Jeffrey Gardens Apt. Corp. v SMS Mgt. LH Mgt., Inc.

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Jeffrey Gardens Apt. Corp. v SMS Mgt. LH Mgt., Inc. 2016 NY Slip Op 32870(U) February 1, 2016 Supreme Court, Queens County Docket Number: 21341/13 Judge: Janice A. Taylor Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication. [* 1] 213' L'2013 ORDER SIGNED VACATING JUDGMENT ENTERED ON 8110:2015 Short Form Order NEW YORK SUPREME COURT - QUEENS COUNTY Presen t : H ONORABLE JANICE A. TAYLOR Justice !AS Part __.12_ ---------------------------- ---------x Index No.: 21341/13 J EFFREY GARDENS APARTMENT CORP. DANIELA Motion Date: 11/6/15 CROCCHIOLA, Motion Cal . No. :54 Motion Seq . No: 5 Plaintiff (s), I - against SMS MANAGEMENT LH MANAGEMENT, INC., KATHY MAZZO, SMSLSH, L.P ., MERILL REALTY CO . and LISA HADAR, Fl LED FEB 16 ia1s Defendant (s ) . COUNTY CLERK QUEENS COUNTY -------------------------------------x The following papers numbered 1 10 read on this motion by plaintiff pursuant to CPLR §§ 3215 , 5015 (a) (1) and (a) (3) vacating the default judgment entered with the Queens County Clerk on August 10, 2015 and preliminarily enjoining SMS Management , LH Management , Inc. , Kathy Mazzso , SMSLSH, L.P . Merill Realty Co . and Lisa Hadar from enforcing , collecting on , or otherwise seeking to execute and/or col lect on the default judgment from any and all Reserve Accounts , Operating Accounts or encumbering and/or garnishing any ot her assets maintained by plaintiff Jeffrey Gardens Apartment Co rp. Papers Numbered Order to Show Cause- Affirmation-Exhibits-Service . ..... 1 - 4 Affirmation in Opposition-Exhibits-Service . ...... ..... 5 - 7 Reply Affirmation-Exhibits-Service .. ... ......... .... . . 8 - 10 Upon the f oregoing papers it is ORDERED that this motion is determined as foll ows : This is an action seeking an accounting and alleging , inter alia , conversion , theft of se rvices , misappropriation and breach of implied cont ract. This action was commenced on November 20 , 2013 by the filing of the summons and complaint. On or abut December 16 , 2013, defendants served an answer to the complaint with counterclaims . The defendants then moved f or a default judgment [* 2] 21 34112013 ORDER SIGNED VACATING JUDGMENT ENTERED ON 81101 2015 P40! 2Cf4 alleging that the plaintiff had failed to serve an answer to the counterclaims. This Court based on the uncontested representation from the defendant that the plaintiff never served an answer to the counterclaim granted the default judgment on the counterclaims in an order dated June 26 , 2015. The clerk of the court then entered a judgment on August 10 , 2015 . The plaintiff has moved to vacate the granting of a default judgment on the defendants' counterclaim. In order to vacate a default in answering and appear ing and to extend the time to appear or compel the acceptance of an untimely answer a defendant must establish a reasonable excuse for the default and a potentially meritorious defense (Wells Fargo, N.A . v Cervini , 84 AD3d 789 (2011]; Midfirst Bank v Al -Rahman , 81 AD3d 797 (2011]; HSBC Bank, USA v Dammond, 59 AD3d 679 [2009]; NYCTL 1997-1 Trust v Villa , 19 AD3d 382 (2005]}. The determination of what constitutes a reasonable excuse is left to the sound disc retion of the court (see Abrams v City of New· York , 13 AD3d 566 [ 2004); Scarlett v McCarthy , 2 AD3d 623 [2003); Westchester Med. Ctr . v Clarendon Ins. Co ., 304 AD2d 753 (2003]}. In appr opriate circumstances a court has the discretion to find that law off ice failure is a reasonable excuse (see Sarcona v J&J Air Container Sta., Inc., 111 AD3d 914 [2d Dept 2013] ; Embraer Fin. Ltd . v Services Aereos Profesionales, S.A. , 42 AD3d 380 [1st Dept 2007)) . The counsel for plaintiff stated that after the defendants filed their motion for a default judgment on the counterclaims his offi ce became counsel for the plaintiff. As part of the substitution , the former counsel provided him wi th all relevant case files. At that time he noticed that the plaintiff's answer t o the defendants' counterclaims was missing from the file. He then contacted the former counsel asking about the answer and was to l d that such an answer was prepared and had been served. However, he was unable to locate the answer to the counterclaims and could not include a copy of the answer in opposition. Plaintiff's counsel has now locaLed the misplaced answer, which includes an affidavit of service , and has submitted these documents on this motion. Additionally the plaintiff submitted the affirmation of its former counsel who stated that he served an answer to the counterclaim on February 28, 2014, and included an affirmation of service. Here , given the strong public policy in resolving cases on the merits, the plaintiff's counsel detailed and credible account of law office failure was a reasonable excuse for the default in answering the counterclaim (see Lyubomirsky v Lubov Arulin, PLLC, 125 AD3d 614 [2d Dept 2015]; Needleman v Tornheim , 106 AD3d 707 [2d Dept 2013 ] } . Moreover, plaintiff has demonstrated a potentially meritorious opposition to the counterclaim. The necessary amount of proof required t o show a meritorious defense is not as high as required to defeat a summary j udgment motion (see Clark v MGM Textiles Indus. , 307 AD2d 520 [3d Dept 2003]) . Plai ntiff a lleges that 2 Ptlfltd li 11'2Q f8 [* 3] 213.,,20130ROER SIGNED VACATING JUDGMENT ENTE~EDON &10 2015 Ptge: Jcif<I defendant Hadar abused her position of a uthority as president of the co-op ' s board to reta in defendant LH Management , a corporation controlled by Hadar. Plaintiff alleges that there was, thus , a conflict of interest and t he defendant Hadar should have recused herself from such a vote , cont ract is i n doubt . and therefore th e validity of the Where a default is found to be excusable, the underlying default judgment must be vacated as well (Stephan 8. Gleich & Assoc . v Gritsipis , 87 AD3d 216 [2d Dept 2011]) . Inasmuch as this Court is vacating the under l ying default in answering the counterclaim and vacating the order dated June 26 , 201 5 , the Judgment entered with the Clerk on August 10 , 2015 must be vacated . Additionally , no judgment s hould have been entered with the clerk as the de fault judgment was not for a sum cer tain judgment . While the motion for a default j udgment on the counterclaim requested a judgment in the amount o f $132 , 000 , when this Court granted the default judgment it did not direct entry of judgment for a sum certain. Therefo re, no judgment should have been entered until there was an assessment of damages. Furthermore , the counterclaim is not for a sum certain . The term sum certain is intended to apply to t hose cases where there can be no dispute as to the amount due , such as actions on money judgment and negotiable instruments (Reynolds Sec . V Underwriters Bank & Trust Co ., 44 NY2d 568 (1978] ; Stephan B. Gleich & Assoc ., 87 AD3d at 222). That is not the case here as t he damages are not undisputable. Therefore , no j udgment should have been entered before an asse ssment of damages had occurred . Finally, the argument that it is procedurally improper for the plaintiff to seek to vacate its default because they opposed the original motion is without merit. Even if this Court were t o treat this motion as a motion t o renew it would still be gran t ed . A motion to renew must be supported by new or additional facts not offered on t he prior mot ion that would change the prior motion and must contain a reasonable justification for why the facts were not presented on the prior motion . A court may grant renewa l based on new facts that were known at the time of the original m ion , if ot there is a reasonable justification as to why these new facts were not submitted in the orig i nal m otion (see Lawman v Gap, Inc. , 38 AD3d 852 [2d Dept 2007 ] ; Simpson v Cook Pony Farm Real Estate, Inc. , 12 AD3d 496 [2d Dept 200 4]). Here , while the answer to the counterclaim and the a ffidavit of service might have been avai lable to t he plaintiff at t he time of the default judgment m otion, t he plaintiff has provided a reasonable j us tifi cation f or the delay in presenting t hese facts and has shown that it exer cised due diligence in locating these documents (see Matter of Surdo v 3 [* 4] 21341.'2013 ORDER S GNEDVACATING JUDGMENT ENTERED ON 8'10.'2015 Pa~ 4 of4 diligence in locating these documents Levittown Pub . School Dist ., 41 AD3d 486 v Mon Leang Mui , 38 AD3d 809 [ 2d Dept Capital Group, Inc., 7 AD3d 568 [2d Dept (see Matter of Surdo v [2d Dept 200 7) ; Bank One 2007]; Gomez v Needham 2004) ) . Accordingly, the motion to vacate the plaintiff's default in answering the counterclaim is granted. The order dated June 26, 2014 is vacated to the extent that ~he branch of the order gra nting the default judgment on the defendants' counterclaims is vaca t ed. The default judgment entered with the Clerk on August 10, 201 5 i s vacat ed. Additionally, in light of the va ca tur of the defau lt judgment all efforts by the defendants to enforce the judgme n t must cease and all encumbrances curren t ly in place pursuant to the default judgment shall be removed. Dated: February 1, 2016 FILED FEB 16 ZOlS COUNTY CLERK QUEENS COUNTY H: \Dec is ions - Pa rt 15 \Dec is! ons-2016\De faui t\2JJ4 J-13_ je f f erygardens _ smsmanagement _ vaca tede faui t_ LD_ SfO . ·•pd 4 Pnr!td ' 11'2018

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