Opinion
17–615014
03-01-2018
MHC GREENWOOD VILLAGE NY, LLC, Plaintiff, v. MIMAR LLC, Defendant.
PLTF'S ATTORNEY: LAZER APTHEKER ROSELLA, P.C., 225 Old Country Road, Melville, NY 11747 DEFT'S ATTORNEY: FREDRICK P. STERN & ASSOCIATES, P.C., 110 Lake Avenue South, Suite 46, Nesconset, NY 11767
PLTF'S ATTORNEY: LAZER APTHEKER ROSELLA, P.C., 225 Old Country Road, Melville, NY 11747
DEFT'S ATTORNEY: FREDRICK P. STERN & ASSOCIATES, P.C., 110 Lake Avenue South, Suite 46, Nesconset, NY 11767
Sanford Neil Berland, J.
Upon the reading and filing of the following papers on this matter: (1) Motion to vacate the default in answering of the Defendant and disqualifying Lazer, Aptheker, Rosella & Yedid, P.C. from representing the Plaintiff brought by Order to Show Cause and supporting papers by Defendant, dated October 26, 2017 ; Opposing Affirmation, Memorandum of Law and supporting papers by Plaintiff, dated November 6, 2017 ; Replying Affirmation and supporting papers by Defendant, dated November 8, 2017 ; (2) Motion seeking a default judgment and supporting papers by Plaintiff, dated October 3, 2017; it is,
ORDERED that Mot. Seq. # 002 made by defendant for an order vacating its default in answering, for leave to file a late answer and for an order disqualifying plaintiff's counsel, is granted only to the extent that the defendant is directed to serve the plaintiff with the answer within 15 days of the entry of this order and plaintiff is directed to accept same; and it is further
ORDERED that Mot. Seq. # 002 is otherwise denied; and it is further
ORDERED that Mot. Seq. # 001 made by plaintiff pursuant to CPLR 3215 [a] seeking a default judgment against the defendant, is denied with leave to renew if the defendant's answer is not served in accordance with this order.
This is an action for damages and injunctive relief arising out of an alleged trespass to real property in connection with the defendant's ownership of a house located at 44 Village Circle South, Manorville, New York. The plaintiff is the owner and operator of Greenwood Village, a residential community for persons aged fifty-five and older in which the defendant's house is located. The defendant is one of several entities owned or managed by Mr. Robert I. Toussie, and it purchased the house at issue at a tax sale a number of years ago. The defendant limited liability company and the other business entities managed by Mr. Toussie, according to Mr. Toussie's affidavit, own hundreds of parcels of property.
According to the complaint, the plaintiff holds title to the real property beneath the houses of all of its residents, including the real property lying beneath defendant's Village Circle South house. As alleged by plaintiff, each resident owns only the physical structure—the house—but leases the real property on which it was built from the plaintiff pursuant to a Residency Agreement. The Residency Agreement sets forth the rights and obligations of the plaintiff, as owner, and the resident, as a member of the community. Under a standard Residency Agreement, the homeowner agrees to pay monthly residency charges, utility charges and other fees and charges; in exchange, the homeowner receives a lease of the real property upon which their house has been built and the right to use the common amenities provided by the plaintiff.
The plaintiff alleges two causes of action in its complaint. The first is to recover damages for a continuous trespass that is claimed to have been occurring since "on or about June 20, 2005," the date the defendant, according to the verified complaint, allegedly took ownership of the house without entering into a Residency Agreement with the plaintiff or paying residency fees associated with the use of the real property beneath the house, both of which defendant has refused to do. The second is for a mandatory injunction directing the defendant to remove the house from plaintiff's property or, in the alternative, for an order permitting plaintiff to remove the house at defendant's expense. The plaintiff's second cause of action was brought as a result of the defendant's alleged failure to maintain the house, which the photographs annexed to the submitted papers purport to show in a deteriorated and unsafe condition.
The allegation that defendant took ownership of the house "on or about" June 20, 2005 appears not only in the complaint, but is repeated in an affidavit tendered by plainitff in support of its motion for a default judgment. Documentation submitted by defendant indicates that it acquired title to the house at a tax sale on May 28, 2009, following a default by the prior owner. According to defendant, June 20, 2005, represents the date from which plaintiff in a prior action against defendant, subsequently abandoned by plaintiff, sought unpaid residency charges for the site.
The matter is now before the court on plaintiff's motion for entry of a default judgment and defendant's separate motion, brought on by order to show cause, for, among other things, relief from its default in timely answering, for leave to file a late answer and for an order disqualifying plaintiff's counsel on account of their prior representation of defendant's managing member and several of his companies. The sufficiency of service of process does not appear to be in question. Rather, the defendant avers that it did not in fact receive notice of the action in time to respond to the summons and complaint, which were not served personally upon it but were served upon the Secretary of State. Further, defendant's counsel complains that although plaintiff's counsel were aware of his representation of the defendant, which he had also represented in a prior action brought by the plaintiff involving the same property (and which was dismissed as abandoned in 2015), plaintiff's counsel informed him that the current action had been commenced and that service of process had been effectuated only after Mimar's time to respond to the complaint had expired and plaintiff had moved—less than two weeks later—for entry of a default judgment, by sending him a "courtesy copy" of their motion. In response, plaintiff challenges the sufficiency of the excuse proffered by the defendant, averring that in addition to serving the Secretary of State, they had mailed a copy of the pleadings directly to Mimar the following day and that prior to commencing the action, they had talked with defendant's counsel in an effort to resolve the matter without litigation, sent him a copy of a draft of the complaint, with the request—to which he agreed—that he discuss the matter with his client, and that they commenced the action several weeks later having failed in several follow up attempts to receive a response to their earlier request. They do not, however, dispute, that they did not inform defendant's counsel that they had commenced the action against his client and that they had effectuated service of process until they subsequently provided him with a courtesy copy of their motion for entry of a default judgment, after Mimar's time to respond to the summons and complaint had expired.
Plaintiff's Motion for Entry of a Default Judgment and Defendant's Motion to Vacate Defendant's Default in Answering and for Leave to File a Late Answer
In support of its motion to vacate its default in timely responding to the summons and complaint, and by extension in opposition to plaintiff's motion for entry of a default judgment, defendant relies on CPLR 317, which allows a party that has not been personally served with process to appear and defend the action notwithstanding that a default judgment has been entered against it, if it did not actually receive process in time to move or answer and can show that it has a potentially meritorious defense:
A person served with a summons other than by personal delivery to him or to his agent for service designated under rule 318, within or without the state, who does not appear may be allowed to defend the action within one year after he obtains knowledge of entry of the judgment , but in no event more than five years after such entry, upon a finding of the court that he did not personally receive notice of the summons in time to defend and has a meritorious defense.
Where, as here, however, the application is made shortly after the default has occurred and before a default judgment has been entered and the relief sought is an order vacating the defendant's default and extending its time to respond to the summons and complaint, the more apt provisions are CPLR 2004 and CPLR 3012(d). As the Second Department has repeatedly observed:
In light of the public policy favoring the resolution of cases on their merits, the Supreme Court may compel a plaintiff to accept an untimely answer (see CPLR 2004, 3012[d] ) where the record demonstrates that there was only a short delay in appearing or answering the complaint, that there was no willfulness on the part of the defendant, that there would be no prejudice to the plaintiff, and that a potentially meritorious defense exists (see Gonzalez v. Seejattan , 123 AD3d 762, 763, 996 N.Y.S.2d 536 ; Evans v. Sandoval , 121 AD3d 1037, 994 N.Y.S.2d 314 ; Arteaga v. Adom Rental Transp., Inc. , 121 AD3d 931, 993 N.Y.S.2d 916 ; EHS Quickstops Corp. v. GRJH, Inc. , 112 AD3d 577, 976 N.Y.S.2d 171 ; Vellucci v. Home Depot U.S.A., Inc. , 102 AD3d 767, 957 N.Y.S.2d 874 ).
Alonso v. Lorimik Realty Corp. , 131 AD3d 496, 14 N.Y.S.3d 713–14 (2d Dept 2015). See also Buchholz v. A.L.A.C. Contracting Corp. , 122 AD3d 660, 661, 996 N.Y.S.2d 175 (2014) ; Koren v. Albert Warehouse & Son, Inc. , 148 AD3d 1127, 1128, 49 N.Y.S.3d 310, 311 (2d Dept 2017) ; Yongjie Xu v. JJW Enterprises, Inc. , 149 AD3d 1146, 1147, 53 N.Y.S.3d 660, 661 (2d Dept 2017) ; Baldwin Route 6, LLC v. Bernad Creations, Ltd. , No. 2015–07266, 2018 WL 846362 (2d Dept Feb. 14, 2018) ; Roy v. 81E98th KH Gym, LLC , 142 AD3d 985, 986, 37 N.Y.S.3d 337 (2d Dept ––––) ; Spence v. Davis , 139 AD3d 703, 704, 31 N.Y.S.3d 539 (2d Dept ––––) ; Klein v. Yeshiva M'kor Chaim , 116 AD3d 672, 982 N.Y.S.2d 787 (2D Dept ––––) ; Calderone v. Molloy Coll. , 153 AD3d at 491, 59 N.Y.S.3d 473 (2d Dept ––––).
Quite apart form the question of whether in the circumstances presented here counsel for the defendant had a reasonable expectation that counsel for plaintiff would first alert him to any decision to proceed with litigation against his client and, in any event, inform him that they had both commenced the action and served process upon his client before seeking entry of a default judgment, and whether defense counsel himself undermined any such expectation by not promptly responding to plaintiff's counsels' inquiries about the status of his efforts to take up with his client the prospects for a non-litigation resolution of the disagreement, public policy favors deciding disputes on the merits, particularly where, as here, the period that elapsed between the expiration of defendant's time to appear and the filing of plaintiff's motion for a default judgment was brief, potentially novel questions of liability and relief are at issue in the underlying matter, and the defendant has potentially meritorious defenses, in whole or in part, to the claims asserted against it and the relief sought. Here, the full nature and extent of the rights the defendant acquired and the duties and obligations it took on when it purchased the structure are in bona fide dispute, as is its contention that it has acquired ownership of or the right to use the land beneath its house by adverse possession or prescription. Similarly, and even if only to avoid bolstering defendant's adverse possession and prescriptive easement claims, even plaintiff now appears ready to allow that it may have overstated the period for which it is seeking relief against defendant by alleging that defendant has occupied the site since June 2005. In any event, defendant is right that the statute of limitations is an available defense, one that necessarily limits the damages plaintiff is seeking for alleged trespass to the three years preceding the commencement of the action (see Bloomingdales, Inc. v. New York City Transit Auth. , 52 AD3d 120, 124, 859 N.Y.S.2d 22, 25 [1st Dept 2008], aff'd , 13 NY3d 61, 915 N.E.2d 608 [2009] ). Further, any potential prejudice that plaintiff might suffer from the comparatively brief delay occasioned by permitting defendant to tender a late answer, particularly in the context of the length of time the alleged trespass has been occurring and plaintiff's decision to abandon its earlier action against the defendant, can be addressed by ensuring that discovery and any other required pre-trial proceedings are initiated and conducted promptly.
Despite having alleged both in its verified complaint and in the affidavit of its representative in support of its motion for entry of a default judgment that defendant has been the owner of the house since "on or about" June 20, 2005 without entering into a Residency Agreement or paying any monthly fees, and seeking damages from defendant for the entire seventeen-year period since then, plaintiff now argues, in opposition to defendant's motion, that defendant actually acquired the house in 2009 and therefore cannot allege ownership of the site by adverse possession or claim a prescriptive easement over it because it cannot show the necessary elements for adverse possession or prescriptive easement for the requisite ten-year period. Notwithstanding plaintiff's multiple, and inconsistent, positions on the length of defendant's ownership and the period for which it should be subjected to an award of damages, there remains the unaddressed question of whether defendant can "tack" onto its period of possession of the site the period during which the prior owner occupied the site without paying rent or fees (see generally Gjokaj v. Fox , 25 AD3d 759, 760, 809 N.Y.S.2d 156, 157 [2d Dept 2006] ).
In light of the circumstances surrounding, and the explanation proffered for, the defendant's failure to serve a timely answer, the public policy favoring the resolution of cases on the merits and the desirability of doing so in this case in particular, the apparent lack of willfulness on the part of the defendant in failing to interpose a timely answer, the implementation of measures to avoid any prejudice to the plaintiff, who will be able to adjudicate its claim on the merits, and the existence of potentially meritorious defenses, that branch of the defendants motion (Mot. Seq. # 002) for an order vacating its default in answering and for leave to file a late claim is granted and plaintiff's motion (Mot. Seq. # 001) seeking entry of a default judgment is denied without prejudice to renewal should defendant not serve an answer to the complaint within the time directed below.
Motion to Disqualify Plaintiff's Counsel
"The disqualification of an attorney is a matter that rests within the sound discretion of the court" (see Matter of Town of Oyster Bay v. 55 Motor Ave. Co., LLC , 109 AD3d 549 [2d Dept 2013] ; Albert Jacobs, LLP v. Parker , 94 AD3d 919 [2d Dept 2012] ; Columbus Constr. Co., Inc. v. Petrillo Bldrs. Supply Corp. , 20 AD3d 383 [2d Dept 2005] ). "A party's right to be represented by counsel of his or her own choosing is a valued right which will not be superseded absent a clear showing that disqualification is warranted" (see Mediaceja v. Davidov , 119 AD3d 911 [2d Dept 2014] ; Zutler v. Drivershield Corp. , 15 AD3d 397 [2d Dept 2005] ). "The party seeking to disqualify a law firm or an attorney bears the burden on the motion" (see Solow v. Grace & Co. , 83 NY2d 303[1994] ; Aryeh v. Aryeh , 14 AD3d 634 [2d Dept 2005] ). A party seeking to disqualify an opponent's attorney must prove: (1) the existence of a prior attorney-client relationship between the moving party and opposing counsel, (2) that the matters involved in both representations are substantially related, and (3) that the interests of the present client and former client are materially adverse ( Tekni—Plex, Inc. v. Meyner & Landis , 89 NY2d 123 [1996] ).
Here, the defendant has failed to meet its burden of showing that disqualification is warranted based upon a purported conflict of interest. Defendant's mere conclusory assertion that there may be a conflict of interest, based solely upon unspecified instances where David Lazer of Lazer, Aptheker, Rosella & Yedid, P.C. represented Mr. Toussie, defendant's managing member, who is not a party to this case, and other corporations owned by Mr. Toussie, none of which is a party to this case, are insufficient to warrant the disqualification of plaintiff's counsel. Therefore, that branch of defendant's motion (Mot. Seq. # 002) seeking to disqualify plaintiff's counsel is denied.
Defendant shall serve and file electronically its answer to the complaint within fifteen days of the date hereof.
The foregoing constitutes the decision and order of the court.