Daniel Lang v. French & Company

This breach of contract action was commenced by service of a summons without complaint on the Secretary of State pursuant to section 306 of the Business Corporation Law. The summons was mailed by the Secretary to the defendant, care of a law office in New York City. It was returned with a notation "returned to writer, addressee unknown." Thereafter a complaint was filed in court but not served upon the defendant which at all times had an office and was actively engaged in business in the City of New York. A default judgment was entered on October 15, 1973. On January 15, 1974 defendant was served with a levy on its property. This was defendants first notice of this lawsuit. Defendant promptly moved to vacate the default and for leave to serve an answer. It posted an undertaking more than sufficient to cover the amount of the default judgment. The courts general policy favors disposition of matters on the merits. It was an abuse of discretion and an unduly harsh penalty, under the facts herein, to deny vacatur of this unintentional default. (See CPLR 317, 5015, subd [a]; and Richards, Fagone & Assoc. v Center Stage Stores, 44 A.D.2d 857.)