CORPORATIONS AND OTHER ENTITIES SHOULD UPDATE NYS SECRETARY OF STATE WITH ANY CHANGE OF ADDRESS

And this case illustrates why.

Schwartzberg v. PRO-ACTIVE HOLDINGS, LLC, 2020 NY Slip Op 32980 - NY: Supreme Court September 11, 2020:

"It is well settled that a defendant seeking to vacate a default judgment pursuant to CPLR 5015(a) "must demonstrate a reasonable excuse for the delay, as well as a meritorious defense to the action." Rodgers v 66 E. Tremont Hgts. Hous. Dev. Fund Corp., 69 AD3d 510 (1st Dept 2010); see also Matter of Messiah G. (Giselle F.), 168 AD3d 420 (1st Dept 2019). This Court has the discretion to determine whether the proffered excuse is sufficient. Rodgers v 66 E. Tremont Hgts. Hous. Dev. Fund Corp., 69 AD3d at 510.

In his affidavit in support of the motion, Ramson states, inter alia, that:

[a]s for a reasonable excuse for [defendant's] default, all I can say is that by the time [p]laintiff commenced [the captioned action], [defendant] had all but ceased its operations and had vacated its [office] located at 50 Broad Street in Manhattan. This was the address [defendant] had designated for service upon it by New York's Secretary of State. For this reason, [p]laintiff's [motion for summary judgment in lieu of complaint] and the resulting [j]udgment were not received by me until the end of 2018, well after the fact."

Doc. 18 at par. 20.

Ramson admits, "[u]pon information and belief", that defendant was served with the motion via the Secretary of State pursuant to Business Corporation Law § 306 and that the Secretary of State presumably mailed the summons and moving papers to defendant's former address on Broad Street.^[1] Doc. 23. Thus, Ramson does not dispute that the defendant was properly served at the Broad Street address on file with the Secretary of State. A presumption of receipt arises once service is completed on the Secretary of State, defendant's designated agent, regardless of whether it is actually received by the company's representative. See 26 Warren Corp. v Aetna Cas. & Sur. Co., 253 AD2d 375, 376 (1st Dept 1998). Although Ramson maintains that defendant no longer occupied the Broad Street address, he does not specify when it vacated the premises or whether it ever had a subsequent address. If defendant was no longer at the Broad Street address, it had an obligation to "keep the Secretary of State advised of [its] current and correct address" and its failure "to receive process due to [its] breach of the obligation to keep a current address on file with the Secretary of State ... does not constitute a reasonable excuse" for its default. Crespo v A.D.A. Mgmt., 292 AD2d 5, 10-11.

Despite his claim that defendant had "all but ceased its operations" by the time this action was commenced, this representation is extremely vague. Does it mean that the company was winding down? That it went bankrupt? That it was dissolved? Even assuming, arguendo, that defendant was no longer in business, "a dissolved corporation may sue or be sued." See Ford v. Pulmosan Safety Equipment Corp., 52 AD3d 710, 711 (2d Dept 2008) (citation omitted). Therefore, this, too, does not constitute a reasonable excuse.

Ramson further proffers as an excuse that, since he and plaintiff were friends, the latter knew how to communicate with him but "never bothered to email [him] any notification that he had filed a motion for [summary judgment]." Doc. 18 at par. 21. However, this contention, based solely on Ramson's personal expectations and devoid of any legal support, does not establish a reasonable excuse.

Given that defendant clearly failed to establish a reasonable excuse for its default, there is no need to address whether it has a meritorious defense, and, thus, the branch of the motion seeking relief pursuant to CPLR 5015(a)(1) is denied."