FOR CORPORATIONS - SECRETARY OF STATE SERVED BUT ADDRESS FOR SERVICE NOT CHANGED

Dwyer Agency of Mahopac, LLC v Dring Holding Corp., 2018 NY Slip Op 06001, Decided on September 12, 2018, Appellate Division, Second Department:

:CPLR 317 provides that a person served with a summons, other than by personal delivery to him or her, who does not appear, may be allowed to defend the action within one year after he or she obtains knowledge of entry of the judgment upon a finding of the court that he or she did not personally receive 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; Moran v Grand Slam Ventures, LLC, 160 AD3d 944, 945). However, the "mere denial of receipt of the summons and complaint is not sufficient to establish lack of actual notice of the action in time to defend for the purpose of CPLR 317" (Goldfarb v Zhukov, 145 AD3d 757, 758; see Moran v Grand Slam Ventures, LLC, 160 AD3d at 945; Thas v Dayrich Trading, Inc., 78 AD3d 1163, 1164). Here, the defendant failed to establish that it did not personally receive notice of the summons in time to defend the action. The affidavit of the defendant's "representative," who appears to be its attorney, stated that the complaint was not delivered "personally" to the defendant, but rather, "to an inaccurate address through the Secretary of State," which address had not been valid "for several years." This representative's affidavit does not appear to be based on personal knowledge. Furthermore, there is no allegation contained in this affidavit that the defendant, in fact, never received the summons and complaint, nor is there any detail as to where the defendant moved to and when, nor whether the defendant made any efforts to update its address on file with the Secretary of State. Under these circumstances, the defendant did not demonstrate lack of actual notice of the action (see Moran v Grand Slam Ventures, LLC, 160 AD3d at 945; Xiao Lou Li v China Cheung Gee Realty, LLC, 139 AD3d 724, 725-726).

In contrast to a motion pursuant to CPLR 317, on a motion pursuant to CPLR 5015(a)(1), the movant is required to establish a reasonable excuse for his or her default. In general, a defendant's failure to keep a current address on file with the Secretary of State does not constitute a reasonable excuse (see Gershman v Midtown Moving & Stor., Inc., 123 AD3d 974, 975; Sussman v Jo-Sta Realty Corp., 99 AD3d 787, 788; Bontempts v Aude Constr. Corp., 98 AD3d 1071, 1072; Castle v Avanti, Ltd., 86 AD3d 531). However, there is no per se rule that a corporation served through the Secretary of State, and which failed to update its address on file there, cannot demonstrate an "excusable default." Rather, a court should consider, among other factors, the length of time for which the address had not been kept current (see Eugene Di Lorenzo, Inc. v A.C. Dutton Lbr. Co., 67 NY2d at 143). Here, no evidence was presented as to how long the address was not updated. Accordingly, the defendant failed to establish a reasonable excuse for its default."