| Stevens v Stepanski |
| 2018 NY Slip Op 05954 [164 AD3d 935] |
| August 29, 2018 |
| Appellate Division, Second Department |
[*1]
| John Stevens, Respondent, v Judith Stepanski et al.,Defendants, and Greenville Inn, Inc., Appellant. |
Jones Law, P.C., Florida, NY (Douglas M. Jones of counsel), for appellant.
Jacoby & Meyers, LLP, Newburgh, NY (James W. Shuttleworth III of counsel), forrespondent.
In an action to recover damages for personal injuries, the defendant Greenville Inn, Inc.,appeals from an order of the Supreme Court, Orange County (Sandra B. Sciortino, J.), datedApril 11, 2016. The order, insofar as appealed from, denied that branch of the motion of thedefendant Greenville Inn, Inc., which was pursuant to CPLR 317 to vacate a judgment of thesame court dated June 1, 2015, entered upon its failure to appear or answer the complaint.
Ordered that the order is affirmed insofar as appealed from, with costs.
On March 25, 2013, the plaintiff commenced this action against Greenville Inn, Inc.(hereinafter Greenville), among others, to recover damages for personal injuries. On March 27,2013, the plaintiff served Greenville by delivering a copy of the summons and complaint to theSecretary of State pursuant to Business Corporation Law § 306. Greenville'saddress on file with the Secretary of State was "The Greenville Inn, Inc., James Delaney, 980 USHighway 6, Port Jervis, NY 12771." The summons and complaint were sent to that address bythe Secretary of State by certified mail, return receipt requested, but the mailing was returned as"unclaimed."
By letter dated June 4, 2013, sent by first-class mail to Greenville's address on file with theSecretary of State, the plaintiff's attorney forwarded a copy of the summons and complaint toGreenville, requested that Greenville notify its insurance carrier of the claim, and advised that ifGreenville failed to answer the complaint within 20 days, the plaintiff would move to hold it indefault.
In September 2013, the plaintiff moved for leave to enter a default judgment againstGreenville. By order dated October 31, 2013, the Supreme Court awarded the plaintiff a defaultjudgment as to Greenville on the issue of liability. On November 13, 2013, the plaintiff mailedGreenville a copy of the order dated October 31, 2013, with notice of entry.
On February 10, 2015, the Supreme Court conducted an inquest, and rendered a decisiondated March 16, 2015, finding that the plaintiff was entitled to damages in the principal sum of$775,000. On April 14, 2015, the plaintiff served Greenville, by first-class mail, with a copy ofthe decision after inquest at its address on file with the Secretary of State. On June 1, 2015, the[*2]Orange County Clerk entered a money judgment in favor ofthe plaintiff and against Greenville.
By order to show cause dated February 3, 2016, Greenville moved to vacate the judgment,inter alia, pursuant to CPLR 317. In support of the motion, Greenville submitted the affidavit ofits two shareholders: James Delaney, its president/secretary, and William Alford, itsvice-president/treasurer. Delaney and Alford averred that they had no knowledge of the actionuntil December 5, 2015, when the plaintiff served Delaney with an information subpoena, andthat Greenville was open for business and operating on March 27, 2013, when the summons andcomplaint were served through the Secretary of State. Further, Delaney and Alford each averred,without providing any other detail, "I do not know why the Certified Mail sent from the NewYork Secretary of State was returned as 'unclaimed.' "
The Supreme Court denied Greenville's motion, finding that Greenville's shareholders failedto explain why they did not receive the summons and complaint at an address they conceded wascorrect, and why they did not receive and respond to any of the other correspondence from theplaintiff during the course of the litigation. Greenville appeals, and we affirm.
CPLR 317 permits a defendant who has been served with a summons other than by personaldelivery to defend the action upon a finding by the court that the defendant did not personallyreceive notice of the summons in time to defend and has a potentially meritorious defense(see Eugene Di Lorenzo, Inc. v A.C. Dutton Lbr. Co., 67 NY2d 138, 141 [1986]; Xiao Lou Li v China Cheung Gee Realty,LLC, 139 AD3d 724, 724-725 [2016]). "[S]ervice on a corporation through delivery ofprocess to the Secretary of State is not 'personal delivery' to the corporation" (Eugene DiLorenzo, Inc. v A.C. Dutton Lbr. Co., 67 NY2d at 142). "The mere denial of receipt of thesummons and complaint is not sufficient to establish lack of actual notice of the action in time todefend for the purpose of CPLR 317" (Goldfarb v Zhukov, 145 AD3d 757, 758 [2016]; see Ultimate One Distrib. Corp. v 2900Stillwell Ave., LLC, 140 AD3d 1054, 1055 [2016]). Whether to grant relief pursuant toCPLR 317 is discretionary (see Goldfarb v Zhukov, 145 AD3d at 759), and relief may bedenied "where, for example, a defendant's failure to personally receive notice of the summonswas a result of a deliberate attempt to avoid such notice" (Eugene Di Lorenzo, Inc. v A.C.Dutton Lbr. Co., 67 NY2d at 143).
Here, Greenville did not contend that the address it kept on file with the Secretary of Statewas incorrect, and its shareholders effectively claimed ignorance as to why the summons andcomplaint were "unclaimed," without offering any details as to how Greenville ordinarilyreceived mail at that address. Further, Greenville offered no explanation as to why it did notreceive any of the other correspondence from the plaintiff, all of which were sent to the sameaddress. Under these circumstances, Greenville's conclusory and unsubstantiated denial ofservice of the certified mailing card and other correspondence from the plaintiff was insufficientto establish that it did not have actual notice of the action in time to defend (see Xiao Lou Liv China Cheung Gee Realty, LLC, 139 AD3d at 725-726; see also Moran v Grand Slam Ventures,LLC, 160 AD3d 944 [2018]). Although the return of a summons and complaint to theSecretary of State as "unclaimed" may be sufficient to warrant a hearing on the issue of whether adefendant had notice of the action in time to defend (see Drillman v Marsam Realty 13th Ave., LLC, 129 AD3d 903,903-904 [2015]), here, Greenville's failure to offer any details as to why it did not receive thecertified mailing card or any of the other correspondence from the plaintiff during the pendencyof the action was insufficient to raise a triable issue of fact warranting a hearing (see Baez v Ende Realty Corp., 78AD3d 576, 576 [2010]; see alsoClover M. Barrett, P.C. v Gordon, 90 AD3d 973, 973-974 [2011]). In light of theforegoing, it is unnecessary to determine whether Greenville demonstrated the existence of apotentially meritorious defense (see Xiao Lou Li v China Cheung Gee Realty, LLC, 139AD3d at 726).
Accordingly, the Supreme Court providently exercised its discretion in denying that branchof Greenville's motion which was to vacate its default pursuant to CPLR 317. Dillon, J.P.,Balkin, Miller and Connolly, JJ., concur.