Summary
finding affidavit of confession of judgment failed to provide facts from which debt arose when it did not adequately refer to a stipulation of settlement containing facts
Summary of this case from Morgan v. Concours Classic Motor Cars, Inc.Opinion
No. 18710/08.
2010-08-2
AROOBA CORP. and Mubashra K. Alam, Plaintiffs, v. AMERICAN MEDICAL CENTERS and J.W. Tony Brown–Arkah, Defendants.
Jeffrey A. Grant, Esq., Jacobson Goldberg & Kulb, LLP, for Plaintiff. J.W. Tony Brown Arkah, Pro Se.
Jeffrey A. Grant, Esq., Jacobson Goldberg & Kulb, LLP, for Plaintiff. J.W. Tony Brown Arkah, Pro Se.
YVONNE LEWIS, J.
Defendants American Medical Centers and J.W. Tony Brown–Arkah (AMC and Mr. Brown, respectively, or collectively, defendants) move for an order, pursuant to CPLR 3218(a)(2), vacating the $188,837.00 judgment in favor of plaintiffs Arooba Corp. (Arooba) and Mubashra K. Alam (Mr. Alam).
Arooba cross-moves, pursuant to CPLR 5019(a), to amend the caption to reflect the true name of defendants' corporation, and defendants also cross-move for an order vacating the $188,837.00 judgment on alleged forgery grounds.
Mr. Alam's name appears on the request for judicial intervention, notice of defendants' cross motion, Mr. Brown's “affirmation in support of notification,” the verified petition, the “order to show cause with T.R.O.,” the “affidavit of emergency” and the “affidavit in support.” However, Mr. Alam's name does not appear on the other supporting documents and none of the submitted papers explain Mr. Alam's relationship to Arooba or any of the other parties herein. In addition, the stipulation dated May 9, 2008 contains Mr. Alam's purported signature under Arooba Corp., but on the stipulation his name reads “Mahmoud” Alam instead of Mubashra K. Alam, as stated on the other documents. This opinion under these circumstances will hereafter only utilize Arooba to refer to plaintiffs.
Background Facts and Procedural History
Mr. Brown is the principal shareholder of American Medical Utilization Management Corporation (AMUMC) which does business as (d/b/a) American Medical Centers Corp. Arooba, lessee of the premises at 434 Rockaway Avenue in Brooklyn, entered into a written sublease agreement with AMC on or about March 1, 2005 whereby AMC agreed to pay monthly rent to Arooba. AMC, though, failed to pay rent due on or about August 2007, executed a lease surrender agreement, subsequently became a tenant at will and thereafter failed to pay rent to Arooba, who has brought the instant petition against AMC and Mr. Brown that seeks an eviction order and $141,905 judgment with interest from September 1, 2007.
Arooba contends that Mr. Brown appeared before a notary public on April 15, 2008 and executed, both individually and as president of AMC, affidavits confessing judgment for $188,837.00. A stipulation was executed by Arooba and defendants on or about May 9, 2008 that settled the matter for $188,837.00 to be paid to Arooba. Judgment was subsequently entered on June 27, 2008 in Arooba's favor for $189,062.00 based on the confessions of judgment. Arooba had issued a restraining notice to the New York State Department of Health (DOH), and the withdrawal of funds from the DOH, according to Mr. Brown, made him unable to meet payroll thereby forcing him to turn patients away. This court's order vitiated the restraining notice which released the funds, and Arooba now requests permission to reserve a restraining notice on the DOH.
Arooba's Cross Motion to Amend the Caption
Arooba seeks an order, pursuant to CPLR 5019(a), amending the caption to reflect the true corporate name of the defendants. Arooba contends that the corporate mis-naming is a simple mistake and opines that amending the name is in the interest of justice. Further, Arooba argues that the amendment will affect no substantial right of any party, though, its rights to enforce the judgment may be impaired without granting the application to amend.
Arooba analogizes the issue to Mr. Brown's own name. At times defense counsel refers to his client as Tony Brown and at other times as Tony Brown–Arkah. Tony Brown and Tony Brown–Arkah are synonymous, and Arooba argues that a similar approach applies for AMC and AMUMC. According to Arooba, Mr. Brown uses his various personal and business names interchangeably in his dealings. The judgment Arooba obtained against defendants arose out of a sublease which bears the name AMC, and Arooba cites a check drawn on the account of AMUMC which lists the same business address as the space leased to AMC.
Arooba also argues to equitably estop defendants from opposing the name correction. Judicial estoppel “precludes a party who assumed a certain position in a prior legal proceeding and who secured a judgment in his or her favor from assuming a contrary position in another action” ( Prudential v. Neildan, 109 A.D.2d 394, 395 [1994] ). Arooba notes in this regard that defendants' previous claims acknowledged the debt, and that defendants carried on business and litigation under the d/b/a name. Defendants failed to object to or correct documents which referred to the d/b/a as a corporation, and therefore, Arooba posits that defendants consented to suit under the d/b/a name. Mr. Brown also signed documents as “president” as if the d/b/a was a corporate entity. Therefore, according to Arooba, defendants' course of conduct, allows judicial estoppel to preclude them from opposing the motion to amend.
Defendants, in response, contend that American Medical Centers Corp. is an entity that does not exist. According to defendants, a d/b/a is not a legal entity and therefore cannot be sued (Dewey v. Hillcrest Gen. Hosp., 201 A.D.2d 609 [1994] ). Defendants argue that any action with such a structural defect must be dismissed because “misnaming is patently no naming” (Maldonado v. Maryland Rail Commuter Service Admin., 91 N.Y.2d 467, 472 [1998] ). Defendants argue that the court cannot allow Arooba to substitute a non-party for a party. They contend that no action is pending against their true legal entity, that Arooba's cross motion was not served on AMUMC and that, consequently, the court does not have personal jurisdiction over the entity.
CPLR 2001 pertinently provides that “the court may permit a mistake, omission, defect or irregularity ... to be corrected, upon such terms as may be just, or, if a substantial right of a party is not prejudiced, the mistake, omission, defect, or irregularity shall be disregarded.” “[S]light mistakes or irregularities not affecting the merits or the substantial right of a party shall not become fatal in their consequences. [Section 105 of the civil Practice Act, now CPLR 2001] does away with the purely technical or legalistic objections by which a party seeks to gain some advantage over his adversary” (People ex rel. Di Leo v. Edwards, 247 App. Div. 331, 334 [1936] ). “A suit at law is not a children's game, but a serious effort on the part of adult human beings to administer justice; and the purpose of the process is to bring parties into court” (U.S. v. A.H. Fischer Lumber Co., 162 F.2d 872, 873 [4th Cir1947] ).
Here, it is clear that Mr. Brown's corporate counterpart was intended to be named as a defendant in the action. “If [the served process] names them in such terms that every intelligent person understands who is meant, as is the case here, it has fulfilled its purpose; and the courts should not put themselves in the position of failing to recognize what is apparent to everyone else” ( id.). Arooba's intent in naming AMC corporation as a party in the suit is obvious, and defendants were fully apprised of the litigation. Accordingly, Arooba's cross motion to amend the caption to reflect the true corporate name of AMC is granted, and this ruling moots defendants' argument that the court lacks personal jurisdiction herein.
Defendants' Cross Motion To Vacate The Judgment
Defendants argue that since the confessions of judgment lack sufficient detail, as required by CPLR 3218(a)(2),
vacating the judgments is warranted. Confessions of judgment are always closely scrutinized “and in judging them a liberal attitude should be assumed in favor of the judgment debtor” ( Rae v. Kestenberg, 23 A.D.2d 565, 566 [1965], affd 16 N.Y.2d 1023 [1965] [citations omitted] ). Relief from judgment is provided under CPLR 5015 which states that “[t]he court which rendered a judgment or order may relieve a party from it upon such terms as may be just, on motion of any interested person with such notice as the court may direct.”
That provision pertinently provides that “a judgment by confession may be entered, without any action ... upon an affidavit executed by the defendant ... [and] if the judgment to be confessed is for money due or to become due, [it must state] concisely the facts out of which the debt arose and [show] that the sum confessed is justly due or to become due.”
Defendants contend that the affidavits of confession fail to concisely explain the facts from which the debt arose, and also fail to state what amount applies to the principal and what amount represents interest. According to defendants, Arooba's statement that “defendant is indebted to the plaintiff in the sum of $188,837 .00 with interest at the default interest rate and late payment penalties, less any payment made ...” is insufficient.
Defendants further note in support of their argument that in County Natl. Bank v. Vogt (28 A.D.2d 793, 793 [1967] ),affd21 N.Y.2d 800 [1968] ) an affidavit of confession stated that the confession was for “a debt justly due to the plaintiff arising from ... money loaned by plaintiff to defendant and not repaid.” The court found the affidavit insufficient for failing to state the facts from of which the debt arose ( Id. at 794) Here, defendants observe, the affidavit merely states that the amount arose from “interest at the default rate, late payment penalties ... and pursuant to the stipulation of settlement dated April 15, 2008.” Defendants contend that no such stipulation was made part of the affidavits of confession nor was it attached to the judgment of confession.
Defendants also rely on Wood v. Mitchel (117 N.Y. 439, 441–442 [1889] ) to argue that a breakdown of the amount owed is necessary to conform with the statute. That case involved an affidavit of confession which stated that “said sum of $5,000.00 is a balance due said plaintiff of money loaned and advanced by him to me ... and includes interest upon such loans and advances to this date” ( id. at 441). The court found the words insufficient and further held that the affidavit should “state interest and principal separately and give the data upon which the amounts of the two items (interest and principal) would be ascertained” ( Id. at 442).
Arooba, in response, opines that defendants cannot raise alleged deficiencies in the affidavits of confession of judgment as a defense. According to Arooba, there is no merit to defendants' contention that vacating the judgment is warranted by alleged deficiencies about the facts supporting the judgment. Arooba asserts that “any alleged deficiency in the statement of confession of judgment is not available to plaintiff” (Giryluk v. Giryluk, 30 A.D.2d 22, 23 [1968] ). Further, Arooba contends that “CPLR 3218 is intended to protect creditors of a defendant from judgments on confession entered by collusion” (Magalhaes v. Magalhaes, 254 App.Div. 880 [1938] [internal citations omitted] ).
The confessions of judgment state that $188,837.00 owed to Arooba is “pursuant to the stipulation of settlement dated April 15, 2008.” The only stipulation of settlement, though, is dated May 9, 2008. That stipulation outlines the facts from which the debt arose, and it also provides a breakdown of the sum owed to Arooba. However, since the stipulation is not dated April 15, 2008, as indicated by the affidavit, the facts in the stipulation of settlement cannot be considered part of the affidavits of confession. The confessions of judgment without the stipulation to supplement them fail to provide facts from which the debt arose and also fail to provide a breakdown of the sum owed. Further, the confessions of judgment refer to an April 9, 2008 affidavit of confession of judgment by defendants, and the purported affidavits of confession of judgment from defendants are dated April 15, 2008. Thus, the confessions of judgment do not satisfy the requirements of CPLR 3218 and are void as defective (County Natl. Bank v. Vogt, 28 A.D.2d at 794).
Voiding the confessions of judgment, in turn, warrants denying Arooba's request for permission to reserve a restraining notice on the DOH. In addition, the lack of sufficient facts in the confessions of judgment moots defendants' contention that Arooba forged his signature on the affidavits. Accordingly, it is
ORDERED that Arooba's cross motion to amend the caption herein is granted, and the caption shall now read as follows:
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF KINGS
— -X
Arooba corp. and Mubashra K. Alam, Plaintiffs,
— against–Index No. 18710/08
American Medical Utilization Management Corporation
and J.W. Tony Brown–Arkah, Defendants.
— -X; and it is further
ORDERED that defendants' cross-motion, pursuant to CPLR 3218(a)(2), to vacate the $188,837.00 judgment in favor of plaintiff is granted; and it is further
ORDERED that defendants' original motion to vacate the $188,837.00 judgment on alleged forgery grounds is denied as moot.
This constitutes the decision and order of this court.