New York Court Rejects Building Owner's Motion For Default Judgment Against Subcontractor And Architect

• Jurisdiction: New York,United States
• Law Firm: Duane Morris LLP
• Subject Matter: Litigation, Mediation & Arbitration, Real Estate and Construction, Trials & Appeals & Compensation, Construction & Planning
• Author: Mr Jose Aquino
• Published date: 04 January 2023

A recent decision of the New York Supreme Court, LAM Group v. Anthony T. Rinaldi LLC, 2022 WL 17881264 (Sup. Ct., NY Co., Dec. 22, 2022), illustrates the importance of meticulously following the procedures set forth in civil practice statues and rules. In LAM, the owners of a commercial building in lower Manhattan brought an action against their contractor, a subcontractor, and other construction professionals alleging breach of contract, negligence, and other claims in connection with the installation of a stucco façade on their property.

Plaintiffs alleged that pieces of the stucco façade from the exterior of the building dislodged and landed on a neighboring property causing damage. Eventually, the entire stucco façade required replacement. Defendant Bayport Construction Group ("Bayport"), a subcontractor, had performed the masonry and stuccowork. Bayport and another defendant, Nobutaka Ashihara Architect PC ("NAA"), the initial architect retained for the project, were served with the summons and verified complaint by service on the New York Secretary of State, pursuant to New York Business Corporation Law ' 306(b). However, neither Bayport nor NAA filed an answer or otherwise appeared in the action. Plaintiffs filed a motions for default judgment against the two non-appearing defendants. The court found that plaintiffs properly served Bayport and NAA with process and with the motion papers, but refrained from entering a default because plaintiffs failed to strictly follow the procedure set forth in the New York Civil Practice Law and Rules ("CPLR").

Generally, an application for default judgment requires the plaintiff to present proof of service of the summons and the complaint, the facts constituting the claim, and the circumstances of the default. (CPLR ' 3215(f).) The affidavits of service show that both Bayport and NAA were properly served with process by service on the Secretary of State. The verified complaint recounts the facts constituting the claim, and counsel's affidavits lay out the circumstances surrounding the defaults. At first glance, plaintiffs appeared to meet all the steps necessary for entry of a default judgment. However, the motions were denied because plaintiffs failed to present proof of additional service upon the defaulting defendants. CPLR ' 3215(g)(4)(i) provides:

"When a default judgment based upon non-appearance is sought against a . . . corporation . . . served pursuant to [Business Corporation Law ' 306(b)], an...