Confessions of Judgment by Out-of-State Residents Are No Longer Enforceable, But Summary Judgment in Lieu of Complaint Can Provide Similar Relief
A discussion of confessions of judgment and the use of summary judgment in lieu of complaint in light of the amendments back in 2019 that made confessions of judgment unenforceable against out-of-state residents. The author comments that "although the amendment is over four years old, I still regularly see litigants demanding confessions of judgment from out-of-state residents in connection with settlement agreements, which are ultimately unenforceable."
November 20, 2023 at 11:00 AM
6 minute read
The procedural device known as a "confession of judgment" has long been a valuable tool to quickly and efficiently obtain a judgment for a sum certain against another party. As a result, confessions of judgment are often used in settlement agreements and other transactional documents in New York whereby a confession of judgment is held in escrow to be filed if a party fails to fulfill their obligations to pay a sum certain.
However, effective as of Aug. 30, 2019, confessions of judgment executed after that date by parties that reside outside of New York are no longer enforceable. Nonetheless, and despite that over four years have passed since this significant amendment, many New York attorneys and litigants continue to insist upon confessions of judgments in settlement agreements, not realizing that they are unenforceable against non-residents.
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