KS LLC YEHUDA KOTKES YEHUDA KOTKES LLC DANIEL SPIEGEL DANIEL SPIEGEL LLC SHLOMO KORLANSKY SLR SUSSEX LLC v. KS LP 50 SUSSEX REDEVELOPMENT URBAN RENEWAL LLC 50 SUSSEX MEMBER LLC 50 SUSSEX MANAGER LLC (2026)

This action arises from a falling-out among partners engaged in a large residential development project in Newark, NJ. On motion sequence 001, this court issued an order entered November 6, 2025, granting plaintiffs' unopposed request for default judgment against defendants KS Sussex Avenue, 50 Sussex Member LLC, and 50 Sussex Manager LLC, in the amount of $5,000,000. (See NYSCEF No. 44 [handwritten order].) These defendants now move to vacate the default judgment and for injunctive relief barring enforcement of the judgment. The motions are denied.

Moving defendants seek vacatur under CPLR 5015 (a) (1). They therefore must establish a reasonable excuse for their default and a potentially meritorious defense. They have done neither.

1. With respect to reasonable excuse, it is undisputed that plaintiffs properly served moving defendants through delivery to their respective registered agents for service. (See NYSCEF Nos. 11-13 [affidavits of service].) Defendants do not claim that their registered agents failed to redeliver process to them—only that they "have no record of receiving process from the registered agents" for those defendants. (NYSCEF No. 56 at ¶ 53 [emphasis added].) This conclusory statement is insufficient to rebut the presumption of proper service. Moreover, defendants fail to offer an account of why they did not receive process from their registered agents. Defendants thus do not offer a reasonable excuse for their default.

Even assuming that defendants had provided a reasonable excuse, they do not show that they have a potentially meritorious defense.¹ The only defense they offer is that this court lacks personal jurisdiction over them. (See NYSCEF No. 57 at 1, 3-7.) That argument is without merit.

2. Personal jurisdiction exists over defendants here because the October 1, 2024, settlement agreement that plaintiffs seek to enforce in this action undisputedly selects New York County as the proper forum for actions arising from the agreement. (See NYSCEF No. 2 at 9 [agreement; see also NYSCEF No. 57 at 4.) A forum-selection clause designating New York as the proper forum manifests consent to the jurisdiction of the New York courts for personal-jurisdiction purposes. (National Union Fire Ins. Co. of Pittsburgh, Pa. v Worley, 257 AD2d 228, 231 [1st Dept 1999].)

Defendants contend, in effect, that this court should decline to enforce the forum-selection clause as "unconscionable, result[ing] from plaintiffs' over-reaching, and . . . unenforceable." (NYSCEF No. 57 at 5 [capitalization omitted].) But they do not explain how that clause was the product of overreaching; nor why a clause designating New York County as the forum for actions arising from a Newark development project is substantively unconscionable or unjust. (See Public Adm'r Bronx County v Montefiore Med. Ctr., 93 AD3d 620, 621 [1st Dept 2012] [rejecting challenge to the substantive reasonableness of a forum-selection clause because the party challenging the clause did not demonstrate that "a trial in" the chosen forum "would be so impracticable and inconvenient that he would be deprived of his day in court"].)

Defendants misplace their reliance on General Obligations Law (GOL) § 5-1402 (see NYSCEF No. 57 at 3-4); that statute is inapplicable here. Section 5-1402 does not, as defendants assert (id. at 3), generally "govern[ ] forum selection provisions in contracts or agreements relating to transactions exceeding one million dollars" (such as the underlying settlement agreement). Rather, when applicable, § 5-1402 creates an exception to other statutes that "limit[ ] or affect[ ] the right of a person to maintain an action or proceeding," most notably CPLR 327 (b) and Business Corporation Law (BCL) § 1314 (b).² But defendants do not identify a statute (whether BCL § 1314 [b] or otherwise) that would restrict plaintiffs' right to bring this action. Whether plaintiffs' claims would, or would not, otherwise qualify for the § 5-1402 exception to restrictions of that kind is irrelevant for purposes of the personal-jurisdiction inquiry.³

No jurisdictional impediment exists to this court's adjudication of this action. Defendants' jurisdictional arguments do not establish a potentially meritorious defense. Absent either a reasonable excuse or a potentially meritorious defense, defendants have not shown that this court's order granting default judgment should be vacated. As a result, defendants' request for injunctive relief barring plaintiffs from enforcing this court's default-judgment order must be denied as well.

Accordingly, it is

ORDERED that defendants' motions to vacate this court's default-judgment order entered November 6, 2025, and for related injunctive relief (mot seqs 003 and 004) are denied.

DATE 1/21/2026

FOOTNOTES

1.   For this reason, no basis would exist to vacate moving defendants' default under CPLR 317, either.

2.   Thus, to the extent that defendants are also asserting on this motion that plaintiffs' putative failure to satisfy GOL § 5-1402 would deprive this court of subject-matter jurisdiction (as defendants contend in their opening memorandum of law on motion sequence 005, see NYSCEF No. 75 at 5), that assertion is without merit.

3.   In any event, plaintiffs' claims do satisfy the requirements of GOL § 5-1402. The underlying agreement is a contract for more than $1 million, the agreement contains a New York choice-of-law clause, and it contains a forum-selection clause, "whereby such foreign corporation or non-resident agrees to submit to the jurisdiction of the courts of this state." (GOL § 5-1402 [1]; see Worley, 257 at 231 ["[B] by agreeing to the forum selection clause in the indemnity agreement, defendant specifically consented to personal jurisdiction over her in the courts of New York and thereby waived any basis to dispute New York's jurisdiction."].) Defendants provide no authority for their position (see NYSCEF No. 74 at 6) that a valid and applicable forum-selection clause will satisfy § 5-1402 only if the clause states in so many words that the parties consent to the jurisdiction of the New York courts.

Gerald Lebovits, J.