Milonis v 3273-3285 Westchester Ave. Realty Corp.
Annotate this CaseDecided on November 4, 2019
Civil Court of the City of New York, Bronx County
James Milonis, as Trustee of James Milonis' Declaration of Trust Dated May 12, 2005, Petitioner(s),
against
3273-3285 Westchester Avenue Realty Corp., Natalie Acevedo D/B/A Gana Liquor Wine & Spirits Corp., Jose Perez D/B/A Sazon Restaurant, Peghe's Deli & Grocery, Inc., Sonia Montanez D/B/A Texas Chicken, Rubin Rodriguez D/B/A Crosby Cleaners, Respondent(s).
900750/19
Attorney for Petitioner: Novick Edelstein Pomerantz, PC
Attorney for Respondents: Richter Retrepo, PLLC
Fidel E. Gomez, J.
In this summary holdover proceeding, respondents 3273-3285 WESTCHESTER AVENUE REALTY CORP. (WARC) and JOSE PEREZ (Perez) seek an order pursuant to CPLR § 5015(a)(1) and (a)(4), vacating this Court's judgment entered on July 29, 2019, after inquest (Rivera, J.), upon the failure of all respondents to appear or otherwise interpose answers. WARC and Perez seek the foregoing relief asserting that their failure to appear or otherwise answer the petition was the result of never being served with the petition. WARC and Perez further assert that they have a meritorious defense to this action insofar as they were current on all rents due to the petitioner. Petitioner opposes the instant motion, averring, inter alia, that WARC and Perez fail to establish both a reasonable excuse for failing to appear or a meritorious defense.
For the reasons that follow hereinafter, the instant motion is denied.
This is a summary holdover proceeding. According to the petition dated March 7, 2019, a Ten Day Notice to Cure (NC) dated February 21, 2019, and a Fifteen Day Notice of Termination (NT) dated March 13, 2019, petitioner owns the premises located at 3273-3285 Westchester Avenue, Bronx, NY (the premises). Pursuant to, inter alia, a lease, respondent WARC became the tenant at the premises and thereafter subleased the same to respondents PEGHE'S DELI & GROCERY, INC. (Peghe's), SONIA MONTANEZ D/B/A TEXAS CHICKEN (Texas), NATALIE ACEVEDO D/B/A GANA LIQUOR WINE & SPIRITS CORP. (Gana), RUBIN RODRIGUEZ D/B/A CROSBY CLEANERS (Crosby) and JOSE PEREZ [*2]D/B/A SAZON RESTAURANT [FN1] (Sazon). Petitioner served respondents with the NC alleging that respondents failed to pay additional rent under the lease totaling $85,183.71 and comprised of, inter alia, fines and assessments. Thereafter, when the foregoing sums were unpaid, petitioner served respondents with the NT, asserting that the lease was terminated, effective April 10, 2019. Based on the foregoing, the petition seeks a judgment of possession of the premises, asserting that respondents remain in possession despite petitioner's termination of the lease.On July 29, 2019, insofar as respondents never appeared nor interposed any answers, this Court (Rivera, J.) issued a judgment after an inquest, which awarded possession of the premises to petitioner. On October 16, 2019, WARC and Perez moved seeking the relief herein.
For the reasons that follow hereinafter, WARC and Perez' motion to vacate this Court's judgment is denied insofar as they fail to establish that they were not duly served with the petition and, thus, fail to proffer a reasonable excuse for their failure to appear and/or answer the petition. Notably, insofar as movants move for vacatur pursuant to CPLR § 5015 interposing the absence of personal jurisdiction as the excuse for failing to appear while also proffering a meritorious defense, the instant motion is one pursuant to both CPLR § 5015(a)(1) and (a)(4)(a)(1). Accordingly, this Court must first determine the jurisdictional portion of the instant motion pursuant to CPLR § 5015(a)(4) and will only reach the issue of vacating the instant judgment on grounds of excusable default pursuant to CPLR § 5015(a)(1) if it determines that this Court has personal jurisdiction over the movants.
To be sure, it is well settled that when a defendant seeks to vacate a default judgment pursuant to CPLR § 5015(a(1) by raising a jurisdictional defense pursuant to CPLR 5015(a)(4), the court must resolve the jurisdictional question before determining whether a discretionary vacatur of the default under CPLR 5015(a)(1) is warranted (Roberts v Anka, 45 AD3d 752, 753 [2d Dept 2007] ["When a defendant seeking to vacate a default judgment raises a jurisdictional objection pursuant to CPLR 5015 (a)(4), the court is required to resolve the jurisdictional question before determining whether it is appropriate to grant a discretionary vacatur of the default under CPLR 5-15(a)(1)."], lv. dismissed 10 NY3d 851 [2008]; Delgado v Velecela, 56 AD3d 515, 516 [2d Dept 2008]; Marable ex rel. Ralph v Williams, 278 AD2d 459, 459 [2d Dept 2000]; Taylor v Jones, 172 AD2d 745, 746 [2d Dept 1991]). Only if the jurisdictional question is resolved in favor of the opponent of vacatur, will the court reach the issue of whether vacatur pursuant to CPLR § 5015(a)(1) is warranted (Roberts at 752; Delgado at 516; Marable ex rel. Ralph at 459; Taylor at 746).
In support of the instant motion, WARC and Perez submit an affidavit of service which indicates that on May 16, 2019, the petition was served upon WARC and Perez when the petition was left at "3273-3285 Westchester Avenue, Bronx, NY 10461 . . . for each tenant(s)/occupant(s) personally with Jane Doe . . . a person of suitable age and discretion, who was willing to receive same and were [sic] employed at said premises."
WARC and Perez also submit an affidavit by Perez, wherein he states, in relevant part, the following: Perez is a shareholder of and signatory for WARC, the tenant at the premises herein. Perez states that other than a Notice of Eviction, he never received any of the documents [*3]which underlie this summary proceeding. According to Perez, WARC is the prime tenant at the premises, which is subleased to other locales, each with its own independent street address at the premises. Specifically, Gana is a subtenant, whose address is 3277 Westchester Avenue, Bronx, NY, 10461. Peghe's is another subtenant, whose address is 3277 Westchester Avenue, Bronx, NY 10461. Crosby is a subtenant, whose address is 3283 Westchester Avenue, Bronx, NY 10461. Perez states that Sazon is not a restaurant located at the premises and that the only restaurant at the premises is Pinones Beach Restaurant (Pinones) which WARC subleased to nonparty Matermind Management Ltd. Pinones is located at 3285 Westchester Avenue, Bronx, NY 10451. Perez states that the fact that Sazon is listed on the affidavit of service rather than Pinones, coupled with the fact that the affidavit of service never lists the specific addresses for each of the respondents who sublease portions of the premises "may explain the lack of any receipt of paperwork in relation" to this summary proceeding.
CPLR § 5015(a)(4)—Lack of Jurisdiction
WARC and Perez' motion seeking to vacate this Court's judgment for lack of personal jurisdiction is denied. On this record, WARC and Perez fail to rebut the presumption of service established by the affidavit of service, which states that they were served with the notice of petition and the petition.
CPLR § 5015(a)(4) authorizes a court to vacate a judgment when the same is obtained despite a "lack of jurisdiction to render the judgment or order" (CPLR § 5015[a][4]). The proponent of a motion to vacate a judgment for want of jurisdiction must establish either that the party to whom a judgment was granted failed to obtain personal jurisdiction over him or her (Toyota Motor Credit Corp. v Hardware Lam, 93 AD3d 713, 713 [2d Dept 2012]; Hossain v Fab Cab Corp., 57 AD3d 484, 485 [2d Dept 2008]), or that the court lacked the requisite subject matter jurisdiction to render judgment (Lacks v Lacks, 41 NY2d 71, 77 [1976]; HSBC Bank USA, N.A. v Ashley, 104 AD3d 975, 976 [2d Dept 2013]).
It is well settled that the burden of establishing personal jurisdiction and proper service rests with the plaintiff (Frankel v Schilling, 149 AD2d 657, 659 [2d Dept 1989]; Torres v Corpus, 131 AD2d 463, 464 [2d Dept 1987]). Generally, an affidavit evidencing proper service upon the defendant is sufficient to support a finding of personal jurisdiction (Skyline Agency, Inc. v Ambrose Coppotelli, Inc., 117 AD2d 135, 139 [2d Dept 1986]). As such, an affidavit of service is prima facie evidence of proper service (Caba v Rai, 63 AD3d 578, 582-583 [1st Dept 2009]; NYCTL 1998-1 Trust Bank of NY v Rabinowitz, 7 AD3d 459, 460 [1st Dept 2004] [Defendant negated service of process upon him by citing to the affidavit of service and pointing to the deficiencies therein.]; Scarano v Scarano, 63 AD3d 716, 716 [2d Dept 2009] ["Here, the defendant's affidavit was insufficient. Since he never denied the specific facts contained in the process server's affidavit, no hearing was required."]; Simonds v Grobman, 277 AD2d 369, 370 [2d Dept 2000] ["The defendants failed to submit a sworn denial of service. Moreover, they did not swear to specific facts to rebut the statements in the process server's affidavits."]). Accordingly, personal jurisdiction will be upheld without a traverse hearing if the only evidence submitted in opposition is a bare or conclusory denial of service (Caba at 583 [Sworn denial conclusorily stating that defendant was not served was insufficient to rebut service as evinced by the affidavit of service.]; Simonds at 370; Beneficial Homeowner Service Corp. v Girault, 60 AD3d 984, 984 [2d Dept 2009]; Rabinowitz at 460; Chemical Bank v Darnley, 300 AD2d 613, [*4]613 [2d Dept 2002]), or a minor discrepancy, such as a mistake in the description of the recipient listed in the server's affidavit (Green Point Savings Bank v Clark, 253 AD2d 514, 515 [2d Dept 1998]). Thus, in order to successfully assail and rebut service so as to warrant a hearing, a defendant's affidavit must specifically rebut the facts in the plaintiff's affidavit of service (Caba at 683; Simonds at 370). If the denial of service is factually specific, then the court must hold a traverse hearing before deciding whether it has personal jurisdiction over the defendant (Frankel v Schilling, 149 AD2d 657, 659 [2d Dept 1989]; Powell v Powell, 114 AD2d 443, 444 [2d Dept 1985]).
At a traverse hearing, plaintiff bears the burden of establishing service upon the defendant (Chaudry Const. Corp. v James G. Kalpakis & Assoc., 60 AD3d 544, 545 [1st Dept 2009]; Schorr v Persaud, 51 AD3d 519, 519—520 [1st Dept 2008]). Moreover, at the hearing, the trial court can resolve issues of credibility, such resolution is accorded great deference, and absent a determination that it is against the weight of the evidence, cannot be disturbed on appeal (McCray v Petrini, 212 AD2d 676, 676 [2d Dept 1995]; Avakian v De Los Santos, 183 AD2d 687, 688 [2d Dept 1992]).
Here, in support of their motion, movants submit the affidavit of service evincing service of the notice of petition and petition. As noted above, with respect to movants, the affidavit indicates that on May 16, 2019, both WARC and Perez were served when the petition was left at 3273-3285 "Westchester Avenue, Bronx, NY 10461 . . . for each tenant(s)/occupant(s) personally with Jane Doe . . . a person of suitable age and discretion, who was willing to receive same and were [sic] employed at said premises." As noted above, an affidavit of service is prima facie evidence of proper service (Caba at 582-583; NYCTL 1998-1 Trust Bank of NY at 460 [1st Dept 2004]; Scarano at 716; Simonds at 370. Thus, personal jurisdiction will be upheld without a traverse hearing if the only evidence submitted in opposition is a bare or conclusory denial of service (Caba at 583; Simonds at 370; Beneficial Homeowner Service Corp. at 984; Rabinowitz at 460; Chemical Bank at 613), or reference to a minor discrepancy, such as a mistake in the description of the recipient listed in the server's affidavit (Green Point Savings Bank at 515). In order to successfully assail and rebut service so as to warrant a hearing, a defendant's affidavit must, therefore, specifically rebut the facts in the plaintiff's affidavit of service (Caba at 683; Simonds at 370).
In this case, the affidavit of service establishes that the movants were duly served pursuant to RPAPL (RPAPL § 735(1) ["Service of the notice of petition and petition shall be made by personally delivering them to the respondent; or by delivering to and leaving personally with a person of suitable age and discretion who resides or is employed at the property sought to be recovered."]), shifting the burden to movants to sufficiently assail service so as to warrant a traverse hearing. Unfortunately, movants fail to meet the requisite burden because Perez, in his affidavit, denies service of the petition upon him in the conclusory manner proscribed by prevailing law. To be sure, with respect to service of the petition, Perez states that "[o[]ther than the Notices of Eviction, I failed to receive any notices or papers related to the landlord-tenant proceeding above-captioned." Thus, rather than specifically rebutting the information in the affidavit such as denying receipt from the person with whom the affidavit indicates the petition was left or denying that any such person worked at the premises, Perez merely points to a discrepancy in the address upon which service was effectuated on all respondents. Even then, he [*5]fails to explain how that discrepancy actually resulted in the lack of service upon him. Significantly, with respect to the foregoing, he merely states that the discrepancies in the address where service was effectuated "may explain the lack of receipt of paperwork." This speculative and conclusory assertion fails to controvert service of the petition upon Perez.
With regard to WARC, Perez' affidavit is deficient for another and equally fatal reason. In his affidavit, Perez states that he is a shareholder and signatory with WARC but never states that WARC has no other employees or shareholders. This is fatal since, pursuant to RPAPL § 735(1) and (1)(b), service upon WARC can be effectuated by leaving a copy of the petition at the premises with a person of suitable age and discretion such that denial that Perez did not receive the petition served upon WARC does not foreclose service upon WARC, via another employee or shareholder. Stated differently, the bare denial of service by Perez is more conclusory with relation to WARC because WARC could have been served via other individuals and Perez fails to refute it.
Having decided the issue of personal jurisdiction in favor of petitioner, the Court now turns to vacatur of the judgment pursuant to CPLR § 5015(a)(1).
CPLR § 5015(a)(1) Excusable Default
Perez and WARC's motion seeking vacatur of this Court's judgment pursuant to CPLR § 5015(a)(1), on grounds of excusable default, is denied. Since the Court finds personal jurisdiction over movants, which is the excuse proffered by movants for failing to answer, that excuse, proffered in connection to this portion of the motion, is unreasonable as a matter of law.
Vacatur of an order or judgement pursuant to CPLR §5015(a)(1), on grounds that it was obtained upon default, requires that the moving party demonstrate a reasonable excuse for the default and the legal merit of the claim or defense asserted (M-Dean Realty Corp., v General Security Insurance Company, 6 AD3d 169, 171 [1st Dept 2004]; Goldman v Cotter, 10 AD3d 289, 291 [1st Dept 2004]). On a motion to vacate a default, movant is only required to "demonstrate the existence of a possibly meritorious defense [or cause of action and it is ] . . . not necessary for [the movant] to establish its defense [or cause of action] as a matter of law but merely to set forth facts sufficient to make out a prima facie showing" (Kwong v Budge-Wood Laundry Serv., 97 AD2d 691, 692 [1st Dept 1983]; Quis v Bolden, 298 AD2d 375, 375 [2d Dept 2002]).
Whether the excuse proffered and the merits asserted are legally sufficient rests within the sound discretion of the court (Goldman at 291). When a party fails to establish a reasonable excuse for the default, the court need not determine whether the party has established the merits of the claim or defense (Lutz v Goldstone, 31 AD3d 449, 450 [2d Dept 2006]). Similarly, the failure to demonstrate the merits of the claim or defense, is by itself, enough to warrant denial of a motion to vacate a default (Matter of William O., 16 AD3d 511, 511 [2d Dept 2005]).
The time within which to move for the vacatur of the default judgment is usually one year after the service of the order or judgment entered upon the default (CPLR § 5015[a][1]). Thus, the failure to move to vacate the default within a year of its entry usually bars vacatur regardless of the reasonableness of the excuse or the existence of the action's merit (Lopez v Imperial Delivery Service, Inc., 282 AD2d 190, 197 [2d Dept 2001]; Nahmani v Town of Ramapo, 262 AD2d 291, 291 [2d Dept 1999]). However, as an exception to this general rule, when vacatur of a default judgment is warranted in the interest of justice, a court can entertain and grant an [*6]untimely motion to vacate a default judgment (Johnson v Sam Minskoff & Sons, Inc., 287 AD2d 233, 236 [1st Dept 2001]); State of New York v Kama, 267 AD2d 225, 225 [1st Dept 1999] [Defendant's failure to answer resulting in a default judgment entered against vacated in the interests of justice despite her five year delay in seeking vacatur. The court found the interests of justice mandated a vacatur of the default and a restoration of the case since the default was taken even though plaintiff knew that defendant lacked the ability to defend the action due to a mental disability and thus might have needed a guardian appointed to avoid the default.]). Thus, should the party seeking to vacate a judgment or order issued on default fail to move within the year prescribed, the court has the authority to entertain such motion, and if the circumstances warrant it, vacate the default in the interest of justice (id.). In such cases, however, the excuse for belatedly seeking to vacate a default judgment must be more compelling (id.; Siegel, NY Prac § 108, at 187 [3d ed] ["but if the year has expired the excuse for the default had best be all the more compelling"]).
Here, the excuse proffered by movants for the failure to answer the petition in this summary proceeding is the absence of service of the petition. In other words, Perez and WARC contend that because they were not served with the petition, they were unable to answer and litigate this matter prior to the entry of the judgment. However, as noted above, the Court found that movants were unable to sufficiently rebut the contents of the affidavit of service such that the issue of service of the petition has been decided against movants. Accordingly movants' excuse is unreasonable as a matter of law. Since, when a party fails to establish a reasonable excuse for the default the court need not determine whether the party has established the merits of the claim or defense (Lutz at 450), here, the Court need not address the merits of movants' defense. It is hereby
ORDERED that all stays be lifted. It is further
ORDERED that petitioner serve a copy of this Order with Notice of Entry upon Perez and WARC within thirty (30) days hereof.
This constitutes this Court's decision and Order.
Dated: November 4, 2019
FIDEL E. GOMEZ, JCC Footnotes
Footnote 1:On this record, whether Perez and Sazon are the same person is never addressed and Perez appears individually and not on behalf of Sazon.
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