ACQUA CAPITAL LLC v. 510 WEST BOSTON POST RD LLC

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Supreme Court, Appellate Division, Second Department, New York.

ACQUA CAPITAL, LLC, Appellant, v. 510 WEST BOSTON POST RD, LLC, Respondent, et al., Defendant.

2017–00701

Decided: September 12, 2018

WILLIAM F. MASTRO, J.P., CHERYL E. CHAMBERS, SANDRA L. SGROI, JOSEPH J. MALTESE, JJ. Max DiFabio (William Yurus, Pleasantville, NY, of counsel), for appellant. Guy T. Parisi, Rye, N.Y. (John A. Vitagliano of counsel), for respondent.

DECISION & ORDER

In an action to foreclose a tax lien, the plaintiff appeals from an order of the Supreme Court, Westchester County (William J. Giacomo, J.), dated June 27, 2016.  The order, insofar as appealed from, granted that branch of the motion of the defendant 510 West Boston Post Rd, LLC, which was pursuant to CPLR 317 to vacate a judgment of foreclosure and sale of the same court (Francesca E. Connolly, J.), dated January 14, 2016, entered upon its default, on the condition that it pay all amounts owed within 30 days of the date of the order.

ORDERED that the order is affirmed insofar as appealed from, with costs.

The plaintiff purchased a tax lien against a parcel of property owned by the defendant 510 West Boston Post Rd, LLC (hereinafter 510).  The lien was for delinquent taxes owed to the defendant Village of Mamaroneck.  The plaintiff commenced this action to foreclose on the lien, and 510 failed to answer or appear.  Thereafter, the Supreme Court issued a judgment of foreclosure and sale in favor of the plaintiff upon 510's default.  Upon learning of the judgment, 510 moved, inter alia, pursuant to CPLR 317 to vacate its default on the ground that it never received notice of the delinquency, of its right to redeem, or of the foreclosure action, and that it had paid other municipal taxes of which it received notice and was ready, willing, and able to pay the Village taxes at issue and all of the plaintiff's expenses in acquiring and enforcing the lien.  The court granted the motion to vacate on the condition that 510 pay all amounts owed within 30 days of the date of the order.  The plaintiff appeals.

CPLR 317 provides that a defendant who is not served by personal delivery in an action may vacate its default as long as it demonstrates that it did not personally receive notice of the lawsuit in time to defend against the action and shows that it possesses a potentially meritorious defense (see Dalton v. Noah Constr. & Bldrs., Inc., 136 A.D.3d 730, 731, 24 N.Y.S.3d 739;  Ferguson v. Shu Ham Lam, 59 A.D.3d 387, 388, 872 N.Y.S.2d 529;  Udell v. Alcamo Supply & Contr. Corp., 275 A.D.2d 453, 713 N.Y.S.2d 77).  The determination of a motion pursuant to CPLR 317 is addressed to the sound discretion of the trial court, “the exercise of which will generally not be disturbed if there is support in the record therefor” (Calderon v. 163 Ocean Tenants Corp., 27 A.D.3d 410, 811 N.Y.S.2d 428 [internal quotation marks omitted];  see Anamdi v. Anugo, 229 A.D.2d 408, 644 N.Y.S.2d 804).

Contrary to the plaintiff's contention, the Supreme Court did not improvidently exercise its discretion in granting that branch of 510's motion which was pursuant to CPLR 317 to vacate the judgment of foreclosure and sale on the condition that it pay all amounts owed within 30 days of the date of the order.  Service of the summons and complaint in the foreclosure action was made upon 510 by delivering the pleadings to the Secretary of State (see Limited Liability Company Law § 303), which did not constitute personal delivery (see Eugene Di Lorenzo, Inc. v. A.C. Dutton Lbr. Co., 67 N.Y.2d 138, 142, 501 N.Y.S.2d 8, 492 N.E.2d 116;  Marinoff v. Natty Realty Corp., 17 A.D.3d 412, 413, 792 N.Y.S.2d 491), and 510's submissions in support of the motion established that it did not receive actual notice of the foreclosure action in time to defend (see Brickhouse Masonry, LLC v. Windward Bldrs., Inc., 101 A.D.3d 919, 920, 956 N.Y.S.2d 175;  Fleisher v. Kaba, 78 A.D.3d 1118, 1119, 912 N.Y.S.2d 604).  Moreover, under the circumstances of this case, 510 succeeded in setting forth a potentially meritorious defense to the foreclosure action.  Finally, the evidence does not suggest that 510's failure to update its service address with the Secretary of State while its principal offices were undergoing renovations constituted a deliberate attempt to evade notice;  hence, that failure did not preclude the granting of relief to it under CPLR 317 (see Dalton v. Noah Constr. & Bldrs., Inc., 136 A.D.3d at 731, 24 N.Y.S.3d 739;  Gershman v. Midtown Moving & Stor., Inc., 123 A.D.3d 974, 975, 999 N.Y.S.2d 485;  Cohen v. Michelle Tenants Corp., 63 A.D.3d 1097, 1098, 882 N.Y.S.2d 282;  Arabesque Recs. LLC v. Capacity LLC, 45 A.D.3d 404, 846 N.Y.S.2d 43;  Hon–Kuen Lo v. Gong Park Realty Corp., 16 A.D.3d 553, 792 N.Y.S.2d 145).

MASTRO, J.P., CHAMBERS, SGROI and MALTESE, JJ., concur.