A state appeals court has ruled that a fine art financing company and a loan servicer defaulted on second amended counterclaims leveled against them worth $10.2 million despite their contention that they hadn’t defaulted because they’d replied to “previous iterations” of the counterclaims.

The Appellate Division, First Department court also has turned back the financing company and loan servicing company’s arguments that state Civil Practice Law and Rules 321(c), which stays an action for a certain time when there’s death, removal or disability of an attorney, should have paused the lawsuit and, therefore, caused them not to default.

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