Riley v 543 E. 21st Ltd. Liab. Co.
Annotate this CaseDecided on February 17, 2005
Civil Court of the City of New York, Kings County
GRANTLEY RILEY, Plaintiff,
against
543 EAST 21ST LIMITED LIABILITY COMPANY and EMESS MANAGEMENT COMPANY, Defendant
1969/00
Donald Scott Kurtz, J.
Defendants move, pursuant to CPLR §§5015 and 2005, to vacate a judgment entered against them on July 23, 2004; pursuant to CPLR §321, substituting Rivkin Radler LLP (hereinafter "Rivkin") as attorneys of record for defendants; and directing that predecessor counsel provide Rivkin with all file materials pertaining to this suit.
This personal injury action arises from an alleged slip and fall on August 29, 1996 at defendants' premises. Plaintiff commenced this action by service of a summons and verified complaint and issue was joined by filing of a verified answer dated August 1, 1997. At that time, defendants were insured by Reliance Insurance Company and they were represented by the law firm of Winget, Spadafora & Schwartzberg, LLP (hereinafter "Winget"). On August 6, 2001, a consent to change attorney substituting the law firm of Hawkins, Feretic, Daly & Maroney, P.C. (hereinafter "Hawkins") for Winget was signed by defendant 543 East 21st LLP, Winget and Hawkins. After no one appeared on behalf of the defendants at the call of the trial ready calendar on August 4, 2003, a default was noted and an inquest was scheduled. At the inquest held on February 11, 2004, judgment was granted in favor of plaintiff in the amount of Five Hundred Thousand Dollars ($500,000.00). A judgment in that amount was entered on July 23, 2004.
Pursuant to CPLR §5015, a defendant moving to vacate a default judgment must demonstrate both an excusable default and a meritorious defense. See CPLR §5015; Eugene Di Lorenzo, Inc. v. A.C. Dutton Lumber Co., Inc., 67 NY2d 138 (1986); Hazen v. Bottiglieri, 286 AD2d 708 (2d Dept 2001); Presbyterian Hosp. in City of New York v. New York Cent. Mut. Ins. Co., 277 AD2d 299, 300 (2d Dept 2000). Determination of what constitutes a reasonable excuse for default lies within the sound discretion of the court. See CPLR §5015(a); Ruppell v. Hair Plus Beauty, Inc., 288 AD2d 205 (2d Dept 2001).
In support of this motion, defendants submit an attorney's affirmation as well as an affidavit from Brenda Brown, defendants' billing manager. Ms. Brown states that she first learned of the July 23, 2004 judgment after receiving a letter from plaintiff's counsel dated August 3, 2004, enclosing a copy of said judgment; that she contacted the Winget firm and was told that they were substituted by the Hawkins firm; that she contacted the Hawkins firm and was told they were not representing defendants in this action; and that the Hawkins firm informed her that they did not have files pertaining to this action and have no records of having appeared in this action. Thereafter, defendants retained the Rivkin firm. Ms. Brown maintains that she believed that this action was being defended and that defendants never intended to abandon the action.
Defendants' attorney's affirmation states that Reliance Insurance Company went into liquidation in October of 2001 and that the Hawkins firm advised him that at one time it was going to represent defendants because it believed that the New York State Liquidation Bureau was going to handle the matter. Thereafter, the Hawkins firm was advised that the Liquidation Bureau would not be handling this matter and therefore, Hawkins did not assume the defense from the Winget firm. The Court finds that defendants have demonstrated a reasonable excuse for their default based on law office failure and must now present a meritorious defense. See CPLR §2005; Parker v. City of New York, 272 AD2d 310 (2d Dept 2000); Lovario v. Vuotto, 266 AD2d 191 (2d Dept 1999).
In order to demonstrate a meritorious defense, a party must submit an affidavit from an individual with knowledge of the facts. See Fidelity and Deposit Co. of Maryland v. Arthur Andersen & Co., 60 NY2d 693, 695 (1983); Domenikos v. Miranda, 255 AD2d 481 (2d Dept 1998). Sufficiency of an affidavit of merit is a matter generally left to the discretion of the trial court. See Fidelity and Deposit Co. of Maryland v. Arthur Andersen & Co. at 695; Weber v. Victory Memorial Hosp., 98 AD2d 719 (2d Dept 1983); Perellie v. Crimson's Restaurant, Ltd.,108 AD2d 903, 904 (2d Dept 1985). The affirmation of an attorney which does not contain evidentiary facts from his or her personal knowledge is insufficient to establish a meritorious defense. See M. Cooper Motor Leasing, Ltd. v. Data Discount Center, Inc., 125 AD2d 454 (2d Dept 1986); Studebaker-Worthington Leasing Corp. v. Mitchell Titus & Co., 238 AD2d 576, 577 (2d Dept 1997). However, a verified answer, in lieu of an affidavit of merit, may constitute a sufficient statement of merit for purposes of vacating a default. See CPLR §3020(d); CPLR §105 (u); Celnick v. Freitag, 242 AD2d 436 (1st Dept 1997); Bethlehem Steel Corp. v. Solow, 51 NY2d 870, 872 (1980). [*2]
To demonstrate a meritorious defense, defendants submit the affidavit of Ms. Brown, wherein she states "we have been advised by defense counsel that there is a meritorious defense to this action." Conclusory hearsay statements by defendants' attorney are insufficient to demonstrate a meritorious defense. See Montrose Concrete Products Corp. v. Silverite Const. Co., Inc., 68 AD2d 904 (2d Dept 1979). See also Brown v. Rosedale Nurseries, Inc., 259 AD2d 256, 257 (1st Dept 1999). Defendants also submit an answer verified by defendants' counsel, denying the existence of a dangerous condition and setting forth several "boilerplate" affirmative defenses. A complaint verified by counsel who does not claim personal knowledge of the facts is insufficient to support a default judgment. See Saks v New York City Health & Hospitals Corp., 302 AD2d 213 (1st Dept 2003); Beaton v. Transit Facility Corp., ___ AD3d ___ (2d Dept 2005). Similarly, an answer verified by counsel who does not claim personal knowledge of the facts is insufficient to support vacature of a default judgment.
In view of the foregoing and in the interests of justice, defendants' motion, pursuant to CPLR §§5015 and 2005, to vacate a judgment entered against them on July 23, 2004 is denied with leave to renew upon a proper affidavit demonstrating a meritorious defense by one with personal knowledge of the facts. That part of defendants' motion seeking to substitute Rivkin as attorneys of record for defendants and directing that predecessor counsel provide it with all file material pertaining to this suit is granted without opposition. All restraints on defendants' bank account are hereby vacated.
The foregoing shall constitute the Decision and Order of the Court.
Dated: February 17, 2005
DONALD SCOTT KURTZ
Judge, Civil Court
ASN by__________ on __________
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