S.A.S.U. Ateliers Jean Nouvel v. 45 Park Place Partners, LLC

Background

S.A.S.U. Ateliers Jean Nouvel brought claims against 45 Park Place Partners, LLC for breach of contract and account stated. On September 4, 2020, S.A.S.U. Ateliers Jean Nouvel requested a certificate of default, stating that the time for 45 Park Place Partners to answer or file another motion had expired. The Clerk of Court issued the certificate that day.

On September 15, 2020, S.A.S.U. Ateliers Jean Nouvel moved for a default judgment. The next day, before the court scheduled a hearing, 45 Park Place Partners appeared and moved to vacate, or cancel, the certificate of default.

Legal standard

The court explained that default judgments are generally disfavored because courts prefer to resolve disputes on their merits. It considered three factors: whether the default was willful, whether denying relief from default would prejudice the plaintiff, and whether the defendant had a potentially meritorious defense. Courts use the same factors when deciding whether to vacate a default. When there is doubt, courts generally resolve that doubt in favor of the party that defaulted.

Court’s analysis

The court found that 45 Park Place Partners’ conduct was not willful. The defendant said it never received the summons and complaint from the Secretary of State and that the documents might have been lost in the mail. The court rejected S.A.S.U. Ateliers Jean Nouvel’s argument that the default was willful because the defendant’s prior counsel had declined to accept service, explaining that the defendant was not required to accept service through that lawyer.

The court also rejected the claimed prejudice. S.A.S.U. Ateliers Jean Nouvel argued that it had spent substantial time and money pursuing a default judgment. The court found that argument unpersuasive, particularly because it had not yet scheduled a hearing on the motion.

Finally, 45 Park Place Partners raised novation as a defense. Novation is a claimed replacement of an earlier agreement with a new one. The court held that, if proven at trial, the defense would completely defeat S.A.S.U. Ateliers Jean Nouvel’s claims. The defendant therefore showed a potentially meritorious defense; it did not have to conclusively prove the defense at this stage.

Disposition

Judge Analisa Torres granted 45 Park Place Partners, LLC’s motion to vacate the Clerk of Court’s certificate of default and denied S.A.S.U. Ateliers Jean Nouvel’s motion for default judgment. The Clerk was directed to terminate the motions listed at ECF Nos. 26 and 30. The opinion did not decide the underlying breach-of-contract or account-stated claims.