Opinion
19216/07.
Decided December 20, 2007.
On July 11, 2007, Smolka Company Inc., (hereinafter Smolka or petitioner) filed a Notice of Petition and Verified Petition with the Kings County Clerk's office (KCC), motion sequence number No. 1 seeking a judgment pursuant to CPLR § 5206(e) directing the following relief: a) that certain real property described in the petition be sold; b) that the proceeds from the sale in an amount not exceeding $50,000.00 be paid to the respondent in the event the property is subject to the homestead exemption; c) and that said judgment obtained by petitioner for $138,320.98 with interest at a rate allowable by law, from June 29, 1995, and the costs, disbursements and attorneys fees of this proceeding, be adjudged to be a lien upon the surplus exceeding $50,000.00, and that the lien be enforced.
Respondent cross moves, under motion sequence number two, for an order dismissing the petition on the grounds that the Court lacks personal jurisdiction and for a further order vacating the original default judgment. Petitioner opposes the defendant's cross motion.
Motion Papers
Petitioner filed a Notice of Petition and Verified Petition with two exhibits. Exhibit 1 is a copy of the statement of judgment for $138.320.98. Exhibit 2 is a copy of the Tax Map for certain real property and affidavits of service for the Notice of Petition.
Respondent's cross motion consists of an affirmation from counsel, an affidavit from respondent, and two exhibits. Respondent's exhibits are the same as the petitioner's exhibits.
Petitioner's opposition to respondent's cross motion to dismiss consists of an attorney's affirmation and seven exhibits. Exhibit 1 is a copy of the notice of levy upon real property, dated February 27, 2007. Exhibit 2 is affidavit of service of the instant Notice of Petition. Exhibit 3 is affidavits of service for the original summons and complaint. Exhibit 4 is a certified copy of a subpoena duces tecum. Exhibit 5 is a certified copy of an affidavit of service upon the respondent of the original summons and complaint. The affidavit alleges personal delivery on March 30, 1995, to Jane Williams, a person of suitable age and discretion at 10524 Flatlands 2nd Street, Brooklyn, New York, followed by a mailing to the respondent on April 3, 1995 at that address. Exhibit 6 are other certified copies of affidavits of service for the original summons and complaint. Exhibit 7 is a copy of the underlying summons and complaint filed with the KCC on March 28, 1995.
Respondent's reply consists of an affirmation of counsel and an affidavit from the respondent.
Undisputed Facts
On March 28, 1995, Smolka, commenced an action in the Supreme Court of the State of New York, County of New York against the respondent and E.B. Mechanical Corp., under index number 107652/95. . On or about June 29, 1995, judgment was entered in that action in favor of petitioner and against the respondent in the amount of $138,320.98 with interest accruing thereon. Said judgment remains unsatisfied. Respondent owns real property located at 741 East 84th Street, Brooklyn, NY, 11236. Petitioner seeks to force a sale of said property to satisfy the judgment. Respondent contests service of the original summons and complaint. Respondent also claims that he was never notified of the default judgment.
Law and ApplicationCPLR § 5206 concerns real property exempt from application to the satisfaction of money judgments. CPLR § 5206(e) provides as follows: "Sale of homestead exceeding fifty thousand dollars in value.
A judgment creditor may commence a special proceeding in the county in which the homestead is located against the judgment debtor for the sale, by a sheriff or receiver, of a homestead exceeding fifty thousand dollars in value. The court may direct that the Notice of Petition be served upon any other person. The court, if it directs such a sale, shall so marshal the proceeds of the sale that the right and interest of each person in the proceeds shall correspond as nearly as may be to his right and interest in the property sold. Money, not exceeding fifty thousand dollars, paid to a judgment debtor, as representing his interest in the proceeds, is exempt for one year after the payment, unless, before the expiration of the year, he acquires an exempt homestead, in which case, the exemption ceases with respect to so much of the money as was not expended for the purchase of that property; and the exemption of the property so acquired extends to every debt against which the property sold was exempt. Where the exemption of property sold as prescribed in this subdivision has been continued after the judgment debtor's death, or where he dies after the sale and before payment to him of his portion of the proceeds of the sale, the court may direct that portion of the proceeds which represents his interest be invested for the benefit of the person or persons entitled to the benefit of the exemption, or be otherwise disposed of as justice requires."
Pursuant to CPLR § 5015, a moving party seeking to vacate a default judgment must demonstrate both an excusable default and a meritorious defense ( Kaufman Satran LLP v Sidbern Estates, Inc. , 4 AD3d 454 [2nd Dept. 2004]. It is within the sound discretion of the Court to determine what constitutes a reasonable excuse as well as a meritorious defense ( Beizer v Funk , 5 AD3d 619 [2nd Dept. 2004]).
However, where the defendant asserts a lack of personal jurisdiction as the ground for vacatur, the defendant need not demonstrate a reasonable excuse for the default or a meritorious defense ( Steele v Hempstead Pub Taxi, 305 AD2d 401, [2nd Dept. 2003]; see also European American Bank Trust Co v Serota, 242 AD2d 363 [2nd Dept. 1997).
Here, the respondent claims that he was not served with the original summons and complaint. In particular, he swears that on March 30, 1995, the alleged address of service, namely, 10524 Flatlands 2nd Street, Brooklyn, New York was not his residence. . In view of the respondent's allegation in his affidavit that he never was served, an issue of fact is raised requiring a traverse hearing ( European American Bank Trust Co v Serota, supra., 242 AD2d at 365 [2nd Dept. 1997]; Lease Corp of America v EBH Martinez Gallery, Inc., 9 Misc 3d 1114 (A) [Kings County, 2005]). If service had not been duly effected, the court would have no jurisdiction over the respondent and the default judgment would be a nullity. Once a movant demonstrates the lack of jurisdiction, a default judgment must be unconditionally vacated ( Citibank, N.A. v Keller, 133 AD2d 63 [2nd Dept. 1987]).
The parties are directed to appear in Part 52 on February 19, 2008 at 10:00 am for a traverse hearing to determine this court's personal jurisdiction over the respondent.
The petitioner's petition and respondent's cross motion are stayed pending the outcome of the hearing.
The foregoing constitutes the decision and order of this Court.