Opinion
651741/2018
12-11-2020
1319 FIRST AVENUE ASSOCIATES, LLC, Plaintiff, v. Jonathan BASH, Dionissios Surilas, and JMG Restaurant Corp. d/b/a Café Luka, Defendants. Dionissios Surilas, Plaintiff, v. Francine Bash, Defendant.
KLG Luz & Greenberg, LLP, New York, NY (Thomas J. Luz of counsel), for defendant/third-party plaintiff Dionissios Surilas. Morrison Tenenbaum, PLLC, New York, NY (Lawrence F. Morrison of counsel), for third-party defendant Francine Bash.
KLG Luz & Greenberg, LLP, New York, NY (Thomas J. Luz of counsel), for defendant/third-party plaintiff Dionissios Surilas.
Morrison Tenenbaum, PLLC, New York, NY (Lawrence F. Morrison of counsel), for third-party defendant Francine Bash.
Gerald Lebovits, J.
The following e-filed documents, listed by NYSCEF document number (Motion 002) 58, 59, 60, 61, 62, 63, 64, 65, 66, 67, 68 were read on this motion to VACATE DEFAULT JUDGMENT.
In this action on a commercial-lease guarantee, third-party defendant, Francine Bash, moves to vacate the grant of summary judgment on default to defendant/third-party-plaintiff Dionissios Surilas. Surilas cross-moves to modify the court's disposition of the motion to specify that summary judgment was granted to him against Bash without opposition, rather than upon her default. Bash's motion is granted; Surilas's cross-motion is denied.
BACKGROUND
Plaintiff, 1319 First Avenue Associates LLC, sued defendants Surilas, Jonathan Bash, and JMG Restaurant Corporation for money that 1319 First Avenue claimed they owed it under the guarantee of a commercial lease. Defendant Surilas cross-claimed against Jonathan Bash and brought a third-party claim against Francine Bash.
Surilas's cross-claim and third-party claim arise from an indemnification agreement allegedly reached among Surilas, Jonathan Bash, and Francine Bash as part of Jonathan Bash's purchase of Surilas's shares of JMG Restaurant Corp.
Plaintiff moved for summary judgment on its claims against Surilas and Jonathan Bash; Surilas cross-moved for summary judgment on his cross-claim against Jonathan Bash and third-party claim against Francine Bash. Jonathan Bash filed an affidavit that opposed plaintiff's motion for summary judgment but did not address Surilas's cross-motion. Francine Bash did not file any papers.
This court held oral argument on the motion and cross-motion; oral argument was presented by counsel for plaintiff, for Surilas, and for Jonathan Bash. (See generally NYSCEF No. 52 [oral argument transcript].) After hearing oral argument on the motion and cross-motion, the court issued a decision on the record (i) granting plaintiff's motion for summary judgment against Surilas and Jonathan Bash; and (ii) granting Surilas's cross-motion for summary judgment against Jonathan Bash and Francine Bash "on default and on the merits." (Id. at 15-16.) The court directed counsel for Surilas to settle an order on his cross-motion. (See id. at 16-17.) The court also issued a brief decision and order stating that the motion and cross-motion were "granted for the reasons in the record on 7/10/19" and directing the parties to "Settle Order." (NYSCEF No. 54.)
Although counsel for Jonathan Bash has also appeared in the action for Francine Bash, he gave his appearance at oral argument only as being for Jonathan Bash, and presented arguments only against plaintiff's motion.
Surilas later filed a proposed order for settlement reflecting the court's grant of summary judgment on his third-party claim against Francine Bash. (See NYSCEF Nos. 50-51.) The proposed order did not address the court's grant of summary judgment to plaintiff on its summary-judgment motion. (See NYSCEF No. 51.) Francine Bash opposed settlement of Surilas's proposed order on the ground that her signature on the indemnification agreement underlying Surilas's claim against her was not genuine. (See NYSCEF No. 55.) The court did not enter the proposed order.
The proposed order also did not address Surilas's cross-claim against Jonathan Bash: Bash's counsel had filed a suggestion of bankruptcy for him shortly after oral argument. (See NYSCEF No. 48.)
Francine Bash now moves under CPLR 5015 (a) (1) to vacate the grant of summary judgment against her on default. Surilas cross-moves under CPLR 2001 to modify the official transcript of oral argument on the motion and cross-motion for summary judgment to state that summary judgment was granted against Francine Bash "without opposition," rather than "on default."
DISCUSSION
This court granted summary judgment on default against Francine Bash. To vacate a default judgment under CPLR 5015 (1) (a), the defaulting party must show a reasonable excuse and the existence of a meritorious defense. ( Eugene Di Lorenzo, Inc. v A.C. Dutton Lumber Co., 67 NY2d 138, 141 [1986].) Francine Bash has met these requirements here.
Bash's motion papers include an affirmation of counsel, who explains that the default was the product of law office failure—essentially that he and his support staff failed to realize that Surilas's cross-motion had been brought against his clients. This court concludes that this failure is a reasonable excuse for Bash's default. (See Cornwall v Lerner, 171 AD2d 540 [1st Dept 2019].) This court further concludes that Bash's representation that she did not sign the indemnification agreement on which Surilas premises his claim against her—supported by a discrepancy between the signature on Bash's affidavit and her putative signature on the agreement—is a potentially meritorious defense warranting the vacatur of summary judgment.
Ths court is not persuaded by Surilas's argument that Francine Bash and her counsel must have realized that Surilas had moved for summary judgment against her, and therefore must have knowingly decided to refrain from opposing that motion. Surilas relies on correspondence among the lawyers referencing the cross-motion. This court is not so sure, though, that the language of the correspondence, standing alone, would clearly have put Bash's counsel on notice that his cross-motion was directed toward her, rather than toward the plaintiff. Moreover, Surilas's papers on the present motion/cross-motion do not seek to explain why Francine Bash would have waived opposition to Surilas's claims against her. The absence of such an explanation is all the more telling given that Bash has put forward on this motion a colorable, fact-based argument why summary judgment against her based on the indemnification agreement would be inappropriate.
Accordingly, it is
ORDERED that Francine Bash's motion under CPLR 5015 (1) (a) to vacate the award of summary judgment against her is granted; and it is further
ORDERED that this court's decision and order entered September 30, 2019, is vacated to the extent that it awarded Surilas summary judgment against Francine Bash; and it is further
ORDERED that Surilas's cross-motion under CPLR 2001 to modify the terms of this court's order on Surilas's cross-motion for summary judgment against Francine Bash, to reflect that Surilas was awarded summary judgment against Francine Bash "without opposition," is denied; and it is further
ORDERED that Surilas may by January 22, 2021, bring a renewed motion for summary judgment on his third-party claim against Francine Bash; and it is further
ORDERED that counsel for Jonathan Bash and Francine Bash shall by January 22, 2021, update the court on the status of Jonathan Bash's bankruptcy proceeding, by letter filed on NYSCEF and emailed to mhshawha@nycourts.gov; and it is further
ORDERED that plaintiff 1319 First Avenue shall by January 22, 2021, submit a proposed order for settlement reflecting this court's grant of summary judgment on plaintiff's claim against Surilas, as indicated in this court's order entered September 30, 2019.