Crestmark v. Teleescrow, Inc.

Background

Crestmark filed an unopposed motion to enter Teleescrow’s confession of judgment. A confession of judgment is a written authorization for judgment to be entered against a party without a typical contested trial. The motion relied on a February 23, 2022, affidavit signed by Eillien Cabrera De Landestoy, identified as Teleescrow’s chief executive officer. The affidavit authorized entry of judgment against Teleescrow under New York Civil Practice Law and Rules § 3218 for $6,164,777.47.

Legal standard

The court stated that the Federal Rules of Civil Procedure do not specifically address entry of judgment by confession. It nevertheless explained that a federal court may enter such a judgment when subject-matter jurisdiction exists and the confession was made knowingly and voluntarily. When those requirements are met, the federal court may enter judgment as allowed by the law of the state where it sits. New York law generally permits entry of a judgment by confession based on an affidavit executed by the defendant, and federal courts generally require a motion seeking entry of the judgment.

Court’s findings and ruling

The court found that subject-matter jurisdiction existed because there was complete diversity between the parties and the amount in controversy exceeded $75,000. It also found that Teleescrow’s confession of judgment was made knowingly and voluntarily and that the affidavit included the information required by New York law, including the amount for which judgment could be entered.

The court granted Crestmark’s motion. It directed the Clerk of Court to close the motion at Docket Number 40 and enter judgment in favor of Crestmark in the amount of $6,164,777.47.