FILED NEW YORK COUNTY CLERK 06/07/2016 0858 PM INDEX NO. 150076/2016 NYSCEF DOC. NO. 25 RECEIVED NYSCEF 06/07/2016 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK -----------------------------------------------------------------x STRATEGIC TRADING LLC and TJ MORROW, -against- Plaintiffs, DEUTSCHE BANK SECURITIES, INC., formerly d/b/a Deutsche Bank Alex Brown Inc., Defendant. -----------------------------------------------------------------x Index No. 150076/2016 Part 13 (Justice Mendez) MEMORANDUM OF LAW IN SUPPORT OF DEUTSCHE BANK SECURITIES INC. S MOTION TO VACATE DEFAULT JUDGMENT AND STAY ENFORCEMENT Philippe Zimmerman Robert McFarlane MOSES & SINGER LLP 405 Lexington Avenue New York, NY 10174 Attorneys for Defendant Deutsche Bank Securities Inc. (formerly d/b/a Deutsche Bank Alex Brown Inc.) Telephone (212) 554-7800 Facsimile (212) 554-7700 pzimmerman@mosessinger.com rmcfarlane@mosessinger.com 3406063v6 999999.1477 1 of 17
TABLE OF CONTENTS Page PRELIMINARY STATEMENT...1 PROCEDURAL BACKGROUND...2 ARGUMENT...3 I. THE DEFAULT JUDGMENT SHOULD BE VACATED PURSUANT TO CPLR 5015(A)....3 1. New York Courts Have a Strong Preference for Deciding Cases on the Merits...3 2. The Requirements of CPLR 5015(a) are Satisfied in the Case at Bar...4 II. ENFORCEMENT OF THE DEFAULT JUDGMENT SHOULD BE STAYED PENDING CONSIDERATION OF DBSI S MOTION TO VACATE THE DEFAULT....10 III. DBSI HAS ACTED EXPEDITIOUSLY TO ENFORCE ITS RIGHTS...12 CONCLUSION...13 3406063v6 999999.1477 i 2 of 17
TABLE OF AUTHORITIES Cases Page(s) 38 Holding Corp. v. New York, 179 A.D.2d 486, 578 N.Y.S.2d 174 (1st Dep t 1992)...3 65 N. 8 St. HDFC v Suarez, 18 A.D.3d 732, 795 N.Y.S.2d 724 (2d Dep t 2005)...5, 6 Arred Enterprises Corp. v Indem. Ins. Co. of N. Am., 108 A.D.2d 624, 485 N.Y.S.2d 80 (1st Dep t 1985)...4 Auerbach v. Tregerman, 106 A.D.3d 633, 965 N.Y.S.2d 716 (1st Dep t 2013)...5, 6 Caba v Rai, 63 A.D.3d 578, 882 N.Y.S.2d 56 (1st Dep t 2009)...4 Daimlerchrysler Ins. Co. v. Seck, 82 A.D.3d 581, 919 N.Y.S.2d 20 (1st Dep t 2011)...3 Dorchester Financial Holdings Corporation v. Banco BRJ, S.A., 11-cv-1529 (S.D.N.Y. July 18, 2014) (KMW) (KNF)...11 Dover Limited v. T.J. Morrow, 12-3136-cv (2d Cir. 2013 Aug. 23, 2014)...11 Graupner v Roth, 293 A.D.2d 408, 409-10, 742 N.Y.S.2d 208 (1st Dep t 2002)...5 Price v. Polisner, 172 A.D.2d 422, 568 N.Y.S.2d 796 (1st Dep t 1991)...4 Reynders v. Reynders, 155 A.D.2d 987, 548 N.Y.S.2d 130 (4th Dep t 1989)...11 Sanford v. 27-29 W. 181st St. Ass'n, 300 A.D.2d 250, 753 N.Y.S.2d 49 (1st Dep t 2002)...3 Smith v. Daca Taxi, 222 A.D.2d 209, 634 N.Y.S.2d 476 (1st Dep t 1995)...3 Stephenson v. Hotel Emps., Rest. Emps. Union Local 100, 293 A.D.2d 324, 739 N.Y.S.2d 822 (1st Dep t 2002)...3 Terrapin Indus., LLC v Bank of New York, 137 A.D.3d 569, 570, 27 N.Y.S.3d 153, 154 (1st Dep t 2016)...5 3406063v6 999999.1477 i 3 of 17
Statutes CPLR 5015... passim CPLR 2201...1, 10 CPLR 3213... passim CPLR 5240...10 CPLR 3104...10 N.Y.U.C.C. 4-404...7 N.Y.U.C.C. 3-413...7 N.Y.U.C.C. 3-414...9 3406063v6 999999.1477 ii 4 of 17
This memorandum of law is submitted on behalf of defendant, Deutsche Bank Securities Inc. ( DBSI or Defendant ), formerly d/b/a Deutsche Bank Alex. Brown Inc., in support of its Motion (i) to vacate the default judgment obtained by plaintiffs Strategic Trading LLC ( Strategic ) and TJ Morrow ( Morrow and, together with Strategic, Plaintiffs ) in the total amount of $262,629.72 on May 23, 2016 (the Default Judgment ) to permit DBSI to defend this action, pursuant to CPLR 5015, and (ii) for an order staying enforcement of the Default Judgment pending the Court s hearing and determination of this application, pursuant to CPLR 2201 and 5240. PRELIMINARY STATEMENT On May 23, 2016, following service of a Summons and a CPLR 3213 Motion for Summary Judgment in Lieu of Complaint ( CPLR 3213 Motion ) on the New York State Secretary of State, Plaintiffs obtained the default judgment against DBSI related to two checks made payable to Morrow dated July 31, 1996 and August 1, 1996 (the 1996 Checks ) related to an account at Alex. Brown & Sons, Inc. ( Alex Brown ), that plaintiff Strategic presented for payment on November 20, 2015 nearly 20 years after being issued. As more fully detailed below, Plaintiffs CPLR 3213 Motion is both procedurally and substantively baseless. Among the reasons that Defendant should not have been found liable on Plaintiffs motion are that (i) Plaintiffs action is not, as required, simply an effort to collect on an instrument for payment of money, (ii) the 1996 Checks state on their face that they are void after 180 days from their date and, therefore, Plaintiffs had no claim against DBSI by reason of their dishonor 20 years later, and (iii) all funds in Morrow s Alex Brown account (Account No. 341-45736-12) at the time the checks were drawn by Alex Brown have long since been withdrawn, suggesting that Plaintiffs here seek to collect funds that Morrow has already obtained or disbursed elsewhere and that he is not owed any money by DBSI. 3406063v6 999999.1477 5 of 17
PROCEDURAL BACKGROUND Plaintiffs commenced this action on or about January 5, 2016, by filing a CPLR 3213 Motion seeking to collect on two mysterious checks purportedly made out to Morrow nearly two decades ago and sent to his account address in 1996. See ECF Doc. Nos 1 8. The CPLR 3213 Motion was returnable February 2, 2016. ECF Doc. No. 1. Plaintiffs, both of whom are located in New York City, where DBSI is located, elected to serve the Motion on the New York Secretary of State, rather than on DBSI personally. See Affidavit of Service, ECF Doc No. 12. By order dated February 18, 2016, this Court granted Plaintiffs motion on default. ECF Doc No. 14. This order was filed on May 19, 2016. Id. On or about May 23, 2016, the Court issued the Default Judgment and Plaintiffs filed Notice of Entry of the Default Judgment, which was received by DBSI on June 1, 2016. ECF Doc No. 19. On May 25, 2016, Plaintiffs personally served a Restraining Notice with a copy of the Default Judgment on DBSI by hand. See Morrow letter, dated May 25, 2016, Exhibit 1. 1 1 Unless otherwise stated, references to exhibits herein refer to those exhibits attached to the Affidavit of Joseph Salama, dated June 7, 2016 (the Salama Aff. ). 3406063v6 999999.1477 2 6 of 17
ARGUMENT I. THE DEFAULT JUDGMENT SHOULD BE VACATED PURSUANT TO CPLR 5015(a). 1. New York Courts Have a Strong Preference for Deciding Cases on the Merits New York courts have a strong preference for deciding cases on the merits rather than on default. Daimlerchrysler Ins. Co. v. Seck, 82 A.D.3d 581, 582, 919 N.Y.S.2d 20 (1st Dep t 2011) ( In light of the strong public policy of this State to dispose of cases on their merits, the motion court improvidently exercised its discretion in denying Nationwide's motion to vacate the default order. ) (citation omitted); Stephenson v. Hotel Emps., Rest. Emps. Union Local 100, 293 A.D.2d 324, 325, 739 N.Y.S.2d 822 (1st Dep t 2002) ( There is a strong public policy that favors deciding matters on their merits in the absence of demonstrable prejudice, and defendant does not allege that any was sustained. ) (citation omitted) (upholding vacatur of default); Smith v. Daca Taxi, 222 A.D.2d 209, 211, 634 N.Y.S.2d 476, 478 (1st Dep't 1995) ( There is a strong preference in the law that matters be decided on the merits. ) (citation omitted). New York courts have a liberal policy of vacating default judgments to allow a defendant to have its day in court so that a dispute may be decided on the merits. The First Department has repeatedly held that it is the general policy of the courts to permit actions to be determined by a trial on the merits wherever possible and for that purpose a liberal policy is adopted with respect to opening default judgments in furtherance of justice to the end that the parties may have their day in court to litigate the issues. 38 Holding Corp. v. New York, 179 A.D.2d 486, 487, 578 N.Y.S.2d 174, 175 (1st Dep t 1992); see also Sanford v. 27-29 W. 181st St. Ass'n, 300 A.D.2d 250, 251, 753 N.Y.S.2d 49, 51 (1st Dep t 2002) ( [A] liberal policy is adopted with respect to opening default judgments in furtherance of justice to the end that the parties may have their day in court to litigate the issues. ) (internal citations omitted). 3406063v6 999999.1477 3 7 of 17
2. The Requirements of CPLR 5015(a) are Satisfied in the Case at Bar An application to vacate a default judgment pursuant to CPLR 5015(a) should be granted where the movant (i) moves within one year of service of notice of the judgment, (ii) demonstrates excusable default and (iii) possesses a potentially meritorious defense. CPLR 5015(a); see Price v. Polisner, 172 A.D.2d 422, 568 N.Y.S.2d 796 (1st Dep t 1991); Arred Enterprises Corp. v Indem. Ins. Co. of N. Am., 108 A.D.2d 624, 626, 485 N.Y.S.2d 80 (1st Dep t 1985) ( It is well settled that to vacate a default judgment the moving party must demonstrate both a reasonable excuse for the default and a meritorious defense to the action. ) The First Department s ruling in Price v. Polisner is instructive. There, the Court concluded that Defendant has met his burden of demonstrating both a reasonable excuse for the default and a meritorious defense to the action The courts favor a determination of an action on the merits. In this case, where there was no willful default the [defendant s] failure to interpose an answer should not preclude an innocent [defendant] from vacating an obviously unintentional default. 172 A.D.2d at 422, 568 N.Y.S.2d at 796, 97 (internal citations omitted); see Caba v Rai, 63 A.D.3d 578, 580 (1st Dep t 2009) ( CPLR 5015(a)(1) is available to any defendant against whom a default judgment was entered, provided that the defendant can demonstrate both a reasonable excuse for the default and a potentially meritorious defense. ). DBSI has meritorious defenses, its default was the result of excusable inadvertence, it is promptly moving for relief and Plaintiffs have not been prejudiced. Thus, vacatur is appropriate. First, DBSI advised Plaintiffs that it intended to seek to vacate the default within days of learning of its entry and has now moved just over two weeks after the entry of the Default Judgment -- well within the one year period provided for in the statute. 3406063v6 999999.1477 4 8 of 17
Second, the First Department has held on numerous occasions that the inadvertent failure to respond to a complaint constitutes a reasonable excuse supporting a motion to vacate a default judgment. For instance, in Graupner v Roth, the Court held, The company's failure to properly process the receipt of service here was an excusable failure of internal corporate procedures, akin to law office failure, especially where, as here, plaintiff's claim is woefully lacking in merit, as extensively detailed in the affidavit of the managing agent's president and its exhibits. 293 A.D.2d 408, 409-10, 742 N.Y.S.2d 208, 210 (1st Dep t 2002). Similarly, in Terrapin Indus., LLC v Bank of New York, the First Department supported vacating a default holding that certain law office failures may constitute reasonable excuses. Defendant, through an affidavit of a person with personal knowledge, established that the delay in responding was due to clerical oversight. Since plaintiff suffered no prejudice and there is no evidence of willfulness, defendant established a reasonable excuse for its delay. 137 A.D.3d 569, 570, 27 N.Y.S.3d 153, 154 (1st Dep t 2016); see also Auerbach v. Tregerman, 106 A.D.3d 633, 965 N.Y.S.2d 716, 717 (1st Dep t 2013) ( The court properly exercised its discretion in granting the motion, given the lack of evidence that the default was willful or part of a pattern of dilatory conduct and the strong public policy in favor of disposing of cases on their merits. ) (citation omitted); 65 N. 8 St. HDFC v Suarez, 18 A.D.3d 732, 733, 795 N.Y.S.2d 724 (2d Dept. 2005) ( Under the circumstances of this case, the defendants established a reasonable excuse for the default attributable to law office failure. The affirmation of their attorney established that the default was not willful or deliberate Moreover, the plaintiff suffered no prejudice, and the defendants' proposed verified answer and motion papers set forth allegations sufficient to make out a prima facie showing of a meritorious defense. ) (citations omitted). 3406063v6 999999.1477 5 9 of 17
Here, DBSI received notice of the CPLR 3213 Motion from its corporate agent for service of process on or about January 27, 2016 four business days before the return date of the motion. Salama Aff. at 18. On January 29, 2016, Joseph Salama, the Managing Director/Associate General Counsel of Deutsche Bank AG, New York Branch, sent an email assigning the matter to an in-house attorney to investigate the claim and, if appropriate, engage outside counsel to defend and supervise, and instructing an in-house paralegal to forward the motion papers to the attorney. Id. Unfortunately, the paralegal did not forward the motion papers by email (it is not clear whether a hard copy was transmitted as per our normal practice) and the attorney assigned the matter inadvertently overlooked it. Id. Neither the attorney to whom the matter was assigned, nor anyone else in our office, recognized this oversight until Plaintiffs served their restraining notice, along with the Default Judgment, on DBSI by hand on May 25, 2016. Id. As in Graupner, Terrapin, Auerbach, Suarez and numerous other cases in which default judgments have been vacated, the default here was inadvertent and not part of a pattern of dilatory conduct. DBSI should not be prejudiced by a default judgment where it possesses meritorious defenses, has no liability to Plaintiffs, Plaintiffs will suffer no prejudice from vacating the judgment, and the default was the result of excusable inadvertence by its legal counsel. Indeed, promptly upon learning of the default, DBSI commenced an investigation of Plaintiffs claim, retained outside counsel and contacted Morrow, who is representing both himself pro se and Strategic. Id. at 19. The speed with which this motion is being filed just over two weeks after the Default Judgment was entered -- evidences DBSI commitment to address the claim on its merits and remedy its default. Third, Plaintiffs cannot show any prejudice from permitting DBSI to defend this matter on the merits after Morrow claims to have lost track of his own interests for nearly 20 years. 3406063v6 999999.1477 6 10 of 17
Morrow has not claimed that DBSI was in any way at fault for his having lost the two 1996 Checks, which were sent to his account address, or forgotten about any funds in his brokerage account at Alex Brown for nearly 20 years. In fact, the statement for the Alex Brown Account for the period October 1 to December 31, 2002 (the December 31, 2002 Account Statement ) shows that all funds had been withdrawn from the account by December 31, 2002. See Exhibit 2. Fourth, DBSI also possesses several meritorious substantive defenses that it should be permitted to present to this Court. The motion alleges that Alex Brown was the drawer of two checks payable to Morrow. Under N.Y.U.C.C. 3-413, which describes the Contract of Maker, Drawer and Acceptor of a negotiable instrument, such as a check, the drawer engages that upon dishonor of the draft he will pay the amount of the draft to the holder However, by their express terms, the checks were void 180 days after their date. As such, Alex Brown disclaimed any liability as drawer if the checks were presented for payment after 180 days, which was precisely what happened here. See N.Y.U.C.C. 4-404 ( Bank Not Obligated To Pay Check More Than 6 Months Old ). Thus, the checks were void and Alex Brown s liability on them was discharged, no later than January 28, 1997, more than 18 1/2 years before Plaintiffs attempted to deposit the checks in November 2015. In short, Plaintiffs had no right to attempt to collect the checks nearly twenty years after their dates and has no claim against Alex Brown (DBSI s predecessor) for breach of its contract as drawer of the void checks. Further, Plaintiffs failed to present any evidence that Alex Brown (or its successor DBSI) currently holds any money belonging to Morrow in any account. The account statements that DBSI has been able to locate for the Alex Brown Account establish that, by December 31, 2002, Morrow s account balance was $0. See Exhibit 2. Thus, even if one accepts that Morrow had 3406063v6 999999.1477 7 11 of 17
$94,119.00 in the account as of July 30, 1996, as claimed by Morrow in paragraph 7 of his affirmation, the account was empty by the end of 2002, with the last transfer occurring on December 20, 2002, when 2,736 shares in Safe Alternatives Corp. of America Inc. were transferred to an account at Pershing. Id. As such, Morrow s claim in his affirmation that DBSI continues to possess the unpaid funds related to the checks is demonstrably false. The very notion that Morrow somehow lost track of nearly $100,000 held in his brokerage account for twenty years, while he also managed to reduce the balance in that Account to zero by the end of 2002, defies credulity. See Ex. 2. The mysterious circumstances by which the checks reappeared 20 years later are also suspicious, particularly given plaintiff Morrow s credibility issues, as further discussed infra. Furthermore, the Alex Brown Account was merely a clearing account established in connection with Morrow s brokerage account at Wall Street Investor Services. See Account Agreement, Ex. 3. Funds typically flow relatively quickly through clearing accounts, rather than stay in such accounts for extended periods, as the accounts are generally for the purchase of, or proceeds from, the sale of securities and other investments. Thus, the undisputed facts in this case support providing DBSI with an opportunity to present its defenses. In addition, a CPLR 3213 motion is only appropriate where a plaintiff seeks to collect upon an instrument for the payment of money only or upon a judgment. See CPLR 3213. Here, the very affirmations submitted by the Plaintiffs establish that the instant action is not simply an action to collect upon an instrument for the payment of money but also to collect funds that Plaintiffs claim, without any documentary support, were in Morrow s account. Even assuming, arguendo, that the checks were authentic and remained valid, Plaintiffs have created an issue of fact as to the party entitled to assert a claim to collect on the 1996 Checks -- TJ Morrow -- or the entity to which 3406063v6 999999.1477 8 12 of 17
the checks were indorsed for collection -- Strategic. See ECF Doc. Nos. 2 and 9. It cannot be the case that both Plaintiffs are entitled to a judgment on the 1996 Checks; an investigation of how the checks were indorsed and what such endorsement means would be required. Furthermore, there are numerous open questions related to this matter that support vacating the Default Judgment. Among the open questions are (a) Why does the December 31, 2002 Account Statement show a balance of $0 in the Alex Brown Account? (b) (c) (d) (e) (f) When was the Alex Brown Account closed? Did Morrow collect the funds reflected in the 1996 Checks from the Alex Brown Account? What is the relationship between Morrow and Strategic? What are Morrow s and Strategic s relative interests in the damages sought in this action? Can Morrow act as Strategic s attorney in this action where he is a fact witness? (g) How did the 1996 Checks appear on or about November 6, 2015? Morrow s affirmation does not explain how the package with the 1996 Checks appeared at the address on the face of the check. Were the checks misplaced and then found? (h) If Morrow is correct that the Raleigh, North Carolina address on the face of the 1996 Checks was not Morrow s, why is the same address on the Account Statements for the Alex Brown Account and how did Morrow s spouse obtain the checks on or about November 6, 2015? An additional basis for vacating the Default Judgment is that Plaintiffs were awarded statutory interest on the checks since August 2, 1996. Even assuming, arguendo, that Plaintiffs were entitled to a judgment on the 1996 Checks, they would only be entitled to interest, if any, from the date on which Alex Brown, as drawer, breached an obligation under Uniform Commercial Code 3-414, in 2015. No purported breach (or actionable conduct) is even alleged to have occurred until the checks were dishonored. On the other hand, if Plaintiff were entitled to judgment 3406063v6 999999.1477 9 13 of 17
for funds he could prove remain in his Account, he would only be entitled to interest, if any, earned by the investments in his brokerage account, which would already have been credited to his account and be part of the debits and credits that resulted in a $0 balance as of December 2002. If his claim is that he was denied the right to withdraw the funds, he would need to prove that (which he has made no attempt to do on the CPLR 3213 Motion), and even then interest would be due only from the date of such denial. In short, Plaintiffs have not pleaded any basis for obtaining statutory prejudgment interest from the date of the checks in the amount of $167,905.72. For the foregoing reasons, DBSI s motion to vacate the default judgment should be granted under CPLR 5015(a). II. ENFORCEMENT OF THE DEFAULT JUDGMENT SHOULD BE STAYED PENDING CONSIDERATION OF DBSI S MOTION TO VACATE THE DEFAULT. Based on the facts and law presented, DBSI requests that the Court issue an order staying enforcement of the Default Judgment pending a determination of the instant motion. This Court possesses the right to stay enforcement of the Default Judgment based on, among other things, CPLR 2201 and 5240. CPLR 2201 provides, Except where otherwise prescribed by law, the court in which an action is pending may grant a stay of proceedings in a proper case, upon such terms as may be just. (Emphasis added). CPLR 5240 provides, The court may at any time, on its own initiative or the motion of any interested person, and upon such notice as it may require, make an order denying, limiting, conditioning, regulating, extending or modifying the use of any enforcement procedure. Section 3104 is applicable to procedures under this article. (Emphasis added). In light of the grounds to vacate presented herein, including the meritorious defenses possessed by DBSI and the numerous open questions noted above, and lack of prejudice to 3406063v6 999999.1477 10 14 of 17
Plaintiffs, maintaining the status quo by enjoining Plaintiffs from taking steps to collect on the Default Judgment while this motion is pending is reasonable. See Reynders v. Reynders, 155 A.D.2d 987, 987-88, 548 N.Y.S.2d 130, 131 (4th Dep t 1989) (Application of stay under 5240 appropriate to preserve the due process rights of judgment debtor[s] ). As noted above, the December 31, 2002 Account Statement establishes that the account balance was $0 as of December 31, 2002, following the transfer of shares that had been in that account to an account with Pershing. Morrow s failure to offer a credible explanation as to how he came to possess the 1996 Checks nearly 20 years after they were offered and his attempt to collect funds from the Alex Brown Account without showing that there were any assets in the account are, at best, suspicious. Moreover, not only does DBSI possess meritorious defenses to Plaintiffs claims, as demonstrated above, but plaintiff Morrow has previously been personally involved in suspicious activity that raises questions as to his credibility. In Dover Limited v. T.J. Morrow, 12-3136-cv (2d Cir. 2013 Aug. 23, 2014), the Second Circuit affirmed a jury s conclusion after a three day trial that Morrow was liable for breach of fiduciary duty to a lender to one of his clients for assisting in arranging a $900,000 loan that his client did not repay, where Morrow had received $400,000 - - $300,000 as a structuring fee and $100,000 as a legal fee. See Exhibit 4. In another case, Morrow was disqualified from acting as counsel for the plaintiff where he was its only fact witness and he was alleged to have arranged for the plaintiff to pay $500,000 in order to become the beneficiary of an allegedly irrevocable and freely-transferable $100 million letter. The defendant in that case, when sued on the letter of credit, claimed that it was fraudulent. See Dorchester Financial Holdings Corporation v. Banco BRJ, S.A., 11-cv-1529 (S.D.N.Y. July 18, 2014) (KMW) (KNF). See Exhibit 5. Finding that Morrow has testified that the plaintiff 3406063v6 999999.1477 11 15 of 17
has no assets and as to the alleged loss and destruction of Morrow s computer, the Magistrate Judge also required Morrow s client post a nearly $650,000 bond as security for the defendant s costs in the matter because the claim Morrow was prosecuting on behalf of his client was of dubious merit and there was record evidence suggesting that the transaction underlying the instant transaction is fraudulent. Plaintiffs have expressly rejected DBSI s request to stay enforcement pending this Court s determination of this application. Indeed, Morrow, who is acting as Plaintiffs attorney, responded to being advised that DBSI intended to appear and seek to vacate the default judgment by informing DBSI s outside counsel that Plaintiffs intends to file a turnover motion. See Affirmation of Philippe Zimmerman, dated June 8, 2016, 5. In addition, Plaintiffs served post-judgment discovery on DBSI and Deutsche Bank AG and threatened to execute on the Default Judgment with the assistance of the New York City Sheriff or Marshall if the judgment is not paid by June 9, 2016. Id at 7. As a result, the instant motion was necessitated and an order staying further enforcement efforts is appropriate while this motion is pending. III. DBSI HAS ACTED EXPEDITIOUSLY TO ENFORCE ITS RIGHTS After learning of the Default Judgment on May 25, 2016, DBSI promptly commenced an investigation of the facts relating to Plaintiffs claim and the circumstances of the delivery of the summons and the CPLR 3213 Motion to DBSI. Salama Aff. at 39. In the less than two weeks since learning of the default, not only did DBSI identify documents establishing that it possesses a meritorious defense, but DBSI retained outside counsel, who spoke with Plaintiffs counsel and requested that Plaintiffs agree to vacate the default to permit the matter to be heard on the merits or stay enforcement of the judgment until after this motion is decided. Unfortunately, Plaintiffs refused DBSI s request and threatened to execute on the Default Judgment with the assistance of 3406063v6 999999.1477 12 16 of 17
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