The Appellate Division unanimously reversed, on the law, the Order which granted defendant's motion to vacate the judgment, as defendant failed to demonstrate a reasonable excuse for its default or a meritorious defense to the action to justify vacatur. Plaintiff's service of process was deemed complete when defendant's registered agent in Delaware was served, regardless of whether it ultimately reached defendant. Moreover, the affidavit from defendant's CEO, stating that the email from the registered agent regarding service of process was sent to his "promotions" inbox, is simply insufficient to rebut the presumption of proper service. Defendant does not dispute that it breached its obligation to update its address with its registered agent, which led to its failure to receive service of process. Even if defendant's excuse were deemed reasonable, it failed to demonstrate a meritorious defense to the action. There is no evidence that defendant maintained the payments owed to plaintiff in a purported "reserve fund," or that plaintiff had knowledge of or ever agreed to the creation of such a fund. Indeed, emails from defendant's CEO to plaintiff's representatives suggest that defendant knew that it owed plaintiff the amounts sought.
Practice point: Defendant is also not entitled to relief under CPLR 317. Regardless of whether plaintiff served defendant's agent for service designated under CPLR 318, a meritorious defense is required under CPLR 317.
Salish Lodge LLC v. Gift Mgt. Inc., NY Slip Op 01239 (1st Dep't March 2, 2021)
