Matter of Avant Guard Props., LLC v City of New York

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Matter of Avant Guard Props., LLC v City of New York 2012 NY Slip Op 32655(U) October 18, 2012 Supreme Court, New York County Docket Number: 115209/2010 Judge: Barbara Jaffe 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. SCANNED ON I012212012 [* 1] SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY m BARBARA JAFFE V/ll PRESENT: PRESENT: - J BARBARA JAFFcf s. - Index Number : 115209/2010 IN RE:AVANT GUARDS vs. CITY OF NEW YORK, ET AL. SEQUENCE NUMBER : 003 DEFAULT JUDGMENT The following papem, numbered I t o Notice of YotionlOrder to Show Cause - Exhibits Answering Affidavits L* INDEX NO. MOTION DATE MOTION SEQ. NO. 7 - ,were read on thls motion tolfor -Affidavits - Exhlbits IN o INob). INo(s). ReplyingAffldavlts ~ 5 PART J. C, Justke ( f 3 I . L Upon the foregoing paperg, it is ordered that this motion is OCT 22 2012 NEW YORK COUNTY CLERK'S OFFICE Dated: I.CHECK ONE: ..................................................................... 2 CHECK As APmoPRwm 3. CHECK IF APPROPRIATE: .............. MOTION is: CASE DISPOSED GRANTED ................................................ J~(ICENED SETTLE ORDER 0DQ NOT POST 0SUBYiT ORDER 0FIDUCIARY APPOINTMENT 0REFERENCE [* 2] Argued: 5122112 Motion seq. nos.: 003,004,005,006 DECISION & ORDER THE CITY OF NEW YORK, NEW YOFK CITY INDUSTRIAL DEVELOPMENT AGENCY, NEW YOFX CITY ECONOMIC DEVELOPMENT CQRPORATION, and SETH PINSKY, in his Official Capacity as Chair of the New York Ct Industrial iy Development Agency and President of the New York City Economic Development Corporation, Respondents. AVANT GUARD, .NC., BARRY BORGEN, PAUL FILED OCT 22 2012 ' NEW YORK COUNTY CLERK'S OFFICE R O W , and ZADOK ZVI, Additional Counterclaim Respondents. BAzlsqRA JAFFE, JSC: For petitioner/Borgen/Zvi: Ann G.Kayman,Esq, 29 Broadway, Ste. 2222 New York, NY 10006 212-227-8283 For NYCIDA: Leonard M.Braman, ACC Michael A. Cardozo 100 Church St., Rm.20-101 New Yo& NY 10007 2 12-788-0967 By notice of motion dated January 17,2012, NYCIDA moves pursuant to CPLR 3212 for an order granting it summary judgment on its counterclaims and dismissing the complaint. Petitioner Avant Guard Properties, Inc. and counterclaim respondents Avant Guard, Inc., Borgen, [* 3] and Zvi oppose. By notice of motion dated January 17,20 12, NYCLDA moves pwsuant to CPLR 32 15 for an order granting it a default judgment against counterclaim respondent Zvi. Zvi opposes. By notice of motion dated January 17,2012 and submitted on default, responded counter-claimant New York City Industrial Development Agency (NYCIDA) moves pursuant to CPLR 3215 for an order granting it a default judgment against counterclaim respondent Rouhmi, and pursuant to CPLR 102, for an order amending the caption. The motions are consolidated for decision. I. MOTION FOR SUMMARY JUDGMENT The parties' submissions raise triable issues as to whether petitioner and counterclaim respondents Avant Guard, Inc., Borgen, and Zvi defaulted under their lease andor breached,their contracts with NYCIDA by improperly altering the use of the premises at issue when they installed a gym on the premises, and by illegally subletting the premises and failing to make payments timely, and whether NYCIDA is thus entitled to damages upon its termination of the parties' lease. No discovery has yet been conducted. 11. MOTION FOR A DEFAULT JUDGMENT AGAINST ZVI While Zvi's verification of his reply to NYCIDA's counterclaims is untimely, NYCIDA has it and has demonstrated no resulting prejudice from the delay. (Kornmeh v Ct ofNew York, iy 96 AD3d 476 [ 1'' Dept 20121; b & R Global Selections, S,L. v Pineiro, 90 m 3 d 403 [l"Dept 201 11). Moreover, there is a preference for resolving actions on the merits, and as triable issues exist as to whether NYCIDA is entitled to judgment on its counterclaims (see supra, I), Zvi has established a meritorious defense. (See Med Facilities, Inc. v Pryke, 172 AD2d 338 [l& Dept 2 I [* 4] 19911 [merits of plaintiff s claim demonstrated by denial of defendant s summary judgment motion]). 111. MOTION FOR A DEFAULT JUDGMENT AGAINST ROUHANI NYCIDA has demonstrated that it properly served Rouhani w t its verified answer wt ih ih counterclaims and that Rouhani failed to appear or answer timely. However, its investigation as to Rouhani smilitary status was conducted before the default, and thus,the motion for a default judgment may not be granted absent a military affidavit reflecting a post-default investigation as to his military status. (8B Carmody-Wait 2d 6 63:181 [2010] [affidavitmust be based on investigation after default]; Sunset 3 Real@ v Booth, 12 Misc 3d 1184[A], 2006 NY Slip Op 5 1441[VI [Sup Ct, Suffolk County 20061; US Bank v Coaxurn,2003 WL 225 18 107,2003NY Slip Op 5 1384[U] [Sup Ct, Westchester County]; Citibunk, N.A. v McGurvey, 196 Misc 2d 292 . [Civ Ct, Richmond County 20031). Moreover, as discussed above, triable issues exist as to the merits of NYCIDA s counterclaims. (See supra, I). IV. AMENDMENT OF CAPTION The parties have stipulated to amend the caption to reflect that this proceeding, originally commenced as an Article 78 proceeding, is now solely a plenary action for damages and declaratory relief. Moreover, they agree that petitioner, now plaintiff, will discontinue the action against all defendants other than NYCIDA, and that the notice of petition will be converted to and deemed a summons. V. C O N Q U m Accordingly, it is hereby ORDERED,that respondenthounterclaimant New York City Industrial Development 3 I I [* 5] Agency s motion for summary judgment is denied (sequence no. 006); it is further ORDERED, that respondentkounterclaimant New York City Industrial Development Agency s motion for a default judgment against counterclaim respondent Zadok Zvi is denied (sequence no. 005); it is M e r ORDERED,that that responden~countercl~m~t York City Indusbial Development New Agency s motion for a default judgment against counterclaim respondent Paul Rauhani is denied without prejudice to renew (sequence no. 003); it is further ORDERED,that that respondentkounterclaimant New York City Industrial Development Agency s motion to amend the caption is granted (sequence no. 004); it is further ORDERED, that all papers, pleadings, and proceedings in the above-entitled action be I amended by: (1) substhting Avant Guard Properties, LLC as the plaintiff for Avant Guard Properties, LLC as the petitioner, (2) substituting New York City Industrial Development Agency as the defendant for New York C t Industrial Development Agency as the respondent, iy (3) esubstituting Avant Guard, hc., Barry Borgen, Paul Rouhani, and Zadok Zvi as additional counterclaim defendants for Avant Guard,Inc., B r y Borgen, Paul Rouhani, and W o k Zvi as ar additional counterclaim respondents, (4) removing The City of New York, New Yor kCity Economic Development Corporation, and Seth Pinsky as respondents f o the caption and rm action, and ( 5 ) converting the notice of petition to and deeming it to be a summons, without prejudice to the proceedings heretofore had herein; it is further ORDERED, that counsel for plaintiff shall serve a copy of this order with notice of entry upon the County Clerk (Room 14I )and the Clerk of the Trial Support Ofice (Room 158), who S are directed to amend their records to reflect such change in the caption herein; and it is M e r 4 [* 6] ORDERED, that the matter is referred to the Case Management Ofice for the scheduling of a preliminary conference. ENTER: DATED: October 18,2012 New York, New York 5

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