186 Rest., Inc. v MGCM, Inc.

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186 Rest., Inc. v MGCM, Inc. 2012 NY Slip Op 31700(U) June 20, 2012 Supreme Court, New York County Docket Number: 102588/2009 Judge: Joan A. Madden Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. ANNED ON 612912012 [* 1] SUPREME COURT OF THE STATE OF NEW YORK PRESENT: WON. JOAN A. MADDEN - NEW YORK COUNTY PART \\ Justice INDEX NO. MOTION DATE -vMOTION SEQ. NO. MOTION CAL. NO. J ing papers, numbered 1 to were read on this motion tolfor PAPER4 NuhlBEREP Notice of Motion/ Order to Show Cause - Affidavlts - Exhlbits ... Answering Affidavits - ExhibltbJ qeplying Affidavits Gross-Motion: Yes m o Upon the foregoing papers, it is ordered that this motion xy h Dated: Check one: & I N N DISPOSITION 1 7 /@ @ON-FINAL J. S. C. , DISPOSITION 0 REFERENCE 0 DO NOT POST 0 SETTLE ORDER/ JUDG. SUBMIT ORDER/ JUDG. Check if appropriate: I [* 2] j i j I I I i I I I I Plaintiff, I -against- I I JUN 29 2012 I I I NEW YORK COUNTY CLERK S OFFlCE I I In this action to recover on a promissory note and personal guaranty, defendants move for an order pursuant to CPLK 3 17 and CPLR 5015 vacating the default judgment entered against them on November 18, 2010, in the total amount of $133,735.08. Plaintiff opposes the motion. 1 j I The motion is granted only to the extent of directing a traverse hearing on the issucs of service of process on individual defendant, Manuel Caisaguano and corporate defendant, I MGCM, Inc. If service is sustained, however, the default judgment shall stand. 1 The affidavits of service state that on March 24,2009, the summons and complaint were served on Manuel Caisaguano and MGCM, Inc. by delivering the papers to Louis Lesagu, at I 1586 Second Avenue, New York, Ncw York, 10028. The affidavit of service on Caisaguano i 1 I describes Imuis Lesagu as a person of suitable age and discretion who identified himself as authorized of recipient, and states that the next day, March 25, 2009, the papers were mailed to Caisaguano at the 1586 Second Avenue address. The affidavit does not specifjr whether the 1586 Second Avenue address is Caisaguano s actual place of business, dwelling house or usual I I place of abode. The affidavit of service on MGCM, Inc. states that the corporation was served I I ~ 1 I 1 [* 3] by personally delivering the papers to Louis Lesagu who s described as authorized. Plaintiff asserts that 1586 Second Avenue is the address of the restaurant defendants purchased from plaintiff in March 2008. Plaintiff s judgment, however, lists I 594 Second Ave. as the address for both Caisaguano and MGCM, IncV2 In support of the instant motion, Caisaguano submits an affidavit that the summons and complaint were not personally served on me and I was never made aware of this matter until I received the Marshall s Notice on or about June 27,201 1, Caisaguano submits a reply affidavit responding to plaintiff s opposition that he was served at the exact address where the restaurant is located, as supported by the affidavit of service. Caisaguano s reply affidavit challenges the content of the affidavit of service by stating, I do not know who Louis Lesagu is, the person who allegedly accepted service on my behalf. Caisaguano s sworn statement specifically denying any knowledge as to Louis Lesagu is sufficient to controvert the veracity and content of the affidavits of service which state that Lesagu was authorized of recipient, i.e. Caisaguano, and authorized by MGCM, Inc. Finkelstein Newrnan Ferrara LLP v. Manning, 67 AD3d 538 ( l S t Dcpt 2009); NYCTL 1998-1 Trust v. Rabinowitz, 7 AD3d 459 (1 Dept 2004). Such sworn, non-conclusory denial raises In connection with that purchase, MGCM, Inc. and Caisaguano as debtor executed a Security Agreement in favor of plaintiff as secured party ; MGCM, Inc., as borr~wer 7 executed a Promissory Note in the sum of $170,000, in favor of plaintiff as lender ; and Caisaguano executed an unconditional guaranty of the obligations contained in the Promissory Note. Caisaguano signed the documents in his individual capacity and as president of MGCM, Inca 2Theparties Security Agreement states that Caisaguano resides as 45-35 49 hStreet, Woodside, NY 11377, that MGCM Corp. has an office located at 1594 Second Avenue, New York, New York 10028, and that the Debtor s place of business is currently 1594 Second Avenue, and in the future at 1586 Second Avenue, New York, New York 10028. 2 [* 4] issues of fact requiring a traverse hearing as to whether Lesagu is a person of suitable age and discretion at Caisaguano s actual place of business, dwelling place or usual place of abode, within the meaning of CPLR 308(2), and whether Lesagu is authorized to accept service on behalf the corporation, MGCM, Inc. See Finkelstein Newman Ferrara LLP v, Manning, sutxa; NYCTL 1998-1 Trust v. Rabiaowitz, Supra; Ananda Capital Partners, Inc v. Stav Electrical Systems (1994) Ltd, 301 AD2d 430 (lJt Dept 2003); Gibson, D u m & Crutches LLP v. Ghbal Nuclear Services & Sueply, Ltd, 280 AD2d 360 ( l s tDept 2001); Columbus Realtv Investment Corn v. Tsiam, 226 AD2d 259 (lstDept 1996). The Court notes, that if the traverse hearing is resolved in plaintiff s favor and service is sustained, defendants motion must be denied, as they have not adequately demonstrated a meritorious defense. A meritorious defense is not necessary to vacate a default judgment based on lack of personal jurisdiction, since a default judgment is void for lack of personal jurisdiction over defendant and thus any judgment entered is a nullity. Kbanal v, Sheldon, 55 AD3d 684 (2nd Dcpt ZOOS), lv app den 12 NY3d 714 (2009); Hsberman v, Simon, 303 AD2d 181 (13,Dept 2003); plnanda Capital partners. Inc v, Stav Electrical Systems (19941 Ltd, supra; All Terraip Proxlerties, Inc. v. Hoy, 265 AD2d 87 (1 Dept 2000); Citxiano by Cipriano v. Hank, 197 AD2d 295 (1 nept 1994). A meritorious defense, however, is required to vacate a default judgment under CPLR 50 15 or CPLR 3 17. See E u E , 67 NY2d 138 (1986); M.R, v. 2526 Valentine LLC 58 AD3d 530 (1 Dept 2009); GroudCommercial Services, Inc v. 160-09 Jamaica Ave L,td Partnership, 25 AD3d 301 ( 18 Dept 2006). Here, defendants motion papers fall short of establishing a potentially meritorious 3 [* 5] defense. In his affidavit, Caisaguano merely states that [ulpon information and belief Defendants only owe Fifty Thousand Dollars ($SO,OOO). Defendants submit no supporting documents as to any payments purportedly made. Absent personal knowledge and documentary proof as to the amount actually paid, Caisaguano s affidavit does not provide a sufficient factual basis to substantiate a defense of partial payment. Defendants additional reliance on fraud as a ground for vacating the default is without merit. Thus, if aftcr the traverse hearing, service is sustained, the default judgment shall stand. Accordingly, it is ORDERED that the motion is granted only to the extent of referring the issues of service of process on defendants MGCM, Inc. and Manuel Caisaguano to a Special Referee to hear and report with recommendations, except that, in the event of and upon the filing of a stipulation of the parties, as permitted by CPLR 43 17, the Special Referee, or another person designated by the parties to serve as referee, shall determine the aforesaid issue; and it is further ORDERED that this matter is hereby referred to the Special Referee Clerk (Room 1 19M, 646-3 86-3028 or sprel~~courts,state.ny.us) placement at the earliest possible date upon the for calendar of the Special Referee Part (Part SRP), which, in accordance with the Rules of that Part (posted on thc Court s website www.n_yco~rts.Rovlsup~lina~i References link under at the Courthouse Procedures ), shall assign this matter to an availablc Special Referee to hear and report as specified above; and it is further ORDERED that counsel shall immediately consult one another, and counsel for defendants shall, within 15 days from the date of this decision and Order submit to the Special Referee Clerk by fax (2 12-401-91 86) or e-mail an Information Sheet (available at the 4 [* 6] References link on the court s website) containing all the information called for therein, and as soon as practical thereafter, the Special Referee Clerk shall advise counsel for the parties of the date fixed for the appearance of the matter upon the calendar of the Special Referee Part; and it is further ORDERED that the parties shall appear for the reference hearing with all witnesses and evidence they seek to present, and shall be ready to proceed, on the date fist fixed by the Special Referee Clerk subject only to any adjournment that may be authorized by the Special Referee Part in accordance with the Rules of that Part; and it is further ORDERED that the hearing will be conducted in the same manner as a trial before a Justice without a jury (CPLR 4320(s)) (the proceeding will be recorded by a court reporter, the rules of evidence apply, etc.) and, except as otherwise directed by the assigned Special Referee for good cause shown, the trial of the issue specified above shall proceed from day-to-day until completion; and it is further ORDERED that any motion to confirm or reject the Report of the Special Referee shall be made within the time and in the manncr specified in CPLR 4403 and Section 202,44 of the Uniform Rules for Trial Courts. The court is notifying the parties by mailing copies of this decision and order. 5

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