Opinion
January 2, 1986
Appeal from the Supreme Court, Rensselaer County (Cobb, J.).
In 1980, plaintiffs engaged a contractor to insulate their home with materials purchased from defendant. When it was discovered that the material had a lesser "R" value than purportedly represented by defendant, plaintiffs commenced the instant action for breach of warranty and fraud by service upon the Secretary of State pursuant to Business Corporation Law § 306. It is undisputed that the summons and complaint were returned to the Secretary of State as undelivered, apparently due to defendant's failure to maintain a current address on file. Plaintiffs ultimately obtained a default judgment against defendant in the amount of $13,460. Once notified, defendant promptly moved to vacate the default pursuant to either CPLR 317 and/or 5015. Special Term vacated the default but left the judgment intact as security pending a final disposition of the matter (see, e.g., Rubin v Payne, 103 A.D.2d 946). Plaintiffs have appealed.
There should be an affirmance. Since defendant did not personally receive notice of the action in time to defend, the issue distills to whether a meritorious defense was presented (see, Marquette Co. v Norcem, Inc., 114 A.D.2d 738; Epstein v Abalene Pest Control Serv., 98 A.D.2d 832). In his supporting affidavit, defendant's vice-president maintained that no contractual relationship existed between the parties and, in any event, the alleged misrepresentations as to the quality of the insulation material were not made by any of defendant's representatives. Despite plaintiffs' assertions that the affidavit was merely conclusory and without evidentiary support, we conclude that it sufficiently establishes a potential meritorious defense (see, R.M.R. Rest. v Bygaph Corp., 113 A.D.2d 994). Plaintiffs failed to specify in either their complaint or supporting affidavits the details of the alleged misrepresentations. This being the case, defendant was left with no alternative but to dispute the allegations and properly did so by affidavit of a corporate officer (see, Teichman v Gendelman, 87 A.D.2d 745; cf. Whitbeck v Erin's Isle, 109 A.D.2d 1032, 1033). The conflicting positions assumed by the parties may appropriately be addressed by the trier of fact. We do agree, as noted by Special Term, that lack of privity is not a viable defense to a fraud claim (see, McKinney Son v Lake Placid 1980 Olympic Games, 92 A.D.2d 991, 993, mod on other grounds 61 N.Y.2d 836). Based on the foregoing, we cannot say that Special Term abused its discretion in vacating the default judgment.
Order affirmed, without costs. Kane, J.P., Casey, Weiss, Yesawich, Jr., and Harvey, JJ., concur.