CEDAR GROVE CAPITAL PARTNERS v. EHRLICH (2024)

Appeal from order, Supreme Court, New York County (Lyle E. Frank, J.), entered May 26, 2023, which, to the extent appealed from as limited by the briefs, granted plaintiff's motion for a default judgment and denied defendants' cross-motion under CPLR 3012(d) for leave to file a late answer, deemed appeal from judgment, same court and Justice, entered January 17, 2024 (CPLR 5520[c]), awarding plaintiff judgment in the amount of $629,611.07 and, as so considered, the judgment unanimously affirmed, with costs.

Supreme Court providently granted plaintiff's motion for a default judgment.  Plaintiffs established proper service and made a prima facie showing of their entitlement to a judgment in their favor through competent proof of the facts constituting their claims (CPLR 3215[f];  see Bautista v. Archdiocese of N.Y., 164 A.D.3d 450, 452, 84 N.Y.S.3d 47 [1st Dept. 2018]).  In response, defendants failed to establish that they had a reasonable excuse for their delay in filing the answer.  The record shows that after defendants' counsel contacted plaintiffs' counsel to request an extension of the time to answer, counsel signed a stipulation acknowledging that their office had accepted service of the pleadings and agreeing to respond to the complaint by a date certain.  Nevertheless, counsel failed to serve or file an answer by the agreed date.

Supreme Court also providently exercised its discretion in declining to grant defendants' cross-motion.  The court properly rejected defendants' assertion that their failure to comply with the stipulated date for filing a response was the result of law office failure arising from insufficient staffing at their counsel's firm.  In fact, three days before the return date of plaintiffs' motion for a default judgment, defendants' counsel managed to commence a new action against plaintiffs in New York County.  Under these circumstances, where defendants chose to turn their attention to filing a new action rather than responding to the pending one, their failure to timely serve an answer cannot be characterized as law office failure (see Aloizos v. Trinity Realty Corp., 171 A.D.2d 426, 427, 567 N.Y.S.2d 7 [1st Dept. 1991]).