This action seeks to recover legal fees allegedly owed to plaintiff law firm, Fox Rothschild LLP, for legal services provided to defendant Tech Talk Media, LLC. Plaintiff initially also named Jonny Caplan (Tech Talk's CEO) and Ronald Hans (its COO), as defendants, but discontinued the action as to Caplan and Hans shortly after commencement. (See NYSCEF No. 4 [notice of discontinuance]; NYSCEF No. 5 [affidavit of service of notice].)

On motion sequence 001, this court granted plaintiff's unopposed request for default judgment against Tech Talk. (See NYSCEF No. 16.) Tech Talk now moves to vacate this court's order granting default judgment. (NYSCEF No. 19 [notice of motion].) The motion is denied.

Plaintiff contends as a threshold matter that this court should not address the merits of Tech Talk's motion to vacate because that motion has (assertedly) been rendered academic. That is, plaintiff represents that after entry of this court's default-judgment order, plaintiff "properly transferred the judgment from New York to Pennsylvania in accordance with Pennsylvania's Uniform Enforcement of Judgment Act," executed on and recovered the full amount of the judgment as entered in Pennsylvania, and filed a satisfaction in this court. (NYSCEF No. 28 [letter from plaintiff to the court].) Plaintiff contends that the filing of the satisfaction renders defendant's "motion to vacate—and any other further action in this case—now moot as the case is concluded." (Id. [capitalization omitted]; accord NYSCEF No. 31 at 2-3 [same].) This court disagrees.

Plaintiff does not provide authority for the proposition that filing a satisfaction of judgment renders moot any motion to vacate.^[FN1] But the Appellate Division, First Department, has held that a motion court is "without jurisdiction to vacate [a] judgment" that has been "paid and satisfied of record," because at that point the judgment "and the obligation thereunder" have been "extinguish[ed]," such that the judgment "ceases to have any existence." (H.D.I. Diamonds, Inc. v Frederick Modell, Inc., 86 AD2d 561, 561 [1st Dept 1982] [reversing grant of motion to vacate]; accord Platinum Funding Corp. v Blue Ocean Lines, Inc., 249 AD2d 19, 19 [1st Dept 1998] [affirming denial of motion to vacate], citing H.D.I. Diamonds, 85 AD2d 561.)

The holding in H.D.I. Diamonds is open to question. The turn-of-the-20th-Century decisions on which it relies do not directly stand for the conclusion reached in that case. Nor does it address a contrary First Department decision from that period. (See Lindenborn v Vogel, 131 AD 75, 77 [1st Dept 1909].) It is difficult to reconcile the H.D.I. Diamonds rule with the longstanding principle that payment of a judgment "by a losing party does not terminate its right to appeal unless made by way of compromise or agreement not to pursue an appeal." (Matter of Seagroatt Floral Co. (Riccardi), 78 NY2d 439, 448 n * [1991], citing Hayes v Nourse, 107 NY 577, 579 [1887].) For that matter, H.D.I. Diamonds would appear to clash with CPLR 5015 (d), which provides that "[w]here a judgment or order is set aside or vacated, the court may direct and enforce restitution" in the same manner as provided for under CPLR 5523 when a judgment is reversed or modified on appeal. (See Valtech Research, Inc. v Meridian Abstract Corp., 23 Misc 3d 531, 533 [Civ Ct, Richmond County 2009] [making this point].)

Be that as it may, though, H.D.I. Diamonds and Blue Ocean Lines remain binding precedent in this Department. This court is therefore obliged to follow them to the extent that they apply. This court concludes, however, that these decisions do not apply here.

As noted above, H.D.I. Diamonds provides that a judgment is extinguished for purposes of a later motion to vacate when it has been "paid and satisfied of record." (86 AD2d at 561.) That has not occurred here. Plaintiff did not enter judgment in New York on this court's order granting default judgment. Although plaintiff represents that it obtained a judgment in [*2]Pennsylvania on that default-judgment order, plaintiff has not provided a copy of the Pennsylvania judgment. Nor, for that matter, has plaintiff provided a copy of its executions on that judgment (or other proof that plaintiff was able to collect the full amount of the judgment from Pennsylvania assets of Tech Talk). Further, although plaintiff attempted to file here a document styled as a satisfaction of judgment, that document was twice returned by the clerk's office, on the grounds that (i) a satisfaction of judgment, to be effective, must be predicated on an already docketed money judgment, and also that (ii) the filed document was also in substance only a proposed, unsigned judgment, not a satisfaction at all, properly speaking. (See NYSCEF No. 27.)

In short, on this record plaintiff has not provided a judgment, proof of collection on that judgment, or a proper satisfaction of judgment. Absent those materials, plaintiff has not shown that Tech Talk's motion to vacate is academic under H.D.I. Diamonds or similar precedents. The court must therefore address the merits of the motion.

Tech Talk's motion to vacate is brought under CPLR 317 and CPLR 5015 (a) (1). (See NYSCEF No. 19 [notice of motion].) A party moving to vacate a default under CPLR 317 or 5015 (a) (1) must ordinarily establish both a reasonable excuse for its default and a potentially meritorious claim or defense.^[FN2] Tech Talk contends that these requirements need not be satisfied here. This contention is unpersuasive. Tech Talk misplaces its reliance on older Appellate Division precedents holding that a default judgment entered absent proper proof under CPLR 3215 (f) is a nullity, such that vacatur would be required even absent a reasonable excuse/meritorious defense. (See NYSCEF No. 29 at 2.) Those precedents have been squarely repudiated by the Court of Appeals. (See Manhattan Telecom. Corp. v H & A Locksmith, Inc., 21 NY3d 200, 203-204 [2013] [holding that a movant's "a failure to submit the proof required by CPLR 3215 (f) should lead a court to deny an application for a default judgment," but that if a court erroneously grants the application instead, the proper means of correcting that error is an application for relief from the judgment pursuant to CPLR 5015," not "treating the judgment as a nullity"].)

Applying the traditional CPLR 317/5015 (a) (1) standards, Tech Talk's motion must be denied because it has not established a reasonable excuse for its default. Tech Talk relies on the affidavit of its COO, Ronald Hans. (See NYSCEF No. 21.) As an initial matter, the affidavit, tellingly, does not say that Tech Talk was unaware that plaintiff had filed a complaint against it. (See id. at 2.)

Regardless, the Hans affidavit identifies three contributing causes of Tech Talk's default. [*3]First, it "uses an agent to collect mail and the Complaint was received and signed by a non-internal employee." (NYSCEF No. 21 at ¶ 9.) Second, it suffered from "multiple cyberattacks during this time" on its "servers, websites, mail forms, and mail servers," leading to significant "lost messages and communications, both inwards and outwards on [its] mailing servers." (Id. at ¶ 10.) Third, Tech Talk's CEO (Jonny Caplan) "was debilitated with ongoing serious medical issues which has stunted his capacity to attend board meetings and make important corporate decisions." (Id. at ¶ 11.) None of these factors constitute a reasonable excuse under the circumstances of this case.

Plaintiff's affidavit of service reflects service by personal delivery on an employee of the Corporation Service Company, an agent authorized to accept service on Tech Talk's behalf. (See NYSCEF No. 2.) Assuming for the moment that this was the "non-internal employee" who signed for the complaint on Tech Talk's behalf (see NYSCEF No. 21 at ¶ 9), it is unclear why delivery of a complaint to a company through the normal channels that it set up would furnish a reasonable excuse for defaulting on that complaint.

Plaintiff represents that it also mailed an additional copy of the complaint to Tech Talk's principal place of business in New York City (See NYSCEF No. 3 [affidavit of mailing].) And plaintiff mailed to Hans himself a copy of the notice that it was discontinuing this action as against him—thereby alerting him to the existence of this action. (See NYSCEF No. 4 [notice of discontinuance]; NYSCEF No. 5 [affidavit of mailing].) Neither of these two additional forms of notice would be affected by the "multiple cyberattacks" referenced in the Hans affidavit. (NYSCEF No. 21 at ¶ 10.) Nor, in any event, does the affidavit provide any details on how those cyberattacks, and any ensuing effects on Tech Talk's email servers, contributed to Tech Talk's default (whether through causing it to miss notifications of this action or otherwise).

Finally, Tech Talk does not explain how the health-related disability of its CEO would have led to its default. Tech Talk does not, for example, represent that Caplan's disability impaired Tech Talk's capacity to retain counsel to respond to the complaint.

Given the absence of a showing that a reasonable excuse existed for Tech Talk's default, the court does not reach the question of a potentially meritorious defense.

Accordingly, it is

ORDERED that Tech Talk's motion to vacate this court's default-judgment order entered July 3, 2024, is denied.