Commercial Division Blog
Court Properly Granted Default Judgment; No Reasonable Excuse for Default
On March 1, 2017, the Second Department issued a decision in Jing Shan Chen v. R & K 51 Realty, Inc., 2017 NY Slip Op. 01541, affirming the grant of a default judgment because of lack of a reasonable excuse for the default, explaining:
To successfully oppose a motion for leave to enter a default judgment based on the failure to appear or timely serve an answer, a defendant must demonstrate a reasonable excuse for its delay and the existence of a potentially meritorious defense. Similarly, to extend the time to answer the complaint and to compel the plaintiff to accept an untimely answer as timely, a defendant must provide a reasonable excuse for the delay and demonstrate a potentially meritorious defense to the action. The determination of what constitutes a reasonable excuse lies within the trial court's discretion. Here, the defendant's principal's unsubstantiated denial of receipt of the summons and complaint served through the Secretary of State did not amount to a reasonable excuse for the defendant's default. Further, although the defendant's principal averred that he learned of the action in January 2015, after the time to answer or otherwise appear had elapsed, the defendant failed to establish a reasonable excuse for not appearing in the action until several months later. Since the defendant failed to demonstrate a reasonable excuse for its default, we need not reach the issue of whether the defendant demonstrated the existence of a potentially meritorious defense.
(Internal quotations and citations omitted).