The following papers numbered 1 to 7 read on this motion by defendant Madeleine Korman for an order enjoining plaintiff from presenting any further judgments without further order of this court upon Putnam Investments, or any other individual or entity maintaining bank accounts or other assets of defendant, enjoining Putman Investments from disbursing any money in her account, vacating the default imposed on June 19, 2008, the inquest of June 26, 2008, and any and all money judgments obtained by plaintiff against defendant including the judgment entered on October 16, 2008 in the amount of Two Hundred Thirty Eight Thousand Thirty and Eighty Six ($238,030.86) Dollars and the amended judgment dated September 8, 2010, and entered on September 10, 2010, in the amount of Two Hundred Seventy Seven Thousand Four Hundred Forty Five and Seventy Six ($277,445.76) Dollars, and granting defendant leave to file an answer

PAPERS

NUMBERED

Notice of Motion-Affidavits-Exhibits...................................1-3

Answering Affirmations-Exhibits.........................................4-5

Reply.....................................................................................6-7

Upon the foregoing papers, it is hereby ordered that this motion, brought by Alan T. [*2]Rothbard, the temporary guardian appointed over the person and property of defendant Madeleine Korman, for an order pursuant to CPLR § 5015(a)(1), vacating the default imposed against her on June 19, 2008, vacating the order of that date striking her answer, vacating the default judgment entered against her on October 16, 2008, vacating the amended judgment entered on September 10, 2010, and granting her leave to file an answer, is granted, in its entirety, in the interests of justice (see, Woodson v Mendon Leasing, 100 NY2d 62 [2003]).

It is further ordered that any and all restraints on the defendant's assets and bank accounts, specifically, Putnam Investments Fund Account Number (redacted for publication), are hereby vacated.

This action for conversion was commenced by plaintiff Sidney Korman, the defendant's husband, on April 10, 2006. The complaint alleges that defendant failed to relinquish or produce plaintiff's share of a Putnam Investments Account ("Putnam") held by defendant, plus any accumulated interest.

The subject account was opened in 2005, solely in the name of defendant.

Defendant subsequently retained an attorney who filed an answer on her behalf. In an affidavit supporting a previously filed motion, sworn to on October 24, 2006, defendant states that the Putman Investments funds were separate property gifted to her from her family, and were never co-mingled with any funds from plaintiff.

During the course of this litigation, defendant's attorney moved to withdraw from representing her, and the application was granted.

No other attorney ever appeared for defendant in this action.

On June 19, 2008, this case appeared on the trial calendar. An order was issued on that date (Schulman, J.), which struck defendant's answer, and which set this matter down for inquest. No reason for the default is stated in the handwritten order, which appears to have been prepared by plaintiff's attorney. There is no reason set forth for the default anywhere in the official court records, including the minutes of the inquest, which are attached to the moving papers. Furthermore, no explanation is provided by plaintiff's counsel in plaintiff's opposition papers to the motion at bar.

A default judgment was subsequently entered against defendant on October 16, 2008, in the amount of $230,330.45. An amended judgment was then entered against defendant almost two years later on September 10, 2010, in the amount of $277,445.76, because the original judgment did not specify the Putnam account number.

At the time of the commencement of this action, at the time of the defendant's default, at the time of the inquest conducted against the defendant, and at the time of the entry of the judgment and amended judgment, the plaintiff was married to the defendant and lived in the marital residence. They continue to reside together as husband and wife.

On September 28, 2010, defendant was taken by ambulance to Jamaica Hospital, where she was kept in the psychiatric ward until she was placed in Bridge View Nursing Home. Defendant's temporary guardian opines, in his reply affirmation in support of defendant's motion at bar, that either the plaintiff erroneously gave the defendant an improper amount of medication, or the defendant herself took the incorrect dosage because of her diminished mental capacity. He argues that the director of the nursing [*3]home maintains that the defendant did not belong there; and that defendant wound up incurring a bill of $80,000.00.

On October 13, 2010, plaintiff brought an Order to Show Cause in the Guardianship Part of this court (Mayersohn, J.) seeking to have himself appointed guardian over the person and property of defendant. Plaintiff alleged that defendant was incapacitated due to dementia, which his supporting petition stated began "approximately four years ago" (2006, the same year this lawsuit was commenced), and which stated that her mental status has continued to decline since that time. Plaintiff also alleged that defendant was unable to administer medications and provide for her own needs.

In addition, plaintiff sought to control the property management of defendant so that he could pay her bills and maintain her in a long term facility.

The Petition, which was required to set forth all of the assets of defendant, only recited two assets of defendant, a bank account at a local Queens bank, and a half interest in their jointly owned co-op. The Petition did not mention the defendant's Putnam account in her sole name which contained almost $500,000.00. Furthermore, at the time of the guardianship Order to Show Cause, plaintiff had a judgment for more than $230,000.00 against the Putnam account based upon defendant's default in this action.

On January 4, 2011, Alan T. Rothbard, Esq. was appointed temporary guardian by Justice Lee A. Mayersohn over defendant pursuant to Mental Hygiene Law § 81.23.

Justice Mayersohn also appointed a court evaluator and an attorney for defendant in the guardianship proceeding. These attorneys found the Putman Investments Account records and learned of the default judgments obtained by plaintiff.

Following a hearing held on November 19, 2010, Justice Mayersohn determined, inter alia, that defendant did suffer from some physical and mental infirmities which resulted in limitations which impaired her ability to fully provide for her personal needs and property management. Justice Mayersohn also determined that unless a guardian was appointed, she would suffer harm in terms of her property and personal needs, and that she could not fully appreciate the nature and consequences of her functional limitations. In the report prepared by court appointed counsel, the attorney stated to Justice Mayersohn that he was concerned by the inquest conducted against defendant, and whether she had had the mental capacity to understand "what was going on".

Pursuant to CPLR§ 5015(a), "the court which rendered a judgment or order may relieve a party from it upon such terms as may be just." CPLR §5015(a) sets forth five grounds upon which a party may be relieved from a judgment or order: (1) excusable default; or (2) newly discovered evidence which would probably produce a different result; or (3) fraud, misrepresentation or other misconduct committed by an adverse party; or (4) lack of jurisdiction to render a judgment or order; or (5) reversal, modification or vacatur of a prior order.

However, in Woodson v Mendon Leasing Corp., 100 NY2d 62, 68 ([2002]), the Court of Appeals emphasized that the bases for vacating a default order and judgment are not limited to the criteria set forth in CPLR §5015(a), and can also be "for sufficient [*4]reason and in the interests of justice". The court explained that the drafters of CPLR§ 5015 (a) "intended that courts retain and exercise their inherent discretionary power [in contrast to power granted by statute] in situations that warranted vacatur [of default judgments] but which the drafters could not easily foresee (citations omitted)"( Woodson v Mendon Leasing, supra). This power recognizes the court's strong preference for deciding cases on their merits (see, Wade v. Village of Whitehall, 46 AD3d 1302, 1301).

Nevertheless, appellate and trial courts have rarely applied the "interests of justice" standard when vacating default judgments in the many decisions rendered since Woodson in 2003. This court finds that thecircumstances presented heredemand the application of this principle. It stains credulity that the defendant would intentionally forfeit the thousands of dollars in the Putnam account, and knowingly fail to defend her stake, while the person she is living with is actively pursuing his purported claim in the account. Moreover, it appears that plaintiff and plaintiff's attorney had an obligation to inform the court at the inquest in 2008 that the parties resided together and that defendant apparently suffered from dementia since 2006, as stated in plaintiff's 2010 guardian petition.

This court will leave to Justice Mayersohn the determination of the possible overreaching by plaintiff and the consequences of his actions.

Under the unique facts of this case, the defendant has clearly demonstrated that the broad equity power available to a court to vacate its own orders or judgments in the interest of substantial justice is warranted, see, Woodson v Mendon Leasing, supra; Stasiak v Forlenza, 84 AD3d 1214; Wade v Village of Whitehall, supra; F & C Contractors Corp. v. Atlantic Mut. Mortgage Corp., 202 AD2d 629.

Accordingly, the motion by defendant is granted in its entirety.

The default imposed on June 19, 2008 is hereby vacated.

The judgment obtained by plaintiff against defendant entered on October 16, 2008 in the amount of Two Hundred Thirty Eight Thousand Thirty and Eighty Six ($238,030.86) Dollars and the amended judgment entered on September 10, 2010, in the amount of Two Hundred Seventy Seven Thousand Four Hundred Forty Five and Seventy Six ($277,445.76) Dollars are both vacated.

If any monies have been removed by the plaintiff out of the subject Putnam account, the plaintiff is directed to replace those funds immediately.

The proposed answer annexed to the moving papers is deemed served.

Defendant's temporary guardian, Mr. Rothbard, is directed to serve a copy of this order with Notice of Entry upon counsel for plaintiff.

The foregoing constitutes the decision and order of this court.

Dated: February 15, 2012_________________________

J.S.C.