Aboulafia Law Firm vacated a default judgment of nearly $4 million entered against the owner of an apartment building in the Bronx. The plaintiff alleged that she slipped on the floor of the building’s lobby in February 2021. She served the summons and complaint through the New York Secretary of State, but the address on file with the Secretary of State was associated with the owner’s prior principal. The owner, a limited liability company, had been purchased by new members in March 2022 and, after the sale, conducted all of its business from offices in Brooklyn, so it never received the summons and complaint, the motion for a default judgment, or notice of the inquest. The plaintiff eventually obtained a judgment against the owner for $3.95 million. The owner first learned of the lawsuit in May 2026, when its bank received an information subpoena and restraining notice to collect on the judgment.
The Supreme Court, Bronx County, vacated the default judgment, the inquest, and the judgment under CPLR 317, which allows a defendant that was served by a method other than personal delivery (e.g., through the Secretary of State) to defend the action if it did not personally receive notice of the summons in time to defend and has a potentially meritorious defense. Unlike a motion to vacate under CPLR 5015(a)(1), CPLR 317 does not require a reasonable excuse for the default. The Court agreed that a failure to keep a current address on file with the Secretary of State is generally not a reasonable excuse, but held that it does not bar relief under CPLR 317, particularly where, as here, nothing suggested that the defendant deliberately tried to avoid service. The Court also found that the owner raised a potentially meritorious defense as to whether it had actual or constructive notice of the alleged condition, because a separate entity was contractually responsible for maintaining and cleaning the building’s common areas, and its superintendent never observed any hazardous condition around the time of the alleged fall. The Court ordered that the owner’s answer be accepted, allowing the case to proceed on the merits.
The decision is a reminder for business owners, especially those who acquire an existing company or property-owning entity, to confirm that the address on file with the New York Department of State is current. It also confirms that, even where a business has no good excuse for missing a lawsuit served through the Secretary of State, CPLR 317 can still provide relief from a default judgment if the business acts promptly after learning of it.
Read the Decision below: