Schreiber v Nissan Lift of New York, Inc.
Attorneys and Parties
Brief Summary
Contract/loan repayment—proof of damages at an inquest following a default judgment
After granting a default on liability and holding an inquest, the court found the plaintiff failed to prove the terms of the loans/guarantees and, in effect, directed entry of judgment for the defendants.
The order directing entry of judgment in favor of the defendants after the inquest.
A default admits liability; at an inquest the only issue is damages. Plaintiff’s testimony and bank records showing a $125,000 personal transfer to Nissan Lift established prima facie damages for that loan, warranting judgment for $125,000. The court also granted leave to appeal under CPLR 5701(c) [appeal by permission]. References to CPLR 3215(f) [proof required to support default judgment] framed the damages inquiry.
Background
Plaintiff, the former chief financial officer of Nissan Lift of New York, Inc., testified that in August 2018 he personally transferred $125,000 to Nissan Lift to help cover a settlement, conditioned on guarantees by Edward Schreiber and S.T.D. Holdings, LLC. Bank statements corroborated the August 2018 transfer and receipt. He sought repayment in December 2021 and April 2022 but was not repaid. He also asserted additional oral loans and vendor payments, but those were made from business accounts not in his name.
Lower Court Decision
The Supreme Court, Nassau County, granted a default judgment on liability and held an inquest on damages. Despite the defendants’ nonappearance, it found the plaintiff had not proven the terms of the loans and guarantees, concluded he failed to establish damages, and, in effect, directed entry of judgment for the defendants.
Appellate Division Reversal
The Appellate Division deemed the notice of appeal an application for leave to appeal and granted leave (CPLR 5701[c]). It reversed, holding that a default admits the complaint’s factual allegations and limits the inquest to the amount of damages. Plaintiff’s testimony and documentary proof of a $125,000 personal transfer to Nissan Lift established entitlement to damages in that principal amount. Claims for additional sums failed for lack of proof tying business-account payments to plaintiff’s personal obligation. The matter was remitted for entry of judgment for plaintiff in the principal sum of $125,000.
Legal Significance
Reaffirms that after a default, liability is conclusively established and the inquest focuses only on quantifying damages. Credible testimony corroborated by bank records can satisfy the plaintiff’s prima facie burden on damages, while amounts paid from business accounts without proof of personal liability are not recoverable. Also clarifies the procedural path for granting leave to appeal under CPLR 5701(c) [appeal by permission].
In a default setting, plaintiffs can secure damages upon prima facie proof—such as testimony and bank statements—showing a personal outlay tied to the defendant; however, claims based on business-account payments require proof of the plaintiff’s personal responsibility to be recoverable.