
    535 East 86th Street Corp., Respondent, v Franklin Mark et al., Appellants.
    [682 NYS2d 839]
   —Order, Supreme Court, New York County (Harold Tompkins, J.), entered February 2, 1998, denying defendants’ motion to vacate the order and judgment (one paper) entered on default on December 16, 1997 granting injunctive relief and setting the matter down for an inquest to determine monetary damages, unanimously reversed, on the law, the facts and in the exercise of discretion, without costs, the motion granted, the judgment vacated, the answer deemed served and filed, and the matter remanded for further proceedings, on condition that defendants pay plaintiff $500 within 30 days of the date of this order.

In view of the very short time period between the filing of the complaint and the entry of default, the absence of a formal motion to enter a default judgment, the ongoing settlement negotiations evincing defendants’ interest in resolving the dispute, and the potential merit of a defense to the claim, and especially in view of our policy preference for resolving disputes on the merits, we grant defendants’ motion as indicated, conditioned on defendants’ payment of $500 to plaintiff in recognition of the inconvenience and expenses incurred by plaintiff due to defendants’ default. Concur — Nardelli, J. P., Rubin, Tom and Mazzarelli, JJ.  