WASTE CONNECTIONS OF NEW YORK v. JUST AN OVEN CORP (2019)

On June 14, 2019, the parties appeared to argue plaintiff's motion for a default judgment and defendants' cross motion for leave to file a late answer. At the initial argument date, the court determined that defendants had demonstrated a meritorious defense. However, defendants did not proffer: (1) a reasonable excuse, or (2) anything other than conclusory statements to refute plaintiff's showing that defendant received actual notice. Therefore, the court put the case over for additional briefing as to whether a showing of reasonable excuse or lack off actual notice was necessary, and if so, to give defendant the opportunity to make this showing.

Defendant, in its supplemental briefing took the position that “Defendants need not show or even proffer a “reasonable excuse” or “excusable default” for not timely responding to Plaintiff's Complaint” (EDOC 36 paragraph 4), because they were proceeding under CPLR 317. According to defendants, CPLR 317 does not require any showing on the part of defendants in that regard, especially prior to entry of judgment. Defendants did not take the opportunity to raise any additional factual contentions with respect to whether they received actual notice.

This was a dangerous course to take. CPLR section 317 allows a “person served with a summons other than by personal delivery ․ may be allowed to defendant the action ․ upon a finding of the court that he did not personally receive notice of the summons in time to defend and has a meritorious defense.” However, “the relief is not automatic, as the section states that a person meeting its requirements “may be allowed to defend the action․ Thus, denial of relief under CPLR 317 might be appropriate where, for example, a defendant's failure to personally receive notice of the summons was a result of a deliberate attempt to avoid such notice” (Dilorenzo v. AC Dutton Lumber Co., 67 NY2d 138, 143 [NY 1986] [citations omitted] ).

Pursuant to Dilorenzo, courts have interpreted CPLR 317 to require a defendant to refute a showing by plaintiff that defendant received actual notice. For example, the Appellate Division, Second Department very recently in Argonne Post No. 71, American Legion Inc., v. Lipschitz, 2019 WL 4458657, ––– NYS 3d –––– (September 18, 2019) had occasion to consider the requirements of CPLR 317. In Argonne, the lower court had before it, like here, a motion for a default judgment and a cross motion for leave to serve a late answer. Although the Appellate court reversed the lower court for denying renewal, it agreed “with the Supreme Court's determination that, in opposition to plaintiff's motion to enter a default judgment, Hilltop did not demonstrate either a reasonable excuse for its failure to answer or appear in the action, or that it did not personally receive notice of the summons and complaint in time to defend the action.” Thus, defendants' argument that they need not demonstrate anything is incorrect (see also State Farm Mutual Auto Ins. Co. v. Dr. Ibrahim Fatiha Chiropractic, P.C. 147 AD3d 696 [1st Dep't 2017]).

In this regard, defendants' unsubstantiated denial that it never received notice when plaintiff claims it sent six separate pieces of mail, either through the secretary of state or directly, is insufficient. Mr. Oueslati, in his affidavit (see EDOC 22) simply claims he “spoke to Defendants' employees who all told me that they never received the summons and complaint.” The affidavit fails to describe who these “employees” were, when and where the conversation took place and other particulars to bring the statement beyond a bare denial (State Farm, supra, 147 AD3d at 697; cf. Kircher v. William Penn Life Ins Co., 165 AD3d 1241, 1243 [2d Dep't 2018]). Thus, defendants have failed to set forth anything to rebut plaintiff's prima facie showing that defendants received actual notice of the lawsuit in time to defend against it.

Therefore, the court must grant plaintiff's motion for a default judgment and deny the cross motion. However, that part of plaintiff's motion for attorney's fees is denied as no basis to award attorney's fees exists. The court also declines to compound the interest already charged under the contracts by awarding statutory interest. Should plaintiff wish to make a separate motion for costs, it has leave to do so.

Accordingly, it is

ORDERED THAT the court grants that part of plaintiff's motion for a default judgment against Just an Oven Corp. d/b/a Li'l Frankies in the amount of 38,087.52; and it is further

ORDERED THAT the court grants that part of plaintiff's motion for a default judgment against Kitchen Table Inc., d/b/a Frank Restaurant in the amount of $44,087.52; and it is further

ORDERED THAT the court grants that part of plaintiff's motion or a default judgment against Raguboy Corp d/b/a/ Supper in the amount of 44,087.52; and it is further

ORDERED THAT all other aspects to the motion, as well as the cross motion, are denied.

The clerk is directed to enter judgment accordingly.

Melissa A. Crane, J.