Default Judgment in Foreclosure Action Vacated as Not Willful; Meritorious Defense Noted

Default Judgment in Foreclosure Action Vacated as Not Willful; Meritorious Defense Noted Plaintiff sought foreclosure on a property Freeway Group Inc. bought from the Espinosa defendants in 2013. Freeway, which manages the property’s three apartments, paid off the mortgages on the property, including that underlying plaintiff’s Feb. 2, 2017, foreclosure complaint. Despite purported service with the summons and complaint, a certifi­cate of default was entered against defendants, and judgment of foreclosure and sale entered on Sept. 6, 2017. Plaintiff was the foreclosure sale’s successful bidder. Nonparty 4 Lafayette Realty LLC later bought plaintiff’s successful bid for $32,000. The court granted Freeway the default judgment’s vacatur, fi­nding Freeway’s default not willful. Freeway submitted evidence that it did not receive process served on N.Y.’s Secretary of State. Nothing in the record suggested Freeway knew plaintiff had a claim against it and deliberately failed to update its address with the Secretary of State. Freeway also had a meritorious defense. Based on its evidence a trier of fact could conclude that Freeway did, in fact, pay off the subject mortgage.

Courchevel 1850 LLC v. Espinosa, 17 CV 799 (July 17)