The Civil Court of Kings County granted a defendant consumer's application to vacate a default judgment entered against her by CACV of Colorado, LLC, and then declined to put the parties back on their initial stipulation in CACV of Colorado, LLC vs. Atekha (Civ. Ct. Kings County 2009). In doing so, the court alluded to the one-sided nature of consumer credit stipulations.
When the consumer failed to make timely payments as per her stipulation with CACV of Colorado, CACV entered a default judgment against the consumer. The consumer then moved by order to show cause for an order vacating that judgment, or for an order deeming the stipulation satisfied.
As a condition precedent to CACV's right to enter judgment, the stipulation required that CACV serve the consumer with a five-day notice of cure. This notice of cure would provide the defendant with notice and opportunity to cure any defects before judgment (for a higher amount) could be entered against her. CACV was also required to provide sufficient proof that the notice to cure was served on the consumer.
The court found that CACV's only proof of mailing was an affidavit, dated nearly 3.5 years after the mailing, in which it was averred that the notice to cure was mailed to the defendant. The court refused to give the affidavit any weight because it was not contemporaneous with the mailing. Because CACV did not meet its burden to establish that it served a notice to cure, the court ordered that the judgment be vacated.
Further, the court stated that the stipulation was "at best fatally indefinite or vague regarding the material and substantial term of the amount due and owing and the rate of interest." CACV used an interest rate of over 16% per annum to arrive at the stipulation amount – a rate the court deemed to be "civilly usurious." The court noted that the stipulation "may fail for lack of consideration" because it was so overwhelmingly one-sided. The court thus declined to put the parties back on the stipulation.