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BARNETT v. DIAMOND FINANCE COMPANY INC (2022)

Supreme Court, Appellate Division, Second Department, New York.2022-02-02No. 2018–00053

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Opinion

DECISION & ORDER ON MOTION

In an action, inter alia, to recover damages for fraud and conversion, the defendant appeals from an order of the Supreme Court, Kings County (Genine D. Edwards, J.), dated October 20, 2017.  The order denied the defendants motion, inter alia, pursuant to CPLR 5015(a) and CPLR 317 to vacate its default, and, in effect, pursuant to CPLR 3215(a) to vacate a clerks judgment entered February 1, 2016, which is in favor of the plaintiff and against it in the total sum of $32,694.52.  Justice Christopher has been substituted for former Justice Cohen (see 22 NYCRR 1250.1[b])

ORDERED that the order is modified, on the law, by deleting the provision thereof denying that branch of the defendants motion which was, in effect, pursuant to CPLR 3215(a) to vacate the clerks judgment, and substituting therefor a provision granting that branch of the motion;  as so modified, the order is affirmed, without costs or disbursements, and the matter is remitted to the Supreme Court, Kings County, for an inquest on damages and for the entry of an appropriate judgment thereafter.

In November 2015, the plaintiff commenced this action and, upon the defendants failure to appear after being served, obtained a default judgment against the defendant.  In February 2016, a clerks judgment was entered in favor of the plaintiff and against the defendant in the total sum of $32,694.52.  Thereafter, the defendant moved, inter alia, pursuant to CPLR 5015(a)(1) and CPLR 317 to vacate its default and, in effect, pursuant to CPLR 3215(a), to vacate the clerks judgment.  In an order dated October 20, 2017, the Supreme Court denied the defendants motion.  The defendant appeals.

A defendant seeking to vacate a default pursuant to CPLR 5015(a)(1) must demonstrate a reasonable excuse for the default and a potentially meritorious defense (see U.S. Bank N.A. v. Dedomenico, 162 A.D.3d 962, 964, 80 N.Y.S.3d 278).  A motion to vacate a default judgment pursuant to CPLR 5015(a)(1) on the ground of excusable default must be made within one year after service upon the moving party of a copy of the judgment, with notice of its entry (see CPLR 5015[a][1]).  We agree with the Supreme Courts determination that the defendant is not entitled to vacate its default pursuant to CPLR 5015(a)(1).  Here, the defendants motion to vacate the clerks judgment was untimely, as it was made more than one year after the clerks judgment with notice of entry was served upon it, and the defendant also failed to establish a reasonable excuse for its more than one-year delay in moving to vacate the clerks judgment (see HSBC Bank USA, N.A. v. Miller, 121 A.D.3d 1044, 1046, 995 N.Y.S.2d 198).  The defendants conclusory allegation of improper service does not constitute a reasonable excuse for its failure to appear or answer the complaint (see HSBC Bank USA, N.A. v. Eliyahu, 170 A.D.3d 1130, 1131–1132, 97 N.Y.S.3d 259).

The defendant also is not entitled to relief pursuant to CPLR 317.  “CPLR 317 permits a defendant who has been served with a summons other than by personal delivery to defend the action upon a finding by the court that the defendant did not personally receive notice of the summons in time to defend and has a potentially meritorious defense” (Goldfarb v. Zhukov, 145 A.D.3d 757, 758, 43 N.Y.S.3d 135).  Here, the plaintiff alleged that it served the defendant by way of service on the Secretary of State.  Service on a corporation by delivering process to the Secretary of State is not personal delivery to the corporation or to an agent designated under CPLR 318 (see Rivera v. Triangle Excavators of N.Y., LLC, 173 A.D.3d 1088, 1088, 100 N.Y.S.3d 883).  However, the mere denial by the defendants president of receipt of service of the summons and complaint did not demonstrate that the defendant did not receive notice of the action in time to defend (see Taron Partners, LLC v. McCormick, 173 A.D.3d 927, 929–930, 103 N.Y.S.3d 485;  Goldfarb v. Zhukov, 145 A.D.3d at 758, 43 N.Y.S.3d 135).  In light of our determination, we need not reach the issue of whether the defendant has demonstrated the existence of a potentially meritorious defense for purposes of either CPLR 5015(a)(1) or CPLR 317 (see Goldfarb v. Zhukov, 145 A.D.3d at 759, 43 N.Y.S.3d 135).

However, the clerk did not have the authority to enter a judgment in the plaintiffs favor since the plaintiffs damages do not constitute a “sum certain” within the meaning of CPLR 3215(a) (see Stephan B. Gleich & Assoc. v. Gritsipis, 87 A.D.3d 216, 224, 927 N.Y.S.2d 349;  Fidelity Natl. Tit. Ins. Co. v. Valtech Research, Inc., 73 A.D.3d 686, 687, 905 N.Y.S.2d 172).

The defendants contention that the plaintiff knew at the time of service that the address listed for the defendant with the Secretary of State was no longer valid is raised for the first time in its reply brief on appeal and is not properly before this Court (see Daly v. Kochanowicz, 67 A.D.3d 78, 92, 884 N.Y.S.2d 144).

The defendants remaining contentions either are without merit or need not be reached in light of our determination.

Accordingly, although we agree with the Supreme Courts determination to deny that branch of the defendants motion which was pursuant to CPLR 5015(a) and CPLR 317 to vacate its default, the court should have granted that branch of the defendants motion which was, in effect, pursuant to CPLR 3215(a) to vacate the clerks judgment.  We therefore remit the matter to the Supreme Court, Kings County, for an inquest on damages and the entry of an appropriate judgment thereafter (see CPLR 3215[b]).

DILLON, J.P., DUFFY, CHAMBERS and CHRISTOPHER, JJ., concur.