Court Greatly Reduces Amount Sought As Condition To Vacating Default

On December 31, 2024, Justice Andrea Masley awarded less than 15% of the amount sought by plaintiffs as the amount for defendants to pay as a condition to excusing their default. The case is Universal Investment v. Bakrie Telecom Pte, Ltd., Index No. 652890/2014.

Plaintiffs had agreed not to seek entry of default further to a motion they had brought, on the condition that defendants pay the attorneys’ fees and costs of the motion. When plaintiffs submitted a bill for $241,415.46 ($237,032.50 in legal fees and $4,382.96 in expenses), defendants refused to pay and plaintiffs sought a default judgment.

Citing the courts’ preference for resolutions on the merits, Justice Masley determined that a much lower payment of $34,382.96 would be sufficient for defendants to avoid entry of default:

CPLR 5015(a) allows the court to impose conditions to relieve a party of a default. Based on the court’s experience, it finds that $30,000 is a reasonable fee for compiling a basic motion for a default judgment. Plaintiffs’ motion consists of the traditional elements i.e. memos of law in support a reply and affidavits, and usual arguments for a default motion. Here, plaintiffs’ expenses associated with the motion are reasonable. These fees would not have been incurred if defendants had timely engaged counsel or at least informed the court and plaintiff that it was seeking counsel.

Universal Investment, p. 3.

Contact the Commercial Division Blog Committee at commercialdivisionblog@schlamstone.com if you or a client have questions concerning default judgments or disputes over the propriety of attorneys’ fees.