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DEFENDANT LIMITED LIABILITY COMPANY’S FAILURE TO UPDATE ITS ADDRESS FOR SERVICE OF PROCESS ON FILE WITH THE SECRETARY OF STATE FOR TEN YEARS WAS NOT A REASONABLE EXCUSE SUFFICIENT TO SUPPORT DENIAL OF PLAINTIFF’S MOTION FOR LEAVE TO ENTER A DEFAULT JUDGMENT (SECOND DEPT).

The Second Department, reversing Supreme Court, determined defendant limited liability company’s (FAC’s) failure to update its address for service of process on file with the Secretary of State was not a reasonable excuse sufficient to defeat a motion for leave to enter a default judgment:

Generally, a corporation’s failure to receive copies of process served upon the Secretary of State due to a breach of its own obligation to keep a current address on file with the Secretary of State does not constitute a reasonable excuse for its delay in appearing or answering the complaint, although “there is no per se rule” … . In determining whether a reasonable excuse was demonstrated, “a court should consider, among other factors, the length of time for which the address had not been kept current” … .  * * *

… FAC failed to meet its burden of establishing a reasonable excuse … . FAC’s failure to file with the Secretary of State the current address of the agent designated to receive service of process on its behalf for a period of at least 10 years, without providing any explanation of its failure, does not constitute a reasonable excuse … . Bachvarov v Khaimov, 2024 NY Slip Op 00753, Second Dept 2-14-24

Practice Point: Failure to update an LLC’s address for service of process on file with the Secretary of State is not a reasonable excuse for a default.

 

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AS LONG AS PLAINTIFF TAKES SOME ACTION THAT WOULD LEAD TO ENTRY OF A DEFAULT... PARTIAL PAYMENT OF A DEBT WITHIN THE STATUTE OF LIMITATIONS PERIOD MAY REVIVE...