Judgments - Entry - Electronic Filing System

Judgments - Default Judgment - Vacatur - Remittal

Judgment, Supreme Court, New York County (Suzanne J. Adams, J.), entered on January 25, 2024, in favor of plaintiff and against defendants in the amount of $701,363.46, and bringing up for review an order, same court and Justice, entered on November 20, 2023, which insofar as appealed from as limited by the briefs, granted plaintiff's motion for a default judgment, unanimously reversed, on the law, without costs, the judgment vacated, and the matter remanded for further proceedings in accordance with this Court's decisions in Adago v Sy (205 AD3d 602 [1st Dept 2022] [Adago I]) and Adago v Sy (216 AD3d 402 [1st Dept 2023] [Adago II]). Appeal from order entered on November 20, 2023, unanimously dismissed, without costs, as subsumed in the appeal from the judgment.

Upon remand for the second time to determine whether a memorandum of understanding was "permeated with fraud" so that its arbitration clause was void (Adago I, 205 AD3d at 602; Adago II, 216 AD3d at 403), Supreme Court granted plaintiff's motion to enter a default judgment against defendants. This was in error as plaintiff never served Adago I with notice of entry and therefore defendants' time to answer never started running (see CPLR 3211 [f]). Plaintiff's reliance on rules about electronic filing is unavailing. This Court has previously determined that "the NYSCEF site's transmission of notification of the entry to e-mail service addresses 'shall not constitute service of notice of entry by any party' " (Fazio v Costco Wholesale Corp., 85 AD3d 443, 443 [1st Dept 2011], quoting 22 NYCRR 202.5-b [h] [3]).

The court also erred in finding that Sy's affidavit in opposition to plaintiff's motion and in support of defendants' cross-motion was inadmissible because it lacked a certificate of conformity required for affidavits sworn to outside of New York pursuant to former CPLR 2309 (c). Rather, the court should have allowed Sy to obtain such a certificate (see e.g. Parra v Cardenas, 183 AD3d 462, 463 [1st Dept 2020]), especially because plaintiff did not raise CPLR 2309 (c) in his motion papers.

Even if, arguendo, defendants were "technically in default by failing to timely answer" (Hammond v Equinox Holdings LLC, 197 AD3d 1039, 1040 [1st Dept 2021]), we exercise our discretion to deny plaintiff's motion (see e.g. Alliance Prop. Mgt. & Dev. v Andrews Ave. Equities, 70 NY2d 831, 833 [1987]). The remittitur in Adago II did not provide for a default judgment (see 216 AD3d at 402-403) and thus, it was "not proper for the supreme court, on the return of the remittitur, to add any new and independent direction" (McGregor v Buell, 33 How Prac 450, 454 [1864] [italics omitted]; see also Wilkins v Earle, 46 NY 358, 358 [1871]). Additionally, Sy "evinced his intent to litigate this case on the merits" (Hammond, 197 AD3d at 1040) by answering and submitting an affidavit, and there is a "strong public policy favoring the resolution of cases on the merits" (id.; see also e.g. Rector v BDG Gotham Residential, LLC, 209 AD3d 509, 509 [1st Dept 2022]; Nedeltcheva v MTE Transp. Corp., 157 AD3d 423, 423 [1st Dept 2018]). Finally, defendants "advanced . . . potentially meritorious defense[s]" (Rector, 209 AD3d at 510 [internal quotation marks omitted]). Concur—Moulton, J.P., Friedman, Higgitt, Rosado, O'Neill Levy, JJ.