Court Voids $701K Confessed Judgment: A Warning on Procedural Integrity and Aggressive Litigation

NEW YORK CITY, NY / ACCESS Newswire / August 28, 2026 / In a landmark decision that highlights the perils of aggressive debt collection, a New York Supreme Court judge has vacated a $701,466.78 judgment against 2594 Atlantic Avenue Corp. and its guarantors, Dayne and Desiree McKenzie. The ruling, which effectively dismisses the entire action brought by M.R. Qualified Holdings, LLC, serves as a sharp rebuke of procedural shortcuts and the high-stakes legal maneuvering that can devastate small business owners and individuals.

The Fatal Flaw: Unauthorized Alterations

The court’s decision was rooted in the strict requirements of CPLR § 3218, which mandates absolute precision in “Confessions of Judgment.” The defendants successfully demonstrated that the instruments used to secure the debt were legally invalid due to unauthorized post-execution alterations. Specifically, the county designation on the documents had been manually changed from “Kings” to “Nassau” after the parties had signed them

The court held that such fundamental defects are not mere technicalities. Because the plaintiff could not provide evidence that the defendants authorized these changes, the judge ruled the documents were legally void. This decision reaffirms that courts will not overlook or allow “curing” of substantive defects in debt instruments, emphasizing that lenders must adhere to rigorous procedural standards.

Litigation Tactics and Allegations Misconduct

The case was characterized by a contentious legal battle, with the plaintiff aggressively pursuing sanctions and contempt orders against both the defendants and their legal counsel, Lisa Cleveland, Esq., and her firm, Cooke Cleveland LLC (CCLLC).

The plaintiff’s efforts to enforce the debt included motions to hold CCLLC in civil contempt for alleged non-compliance with subpoenas, even demanding the disgorgement of funds from the firm’s escrow account. Conversely, the defense team fought to quash these subpoenas and vacate restraining notices, arguing that the underlying judgment was fundamentally flawed.

While the court ultimately denied the plaintiff’s motions for sanctions and contempt, the aggressive nature of these filings underscores the immense pressure defendants often face when forced to defend against potentially invalid debt instruments. The legal fees and operational disruptions caused by such litigation can be as damaging as the debt itself.

The Real-World Cost: Property and Asset Liquidation

The impact of this litigation extended far beyond the courtroom, placing the defendants’ assets and livelihoods in immediate jeopardy. The court’s order brings a halt to a series of aggressive enforcement actions that threatened the defendants’ core assets:

Corporate Asset Liquidation: A UCC sale of the corporate defendant’s property had already been conducted on June 26, 2025, leaving the business struggling in the wake of the plaintiff’s enforcement.

Real Estate Under Threat: The defendants were forced to file urgent motions to cancel and adjourn a scheduled public auction of their real property. Furthermore, the litigation had entangled the interests of Desiree McKenzie in a separate special proceeding concerning property in Baldwin, New York.

A Victory for Procedural Fairness

By vacating the judgment and dismissing the action, the court has provided a vital reprieve for the defendants. This ruling serves as a stark reminder of the rigorous scrutiny courts apply to debt collection instruments and the potential consequences for lenders who circumvent procedural laws. For small businesses and individuals caught in the crosshairs of aggressive collection tactics, the decision is a significant win, reinforcing the necessity of strict adherence to the law in every step of the legal process.

About the Case

The matter involved 2594 Atlantic Avenue Corp., Dayne McKenzie and Desiree McKenzie as defendants and M.R. Qualified Holdings, LLC as plaintiff. The dispute centered on the validity of confessed-judgment instruments and subsequent enforcement proceedings in New York Supreme Court.

The court’s ruling vacated the $701,466.78 judgment and dismissed the action based on defects involving unauthorized alterations to the underlying instruments.

Company Details

Company Name: Borg Bryks LLP
Contact Person: Jonathan M. Borg
Email: jmb@borgbryks.com
Address: New York, United States
Website: https://www.borgbryks.com/

SOURCE: Borg Bryks LLP

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