Although Not Raised by the Defendant Below, the Appellate Court Vacated the Default Pursuant to CPLR 317

The Second Department determined plaintiff's motion for leave to file a default judgment was properly denied and defendant was properly allowed to serve a late answer.  Although the defendant failed to explain why it failed to file the correct address for service of process with the Secretary of State, there was no question that the defendant did not receive notice of the summons in time to defend and did nothing to deliberately avoid service.  The Second Department used CPLR 317 as its basis for vacating the default, even though that ground was not cited by the defendant below:

Although the defendant did not cite to CPLR 317 in opposition to the plaintiffs' motion, under the circumstances of this case, this Court may consider CPLR 317 as a basis for vacating the default (see CPLR 2001…). CPLR 317 permits a defendant who has been “served with a summons other than by personal delivery” to defend the action upon a finding by the court that the defendant “did not personally receive notice of the summons in time to defend and has a meritorious defense” (CPLR 317…). Here, the record reveals that neither the defendant nor its agent received actual notice of the summons, which was delivered to the Secretary of State, in time to defend itself against this action … . There is no basis in the record upon which to conclude that the defendant was deliberately attempting to avoid service of process, especially since the plaintiffs had knowledge of the defendant's actual business address … . In addition, the defendant met its burden of demonstrating the existence of a potentially meritorious defense … . Gershman v Midtown Moving & Storage Inc, 2014 NY Slip Op 08959, 2nd Dept 12-24-14