Tri State Flood, Inc. v. Wet Out Now Cleaning & Restoration, LLC

2021 NY Slip Op 51240(U)

Tri State Flood, Inc., Appellant, v. Wet Out Now Cleaning and Restoration, LLC, Respondent.

Supreme Court of New York, Second Department

December 16, 2021

Unpublished Opinion

Ivars Berzins, P.C. (Ivars Berzins of counsel), for appellant.

Soffey & Soffey, LLC, for respondent (no brief filed).

PRESENT: TERRY JANE RUDERMAN, P.J., JERRY GARGUILO, HELEN VOUTSINAS, JJ

Appeal from an order of the District Court of Suffolk County, Second District (Garrett W. Swenson, Jr., J.), dated January 21 2020 and, in effect, from an order of that court dated July 27, 2020. The order dated January 21, 2020 granted defendant's motion to vacate a default judgment to the extent of setting the matter down for a traverse hearing. The order dated July 27, 2020, following the traverse hearing granted defendant's motion to vacate the default judgment and dismissed the complaint.

ORDERED that the appeal from the order dated January 21, 2020 is dismissed; and it is further, ORDERED that the order dated July 27, 2020 is reversed, without costs, the branch of defendant's motion seeking to vacate the default judgment pursuant to CPLR 5015 (a) (4) is denied, and the matter is remitted to the District Court for a determination of the branch of defendant's motion seeking to vacate the default judgment pursuant to CPLR 5015 (a) (1).

The appeal from the order dated January 21, 2020 is dismissed, as no appeal as of right lies from an order setting a matter down for a traverse hearing to determine whether service was proper (see UDCA 1702 [a] [2]; MY-Trade Cabinet Co., Inc. v Blancher, 55 Misc.3d 135 [A], 2017 NY Slip Op 50486[U] [App Term, 2d Dept, 9th & 10th Jud Dists 2017]; State Farm Mut. Auto. Ins. Co. v Omezie, 54 Misc.3d 136 [A], 2017 NY Slip Op 50110[U] [App Term, 2d Dept 2d, 11th & 13th Jud Dists 2017]).

In this action for breach of contract, plaintiff served defendant which is a limited liability corporation, by serving process on the New York State Secretary of State (see CPLR 311-a [a]; Limited Liability Corporation Law § 303). On October 24, 2019, a default judgment was entered against defendant in the principal sum of $8, 181.07.

In November 2019, defendant moved to vacate its default on the grounds of lack of personal jurisdiction (see CPLR 5015 [a] [4]) or, in the alternative, a reasonable excuse for its default and a meritorious defense (see CPLR 5015 [a] [1]). In a supporting affidavit, defendant's president and sole shareholder, John Tuseo, stated that he had first learned of the action and the judgment when he received notice that defendant's bank accounts had been frozen. Tuseo confirmed that defendant, as well as other entities with which Tuseo was associated, had done business with plaintiff, but remarked that the contract upon which plaintiff sought a recovery was against one of those other entities. Tuseo further asserted that defendant had defenses against plaintiff's claim, including, among other things, part payment. In its opposition to defendant's motion, plaintiff's president, Vincent Scozo, controverted Tuseo's claims with respect to the merits of the defense, but argued that, in any event, its process server's affidavit of service on the Secretary of State was presumptively valid, and that defendant had failed to allege any specific facts to challenge the substance of the affidavit of service.

In its order dated January 21, 2020, the District Court granted defendant's motion to the extent of ordering a traverse hearing and added that, in the event it determined that defendant had been properly served, it would consider whether defendant was entitled to vacatur of the default judgment. At the traverse hearing, plaintiff offered the affidavit of service into evidence but did not present any testimony respecting the service of process on defendant. Following the hearing, the court found that plaintiff had failed to establish the validity of service of the summons and complaint, concluded that personal jurisdiction had not been obtained over defendant, and dismissed the complaint. The sole issue plaintiff raises on appeal is whether the court erred in setting this matter down for a traverse hearing.

A process server's affidavit of service upon the New York State Secretary of State as agent for the service of process pursuant to Limited Liability Company Law § 303, creates a rebuttable presumption that service has been made (see Greenwood Realty Co. v Katz, 187 A.D.3d 1153, 1153 [2020]; Bank of NY Mellon v Marolda, 139 A.D.3d 774, 777 [2016]). The mere denial of receipt of a summons and complaint is insufficient to rebut the presumption of proper service created by service upon the Secretary of State (see NYCTL 2013-A...