Default Judgment Against Your Business in New York?

A default judgment can sometimes be vacated. The grounds New York law recognizes, the deadlines that apply, and why every week matters.

Discuss Your Case

How a Default Judgment Happens.

When a defendant fails to appear or answer, CPLR 3215(a) lets the plaintiff seek a default judgment. If the claim is for a sum certain, the clerk can enter judgment for the amount demanded without a hearing. Many business owners learn about the case only when a bank account is restrained.

The Grounds for Vacating a Default.

Excusable default.

CPLR 5015(a)(1) allows the court to vacate a judgment for excusable default if the motion is made within one year after service of a copy of the judgment with written notice of its entry. Courts generally expect a reasonable excuse for the default and a meritorious defense to the claim.

Lack of jurisdiction.

CPLR 5015(a)(4) allows the court to vacate a judgment for lack of jurisdiction to render it, which is the ground when service was defective. The one-year limit written into subdivision (a)(1) does not appear in subdivision (a)(4).

Fraud or misconduct.

CPLR 5015(a)(3) allows relief for fraud, misrepresentation, or other misconduct of an adverse party.

No actual notice of the summons.

Under CPLR 317, a defendant that was served other than by personal delivery, and did not personally receive notice of the summons in time to defend, may be allowed to defend within one year after learning of the judgment, and never more than five years after its entry, if it has a meritorious defense. This often applies to businesses served through the Secretary of State at an outdated address.

The extra mailing to corporations.

When a corporation was served through the Secretary of State under Business Corporation Law 306(b), CPLR 3215(g)(4) requires the plaintiff to make an additional service of the summons by first class mail to the corporation's last known address at least 20 days before judgment is entered, and to file an affidavit saying so. Whether that mailing was made is one of the first things to check.

By agreement.

Under CPLR 5015(b), the clerk may vacate a default judgment on a stipulation of consent by the parties. A plaintiff sometimes agrees to this rather than litigate a motion it may lose.

Move Quickly.

The one-year clock under CPLR 5015(a)(1) usually starts when the judgment is served with notice of entry, and the business may not realize that has happened. Meanwhile, the plaintiff can restrain accounts and enforce the judgment. Gather the judgment, any notice of entry, any restraining notice from your bank, and a note of when and how you first learned of the case.

Frequently Asked Questions

Can a default judgment against my business be vacated in New York?

Often, depending on the facts. CPLR 5015 allows vacatur for excusable default, lack of jurisdiction, and fraud or misconduct, and CPLR 317 helps defendants who were not personally served and did not receive notice in time.

How long do I have to move to vacate a default judgment in New York?

For excusable default under CPLR 5015(a)(1), within one year after service of a copy of the judgment with written notice of entry. Under CPLR 317, within one year after learning of the judgment and no more than five years after entry. Other grounds have different rules.

What do I need to show to vacate a default for excusable default?

Courts generally expect a reasonable excuse for the default and a meritorious defense to the claim.

My bank account was restrained. What should I do?

Act immediately. Gather the restraining notice, the judgment, and any papers you received, and have a lawyer review whether the judgment can be vacated and whether service was proper.

Why the Courtroom Matters.

I have practiced in New York for 28 years, and my office is in New York Supreme Court every week, in all five boroughs and in Nassau, Suffolk, and Westchester. I know how the parts run and what the judges expect, and that shapes every paper and every conversation about settlement from the first day.

When you contact me, I run a conflict check first. If I can take the case, I will tell you plainly where things stand, what the deadlines are, and what it will take.