law, before a court can render a judgment against you, it must first acquire PERSONAL JURISDICTION over you. Personal jurisdiction is obtained by serving you with a summons and complaint; but, you must be properly served. Here are the ways you can be served:
- Personal Service – delivering a copy of the summons and complaint to you personally;
- Suitable Age and Discretion Service – delivering a copy of the summons and complaint to someone in your home of “suitable age and discretion†(someone competent enough to pass the papers on to you);
- Nail and Mail – After at least two failed attempts at personal or suitable age and discretion service, the process server may post a copy of the summons and complaint to the door and mail a copy to your last known address.
There are three statutory grounds to vacate a default judgment.
CPLR §5015(a)(l)
New York Civil Practice Laws and Rules §5015(a)(1) provides for vacatur based on excusable default. The judgment debtor must provide the court in his or her sworn statement, a reasonable explanation for defaulting as well as offer a meritorious defense. A reasonable explanation for defaulting can obviously include the fact that the consumer was never served and was unaware of the lawsuit but can also include any other reasonable explanation why he or she did not defend. As for a meritorious defense, the defendant should state whatever defenses are available and which might mitigate the Plaintiff’s claim. In debt buyer cases, the consumer can argue that he or she never did business with the debt buyer and was never extended credit or any other available defense.
A motion to vacate based on CPLR §5015(a)(1) excusable default must be made within one year after service upon the defendant of a copy of the judgment or order with written notice of its entry.
CPLR §5015(a)(4)
When vacatur is sought under CPLR §5015(a)(4), the judgment debtor is arguing a “lack of jurisdiction to render the judgment or order”. Essentially, the consumer is arguing that the court lacks personal jurisdiction because he or she was never served with a summons and complaint. The motion may be made at any time, and the defendant need not show either a reasonable excuse for the default or a meritorious defense (although it is recommended that these be demonstrated)
CPLR §317
CPLR §317, provides that “[a] person served with a summons other than by personal delivery to him… may be allowed to defend the action within one year after he obtains knowledge of entry of the judgment, but in no event more than five years after such entry”. Under CPLR §317, the movant must demonstrate a meritorious defense.
When you file an order to show cause challenging service of process, there are four possible outcomes for an Order to Show Cause to vacate a default judgment:
- The motion is denied on all grounds and the judgment stands.
- The court grants the motion and dismisses the case for clack of personal jurisdiction because the affidavit of service is facially defective (i.e., what the process server has alleged does not constitute proper service) or the defendant has documentary evidence sufficient to refute the truth of the process server’s claims (e.g., proof that the defendant did not reside at the place where service was effected, proof that the defendant or person of suitable age and discretion could not have been served at the time and place alleged).
- The motion is granted to the extent that the judgment is vacated but denied as to dismissal of the complaint. In this case, the court will generally grant the defendant a certain period of time to answer the Complaint if he or she has not already done so.
- The Court schedules a traverse hearing to determine whether service is proper. At a traverse hearing the burden is on the debt collector to call the process server as a witness and testify as to the service. The Court either decides at the hearing that service was improper as a matter of law and dismisses the Complaint without prejudice or, more likely, orders plaintiff to re-serve the Complaint properly. The Court might allow re-service of the Complaint right there in court.
Why your order to show cause was denied first depends on the basis you were challenging the default judgment.
- If you are claiming that the affidavit of service relied on by the debt collector is false because the papers were served at the wrong address, you probably failed to offer sufficient evidence to prove where you were living at the time.
- If you are claiming that the affidavit of service relied on by the debt collector is false because the person described does not match you, you probably failed to sufficiently distinguish between the description in the affidavit of service and your true attributes.
- If you are claiming you have a reasonable excuse for your default and a meritorious defense, you probably failed to convince the judge that your excuse was reasonable or that your defense has merit.
WHAT YOU SHOULD DO:
So, what do you do if you discover that a default judgment has been entered against you? Fortunately, New York courts have recognized that default judgments are highly questionable particularly due to the pervasiveness of improper service of the summons and complaint. For this reason, debtors ae often successful having default judgments vacated by filing an “order to show causeâ€. However, if you fail to make a proper showing, your motion may be denied. Consider hiring an experienced consumer protection attorney familiar with debt defense. Having a lawyer will help to ensure that your motion meets all the elements needed to win your motion.
If you need help settling or defending a debt collection law suit, stopping harassing debt collectors or suing a debt collector, contact us today to see what we can do for you. With office located in the Bronx, Brooklyn and Rockland County, the Law Offices of Robert J. Nahoum defends consumers in debt collection cases throughout the Tristate area including New Jersey.
The Law Offices of Robert J. Nahoum, P.C
(845) 232-0202
www.nahoumlaw.com
info@nahoumlaw.com