Dismissal and Nonsuit - Restoring Action to Calendar - Motion to Renew Motion for Default Judgment - Law Office Failure and Lack of Prejudice to Opposing Party

Order, Supreme Court, New York County (David B. Cohen, J.), entered on or about April 3, 2025, which to the extent appealed from as limited by the briefs and appealable, denied plaintiffs' motion to renew its motion for an order of default judgment, unanimously modified, on the law, to grant renewal, and, upon renewal, to grant the motion to the extent of reinstating the complaint, and otherwise affirmed, without costs. Appeal from order, same court and Justice, entered on or about July 2, 2024, which denied plaintiffs' motion for a default judgment against defendants and sua sponte dismissed the action in accordance with CPLR 3215 (c), unanimously dismissed, without costs, as academic.

In this action seeking relief for, among other things, rent overcharges, Supreme Court should have granted plaintiffs' motion for renewal of their motion for a default judgment, and upon renewal, should have granted the motion to the extent of reinstating this action, as the evidence submitted on the motion provided sufficient basis for restoration of the action (see Laourdakis v Torres, 98 AD3d 892, 893 [1st Dept 2012]). Upon renewal, plaintiffs' counsel explained that the parties were engaged in settlement discussions while a related rent overcharge action against these defendants involving 33 other tenants in the same building was being actively litigated. Counsel further explained that he was later transitioning to retirement while his law office was reopening after the height of the COVID-19 pandemic. Plaintiffs also presented admissible evidence of this action's merit, and defendants did not deny that the action has merit, nor did they assert that the delay of less than three months beyond the deadline for filing the default motion resulted in any prejudice to them. Notably, on renewal, plaintiffs presented evidence that defendants had served rent demands on them while neglecting to respond to their default motion.

Although the specific details of the law office failure of plaintiffs' counsel could have been presented in the initial motion, where, as here, an action is dismissed for failure to take proceedings and the motion to renew is based on information that could have been presented earlier, courts have discretion to consider that information in the interest of justice (see Laourdakis, 98 AD3d at 893). As we have held, a party "should not be deprived of his day in court by his attorney's neglect or inadvertent error, especially where the other party cannot show prejudice . . . [and] the complaint has merit" (Sanchez v Javind Apt. Corp., 246 AD2d 353, 355 [1st Dept 1998] [internal quotation marks and citation omitted]). On balance, weighing the extent of counsel's negligence against the merits of the claim and the lack of prejudice to the other side, plaintiffs established sufficient cause for maintaining this action, warranting reinstatement of their claims (CPLR 3215 [c]; see U.S. Bank N.A. v Nunez, 190 AD3d 660, 661 [1st Dept 2021]). Concur—Kern, J.P., Scarpulla, Mendez, Rodriguez, Rosado, JJ.