On October 15, 2024, Justice Chan of the New York County Commercial Division issued a decision in SNCO Cap LLC v. Kaufman, 2024 NY Slip Op. 33816(U), holding that confusion over the capacity in which a person was served was not a reasonable excuse justifying vacating a default judgment, explaining:
[T]o vacate a default judgment, defendants must show that their default was excusable and that they have a meritorious defense to the action. In determining a motion to vacate a default judgment and exercising its discretion, the court is obligated to give a balanced consideration to these factors and also to the extent of the delay, the prejudice to the non-defaulting party, and the evidence of intent or lack of intent deliberately to default or abandon the action.
Cable and the defaulting defendants have offered an excuse for their default, but it is not reasonable. Cable claims confusion as to whether the service was personal or for his affiliated companies. However, SNCO’s November 17, 2022 email, sent in compliance with the court’s Alternative Service Order, clearly named Cable Holdings and Service Peak as the entities served.
This alleged confusion fails to justify Cable’s seven-month delay in filing an answer or the defendants’ one-year delay in appearing. Even if there had been initial uncertainty about whether the service applied to the corporate entities or to Cable personally-which is implausible given the explicit identification of the defendants-it does not explain why the defaulting defendants took no action for a full year. Cable could have easily clarified any misunderstanding with a simple inquiry, yet no effort was made to resolve any supposed confusion over the clearly worded ·notice. This extended delay reflects a lack of reasonable diligence in addressing the lawsuit.
(Internal quotations and citations omitted).