In commercial actions, the relief sought is almost always a monetary judgment. Often, years are spent pursuing a case in hopes of getting the best outcome for your client. If and when your client finally obtains that judgment, both counsel and the client should be mindful of how long those judgments last. A monetary judgment is valid for twenty years and acts as a lien for the first ten years. CPLR § 211(b). Importantly, the lien (and likely the judgment) can be extended after the first ten years. CPLR § 5014; see In re Vinieris, 391 B.R. 707, 711 (Bankr. S.D.N.Y. 2008); Anchor Sav. Bank v. Parker, 10 Misc. 3d 1074(A) at *1 (Sup. Ct. Nassau Cnty 2006).
Confessions of Judgment (“COJ”), which are generally used in conjunction with settlement agreements, have a different shelf life. COJs are entered “upon an affidavit executed by the defendant,” CPLR § 3218(a), not by a court. A COJ admits liability and is often used in circumstances where the settlement agreement allows for payment over a period of time. If the defendant defaults on the settlement agreement and fails to pay the amount owed, then the plaintiff can obtain a judgment by filing the COJ.
A plaintiff has three years to file the COJ with the county clerk before it expires. Once filed with the county clerk, a judgment is entered and it becomes valid for twenty years. However, a Confession of Judgment cannot be otherwise extended and so failing to file within the three years can be a fatal mistake. Parties can negotiate around this three-year deadline by placing language in the settlement agreement requiring the defendant to execute successive COJs. For example, if the parties agree that the settlement should be paid monthly between 2021 and 2026 and the defendant executes the first affidavit in July 2021, such language requires the defendant to execute a new affidavit prior to July 2024.
While these affidavits are a useful tool, keep in mind that the plaintiff must file the Confession of Judgment with the county clerk where the defendant resided at the time the affidavit was executed or filed. CPLR § 3218(b). Consequently, a COJ can only be filed against a party that was a New York resident either at the time the affidavit was executed or at the time of filing. If the defendant was never a New York resident, then a COJ is not a viable option.
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