DEFENDANT DID NOT MEET THE CRITERIA FOR VACATION OF A DEFAULT JUDGMENT UNDER EITHER CPLR 5015 OR 317; CRITERIA EXPLAINED (FIRST DEPT).

The Second Department, reversing Supreme Court, determined defendant’s motion to vacate the default judgment did not meet the criteria of either CPLR 5015(a)(1) or CPLR 317:

“A defendant seeking to vacate a judgment pursuant to CPLR 5015(a)(1) must demonstrate a reasonable excuse for the default and a potentially meritorious defense to the action” … . * * *

Here, the defendant failed to provide a “detailed and credible explanation” for the default … . Rather, the defendant submitted only an affidavit of an employee of its loan servicer averring that the defendant’s agent for process had emailed the summons and complaint to the servicer, and the complaint had been “routed in error to the incorrect email address within” the servicer, which prevented the servicer from “timely notify[ing] its counsel of the [instant] action.” That conclusory and nondetailed allegation does not constitute a reasonable excuse warranting vacatur of the default … . * * *

Although the defendant expressly moved pursuant to CPLR 5015(a)(1) only, the Supreme Court properly considered whether the defendant set forth grounds to vacate its default pursuant to CPLR 317 … . CPLR 317 provides, in relevant part, that a party served with a summons other than by personal delivery and 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 meritorious defense.” A defendant moving pursuant to CPLR 317 is not required to set forth a reasonable excuse for the delay in answering the complaint … . However, “‘to support a determination granting relief under CPLR 317, a party must still demonstrate, and the Court must find, that the party did not receive actual notice of the summons and complaint in time to defend the action'” … .

… [T]he defendant did not even deny receipt of the summons and complaint. 259 Milford, LLC v FV-1, Inc., 2022 NY Slip Op 06898, Second Dept 12-7-22

Practice Point: The criteria for vacation of a default judgment pursuant to CPLR 5015 and 317 are different and are explained in this decision. The defendant did not meet the criteria for either statute.