On July 10, 2024, the Second Department issued a decision in Wells Fargo Bank, NA v. Stewart, 2024 NY Slip Op. 03777, holding that ongoing settlement negotiations do not excuse a failure to answer, explaining:
Pursuant to CPLR 5015(a), a defendant seeking to vacate a default in answering a complaint and to compel the plaintiff to accept an untimely answer as timely must show both a reasonable excuse for the default and the existence of a potentially meritorious defense. Here, the Supreme Court properly determined that the defendant’s participation in settlement conferences and the plaintiff’s bad faith negotiations did not constitute a reasonable excuse for his default. The defendant failed to explain how the settlement conferences and the plaintiff’s bad faith negotiations precluded him from answering the complaint before engaging in the settlement conferences or in the nine years since the conferences concluded. Because the defendant failed to establish a reasonable excuse for his default in answering the complaint, it is unnecessary to consider whether he established the existence of a potentially meritorious defense.
Moreover, the instant action does not present unique or unusual circumstances that warrant vacating the defendant’s default in the interest of justice.
(Internal citations omitted).