Failure to Seek Default Judgment Within One Year of Default Results in Dismissal of Claims

On March 13, 2019, Justice Knipel of the Kings County Commercial Division issued a decision in Matter of Lev v. Rosenberg, 2019 NY Slip Op. 30824(U), holding that a defendant's failure to seek a default judgment within one year of the plaintiff's failure to respond to the defendant's counterclaims was grounds for dismissal of those counterclaims, explaining:

CPLR 3215(c) provides that if the plaintiff fails to take proceedings for the entry of judgment within one year after the default, the court shall not enter judgment but shall dismiss the complaint as abandoned, without costs, upon its own initiative or on motion, unless sufficient cause is shown why the complaint should not be dismissed. Although counterclaims are not specifically mentioned in CPLR 3215, the legislative history reveals that it was intended to apply to counterclaims, in addition to claims pleaded in a complaint. Here, Rosenberg has failed to (1) seek leave to enter a default judgment on his counterclaims against Lev within one year after default, (2) establish a reasonable excuse for his delay in seeking a default judgment on his counterclaims, and (3) demonstrate that his counterclaims are potentially meritorious. Accordingly, all of Rosenberg's counterclaims against Lev, as set forth in his and Noah's joint answer, dated Oct. 24, 2016, are dismissed as abandoned, without costs, pursuant to CPLR 3215(c).

(Internal quotations and citations omitted) (emphasis added).

If you are served with a complaint (or counterclaims, as happened in this case) and fail timely to answer, the court can enter judgment against you: a default judgment. But as this decision shows, failing timely to seek such a judgment can result in the dismissal of the claims that were the subject of the default. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client have questions regarding whether you have been properly served or if a default judgment has been entered against you.