Opinion
2007-732 Q C.
Decided June 12, 2008.
Appeals from two orders of the Civil Court of the City of New York, Queens County (Stephen S. Gottlieb, J.H.O.), dated, respectively, February 7, 2007 and April 11, 2007. The order dated February 7, 2007 denied tenant's motion to dismiss the nonpayment summary proceeding. The order dated April 11, 2007 denied tenant's motion to vacate a default final judgment, entered March 16, 2007, awarding landlord possession and the sum of $179,362.75.
Appeal from order dated February 7, 2007 dismissed.
Order dated April 11, 2007 affirmed without costs.
PRESENT: PESCE, P.J., GOLIA and STEINHARDT, JJ.
The appeal from the order dated February 7, 2007 is dismissed because the right of direct appeal from that order terminated with the entry of the final judgment ( see Matter of Aho, 39 NY2d 241).
Landlord commenced this commercial nonpayment proceeding by notice of petition and verified petition dated December 11, 2006, seeking possession and $179,362.75 in rent arrears. Tenant answered, raising 11 affirmative defenses. Tenant subsequently moved to dismiss the proceeding on the ground that there was another action pending between the same parties. By order dated February 7, 2007, the court denied tenant's motion.
On March 9, 2007, the matter was set for trial on March 16, 2007. Tenant failed to appear, and a default final judgment awarding landlord possession and the sum of $179,362.75 was entered on March 16, 2007. Tenant subsequently moved to vacate the default final judgment, asserting, among other things, that, on March 9, 2007, the case had been set for trial on April 11, 2007, not March 16, 2007. Tenant asserted that March 16, 2007 was merely a deadline for its counsel to file a motion to withdraw based upon a possible conflict of interest.
The court denied tenant's motion to vacate, noting that the case had been marked final for trial since February 7, 2007, and stating that tenant's version of what had happened on March 9, 2007 was "inconsistent with the actual facts and circumstances." The court indicated that it was made clear on March 9, 2007 that the potential trial date of April 11, 2007 was set only in case tenant's counsel chose to file a motion to withdraw by March 16, 2007. In that event, the trial would be postponed from March 16, 2007 to April 11, 2007 in order to allow tenant time to obtain new counsel. Tenant's counsel decided not to file a motion to withdraw before March 16, 2007, so the trial went forward on March 16, 2007 as originally planned.
In order to vacate the default final judgment, tenant was required to establish both a reasonable excuse for the default and a meritorious defense (CPLR 5015 [a]; Eugene Di Lorenzo, Inc. v A.C. Dutton Lbr. Co., 67 NY2d 138, 141). The determination of what constitutes a reasonable excuse for a default lies within the sound discretion of the motion court ( see e.g. Matter of Gambardella v Ortov Light., 278 AD2d 494). We find that the court did not improvidently exercise its discretion in finding that tenant had no adequate excuse for its failure to appear. Moreover, tenant failed to demonstrate that any of its various asserted defenses had any merit.
Accordingly, we affirm the order denying tenant's motion to vacate the default final judgment.
Pesce, P.J., and Golia, J., concur.
Steinhardt, J., concurs in part and dissents in part in a separate memorandum.
Steinhardt, J., concurs in part and dissents in part and votes to dismiss the appeal from the order dated February 7, 2007, and to reverse the order dated April 11, 2007 and grant tenant's motion to vacate the default final judgment, in the following memorandum:
Tenant, restaurant owner, appeals from two orders dated, respectively, February 7, 2007 and April 11, 2007. The initial order denied tenant's motion to dismiss the nonpayment summary proceeding, and the second order denied tenant's motion to vacate the default final judgment, entered March 16, 2007, awarding landlord possession and the sum of $179,362.75. While I concur in the dismissal of the appeal from the order dated February 7, 2007, I vote to reverse the order denying plaintiff's motion to vacate the default, and to permit tenant an opportunity to defend on the merits.
On or about January 1, 2005, the parties entered into a lease agreement. In August 2005, landlord attempted to serve tenant with a notice to cure, and thereafter with a notice of termination, based upon tenant's failure to pay rent. Subsequently, tenant filed a bankruptcy petition and an action in the Supreme Court for a Yellowstone injunction. Both were dismissed. In addition, an action for a corporate dissolution of tenant was commenced in the Supreme Court.
In May 2006, landlord commenced a holdover summary proceeding in the Civil Court. At no time were the issues of rent before the court, same having been severed and deferred pending the determination of landlord's request for a final judgment of possession. The holdover proceeding was ultimately dismissed in November 2006, on the ground that tenant had not received the necessary notice to cure. One month later (December 2006), landlord commenced the instant nonpayment proceeding. Tenant's efforts to have the proceeding dismissed were unsuccessful, and, by order dated February 7, 2007, the matter was set down for trial. The case next appeared on the court calendar on March 9, 2007. In the interim, landlord had obtained new counsel, prior counsel having been disqualified by virtue of a conflict of interest. On March 16, 2007, a default final judgment was entered against tenant. Later that day, tenant moved, by order to show cause, for an order vacating said default. The motion was denied on April 11, 2007.
"Our courts take a liberal approach in completely, conditionally, or partially setting aside a default judgment where, in the interest of justice and in the court's discretion, such relief is deemed appropriate ( Oppenheim v. Melnick, 34 AD2d 784, mot. for lv. to app. den. 27 NY2d 484; Ladd v. Stevenson, 112 N.Y. 325, 332; Wall v. Bennett, 33 AD2d 827; 5 Weinstein-Korn-Miller, N. Y. Civ. Prac., par. 5015.02; Practice Commentary on CPLR 5015 by Prof. David D. Siegel in McKinney's Cons Laws of N.Y., Book 7B, p. 580)" ( Schutzer v Berger, 40 AD2d 725, 725).
"In order to prevail on their motion to vacate, the defendants were required to demonstrate both a reasonable excuse for their default and a meritorious defense ( see Hospital for Joint Diseases v Dollar Rent A Car, 25 AD3d 534; Fekete v Camp Skwere, 16 AD3d 544, 545). The determination of what constitutes a reasonable excuse lies within the trial court's discretion ( see Santiago v New York City Health Hosps. Corp., 10 AD3d 393, 394; Roussodimou v Zafiriadis, 238 AD2d 568, 569)" ( Nurse v Figeroux Assoc., 47 AD3d 778, 778-779).
The lower court improvidently exercised its discretion in not permitting this matter to proceed on the merits. It is the position of tenant's counsel that there was some confusion in his mind as to whether it was, in fact, necessary for him to appear in court on March 16, 2007. He opined that he thought an appearance was needed only if he planned to move to be relieved as counsel for tenant and that the case was, in fact, set for trial on April 11, 2008. (There was an issue as to the ethics of his representation of tenant, but no such motion was forthcoming prior to March 16, 2007.) It is undisputed that on the day the default was issued, landlord's attorney contacted tenant's counsel via cell phone and that he (tenant's counsel) arrived in Queens County Civil Court post haste, making the trip from Westchester County, arriving, apparently, just moments after the issuance of the default judgment. An application to open said default was made the same day. Under the totality of the circumstances, the default was excusable.
Furthermore, the long and convoluted history between these parties leads to the conclusion that tenant has demonstrated the existence of a potentially meritorious defense. (A 50% shareholder in tenant corporation is apparently also a 50% partner of landlord. In fact, it is not clear as to whether said "partner" is, in fact, participating in the instant proceeding and, if so, on which side.)
Accordingly, I vote to reverse the order dated April 11, 2007, vacate the tenant's default and permit this matter to proceed on the merits.