Opinion
02 Civ. 0589 (LAK)
June 4, 2002
ORDER
Defendants Ernie Cappone, John Riccardi, Jr., Michael Thomas Metejka a/k/a Michael Nixon, Sharon Nixon a/k/a Sharon Matejka, Arington Clearing Corp. a/k/a Matchbook Clearing Corp. a/k/a Bluestone Depositary Corp., and Arington Depositary Corp. a/k/a Matchbook Depositary Corp. a/k/a Bluestone Depositary Corp. move to vacate the default judgment entered against them on May 1, 2002.
In determining whether to vacate a default judgment, the Court considers "the willfulness of the default, the existence of a meritorious defense, and the level of prejudice that the non-defaulting party may suffer should the relief be granted." Pecarsky v. Galaxiworld.com Ltd., 249 F.2d 167, [ 249 F.3d 167,] 170 (2d Cir. 2001).
1. The moving defendants were served with the summons and complaint as well as a motion for a preliminary injunction and an order of attachment a long time ago. (DI 6, 16) Funds belonging to one or more of them were subjected to court imposed restraint. (DI 12) A number of them were served with the motion to enter a default judgment against them. (DI 20) Yet none entered an appearance or otherwise sought to defend the case until after entry of the default judgment against them. Significantly, none contests the due service of all of these papers. None contends that the defaults were inadvertent or, for that matter, offers any other explanation for the failure to appear previously. In all the circumstances, the Court finds that the default by each of the movants was willful.
2. None of the movants has seriously contended that a meritorious defense to the action exists. The Court has only an unverified answer purportedly submitted on behalf of all defendants by an attorney who concededly does not represent all of the defendants. The answer charitably may be described as boilerplate and contains 51 affirmative defenses, many of which are patently insufficient. In any case, it certainly does not establish the existence of a meritorious defense even granting the low showing that is required for that purpose. Indeed, on the record thus far before the Court in this and a related case, it appears that these defendants participated in a particularly egregious fraud.
See, e.g., Securities and Exchange Comm'n v. McNulty, 137 F.3d 732, 738, 740 (2d Cir.) ("In order to make a sufficient showing of a meritorious defense . . . the defendant need not establish his defense conclusively, but he must present evidence of facts that, if proven at trial, would constitute a complete defense.") (internal quotation and citations omitted), cert. denied, 525 U.S. 931 (1998); Gonzalez v. City of New York, 104 F. Supp.2d 193, 195-96 (S.D.N.Y. 2000).
3. Finally, it is apparent from proceedings in this and the related cases that the claims against the limited fund thus far attached exceed or, in any case, are likely ultimately to exceed the resources available to satisfy the claimants. Vacatur of the default judgment will prejudice the plaintiff by creating the risk that some other creditor will obtain a lien on the available assets superior to that of the plaintiff.
For all of the foregoing reasons, the motion to vacate the default judgment is denied.
SO ORDERED.