The following e-filed documents, listed by NYSCEF document number (Motion 001) 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37 were read on this motion for DEFAULT JUDGMENT. This breach-of-contract action arises from a transaction between the parties involving a $5,000 luxury watch. Plaintiff, Esha, Inc., and defendant, Hodinkee, Inc., agreed in November 2021 that Esha would sell Hodinkee the watch. Esha sent the watch and an invoice to Hodinkee. Hodinkee then emailed back a written contract, asking Esha to sign. Shortly afterwards, Esha sent a second invoice to Hodinkee, reflecting a slightly lower negotiated price for the watch. The parties then disputed whether Esha should be required to sign Hodinkee’s contract as a prerequisite for receiving payment on the invoices. Esha brought this action, asserting claims for breach of contract, account stated, and unjust enrichment. Esha seeks payment for the face value of the watch plus shipping costs (totaling $5,052); and also 18 percent annual default interest and attorney fees, as provided for on the invoices.1 Hodinkee did not appear or respond following service of the complaint. Esha now moves for default judgment under CPLR 3215, seeking $5,052 for the face value of the watch plus shipping costs, $464.19 in default interest, and $5,305.65 in attorney fees and costs. Hodinkee opposes the motion and asks this court to require Esha to accept Hodinkee’s answer.2 The default-judgment motion is denied; Hodinkee’s request for an order requiring acceptance of the answer is granted. DISCUSSION Esha’s moving papers satisfy the requirements of CPLR 3215. This court concludes, though, that Hodinkee has shown a sufficient basis to require Esha under CPLR 3012 (d) to accept Hodinkee’s otherwise-untimely answer so that this action can be decided on its merits. In considering whether to grant an application under CPLR 3012 (d), the Appellate Division, First Department, has held that a court should consider factors such as “the length of the delay, the excuse offered, the extent to which the delay was willful, the possibility of prejudice to adverse parties, and the potential merits of any defense.” (Emigrant Bank v. Rosabianca, 156 AD3d 468, 472-473 [1st Dept 2017]; accord Gordon Law Firm, P.C. v. Premier DNA Corp., 205 AD3d 416, 417 [1st Dept 2022] [same].)3 The record reflects that Esha served Hodinkee via the Secretary of State on April 1, 2022. (See NYSCEF No. 2.) Hodinkee was therefore required to appear and respond by May 2, 2022. (See CPLR 320 [a]; General Construction Law §25-a.) Upon Hodinkee’s failure to do so, Esha moved for default judgment on May 23, 2022. (See NYSCEF No. 3.) The delay here was thus only a matter of weeks. Hodinkee explains its failure to appear through the affidavit of its chief financial officer.4 The affidavit represents that although Hodinkee’s employees in New York City — located at the address on file with the Secretary of State — were notified in early 2022 “to monitor daily mail deliveries closely for any documents that may appear to be a service of process or any other correspondence related to this claim via postal delivery,” Hodinkee did not receive service of the summons and complaint.5 (NYSCEF No. 23 at 12.) This explanation, which goes beyond a mere conclusory denial of receipt, constitutes a reasonable excuse for Hodinkee’s default — particularly since an attorney for Hodinkee undisputedly contacted Esha’s counsel the same day that Hodinkee received the current default-judgment motion. (NYSCEF No. 24 at 15.) For that same reason, Esha has not established that Hodinkee willfully defaulted. And Esha does not attempt to show that it has been prejudiced by the delay in Hodinkee’s responding to the complaint. Additionally, Hodinkee has a potentially meritorious defense. With respect to Esha’s breach-of-contract and account-stated claims, questions exist about when Esha is asserting a contract to have been formed and what that contract would consist of; whether the asserted agreement between the parties on which Esha relies encompasses default-interest and attorney-fee provisions; whether Hodinkee’s transmission to Esha of a full written contract along with a request for Esha to sign constitutes an unagreed-to counterproposal that defeats the formation of a contract; and whether Hodinkee’s later repeated requests to Esha to sign that written contract as a condition of payment constitute objections to Esha’s invoices for account-stated purposes. With respect to Esha’s unjust-enrichment claim, it is undisputed that Hodinkee offered to return the watch at issue, and that Esha refused the offer. Esha points out that Hodinkee’s offer occurred days after Esha filed the complaint; but that offer was still made before service realistically could have reached Hodinkee. In any event, Esha does not definitively show that it may obtain judgment on an unjust-enrichment claim for the face value of a watch (plus accrued contractual interest) when Esha refused to accept the return of the watch itself. This court need not, and does not, definitively decide any of these merits-related issues. The court concludes only that Hodinkee has defenses to Esha’s claims that are at least potentially meritorious. That conclusion, combined with the other CPLR 3012 (d) factors, warrants denying Esha’s default-judgment motion and granting Hodinkee’s application to require Esha to accept its answer. Accordingly, it is ORDERED that Esha’s CPLR 3215 motion for default judgment is denied; and it is further ORDERED that Hodinkee’s application for an order requiring Esha to accept Hodinkee’s untimely order is granted, on condition that Hodinkee file an answer within 20 days of entry of this order; and it is further ORDERED that if Hodinkee does not answer within 20 days of entry, absent good cause shown the court will grant default judgment against Hodinkee on the written request of Esha (which shall be e-filed and emailed to [email protected]); and it is further ORDERED that Esha serve a copy of this order with notice of its entry on Hodinkee. Dated: October 7, 2022
