Jones, Wolf & Kapasi, LLC Defeats Appeal of Default Judgment Related to Breached Promissory Notes

       Jones, Wolf & Kapasi, LLC ("JWK") defeated an appeal in the Appellate Division, Superior Court of New Jersey, related to a default judgment JWK obtained on behalf of our clients premised on Defendants’ American Exchange Loans, LLC (“AEL”); Eugene Shnayderman (“Shnayderman”); Associated Sales and Leasing, Inc.; and Associated Holding Enterprises, LLP breach of numerous promissory notes.

       As set forth in the court’s decision, JWK alleged that Defendants:

“…breached the terms of the notes by failing to make the required principal and interest payments. Accordingly, plaintiffs filed a verified complaint against defendants on December 31, 2018. Plaintiffs alleged that contrary to Shnayderman's representations, the loan proceeds were not used solely for automobile loans to consumers, but instead were used for personal expenses, including acquisition of a property. Further, plaintiffs alleged defendants failed to timely pay the principal and interest payments due. Plaintiffs contended AEL used some of the monies from its first loan to purchase a residence on Harding Avenue in Perth Amboy and that AEL fraudulently transferred ownership of this property to Shnayderman for the sum of one dollar.”

         Due to Defendants’ failures to respond to the Complaint, JWK was forced to seek several default judgments against them, which were vacated in good faith with the understanding, and Defendants’ representations, they would respond to the Complaint. Despite Defendants’ assurances, they continued to default, requiring JWK to obtain the default judgment, which was the subject of the Appellate Division’s decision. Accordingly, in upholding the default judgment obtain by JWK against Defendants, the Appellate Division opined:

“We are satisfied Judge LeBlon properly found defendants failed to meet the good cause standard to vacate default. Indeed, almost four months after the complaint was filed and default was entered twice, none of the defendants offered a certification to address their delay in filing an answer. At oral argument, the only explanation offered to Judge LeBlon for defendants missing their filing deadline was that a miscommunication occurred between defense counsel and one of the defendants, namely, Shnayderman, who could not be timely reached to file an answer. As the judge noted, no explanation was given for why this defendant could not be contacted electronically. The judge also rejected defense counsel's position that the delay was justified based on a need for defendants' proposed answer to be verified. We note the record offers no reasonable basis for why the other defendants missed the filing deadline.”

           The case is Patel et al. v American Exchange Loans, LLC and Eugene Shnayderman, Associated Sales and Leasing, Inc, and Associated Holding Enterprises, LLP, A-3789-18T3 (App. Div. June 5, 2020) and the decision can be read here.

            For more information about Jones, Wolf & Kapasi, LLC, you are invited to connect with us at: legaljones.com or @JonesWolfKapasi.