Are you wondering what documentation or proof you will need to provide in order to vacate a default judgment in New York? Similarly, do you need proof to vacate a judgment entered pursuant to a confession of judgment you signed outside of New York that was entered in New York before the law changed prohibiting this practice?
When seeking to set aside a judgment on default or entered pursuant to a confession, you need to submit an affidavit to the court in support of an application to vacate the judgment. The application will either be by motion to vacate or by order to show cause. The affidavit submitted in support is your sworn testimony and is evidence. There is no actual requirement to attach any sort of documentation to support the allegations set forth in your affidavit.
That being said, you may wish to consider submitting some evidence, especially in light of the fact that the creditor may have documentation refuting your arguments.
An Example From Our Firm
A client came to us recently because their bank account was restrained. Because of the freeze on their account, they learned a judgment had been entered against them shortly after entering a borrowing agreement years ago.
The client lived in New Mexico and signed a confession of judgment in 2017 to secure a loan as part of a merchant advance agreement. When payment could not be made, the finance company docketed the confession of judgment in New York without their knowledge.
A court can vacate the judgment if it finds that the confession of judgment has a default provision that wasn’t complied with. The underlying agreement provided that the borrower would comply with a laundry list of items as it related to her bank accounts and receivables so as to not interfere with the merchant’s ability to pull a daily amount from the borrower’s account.
The client believed they had a meritorious defense to set aside the judgment thinking the merchant never attempted to pull the money from their account as required by the agreement. Therefore, they thought the merchant had no right to enter the confession of judgment, obtain a judgment against them, and subsequently restrain their account.
Setting forth allegations that the merchant failed to act, may have been enough in their affidavit. What could support their allegation and strengthen the likelihood of success on the motion? Their bank account records from 2017, showing any electronic transactions (or lack thereof) with the plaintiff lender. The lender probably has the records in their possession to support the entry of judgment. And, if our client planned to move forward and vacate the judgment, they ought to know what opposition they would face.
Since banks must hold records for five years, we suggested our client obtain records from the time period (which were available almost instantaneously). Upon review, the client realized there had been NSF transactions with the plaintiff lender and the lender was within their right to enter the judgment against them.
There is clear case law in New York that judgment debtors can not challenge judgments “entered against them by confession unless the judgments are defective on their face, were entered without authority or in violation of its terms, were procured in violation of any due process requirements, or were the results of fraud,,,, “ (Yellowstone Capital v. Central USA WIreless LLC).
In this case, our client would not have been successful as they did not have a meritorious defense.
Although the client did not have to attach documentation to their affidavit to support the allegation of a meritorious defense, by suggesting she obtain the information, she was able to make a determination that she would not be successful in an application to vacate and/or set aside the judgment.
If you have a debt collection matter you need assistance with, contact Frank, Frank, Goldstein and Nager. We have the experience that pays.
