On August 1, 2024, Justice Cohen of the New York County Commercial Division issued a decision in Downtown Special Situations Holdings, LLC v. Mills Dental-Downtown Brooklyn, PLLC, 2024 NY Slip Op. 32698(U), holding that the failure of a limited liability company to appear by counsel lead to entry of default judgment against it, explaining:
Pursuant to CPLR 321(a), a limited liability company is required to be represented by counsel to prosecute or defend a litigation. As such, a limited liability company is subject to a default judgment when the Court relieves the limited liability company’s counsel, and the limited liability company then fails to appear by new counsel after a stay of the action is lifted.
As noted, the Court stayed this matter for forty-five days to afford all the Defendants sufficient time to retain new counsel. Moreover, even after the stay expired on January 30, 2023, the LLC Defendants has had months to appear through counsel and stand ready to defend this case. To date, the LLC Defendants have not done so. Plaintiff also submitted an affidavit of service demonstrating that the LLC Defendants and the Individual Defendants were served with the Notice for Default Judgment and supporting papers.
In light of the default, damages as the amount Plaintiffs are entitled to recover from the LLC Defendants shall be determined after an inquest before a JHO/Special Referee.
(Internal quotations and citations omitted).