CCU LLC v Steier
Annotate this CaseDecided on December 7, 2012
Civil Court of the City of New York, Kings County
CCU LLC, Plaintiff,
against
Alexander Steier, Defendant,
CV-066150-05/KI
Cohen & Slamowitz, LLP for Plaintiff
Alexander Steier, pro se
Noach Dear, J.
This action began as an attempt by Plaintiff CCU LLC (henceforth, "CCU" or "Plaintiff") to collect a debt allegedly owed by Defendant Alexander Steier (henceforth, "Steier" or "Defendant"). A default judgment was entered against Steier in October of 2005. Thereafter, Plaintiff began enforcement through garnishment of Defendant's salary. Steier filed an Order to Show Cause in 2012 seeking to vacate judgment and income executions and to restore the case to the calendar. Following several adjournments, on September 13, Defendant's motion was granted on consent of the parties and a trial date of November 1 was set.
As part of this Court's standard order vacating a default judgment, Plaintiff was directed that it was to within 10 days return any monies that had been collected in the enforcement of the judgment. Following an anticlimactic trial to which Plaintiff brought no witnesses, this Court found in favor of Defendant. When asked by this Court why the garnished funds had not yet been returned despite more than ten days having passed, counsel for CCU, Eric Greenberg of Cohen & Slamowitz, LLP, stated that it was "[p]robably a clerical error and I'm profoundly sorry that was the case. I will make sure that it is returned as soon as I get back to my office" [11/1/12 Transcript, at 4:2-4]. Mr Greenberg was cautioned that, if the funds were not returned [*2]by November 13, his firm would be held in contempt and would be required to pay $500 per day from November 1, 2012 until payment is made [Id., at 4:16-5:13].
Instead of complying, on November 9, Plaintiff's attorneys filed an Order to Show Cause seeking to stay this Court's various orders and to reargue Defendant's motion to vacate the default judgment (to which it consented on September 13). By taking it to a different judge who was unfamiliar with the history of this case, the OSC was signed. Attempts to recoup the garnished funds were stayed conditional on Plaintiff's deposit of the complete sum collected with the Clerk of the Court. CCU has provided no proof that it has done so.
Both parties were, as previously scheduled, before this Court on November 13 to address the return of the garnished funds. Upon presentation of the OSC, this Court elected to, upon consent of the parties, address the motion on its merits the next day [11/13/12 Transcript, at 11:20-12:4]. At that hearing, CCU's counsel explained that the ground upon which it sought to vacate the September 13 decision on consent is duress [11/14/12 Transcript, at 24:1-2] and that Cohen & Slamowitz needed time to file a reply [Id., at 25:17-21]. This Court set a deadline of November 23 to do so and elected to take the motion on submission [Id., at 34:7-9]. Unfortunately, CCU's reply addresses the merits of Steier's OSC, irrelevant at this stage, rather than the merits of its own motion.
I. By Failing to Seek to Vacate the Court's 9/13/12 Order Prior to or During Trial, CCU Waived the Right to Do So
Plaintiff's counsel acknowledged that the September 13, 2012 order vacating the default judgment was issued on consent [Affirmation of Eric Greenberg, at ¶10] and gives no reason why he failed to review the file between the hearing date, September 13, and the trial date, November 1, at which point he "realized the drastic mistake ... consenting to have the judgment vacated" [Id., at ¶ 12]. As Plaintiff's counsel neither moved to vacate the Court's September 13, 2012 order nor raised the issue at trial, CCU waived its right to do so thereafter.
II. Even Were Plaintiff's Motion Timely, No Grounds To Vacate Have Been Demonstrated
An order entered on consent, effectively a stipulation entered into in open court, will not be vacated absent sufficient cause. Only those bases that would warrant vacating a contract such as fraud, collusion, mistake or accident would allow a party to be relieved from the consequences of its agreement (Hallock v. State, 64 NY2d 224, 230 [1984]; Racanelli Const. Co., Inc. v. Tadco Const. Corp., 50 AD3d 875 [2d Dept. 2008]; Department of Housing Preservation And Development v. French Open, 23 Misc 3d 1138(A), 889 N.Y.S.2d 505 (Table) [2009] ["The Consent Order entered into between the parties is a contract that sets forth the obligations that must be met in order to fulfill its intent."]; Aguilar v. Elk Drive, Inc., 117 Misc 2d 154, 157 [1982]["The fundamental rule of law is that a stipulation or Consent Order is to remain undisturbed unless a party seeking vacatur can show ... good cause therefor, such as fraud, collusion, mistake, accident, or some other ground of the same nature.'"][citations omitted]). [*3]
In its papers, Plaintiff asserts that its counsel's consent to vacate the default judgment "occurred as a result of both duress and a mistake" [Affirmation of Eric Greenberg, at ¶13]. At the hearing held on November 14, another member of Cohen and Slamowitz explained that Plaintiff's position is based on "[d]uress, undue duress. Undue influence, duress" [11/14/12 Transcript, at 24:1-2]. And in CCU's reply, "duress and intimidation" are the stated bases [Reply, at ¶3]. Thus, to the best of this Court's understanding, the alleged grounds for vacating the September 13 order are mistake and duress.
A. Mistake
Court ordered relief based on mistake in entering a contract is rarely granted (Simkin v. Blank, 19 NY3d 36, 52 [2012]["We have explained that [t]he mutual mistake must exist at the time the contract is entered into and must be substantial....Court-ordered relief is therefore reserved only for exceptional situations."] [internal quotation marks and citations omitted] ). Based on Mr. Greenberg's affirmation, it appears that the alleged mistake was Plaintiff's alone, not mutual, and, thus, absent extreme circumstances insufficient grounds to vacate a consent order (Thor Properties, LLC v. Chetrit Group LLC, 91 AD3d 476, 478 [1st Dept. 2012] ["To void a contract for mistake, the mistake must be mutual, substantial and must exist at the time the parties enter into the contract."]). Even absent such an admission, it is clear that this was not a "mutual mistake" as discussed in the case law (Aventine Inv. Management, Inc. v. Canadian Imperial Bank of Commerce, 265 AD2d 513, 514 [2d Dept. 1999] ["A claim of mutual mistake is stated where the allegations indicate that the parties have reached an oral agreement and, unknown to either, the signed writing does not express that agreement."]). Both parties intended for the default judgment to be vacated as stated in the order, whatever regrets Plaintiff is now having. Equities also do not favor vacating the consent order as doing so would greatly prejudice Steier's rights. Thus, the Court will not vacate its September 13 order based on "mistake."
B. Duress or Undue Influence
CCU also asserts that there was duress or undue influence leading its counsel to consent to vacate judgment improvidently. Both of those grounds, however, are based on the conduct of the other party to the agreement (Madey v. Carman, 51 AD3d 985, 987[2d Dept. 2008][duress]; Hearst v. Hearst, 50 AD3d 959, 961-962 [2d Dept. 2008][undue influence]). There has been no assertion of any such behavior by Steier, rather by the Court and its former court attorney. Accordingly, "traditional" duress and undue influence are inapplicable here.
Plaintiff's counsel, in fact, appears to be claiming that the source of the duress and undue influence is this Court. There appear to be few civil cases where such a claim was advanced, always unsuccessfully (Kyle v Lebovits, 17 Misc 3d 1124[A], 2007 NY Slip Op 52132[U][2007] [upholding settlement agreement]; Medical Recovery Servs. v Carnes, 148 Idaho 868, 872, 230 P3d 760, 764 [2010] ["the fact that legal proceedings can be intimidating does not amount to such coercion or duress as would render payment involuntary."]; Turesky v. Carp, 1993 WL 273750, *3 [MassAppDiv 1993][upholding consent to Agreement for Judgment]). Here too, the [*4]result will be the same. Other than blanket, inaccurate statements about this Court's adjournment policies [Affirmation of Eric Greenberg, at ¶¶9-10], no details of the allegedly problematic conduct have been provided. What at first glance appeared to be elaborations [see 11/14/12 Transcript, at 19:19-22, 27:22-24], are actually referring to trial, November 1, a month and a half after the consent order was entered and assail the capabilities of young lawyers more than state a grievance against this Court. Accordingly, counsel's consent to Defendant's motion of his own volition and based on his own reasoning, was not due to duress or undue influence and the September 13 order will not be vacated .
III. Contempt
This Court has repeatedly informed CCU's counsel that they are in violation of the September 13 order to the extent that the garnished funds have not yet been returned to Steier [see, for example, 11/1 Transcript, at 3:17-25]. At one juncture, Mr. Greenberg alleged that it was "[p}robably a clerical error and I'm profusely sorry that was the case. I will make sure that it is returned as soon as I get back to my office [Id., at 4:3-5]. This Court exhorted him to do so and stated that a contempt hearing would be held on November 13 if the money still had not been returned [Id., 4:17-5:11]. Any jurisdictional defects therefor were waived by counsel's appearance that day.
Plaintiff's OSC, as signed on November 9, ordered "that pending a determination of this motion and upon Plaintiff's deposit with the Clerk of the Court of the sum representing any money collected from Defendant as a result of the judgment...any action by Defendant or the court in regard to Plaintiff's return of any money collected from Defendant as a result of the judgment shall be stayed." Neither CCU nor its counsel has provided any proof that it made such a deposit and, when this Court investigated on its own initiative, the Clerk's office noted that they have no record of such a payment. Accordingly, the order to return the funds prior to November 13 was not stayed and Plaintiff is in continuing violation of this Court's orders of September 13 and November 1.
As a result of Plaintiff's failure to meet the conditions for a stay and in light of this order and prior notice provided in person to the parties, this Court intends to hold a civil contempt hearing on December 17, 2012 to determine whether and, if so, how much money to award Steier for the damage caused by Plaintiff's conduct.
Ordered that Plaintiff's motion to vacate this Court's September 13, 2012 order is denied in its entirety; and it is further
Ordered that a contempt hearing will be held on December 17, 2012 to determine whether Plaintiff and/or its counsel should be sanctioned for failing to obey this Court's September 13, 2012 order.
The foregoing constitutes the Decision and Order of the Court.
Dated: Brooklyn, New York
[*5]
December 7, 2012
_________________________
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