Maxim Group LLC. v SML Capital LLC

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Maxim Group LLC. v SML Capital LLC 2017 NY Slip Op 32586(U) December 1, 2017 Supreme Court, New York County Docket Number: 650703/2014 Judge: Barry Ostrager 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. [*FILED: NEW YORK COUNTY CLERK 12/12/2017 02:39 PM 1] NYSCEF DOC.NEW 61 !FILED: NO. YORK COUNTY CLERK 12/06/2017 11:22 AMJ NYSCEF DOC. NO. INDEX NO. 650703/2014 INDEX NO. 650703/2014 RECEIVED NYSCEF: 12/12/2017 RECEIVED NYSCEF: 12/06/2017 52 ... SUPREME COURT OF THE STATE OF NEW YORK · NEW YORK COUNTY PRESENT: PART HON. BARRY R. OSTRAGER 61 Justice ··--~-"------·-------------~-----"""---------·· - ·. ·~-.-o-'--. -X MAXIM GROUP LLC. 650703/2014 INOEX NO. Plaintiff. MOTION DATE MOTION SEQ. NO.· ··V- . 11/22/2017 -· ---·-·-----· ·- ______ 002 ,, .. SML CAPITAL LLC, STEVEN LIEBMAN, BRETT HIRSCH . DECISION AND ORDER Defendants. -------------··-··--·-----~--""-'·c·-·-------~~-----'----..c...X The following e-filed documents, listed by NYSCEF document number 29, .30. 31. 32, 33, 34. 35, 36. 37, 38,40,41.42.43,44,45,46,47,48 were read on this application to/for Vacate - Decision/Order/Judgment/Award Upon the foregoing documents, it Is OSTRAGER. J. An evidentiary hearing was held on November 30 and December I with respect to defendant Brett Hirsch's motion to vacate a default judgment entered against him on October 5. 2015. Defendant Hirsch also seeks to have restraints on his assets lifted and to have any enforcement of the judgment stayed. Defendant Hirsch was s~rvcd at his former marital residence by process server Steve Kemp who testified that on April 8, 2014 he personally served Hirsch's ex-wife Sarah who accepted service. Kemp testified that consistent with his long experience as a process server he would not have lefi the papers with Sarah Hirsch if he was not satisfied that she was accepting 65070312014 MAXIM GROUP LLC vs. SML CAPITAL LLC Motion No. 002 Page 1of4 2 of 5 1 of 4 [*FILED: NEW YORK COUNTY CLERK 12/12/2017 02:39 PM 2] NYSCEF DOC. NO. YORK COUNTY CLERK 12/06/2017 11:22 AM) lFILED: NEW 61 NYSCEF DOC. NO. 52 ,. INDEX NO. 650703/2014 RECEIVED NYSCEF: 12/12/2017 INDEX NO. 650703/2014 RECEIVED NYSCEF: 12/06/2017 service for Brett Hirsh at his usual place of abode. The testimony adduced from Sarah and Brett indicated that the couple had separated prior to April 8, 2014 when process was served although the couple did not formally divorce until several months later. Sarah and Brett Hirsch testified that Brett Hirsch no longer resided at the 73 Dorothy Street residence on April 8. 2014 when process was served. Brett testified that after April 8, 2014 he stopped by his former residence on occasion and Sarah testified that she bundled for Drctt Hirsch whatever mail or papers were delivered to Brett Hirsh at 73 Dorothy Street. Passing the issue of whether the Court finds the testimony of Sarah and Brett Hirsh completely credible (which the Court does not). the Court finds it counter· intuitive and contrary to the credible evidence that Sarah Hirsch did not both accept service on behalf of Brett Hirsch and give whatever mail and papers had been addressed to him on any visits that he made to 73 Dorothy Street. This case is thus on all fours with the case of CC Home Lenders v. Cioffi, et al, 294 AD. 2d 325, 742 N.Y.S. 2d 101 (2002) where the Second Department reversed a finding that service ofa summons and complaint was improper because the marital residence was no longer the defendant's "usual place of abode" where, as here the defendant never notified the post office, the Department of Motor vehicles, or anyone else that he was no longer living in his marital residence. On the basis of the testimony adduced at the cvidentiary hearing. the Court questions the credibility of any testimony suggesting that Sarah Hirsch did not accept service on behalf of Brett Hirsch or that Brett Hirsch did not receive the C()mplaint. The Court nevertheless finds that the defaull was excusable given the volume of mail that he claims accumulated at his former marital residence. The complaint against JI irsch relates to the non·payment of securities tr.ansactions that were executed for the account of SML Capital by Maxim. The plaintiff in this action initiated an arbitration against Steven Liebman, the owner of SML Capital and, after discontinuing this 65070312014 MAXIM GROUP LLC vs. SML CAPITAL LLC Page 2 of 4 Motion No. 002 3 of 5 2 of 4 [*FILED: NEW YORK COUNTY CLERK 12/12/2017 02:39 PM 3] NYSCEF DOC.NEW 61 [FILED: NO. YORK COUNTY CLERK 12/06/2017 11:22 AM) INDEX NO. 650703/2014 RECEIVED NYSCEF: 12/12/2017 INDEX NO. 650703/2014 RECEIVED NYSCEF: 12/06/2017 NYSCEF DOC. NO. 52 ·":. action against SML Capital and Liebman. received an arhitra1ion award which was never satisfied. Hirsch was apparently also named in the arbitration but did not appear but the arbitration award (which was no! part of the record of the hearing) was apparently against r.iebman and Hirsch jointly and severally. Hirsch claims to have neither been served with any notice to arbitrate nor have any knowledge of the arhitration. Liebman has submil1ed an affidavit in this case stating that defendant Hirsch has no ownership interest in SML Capital. Consequently. Hirsch asserts that he has a meritorious defense to this action and the record before this Court dncs not pcnnit the Court to make any findings with respect to the arbitration award. Hirsch is now a non-domiciliary with a rather checkered history with respect to securities scams and taking liberties with the truth. It would be extremely prejudicial to the plaintiff to release the restraints that plaintiff has obtained on Hirsch's assets. Therefore, given the strong policy in the law of resolving cases on the merits. the default judgment is vacated, Hirsch will answer the complaint within 20 days, and the parties will complete all discovery within 60 days in contemplation of a prompt trial on the merits of what appears to he an extremely simple issue of fact (i.e., whether Hirsch is liable for the unsuccc~sful trades in the SML Capital LLC account for which plaintiff Maxim was not paid and, perhaps. whether the arbitration award is relevant to a merits disposition of this case). rn the latter connection, the default judgment against Hirsch which Maxim obtained was assigned to a Mr. Shapiro, but that is not relevant to any issues before the Court. Pending the resolution of the disposition of this action on the merits, plaintiff and its assignee arc enjoined from taking any steps to enforce the default judgment which is hereby vacated in fayor of a pre-trial attachment on the funds that were previously subject to the restraint obtained by the plaintiff. 65070312014 . MAXIM GROUP LLC vs. SML CAPITAL LLC Page 3 of 4 Motion No. 002 4 of 5 3 of 4 [*FILED: NEW YORK COUNTY CLERK 12/12/2017 02:39 PM 4] NYSCEF DOC.NEW 61 !FILED: NO. YORK INDEX NO. 650703/2014 COUNTY CLERK 12/06/2017 11:22 AM) INDEX NO. 650703/2014 RECEIVED NYSCEF: 12/12/2017 RECEIVED NYSCEF: 12/06/2017 NYSCEF DOC. NO. 52 The Clerk is directed to restore this action to the Court's calendar. 1211/2017 DATE RRY R. OSTRAGER, J.S.C. RY CHECK ONE: CAS.E DISPO. SEO GRAN TEO 0 R. OSTRAGER HON-FIHAL. D18flOSmON DENIED. ~TED IN PART APPLICATION: SETTLE ORDER SUBMIT ORDER eHECK~ APPROPRIATE: OONOTPOST. FIDUCIARY APPOINlM£NT 650703/2014 MAXIM GROUP L.L.C Motion No. 002 v.. SML CAPITAL LLC . D D - JSC OTHER REFERENCE Pnga4 of4 5 of 5 4 of 4

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