Statement Pursuant to CPLR § 2219

The following e-filed documents listed on NYSCEF (Motion No. 001) numbered 4-21 were read on this motion. This constitutes the Decision and Order of this Court with respect to the Order to Show Cause filed by Plaintiff CLEAN POWER LAUNDROMAT INC. ("Plaintiff") seeking entry of a default judgment pursuant to CPLR § 3215 and a preliminary injunction enjoining Defendant DWECK FAMILY LIMITED PARTNERSHIP ("Defendant") from conveying, financing, or otherwise encumbering the real property located at 140 Port Richmond Avenue, Staten Island, New York 10302 ("subject property").

This commercial dispute arises from a written lease agreement executed on June 1, 2021, by which Defendant, a domestic limited partnership, leased to Plaintiff, a domestic corporation, the subject property for use as a laundromat. Under the lease terms, Plaintiff was obligated to tender monthly rent and remit real estate taxes, which Defendant was then required to forward to the appropriate taxing authorities.

Plaintiff asserts that it has, at all relevant times, fulfilled its financial obligations under the lease, including rent and real estate taxes. Nonetheless, Defendant allegedly failed to tender said taxes to the City of New York. This dereliction culminated in the issuance of a Lien Sale Notice by the New York City Department of Finance, placing the property—and by extension Plaintiff's leasehold interest—at risk of foreclosure.

In response, Plaintiff commenced the instant action sounding in breach of contract. Service of process was effected upon the Secretary of State pursuant to BCL § 306. An affidavit of additional mailing was also executed. To date, Defendant has neither appeared nor interposed an answer. Plaintiff now seeks a default judgment in the sum of $109,032.40 and interim injunctive relief to restrain the pending sale of the subject premises.

Defendant opposes, contending inter alia that personal jurisdiction is lacking due to improper service, that it never received the Summons and Complaint until service of the instant Order to Show Cause, and that the lease does not provide for any remedy for failure to remit real estate taxes. Defendant further asserts that there is a binding contract of sale and that the property is scheduled to be conveyed imminently, with all tax liens to be satisfied at closing.

To obtain a default judgment, a plaintiff must demonstrate (1) proper service of the Summons and Complaint, (2) the defendant's failure to appear or respond, and (3) the merits of the claim. (see Austin 26 Dental Group, PLLC v Sino Northeast Metals (U.S.A.), Inc., 230 AD3d 545 [2d Dept 2024]; Deutsche Bank Natl. Trust Co. v Silverman, 178 AD3d 898 [2d Dept 2019]; HSBC Bank USA, N.A. v Clayton, 146 AD3d 942 [2d Dept 2017]; U.S. Bank, Natl. Assn. v Razon, 115 AD3d 739 [2d Dept 2014]).

Here, Plaintiff submitted proof of service upon the Secretary of State and supplemental mailing in accordance with CPLR § 3215 [g] [3]. Contrary to Defendant's assertion, service upon the Secretary of State is deemed complete once effectuated, irrespective of whether Defendant subjectively received the Summons and Complaint. Defendant's admission that the Secretary of State's listed address is outdated does not vitiate service. It is well settled that the failure to update corporate addresses does not deprive the Court of jurisdiction.

Moreover, Defendant has not filed a motion to vacate default under CPLR § 5015 [a] nor has it presented a meritorious defense to the action. The assertion that the lease does not require refund of tax funds is unavailing. Plaintiff does not seek a refund, but damages stemming from Defendant's failure to remit taxes to the City, thereby jeopardizing Plaintiff's leasehold through no fault of its own. The record establishes that Plaintiff performed under the lease, while Defendant failed to satisfy a material obligation.

Accordingly, Plaintiff is entitled to default judgment in the amount demanded.

A preliminary injunction is a drastic remedy and will issue only upon a clear showing of: (1) a likelihood of success on the merits; (2) irreparable harm in the absence of injunctive relief; and (3) a balance of the equities tipping decidedly in the movant's favor. (see Straisa Realty Corp. v Woodbury Assoc., 154 AD2d 453 [2d Dept 1989]; Chana v Machon Chana Women's Inst., Inc., 162 AD3d 635 [2d Dept 2018]; Congregation Erech Shai Bais Yosef, Inc. v Werzberger, 189 AD3d 1165 [2d Dept 2020]).

Here, Plaintiff has substantiated all three prongs. First, the documentary evidence establishes a prima facie breach of contract. Defendant's failure to remit tax payments, despite having received them from Plaintiff, constitutes a material breach. Second, Plaintiff will suffer irreparable harm if Defendant conveys the property to a third party. The injury to Plaintiff's business operations—being threatened with foreclosure and potential displacement—cannot be adequately redressed by monetary damages alone. Third, the equities clearly favor Plaintiff. It has complied with all lease obligations, while Defendant has not only breached those obligations but now seeks to alienate the property in an effort that may frustrate judgment enforcement.

Defendant's suggestion that the tax liens will be cured at closing is speculative and fails to address the interim threat to Plaintiff's tenancy. Furthermore, the existence of a clause permitting transfer of the property does not immunize Defendant from judicial restraint where bad faith is evident.

Accordingly, it is hereby:

ORDERED, that Plaintiff's motion for a default judgment is GRANTED in the amount of $109,032.40, and it is further,

ORDERED, that Plaintiff's request for a preliminary injunction is GRANTED, and Defendant, its agents, successors, and assigns are hereby enjoined and restrained from selling, transferring, financing, or leasing the subject property located at 140 Port Richmond Avenue, Staten Island, New York 10302 pending further order of this Court, and it is further,

ORDERED, that Plaintiff shall post an undertaking in the amount of $10,000.00 pursuant to CPLR § 6312 [b] as a condition for the effectiveness of this injunction, and it is further

ORDERED, that this constitutes the Decision and Order of the Court