Olivetti Leasing Corp. v. Mar-Mac Precision Corp.
| Decision Date | 12 February 1983 |
| Docket Number | MAR-MAC |
| Citation | 459 N.Y.S.2d 399,117 Misc.2d 865 |
| Parties | OLIVETTI LEASING CORPORATION, Plaintiff, v.PRECISION CORP., Defendant. |
| Court | New York Supreme Court |
Brian J. Oberman, New York City, for plaintiff.
Seymour Herzog, New York City, for defendant.
The principal issues presented on this motion to vacate a default judgment are: (1) whether a corporate defendant which was served by service upon the Secretary of State is required to demonstrate that its default in answering was excusable; and (2) whether the defendant's failure to submit a proposed answer, by that very fact, bars the Court from vacating the default. I answer both questions in the negative and vacate the default.
A default judgment was entered by plaintiff, Olivetti Leasing Corporation, against defendant, Mar-Mac Precision Corporation, on July 29, 1982 in the sum of $36,559.57. The complaint is grounded on a claimed breach of a contract regarding the lease of certain computer equipment by Olivetti to Mar-Mac.
The action was instituted by service upon the Secretary of State. Mar-Mac was formed more than ten years ago. Its certificate of incorporation gave the name and address of the law firm that handled the incorporation as the address to which the Secretary of State shall mail a copy of any process against Mar-Mac served upon him. BCL § 402(a)(7).
Mar-Mac's counsel in this action states that he has represented the defendant corporation since its inception and that counsel who handled the incorporation only filed the certificate of incorporation.
For some unspecified reason, or for no reason, the address to which the Secretary of State should forward process has never been changed. However, the firm that processed the incorporation has long since dissolved. As a result, Mar-Mac alleges that it never received notice of the service of process and first learned of this action after the default judgment was entered.
Olivetti does not dispute these facts. Rather, it asserts, in conclusory fashion, that Mar-Mac has not met its burden of demonstrating a meritorious defense and excusable neglect. Olivetti also asserts that Mar-Mac's failure to submit a proposed answer bars this Court from vacating the default judgment.
Two applicable sections of the CPLR authorize the vacating of a default judgment, §§ 5015 and 317. Both sections require that the defendant seeking to vacate a default judgment demonstrate a meritorious defense. Contrary to Olivetti's assertion, Mar-Mac has met this burden. Mar-Mac's papers clearly demonstrate that it has been embroiled in an ongoing controversy with Olivetti since it received the leased equipment.
In essence, Mar-Mac claims that the leased equipment failed to perform as promised and that Olivetti has been unable to make it perform, despite many complaints by Mar-Mac.
Olivetti does not now dispute that the software it leased to Mar-Mac failed to perform. However, it argues that since the subject matter of the action involves only the lease of the computer's hardware, Mar-Mac has failed to demonstrate a meritorious defense. Mar-Mac responds with the persuasive argument that it leased the hardware and software as a package and that the failure of one part of the package constitutes a failure of the entire package.
It appears that Mar-Mac has set forth a meritorious defense, thus meeting its burden under either of the two applicable CPLR sections.
Olivetti also urges that Mar-Mac must show that its default was excusable. Olivetti argues, in effect, that Mar-Mac must show that its failure to change the address to which the Secretary of State should forward a copy of process is due to excusable neglect. This argument is also without merit.
While it is fundamental that one moving to vacate a default under CPLR 5015 must demonstrate excusable default as well as a meritorious defense, one moving under CPLR 317 has a lesser burden and need make a timely application on only a showing of merit. See: Cecelia v. Colonial Sand Co., 85 A.D.2d 56, 448 N.Y.S.2d 617; National Bank of Northern New York v. Grasso, 79 A.D.2d 871, 434 N.Y.S.2d 553; Brac Construction Corp. v. Di-Com Corp., 51 A.D.2d 740, 379 N.Y.S.2d 483.
CPLR 317 applies to persons served with other than personal in-hand delivery of the summons. National Bank of Northern, N.Y. v. Grasso, supra, 79 A.D.2d at 872, 434 N.Y.S.2d 553. This section places a lighter burden on the defaulting defendant, evidently to encourage personal delivery whenever possible. Where, as is true in the instant case, service is effected upon the Secretary of State, CPLR 317 is available to the movant simply upon a showing of a meritorious defense. Cecelia v. Colonial Sand Co., 85 A.D.2d 56, 448 N.Y.S.2d 617; Brac...
To continue reading
Request your trial
-
Frank v. Martuge
... ... accompany a motion to vacate (see, Hilldun Corp. v Scarboro Textiles, 73 A.D.2d 535, 535), it was ... defense to plaintiff's claim (see, Olivetti Leasing Corp. v Mar-Mac Precision Corp., 117 ... ...
-
Smith v. Smith
...on personal knowledge establishing a meritorious defense (see, Frank v Martuge, 285 A.D.2d 938, 939-940; Olivetti Leasing Corp. v Mar-Mac Precision Corp., 117 Misc.2d 865, 868; cf., Hilldun Corp. v Scarboro Textiles, 73 A.D.2d 535; Back v Stern, 23 A.D.2d Our decision herein does not affect......
-
Junowicz v. Junowicz
...of a meritorious defense (see, CPLR 5015 Shaw v. Shaw, 97 A.D.2d 403, 467 N.Y.S.2d 231; see also, Olivetti Leasing Corp. v. Mar-Mac Precision Corp., 117 Misc.2d 865, 459 N.Y.S.2d 399). Under the circumstances of this case, the Supreme Court did not abuse its discretion in vacating the defau......
-
Frank v. Martuge
... ... accompany a motion to vacate (see, Hilldun Corp. v Scarboro Textiles, 73 AD2d 535, 535), it was ... defense to plaintiff's claim (see, Olivetti Leasing Corp. v Mar-Mac Precision Corp., 117 Misc ... ...