VICTORY BLVD ASSOCIATE LLC v. PILLARS FUNDING LLC (2026)

DECISION & ORDER

In an action, inter alia, to recover damages for breach of contract, the plaintiff appeals from an order of the Supreme Court, Orange County (Elena Goldberg Velazquez, J.), dated January 9, 2024.  The order, insofar as appealed from, granted that branch of the defendants’ motion which was pursuant to CPLR 5015(a) to vacate a judgment of the same court dated September 27, 2023, entered upon the defendants’ failure to appear or answer the complaint.

ORDERED that the order dated January 9, 2024, is reversed insofar as appealed from, on the law and in the exercise of discretion, with costs, and that branch of the defendants’ motion which was pursuant to CPLR 5015(a) to vacate the judgment dated September 27, 2023, is denied.

In December 2021, the plaintiff commenced this action, inter alia, to recover damages for breach of a commercial lease agreement.  On March 4, 2022, the Supreme Court issued a judgment in favor of the plaintiff and against the defendants upon the defendants’ failure to appear or answer the complaint (hereinafter the first default judgment).  In March 2023, the defendants moved, among other things, to vacate the first default judgment.  In an order dated August 2, 2023, the court, inter alia, granted that branch of the defendants’ motion.  However, the defendants again failed to timely appear or answer the complaint.

On September 27, 2023, the Supreme Court issued a judgment in favor of the plaintiff and against the defendants upon the defendants’ default (hereinafter the second default judgment).  Thereafter, the defendants moved, inter alia, pursuant to CPLR 5015(a)(1) to vacate the second default judgment.  In an order dated January 9, 2024, the court, among other things, granted that branch of the defendants’ motion.  The plaintiff appeals.

Pursuant to CPLR 5015(a)(1), “[a] defendant seeking to vacate a default in appearing in the action or answering the complaint must show both a reasonable excuse for the default and a potentially meritorious defense” (Wells Fargo Bank, N.A. v. Hyun Jung Kim, 189 A.D.3d 1673, 1674, 135 N.Y.S.3d 267;  see JPMorgan Chase Bank, N.A. v. Morton, 226 A.D.3d 665, 667, 210 N.Y.S.3d 112).  “The determination of what constitutes a reasonable excuse lies within the Supreme Court's discretion” (Gershman v. Ahmad, 131 A.D.3d 1104, 1105, 16 N.Y.S.3d 836;  see Patel v. New York City Tr. Auth., 199 A.D.3d 925, 926–927, 154 N.Y.S.3d 470).  “Law office failure may be accepted as a reasonable excuse ․ provided that such an excuse is supported by a detailed and credible explanation for the law office failure alleged to have caused the default” (Wells Fargo Bank, N.A. v. Hakim, 230 A.D.3d 1271, 1273, 218 N.Y.S.3d 458 [citation and internal quotation marks omitted];  see Patel v. New York City Tr. Auth., 199 A.D.3d at 927, 154 N.Y.S.3d 470).

Here, in support of their motion, the defendants proffered only conclusory and unsubstantiated allegations of law office failure, which did not constitute a reasonable excuse for their default in appearing or answering the complaint (see Ting Chen v. Xiao Fang Shen, 228 A.D.3d 798, 799–800, 213 N.Y.S.3d 416;  Ki Tae Kim v. Bishop, 156 A.D.3d 776, 777, 67 N.Y.S.3d 655).  Since the defendants failed to demonstrate a reasonable excuse for their default, it is unnecessary to determine whether they demonstrated the existence of a potentially meritorious defense to the action (see New York Vein Ctr., LLC v. Dovlaryan, 162 A.D.3d 1056, 1058, 80 N.Y.S.3d 132).  Accordingly, the Supreme Court should have denied that branch of the defendants’ motion which was pursuant to CPLR 5015(a) to vacate the second default judgment.

CHAMBERS, J.P., WOOTEN, WARHIT and LANDICINO, JJ., concur.