SPIRA v. NEW YORK CITY TRANSIT AUTHORITY (2008)

Order, Supreme Court, New York County (Robert D. Lippmann, J.), entered October 6, 2006, which granted plaintiff's motion for a default judgment, unanimously reversed, on the law, the facts and in the exercise of discretion, without costs, and the motion denied on condition that defendants pay $5,000 to plaintiff's attorneys within 30 days of service of a copy of the order.

Under the circumstances, it was an improvident exercise of discretion to grant the default judgment.   While defendant's excuse for its default, i.e., law office failure by reason of understaffing, is not particularly compelling, it constitutes “good cause” nonetheless (Casiano v. City of New York, 245 A.D.2d 244, 666 N.Y.S.2d 636 [1997] ), especially since there is no evidence that plaintiff was prejudiced;  on the other hand, defendant will be severely prejudiced if the motion is granted.   Moreover, defendant showed an intent to defend, with its proffer of a stipulation seeking to extend the time to answer before the period expired, and its belated (six months late) service of an answer with a meritorious defense.   In our view, this is not an appropriate case for departure from this State's preference for resolving controversies upon the merits.