American Express Natl. Bank v Hybrid, Inc.

[*1] American Express Natl. Bank v Hybrid, Inc. 2022 NY Slip Op 22238 Decided on August 3, 2022 Supreme Court, New York County Lebovits, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and subject to revision before publication in the printed Official Reports.

Decided on August 3, 2022
Supreme Court, New York County

American Express National Bank, Plaintiff,

against

Hybrid, Inc. and Sanaa Murad, Defendants.



Index No. 650517/2021

Zwicker & Associates, P.C., Piscataway Township, NJ (Brandon G. Stanislaus of counsel), for plaintiff.

No appearance for defendants. Gerald Lebovits, J.

In this action to collect on a commercial loan, plaintiff American Express National Bank, a "national bank located in Utah," moves for default judgment under CPLR 3215 against defendants Hybrid, Inc., apparently a California company, and Sanaa Murad, a California resident. But plaintiff did not move for default judgment within one year, as required by CPLR 3215 (c). Nor, in any event, has plaintiff established proper service on defendants or the facts constituting its claims against them.

Plaintiff served defendants under CPLR 313 on February 10, 2021. (NYSCEF Nos. 3, 4 [affidavits of service].) It filed affidavits of service on the defendants on April 28, 2021. (See id.) And it moved for default judgment on April 18, 2022. (See NYSCEF No. 6.) The question, then, is whether defendants' time to appear is measured from the date of service (in which case the default-judgment motion is untimely), or from the date of filing of the affidavits of service (in which case the motion is timely). Plaintiff contends, without citation to authority, that the starting point is the affidavit-filing date. (NYSCEF No. 11 at 2 n 2.) Considering the matter as an issue of first impression, this court disagrees.

CPLR 320 (a) provides that if service was made under CPLR 313, "the appearance shall be made within thirty days after service is complete." CPLR 320 does not, however, define when CPLR 313 service is complete. This court is unaware of precedent addressing this particular issue. The court concludes that for appearance-deadline purposes, determining when CPLR 313 service is complete entails looking through to the particular method(s) of service used.

CPLR 313 permits out-of-state service "in the same manner as service is made within the state." Thus, determining when CPLR 313 out-of-state service is "complete" for appearance-deadline purposes should depend on the chosen means of service, just like in-state service. In other words, out-of-state service by personal delivery will be complete upon delivery (see CPLR 308 [1]; CPLR 311 [a] [1]); out-of-state service by leave-and-mail or nail-and-mail substituted service will be complete 10 days from filing of the affidavit of service (see CPLR 308 [2], [4]); and so on.

Here, the affidavits reflect that on February 10, 2021, plaintiff served defendant Murad in California by personal delivery (NYSCEF No. 3), and served defendant Hybrid by personal delivery in California to an authorized agent, namely Murad (NYSCEF No. 4). Service was complete upon delivery. Defendants' deadline to appear and respond—under CPLR 313 and 320, [*2]30 days from the completion of service—was March 14, 2021, because the 30th day of the period fell on a Saturday. (See General Construction Law § 25-a.) Plaintiff's default-judgment motion, filed more than one year later, on April 18, 2022, was untimely. (CPLR 3215 [c].)

CPLR 3215 (c) requires dismissal of an untimely default-judgment motion unless movant provides "sufficient cause . . . why the complaint should not be dismissed." Plaintiff does not give sufficient cause here. Plaintiff's affirmation of counsel cites cases involving delays due to ongoing settlement negotiations. (NYSCEF No. 11 at 2 n 2.) But plaintiff has not shown that it was engaged here in settlement negotiations. Counsel indicates that "over 40 phone calls [were] made to Defendants since the complaint was filed" (id.)—but not whether any of those telephone calls was answered or returned. This court is skeptical, to say the least, that a party's making a series of debt-collection calls (or leaving a series of debt-collection messages) may, standing alone, constitute "sufficient cause" to ward off a CPLR 3215 (c) dismissal.

The only other sufficient-cause factor plaintiff identifies is that it mailed the additional notice to defendants required by CPLR 3215 (g) in August 2021, before the one-year period had run. (Id.) But that timely mailing only raises the question why plaintiff did not move for default judgment in the fall of 2021, shortly after that mailing, rather than waiting until mid-April 2022.[FN1]

Plaintiff has not shown sufficient cause for its failure to move for default judgment within one year of the expiration of defendants' defaults.[FN2]

Accordingly, it is

ORDERED that American Express's motion for default judgment under CPLR 3215 is [*3]denied, and the action is dismissed as against all defendants; and it is further

ORDERED that American Express serve a copy of this order with notice of its entry on all parties and on the office of the County Clerk, which shall enter judgment accordingly.

8/3/2022 Footnotes

Footnote 1: Even if this court were to conclude that plaintiff's delay in bringing this motion should be excused, plaintiff's motion papers would be insufficient for the same reasons as in American Express National Bank v Pino Napoli Tile & Granite, LLC (2022 NY Slip Op 50488[U] [Sup Ct, NY County June 13, 2022]). As in Pino Napoli, Plaintiff has not established that service was proper by consent or that this court has longarm personal jurisdiction over defendants so as to permit service under CPLR 313 (see id. at *1); plaintiff has not shown that it may sue defendant Hybrid consistent with Business Corporation Law § 1314, nor established the facts constituting its claim against Hybrid (see id. at *2-*3); and plaintiff has not demonstrated that defendant Murad may properly be held personally liable for the loan assertedly taken out by Hybrid (see id. at *3).

Footnote 2: Although plaintiff's papers on this motion have failed to show that service was valid, this court lacks a basis on this record to conclude definitively that service was invalid. The court therefore assumes for the moment that plaintiff's CPLR 313 service on defendants started their CPLR 320 time-to-appear clock running, such that defendants' lack of appearance within 30 days from service constituted a default. If service were instead invalid, defendants would not be in default to begin with, making it questionable whether a CPLR 3215 (c) dismissal would be appropriate. But in that scenario, this court would be required to dismiss anyway for lack of personal jurisdiction.