BILL NUMBER: S6471

SPONSOR: HOYLMAN
 
TITLE OF BILL:  An act to amend the civil practice law and rules, in
relation to the permitted submissions in a default judgment

This is one of a series of measures being introduced at the request of
the Chief Administrative Judge upon the recommendation of his Advisory
Committee on Civil Practice.

This measure would amend CPLR 3215(b) to outline the procedure for an
inquest on a default judgment.

A defendant who defaults in appearing concedes only liability. See Roki-
na Opt. Co. v. Camera Kings, 63 N.Y.2d 728, 730 (1984) ("a defendant
whose answer is stricken as a result of a default admits all traversable
allegations in the complaint, including the basic allegation of liabil-
ity, but does not admit the plaintiff's conclusion as to damages");
Glenwood Mason Supply Co., Inc. v. Frantellizzi, 138 A.D.3d 925 (2d
Dep't 2016). Therefore, the defaulting defendant may still contest
damages at an inquest. The CPLR does not contain a detailed procedure
for conducting an inquest, but there are provisions in the Uniform Rules
for the Supreme and County Courts ("Uniform Rules") addressing the
              

issue. These provisions permit the plaintiff to put in paper proof of
damages at the inquest and do not require live testimony. Section 202.46
of the Uniform Rules (22 NYCRR 202.46), entitled: "Damages, inquest
after default; proof", provides:

(a) In an inquest to ascertain damages upon a default, pursuant to CPLR
3215, if the defaulting party fails to appear in person or by represen-
tative, the party entitled to judgment, whether a plaintiff, third-party
plaintiff, or a party who has plead a cross-claim or counterclaim, may
be permitted to submit, in addition to the proof required by CPLR
3215(e) (sic; should be CPLR 3215(f)), properly executed affidavits as
proof of damages. (emphasis added)

(b) In any action where it is necessary to take an inquest before the
court, the party seeking damages may submit the proof required by oral
testimony of witnesses in open court or by written statements of the
witnesses, in narrative or question-and-answer form, signed and sworn
to. (emphasis added)

See Archer v. Motor Veh. Accident Idem. Corp., 2012 NY Slip OP 33568(U),
2012 WL 10816412 (Sup. Ct., Queens County 2012)(setting down matter for
inquest but noting "VD' lieu thereof, plaintiff may submit properly
executed affidavits as proof of damages (22 NYCRR 202.46)"), aff'd on
other grounds 188 A.D3d 5 (2d Dep't 2014); see also Siegel, New York
Practice § 295 ("Papers on Default Application") ("Even at an inquest on
damages conducted after the defendant has conceded liability by failing
to appear, the plaintiff may put in paper proof of damages; live testi-
mony is not indispensable.").

There are similar Uniform Rules in other courts. See 22 NYCRR 208.32
("Damages, inquest after default; proof') (Uniform Civil Rule for the
New York City Civil Court permitting submission of proof at inquest by
affidavits); see also 22 NYCRR 202.70(g), Commercial Division Rule
32(a)("Direct Testimony by Affidavit")(allowing testimony by affidavit
at a contested non-jury trial or evidentiary hearing, not just an
inquest upon a default).
Despite the existence of these procedures in the Uniform Rules governing
default judgment applications, we understand that courts and lawyers may
not be aware of their existence. Furthermore, the procedure allowed by
the plain language of these rules may not sufficiently respect the due
process right of a defaulting party to fully cross-examine witnesses
testifying as to damages.

In Rokina Opt. Co. v Camera King, supra, the Court of Appeals held that
"judgment against a defaulting party may be entered only upon applica-
tion to the court along with notice to the defaulting party and 'a full
opportunity to cross-examine witnesses, give testimony and offer proof
in mitigation of damages'." Quoting from Rokina in Conteh v. Hand, 234
AD2d 96 (1st Dep't 1996), the First Department ruled that Supreme Court
improperly refused to permit the defendants to call a witness at an
inquest on damages after the completion of plaintiff's testimony. The
court remanded the matter for a new inquest on damages.  In Ruzal v.
Mohammad, 283 A.D.2d 318, 319, (1st Dept 2001), the First Department
ruled that Supreme Court "erred in holding an inquest on submissions
only without defendant having first defaulted on a formal inquest
proceeding (22 NYCRR § 202.46(a))." Quoting again from Rokina and citing
to Conteh, the First Department ordered "the matter restored to the
trial calendar for a proper inquest on damages."

There also is case law interpreting the Uniform Rules, which holds that
the plaintiff can only proceed on documentary proof if a defaulting
defendant does not contest damages at the inquest. In Suleiman v. Miamor
Transp. Corp., 13 Misc.3d 1230(A), 2006 WL 3068963 (Sup.Ct., Bronx Coun-
ty 2006), for example, the trial court refused to allow plaintiffs to
submit affidavits from their doctors as proof of damages in lieu of
their testimony. Interpreting Uniform Rule 202.46, the court concluded
that the rule does not permit the plaintiff to submit proof of damages
at an inquest in documentary form if the defendant appears at the
inquest. Similarly, in Rivera v. Serrata, 19 Misc. 3d 379 (Sup. Ct.,
Bronx County 2008), where the inquest was conducted before a jury, the
court held that the presentation of written statements pursuant to
Uniform Rule 202.46 in lieu of live testimony "would not sufficiently
assist the jurors in determining whether plaintiff suffered a 'serious
injury' and in their assessment of the amount of damages." The court
read the phrase "'before the court' in the rule, 22 NYCRR 202.46(b), as
providing that plaintiff may present,such documentary evidence only in a
non-jury proceeding, since the court, as finder of fact, would be in a
position to properly evaluate and weigh such evidence, along with that,
if any, presented by the defendant."

The court's decision in Suleiman relies on language in Rokina, Conteh
and Ruzal to reach the conclusion that a plaintiff is not permitted to
submit proof of damages on papers alone if the defendant appears at the
inquest. We believe that this interpretation of the relevant Uniform
Rules is unnecessarily restrictive, as a party applying for a default
judgment before the court should be permitted to submit proof in affida-
vit form. See Rawlings v. Gillert, 104 A.D.3d 929 (2d Dep't 2013) (while
noting that "the defendant is entitled to a 'full opportunity to cross-
examine witnesses, give testimony and offer proof in mitigation of
damages,'" the court also ruled that "plaintiff should have been permit-
ted to submit evidence, including affidavits (see 22 NYCRR 202.46),
supporting her claims for (damages)"). The defaulting party must, howev-
er, be afforded the opportunity to fully cross-examine any damages

witnesses, regardless of whether they have provided oral testimony or
have submitted proof in affidavit form.

Given the conflicting case law in this area, we request enactment of the
instant measure to ensure clarity and due process in default judgment
actions.

This measure, which would have no fiscal impact, would take effect imme-
diately.

 
2017-18 LEGISLATIVE HISTORY::

A10363 (Abinanti) (2018-referred to codes)