Opinion
28268/09.
Decided December 19, 2010.
Christopher Belmonte, Esq., Satterlee Stephens Burke Burke LLP, New York, NY, Attorney for Plaintiff.
Rex Whitehorn, Esq., Rex Whitehorn Associates, P.C., Great Neck, New York, Attorney for Defendants.
The following papers numbered 1 to 3 read on this motion:
Papers Numbered 1 2 3
Order to Show Cause/ Affidavits (Affirmations) Annexed Opposing Affidavit (Affirmations) Plaintiff's Memorandum of Law in OppositionDefendants move by Order to Show Cause to vacate the default judgment entered against Crosstown West 28 LLC ("Crosstown"), MB 146 28, LLC ("MB 146"), Elizabeth Shaoul and 140 West Associates, LLC ("140 West"), pursuant to CPLR 317, based upon the contention that the Brooklyn Federal Savings Bank ("plaintiff") did not effect proper service, that the court lacked jurisdiction over the defendants, that the default was not wilful and that the defendant has a meritorious defense or, alternatively, pursuant to CPLR 5015, upon the contention that the defendants' default was excusable and that they have a meritorious defense. The Order to Show Cause, signed by this court on July 20, 2010, also issued a temporary injunction, pursuant to CPLR 2201, prohibiting the plaintiff from taking any steps to enforce or collect the judgment entered against all defendants on July 1, 2010.
Background
The Note and the Guarantees
On February 1, 2008, defendants Crosstown and MB 146 (the "Borrowers") jointly executed a promissory note (the "Note") in favor of plaintiff. Pursuant to the Note, plaintiff loaned $22,750,000 to the Borrowers, which they promised to pay back, with interest, upon the maturity date. The initial maturity date of the Note was August 1, 2008. The Note provided that if certain conditions were met, plaintiff could extend the maturity date to February 1, 2009 and again to August 1, 2009. It specified that on whichever applicable maturity date, the outstanding balance of the principal sum, together with the accrued and unpaid interest, was due and payable to plaintiff. According to plaintiff, it extended the maturity date twice, but the Borrowers failed to pay the Note in full when due on August 1, 2009, even after plaintiff made a demand for payment. Plaintiff subsequently demanded payment by Shaoul, who had executed a guarantee on February 1, 2008 and 140 West, who had executed a guarantee on May 22, 2009 (the "Guarantees"), each promising to cover the outstanding balance in the event the Borrowers defaulted. Plaintiff alleges that Shaoul and 140 West (the "Guarantors") failed and refused to pay to plaintiff the sums guaranteed by them.
Section 11 of the Note provides:
Maker [the Borrowers] consents to the personal jurisdiction over Maker by any federal or state court situated in the State of New York and consents to the laying of venue in any jurisdiction over Maker by any federal or state court situated in the State of New York. Maker irrevocably appoints Elizabeth Shaoul having an address at 7 Dock Lane, Great Neck, NY, 11024, as Maker's agent for receipt of service of process on Maker's behalf in connection with any suit, writ, attachment, execution or discovery of supplementary proceedings in connection with the enforcement of this Note (collectively, an "Action"). Service in any Action and any notice of sale or other notices required under Article 14 of the New York Real Property Actions and Proceedings Law shall be effected by any means permitted by the court in which any Action is filed, with a copy sent by certified mail, return receipt requested, to Maker at its address as hereinbefore stated or at such other address as shall be designated from time to time by Maker. Maker or its agent for receipt of process may designate a change of address or may substitute another agent for the service of process who shall be acceptable to Holder [plaintiff] in its sole but reasonable discretion, by written notice to Holder by certified mail, return receipt requested, at least ten (10) days before such change of address is to become effective. MAKER WAIVES ANY RIGHT IT MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS, TO ASSERT THAT IT IS NOT SUBJECT TO THE JURISDICTION OF SUCH COURTS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE HEREWITH.
Section 15 of both of the Guarantees also provides that each Guarantor irrevocably submits to the jurisdiction of New York courts and states that, "[t]o the extent permitted by law, the Guarantor also irrevocably consents to the service of any and all process in any such action or proceeding by the mailing of copies (certified mail, return receipt requested and postage prepaid) of such process to [the Guarantors] at [their] address[es] specified in Section 10."
The reference in Section 15 to Section 10, which is entitled "Governing Law," appears to be erroneous. It is likely that the reference in Section 15 should be to Section 11, which is entitled "Addresses of Notices."
Plaintiff commenced this action on November 6, 2009 and moved, pursuant to CPLR 3213, for summary judgment in lieu of a complaint based upon an instrument for the payment of money only. Plaintiff sought to recover the outstanding amount under the Note, as well as attorneys' fees, from the Borrowers for defaulting upon the Note and also from the Guarantors for defaulting upon the Guarantees.
Service
Plaintiffs initially attempted to serve defendants in accordance with the terms of the Note and submitted Affidavits of Attempted Service, stating that it attempted to serve Shaoul, MB 146 and Crosstown on November 10, 2009 at 7 Dock Lane, Great Neck, New York, the address for MB 146 contained in the Note, as well as the address for Shaoul contained in the Note and in the guarantee signed by her. The affidavits further state that Demovsky Lawyer Service, Inc. ("DLS") attempted to serve Shaoul, MB 146 and Crosstown on November 11, 2009 at 10 Cove Lane, Kings Point, NY, the address for Crosstown contained in the Note. According to the affidavits, upon attempting to serve Shaoul at both addresses, DLS learned that Shaoul's mother, and not Shaoul herself, resided at 7 Dock Lane, Great Neck, NY and that another individual resided at 10 Cove Lane, Kings Point, NY.
On November 23, 2009, plaintiff, through the Sheriff's Office of the City of New York (the "Sheriff"), served Crosstown c/o Marc Ravner or Benjamin Shaoul, MB 146 c/o Elizabeth Shaoul, and 140 West c/o Marc Ravner or Benjamin Shaoul by personally delivering a copy of the CPLR 3213 motion papers to Richell Laraque, the receptionist at 594 Broadway, Suite 101, New York, NY. DLS also served Crosstown c/o Magnum Management and MB 146 c/o Magnum Management on November 24, 2009 in the same manner. According to the affidavits of service from both DLS and the Sheriff, Laraque represented that she was authorized to accept service on behalf of all three of the LLC defendants.
The Sheriff's affidavit for Crosstown states "Ritchell Larique" instead of "Richell Laraque." It is assumed that these names refer to the same individual, who will be referred to herein as "Laraque."
DLS also served Shaoul c/o Magnum Management at her place of business on November 24, 2009, by leaving a copy of the papers with Laraque, "a person of suitable age and discretion," at 594 Broadway, Suite 101, New York, NY and by mailing the same to Shaoul by first class mail, in an envelope marked "PERSONAL AND CONFIDENTIAL" at her place of business. The Sheriff did the same on November 24, 2010.
Plaintiff submitted an Affidavit of Service by Certified Mail, dated November 24, 2009, stating that the summons and motion for summary judgment in lieu of complaint along with accompanying affidavits and memoranda of law were sent via certified mail to Shaoul and to MB 146 c/o Shaoul at 7 Dock Lane, Great Neck, NY. The affidavit further stated that the identical mailings were sent via certified mail to Crosstown c/o Shaoul at 10 Cove Lane, Kings Point, NY and to 140 West c/o Magnum Management at 594 Broadway, Suite 1010, New York, NY 10012.
On December 7, 2009, according to its affidavit of service, DLS arrived at Shaoul's actual address of residence, 166 West 18th Street, Apt. 9B-W, New York, NY, and attempted to serve her personally, but was stopped by Shaoul's concierge, Jesus Pagan. Pagan called Shaoul's apartment and was advised by Shaoul to accept the papers on her behalf. The DLS process server stated in his affidavit of service that this call was made in his presence. All affidavits of attempted service, the Sheriff's affidavits of service upon Shaoul, Crosstown and MB 146 dated November 23, 2009, the affidavit of service upon Shaoul dated December 7, 2009 and the affidavit of service by certified mail were all filed with the Kings County Clerk's Office on December 11, 2009.
Default Judgment
Plaintiff's counsel, Christopher Belmonte, Esq., made plaintiff's motion initially returnable on Tuesday, January 19, 2010, but the motion was administratively adjourned to January 20, 2010. Upon his request for an adjournment, defendants' counsel, Rex Whitehorn, Esq., through a letter to Belmonte, dated January 18, 2010 as well as through a letter to this court, dated January 19, 2010, submitted a stipulation of adjournment, dated January 19, 2010, adjourning the motion to March 3, 2010. Mr. Whitehorn also submitted an affirmation of actual engagement, dated January 18, 2010. Both the stipulation and Mr. Whitehorn's affirmation contained a signature block under his signature stating, "Special appearance as Attorneys for Defendants" under Mr. Whitehorn's signature. In both the letter to Mr. Belmonte, as well as the letter to this court, however, Mr. Whitehorn stated generally that his office would be appearing for the defendants.
According to Mr. Belmonte's affidavit, on March 1, 2010, Mr. Whitehorn contacted Mr. Belmonte's office to notify plaintiff that he had prepared opposition papers and planned to serve them upon plaintiff's counsel. Mr. Whitehorn further requested another adjournment of the return date of the motion in order to give plaintiff's counsel an opportunity to reply to defendants' anticipated opposition. Plaintiff's counsel declined to consent to such adjournment. Mr. Whitehorn appeared in court on March 3, 2010, but failed to serve or file any opposition to plaintiff's CPLR motion and requested additional time to serve and file the papers. This court granted this request and directed the defendants, on the record, to serve and file opposition papers by March 23, 2010. The court further adjourned the hearing date of the motion to April 7, 2010. Defendants failed to file or serve their opposition papers by March 23, 2010, and counsel appeared in court on the hearing date of April 7, 2010 to request an additional adjournment. The court denied defendants' request and ruled that, by failing to serve and file opposition papers by March 23, 2010, defendants violated the court's order and were in default. The court then granted plaintiff's motion for summary judgment in lieu of complaint on default, directing the submission of an order on notice.
According to plaintiff, on or about May 14, 2010, it served, by hand, its Notice of Settlement of Proposed Order and Affidavit in Support of the Entry, upon defendants' counsel, as directed by this court. Defendants did not oppose the order. On June 1, 2010, this court signed an order directing entry of judgment against the defendants. On June 10, 2010, the order was entered in the Kings County Clerk's Office. On June 23, 2010, Plaintiff served its Notice of Entry of the Order upon defendants' counsel. Defendants' counsel again did not respond. On or about June 25, 2010, the Kings County Clerk's Office entered judgment against defendants, which was subsequently amended on July 1, 2010 because of a miscalculation of interest. Plaintiff served another Notice of Entry of the amended judgment upon defendants' counsel on July 6, 2010. Subsequently, Plaintiff commenced enforcement proceedings against the defendants by serving Notices to Judgment Debtor or Obligor upon the Guarantors and Restraining Notices to Judgment Debtors on all defendants. Only after the service of these enforcement proceedings did defendants move, by Order to Show Cause, on July 20, 2010, to vacate the default judgment entered against them.
Analysis
Defendants move to vacate the default judgment entered against them pursuant to both CPLR 317 and CPLR 5015. Although the defendants do not specify the particular provisions of CPLR 5015 upon which they are moving, the relevant subsections for this action are CPLR 5015 (a) (1), which provides for vacatur in the case of excusable default and meritorious defense and CPLR 5015 (a) (4), which provides for vacatur when jurisdiction is lacking, irrespective of reason or merit.
Jurisdiction
The jurisdictional issue, under CPLR 5015 (a) (4), must be addressed first ( Mayers v Cadman Towers, Inc., 89 AD2d 844, 453 [2d Dept 1982]; Siegel, Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR C5015:9, p. 220-221). If this court determines that jurisdiction was not acquired over any party, the default against that party must be vacated ( id.). If, however, jurisdiction was acquired, vacatur of the default still may be appropriate under CPLR 317 or CPLR 5015 (a) (1).
Plaintiff claims that jurisdiction was acquired over the LLCs by personal service on either November 23, 2009 or November 24, 2009, by personally delivering the summons and motion to Laraque, which both DLS and the Sheriff believed to have been authorized to accept service. CPLR311-a provides that personal service on a limited liability company shall be made by delivering a copy personally to:
(i) any member of the limited liability company in this state, if the management of the limited liability company is vested in its members, (ii) any manager of the limited liability company in this state, if the management of the limited liability company is vested in one or more managers, (iii) to any other agent authorized by appointment to receive process, or (iv) to any other person designated by the limited liability company to receive process, in the manner provided by law for service of a summons as if such person was a defendant.
Defendants contend that personal service was not properly effected upon the LLC defendants by delivery to Laraque under CPLR 311-a (a) (i) or (ii), because Laraque was not a member or manager of the LLCs, but rather a receptionist. Nor is there evidence that Laraque was authorized, by appointment or designation by the LLCs, to accept such service under CPLR 311-a (a) (iii) or (iv) ( see Stuyvesant Fuel Serv. Corp. v 99-105 3rd Ave. Realty LLC, 192 Misc 2d 104 [Civ Ct, Bronx County 2001]).
Although the affidavits submitted by representatives of both the Sheriff and DLS, on two different dates, state that they each believed that Laraque was authorized to accept service on behalf of Crosstown, MB 146 and 140 West, plaintiff does not suggest that Laraque was a member or a manager pursuant to CPLR 311-a (i) or (ii). In fact, the identities of the members of the LLCs are not revealed in the motion papers. Nor does plaintiff suggest that Laraque was, in fact, authorized to receive such service pursuant to CPLR 311-a (iii) or (iv). Thus, it is clear that personal service was not effected upon the LLC defendants by serving Laraque pursuant to CPLR 311-a.
Both the Borrowers and Guarantors, however, expressly consented to personal jurisdiction, and Borrowers expressly waived jurisdictional objections in Section 11 of the Note, which precludes defendants' challenge to this court's jurisdiction. It is well-settled law that parties are free to contractually consent to personal jurisdiction and waive strict compliance with statutory service requirements ( see Alfred E. Mann Living Trust v ETIRC Aviation S.A.R.L., 910 NYS2d 418, 2010 NY Slip Op 07412 [1st Dept 2010] citing Gilbert v Burnstine, 255 NY 348, 355 [1931]). Personal jurisdiction consists of two main components. The first component "involves service of process, which implicates due process requirements of notice and opportunity to be heard" ( Keane v Kamin, 94 NY2d 263, 265). The second component "involves the power, or reach, of a court over a party, so as to enforce judicial decrees ( id.)," to which all parties consented.
Although the defendants have contractually consented to personal jurisdiction, they are, however, still entitled to service upon them in accordance with the terms of the Note and the Guarantees. They are further entitled to protection of their due process rights to notice and the opportunity to be heard, which they have not waived ( see Alfred E. Mann Living Trust v ETIRC Aviation S.A.R.L., 2010 NY Slip Op 07412).Section 11 of the Note irrevocably appointed Elizabeth Shaoul as the agent for receipt of process and provided for service to be effected by any means permitted by the court with a copy sent by certified mail, return receipt requested, to the Borrowers at their respective addresses. The affidavits of attempted service and the affidavit of service by certified mail establish that plaintiff did comply with the requirement to mail copies of the summons and motion to the Borrowers by certified mail, but were unable to serve Shaoul at the address provided as she no longer resided at the address provided. Plaintiff could simply have completed service by leaving copies of the summons and motion with Shaoul's mother, a person of suitable age and discretion, at the address provided in the Note, followed by mailing to that address, but chose not to do so. Instead, service was effected upon Shaoul, pursuant to CPLR 308 (2), by service upon Laraque, a person of suitable age and discretion, on both November 23, 2009 and November 24, 2009, at her place of business, with a subsequent mailing of a copy of the summons and motion to her place of business at 594 Broadway, Suite 1010, New York, 10012. Although only one set of summons and motion papers addressed to Shaoul was delivered to her place of business and one set subsequently mailed, the Court of Appeals has held that the CPLR is silent on the issue of serving multiple defendants through a single delivery ( see Raschel v Rish, 69 NY2d 694, 696-97 (holding that "the guiding principle must be one of notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections,'" quoting Mullane v Central Hanover Bank Trust Co., 339 US 306); see also The Stanley Agency, Inc. v Behind the Bench, Inc., 23 Misc 3d 1107(A), 2009 WL 975790 [Sup Ct, Kings County 2009]). Because Shaoul was irrevocably appointed as the agent for receipt of process for the Borrowers, Shaoul should have known that she may be required to accept service on behalf of the Borrowers. Thus service upon Shaoul, pursuant to CPLR 308 (2), of the summons and motion papers was sufficient to comply with the terms of the Note and to provide the Borrowers with notice of the pendency of the action. In light of the Borrowers' contractual consent to personal jurisdiction, waiver of jurisdictional objections and their broad grant of authority to allow service upon Shaoul, their appointed agent, by any means permitted by the court, this court finds that service upon the Borrowers was adequately effected by serving Shaoul, pursuant to CPLR 308 (2), and was sufficiently in compliance with the terms of the Note.
No evidence was submitted to indicate that the Borrowers designated a change of address or substitution of another agent.
Moreover, defendants cannot successfully assert that their due process rights were violated. There can be no doubt that all defendants had actual notice of the action, as they retained an attorney to represent them, who appeared twice before the court, sent correspondence to both the court's and opposing counsel's attention and entered into stipulations on behalf of all the defendants. Shaoul also received notice of the action through her concierge, through service at her place of business and through subsequent mailings to both her home and place of business.
Service was also made in accordance with the Guarantees. 140 West, although also not served by personal delivery pursuant to CPLR 311-a, was served on November 24, 2010, pursuant to Section 15 of its guarantee, by which it consented to service by certified mail sent to its address at 594 Broadway, Suite 1010, New York, NY. Shaoul was served on November 24, 2010, pursuant to CPLR 308 (2), as previously established, and also in accordance with Section 15 of the guarantee she executed, consenting to service by certified mail sent to her address at 7 Dock Lane, Great Neck, NY.
Short-Service
Defendants argue that, even if the defendants were served, they were short served, which, they claim, constitutes an incurable jurisdictional defect. Because defendants have all contractually consented to the jurisdiction of this court, they can not prevail upon such objection absent lack of notice or other due process violation, which is not present here. Defendants correctly state that the motion should have been made returnable no earlier than January 20, 2010, as opposed to its initial return date of January 19, 2010. However, this court administratively adjourned the motion to January 20, 2010, thus correcting the defect of short service. Although plaintiff's demand for opposing papers by January 10, 2010, was improper, as the defendants had until January 20, 2010 to appear and answer ( see CPLR 308 (2), CPLR 320 (a)), no prejudice resulted from the demand or the alleged short service as plaintiff consented to defendants' request for an adjournment of the motion until March 3, 2010, which provided the defendants ample time to answer.
Shaoul and the Borrowers were served under CPLR 308 (2), which provides that service is complete ten days after proof of service is filed with the court's clerk. Under CPRL 320 (a), "[a]n appearance shall be made within twenty days after service of the summons, except that if the summons was served on the defendant by delivering it to an official of the state authorized to receive service in his behalf or if it was served pursuant to section 303, subdivision two, three, four or five of section 308, or sections 313, 314, or 315, the appearance shall be made within thirty days after service is complete." Thus, Shaoul and the Borrowers had 30 days after service was complete to appear and/or answer pursuant to CPLR 320 (a). The Sheriff filed proof of service for all parties on December 11, 2009, making service upon Shaoul and the Borrowers complete ten days after filing proof of service, on December 21, 2009. Thus, the return date on the motion against the Guarantors should have been no earlier than January 20, 2010. It is noted that service upon the other Guarantor, 140 West, was made pursuant to the term of its guarantee and that proof of mailing was also filed on December 11, 2009. While the terms of the guarantee did not provide for when service would be complete, it is clear that service would have been complete at least ten days after the filing of proof of mailing, if not earlier. It is also noted that, contrary to plaintiff's contention that Shaoul was served on December 7, 2009 by personal delivery, pursuant to CPLR 308 (1) and was therefore required to appear 20 days later on December 27, 2009, Shaould was actually served by substituted service, pursuant to CPLR 308 (2). Because such delivery was made to Shaoul's concierge, Jesus Pagan, outside of Shaoul's presence, it does not conform with the requirements of personal delivery. ( Hoffman v Petrizzi, 144 AD2d 437 [2d Dept 1988]; Selby v Jewish Mem. Hosp., 130 AD2d 651 [2d Dept 1987]).
Moreover, even if the defendants had not consented to the jurisdiction of this court, short service would not necessitate a vacatur of the default judgment. Although some courts have found that short service constitutes a jurisdictional defect ( see Tokyo Leasing (U.S.A.) Inc. v G-IV Wash, Clean Dry, Inc. , 4 Misc 3d 164 [Dist Ct Nassau County 2004]), short service is a curable defect that does not deprive the court of jurisdiction if the defendant is not prejudiced. ( Plaza 400 Owners v Rensicoff, 168 Misc 2d 837, 839 [Civ Ct New York County 1996]). In Plaza, the court reasoned that the provisions in CPLR 3213 and 320 (a) relating to the time to answer or appear "do not provide for the method of service of process and do not affect the validity of service." ( Id. at 841). The court found that these issues relate only to the defendant's available response time. Thus, if service was complete before the return date, despite being insufficient to afford the full statutory response time, jurisdiction had already been obtained before the beginning of the answer and appearance period. ( Id. at 842). The court correctly reasoned that it therefore had the power to hear the motion, but must cure the short service by affording the defendant adequate opportunity to prepare and serve a response before a decision could be rendered, as was done here. ( Id. at 842).
The fact pattern in Plaza closely resembles the situation at bar where the parties stipulated to adjourn the matters to March 3, 2010, more than a month longer than the time defendants were required to be given by statute. However, defendants' counsel still failed to serve opposing papers on the designated date and requested more time. The court granted an additional 20 days to file and serve their answer and the defendants again failed to serve any opposing papers. The adjournments granted by the court constituted more than adequate time to compensate for the short service. No excuse has been provided to explain defendants' continuing default. The defendants' default cannot credibly be ascribed to the short service. There is no indication that the plaintiff attempted to provoke the defendants' default. The defendants had ample time to set forth a meritorious defense yet failed to do so. It is clear that they received adequate notice of the action and were not prejudiced in any way. Defendants' counsel appeared on their behalf on more than one occasion, requesting more time to file and serve an answer. The extended time to answer granted by this court was more than sufficient.
The purpose of CPLR 3213 is to dispose of disputes in a more direct, simple and time-saving manner, and to procure an effective and speedy judgment on presumably meritorious claims. ( Flushing National Bank v Brightside Manufacturing Inc., 59 Misc 2d 108 [Sup Ct Queens County 1969]). In Flushing National Bank, the court reasoned that it is important to "further this legislative intent without setting up hyper-technical barriers to the end sought by the enactment of the statute." ( Id. at 109). The court further reasoned that because it is difficult to predict exactly when service will be completed, selection of a return date may also be difficult. The court should exercise discretion by giving defendants sufficient time to answer the moving papers, while retaining jurisdiction. ( Id. at 110). This reasoning follows that of the court in Plaza in that jurisdiction is not the issue where an adverse party has not been afforded enough time to respond to a motion, complaint, or summons. ( Plaza 400 Owners v Resnicoff, 168 Misc 2d 837).
The Tokyo Leasing v G-IV Wash, Clean Dry case, cited by the defendants, is distinguishable from the instant action because in that case, the trial court dismissed the motion for summary judgment in lieu of a complaint on the initial return date, based upon lack of service, as well as short service, and upon a finding that the instrument sued upon did not qualify as one for the payment of money only. The defendants were never granted additional time to answer and there was no default. ( Tokyo Leasing (U.S.A.) v G-IV Wash, Clean Dry , 4 Misc 3d 164). Here, because the parties stipulated to the first adjournment, and the court subsequently granted a second adjournment, the default by the defendants could not be attributable to the short service. Any short service that may have existed was not a jurisdictional defect and was cured by the multiple adjournments. Thus, the court had jurisdiction over the defendants when it held them in default on April 7, 2010.
Meritorious Defense
Although the court has found that it had jurisdiction over the defendants, they could still be entitled to vacatur of the default judgment pursuant to either CPLR 317 or CPLR 5015 (a) (1) upon a demonstration of a meritorious defense. CPLR 317, provides:
A person served with a summons other than by personal delivery to him or to his agent for service designated under rule 318, within or without the state, who does not appear may be allowed to defend the action within one year after he obtains knowledge of entry of the judgment, but in no event more than five years after such entry, upon a finding of the court that he did not personally receive notice of the summons in time to defend and has a meritorious defense.
Even where service was by personal delivery, the court may vacate a default judgment pursuant to CPLR 5015 (a) (1), which provides:
The court which rendered a judgment or order may relieve a party from it upon such terms as may be just, on motion of any interested person with such notice as the court may direct, upon the ground of:
1. excusable default, if such motion is made within one year after service of a copy of the judgment or order with written notice of its entry upon the moving party, or, if the moving party has entered the judgment or order, within one year after such entry.
Both of these provisions require that the defaulting defendants set forth a meritorious defense, which the defendants have failed to establish in this action. ( Baldwin v Mateogarcia , 57 AD3d 594 [2d Dept 2008]; Siegel, Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR C5015:6, p. 211; Alexander, Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR C317:2, p. 93-94). No affidavit from an individual with knowledge of the facts has been submitted, as required to establish a meritorious defense( Peacock v Kalikow, 239 AD2d 188 [1st Dept 1997]). Instead, only an affirmation from Mr. Whitehorn, defendants' attorney, who has no personal knowledge of the facts and who has not set forth any substantive defense or disputed that defendants defaulted upon obligations under the Note and the Guarantees, has been provided. ( Amato v Fast Repair, Inc. , 15 AD3d 429 [2d Dept 2005]). Thus, the defendants are not entitled to relief under CPLR 317 and CPLR 5015 (a) (1).
Finally, the substantial effort expended by plaintiff to effect service upon the defendants merits attention. The purpose of CPLR 317 is to provide relief when a defendant has not received adequate notice of the action so as to timely defend ( see Deutsche Bank Nat. Trust Co. v Matos , 77 AD3d 606 [2d Dept 2010]). Here, plaintiff first attempted to serve the Borrowers and Shaoul by personal service upon Shaoul followed by certified mail to the addresses provided in the Note and Shaoul's guarantee, and finally effected service by substituted service, through both DLS and the Sheriff, at Shaoul's actual place of business and also by substituted service at Shaoul's actual home. This court finds these efforts to constitute sufficient compliance with the terms of the Note and Guarantees and provided notice reasonably calculated to apprise the parties of the pendency of the action. Ample evidence establishes that all of the defendants did receive adequate notice of the action, were given the opportunity to defend themselves, and have failed to provide any excuse for their default or competent evidence of a meritorious defense.
Defendants' motion to vacate the default judgment is denied and the temporary stay is hereby vacated in its entirety. This constitutes the decision, order, and judgment of the court.