How an Incorrect Business Address Can Lead to a Default Judgment

Photo of a blank envelope to represent incorrect address default judgmentDon’t forget to double-check to see if the address on file with the New York Department of State for your company is correct. An incorrect address can lead to a default judgment. If your address is incorrect, you won’t receive notice of a pending lawsuit. That lack of notice can lead to a default judgment.

A client contacted us to vacate a default judgment entered against her company. Not only did the client claim she paid most of the debt, she swore the company never received notice of the lawsuit.

It turns out, she was right!

Through our research in preparing the application to vacate the judgment, we looked up the address on file with New York State. It turned out the reason the client had not received notice was because the address listed with the New York Department of State was not current. The company had moved years ago.

Although technically service of the summons and complaint on the client’s company was “proper,” the client hadn’t received notice, the case, therefore, defaulted resulting in a default judgment entered against the company.   

How an Incorrect Address Hurts You

When a business incorporates in New York (or becomes licensed to do business in New York) they register with the Department of State. The corporation’s status — such as active, inactive, or dissolved — is available to all as a public record. The posting includes the name, address and more. You can check the Department of State’s website to search for your own company.

One of the ways to serve notice of a lawsuit — as well as other actions and notices — on a corporation in New York is to serve the Secretary of State as an agent for the corporation.

In a civil action, a process server serves two copies of the summons and complaint on the State. The State keeps one copy and mails the second to you at the address listed with their office.

In our client’s case, the address on file was so old the post office did not forward it. No one thought to update the address on file with the Department of State. Even though the Department of State receives undeliverable mail, service is still valid on the Corporation.

Can You Vacate a Default Judgment?

The issue of a party failing to update an address with the state comes up frequently in debt collection. It’s a company’s responsibility to make sure that their records are kept up to date.

Willfully or not, faIling to update a corporation’s address is not an “excusable default” in New York. In the state, a company must prove both an excusable default and a meritorious defense to vacate a default judgment, an incorrect address doesn’t count.

Serving the Secretary of State as agent for a corporation is almost foolproof. We serve most of our B2B lawsuits on the Secretary of State.

If you’re looking for help in vacating a judgment entered against your company or looking to pursue a customer for non-payment, contact us for a consultation.

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