Court Cannot Consider Affirmative Defenses in Deciding Judgment by Default for Non-Appearance

On April 4, 2018, the Second Department issued a decision in Power Up Lending Group, Ltd. v. Cardinal Resources, Inc., 2018 NY Slip Op. 02351, holding that in deciding a motion for default due to non-appearance, a court could not consider affirmative defenses, explaining:

Pursuant to CPLR 3215, a plaintiff may seek a default judgment against a defendant who fails to appear or answer. A plaintiff moving for a default judgment against a defendant must submit proof of service of the summons and complaint, proof of the facts constituting the cause of action, and proof of the defaulting defendant's failure to answer or appear.

Here, the plaintiff, by its submissions, met all of these requirements and, thus, demonstrated its entitlement to a default judgment against the defendants in the amount of $66,264.90. The Supreme Court erred when it severed those provisions of the agreements which it found to be illegal pursuant to the criminal usury statute. Usury is an affirmative defense which a defendant must either assert in an answer or as a ground to move to dismiss the complaint pursuant to CPLR 3211. Otherwise, the defense is waived.

(Internal citations omitted).

If you fail to appear in an action after having been properly served, you run a risk that the court will enter judgment against you (a default judgment). As this decision shows, not only will the court not consider any facts or legal arguments you might use to defend yourself, it cannot even consider legal defenses of which it is aware in deciding to enter judgment. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client have not timely responded to a summons or someone has moved for default judgment against you.