Redbridge Bedford, LLC v. 159 N. 3RD St. Realty Holding Corp.

175 A.D.3d 1569

109 N.Y.S.3d 352

REDBRIDGE BEDFORD, LLC, et al., Respondents,

v.159 NORTH 3RD ST. REALTY HOLDING CORP., et al., Appellants.

2016–12637

Index No. 510835/16

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

Argued—April 18, 2019

September 25, 2019

Wenig Saltiel LLP, Brooklyn, N.Y. (Meryl L. Wenig, Jason M. Fink, and Nicholas M. Moccia of counsel), for appellants.

Lupkin & Associates PLLC, New York, N.Y. (Jonathan D. Lupkin, Michael B. Smith, Rebecca C. Smithwick, and Isabel D. Knott of counsel), for respondents.

WILLIAM F. MASTRO, J.P., RUTH C. BALKIN, SHERI S. ROMAN, FRANCESCA E. CONNOLLY, JJ.

DECISION & ORDER

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

In 2010, the defendants entered into two leases for commercial space in two adjoining buildings, one for a retail space and the other for a storage space (hereinafter together the subject premises), with the plaintiffs' predecessor-in-interest. Each lease contained a provision giving the plaintiffs, as landlord, the right to access the subject premises to make repairs, replacements, and improvements. In June 2016, the plaintiffs commenced this action alleging, inter alia, that the defendants had breached the leases by refusing to provide them with access to the subject premises for the purpose of performing certain construction work. In the first and second causes of action, the plaintiffs sought injunctive relief directing the defendants to provide them with access to the subject premises. In the third cause of action, the plaintiffs sought, pursuant to the terms of the leases, to recover their attorney's fees and expenses arising from the defendants' failure to provide access to the subject premises. On June 27, 2016, the Supreme Court granted the plaintiffs' application for a temporary restraining order (hereinafter TRO), which provided the plaintiffs with certain access to the subject premises. On June 28, 2016, the defendants were served with the summons and complaint by delivery to the Secretary of State.

On August 26, 2016, the plaintiffs moved for leave to enter a default judgment upon the defendants' failure to timely appear or answer. The defendants opposed the plaintiffs' motion and cross-moved, inter alia, to vacate their default in answering the complaint, to extend their time to answer, and to dismiss the cause of action for attorney's fees and expenses for failure to state a cause of action. In the order appealed from, the Supreme Court granted the plaintiffs' motion and denied the defendants' cross motion. The defendants appeal.

In order to be entitled to enter a default judgment upon a defendant's failure to appear or answer the complaint, a plaintiff must submit evidence of service of the summons and complaint upon the defendant, evidence of a viable cause of action, and evidence of the defendant's default in answering or appearing (see CPLR 3215[f] ; L & Z Masonry Corp. v. Mose , 167 A.D.3d 728, 729, 90 N.Y.S.3d 92 ; Clarke v. Liberty Mut. Fire Ins. Co. , 150 A.D.3d 1192, 1194, 55 N.Y.S.3d 400 ; Deutsche Bank Natl. Trust Co. v. Kuldip , 136 A.D.3d 969, 970, 25 N.Y.S.3d 653 ). Here, the plaintiffs satisfied these requirements (see Bank of Am., N.A. v. Agarwal , 150 A.D.3d 651, 652, 57 N.Y.S.3d 153 ; U.S. Bank, N.A. v. Razon , 115 A.D.3d 739, 740, 981 N.Y.S.2d 571 ).

" ‘In order to avoid the entry of a default judgment, a defendant who has failed to appear or answer the complaint must provide a reasonable excuse for the default and demonstrate a potentially meritorious defense to the action’ " ( Yuxi Li v. Caruso , 161 A.D.3d 1132, 1133, 77 N.Y.S.3d 685, quoting Jong Gwon Kim v. Strippoli , 144 A.D.3d 982, 983, 42 N.Y.S.3d 245 ; see Fried v. Jacob Holding, Inc. , 110 A.D.3d 56, 60, 970 N.Y.S.2d 260 ). A defendant seeking to vacate a default in appearing or answering is required to make the same showing (see CPLR 5015[a][1] ; Jian Hua Tan v. AB Capstone Dev., LLC , 163 A.D.3d 937, 938, 83 N.Y.S.3d 86 ; LaSalle Bank N.A. v. Calle , 153 A.D.3d 801, 802, 61 N.Y.S.3d 104 ; Wells Fargo Bank v. Malave , 107 A.D.3d 880, 880–881, 968 N.Y.S.2d 127 ). The determination of what constitutes a reasonable excuse lies within the discretion of the trial court (see Jian Hua Tan v. AB Capstone Dev., LLC , 163 A.D.3d at 938, 83 N.Y.S.3d 86 ; Gershman v. Ahmad , 131 A.D.3d 1104, 1105, 16 N.Y.S.3d 836 ; Fried v. Jacob Holding, Inc. , 110 A.D.3d at 60, 970 N.Y.S.2d 260 ).

Here, the defendants' proffered excuse of improper service did not constitute a reasonable excuse. In this regard, they did not contest that they were served with the summons and complaint by delivery to the Secretary of State (see Business Corporation Law § 306[b][1] ; CPLR 311[a][1] ). Rather, they maintain that such service was improper because proper service could only be made upon their counsel, who had appeared on their behalf in opposition to the plaintiffs' application for a TRO. However, "[a]n attorney is not automatically considered the agent of his [or her] client for the purposes of the service of process" ( Broman v. Stern , 172 A.D.2d 475, 476, 567 N.Y.S.2d 829 ). Moreover, "absent proof that a defendant has designated his or her attorney as an agent for the acceptance of process, an attorney lacks the authority to accept service on the defendant's behalf" ( Born To Build, LLC v. Saleh , 139...