First Cardinal LLC v Vector Structural Preserv. Corp.

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First Cardinal LLC v Vector Structural Preserv. Corp. 2012 NY Slip Op 31619(U) May 22, 2012 Sup Ct, Nassau County Docket Number: 23217/10 Judge: F. Dana Winslow 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. ................. ..... ........ ....................... ), [* 1] SHORT FORM ORDER SUPREME COURT - STATE OF NEW YORK Present: HON. F. DANA WINSLOW, Justice TRIAL/IAS, PART 3 NASSAU COUNTY FIRST CARDINAL LLC as administrator of the Contractors Compensation Trust, Plaintiff, MOTION DATE: 3/1/12 MOTION SEQ. NO. : 001 -againstVECTOR STRUCTURAL PRESERVATION CORP., INDEX NO. : 23217/10 Defendant. The following papers read on this motion (numbered 1-3): Order to Show Cause..................................................... Affirma tio n in Op positio n............... ............ .................. Rep ly Af.tidavit................... .... In this action to collect allegedly unpaid workers compensation premiums defendant moves pursuant to CPLR 5015 and CPLR 317 to vacate the default judgment in the sum of$24 826. , issued by the Nassau County Clerk on May 18 2011 and entered on June 2 2011 (the " Judgment" Defendant's President , Vassilios Handakas C' Handakas ), states as follows: (i) that defendant engaged ADP Insurance Services to calculate and pay premiums to plaintiff on a weekly basis; (ii) that plaintiff conducted an audit of defendant's operations and claimed that certain insurance certificates were missing and certain monies were due; and (iii) that defendant provided the insurance certificates and heard nothing further from plaintiff unti it received a copy of the Property Execution obtained by plaintiff. Affidavit of Vassilos Handakas, sworn to on December 22 2011 (" Defendant' s Affidavit" 4- 7. Handakas states further that he never received the Summons and Complaint purportedly served on February 10, 306 by delivery to the New York Secretary of State , nor the second mailng to the defendant's office address pursuant 3215(g). Defendant's Affidavit 13- 14; OTSC Exh. D. Handakas admits that the New York Secretary of State has the proper address for service upon the defendant (which is the office address used by plaintiff for the second mailng), but states 2011 pursuant to BCL to CPLR [* 2] that none of his office staff recalls signing for any documents from the Secretary of State. Defendant's Affidavit ~12. Handakas claims to be familar with legal documents such as the Summons and Complaint , and states that " (i)t is my policy to immediately forward such papers to our counsel when same are received. On the merits , the Defendant' s Affidavit states that " Vector made the required premium payments weekly, " but is silent with respect to the additional monies demanded by plaintiff upon audit. Defendant' s AffIdavit '114. In his Reply Affidavit, sworn to on February 23 2012 (" Reply Affidavit" ), Handakas asserts that plaintiffs auditor misclassified defendant's employees and accordingly, assessed erroneous premiums against defendant. Reply Affidavit , ~~ 9- 10. Handakas demonstrates that he disputed the classifications used by plaintiff, in writing, on or about December 22 2009. Reply Affidavit ~10; Reply Exh. B. A party seeking to vacate a default pursuant to CPLR ~5015(a)(1) must demonstrate both a reasonable excuse for the default and the existence of a meritorious defense to the action. DiLorenzo v. A. C. Dutton Lumber Co., Inc., 67 NY2d 138; Royal Agricola, S. A. v. F. D. Import and Export Corp. , 37 A. D.3d 693; Parker v. City of New York, 272 AD2d 310. The determination of what constitutes a reasonable excuse lies within the discretion of the Court. Id. Where the Summons and Complaint have been served by some means other than personal delivery, a part may apply for relief pursuant to CPLR ~317. Service upon a corporation by delivery to the Secretary of State is one of the means of service contemplated by this section. Pabone v. Jon-Bar Enterprises Corp., 140 AD2d 872; Solomon Abrahams, P. C. v. Peddlers Pond Holding Corp., 125 AD2d 355. Vacatur pursuant to CPLR ~317 does not require a showing of a reasonable excuse for the default , but the party seeking such relief must demonstrate that it did not personally receive actual notice of the action in time to defend the action. Harbert Offset Corp. v. Bowery Sav. Bank 174 A. 2d 650; Solomon Abrahams, 125 AD2d at 356- 357. As on a motion pursuant to CPLR ~5015(a)(1), the party also must demonstrate the existence of a meritorious defense. It is well settled that the " mere denial" of receipt of the Summons and Complaint is not only insufficient to rebut the presumption of proper service created by plaintiffs affidavit of service , but also fails to satisfY the defendant' s burden of showing that it did not receive actual notice in time to defend the action. Thas v. Dayrich Trading, Inc., 78 AD3d 1163; Montefiore Medical Center v. Auto One Ins. Co., 57 AD3d 958; Cavalry Portfolio Services, LLC, v. Reisman, 55 AD3d 524; Coyle v. Mayer Realty Corp., 54 AD3d 713; Trini Realty Corp. v. Fulton Center LLC, 53 AD3d 479; Commissioners g., [* 3] of State Ins. Fund v. Nobre, Inc. , 29 AD3d 511. A " mere denial" of receipt is particularly unavailng, where, as here , there is no indication that the address on fie with the Secretary of State was incorrect, or there is proof of an additional mailng pursuant to See, e. Trini Realty, 53 AD3d at 480; Thas, 78 AD3d at 1164. CPLR ~3215(g). In the case at bar , Defendant's Affidavit amounts to little more than a denial of notice of the action. Although at least two cases suggest that an affidavit detailng the office procedures employed by the defendant in the handling of legal papers might be Westchester Medical Center v. Philadelphia Indemnity Ins. Co., 69 AD3d 613; Hospital for Joint Diseases v. Lincoln Gen. Ins. Co., 55 AD3d 543), the Court wil not strain to reach that holding here. Handakas sufficient to demonstrate non-receipt (see reference to his " policy " of forwarding all legal papers to defendant's counsel and the office staffs non-recollection of any such papers , adds texture but no real substance to the denial. Defendant offers no other explanation for its failure to answer or appear in this See action. Accordingly, relief on the basis that the default is excusable is not available. CPLR ~5015(a)(1). Nonetheless, the grounds enumerated in CPLR ~5015(a) are neither preemptive nor exhaustive , and were not intended to limit the inherent power of the Court to vacate its own judgment in the interests of justice. Town of Warwick v. Black Bear Campgrounds, 2012 WL 1605761. " Resolution of disputes on the merits rather than by default is favored, and to that end a liberal policy toward opening defaults exists. Pabone, 140 AD2d at 873. In this case , the Court holds that vacatur of the Judgment is warranted in the interest of justice. First , the Court believes that defendant has stated a potentially meritorious defense. Defendant asserts that it automatically paid , through payroll deductions , the amount of premiums calculated by its agent , and offers specific grounds to dispute the amounts claimed by plaintiff. More importantly, however , the Court finds that the application for a default judgment was inappropriately submitted to the Clerk (as opposed to the Court) in the first instance. A Clerk' s judgment is only appropriate when the debt is for a " sum certain " or CPLR 3215(a); Reynolds Securities, Inc. v. Underwriters Bank & Trust Co., 44 N. 2d 568. "The term ' sum certain ' in this context contemplates a situation in which , once liabilty has been established, there can be no dispute as to the amount due , as in actions on money judgments and negotiable instruments. Obviously, the clerk then functions in a purely a sum which could be made certain by computation. See [* 4] Securities, 44 NY2d at 572. Submission to the clerk is inappropriate where the amount ofplaintiffs damages cannot be determined without extrinsic proof. Id. ministerial capacity. " Reynolds As evident from the submissions , the amount claimed by plaintiff in its application for a default judgment was not a sum certain. Rather , it was derived from an audit of defendant's operations, which defendant challenges on the basis of inappropriate assumptions and classifications. This is a classic example of damages which cannot be determined without resort to extrinsic proof. The Court therefore finds that the Judgment is invalid , and that the matter should be remitted for an appropriate determination of liability and damages due to plaintiff, if any. Accordingly, it is ORDERED , that defendant's motion to vacate the Judgment is granted. The Judgment is vacated and any enforcement procedure or device arising from the Judgment and currently in effect shall be released , rescinded or otherwise vacated. It is further ORDERED , that defendant shall fie and serve an Answer to the Complaint witl1in twenty (20) days after entry of this Order. Defendant shall serve a copy of this Order upon plaintiff forthwith , upon receipt from any source. Dated' ENTERED JUN 13 2012 NASSAU COUNTY COUNTY CLERK' S OFFICE

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