On April 29, 2025, the Justice Robert R. Reed of the Commercial Division of the Supreme Court of New York County issued a significant ruling in ACM MCC VI LLC v. Able Liquidation Three, Thomas Rossi, et al., granting a default judgment on liability against defendant Thomas Rossi in a commercial dispute after two unsuccessful requests. This case underscores key principles in default practice under CPLR 3215 and offers important procedural lessons for litigators pursuing judgments in complex commercial matters.

Background

The dispute arose from the collapse of Merchant Cash and Capital, LLC (“MCC”), a company engaged in merchant cash advance financing. Following MCC’s financial troubles, its secured lender ACM MCC VI LLC (“ACM”) acquired MCC’s rights and interests through a 2018 foreclosure sale. Defendant, Able Liquidation Three (“Able”), and its principal, Thomas Rossi (“Rossi”), were hired by MCC to collect delinquent payments from merchants. ACM alleged that Rossi and Able entered into nine settlement agreements with merchants totaling $992,000 and collected approximately $841,665—but remitted only $34,000 to MCC. The remainder was allegedly diverted, with Rossi and his company taking unauthorized “fees.” In December 2019, ACM sued Rossi and others, asserting claims for (1) breach of fiduciary duty and aiding and abetting breach of fiduciary duty, (2) breach of contract, (3) unjust enrichment, (4) conversion, and (5) an accounting.

Procedural History

ACM’s road to a default judgment against Rossi was long and complicated. Plaintiff initially filed its complaint on December 6, 2019. Before the motion that is the subject of this decision, ADM had filed two prior, successful motions for default judgment. The first motion was denied due to insufficient evidence, including the absence of a copy of the collection agreement and proof of additional notice required by CPLR 3215(g)(4)(i). The second motion was a partial success: default judgment was granted against co-defendant Able on liability for three causes of action (breach of contract, unjust enrichment, and conversion), but denied as to Rossi due to improper service. After correcting the service and evidentiary issues, ACM moved a third time for the same relief.

The Holding

On the third try, Justice Reed finally granted a default judgment against Thomas Rossi on liability, holding that: (1) ACM had properly served Rossi under CPLR 3215(g)(3)(i), (2) Rossi failed to appear or respond, and (3) ACM sufficiently established the factual basis for its claims through verified pleadings and prior court findings. Notably, the court invoked the “law of the case” doctrine, relying on its earlier determination that ACM had proven the merits of its breach of contract, unjust enrichment, and conversion claims against Able. Since Rossi defaulted, those factual allegations were deemed admitted. The court ordered that an inquest be scheduled to assess damages.

Implications

1. Strict Compliance with Default Practice Is Critical

Obtaining a default judgment in New York is not an easy process. Courts demand precision of process, including proof of proper service, proof of the defendant’s failure to appear, and proof of the facts constituting the claim. Even meritorious claims can falter if procedural rules, especially notice requirements under CPLR 3215(g), are not strictly followed.

2. Law of the Case Is a Powerful Tool

Once a court has ruled on the sufficiency of claims or evidence, that ruling can shape future motions. Here, ACM leveraged the prior partial default ruling to support its renewed motion against Rossi. Courts will not re-litigate settled issues without a compelling cause, emphasizing how consistency and efficiency in judicial decision-making can help your case.

3. Default Admits Liability, Not Damages

Litigators must be ready for the next phase. A liability finding on default is only half the battle; damages must still be proven at an inquest, and plaintiffs will now face the challenge of demonstrating actual financial harm.

4. Procedural Persistence Pays Off

ACM’s willingness to correct earlier deficiencies and pursue judgment a third time demonstrates how persistence, coupled with procedural compliance and knowledge, can ultimately lead to success after multiple setbacks.

Conclusion

This case is more than a routine default judgment – it serves as a procedural roadmap for successfully obtaining default relief after earlier missteps or failed attempts. For attorneys navigating breach of contract and commercial collection actions, this case is a reminder that exceptional knowledge of procedural practice and rules can lead to major wins. For defendants, it’s a warning that ignoring a lawsuit may lead to liability when the plaintiff is persistent.

panel Comm Fed

On April 23, 2025, Matt Donovan and Viktoriya Liberchuk moderated a panel featuring Westchester Commercial Division Justices Linda S. Jamieson and Gretchen Walsh. The “town-hall” event covered a wide range of topics, including motion practice, artificial intelligence in legal proceedings, alternative dispute resolution, and trial procedures, to name just a few.

Below are some of the evening’s highlights:

Professionalism in the Courtroom

The Justices both stressed the significance of upholding professionalism and maintaining a respectful atmosphere in the courtroom. Justice Jamieson specifically underscored the necessity for courteous behavior. They expressed a shared annoyance with lawyers who interrupt each other or engage in contentious exchanges, instead of communicating with the court in a respectful manner. As for the dress code, Justices are noting a bit of a post-COVID trend that is, shall we say, less than sartorial.

Summary Judgment & Rule 19-a Statements

Under Commercial Division Rule 19-a, when a motion for summary judgment is filed, the Court may direct the filing of “a separate, short and concise statement, in numbered paragraphs, of the material facts as to which the moving party contends there is no genuine issue to be tried.”

Justice Jamieson and Justice Walsh agreed on the significance of Rule 19-a statements, describing them as an essential tool for clarifying the relevant facts and narrowing the key issues in a case. Both Justices require Rule 19-a statements in their individual Part Rules. They highlighted that the Rule 19-a statements serve as a roadmap for the court, streamlining the decision-making process. Both Justices stressed the importance of citing to the record, emphasizing that well-supported references not only enhance the accuracy of the facts presented but also allow the court to easily verify the information.

Resolving Disputes through ADR

The Justices frequently encourage the parties early and often to participate in the Commercial Division’s ADR Program. This is because both Justices believe in the benefits of the ADR Program, which aims to resolve disputes at the outset of the litigation. Justice Jamieson highlighted the unique advantages of mediation, emphasizing that mediators can take a more flexible and creative approach to resolving disputes—an approach that judges, bound by legal constraints, cannot always use.

Temporary Restraining Orders

The Commercial Division in Westchester does not follow a defined process for handling Temporary Restraining Orders. However, both Justice Jamieson and Justice Walsh have expressed a preference for being notified well in advance. Justice Jamieson recommends that parties call her chambers to provide notice of an impending TRO application, while Justice Walsh prefers that parties send a letter to her chambers. Moreover, as a reminder, under 22 NYCRR § 202.8-e “the applicant must give notice of the time, date and place that the [TRO] application will be made in a manner, and provide copies of all supporting papers, to the opposing parties sufficiently in advance.”

Remote vs. In-Person Appearances

Although Justice Jamieson and Justice Walsh both permit remote court appearances, they generally prefer when lawyers (and even their clients) appear in person. Justice Jamieson finds that in-person appearances let her familiarize herself with the main parties involved and gives her a chance to resolve the case. Justice Walsh typically requires in-person appearances for Orders to Show Cause and trial-related proceedings but frequently conducts preliminary conferences virtually. Justice Jamieson, by contrast, holds most appearances in person.

Artificial Intelligence

The Justices expressed a cautious but open-minded view on the role of artificial intelligence in the courtroom. They recognized the potential benefits of AI in specific scenarios, but also voiced substantial worries about its impact, especially in regards to privacy and matters of evidence. They expressed concern over the admission of deepfakes as a form of evidence. Moreover, the Justices expressed concerns that overreliance on AI may affect the writing skills of junior attorneys. Notably, neither Justice has incorporated AI into their courtroom practices.

Junior and/or Underrepresented Attorneys

Justice Jamieson and Justice Walsh have expressed strong support for the active involvement of junior or underrepresented attorneys in courtroom proceedings. Both Justices allow multiple attorneys to argue a motion or examine witnesses at trial when doing so offers such attorneys with an opportunity to appear and speak in court. This practice helps strengthen their advocacy skills and provides valuable experience.

Notably, Justice Walsh’s Commercial Division Part Rules permit parties to request oral argument if they indicate that the motion will be argued—either in whole or in part—by an attorney who either (1) promotes diversity within the legal profession or (2) has been admitted to practice for less than five years.

This event offered a valuable opportunity to gain deeper insight into the practices of the Westchester Commercial Division Justices. We extend our sincere gratitude to the Judges—there is no better way to understand their expectations than by hearing directly from them.

You,Should,Know,This

As readers of this blog are well aware, we here at New York Commercial Division Practice take great pride in posting about proposed or amended rules of practice in the Commercial Division. Knowledge of the local rules is particularly relevant when filing documents. One recent local rule change that may catch our readers’ eyes is Nassau County Supreme Court’s new procedures for filing an order to show cause .

Litigants generally have two options when bringing a motion before a court in New York State: (i) a motion on notice; or (ii) a motion brought by order to show cause. An order to show cause is typically used for emergency applications or when a litigant is seeking some form of immediate relief, such as a stay or temporary restraining order. As part of an application for an order to show cause, a party’s attorney must submit an affirmation under 22 NYCRR § 202.7(f), which provides that the opposing party has been given notice of the date, place, and time that the application will be filed with the court in order to appear in response to the application. This is where things get interesting.

Continue Reading A Good Lawyer Knows the Law; A Great Lawyer Also Knows the Local Rules
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Element5 Digital, Unsplash

Business Corporation Law § 619 (“BCL”) gives shareholders an “exclusive method . . . to test the validity of an election of a director.” Specifically, BCL § 619 states:

“Upon the petition of any shareholder aggrieved by an election, and upon notice to the persons declared elected thereat, the corporation and such other persons as the court may direct, the supreme court at a special term held within the judicial district where the office of the corporation is located shall forthwith hear the proofs and allegations of the parties, and confirm the election, order a new election, or take such other action as justice may require”

But under what circumstances can a court reverse an election? And what factors does a court consider? The case of Jazwinski v Justice Ct. Mut. Hous. Coop. is illustrative on these questions.

Continue Reading It’s Time to CO-OPerate: Commercial Division Refuses to Overturn Election of Board of Directors
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Al Elmes, Unsplash

On March 4, 2025, the New York County Lawyers Association (“NYCLA”) celebrated a significant milestone during its Annual Gala held at The Pierre Hotel in Manhattan. The event commemorated the 30th Anniversary of the Commercial Division of the New York State Supreme Court.

At the Gala, the NYCLA presented its highest honor – the William Nelson Cromwell Award, which was first established in 1964. This prestigious award is conferred upon individuals who have demonstrated exceptional commitment to public service. This award is named in honor of William Nelson Cromwell, one of NYCLA’s earliest and most esteemed leaders, for “unselfish service to the profession and the community.”

At the Gala, the award was presented to the Commercial Division Justices in New York State. Among those present to accept the honor were Commercial Division Justices from across New York State, including Justice Boddie of the Brooklyn Commercial Division, Justice Driscoll of the Nassau County Commercial Division, Justices Chan, Masley, and Reed of the Manhattan Commercial Division, and Justice Jamieson of the Westchester County Commercial Division.

Continue Reading A Court that Means Business: Three Decades of the New York Commercial Division

In a recent decision, the New York County Commercial Division reaffirmed the high bar that parties must meet when attempting to seal court documents in business disputes. In Linkable Networks, Inc. v. Mastercard Inc., the court ruled that Mastercard, despite having the consent of the plaintiff, was not entitled to an order sealing documents referenced in prior motion practice and produced in discovery. This ruling is another reminder of the high bar courts have set to seal documents, as discussed by my colleague Serene Carino in her blog post “Signed, Seal, Delivered.” It also highlights the balance courts strike between protecting sensitive business information and upholding the public’s right to access judicial records.

Under Section 216.1(a) of the Uniform Rules for Trial Courts, a court may seal or redact court records only upon a written finding of “good cause.” The rule stipulates that such an order must specify the grounds for sealing and take into account both the interests of the parties involved and the public’s right to transparency. In the business context, courts are more willing to seal records when trade secrets or competitive advantages are at risk.

Continue Reading Commercial Division Clarifies Standards for Sealing Court Records in Business Disputes
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Oleksandr Sushko, Unsplash

Under CPLR 3213, a plaintiff can move for summary judgment in lieu of complaint which, under the right circumstances, serves as a useful tool to avoid extensive litigation and obtain speedy relief. Recently, in JADR Consulting Group Pty Ltd. v Ault Alliance, Inc., some loan sharks attempted to take advantage of the device’s efficiency. Manhattan Commercial Division Justice Margaret A. Chan heard the legendary jaws theme music but was not deterred, instead denying summary judgment and granting the defendant’s cross-motion to dismiss.

Background:

In JADR, the plaintiff and the defendant entered into a promissory note in which the defendant promised to repay a principal of $2,756,245.10. However, plaintiff conceded that the defendant only received $2,249,996. The interest rate on the note was set at 16% per annum, and the default rate was set at 24% per annum or the maximum permitted by law.

That note was amended twice. First, a new section was added to include that in the event of a default, the principal would increase by $1,000,000. Second, the maturity date of the note was extended and included that any default would, at the plaintiff’s discretion, extend the maturity date by 30 days, but also add $250,000 to the principal to be repaid. Further, both amendments increased the principal amount despite the fact that the defendant never received additional consideration.

Continue Reading You’re Gonna Need a Bigger Boat: Criminal Usury Statutes Prevent Loan Sharks
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Regular visitors to this blog no doubt are aware that the rules of practice for the Commercial Division are centered on innovation, efficiency, cost-effectiveness, and predictability.  This includes the rules governing trial and trial preparation (Rules 25-33), which are important enough to merit their own, separate Preamble. 

As it stands, the Preamble to Rules 25-33 explains that “[t]hese rules emphasize the importance of pre-trial preparation and remind the practitioner that such preparation is an essential element of successfully . . . conducting a complex commercial  . . . trial [and] identify a series of key items that must be addressed or completed before commencing a trial in the Commercial Division” (emphasis added).  The Preamble goes on to list the items that counsel are obligated to address in advance, including:

  • “accurately estimating the length of the trial so that the court, counsel and parties can properly allocate their time”;
  • “preparing and communicating to the court motions in limine in advance of the trial date”;
  • “reviewing, assembling, and pre-marking exhibits”;
  • “addressing issues that may arise in connection with the use of deposition testimony at trial”;
  • “agreeing on a schedule for witnesses and the manner in which each witness will testify (including giving consideration to direct testimony by affidavit in a non-jury trial)”; and
  • “preparing and negotiating jury instructions and verdict sheets.”
Continue Reading Preparation Is Everything:  Commercial Division Advisory Council Proposes New Model Pre-Trial Order for Trials in the Commercial Division
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Frequent readers of this blog know that we are not shy in acknowledging the Commercial Division’s status as the leading forum for resolving complex business disputes. This reputation can be, in part, largely attributed to the ongoing efforts of the Commercial Division Advisory Council, which continually assesses and suggests practical, significant modifications to the Commercial Division Rules. These changes aim to maintain the utmost level of efficiency and reinforce the Commercial Division’s standing as a global leader in resolving commercial disputes.

The Advisory Council has recently proposed a significant rule change: an amendment to Commercial Division Rule 11 to mandate immediate exchange of specified categories of information at the outset of any litigation in the Commercial Division, eliminating the need for formal discovery requests. This proposal seeks to reduce some of the costs, delays, and complications associated with discovery, and to allow parties to “competently assess the risks of trial and the benefits of potential settlement in the early stage of the litigation.”

The proposal recommends a more standardized disclosure system for all Commercial Division cases, replacing the existing practice in which individual judges often establish their own “partial-disclosure regimes” to facilitate discovery. The Advisory Council believes that having a Commercial Division rule tailored to the discovery needs of complex commercial litigation will create a “more uniform and consistent approach, benefiting counsel and preventing the spread of individual judges’ idiosyncratic practices.”

Continue Reading Getting Ahead of Discovery: Can Amended Rule 11 Streamline Commercial Litigation?
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Although discretionary, it is well-known among commercial practitioners that the Commercial Division justices generally like a Rule 19-a statement of material facts included with the submission of a summary judgment motion. When responding to a Rule 19-a statement, the responding party should be thinking a couple moves ahead. The ultimate goal should be to make things easier for the judge to accept clearly stated facts that cannot be contested before the commencement of a trial. The last thing that you want to happen is to be caught in a Steve Urkel “did i do that ” moment in failing to dispute a contested fact. A recent decision issued by Manhattan Commercial Division Justice Robert R. Reed sheds light on the consequences of that very scenario.

Background and Analysis:

Perella Weinberg Partners LLC et al. v Michael A. Kramer et al., involved a breach-of-contract dispute related to the defendants’ departure from the plaintiffs’ financial-advisory firm. During the course of the litigation, both parties moved for summary judgment on their respective claims and counterclaims. As part of their submissions, the parties submitted and responded to their respective Rule 19-a statements.

Continue Reading A Cautious Reminder When Responding to a Rule 19-a Statement of Material Facts on a Motion for Summary Judgment