ESGRO CAPITAL MANAGEMENT LLC v. NYC (2023)

Order of the Appellate Term of the Supreme Court of the State of New York, First Department (Hagler, J.P., Tisch, Michael, JJ.), entered on or about June 21, 2022, which, insofar as appealed from as limited by the briefs, affirmed an order of Civil Court, New York County (Matthew P. Raso, J.), entered on or about December 7, 2020, denying, based on a finding of waiver, defendant's motion pursuant to CPLR 5015(a)(4) to vacate a default judgment entered against her and to dismiss plaintiff Esgro Capital Management LLC's complaint for lack of personal jurisdiction, unanimously modified, on the law, to the extent of reversing the affirmance of the denial of defendant's motion to vacate pursuant to CPLR 5015(a)(4), the matter remanded to Civil Court for further proceedings on the CPLR 5015(a)(4) motion to vacate in accordance with this decision, and otherwise affirmed, without costs.

The proper approach for determining whether a defendant has waived the CPLR 5015(a)(4) personal jurisdiction defense involves the consideration of whether the defendant's particular actions amount to “an intentional relinquishment of a known right” (Homapour v. Harounian, 200 A.D.3d 575, 576, 160 N.Y.S.3d 223 [1st Dept. 2021];  see Hyperion Med. P.C. v. Trinet HR III, Inc., 190 A.D.3d 456, 458, 140 N.Y.S.3d 207 [1st Dept. 2021]), and results from the taking of some affirmative action evincing the intent to accept a judgment's validity – such as the making of voluntary payments to satisfy a default judgment prior to moving to vacate (see e.g. Eastern Sav. Bank, FSB v. Campbell, 167 A.D.3d 712, 715–716, 90 N.Y.S.3d 212 [2d Dept. 2018]).  The mere fact that a defendant, like defendant here, was subject to payments pursuant to a wage garnishment order for more than one year without taking some action is not, without more, a proper basis for finding waiver of the ability to seek relief under CPLR 5015(a)(4) (see Community State Bank v. Haakonson, 94 A.D.2d 838, 839, 463 N.Y.S.2d 105 [3d Dept. 1983];  compare Calderock Joint Ventures, L.P. v. Mitiku, 45 A.D.3d 452, 453, 848 N.Y.S.2d 36 [1st Dept. 2007]).

Motion for leave to file an animus curiae brief granted.