CACV of Colo., LLC v Atekha

[*1] CACV of Colo., LLC v Atekha 2009 NY Slip Op 51938(U) [24 Misc 3d 1250(A)] Decided on August 20, 2009 Civil Court Of The City Of New York, Kings County Dear, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on August 20, 2009
Civil Court of the City of New York, Kings County

CACV of Colorado, LLC, Plaintiff,

against

Elizabeth Atekha, Defendant.



CV-37321-05/KI



Appearances:

Daniels & Norelli, P.C.

Attorneys for Plaintiff

Elizabeth Atekha

Defendant pro se

Noach Dear, J.

Upon the foregoing papers and following an evidentiary hearing that was conduced on March 11, 2009, defendant's motion to vacate a judgment or to deem the judgment and/or stipulation satisfied is decided as follows:

FACTUAL BACKGROUND:

The defendant Elizabeth Atekha moved by order to show cause for, among other things, an order vacating a judgment that was entered upon her alleged default in complying with a stipulation of settlement or for an order deeming the stipulation satisfied. When the court entertained oral arguments, the court determined that defendant's motion presented issues of fact and that an evidentiary hearing was required. The court held the hearing on March 11, 2009 at which time both parties were afforded the opportunity to offer evidence in support of their position.

After due deliberation and upon careful examination of the evidence, and having had an opportunity to assess the credibility of the witnesses, the court makes the following findings of facts and conclusions of law:

The pivotal issues at the hearing were whether the defendant satisfied the judgment and whether plaintiff served a notice to cure prior to entering judgment pursuant to the stipulation.

As a condition precedent to plaintiff's entitlement to enter judgment due to defendant's default in complying with the terms of the stipulation was that the plaintiff was required to serve defendant with a five day notice to cure. From the outset, the court notes that papers submitted by plaintiff at the time the judgment was entered were insufficient to demonstrate that a notice to [*2]cure was served. In this regard, plaintiff submitted only a conclusory attorney's affirmation in support of its claim that a notice to cure was served prior to the judgment's entry. Indeed, the attorney neither indicated that he personally mailed the notice to cure nor described the procedures pursuant to which it was mailed. Under these circumstances, the mailing was not established (see Residential Holding Corp. v. Scottsdale Ins. Co., 286 AD2d 679 [2d Dept 2001]; Delta Diagnostic Radiology, P.C. v. Chubb Group of Ins., 17 Misc 3d 16 [App Term, 2d & 11th Jud Dists 2007]).

With respect to the first issue, the defendant did not meet its burden of establishing that she satisfied the terms of the stipulation of settlement and that the judgment was satisfied.

With respect to the second issue, the only proof submitted by plaintiff to prove that a notice of cure was mailed to the defendant was an affidavit dated March 5, 2009. Therein, the affiant averred that she mailed a notice to cure to the defendant on September 9, 2005, almost 3.5 years earlier. The affidavit contains no explanation as to how affiant was able to recall the mailing, nor does it indicate how the information contained in the affidavit was obtained.

DISCUSSION:

A stipulation is a contract and will be enforced according to its terms (McCoy v. Feinman, 99 NY2d 295, 302 [2002] [citations omitted]; Charter Realty & Dev. Corp. v. New Roc Assocs., LP, 293 AD2d 438, 439 [2d Dept 2002]). There is a strong policy in this jurisdiction favoring the enforcement of valid stipulations (Hallock v. State of New York, 64 NY2d 224, 230 [1984]; Navarro v. A. Trenkman Estate Inc., 279 AD2d 257 [1st Dept 2001]). However, where enforcement of a stipulation would be "unjust or inequitable or permit the other party to gain an unconscionable advantage, courts will afford relief" (Bank of New York v. Forlini, 220 AD2d 377, 378 [2d Dept 1995] [citations and quotations omitted]; see also Woody's Lbr. Co., Inc. v. Jayram Realty Corp., 46 AD3d 804 [2d Dept 2007]). Moreover,"[a] [stipulation] should not be interpreted in such a way as would leave one of its provisions substantially without force or effect" (John E. Andrus Mem'l Home v. De Buono, 260 AD2d 635, 636 [2d Dept 1999] [citations omitted]).

Here, as a condition precedent to plaintiff's right to enter judgment pursuant to the stipulation of settlement, plaintiff was required to serve defendant with a five day notice of cure. It is essential that the party seeking a default judgment comply with the notice to cure provisions contained in a stipulation of settlement because it provides the defaulting party notice and an opportunity to cure the defects before the aggrieved party can enter judgment for what is typically a higher amount (see 542 Holding Corp. v. Prince Fashions Inc., 46 AD3d 309, 310 [1st Dept 2007] [citations omitted] ["[t]he purpose of a notice to cure is to specifically apprise the [defendant] of claimed defaults in its obligations under the [stipulation of settlement] and of the [default provisions] of the [contract] if the claimed default is not cured within a set period of time"]; see also Manhattan College v. Akinbola-Lee, 2008 NY Slip Op 50337(U) [Nassau Dist Ct]; J.T.M. Group v. Fleischman, 2001 NY Slip Op 40456(U), 1 [App Term, 9th & 10th Jud Dists]). [*3]

Furthermore, since entry of judgment was conditioned upon service of a notice to cure, the plaintiff was required to provide sufficient proof that the notice to cure was served (Solid Gold Const. v. Robertson, 2003 NY Slip Op 51662(U) [App Term, 2d & 11th Jud Dists]; Electronic Servs. Intl. v. Silvers, 233 AD2d 361 [2d Dept 1996]; Capital One Bank v. Hembrick, 2007 NY Slip Op 52177(U), 2-3 [Civ Ct, New York County]).

As shown above, plaintiff's only proof of mailing was the March 5, 2009 affidavit in which the affiant averred that she mailed the notice to cure to the defendant with no explanation as to how she was able to recall the mailing almost 3.5 year after the fact. The court gives this affidavit absolutely no weight. While an affidavit of mailing that is executed at or around the time of the mailing raises a presumption that a proper mailing occurred (Engel v. Lichterman, 62 NY2d 943, 944-45 [1984]; Szaro v. NY State Div. of Hous. & Cmty. Renewal, 13 AD3d 93, 94 [1st Dept 2004]; see also Solid Gold Const. v. Robertson, 2003 NY Slip Op 51662[U]), the affidavit in this case was any thing but contemporaneous. The court thus concludes that the plaintiff did not meet its burden in establishing that it served a notice to cure. It necessarily follows that the judgment must therefore be vacated (see also J.T.M. Group v. Fleischman, 2001 NY Slip Op 40456(U), 1 [App Term, 9th & 10th Jud Dists]; Madison Ave. Leasehold, LLC v. Madison Bentley Assoc. LLC, 8 NY3d 59, 68 [2006]).[FN1]

There is one aspect of this case that remains puzzling. Plaintiff initially sued for $8,963.10 with interest from September 24, 2003. The summons and complaint is dated April 15, 2005. The stipulation of settlement dated May 12, 2005 stated that defendant owed $11,265.54. In December 2005, plaintiff entered judgment against the defendant for the suit amount, less $600 in payments, for a total of $10,027.17. Needless to say, the substantial difference in the amounts is cause for concern, especially since plaintiff's counsel drafted these documents.

For the sake of judicial economy, this court finds, among other things, that the stipulation was at best fatally indefinite or vague regarding the material and substantial term of the amount due and owing and the rate of interest (see generally Marlio v. McLaughlin, 288 AD2d 97, 99 [1st Dept 2001]; see also Cobble Hill Nursing Home, Inc. v. Henry and Warren Corp., 74 NY2d 475 [1989]; Behrends v. White Acre Acquisitions, LLC, 54 AD3d 700, 701 [2d Dept 2008]; see also 166 Mamaroneck Ave. Corp. v. 151 East Post Rd. Corp., 78 NY2d 88, 91 [1991]), or void at worst (see e.g. Abir v. Malky, Inc., 59 AD3d 646, 649 [2d Dept 2009] [citations omitted] ["usurious contract is void and relieves the plaintiff of the obligation to repay principal and interest thereon"]; see also Seidel v. 18 East 17th St. Owners, Inc., 79 NY2d 735, 740 [1992]).[FN2] [*4]Additionally, when determining what, if any, is due and owing under the stipulation and, alternatively, under the judgment amount after accounting for defendant's payments made, this court calculated that in order to obtain the stipulation amount of $11,265.54 in May 2005, the plaintiff used a civilly usurious rate of interest of over 16% per annum to arrive at that sum (see General Obligations Law § 5-501[1]; Banking Law § 14-a[1]; see also O'Donovan v. Galinski, 62 AD3d 769, 769-770 [citations omitted]).[FN3]

Thus, the court cannot put the parties back on the stipulation (see e.g. General Obligations Law § 5-501[1] supra; Banking Law § 14-a[1]; see also Bright v. Freeman, 24 AD3d 586, 588 [2d Dept 2005]). Although many motion courts in this type of situation have placed the parties back onto the stipulation, it is this court's opinion that pursuant to the Civil Court Act this court cannot compel specific performance with the stipulation (see e.g. Perez v. New York Presbyterian Hosp.,11 Misc 3d 722, 723 [Civ Ct, New York County 2006]).

Based on the above, it is hereby

ORDERED that defendant's application to vacate the judgment is hereby GRANTED after argument, and any judgment and all post judgment enforcement, including any income executions and restraints shall be vacated. Any monies or other assets that may have been collected in the enforcement of the judgment shall be returned to the defendant forthwith, provided that defendant serve an answer together with a copy of this Order on plaintiff and file proof of service of the answer and this order with the Court (Room 303) and the Judgment Clerk (Room 302) within 60 days of entry of this order; and it is further

ORDERED that upon compliance with the above conditions, the aforesaid judgment and all post judgment enforcement, including any income executions and restraints shall be vacated without further order of the Court. Any monies or other assets that may have been collected in the enforcement of the judgment shall be returned to the defendant forthwith without further order of the Court; and it is further

ORDERED that the clerk shall place this action on the appropriate calendar upon receipt of the answer, proof of service thereof and payment of the proper fee, if any; and it is further

ORDERED that should the defendant fail to comply fully with the terms of this order, the judgment shall stand in full force and effect and plaintiff shall be entitled to enforce execution as provided by statute; and it is further [*5]

ORDERED that defendant's application to deem the judgment or stipulation satisfied is DENIED as academic.

The foregoing constitutes the Decision and Order of the Court.

Dated: Brooklyn, New York

August 20, 2009

_________________________

Hon. Noach Dear

Civil Court Judge (NYC) Footnotes

Footnote 1: In any event, CPLR 5015 vests the courts with the inherent power to vacate default judgments, especially as here where the interests of justice require such action (Sabre, Inc. v. Paras Exims, Inc., 60 AD3d 563, 564 [1st Dept 2009] [citations omitted]).

Footnote 2: Further, this court notes that given the overwhelming one-sidedness of the stipulation, it appears the stipulation may fail for lack of consideration (see e.g. Debtor and Creditor Law § 273; see also O'Malley v. O'Malley, 41 AD3d 449, 451-452 [2d Dept 2007] [citations omitted]).

Footnote 3: This conclusion is bolstered because in light of the ethical rules placed upon attorneys, "there is simply no valid line of reasoning and permissible inferences which could possibly lead rational" fact finder to conclude that any grounds of enforcing the stipulation exist (see e.g. Lang v. Newman, 12 NY3d 868, 870 [2009]).