Gray v. Goodluck-Hedge

Citation: 2022 NY Slip Op 05204Docket: 2019-10450

Court: Appellate Division of the Supreme Court of the State of New York; September 21, 2022; New York; State Appellate Court

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In Gray v. Goodluck-Hedge, 2022 NY Slip Op 05204, the Appellate Division, Second Department, reversed a July 31, 2019 order from the Supreme Court, Queens County, which had granted defendant Patricia A. Cupid's motion to vacate a prior default judgment and compel the plaintiff to accept her late answer. The plaintiff, Nickeisha Gray, initiated a personal injury action following an incident at a gym owned by Cupid, with the complaint filed in June 2017. Cupid was served via affixation to her door and mailing; however, she did not respond. After the plaintiff sought a default judgment, Cupid alleged she was unaware of the action until receiving the plaintiff's motion, claiming she was on vacation when the service occurred. Although she submitted an answer after the default judgment motion, the court initially granted the default judgment due to her lack of a timely response and absence of a merit affidavit. Cupid later sought to vacate this judgment, arguing the circumstances of her non-response. The appellate court ultimately denied Cupid's motion, reinstating the default judgment against her.

On July 31, 2019, the Supreme Court granted Cupid's motion to vacate a prior order from October 29, 2018, and compelled the plaintiff to accept Cupid's late answer. The plaintiff appealed this decision. Cupid did not dispute the validity of service but claimed she was unaware of the action until the plaintiff sought a default judgment. Under CPLR 5015(a)(1), Cupid argued her delay was justified because she lacked notice of the action. She also referenced CPLR 317, which allows a defaulting defendant served through non-personal methods to defend if they did not receive notice in time and have a potentially meritorious defense.

Cupid claimed her absence due to vacation during the service attempt at her door constituted a reasonable excuse. However, she failed to explain why she did not receive notice via mail, which had been sent twice. The court determined that Cupid's denial of receipt was insufficient to establish a reasonable excuse for her default, thus rendering it unnecessary to assess whether she had a potentially meritorious defense. The remaining arguments from the parties were either meritless or irrelevant based on this conclusion. 

In a dissent, Justice Brathwaite Nelson noted that the plaintiff had filed a claim against Cupid following an injury allegedly caused by defective exercise equipment at Tizana's Body Renewal Gym. The plaintiff's affidavit of service indicated that Cupid was served by affixing the summons to her door and mailing it, though the mailing lacked confirmation of being addressed to her. Cupid's attorney contended that she was unaware of the action until notified of the default motion and asserted that the plaintiff's proof of claim was insufficient, arguing that Cupid, as the property owner, had no control over the gym's operations.

The attorney representing Cupid did not include any evidentiary submissions with her affirmation opposing a default judgment. Cupid filed her answer on July 3, 2018, admitting ownership of the premises but denying negligence and asserting affirmative defenses, along with cross claims for contribution and indemnification against other defendants. On August 3, 2018, she served discovery demands to the plaintiff. Following a compliance conference on August 23, 2018, the parties agreed on discovery timelines, and Cupid participated in the discovery process. She subsequently initiated a third-party action against Earl Jones, claiming he violated lease terms by subletting the premises.

Despite her participation, the plaintiff's motion for a default judgment against Cupid remained pending, and on October 29, 2018, the court granted this motion, noting Cupid's failure to provide a basis for her opposition or a meritorious defense. In response, Cupid moved to vacate the default judgment under CPLR 5015(a) and 317, seeking to compel acceptance of her previously filed answer. She submitted an affidavit stating she was in Canada when the summons was allegedly affixed to her door and first learned of the action on June 22, 2018, upon receiving the plaintiff's default motion papers. 

Cupid's attorney claimed she had diligently defended the action since learning about it and explained the lack of an affidavit in opposition to the default motion was due to difficulties in communication with the plaintiff's counsel. The plaintiff opposed the motion, arguing Cupid failed to establish a reasonable excuse for her default or a meritorious defense but did not address Cupid’s CPLR 317 claim. In her reply, Cupid maintained that vacating the default would not prejudice the plaintiff, as she had been actively participating in the case and provided travel documents corroborating her claims regarding her absence.

On July 31, 2019, the Supreme Court, presided over by Justice Carmen R. Velasquez, granted Cupid's motion to vacate an earlier order from October 29, 2018, and deemed her previously served answer timely and valid. The court accepted Cupid's explanation for her default, noting her absence at the time of service, lack of notice upon her return, and absence of mailed summons. Additionally, the court identified a potentially meritorious defense from Cupid. It highlighted her participation in a compliance conference shortly after the default motion, where no objections were raised by the plaintiff, and a discovery schedule was established without indication of her default.

The plaintiff appealed, asserting that Cupid did not overcome the presumption of proper service as established by the process server's affidavit. However, Cupid's motion assumed proper service but argued for the right to defend despite her late appearance. Under CPLR 5015(a), a party may be relieved from a judgment for 'excusable default' if they demonstrate a reasonable excuse for their delay and a meritorious defense. The court has discretion in determining what constitutes a reasonable excuse, considering factors such as delay, prejudice to the opposing party, and public policy favoring resolution on the merits.

CPLR 317 also allows a defendant not personally served to seek relief from a default by proving they did not receive actual notice in time to defend and possess a meritorious defense, without needing to show a reasonable excuse for the default. The plaintiff did not challenge this provision in the Supreme Court or on appeal. The court has discretion in vacating a default under both CPLR provisions and may do so for sufficient reason in the interest of justice.

The Supreme Court's decision to allow Cupid to vacate her default is supported by several key points. There was no prejudice to the plaintiff, nor was there evidence of willful delay by Cupid. Her affidavit demonstrated that she did not receive the summons and complaint, learning of the case only upon the plaintiff's motion for a default judgment. This was corroborated by the process server's affidavit, which did not confirm mailing the summons to her. After entering the action, Cupid actively participated in discovery and motion practice, and the plaintiff did not object to her late response, continuing with discovery proceedings. 

During a compliance conference, both parties agreed on discovery exchanges and deposition dates, with no indication from the plaintiff that Cupid was in default. Given these circumstances and the principle favoring resolution on the merits, the Supreme Court acted within its discretion to find a valid excuse for Cupid's default. The court could have also vacated the default under CPLR 317 or its inherent authority, given Cupid's potential meritorious defense. While the Appellate Division has the power to substitute its discretion, it is encouraged to respect the trial court's judgment, particularly in matters that promote public policy favoring case resolution. Therefore, the order allowing Cupid to vacate her default should be affirmed.