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INFORMAL APPEARANCES

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  • Posted on: Jul 31 2020

It makes sense that a “plaintiff appears merely by bringing it.”  Deutsche Bank Nat. Trust Co. v. Hall, ____ N.Y.S.3d ___, 2020 WL 4342753 (July 29, 2020) (citation and internal quotation marks omitted).  Once served with process, a defendant must appear in an action to avoid a default.  Section 320(a) of New York’s Civil Practice Law and Rules (the “CPLR”), which sets forth, inter alia, the manner in which a defendant can appear in an action provides that “[t]he defendant appears by serving an answer or a notice of appearance, or by making a motion which has the effect of extending the time to answer.”  An appearance pursuant to CPLR §320(a) is a formal appearance in the action.  As will be discussed herein, New York courts also recognize “informal appearances.”  An appearance, whether formal or informal, can have a significant impact on litigation.  Among other things, an appearance could: preclude the entry of a default judgment by plaintiff; operate to preclude a defendant from interposing a defense of lack personal jurisdiction; and, preclude a defendant from having a complaint dismissed pursuant to CPLR 3215(c) based on a plaintiff’s failure to seek a default judgment within a year of default.  [This BLOG has addressed CPLR 3215(c) [HERE].]  Depending on the circumstances, a plaintiff or a defendant may argue that a defendant has “informally appeared” in an action.

To constitute an informal appearance, a defendant must have engaged in “meaningful participation in the merits of the case.”  Kurlander v. Willie, 45 A.D.3d 1006, 1007 (3rd Dep’t 2007) (citation omitted).  

The plaintiff in Kurlander commenced a mortgage foreclosure action and served defendant with process.  In response, defendant visited the office of plaintiff’s counsel, paid the principal balance due on the loan and received a receipt marked “paid in full.”  Thereafter, counsel wrote several letters to defendant advising that interest was still due and, if not paid, the foreclosure action would proceed.  An answer was never filed and a judgment of foreclosure and sale was obtained on default.  The denial of defendant’s motion to vacate the default was affirmed.  The Third Department was “unpersuaded” by defendant’s argument that the “payment of the unpaid principal balance constituted an ‘informal appearance’ in the action such that he was entitled to notice of all subsequent proceedings.”  Kurlander, 45 A.D.3d at 1007.  

In Wells Fargo Bank, N.A. v. Martinez, 181 A.D.3d 470 (1st Dep’t 2020), also a foreclosure action, defendant sought dismissal of the complaint as abandoned pursuant to CPLR 3215(c) because plaintiff failed to move for a default judgment within a year of defendant’s default.  In opposition to defendant’s motion, plaintiff unsuccessfully argued that defendant waived his right to a CPLR 3215(c) dismissal to the extent that defendant’s participation in a foreclosure settlement conference constituted an informal appearance in the litigation.  The Court held that “[a]lthough a party may waive it [sic] rights under CPLR 3215(c) by serving an answer or taking any other steps which may be viewed as a formal or informal appearance, defendant’s participation in settlement conferences did not constitute either a formal or an informal appearance since he did not actively litigate the action before the Supreme Court or participate in the action on the merits.”  Martinez, 181 A.D.3d at 470 (citations, internal quotation marks and brackets omitted).  See also, HSBC Bank USA, Nat. Assoc. v. Grella, 145 A.D.3d 669, 671 (2nd Dep’t 2016) (holding that a motion for leave to serve an untimely answer pursuant to CPLR 3012(d) does not constitute an informal appearance.)

Similarly, the Second Department in Whiteside v. Manfredi, 132 A.D.3d 851 (2015), rebuffed plaintiff’s attempt to argue that defendant’s motion to dismiss pursuant to CPLR 3215(c) should be denied due to defendant’s “informal appearance” in the action.  The plaintiff in Whiteside commenced a wrongful death action in 2006.  Defendant hospital’s counsel wrote to plaintiff’s counsel shortly thereafter forwarding a “Notice of Bankruptcy” and advising that the hospital was in bankruptcy and that an automatic stay was in effect.  The hospital emerged from bankruptcy in 2007 and two years later moved to dismiss the action as against it pursuant to CPLR 3215(c).  The motion court denied the motion.  In reversing the motion court, the Second Department held that “[c]ontrary to the Supreme Court’s determination, the letter [from counsel] and the accompanying notice of bankruptcy did not constitute an informal appearance by the hospital.”  Whiteside, 132 A.D.3d at 852.

The motion court in  HSBC Bank USA, Nat. Assoc. v. Assouline, 177 A.D.3d 603 (2nd Dep’t 2019), denied defendant’s motion to vacate a judgment of foreclosure and sale based on lack of personal jurisdiction due to improper service of process.  The Second Department reversed. In Assouline, the defendant was able to rebut the presumption of proper service raised by the process server’s affidavit.  The Court rejected plaintiff’s attempt to argue that the defendant waived the personal jurisdiction defense by making an informal appearance to the extent that: defendant communicated with plaintiff’s attorney to discuss a loan modification; and, defendant’s attorney contacted plaintiff’s servicer to discuss a settlement “prior to litigation” – suggesting that defendant’s counsel was unaware of the pending litigation.  The matter was remitted to supreme court to determine, inter alia, whether defendant was properly served.

The Second Department in City of Newburgh v. 96 Broadway LLC, 72 A.D.3d 632 (2010), reversed the trial court’s grant of plaintiff’s motion for a default judgment because subsequent to the commencement of the action “the defendants twice appeared in court, filed a petition to remove the action to federal district court, entered into a stipulation with the plaintiff, and opposed the plaintiff’s motion to hold them in contempt [by which] acts, the defendants appeared in the action and, thus, should not have been deemed in default.”  Newburgh, 72 A.D.3d at 632 (citations omitted).

Hall was a mortgage foreclosure action in which the motion court granted plaintiff’s motion for a default judgment and denied defendant’s cross-motion to dismiss the complaint on numerous grounds.  The Second Department affirmed and found that in its motion for a default judgment against defendant, plaintiff demonstrated that defendant was properly served with process, failed to appear or answer and it was entitled to foreclose on the subject mortgage.  Hall at *2.  The Court concluded that defendant informally appeared in the action but found unavailing, his argument that his “informal appearance” precluded a default finding and that “even if an ‘informal appearance’ is made after the expiration of the time to answer or move specified in CPLR 320(a) judgment by default is precluded.”  Hall at *2 (some internal quotation marks, brackets and ellipses omitted).  Addressing the issue of “informal appearances,” the Hall Court stated:

It is true that “[i]n addition to the formal appearances listed in CPLR 320(a), the law continues to recognize the so-called ‘informal’ appearance” (Siegel & Connors, N.Y. Prac § 112). “It comes about when the defendant, although not having taken any of the steps that would officially constitute an appearance under CPLR 320(a), nevertheless participates in the case in some way relating to the merits” (id.).

Although “an informal’ appearance can prevent a finding that the defendant is in default, thereby precluding entry of a default judgment” (Vincent C. Alexander, Practice Commentaries, McKinney’s Cons Laws of NY, CPLR C320:4), this is only true when the participation constituting the informal’ appearance occurred within the time limitations imposed for making a formal appearance. Indeed, even service of a formal “notice of appearance will not protect the defendant from entry of a default judgment if, after service of the complaint, the defendant does not timely make a CPLR 3211 motion or serve an answer” (Vincent C. Alexander, Practice Commentaries, McKinney’s Cons Laws of NY, CPLR C320:1). Accordingly, an informal’ appearance, without more, does not somehow absolve a defendant from complying with the time restrictions imposed by CPLR 320(a) which govern the service of an answer or the making of a motion pursuant to CPLR 3211. Contrary to Hall’s contention, this Court has never held otherwise; to do so would effectively eliminate any need for compliance with the time limitations imposed by CPLR 320(a), and render those statutory provisions meaningless for all practical purposes.

Hall at *2-3 (some citations omitted).

Because the Hall defendant’s informal appearance was made after the expiration of his time to appear or answer, he was found to be in default.  Accordingly, defendant’s substantive defenses were deemed waived.  As to the waiver of the defense of lack of personal jurisdiction, the Hall Court stated that:

Hall himself argues … he engaged in significant activity after his statutory time to answer had expired, which amounted to an informal appearance. This activity was sufficient to warrant a finding that Hall had acknowledged the jurisdiction of the court without preserving his objection based on improper service.  

Hall at *3 (citations omitted).  Similarly, the Court found defendant to have waived the defenses of lack of standing, lack of compliance with RPAPL §1304 and res judicata because “where the plaintiff has demonstrated, prima facie, that a defendant is in default because he or she “failed to appear” within the meaning of CPLR 3215(a), that defendant is generally precluded from raising any nonjurisdictional defense without first rebutting the prima facie showing of default.”  Hall at *3 (citations omitted, emphasis in original).  [Note: this Blog has addressed issues related to RPAPL 1304 [HERE], [HERE], [HERE], [HERE], [HERE] and [HERE] and standing in mortgage foreclosure actions [HERE], [HERE], [HERE], [HERE] and [HERE].]

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