ADMV Cattle v Kosher

[*1] ADMV Cattle v Kosher 2013 NY Slip Op 51990(U) Decided on December 5, 2013 Supreme Court, Kings County Battaglia, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 December 5, 2013
Supreme Court, Kings County

ADMV Cattle, Plaintiff,

against

Avi Glatt Kosher AND SHALOM GLATT SUPERMARKET, INC., Defendants.



20547/12



Plaintiff ADMV Cattle was represented by William W. Siegel, Esq. Defendant Shalom Glatt Supermarket Inc. was represented by Revaz Chachanashvilli Esq. of Revaz Chachanashvilli & Associates.

Jack M. Battaglia, J.

By Order to Show Cause dated August 16, 2013 of Hon. Debra Silber, defendant Shalom Glatt Supermarket, Inc. moves for an order, among other things, vacating a Judgment against it for $80,244.17, entered on May 23, 2013 upon its default in answering the summons and complaint of plaintiff ADMV Cattle, LLC.

"A defendant seeking to vacate a default in appearing or answering must demonstrate a reasonable excuse for the default and a potentially meritorious defense to the action." (See Wells Fargo Bank v Malave, 107 AD3d 880, 880-81 [2d Dept 2013].) Here, the papers submitted by Defendant in support of the order did not include an affirmation or affidavit of anyone with personal knowledge as to either the reasonable excuse or meritorious defense prong of the required showing. Nonetheless, on the return date for the motion, and in the interest of judicial efficiency, Defendant was granted leave to submit the requisite proof in its reply to Plaintiff's opposition. Defendant [*2]submits an affidavit of Boris Nisimov, "the owner of" defendant Shalom Glatt Supermarket, Inc. (see Affidavit by Defendant ¶ 1.)

This action was commenced on October 17, 2012 with the filing of a summons and verified complaint, the latter seeking $65,520.88 as payment for "work, labor, services, supplies and/or goods" (see Verified Complaint ¶¶ 3, 7.) An Affidavit of Service through the Department of State as to Defendant was filed on November 8, 2012 (see CPLR 311[a][1]; BCL §306.) Plaintiff submits with its opposition to this motion a Receipt for Service from the Department, showing a "Service of Process Address" for Defendant at 100-17 Queens Blvd., Forest Hills.

Plaintiff's Application for Judgment dated May 1, 2013 was made to the clerk pursuant to CPLR 3215(a), accompanied by the Affidavit of Service and an Affidavit of Facts of Charles Pinter, Plaintiff's president. The Application for Judgment included counsel's affirmation that the additional notice required by CPLR 3215(g)(4) was given to Defendant "at the last known corporate address at 1002 Quinten Rd, Brooklyn."

The Receipt for Service submitted with Plaintiff's opposition shows Defendant's "Service of Process Address" as 100-17 Queens Blvd., whereas the additional notice was mailed to 1002 Quentin Rd. Plaintiff's opposition also includes a copy of Defendant's check, which shows Defendant's address at 100-17 Queens Blvd. Although the check is not authenticated on behalf of Plaintiff by anyone with personal knowledge, it is essentially authenticated, with an explanation, by Defendant's President in his affidavit submitted in reply.

Moreover, Plaintiff's summons shows the address of defendant Shalom Glatt Supermarket, Inc. as "C/o Secretary of State," and the address of co-defendant Avi Glatt Kosher, which has apparently not been served, as 1002 Quentin Rd., Brooklyn. Defendant, meanwhile, submits an invoice from a supplier, Prime Kosher, showing an address at 1002 Quentin Rd. Ignoring the rest of Defendant's President's explanation, it is not difficult to conclude that the Quentin Rd. address in Brooklyn is probably the business address of co-defendant Avi Glatt Kosher, and not a business address of Defendant.

Had the Affidavit of Facts submitted to the clerk in support of the Application for Judgment been submitted to this Court, it likely would have been found insufficient "proof of the facts of the claim" required by CPLR 3215(f). Nowhere in the Affidavit does the name of defendant Shalom Glatt Supermarket, Inc. appear, except in the caption for the action together with the name of co-defendant Avi Glatt Kosher. Except for a checkmark next to "Goods sold and delivered" on a list of possible claims, a remaining balance of $65,520.88, and the completion of a blank for the date an "accounting" was mailed to "the defendant," there are no stated facts as to the claim, and no indication as to the basis of the affiant's knowledge (see Barrailler v City of New York, 12 AD3d 168, 169 [1st Dept 2004]; Flick Lbr. Co. v Breton Indus., 223 AD2d 779, 780 [3d Dept 1996]; Dempsey v Intercontinental Hotel Corp., 126 AD2d 477, 479 [1st Dept 1987].) The Application for Judgment likewise does not name defendant Shalom Glatt Supermarket, Inc., except in the caption with the name of the co-defendant. [*3]

Nonetheless, it is now clear, after a conflict among the Departments, that the failure to submit the proof required by CPLR 3215(f) should lead to denial of an application for a default judgment, but it does not render the judgment void; rather, in order to vacate the judgment, the defendant must make the requisite showing under CPLR 317 or CPLR 5015(a). (See Manhattan Telecom. Corp. v H & A Locksmith, Inc., 21 NY3d 200, 203-04 [2013].) As will appear, however, that does not mean that the failure to submit the required proof is of no significance at all.

Moreover, a plaintiff's failure to properly serve the additional notice pursuant to CPLR 3215(g)(4) is not a "fatal defect" that, in itself, warrants vacating a judgment. (See Castle v Avanti, Ltd., 86 AD3d 531, 532 [2d Dept 2011]; Thas v Dayrich Trading, Inc., 78 AD3d 1163, 1164-65 [2d Dept 2010].) It may be considered, however, on whether a defendant makes a showing pursuant to CPLR 5015(a)(1) or CPLR 317 sufficient to warrant vacating the judgment. (See id. at 1164.)

Defendant's President seeks to show a reasonable excuse for Defendant's default with the following assertions: "3.I never received any motions for default judgment in this matter.

4.I was never personally served a Summons and Complaint in this matter. No one served me at my business nor at my home address. 5.My father Ruben Nisimov received a Summons in the mail regarding this case. My father did consult with an attorney on my behalf. However, there was a misunderstanding with the attorney and my father because of my father's inability to speak English. Therefore, the matter was never properly addressed." (Affidavit by Defendant ¶¶ 3-5.)

As noted above, Plaintiff obtained its judgment by default by application to the clerk pursuant to CPLR 3215(a); and, since Defendant had not appeared and the application was made within one year after the default, notice to Defendant was not required (see CPLR 3215[g][1].)

The assertions of Defendant's President that he was not personally served are, of course, beside the point, since service upon a corporation through the Secretary of State does not require such personal service. Moreover, Defendant's President does not expressly deny that the summons and verified complaint were received by mail at its business address, which is the same as the "Service of Process Address" designated in the Receipt for Service (see Affidavit by Defendant ¶ 1.)

Indeed, Defendant acknowledges that a summons at least was received in the mail by the President's father, but is silent as to the address at which the document was received, or when it was received. No information is provided as to the relationship between the President's father and Defendant, if any, and no information as to when his father informed the President about receipt of the summons or his consultation with an attorney. There is no affidavit or affirmation from the father [*4]or the attorney about the consultation, or any "misunderstanding" between them, or any explanation why "the matter was not properly addressed."

Where a party has a reasonable explanation that its interests would be adequately represented by its attorney, reasonable excuse for a default may be established where the default results from the attorney's mistake, neglect, or other inadequacy. (See Blake v United States, 109 AD3d 504, 505 [2d Dept 2013]; Smyth v Getty Petroleum Mktg., Inc., 103 AD3d 790, 790 [2d Dept 2013]; Deutsche Bank Natl. Trust Co. v Luden, 91 AD3d 701, 701-02 [2d Dept 2012]; Evolution Impressions, Inc. v Levandowski, 59 AD3d 1039, 1040 [4th Dept 2009]; Osborne v Jones, 50 AD3d 515, 515 [1st Dept 2008]; Weitzenberg v Nassau County Dept. of Recreation and Parks, 29 AD3d 683, 685 [2d Dept 2006]; Cantarelli S.P.A. v L. Della Cella Co., Inc., 40 AD3d 445, 446 [1st Dept 2007].) Here, the assertions of Defendant's President are far from sufficient to establish a reasonable excuse under this authority.

Indeed, in his Affidavit in Opposition, Plaintiff's counsel asserts that "on or about November 20, 2012, shortly after service of the Summons and Complaint was made upon the defendant through the Secretary of State," counsel's office was contacted on behalf of Defendant by an attorney with an address in Forest Hills. Defendant's Reply takes no notice of the assertions.

Considering Defendant's application pursuant to the somewhat more forgiving provisions of CPLR 317, which does not require a "reasonable excuse" for the delay (see Eugene DiLorenzo, Inc. v A.C. Dutton Lumber Co., Inc., 67 NY2d 138, 141-43 [1986]), Defendant "must still demonstrate, and the Court must find, that [Defendant] did not receive actual notice of the summons and complaint in time to defend the action" (see Capital Source v AKO Medical, P.C., 110 AD3d 1026, ___ [2d Dept 2013] [internal quotation marks and citations omitted].) Here, the assertions of Defendant's President do make that showing either. At best, they might be understood as stating that the President did not himself know about the action until the Marshal's Notice was posted in July 2013. But "[t]he mere denial of receipt of the summons and complaint is insufficient to establish lack of actual notice for the purposes of CPLR 317." (See id. at ___ [internal quotation marks and citation omitted].) In addition, there is the acknowledgment of the receipt at some time and place of the summons at least, and the involvement of counsel on Defendant's behalf.

Generally, when a defaulting defendant fails to demonstrate a reasonable excuse for the default, or that it did not received actual notice of the summons and complaint in time to defend, "it is unnecessary to determine whether it demonstrated the existence of a potentially meritorious defense." (See Capital Source v AKO Medical, P.C., 110 AD3d at ___.) Here, however, it is noteworthy that Defendant has demonstrated a meritorious defense to the action.

The affidavit of Defendant's President asserts as to plaintiff ADM Cattle, LLC and co-defendant Avi Glatt Kosher: "9.I do not have any connection to AVI GLATT KOSHER, nor do I know who the owner is. I have never had any dealings with them.[*5]

10.I did not have any contractual or verbal agreements with Plaintiff ADMV Cattle nor Defendant AVI GLATT. Nor am I aware of any produce delivered by them.

11.I understand that there has been two checks made out from my company checkbook in the amount of $4,700.00 to ADMV Cattle, however that check was made out upon Prime Kosher's request that we pay ADMV cattle instead of Prime Kosher. The circumstances behind those two checks are as follows:

...

19.I do not have any verbal or written agreement with ADMV CATTLE. I do not have in my possession any invoices sent to me from ADMV Cattle. I do not know of this company aside from the checks I was asked to make out to them by Prime Kosher. I do NOT owe this company any monies in connection with any produce delivered. It seems ADMV cattle is claiming $85,000 owed. I have never had such a large invoice for produce in one order.

20.I have searched my records and I do not show any deliveries from ADMV Cattle, nor do I show any invoices from them." (Affidavit by Defendant ¶¶ 9-11, 19-20.)

These assertions, considered in the light of the address for defendant Avi Glatt Kosher found on the Summons and Complaint, which is the address to which the notice required by CPLR 3215(g)(4) was mailed, and which is also the address of Defendant's supplier, Prime Kosher, would provide at least an inference that Plaintiff has obtained judgment for the unpaid price of goods delivered to its customer, Avi Glatt Kosher/Prime Kosher, which goods may or may not have been delivered to Defendant. The Application for Judgment and Affidavit of Facts submitted to the clerk, described above, provide little, if any, probative evidence in support of the claim against Defendant.

"[I]t has long been held that courts have inherent power beyond that which is contained in the CPLR to open defaults and where the amount awarded on a default judgment has been perceived as excessive the courts have exercised their inherent power to modify or reduce the amount." (See Neuman v Greenblatt, 260 AD2d 616, 617 [2d Dept 1999]; see also Abbott v Crown Mill Restoration Dev., LLC, 109 AD3d 1097, 1100 [4th Dept 2013]; F & K Supply, Inc. v Shean, 56 AD3d 1076, 1078 [3d Dept 2008]; Quigley v Coco's Water Café, Inc., 43 AD3d 1132, 1133 [2d Dept 2007]; Singh v Gladys Towncars Inc., 42 AD3d 313, 314 [1st Dept 2007]; Bajwa v Saida, Inc., 6 AD3d 471, 473 [2d Dept 2004].)

Despite the broad references to the courts' inherent power to vacate default judgments, where the movant has not established a basis for relief pursuant to CPLR 317 or CPLR 5015(a), that power has apparently been sparingly exercised, and limited to reducing the amount of the damages or other component of the award. It would be disingenuous to characterize any questions with respect to the judgment at issue here as limited to damages. [*6]

Here, however, we have a judgment issued by the clerk based upon an Affidavit of Facts that this Court would find insufficient as "proof of the facts constituting the claim" required by CPLR 3215(f); mailing of the additional notice required by CPLR 3215(g)(4) to the wrong address; and a showing of a meritorious defense that would avoid Plaintiff's entire claim. Moreover, Defendant (or someone on its behalf) has twice sought the assistance of counsel to deal with this action, at the time a summons was received, and now to vacate the judgment, and twice counsel has failed to adequately assist. (The Court recognizes, of course, that because Defendant's President's affidavit was submitted in reply, Plaintiff did not have the opportunity to address it.)

Although Defendant's showing on this motion is insufficient to allow vacating the judgment, some relief is warranted "in the interests of substantial justice" (see Abbott v Crown Mill Dev., LLC, 109 AD3d at 1100 [quoting Woodson v Mendon Leasing Corp., 100 NY2d 62, 68 (2003)]), and "in light of the strong public policy in favor of resolving cases on the merits" (see Smyth v Getty Petroleum Mktg., Inc., 103 AD3d 790, 791 [2d Dept 2013].) Defendant will be granted a limited period of time to renew this motion, during which time enforcement of the judgment will be stayed.

Defendant's motion is denied, with leave to renew no later than February 7, 2014. Until the determination of any renewal motion, or February 7, 2014 if no renewal motion is served by that date, all enforcement of the Judgment issued May 23, 2013 is hereby stayed.

The Court is this date mailing a copy of this Decision and Order to the parties and to Marshall Martin A. Bienstock.

December 5, 2013___________________

Jack M. Battaglia

Justice, Supreme Court