Opinion
0114853/2005.
March 6, 2008.
DECISION and ORDER
Plaintiffs seek an order vacating the order entered October 15, 2007, and restoring this action to the calendar. that order, I dismissed the complaint because counsel for plaintiffs failed to appear for a court-ordered compliance conference.
Plaintiffs contend that there is a reasonable excuse for the absence of plaintiffs' counsel at the October 15, 2007 conference, and that they have a meritorious cause of action, in which they allege that defendant Juan Peirano Basso embezzled millions of dollars from plaintiffs' accounts held at the Trade and Commerce Banks (TCB) of the Cayman Islands, as established by a judgment in a related action, Donnybrook v. Juan Peirano Basso, Index No. 105484/05 (Donnybrook Action), in this court.
As for an excuse for the failure to appear, counsel for plaintiffs, John P. Gleason, Esq., asserts in his affirmation that he did not receive written or oral notice from the court that a conference was scheduled for October 15, 2007, nor was he notified by the court service to which his firm subscribes, United Lawyers Service. On October 11, 2007, when defense counsel, Barry M. Traub, Esq., telephoned him to discuss issues pertaining to discovery, Traub did not mention the then-upcoming conference. Moreover, on October 12, 2007, plaintiffs tiled their note of issue and statement of readiness.
On the day of the conference, Traub called Gleason's office to say he was running late. A not-yet-admitted first-year associate took Traub's call. He told Traub that Gleason was at a meeting, but "would presumably head to the conference." The associate contacted the court to determine the status of the conference, and learned that the complaint was dismissed.
As to the merits, Mr. Gleason asserts that this action is related to the Donnybrook Action, in which plaintiffs there obtained a judgment against the defendant here. Moreover, the Cayman Island authorities have appointed a liquidator for TCB, and, in the course of the dissolution proceeding, have uncovered a set of double books that defendant and his family maintained to conceal his fraud from the Cayman Island authorities and the embezzlement of plaintiffs' funds.
In opposition, defense counsel challenges the excuse, stating that as an associate from Mr. Gleason's firm attended the June 25, 2007 preliminary conference, the date for the compliance conference provided for in the preliminary conference order was known. (Traub Aff., Ex. B). On the merits, Mr. Traub contends that the allegations pertain to TCB, not defendant, and that defendant always acted in the best interests of his clients.
Defendant also relies on a stay arising from a proceeding under chapter 15 of the united States Bankruptcy Code, In re Trade and Commerce Bank (In Liquidation), pending in the Southern District of New York (05-60279). If this action were stayed by virtue of that one — which does not appear to be the case — the argument supports granting the motion.
Plaintiffs' attorney's failure to appear at the conference amounted to law office failure which can constitute a reasonable excuse ( Harwood v. Chaliha, 291 AD2d 234, 234 [1st Dept 2002]). The circumstances there are similar to those here. Moreover, an associate's inexperience, leading to a non-willful default, can constitute law office failure, and a reasonable excuse for the default ( Ramos v. Dr. Martin Luther King, Jr. Health Ctr., 282 AD2d 201 [1st Dept 2001]).
Plaintiffs have the better argument here. The motion is granted, but I am conditioning the relief sought upon the payment of costs in the amount of $300 by counsel for plaintiffs to defense counsel (see Bodden v. Penn-Attransco Corp., 20 AD3d 334 [1st Dept 2005]), because the preliminary conference order establishes that plaintiff had notice of the scheduled conference.
Finally, Defendant's argument that the motion should not be granted because defendant should not be required to defend this action in New York in that the acts complained of occurred elsewhere is without merit. This action was commenced in 2005, and defendant has not sought relief on this ground. Defendant makes other contentions pertaining to discovery that are not germane to this motion.
Accordingly, it is
ORDERED that the motion by plaintiffs for an order vacating the order entered October 15, 2007, and restoring this action to the calendar is granted, conditioned upon the payment of costs in the amount of $300 by counsel for plaintiffs to defense counsel prior to the conference set below, of which courtesy copies to counsel of this decision is notice; and it is further
ORDERED that counsel shall appear for a pre-trial conference in Part 55, 60 Centre Street, Room 432, New York, New York, on April 7, 2008 at 2 PM.