[App Div 2d Dept]

5015 “potentially meritorious”

Mid-Hudson Props., Inc. v Klein, 2018 NY Slip Op 08638 [2 Dept. 2018]

Although it was not necessary for Varble to establish the validity of his defense as a matter of law in order to obtain vacatur of his default (see Marinoff v Natty Realty Corp., 17 AD3d 412), he satisfied his burden of demonstrating a potentially meritorious defense based upon the absence of a personal guaranty (see Brown Bark II, L.P. v Weiss & Mahoney, Inc., 90 AD3d 963) as well as the dissolution of KVG, P.C., by operation of law upon Greco leaving the firm, and later being disbarred in March 2016 (see Partnership Law §§ 60, 62[3]; Magee v Magee, 120 AD3d 637; Mashihi v 166-25 Hillside Partners, 51 AD3d 738).

Notice of appearance and personal jurisdiction

Deutsche Bank Natl. Trust Co. v Vu, 2018 NY Slip Op 08629 [2d Dept. 2018]

“The filing of a notice of appearance in an action by a party’s counsel serves as a waiver of any objection to personal jurisdiction in the absence of either the service of an answer which raises a jurisdictional objection, or a motion to dismiss pursuant to CPLR 3211(a)(8) for lack of personal jurisdiction” (U.S. Bank N.A. v Pepe, 161 AD3d 811, 812; see Wilmington Sav. Fund Socy. FSB v Zimmerman, 157 AD3d 846, 847; American Home Mtge. Servicing, Inc. v Arklis, 150 AD3d 1180, 1181-1182; Countrywide Home Loans Servicing, LP v Albert, 78 AD3d 983, 984). Here, in November 2014, the defendant’s attorney appeared in the action on her behalf by filing a notice of appearance dated October 31, 2014, and did not move to dismiss the complaint on the ground of lack of personal jurisdiction at that time, or assert lack of personal jurisdiction in a responsive pleading (see American Home Mtge. Servicing, Inc. v Arklis, 150 AD3d at 1181-1182). The defendant did not move to dismiss the complaint until September 2015, 10 months after filing a notice of appearance. Under those circumstances, the defendant waived any claim that the Supreme Court lacked personal jurisdiction over her in this action (see U.S. Bank N.A. v Pepe, 161 AD3d at 813; Wilmington Sav. Fund Socy., FSB v Zimmerman, 157 AD3d at 846-847).
Although the plaintiff raises this issue for the first time on appeal, it involves a question of law that appears on the face of the record, and could not have been avoided if brought to the attention of the Supreme Court (see U.S. Bank N.A. v Bassett, 137 AD3d 1109, 1110; Guy v Hatsis, 107 AD3d 671, 671-672). Accordingly, we reach the issue and determine that the defendant was not entitled to dismissal of the complaint insofar as asserted against her for lack of personal jurisdiction.

Bold is mine.

“A judgment rendered without jurisdiction is void” but…

Bank United, FSB v Verbitsky, 2018 NY Slip Op 08623 [2d Dept. 2018]

As a threshold matter, the defendant correctly contends that the Supreme Court should have granted those branches of her motion which were to vacate and set aside the foreclosure sale and, in effect, to vacate the judgment of foreclosure and sale and the order of reference. “[A] court is without power to render a judgment against a party over whom the court lacks jurisdiction. A judgment rendered without jurisdiction is void” (Berlin v Sordillo, 179 AD2d 717, 719; see Diaz v Perez, 113 AD3d 421, 421; U.S. Bank, N.A. v Bernhardt, 88 AD3d 871, 872). Accordingly, upon, in effect, confirming the referee’s finding that the defendant was not properly served, the court was required to vacate and set aside the foreclosure sale, as well as the judgment of foreclosure and sale and order of reference upon which it was based (see Prudence v Wright, 94 AD3d 1073, 1074; U.S. Bank, N.A. v Bernhardt, 88 AD3d at 872).

However, in light of the plaintiff’s timely cross motion pursuant to CPLR 306-b (see US Bank N.A. v Saintus, 153 AD3d 1380, 1382), the Supreme Court could consider whether to extend the time for service of process, rather than granting the branch of the defendant’s motion which was to dismiss the complaint insofar as asserted against her for lack of personal jurisdiction.

Mailing

Aurora Loan Servs., LLC v Vrionedes, 2018 NY Slip Op 08622 [2d Dept. 2018]

“Although an affidavit of service may be a preferable method for a plaintiff to prove that it mailed the RPAPL 1304 notices in accordance with the statute, that is not the only method by which a residential foreclosure plaintiff may establish that it properly mailed the required notice” (HSBC Bank USA, N.A. v Ozcan, 154 AD3d at 826 [citation omitted]; see Flagstar Bank, FSB v Mendoza, 139 AD3d at 900). As this Court has previously observed, “[t]here is no requirement that a plaintiff in a foreclosure action rely on any particular set of business records to establish a prima facie case, so long as the plaintiff satisfies the admissibility requirements of CPLR 4518(a), and the records themselves actually evince the facts for which they are relied upon” (Citigroup v Kopelowitz, 147 AD3d 1014, 1015; see HSBC Bank USA, N.A. v Ozcan, 154 AD3d at 826). “[M]ailing may be proved by any number of documents meeting the requirements of the business records exception to the hearsay rule under CPLR 4518” (HSBC Bank USA, N.A. v Ozcan, 154 AD3d at 826; see Viviane Etienne Med. Care, P.C. v Country-Wide Ins. Co., 25 NY3d 498, 508; CitiMortgage, Inc. v Pappas, 147 AD3d at 901).

Piercing

Sky-Track Tech. Co. Ltd. v HSS Dev., Inc., 2018 NY Slip Op 08708 [2d Dept. 2018]

“The general rule . . . is that a corporation exists independently of its owners, who are not personally liable for its obligations, and that individuals may incorporate for the express purpose of limiting their liability” (East Hampton Union Free School Dist. v Sandpebble Bldrs., Inc., 66 AD3d 122, 126, affd 16 NY3d 775). “The concept of piercing the corporate veil is an exception to this general rule, permitting, in certain circumstances, the imposition of personal liability on owners for the obligations of their corporation” (id. at 126). “A plaintiff seeking to pierce the corporate veil must demonstrate that a court in equity should intervene because the owners of the corporation exercised complete domination over it in the transaction at issue and, in doing so, abused the privilege of doing business in the corporate form, thereby perpetrating a wrong that resulted in injury to the plaintiff” (id.; see Matter of Morris v New York State Dept. of Taxation & Fin., 82 NY2d 135, 142; JGK Indus., LLC v Hayes NY Bus., LLC, 145 AD3d 979, 980). “Factors to be considered in determining whether the owner has abused the privilege of doing business in the corporate form’ include whether there was a failure to adhere to corporate formalities, inadequate capitalization, commingling of assets, and use of corporate funds for personal use'” (East Hampton Union Free School Dist. v Sandpebble Bldrs., Inc., 66 AD3d at 127, quoting Millennium Constr., LLC v Loupolover, 44 AD3d 1016, 1016-1017).

Inherent power to vacate

Nationstar Mtge., LLC v Russo, 2018 NY Slip Op 08668 [2d Dept. 2018]

“Under CPLR 5015(a), a court is empowered to vacate a default judgment [or order] for several reasons, including excusable neglect; newly-discovered evidence; fraud, misrepresentation or other misconduct by an adverse party; lack of jurisdiction; or upon the reversal, modification or vacatur of a prior order” (Woodson v Mendon Leasing Corp., 100 NY2d 62, 68; see CPLR 5015[a]; Wells Fargo Bank, N.A. v Choo, 159 AD3d 938, 938; HSBC Bank USA v Josephs-Byrd, 148 AD3d 788; 40 BP, LLC v Katatikarn, 147 AD3d 710). “However, CPLR 5015(a) does not provide an exhaustive list as to when a default judgment [or order] may be vacated, and a court may vacate its own judgment [or order] for sufficient reason and in the interests of substantial justice” (40 BP, LLC v Katatikarn, 147 AD3d at 711, citing Woodson v Mendon Leasing Corp., 100 NY2d at 68; see Wells Fargo Bank, N.A. v Choo, 159 AD3d at 938; Hudson City Sav. Bank v Cohen, 120 AD3d 1304, 1305).
Although the Supreme Court retains “inherent discretionary power to relieve a party from a judgment or order for sufficient reason and in the interest of substantial justice” (Galasso, Langione & Botter, LLP v Liotti, 81 AD3d 884, 885; see Ladd v Stevenson, 112 NY 325, 332; Katz v Marra, 74 AD3d 888, 890), “[a] court’s inherent power to exercise control over its judgment is not plenary, and should be resorted to only to relieve a party from judgments taken through [fraud], mistake, inadvertence, surprise or excusable neglect” (Matter of McKenna v County of Nassau, Off. of County Attorney, 61 NY2d 739, 742 [internal quotation marks omitted]; see Wells Fargo Bank Minn., N.A. v Coletta, 153 AD3d 757, 758; HSBC Bank USA v Josephs-Byrd, 148 AD3d at 790)

No foundation for the expert opinion [biomechanical engineering]

Imran v R. Barany Monuments, Inc., 2018 NY Slip Op 08921 [2d Dept. 2018]

Under the circumstances of this case, we agree with the Supreme Court’s determination to grant the plaintiff’s motion pursuant to CPLR 4404(a) to set aside the jury verdict on the issue of damages (see Dovberg v Lauback, 154 AD3d 810). “An expert’s opinion must be based on facts in the record or personally known to the witness'” (Pascocello v Jibone, 161 AD3d 516, 516, quoting Hambsch v New York City Tr. Auth., 63 NY2d 723, 725). Here, a proper foundation was lacking for the admission of McGowan’s opinion (see Parker v Mobil Oil Corp., 7 NY3d 434, 447). Among other things, McGowan failed to calculate the force exerted by all four vehicles, the crash test he utilized to determine the delta-v differed in several significant respects from the instant accident, and he reviewed simulations in which the weight of the dummies was not similar to that of the plaintiff.

3126

Shohat v Suky, 2018 NY Slip Op 08548 [1st Dept. 2018]

Defendants engaged in willful and contumacious conduct warranting the penalty of striking their answer (seeCPLR 3126; McHugh v City of New York, 150 AD3d 561 [1st Dept 2017]). They failed to comply with several court orders directing compliance with outstanding discovery requests by dates certain. The discovery responses they served only after plaintiff moved to strike consisted almost entirely of objections.

Spivey v City of New York, 2018 NY Slip Op 08557 [1st Dept. 2018]

The default on which the dismissal was based — plaintiff’s failure to respond to a motion to dismiss under CPLR 3126, allegedly due to his counsel’s mis-calendaring of the return date — was not an isolated mistake but part of a pervasive pattern of neglect in prosecuting this action evident from the record, including his persistent failure to satisfy discovery obligations for about a year and a half. As part of a pattern of “intentional[] and repeated[] fail[ure] to attend to [his obligations]” (Imovegreen, LLC v Frantic, LLC, 139 AD3d 539, 540 [1st Dept 2016]), the law-office failure leading to the default was not excusable.

Suarez v Dameco Indus., Inc., 2018 NY Slip Op 08576 [1st Dept. 2018]

The motion court providently exercised its discretion in granting plaintiff’s motion to strike Dameco’s answer for willful failure to comply with discovery orders (see CPLR 3126). Dameco’s counsel offered a barebones affirmation disclosing that Dameco was now defunct and claiming that counsel’s attempts to contact unnamed former officers of Dameco through an investigative service had been unsuccessful, which was insufficient to establish good-faith efforts to comply (see Cavota v Perini Corp., 31 AD3d 362, 364 [2d Dept 2006]; Hutson v Allante Carting Corp., 228 AD2d 303 [1st Dept 1996]; see also Reidel v Ryder TRS, Inc., 13 AD3d 170, 171 [1st Dept 2004]; compare Lee v 13th St. Entertainment LLC, 161 AD3d 631 [1st Dept 2018]). Although Dameco was apparently still in business when the action was commenced, defense counsel provided no explanation for Dameco’s failure to preserve any records relating to its repair, service, and maintenance of the elevator that allegedly caused plaintiff’s injuries, including inspection records that Dameco was statutorily required to prepare. In light of plaintiff’s showing of willful failure to comply, and since the complete absence of records impedes plaintiff’s ability to prove his case, the sanction of striking Dameco’s answer was appropriate under the circumstances.

Aiken v Liotta, 2018 NY Slip Op 08621 [2d Dept. 2018]

We agree with the Supreme Court’s denial of the defendant’s motion to enforce certain orders of preclusion against the plaintiff Rosemary Wiltshire pursuant to CPLR 3126 and, thereupon, for summary judgment dismissing the complaint insofar as asserted by that plaintiff. Despite Wiltshire’s delays, she substantially complied with the relevant discovery demands and orders, and the defendant failed to demonstrate that the delays were the product of willful and [*2]contumacious conduct (see Brannigan v Christie Overhead Door, 144 AD3d 959, 960; McDermott v Bahnatka, 83 AD3d 1014, 1015; LOP Dev., LLC v ZHL Group, Inc., 78 AD3d 1020, 1020; Jenkins v Proto Prop. Servs., LLC, 54 AD3d 726; Zouev v City of New York, 32 AD3d 850, 851; Passarelli v National Bank of Westchester, 81 AD2d 635, 636).

3216

Element E, LLC v Allyson Enters., Inc., 2018 NY Slip Op 08915 [2d Dept. 2018]

An action cannot be dismissed pursuant to CPLR 3216(a) “unless a written demand is served upon the party against whom such relief is sought’ in accordance with the statutory requirements, along with a statement that the default by the party upon whom such notice is served in complying with such demand within said ninety day period will serve as a basis for a motion by the party serving said demand for dismissal as against him for unreasonably neglecting to proceed'” (Cadichon v Facelle, 18 NY3d 230, 235, quoting CPLR 3216[b][3]; see Deutsche Bank Natl. Trust Co. v Cotton, 147 AD3d 1020, 1021).
Here, the court order which purported to serve as a 90-day notice pursuant to CPLR 3216 “was defective in that it failed to state that the plaintiff’s failure to comply with the notice will serve as a basis for a motion’ by the court to dismiss the action for failure to prosecute” (Deutsche Bank Natl. Trust Co. v Cotton, 147 AD3d at 1021, quoting CPLR 3216[b][3]; see Cadichon v Facelle, 18 NY3d at 235; US Bank N.A. v Saraceno, 147 AD3d 1005, 1006; Wasif v Khan, 82 AD3d 1084, 1085). Moreover, the record contains no evidence that the court ever made a motion to dismiss, or that there was an “order” of the court dismissing the case (see Cadichon v Facelle, 18 NY3d at 236). As in Cadichon v Facelle (id.), “[i]t is evident from this record that the case was ministerially dismissed,” without the court having made a motion, and “without the entry of any formal order by the court dismissing the matter” (see US Bank N.A. v Saraceno, 147 AD3d at 1006). The procedural device of dismissing an action for failure to prosecute is a legislative creation, not a part of a court’s inherent power (see Airmont Homes v Town of Ramapo, 69 NY2d 901, 902), and, therefore, a court desiring to dismiss an action based upon the plaintiff’s failure to prosecute must follow the statutory preconditions under CPLR 3216.
Since the action was not properly dismissed pursuant to CPLR 3216, the Supreme Court should have granted that branch of the plaintiff’s motion which was to restore the action to the active calendar. To the extent that prior cases from this Court are inconsistent with the holding herein (see e.g. Stroll v Long Is. Jewish Med. Ctr., 151 AD3d 789; Duranti v Dream Works Constr., Inc., 139 AD3d 1000, 1000; Bender v Autism Speaks, Inc., 139 AD3d 989; Dai Mang Kim v Hwak Yung Kim, 118 AD3d 661, 661; Bhatti v Empire Realty Assoc., Inc., 101 AD3d 1066, 1067), henceforth they should no longer be followed.
Notably, the order purporting to be a 90-day demand was issued at a time when disclosure was complete, and when there was no evidence that the plaintiff had been dilatory in prosecuting the action. Notwithstanding the Supreme Court’s failure to issue a valid 90-day demand, the plaintiff demonstrated extreme lack of diligence in failing to file the note of issue, and in failing to prosecute the action after the case was ministerially dismissed. Given the plaintiff’s dilatory conduct, we grant that branch of the plaintiff’s motion which was for an extension of time to file a note of issue only to the extent of remitting the matter to the Supreme Court, Nassau County, for the issuance of a 90-day notice in accordance with CPLR 3216. Notably, effective January 1, 2015, the Legislature amended the statutory preconditions to dismissal under CPLR 3216, including a requirement that a court issuing the demand set forth the specific conduct constituting the neglect and that additional notice be given to the parties prior to dismissal of the action for unreasonable neglect to proceed (see CPLR 3216[a], [b][3]).

Bold is mine.

4518

Nationstar HECM Acquisition Trust 2015-2 v Andrews, 2018 NY Slip Op 08944 [2d Dept. 2018]

Here, in support of its cross motion, the plaintiff submitted, among other things, the affidavit of Stephen Craycroft, an assistant secretary of Nationstar Mortgage, LLC, who attested that the plaintiff was in possession of the note at the time of the commencement of this action. However, the plaintiff failed to demonstrate the admissibility of the records relied upon by Craycroft under the business records exception to the hearsay rule (see CPLR 4518[a]), since Craycroft did not clearly attest that he was personally familiar with the plaintiff’s record-keeping practices and procedures (see Aurora Loan Servs., LLC v Komarovsky, 151 AD3d 924, 926; Arch Bay Holdings, LLC v Albanese, 146 AD3d 849, 853; Aurora Loan Servs., LLC v Baritz, 144 AD3d 618, 620; HSBC Mtge. Servs., Inc. v Royal, 142 AD3d 952, 954; Deutsche Bank Natl. Trust Co. v Brewton, 142 AD3d 683, 685; U.S. Bank N.A. v Madero, 125 AD3d 757, 758; cf. Bank of N.Y. Mellon v Lopes, 158 AD3d 662, 663-664). Inasmuch as the plaintiff’s cross motion was based on evidence that was not in admissible form, the plaintiff failed to establish its prima facie entitlement to judgment as a matter of law (see Aurora Loan Servs., LLC v Mercius, 138 AD3d 650; U.S. Bank N.A. v Madero, 125 AD3d at 758).