This proceeding was originally commenced with the name of the plaintiff as NYCTL 2014-A Trust and the Bank of New York Mellon as Collateral Agent and Custodian for the NYCLY 2014-A Trust, against 127 W138th Street LLC, Seedco Financial Services, Inc., Wachovia Bank NA, and Sustained Excellence Alliance Corporation, as defendants. It is an action to foreclose a tax lien which had been purchased by plaintiff from the City of New York. An order of Justice Edmead dated June 26, 2017 granted plaintiff’s motion to amend the plaintiff’s name in the caption to NYCTL 1998-2 Trust and the Bank of New York Mellon as Collateral Agent and Custodian for the NYCTL 1998-2 Trust. This is the current name of the plaintiff and the record should reflect the change. The real property in question is vacant land located at 127 West 138th Street, New York, New York. It was sold at a tax lien foreclosure sale by a referee’s deed dated July 17, 2017, from Roberta Ashkin, Esq., as referee, to 127 West 138 Street NBA LLC. The original successful bidder, Nison Badalov, had assigned his bid to the 127 West 138 Street NBA, LLC. The purchase price was $590,000.00. In November 2017, after title passed, defendant filed a motion to vacate its default in appearing and answering and seeking the canceling of the referee’s sale. No one is contesting that the successful bidder was a bona fide purchaser for value. By an order of Justice McMahon dated June 12, 2018, defendant’s motion to vacate its default based on challenging the service of process on 127 W138th Street LLC was referred to a Judicial Hearing Officer/Special Referee to “hear and report” on two issues. First, to conduct a traverse hearing as to whether the initial service of process on the secretary of state was done properly; and second, to determine the nature, extent and seriousness of the alleged conflict of interest of plaintiff’s initial lawyers, Windels, Marx, Lane & Mittendorf, LLP (Windels) as it had in the past performed legal services for the defendant llc. A hearing was held on April 8, 2019. Both sides appeared by counsel. The court was provided with a video copy of the deposition testimony of the process server, Sarah Roberts, and the office manager at the process serving agency, Robert Haak. The deposition was conducted in Albany, New York on January 17, 2019. Counsel for both plaintiff and defendant llc participated at the deposition. Both witnesses testified credibly. BACKGROUND: May 23, 1989: Abyssinian Development Corporation formed as a domestic not-for-profit corporation. The current agent for service of process is Charles E. Simpson, Esq., Windels, Marx, Lane & Mittendorf, LLP, 156 West 56th Street, New York, New York, 10019. April 1, 2005: 127 W138th Street, LLC formed as a domestic limited liability company with the agent for service of process listed in the article of organization as Windels, Marx, Lane & Mittendorf, LLP, 156 West 56h Street, New York, New York, 10019, Attn: Charles E. Simpson, Esq. May 12, 2005: 127 W138th Street, LLC acquires property, 127 West 138th Street, by deed from Neighborhood Eighth Avenue, LLC. Deed lists purchaser’s address as c/o Abyssinian Development Corporation, 4 West 125th Street, New York, New York, 10027. Property is also known as Block 2007 Lot 14, New York County. The recorded deed was to an attorney at the Windels firm at the above address. December 27, 2007: A Certificate filed with the Department of State discloses that the Abyssinian Development Corporation is the sole member of the 127 W138th Street, LLC. April 2007: The Limited Liability Company Biennial Statement filed with the Department of State by 127 W138th Street, LLC changes the agent for service of process for 127 W138th Street, LLC to: c/o Abyssinian Development Corporation, Attn: Janes. T. Howard, 4 West 125th Street, New York. New York, 10027. Biennial Statements filed in April 2009 and April 2011 keep that information as valid for the agent for service of process. Even though required by statute, no Biennial Statement was filed by the defendant after April 2009. This remained the address for service of process in the Department of State records for the defendant through June 2019. August 13, 2014: Tax Lien Certificate No. 1A includes Block 2007 Lot 14, in the properties whose tax lien was sold to NYCTL 1998-2 Trust. Certificate filed August 20, 2014 with the City Register. NYCTL 1998-2 Trust is a Delaware Trust and is not registered with the Department of State as a foreign entity doing business in New York. September 11, 2014: Tax Lien Certificate No. 1A filed again with the City Register without an explanation as to why it was refiled. August 10, 2016: Tax Lien Certificate No. 1B includes Block 2007 Lot 14 in properties sold to the NYCTL 1998-2 Trust. Certificate filed August 24, 2016 with the City Register. The amount listed as being outstanding is greater than that set forth in the prior tax lien certificate and appears to include the amount due in August 2014 plus subsequent real property tax charges. April 15, 2015: Summons and Complaint to foreclose a tax lien filed in Supreme Court, New York County (Index # 153796/2015). The complaint alleges it is to foreclose the Tax Lien Certificate dated August 13, 2014. The complaint lists the plaintiff as the NYCTL 2014-A Trust. This information is contradicted by the copy of the tax lien certificate attached to the complaint which designates the NYCTL 1998-2 Trust as the owner of the tax lien. April 28, 2015: Summons & Complaint served upon 127 W138th Street, LLC by delivering the process to the secretary of state in Albany pursuant to Limited Liability Company Law §303. May 22, 2015: Service of process by the secretary of state to the address on file with secretary of state, c/o Abyssinian Development Corporation, Attn: James T. Howard, 4 West 125th Street, New York, NY 10027 returned as “undeliverable” to secretary of state. April 16, 2016: Judgment of Foreclosure and Sale granted to plaintiff. March 22, 2017: Referee conducts auction for the sale of the property pursuant to a notice of sale published in the New York Law Journal. March 29, 2017: Date defendant requests to enter into an agreement with the City of New York to pay property taxes. May 5, 2017: Date defendant enters into the Installment Agreement with the City of New York to pay $2,377.94 for open real property taxes beginning July 1, 2017. This is an amount substantially less than the amount due and owing in the tax lien certificates of 2014 ($6,321.53) and 2016 ($9,231.60). July 17, 2017: Title conveyed to assignee of successful bidder by referee’s deed. November 3, 2017: Defendant’s motion to vacate default and set aside sale filed. January 17, 2018: Consent to change plaintiff’s attorney signed. December 4, 2018: Affidavit from secretary of state explaining process returned as “undeliverable” with the reason “attempted unknown/not known.” THE HEARING: A. Is There a Basis for Defendant’s Motion to Vacate Its Default and Set Aside the Judgment of Foreclosure and Sale? Defendant sought this relief pursuant to Civil Practice Law & Rules (CPLR) §311(a) (1) and CPLR §5015(a)(4). Defendant has not cited the correct CPLR section for service of process on a limited liability company. It has referenced CPLR §311 which deals with service upon a corporation. There is a separate section for service on a limited liability company (llc), CPLR §311-a. The court will interpret the motion as referring to the proper section. CPLR §311-a(a) lists the ways in which process may be served upon a limited liability company. Plaintiff selected a method authorized by the statute, service upon the secretary of state. Defendant contends that once plaintiff learned that process had been returned undelivered, it should have attempted service by another means. As noted below, there is no provision in the Limited Liability Company Law (LLCL) for what steps are to be taken when the mailing by the secretary of state is returned as “undeliverable” rather than “refused.” The way the courts have interpreted the equivalent sections of the Business Corporations Law (BCL) is that service is complete when delivered to the secretary of state. The failure of the named defendant to receive a copy of the process is generally not grounds to vacate a default judgment. As the time line set forth above indicates, although the secretary of state learned that the process was returned as “undeliverable” in May 2015, no affidavit as to that affect was prepared until December 2018 presumably for this motion. There is no indication that the plaintiff was ever notified that the process was never received by the defendant until the defendant’s motion in November 2017. It appears that the plaintiff throughout the litigation had sent all correspondence and motions to the address the defendant maintained with the secretary of state. Defendant should be arguing that CPLR §311-a(b) was triggered when the mailing was returned. This provides: If service is impracticable under subdivision (a) of this section, it may be made in such manner as the court, upon motion without notice, may direct. Defendant is asserting that the plaintiff had an obligation to attempt personal delivery or some other manner of service authorized by the statute either initially or when service as not actually effectuated. Records from the Department of State would establish that as of December 2007, the sole member of defendant llc, was the Abyssinian Development Corporation (ADC). This entity’s agent for service of process was Charles E. Simpson, Esq., at Windels, Marx, Lane & Mittendorf, LLP, 156 West 56th Street, New York, New York. Neither the secretary of state nor the plaintiff had any notice that the address the defendant maintained for service of process with the Department of State, 4 West 125th Street, was no longer valid. Had the secretary of state given notice to plaintiff that the process had been returned as “undeliverable,” when it learned that information in May 2015, plaintiff could have sought guidance from the court as to how to serve the defendant as provided for by CPLR §311-a(b). Ostensibly, plaintiff could have then attempted to serve ADC as set forth in CPLR §311 and if then unsuccessful applied to the court for guidance. This would mean delivering to an officer, director or agent of ADC or presumably to Charles Simpson the person designated by ADC in its corporate registration as its agent for service of process. However, as currently written, there is no requirement in the statute that a plaintiff undertake an alternate method of service once process has been successfully served upon the secretary of state. The conflict of interest claim by defendant, was triggered because counsel for the plaintiff when the litigation commenced was the Windels firm, which was also the lawyer for defendant when the defendant was organized in April 2005. It is unclear what legal services, if any, the Windels firm was performing for the defendant llc when it commenced this action for plaintiff. It is clear however, that Simpson, as agent for ADC was a member of the Windels firm when the litigation was commenced. Defendant has not provided the court with any specifics as to what legal services the Windels firm was providing to the defendant llc or ADC when the action was commenced or for that matter what legal services Simpson provided to either entity other than being designated as the person to whom process served upon ADC was directed. The issue is whether the plaintiff had to make any inquiry beyond that which appeared in the records of the Department of State for the defendant’s agent for service. As set forth below, the address registered with the Department of State is the same one registered with the New York City Department of Finance by defendant for receipt of its property tax bills. Also, had plaintiff undertaken a title search, it would produce a record of all the mortgages and liens against the property. They too, have defendant’s address as that of the ADC at 4 West 125th Street, New York, New York. All reasonable inquires would lead plaintiff to the same “undeliverable” address. The other section relied upon by defendant in its motion papers to vacate its default is CPLR §5015(a)(4). Defendant asserts that the court lacked jurisdiction to render the judgment because the summons and complaint was never received. Case law holds that this section of CPLR 5015 applies both to lack of subject matter jurisdiction and the failure to obtain personal jurisdiction. Here defendant asserts there was no personal jurisdiction because the process was returned to the secretary of state as “undeliverable.” Defendant alternatively cites CPLR §5015(a)(1) which permits relief from a judgment if there is an excusable default and a meritorious defense. Defendant is not seeking relief using CPLR §317 which permits a default to be vacated if service was made by other than personal delivery and there is a meritorious defense. This section is not applicable because case law has held that service upon the secretary of state as an agent for service of process, is not the type of agent contemplated for either CPLR §318 service or CPLR §317 relief [Seijas v. Rawhide Ranch, Inc., 99 Ad2d 739 (1984)]. That is, once the plaintiff establishes compliance with the requirements of a statute that permits service upon the secretary of state relief under CPLR §317 is not available to the defendant. Defendant asserts its excusable default is because it never received the process which commenced this action and had it, it would have defended that action. The failure to properly maintain a current address for service of process with the secretary of state, as occurred in this action, will defeat an application for relief from a default judgment based on an excusable default [Olivaria v. Lin & Son Realty Corp., 84 AD3d 423 (2011)]. Defendant has not offered an explanation as to why it failed to comply with the relevant statutes and keep its address updated with the secretary of state. There does not appear to be any decision applying this standard which arises from courts’ interpretation of the Business Corporations Law (BCL) to an llc. However, as service upon the secretary of state is permitted under BCL and the LLCL, the same reasoning should apply to preclude relief when the defendant fails to keep an address current. Defendant contends that it has at least two meritorious defenses. The first is that the plaintiff that originally commenced this action, NYCTL-2014-A Trust was not the owner of the debt, therefore it lacked the standing to bring the suit. This defect was corrected when the court granted plaintiff’s unopposed motion to amend the caption in May 2017. There is case law which holds that so long as there is no prejudice to the defendant, amending the caption is within the discretion of the court [CPLR §2001]. The record is clear that examination of the pleadings and the exhibits attached to it would have disclosed that the purchaser of the tax lien was the NYCTL 1998-2 Trust. This information was also readily available by searching the public records. This is consistent with the court’s holding in NYCTL 2005-A Trust v. Bullard Purchasing & Sales, Inc., 2012 WL 5183644 (Sup Ct. NY CO.)]. Defendant has raised the error in the caption as a “lack of standing” issue. Courts have distinguished between a defense based on the plaintiff’s lack of standing from one arising from the plaintiff’s lack of capacity to sue. An allegation of the plaintiff’s lack of standing triggers an inquiry as to whether the plaintiff has an interest in the claim at issue which the law will recognize as a sufficient predicate for determination of the issue being raised by the plaintiff, while lack of capacity leads to an inquiry into the litigant’s status, its power to appear and bring its grievance to the court [Wells Fargo Bank Minnesota v. Mastropaolo, 42 AD3d 239 (2007)]. The plaintiff has established that it had both the standing and capacity to bring this litigation. This scrivener’s error in pleading was corrected and prior to the foreclosure sale. In any case there is no prejudice to the defendant. Also, a potential meritorious defense is the defendant’s allegation that it entered into a payment agreement with the City of New York in May 2017 prior to the foreclosure sale to bring its outstanding real property bills current. The problem with this defense is that the agreement produced, is one for $2,377.94, which is an amount insufficient to bring the account current if compared to the tax lien certificate amounts in 2014 and 2016. Defendant implies that had the Department of Finance said there was more money owed for prior years, it would have included those amounts in the agreement and brought the entire account up-to-date. Defendant’s Installment Agreement specifically states: “The property listed above is, or may be, included in a list of properties on which there are tax liens that may be sold by the City of New York.” This statement should have triggered an inquiry by the defendant as to whether there were other unpaid years and at that point could have prevented the foreclosure sale. This argument is not credible. Should the City, when it entered into the May 2017 payment plan with the defendant, have known the entire amount due even though tax liens had been sold to the plaintiff? Probably yes. On the other hand, property tax bills are a matter of public record and can be checked by any one with access to a computer if they know either the street address of the property or its tax block and lot number. Sophisticated attorneys such as those engaged by the defendant using even a minimal amount of effort could have determined the exact amount due for real property taxes, discovered that there were tax liens in existence, and that a tax foreclosure proceeding was pending, irrespective of whether process was received. In fact, if you read over the relevant sections of Title 11 of the New York City Administrative Code, Chapters 3 &4, it becomes apparent that it takes a great deal of effort for a property owner not to know that the real property taxes are in arrears, that the lien is being sold and that the lien is being foreclosed. There are numerous notice requirements the City and the lien purchaser must give to the property owner before the process can be completed. Unfortunately, the entire process presumes that the City has a valid address from the property owner. It did not, because of the defendant’s failure to exert the minimum effort to have a valid address on file. A check of Department of Finance records discloses that the address to which tax bills were being sent was the same one defendant maintained with the Department of State. Is it any wonder that the defendant failed to get regularly scheduled tax bills, delinquency or lien notices? Not keeping a current address with the secretary of state along with the failure to tender the entire amount due for outstanding taxes extinguishes the defendant’s right to redeem the property and terminate the rights of a successful purchaser [Ameritek Construction Corp. v. Gas, Wash & Go, Inc.,247 Ad2d 418 (1998)]. Defendant is not entitled to the relief it is seeking. It lacks both a reasonable excuse and a meritorious defense. B. Service of Process Because New York on more than one occasion has confirmed Mama Rose’s observation in “Gypsy” that “New York is the center of New York” and not the center of the world, and this is the “unified” court system and not the “uniform” court system both the Limited Liability Company Law (LLCL) and Civil Practice Law & Rules (CPLR) must be examined to determine if process was properly served. CPLR §311-a sets forth how to obtain personal service on a limited liability company. Among the methods authorized is: “Service on a limited liability company may also be made pursuant to article three of the limited liability company law.” It should be noted that, although the LLCL was enacted in 1994, the legislature did not add CPLR §311-a until five years later in 1999. Plaintiff elected to serve the defendant pursuant to LLCL article three as permitted by CPLR §311-a. Because the property is a vacant lot, delivery to someone at the property was impossible. LLCL §301 provides that the New York secretary of state is an agent for service of process for every domestic limited liability company. The failure to designate the secretary of state makes the formation of the limited liability defective. LLCL §301 (c) provides: Any designated post office address to which the secretary of state shall mail a copy of process served upon him or her as agent of a domestic limited liability company or foreign limited liability company shall continue until the filing of a certificate under this chapter directing the mailing to a different post off address. Defendant 127 W138th Street, LLC, filed its Articles of Organization with the Department of State on April 1, 2005. At paragraph “Third” of this document it designates the post office address to which the secretary of state is to forward process as: Windels, Marx, Lane & Mittendorf, LLP 156 West 56th Street, New York New York 10019 Attn: Charles E. Simpson, Esq. A filing dated December 27, 2007 contained the following information; that is, the Abyssinian Development Corporation is the sole member of 127 W138th Street, LLC. The ADC is a domestic not-for-profit corporation. The copy of the initial organization papers filed for the llc and submitted as an exhibit in this litigation, does not indicate who are the members of the defendant llc. Whether a not-for-profit corporation such as ADC may be the sole member of a for profit entity such as a limited liability company is an interesting question. A review of LCL §102 “definitions” defines a member as a “person” and then goes on to list corporations as a “person.” Because the legislation does not distinguish between corporations formed under the Business Corporations Law from those created pursuant to the Not-For-Profit Corporations Law, a distinction which the secretary of state makes when it issues a filing receipt, ADC can be the sole member of defendant llc. This seems to be a mechanism for not-for-profits to engage in for profit activities. Although there does not appear to be any case law addressing this specific issue, the Court of Appeals did not question such a structure in a case regarding the extension of a tax exemption which a not-for-profit corporation held, to a for profit limited liability company it established [Matter of Greater Jamaica Development Corp. v. New York City Tax Commission, 25 NY3d 614 (2015)]. LLCL §301(e)(1) requires every limited liability company to biennially file a: statement setting forth the post office address…to which the secretary of state shall mail a copy of any process accepted against it served upon him or her. Such address shall supersede any previous address on file with the department of state for this purpose. Defendant filed a biennial statement in 2007 changing the designated agent for service from Windels, Marx, Lane & Mittendorf to: c/o Abyssinian Development Corporation, Attn: John T. Howard, 4 West 125th Street, New York, New York, 10027. Defendant’s biennial filing in 2009 and 2011 kept this as the address for service of process. Defendant concedes it failed to file any biennial statements since 2011. It offers no explanation as to why it ignored compliance with the statute. As noted above, this failure of the defendant to maintain a current address for service of process with the secretary of state, means that defendant llc’s authority to conduct business in New York is suspended. A current check of the records of the Department of State lists the defendant as an “active” entity and continues to have the Abyssinian Development Corporation as the address for service of process. The records of the Department of State for the Abyssinian Development Corporation list as the address to serve process on that entity as Charles E. Simpson, Esq., Windels, Marx, Lane & Mittendorf LLP, 156 West 56th Street, New York, New York 10019. The process server’s affidavit states she served the secretary of state in Albany on April 28, 2015. The parties provided the court with a video of the deposition of the process server in January 2019. The certified records from the Department of State indicate that the process received in this proceeding was sent c/o Abyssinian Development Corporation Attn: James T. Howard, 4 West 125th Street, New York, NY 10027, the last address on file for the defendant. The process was returned to the Department of State on May 22, 2015 marked “undeliverable” by the post office; with the further notation, “attempted unknown/not known.” Defendant asserts that it never had notice of the litigation which, based on the evidence, is an accurate statement. However, the reason it lacked notice is its failure to comply with the requirement of the LLCL. Defendant never updated the information mandated by statute that it was required to do [LLCL §301-A]. This section sets forth the procedure for a person designated to receive process to resign and to have a replacement designated. In fact, the failure to do so will result in the llc’s authority to do business being suspended [LLCL §301-A (b)] and for the restoration of authority upon a proper filing. LLCL §301-A sets forth the procedure for service of process upon a llc by delivery to the secretary of state. It provides that the secretary of state may personally deliver copies of the process to the llc or it may be “sent by or on behalf of the plaintiff to such limited company [sic] by registered or certified mail with return receipt requested to the last address of such limited liability company known to the plaintiff” [LLCL§301-A(e)(2)(ii)]. The section goes on to uphold the validity of such mail service if the acceptance was refused by the llc by requiring a second mailing by ordinary mail. The statute makes no provision for service of process by another means if the notice is returned as it was in this case as “undeliverable.” Failure to receive a copy of the process does not affect the validity of the service because “(s)ervice of process on such limited liability company shall be complete when the secretary of state is so served” [LLCL §303(a)]. This is consistent with equivalent sections of the Business Corporations Law (§306) and the Not-For-Profit Corporations Law (§306) which make service on the secretary of state complete. If the legislature wanted to make a provision requiring a plaintiff make service in another manner when it is returned to the secretary of state as “undeliverable,” it could have done so because the case law in New York has consistently held that delivery to the secretary of state completes service irrespective of actual receipt by the defendant. The law in New York has been that when a party fails to comply with statutory requirements of updating its address and as a result does not receive notice of an action against it, due process does not necessarily require the plaintiff to do anything more to give the defendant actual notice of the litigation [Clermont v. Intra-Op Monitoring Services, LLC, 2017 WL2239564, USDC/SDNY]. There is no evidence that the plaintiff had actual knowledge that the process was returned “undeliverable” until, in preparation for this hearing, it obtained the certification from the Department of State with that information. There is an additional problem for the defendant’s assertion that it lacked knowledge of the litigation in that a Notice of Sale by the foreclosure of the tax lien was published in the New York Law Journal on February 2, 9, 16 & 23, 2017. Subsequently there was a Notice of Postponement of the Sale published on March 15, 2017. If defendant was diligently monitoring its property it would have discovered the Notice of Sale and could have taken steps prior to the sale to vacate its default and defend the action on the merits. Defendant has failed to explain why it did not pay its real estate tax bills for several years which triggered the sale of the lien and its foreclosure. It was aware that real property taxes were due. The secretary of state should not feel offended that the defendant failed to change its address for notice with that office. A search of New York City Department of Finance records reflects 4 W 125th Street, New York, New York as the address where taxable status, real estate tax bills and other notices were sent from at least January 2013 through January 2017. It is no wonder that the taxes were not being paid by defendant if they were being sent to the same undeliverable address which defendant provided to both the Department of Finance and the Department of State. Based on the foregoing, it must be concluded that plaintiff complied with the LLCL requirements for service of process. It never obtained actual knowledge of another address at which to effectuate service. Nor is there any evidence that the secretary of state ever told plaintiff that the process was returned as “undeliverable” so that application could have been made to the court for an alternate means of service. The fact that the secretary of state did not have an accurate address is solely the responsibility of the defendant. The law does not require actual receipt of process for it to be effective. Reasonable compliance with the statute is all that is required, and plaintiff did that here. Foreclosure is considered an equitable remedy, therefore, defendant to seek relief from the court for its default, must also comply with the rules of equity. Defendant has unclean hands in that it failed to take the necessary steps such as complying with the LLCL to ensure it would get notice of any litigation, by keeping the name of its agent for service of process current. C. Was There A Conflict of Interest? Defendant contends that its rights were adversely affected because the Windels firm represented the plaintiff when this action was commenced; was the law firm that filed the initial articles of organization for 127 W138th Street, LLC; was the initial agent for service of process; at the same time the Windels firm was counsel for the Abyssinian Development Corporation and Charles E. Simpson, Esq. of the Windels firm is the agent for service of process for the ADC on its registration documents filed with the Department of State. Upon learning that there was a potential conflict of interest, the Windels firm withdrew as counsel for the plaintiff in January 2018. Defendant has not produced any documentation that at the time the action was commenced the Windels firm was performing any legal services for the defendant llc. Even if it were counsel or performing legal services for ADC, which likewise of which there is no documentation, those are two separate legal entities. The argument of defendant is that because ADC is the sole member of the llc counsel should have known this and therefore is in a conflict position. Ironically, had the Windels firm realized Simpson was the agent for service of process for ADC, it could have walked down the hall and served him rather than the secretary of state and obviated this additional litigation. A witness for the Windels firm testified that it did its normal conflict search through client records when the litigation started, and nothing was generated indicating it had any relationship with the llc. No search was done regarding ADC, but why would it, if ADC was only the agent for service of process. Defendant’s witness, Charles Simpson, stated that the conflict of interest search as described by plaintiff’s witness does not sound like it was done in the manner he believed the WIndels firm usually used. Rule 1.10 of the Rules of Professional Conduct (Rules) at paragraph (e) requires a law firm to “implement and maintain a system by which proposed engagements are checked against current and previous engagements….” Violation of the Rule would subject the offending lawyer or firm to a disciplinary proceeding. The Rules do not create a separate cause of action. The injured client would have a malpractice claim against the offending attorney. There is no such litigation pending by the defendant llc against the Windels firm. To prevail in such an action, the defendant would have to establish that it suffered damages directly arising from the breach of duty by the Windels firm [Engelke v. Brown, Rudnick, Berlack, Israels, LLP, 111AD3d 444(2013)]. There does not appear to be any relationship between the Windels firm having at one time been involved with the defendant and the defendant’s failure to pay its real property taxes or obtain notice of the litigation. Had a conflict search been conducted, the Windels firm would have been required to send the file to another attorney to prosecute the action. Assuming that was done, how would have this litigation been changed? Because you cannot serve a vacant lot and attempting personal delivery to the registered address of 4 West 125th Street would have also been ineffective, service would most likely have been made upon the secretary of state with the same results: returned as “undeliverable.” Defendant would have been in the same position it finds it self now, having lost the property in a foreclosure sale. And having no explanation as to how it arrived at this position. RECOMMENDATION: “Here’s another fine mess you’ve gotten me into,” was often directed by Oliver Hardy to Stan Laurel in an attempt to relieve himself from any responsibility for the situation in which they found themselves. Defendant 127 W138th Street, LLC, like Hardy is in this predicament resulting from its own failure to provide the Department of State and the New York City Department of Finance with an accurate address at which it could receive notice. The testimony of the process server and the manager at the agency confirm that service was made in accordance with the LLCL. The secretary of state complied with the mailing requirement as set forth in the statute. There is no showing that the plaintiff at anytime prior to the tax lien foreclosure transfer of the deed to the bona fide purchaser had actual knowledge that process had been returned as “undeliverable.” Any address plaintiff could have checked would have disclosed the same no longer valid address for the defendant, whether that was with the secretary of state, the finance department, or recorded documents generated from a title search. The traverse should be denied. Service of process was made in conformity with the statute. As to the conflict of interest issue raised by the defendant. Plaintiff’s witness testified as to the law firms process for searching client records for any potential conflict and that this process was followed. This complies with the requirements of the Rules of Professional Responsibility. Counsel ceased representing plaintiff when the potential conflict was made known to the firm. In any case, defendant has not shown how it was adversely affected by the alleged conflict of interest. The reason it did not have notice of the lien or the litigation was because defendant llc cavalierly ignored all the rules and regulations put into place to give it notice. This has nothing to do with the Windels firm’s activities in initially representing the plaintiff. Any conflict of interest that existed has been cured and while it existed there was no harm to defendant llc or its ability to defend this litigation. Finally, it does not appear that defendant is entitled to the relief it is seeking under the statutes which permit the vacating of a default judgment. The excuse for the default was self-inflicted and does not qualify as an excuse under the case law and the defendant has not set forth a meritorious defense. NOTICE: In accordance with CPLR 4403 and 22 NYCRR 202.44(a), following the filing of the report and notice to each party of the fling of the report, plaintiff, shall move with a copy of the transcript of the hearing, to confirm or reject all or part of the of the report within fifteen (15) days after notice of the filing of the report. If plaintiff fails to do so, then defendant shall so move, with a copy of the transcript of the hearing, within thirty (30) days after notice of the filing is given. See Rosen v. Buzz Me, LLC, 2009 NY Misc Lexis 4082, 2009 NY Slip Op 30211(U) (Sup Ct, NY Co. 2009); Gould v. Venus Bridal Gown and Accessories Corp., 148 Misc2d 589 (Sup Ct, NY Co. 1990). All such motions must include a copy of the transcript of the hearing. See Galiber v. Previts, 40 NY2d 822 (1976); see generally Kalfus v. Kalfus, 243 AD2d 324 (1st Dept 1997); Board of Manages of Brightwater Towers Condominium v. Lukashevskaya, 37 Misc3d 1202(A), (Sup Ct, Kings Co. 2012). Should no party move to confirm or reject this report within the time limits herein noted, the court, on its own motion, shall issue its determination, pursuant to 22 NYCRR 202.44. This constitutes the report of the Special Referee/Judicial Hearing Officer. July 23, 2019 ENTER: Philip S. Straniere Judicial Hearing Officer Notes: 1. It appears that each year at least one NYCTL entity is created to purchase New York City real property tax liens and then take steps to enforce and collect on those liens. These entities are formed in Delaware as trust, and they do not appear to be registered with the New York Department of State. Yet their business model requires them to use the courts of New York to enforce the claims purchased. Are these NYCTL entities paying any taxes on the revenue generated in New York? Because utilizing the court system is part of its business model, should not they be registered to do business to be able to maintain these actions in New York? 2. The New York City Department of Finance in its Assessment Roll each year for real property must disclose an “estimated” market value. Admittedly this is not the same amount that a real estate appraiser might fix as the fair market value of a property, but the statute required the City to make a good faith attempt at setting a value. This vacant land is 26 feet by 99.92 feet. For the 2017-2018 tax year the estimated market value was $84,000.00. The auction price paid in July 2017 was $590,000.00, a number significantly greater than the City’s market value estimate. The property was also used to secure a mortgage in January 2008 from Seedco Financial Services, Inc. to Odell Clark Place, LLC, in the amount of $1,500,000.00. It was used to secure a mortgage from Sustained Excellence Alliance Corporation to 127 W138th Street, LLC on May 12, 2005 for $250,000.00. On December 28, 2007, the property was used to secure a mortgage from Wachovia Bank to 127 W138th Street LLC, as part of a Building Loan Note from Wachovia to Odell Clark Place, LLC for $17,018,750.00. On March 19, 2018, Wells Fargo Bank, filed a satisfaction of mortgage with the City register indicating that a loan in the amount of $1,120,000.00 made on December 28, 2017 had been paid off by 127 W138th Street LLC. As noted above in the decision, all these documents list 4 West 125th Street as the address for the llc.
