Opinion
No. 12860/2013.
07-09-2014
BIG J DEVELOPMENT CO., INC., Plaintiff, v. BIG J DEVEOPMENT CO., INC., Issac Zedner, Abraham Zeda a/k/a Abaham Zedner, Rushmore Capital Partners LLC and Fresh Invesing Inc., Defendants.
Timothy R. Cutler, Esq., Brooklyn, Attorney for Plaintiff. Christopher Rosado, Esq., Miller, Rosado & Algios, LLP, Mineola, Attorney for Defendant Fresh Investing, Inc. Lowell B. Davis, Esq., Carle Place, Attorney for Defendants Big J Development Co., Isaac Zedner, and Abraham Zeda. Rushmore Capital Partners LLC, New York, Defendant pro se.
Timothy R. Cutler, Esq., Brooklyn, Attorney for Plaintiff.
Christopher Rosado, Esq., Miller, Rosado & Algios, LLP, Mineola, Attorney for Defendant Fresh Investing, Inc.
Lowell B. Davis, Esq., Carle Place, Attorney for Defendants Big J Development Co., Isaac Zedner, and Abraham Zeda.
Rushmore Capital Partners LLC, New York, Defendant pro se.
Opinion
CAROLYN E. DEMAREST, J.
The following papers numbered 1 to 10 read herein:
| Papers | Numbered |
|---|---|
| Notice of Motion/Order to Show Cause/Petition/Cross Motion and Affidavits (Affirmations) Annexed | 1–3 7–9 |
| Opposing Affidavits (Affirmations) | 10 |
| Reply Affidavits (Affirmations) | 4 |
| Affidavit (Affirmation) Memoranda of Law | 5, 6 |
In this action by plaintiff Big J Development Co., Inc. (Big J 1978) against defendants Big J Development Co., Inc. (Big J 2004), Isaac Zedner s/h/a Issac Zedner (Isaac), Abraham Zeda a/k/a Abraham Zedner (Abraham), Rushmore Capital Partners LLC (Rushmore), and Fresh Investing Inc. (Fresh Investing) seeking a judgment pursuant to RPAPL 1501 quieting title to certain real property, declaring any transfer of such property and the mortgage dated May 11, 2010 which encumbered such property to be and void, and granting it monetary damages and injunctive relief, Fresh Investing moves, under motion sequence number 1, for an order, pursuant to CPLR 3211(a)(1), (3), and (5), dismissing Big J 1978's complaint as against it. Big J 1978 cross-moves for an order: (1) denying Fresh Investing's motion, (2) granting it summary judgment as against Big J 2004, Issac, and Abraham, (3) granting it a default judgment as against Rushmore, (4) granting it summary judgment as against Fresh Investing, (5) vacating and setting aside the deed of transfer of the subject real property to Fresh Investing and declaring such deed to be of no force or effect, (6) vacating and setting aside the mortgage of Rushmore and declaring it to be of no force and effect, (7) directing the Office of the City Register of the City of New York to correct the record of title to the subject real property to reflect the vacatur and setting aside of Rushmore's mortgage and the deed of transfer to Fresh Investing, and (8) awarding it money damages for loss of rents and its legal costs and disbursements as against Big J 2004, Isaac, and Abraham in an amount to be determined by the court.
BACKGROUND
Big J 1978 was incorporated in the State of New York on September 5, 1978 by Jacob Zedner (Jacob), who is Big J 1978's sole officer. On October 20, 1981, Big J 1978 purchased real property located at 150 Hale Avenue, in Brooklyn, New York (the property), which consists of four residential units. Big J 1978's deed to the property was recorded on November 17, 1981. In May 1986, the property was transferred to the City of New York pursuant to a tax lien foreclosure, and was then transferred back to Big J 1978 pursuant to an order dated October 18, 1988, which vacated and set aside the tax lien sale. Big J 1978 was dissolved by proclamation on September 25, 1991. On October 2, 1992, the property was again transferred to the City of New York pursuant to a further in rem tax lien sale, which was again vacated by an order dated September 9, 1993. On October 17, 2005, the Finance Department of the City of New York filed a certificate of correction to correct the chain of title and index to reflect the correct and present owner, and filed the original 1981 deed to Big J 1978, reflecting Big J 1978's ownership of the property.
Thereafter, Big J 1978 did not make any further transfers of its property, and, as shown by an ACRIS printout, at no time subsequent to the recording of the certificate of correction was title to the property ever transferred out of the name of Big J 1978. Jacob served time in a federal prison from April 2003 through sometime in 2007, and, thereafter, he moved to Israel, where he has lived for many years and where he remains living. Emmanuella “Vickie” Gautier (Gautier), whose three children were fathered by Jacob, has resided in the basement apartment of the property since 2005, and she claims to have managed the property, executed leases on behalf of Big J 1978, collected rents, filed tax returns, and discharged the running costs of the building.
Big J 2004, which has the exact same name as Big J 1978, was first created and incorporated in the State of New York on May 20, 2004 by Isaac and Abraham, who are blood relatives of Jacob. Isaac and Abraham are the sole shareholders and officers of Big J 2004 and have never been shareholders or officers of Big J 1978.
On May 11, 2010, Isaac and Abraham, acting on behalf of Big J 2004, executed a note and obtained a mortgage in the principal sum of $165,000 from Rushmore, encumbering the property. Issac executed the mortgage as the president of Big J 2004. Isaac and Abraham also gave Rushmore an assignment of the leases and rents. The title company who handled the transaction in connection with the mortgage and who presented the accompanying documents to the New York City Register's office was Village Agency Services, Inc. (Village Agency).
On December 14, 2010, Big J 1978 filed a summons and complaint in an action against Issac, Abraham, Rushmore, and Village Agency (Big J Development Co., Inc. v. Zedner, Sup Ct, Kings County, index No. 30395/10) (the 2010 action). Big J 1978's complaint in the 2010 action set forth three causes of action. Big J 1978's first cause of action pursuant to RPAPL article 15 sought to have the mortgage and the assignment of the leases and rents cancelled and voided on the ground that it was obtained through fraud because Isaac was not the president or authorized agent of Big J 1978. It alleged that Issac did not have the authority or right to encumber the property, and that, therefore, Rushmore had no valid mortgage encumbering the property. Big J 1978's second cause of action for fraud alleged that Isaac and Abraham encumbered the property fraudulently, and that Isaac falsely claimed to be its president and benefitted in the amount of $165,000. Big J 1978's third cause of action for conversion alleged that it owned the property and had a right to any funds obtained through encumbering the property in the amount of $165,000, and that Issac and Abraham did not supply the funds received from Rushmore to it and, therefore, wrongfully converted these funds. Big J 1978's complaint in the 2010 action was verified by Gautier, who is not its shareholder or officer, as its purported “agent.”
Big J 2004 was dissolved by proclamation on January 26, 2011. It, thereafter, defaulted on the note and mortgage encumbering the property by failing to pay the amount due on June 1, 2011.
By a motion filed on October 26, 2011 in the 2010 action, Big J 1978 sought a default judgment against Isaac and Abraham, and Isaac and Abraham opposed that motion. On November 29, 2011, Isaac and Abraham cross-moved for an order, pursuant to CPLR 3211(a)(1), (3), (7), and (10), to dismiss Big J 1978's complaint in the 2010 action. On January 18, 2012, the court denied Big J 1978's motion and granted Isaac and Abraham's cross motion on default upon Big J 1978's failure to appear on the return date of the motion and cross motion.
Big J 1978's attorney in the 2010 action, Peter J. Mollo, Esq. (Mr. Mollo), in a letter to Gautier dated January 24, 2012, stated that he was retiring and would no longer be able to represent her in the 2010 action. He enclosed a proposed order with notice of settlement, dated January 20, 2012, which provided that the 2010 action was dismissed due to Big J 1978's failure to appear. Despite receiving this notice, at no time thereafter did Big J 1978 seek to vacate its default in the 2010 action.
In or about April or May 2012, Big J 2004 commenced holdover proceedings against all of the tenants of Big J 1978 who were residing at the property. This included Gautier, as reflected by a notice of petition in a holdover proceeding against her dated May 4, 2012 and filed on May 22, 2012 (Big J Development Co., Inc. v. Gautier, Civil Court, Kings County, index No. 63391/12). After three adjournments, the action was dismissed on September 6, 2012 due to Big J 2004's failure to appear.On October 18, 2012, Rushmore filed an action against Big J 2004 and Isaac, seeking to foreclose on its mortgage on the property (Rushmore v. Big J Development Co., Inc., Sup Ct, Kings County, index No. 20709/12) (the foreclosure action). A judgment of foreclosure and sale was filed on May 13, 2013. Big J 1978 claims that it was not served with a copy of this judgment and did not become aware of the foreclosure and impending sale of the property until it received a letter on May 29, 2013 from an attorney advertising that if it qualified under certain Federal and State laws, he could help stop the pending foreclosure sale by auction which was scheduled to take place on June 20, 2013.
On June 17, 2013, Isaac and Abraham, acting on behalf of Big J 2004, closed on a sale of the property to Fresh Investing (which was incorporated in the State of New York on May 21, 2013) for the sum of $340,000. The mortgage payoff was approximately $220,000, leaving $120,000 retained by Big J 2004. On July 5, 2013, Big J 1978 moved, by order to show cause, for leave to intervene in the foreclosure action. Upon hearing counsel for Big J 1978, Big J 2004 (in opposition), and Rushmore (who appeared by a letter to the court), Justice Ann T. Pfau, by an order dated July 11, 2013, denied Big J 1978's motion to intervene because the mortgage had been satisfied and the action was being discontinued by Rushmore. By an order dated September 10, 2013, Justice Pfau vacated the judgment of foreclosure and sale, discontinued the foreclosure action, and cancelled and discharged the notice of pendency upon consent of the parties since the foreclosure action was settled by the mortgage being satisfied.On July 17, 2013, Big J 1978 filed the summons and complaint in this action, and, on November 1, 2013, it filed a notice of pendency. Big J 1978's complaint, which is verified by Gautier, sets forth six causes of action. Big J 1978's first cause of action for avoidance of deed of sale seeks to compel the determination of its claim to title to the property pursuant to RPAPL article 15. It alleges that Isaac, Abraham, and Big J 2004 did not have title to the property at any time nor the authority to mortgage, sell, or in any way encumber it, that Rushmore obtained no valid lien in the property, and that Fresh Investing acquired no valid title to the property and that the deed to it should be cancelled and declared and void. It seeks a declaratory judgment, declaring the deed to Fresh Investing to be and void.
Big J 1978's second cause of action for avoidance of mortgage seeks a declaratory judgment, declaring the mortgage of the property to Rushmore to be and void. Big J 1978's third cause of action for fraud against Isaac and Abraham alleges that Isaac and Abraham fraudulently obtained the mortgage from Rushmore encumbering the property as security for a loan in the sum of $165,000, and executed an assignment of all leases and rents, holding themselves out as the owners of the property. It seeks damages equal at least to the current market value of the property. Big J 1978's fourth cause of action for conversion against Issac and Abraham alleges that Issac and Abraham converted the property for their own use and benefit by executing the mortgage and the assignment of leases and rents, and seeks damages in a sum equal at least to the current market value of the property. Big J 1978's fifth cause of action for unjust enrichment alleges that Isaac and Abraham were unjustly enriched in the sum of $165,000 by executing the mortgage, and seeks damages. Big J 1978's sixth cause of action for injunctive relief alleges that Fresh Investing has served the tenants of the property with notices to quit and seeks eviction of the tenants, and it seeks an injunction restraining Fresh Investing from taking any further action with respect to the property which is contrary or adverse to its interest in the property.
Fresh Investing filed its instant motion on November 15, 2013 and Big J 1978 filed its instant cross motion on January 8, 2014. On March 14, 2014, Big J 1978 moved, by an order to show cause, under motion sequence number 3, for a temporary restraining order, requiring Fresh Investing's agents to stay away from the basement apartment of Gautier. By an oral decision on April 2, 2014, the court denied Big J 1978's motion.
DISCUSSION
In support of its instant motion, Fresh Investing notes that this is Big J 1978's second attempt to quiet title to the property and that the gravamen of Big J 1978's complaint in this action is the same as that in the 2010 action. It argues that, therefore, as a result of the dismissal of the 2010 action, this action is barred by the doctrine of res judicata.
In opposition, Big J 1978 argues, as a threshold issue, that this motion is untimely and that Fresh Investing waived the defense of res judicata. It notes that Big J 2004, Isaac, and Abraham were served on or about July 29, 2012, and that Fresh Investing was served via the Secretary of State on August 19, 2013. It claims that Fresh Investing, along with Big J 2004, Isaac, and Abraham, interposed an answer on August 10, 2013 (which, notably, was prior to the date of service upon Fresh Investing), in which it failed to plead the affirmative defense of res judicata.
Big J 1978 contends that since the instant motion was not served upon it by Fresh Investing until November 7, 2013, its appearance was untimely pursuant to CPLR 320(a), which provides that a defendant “appears by serving an answer or a notice of appearance, or by making a motion which has the effect of extending the time to answer,” and requires such an appearance to be made within 20 days after service of the summons, “except that if the summons was served on the defendant by delivering it to an official of the state authorized to receive service in [its] behalf or if it was served pursuant to section 303, subdivision two, three, four or five of section 308, or sections 313, 314 or 315,” the appearance may be made within 30 days after service is complete. It asserts that Fresh Investing's motion was made more than two months after it was served. It also argues that since the answer did not plead the affirmative defense of res judicata, it was waived.
Fresh Investing's attorney, Christopher Rosado, Esq. (Mr. Rosado) of the law firm Miller, Rosado & Algios, LLP, responds that on October 30, 2013, after his law firm was retained to represent it, he personally contacted Big J 1978's attorney, Timothy R. Cutler, Esq. (Mr. Cutler), by telephone to request an extension of Fresh Investing's time to respond to the complaint. Also on October 30, 2013, Mr. Cutler informed Mr. Rosado that he thought that Fresh Investing had already answered the complaint and provided him with a copy of an answer dated August 10, 2013 interposed in this action by Lowell Davis, Esq. (Mr. Davis), on behalf of Big J 2004 and its principals, Isaac and Abraham, as well as purportedly on behalf of Fresh Investing. Mr. Rosado immediately responded in an October 30, 2013 e-mail to Mr. Cutler, which stated that at no time did Fresh Investing ever authorized or retain Mr. Davis to interpose an answer or otherwise represent it in this action, and requested an extension of time to Fresh Investing to November 8, 2013 to respond to the complaint.
By a fax dated November 1, 2013, Mr. Cutler granted Mr. Rosado's request for an extension of time to November 8, 2013 and also acknowledged that Fresh Investing “seemingly erroneously, appeared and answered.” Thus, since there is a signed writing by Mr. Cutler extending Fresh Investing's time to appear in this action to November 8, 2013 and Fresh Investing's motion was served on November 7, 2013, as evidenced by an affidavit of service annexed to Fresh Investing's motion, it is timely brought (see CPLR 2104 ).
While it is true, as Big J 1978 argues, that the affirmative defense of res judicata is waived if an answer is interposed which does not assert it (see CPLR 3211[e] ; Giacomazzo v. Moreno, 94 A.D.2d 369, 373 [1st Dept 1983], appeal denied 60 N.Y.2d 558 [1983] ), here, Fresh Investing has shown that it did not previously interpose an answer since it never retained Mr. Davis to represent it. Therefore, it did not waive the defense of res judicata since it timely made a motion to dismiss pursuant to CPLR 3211(a)(5) which asserts this defense.
In turning to the merits of Fresh Investing's motion, the court notes that “[p]ursuant to the doctrine of res judicata, or claim preclusion, a valid final judgment bars future actions between the same parties on the same cause of action” (Lazides v. P & G Enters., 58 AD3d 607, 609 [2d Dept 2009], lv denied 13 NY3d 703 [2009];see also Gramatan Home Invs. Corp. v. Lopez, 46 N.Y.2d 481, 485 [1979];Matter of Field Home–Holy Comforter v. DeBuono, 238 A.D.2d 589, 590 [2d Dept 1997] ). Thus, “[t]he doctrine of res judicata precludes a party from litigating a claim where a judgment on the merits exists from a prior action between the same parties involving the same subject matter' “ (Matter of Josey v. Goord, 9 NY3d 386, 389 [2007], quoting Matter of Hunter, 4 NY3d 260, 269 [2005] ). Furthermore, “under New York's transactional analysis approach to res judicata, once a claim is brought to a final conclusion, all other claims arising out of the same transaction or series of transactions are barred, even if based upon different theories or if seeking a different remedy' “ (Matter of Hunter, 4 NY3d at 269, quoting O'Brien v. City of Syracuse, 54 N.Y.2d 353, 357 [1981];see also Matter of Carter v. Walt Whitman N.Y. City Hous. Auth., 98 AD3d 1113, 1113–1114 [2d Dept 2012], lv denied 20 NY3d 856 [2013] ).
Big J 1978 argues that there was no dismissal on the merits in the 2010 action. It asserts that the cross motion for dismissal in the 2010 action was based upon the sole grounds of lack of capacity and that the issue of title to the property was never litigated, argued, or decided. It contends that the dismissal of the 2010 action did not establish that it was not the owner of the property, and that the dismissal based on the ground of lack of capacity did not constitute a dismissal on the merits.
Big J 1978 asserts that it has a meritorious claim that there was a break in the chain of title to the property claimed to have been acquired by Fresh Investing. It states that this is shown by a title report from Commonwealth Land Title Insurance Company dated September 25, 2013, which certified a good and marketable title to the property acquired by Fresh Investing by the deed dated June 17, 2013. This title report, in an added paragraph 27 dated October 23, 2013, stated that “[t]here is no evidence of record that the entity created on May 20, 2004 was the rightful and legal successor to the entity by the same name created on September 5, 1978,” and that “[t]he break in the Chain of Title must be fully resolved to the satisfaction of this Company well in advance of closing.” Big J 1978 argues that it is entitled to summary judgment on the issue of title because it has produced the title report, which, pursuant to CPLR 4523, has the legal effect of an official search.
While certainly, as evidenced by the title report, there appears to have been some fraud by Big J 2004, Big J 1978's argument is nevertheless unavailing due to the dismissal of the 2010 action. As set forth above, the court's January 18, 2012 order, which granted the cross motion to dismiss the 2010 action (contrary to Big J 1978's argument), was actually based upon Big J 1978's default in appearing on the return date of such cross motion. It is well established that “res judicata applies to an order or judgment taken by default which has not been vacated, as well as to issues which were or could have been raised in the prior [action]' “ (Lazides, 58 AD3d at 609, quoting Matter of Eagle Ins. Co. v. Facey, 272 A.D.2d 399, 400 [2d Dept 2000] ; see also Matter of Allstate Ins. Co. v. Williams, 29 AD3d 688, 690 [2d Dept 2006] ). Consequently, “[a] judgment by default which has not been vacated is conclusive for res judicata purposes, and encompasses both issues which were raised or could have been raised in the prior action” (Richter v. Sportsmans Props., Inc., 82 AD3d 733, 734 [2d Dept 2011] ; see also Lazides, 58 AD3d at 609;Perkins v. Allstate Ins. Co., 51 AD3d 647, 648 [2d Dept 2008] ; Zayatz v. Collins, 48 AD3d 1287, 1289 [4th Dept 2008] ; 83–17 Broadway Corp. v. Debcon Fin. Servs., Inc., 39 AD3d 583, 585 [2d Dept 2007] ; Burden v. Graves, 23 AD3d 421, 422 [2d Dept 2005] ; Rizzo v. Ippolito, 137 A.D.2d 511, 513 [2d Dept 1988] ; Romano v. Astoria Fed. Sav. & Loan Assn., 111 A.D.2d 751, 752 [2d Dept 1985], appeal dismissed 66 N.Y.2d 916 [1985] ).
Big J 1978 further argues that there was no final judgment on the merits since the proposed order included the words “with prejudice,” and the signed order deleted the words “with prejudice,” and simply reads that the 2010 action “is dismissed.” This argument is unavailing. Even if a prior judgment “does not specifically recite that it is on the merits', that judgment should be given res judicata effect” in order to prevent the plaintiff from circumventing the prior order (Barrett v. Kasco Constr. Co., 56 N.Y.2d 830, 831 [1982];see also Strange v. Montefiore Hosp. & Med. Ctr., 91 A.D.2d 507, 507 [1st Dept 1982], affd 59 N.Y.2d 737 [1983] ). Thus, here, the court's January 18, 2012 order in the 2010 action has res judicata effect with respect to the present action.
Big J 1978 also argues that the dismissal in the court's January 18, 2012 order was made pursuant to 22 NYCRR 202.27, and it has been held that such a dismissal does not receive res judicata effect (see Espinoza v. Concordia Intl. Forwarding Corp., 32 AD3d 326, 328 [1st Dept 2006] ). This argument is rejected. 22 NYCRR 202.27 provides that “[a]t any scheduled call of a calendar or at any conference, if all parties do not appear and proceed or announce their readiness to proceed immediately or subject to the engagement of counsel, the judge may note the default on the record and ... “[i]f the defendant appears but the plaintiff does not, the judge may dismiss the action and may order a severance of counterclaims or cross-claims.” Here, the cross motion was not granted as a result of Big J 1978's failure to appear at a court conference or at a calendar call, which is defined as “[a] court session in which the judge calls each case awaiting trial, determines its status, and assigns a trial date” (Black's Law Dictionary [9th ed 2009] ). Rather (as previously discussed), Big J 1978 failed to appear on the return date of the cross motion and defaulted on such cross motion, resulting in the granting of a default judgment by the court (see e.g. Eastern Sav. Bank, FSB v. Brown, 112 AD3d 668, 669–670 [2d Dept 2013] ; Lehman Bros. Holdings, Inc. v. Matt, 34 AD3d 290, 290–291 [1st Dept 2006] ). Res judicata bars a second action predicated upon the same claim where there is a grant of a motion by default in a first action (see Smith v. Palmieri, 103 A.D.2d 739, 741 [2d Dept 1984] ).
Big J 1978, however, argues that unbeknownst to it, its attorney in the 2010 action, Mr. Mollo, was suspended from the practice of law on January 9, 2012 and that he did not notify it of that fact or of the return date of its motion, leaving it unable to appear. Big J 1978 argues that it was, therefore, not afforded a full and fair opportunity to litigate in the prior action. This argument is rejected. Big J 1978 concedes that it became aware of the default judgment against it in the 2010 action when Gautier was sent a copy of the order by Mr. Mollo's letter dated January 24, 2012. Despite this notice, Big J 1978 never moved to vacate its default pursuant to CPLR 5015 (see Rizzo, 137 A.D.2d at 513), and, instead, waited until July 17, 2013 (nearly one and a half years) before commencing the instant action, during which time Fresh Investing purchased the property for $340,000. The judgment by default in the 2010 action, which was never vacated, is conclusive for res judicata purposes (see Richter, 82 AD3d at 734). Big J 1978 additionally argues that the claims which it alleges in this action do not arise out of the same transaction as its claims in the 2010 action so as to be barred by the doctrine of res judicata. It asserts that the 2010 action sought to quiet title on the basis of the fraud of Isaac and Abraham as individuals and did not consider the role of Fresh Investing, which did not yet exist at that time. It contends that the fraud of Isaac and Abraham related to the mortgage of the property which was not owned by Big J 2004, and did not relate to the subsequent purchase by Fresh Investing, which could not have been anticipated or litigated as part of the 2010 action since no sale to it had yet occurred. It argues that it has not been established that Fresh Investing is the lawful owner of the property.
This argument must be rejected. “ “The fact that causes of action may be stated separately, invoke different legal theories, or seek different relief will not permit relitigation of claims” ‘ “ (Bayer v. City of New York, 115 AD3d 897, 898 [2d Dept 2014], quoting Pondview Corp. v. Blatt, 95 AD3d 980, 980 [2d Dept 2012], quoting Matter of ADC Contr. & Constr., Inc. v. Town of Southampton, 50 AD3d 1025, 1026 [2d Dept 2008] ). Thus, the doctrine of res judicata “operates to preclude the renewal of issues actually litigated and resolved in a prior proceeding as well as claims for different relief which arise out of the same factual grouping or transaction and which should have or could have been resolved in the prior proceeding” (Bayer, 115 AD3d at 898). As discussed above, the causes of action in the 2010 action were to quiet title to the property, and for fraud and conversion, and the basis of these claims were that Isaac and Abraham did not have the right to obtain the mortgage of the property from Rushmore. The present action likewise seeks to quiet title to the property and asserts claims of fraud and conversion based upon Isaac and Abraham's lack of authority to obtain the mortgage from Rushmore. It simply now removes Village Agency as a defendant and adds Big J 2004 and Fresh Investing as defendants and adds causes of action seeking to avoid the deed to Fresh Investing, and for unjust enrichment and injunctive relief. These claims arise out of the same series of transactions as those alleged in the 2010 action.Significantly, the underlying claim of Big J 1978 in the 2010 action, i.e., that it had sole title to the property and that Big J 2004 had no valid title to the property and could not encumber it, is the same claim which underlies its present claim with respect to Fresh Investing, namely, that Big J 2004 did not have valid title to the property to effectuate the transfer to it. A judgment is not prevented from having a res judicata effect in a subsequent action involving the same issue by the presence of an additional party as a defendant (see Matter of Fidelity Brokerage Servs. v. Epstein, 239 A.D.2d 342, 342 [2d Dept 1997] ; Granite Bond & Mtge. Corp. v. Hutchins, 225 App.Div. 412, 414 [4th Dept 1929] ), and, here, the underlying claim is based on the same transactions and merely adds different relief sought with respect to Fresh Investing. Moreover, the transfer to Fresh Investing, which Big J 1978 seeks to declare void, could not have occurred if Big J 1978 had been successful in the 2010 action, in which it defaulted and then allowed the default judgment to stand without seeking to vacate it. Thus, the granting of Fresh Investing's motion for dismissal of this action against it is mandated based upon the doctrine of res judicata (see CPLR 3211[a][5] ).
In addition, Fresh Investing, as an alternative ground for its motion, seeks dismissal of this action against it, pursuant to CPLR 3211(a)(3), based upon Big J 1978's lack of capacity to sue. As discussed above, Big J 1978 was dissolved by proclamation on September 25, 1991 for the non-payment of franchise taxes pursuant to Tax Law § 203–a. Big J 1978 concedes that it was dissolved by proclamation in 1991, nearly 23 years ago, prior to the time the mortgage was given to Rushmore and before the sale of the property to Fresh Investing. Upon dissolution, a corporation's legal existence terminates, and absent subsequent reinstatement, the corporation is legally dead, and is no longer permitted to sue or be sued, except as specifically permitted by statute (see Weiss v. Markel, 110 AD3d 869, 871 [2d Dept 2013] ; Calabrese Bakeries, Inc. v. Rockland Bakery, Inc., 102 AD3d 1033, 1035 n 6 [3d Dept 2013] ; Moran Enters., Inc. v. Hurst, 66 AD3d 972, 975–976 [2d Dept 2009] ). Pursuant to statute, the dissolved corporation may only institute a suit if it is related to the winding up of its affairs (Business Corporation Law §§ 1006, 1009 ). Thus, Big J 1978 lacked the legal capacity to sue due to its dissolution (see Business Corporation Law § 1005[a][1] ; § 1006[a][4] ; [b]; Brooklyn Elec. Supply Co., Inc. v. Jasne & Florio, LLP, 84 AD3d 997, 997 [2d Dept 2011] ; Moran Enters., Inc., 66 AD3d at 975–976;2 N. Broadway Food, Inc. v. Anduze, 33 AD3d 992, 992 [2d Dept 2006] ; Syzygy Sys. Corp. v. Bader, 243 A.D.2d 336, 336 [1st Dept 1997] ). Therefore, Fresh Investing is also entitled to dismissal of this action based upon Big J 1978's lack of capacity to sue (see CPLR 3211[a][3] ). In view of this disposition, Big J 1978 is not entitled to summary judgment as against Fresh Investing, and its cross motion, insofar as it seeks summary judgment as against Fresh Investing, must be denied.
In any event, Big J 1978's cross motion, insofar as it is asserted against Fresh Investing, would be premature since Fresh Investing has not yet interposed an answer.
Big J 1978, by its cross motion, also seeks summary judgment as against Big J 2004, Isaac, and Abraham. Big J 2004, Isaac, and Abraham did not interpose the affirmative defense of res judicata in their answer and they have not sought leave to amend their answer, nor have they cross-moved for summary judgment. In opposition to Big J 1978's cross motion, they argue that Gautier lacks standing to maintain this action for the same reasons which they had originally set forth in their earlier cross motion to dismiss in the 2010 action. Big J 1978's attorney concedes that Gautier was never an officer of Big J 1978, but Big J 1978 has submitted a power of attorney and a corporate resolution to show that Gautier has standing to bring this action. Big J 2004, Isaac, and Abraham contend that the power of attorney and corporate resolution are defective and insufficient to confer standing upon Gautier. The power of attorney, dated March 7, 2013 and executed by Jacob as the president of Big J 1978 in favor of Gautier, is missing its second page and the box for “claims and litigation” is not initialed. The corporate resolution, which is dated January 2, 2013 (subsequent to the dismissal of the 2010 action on January 18, 2012), is executed by Jacob, but is not notarized, and states that it authorized Gautier to act as agent for Big J 1978 in connection with the 2010 action and any suit, proceeding, or other matter arising therefrom (without specifically mentioning the instant action) and to intervene in the foreclosure action.
In any event, as discussed above, Big J 1978 lacks legal capacity to sue based upon its dissolution by proclamation prior to the accrual of its claims against Big J 2004, Isaac, and Abraham, and such lack of capacity to sue is fatal to its claims against them. Therefore, Big J 1978's cross motion, insofar as it seeks summary judgment as against Big J 2004, Abraham, and Isaac, must be denied. While Big J 2004, Abraham, and Isaac have not moved for summary judgment, the court, pursuant to CPLR 3212(b), may search the record on this issue of law which was the subject of Fresh Investing's motion to dismiss and Big J 1978's cross motion for summary judgment (which sought denial of Fresh Investing's motion, admitted that it was a dissolved corporation, and asserted that the cross motion in the 2010 action was granted on the ground of lack of capacity) and award summary judgment to these non-moving defendants (see Rivera v. Bushwick Ridgewood Props., Inc., 63 AD3d 712, 714 [2d Dept 2009] ; Garcia v. Lopez, 59 AD3d 593, 594 [2d Dept 2009] ). Thus, upon a search of the record, summary judgment dismissing Big J 1978's claims as against Big J 2004, Abraham, and Isaac must be granted (see CPLR 3212[b] ).
Big J 1978, in its cross motion, also seeks a default judgment as against Rushmore. It points to the fact that Rushmore has not appeared in this action, and Rushmore also has not filed papers in response to its cross motion. Big J 1978 has submitted an affidavit of service, attesting to service upon Rushmore by delivering and leaving two copies of the summons and complaint with Amy Lesch, as an authorized agent in the Office of the Secretary of State of the State of New York, pursuant to Limited Liability Company Law § 303. This creates a presumption that service upon Rushmore was effectuated (see CPLR 311–a [a]; Limited Liability Company Law § 303[a] ; Engel v. Lichterman, 62 N.Y.2d 943, 944–945 [1984];Trini Realty Corp. v. Fulton Ctr. LLC, 53 AD3d 479, 479 [2d Dept 2008] ; Commissioners of State Ins. Fund v. Nobre, Inc., 29 AD3d 511, 511 [2d Dept 2006] ).
However, there is no affidavit of merits which would support Big J 1978's claim with respect to Rushmore (see CPLR 3215[f] ). Big J 1978's complaint, as asserted against Rushmore, in its second cause of action for avoidance of mortgage, seeks to have the mortgage to Rushmore declared and void and demands a judgment in its favor quieting title to the property. As previously discussed, Rushmore's mortgage was already satisfied in the foreclosure action and Rushmore no longer claims any interest in the property. Thus, Big J 1978's complaint fails to state any cognizable claim for relief against Rushmore. Furthermore, Big J 1978's lack of capacity to sue, as a dissolved corporation, is also fatal to its claims against Rushmore. Consequently, Big J 1978's cross motion, insofar as it seeks a default judgment as against Rushmore, must be denied and the complaint against it dismissed.
CONCLUSION
Accordingly, Fresh Investing's motion to dismiss Big J 1978's complaint as against it is granted. Big J 1978's cross motion is denied in its entirety, and, upon a search of the record pursuant to CPLR 3212(b), summary judgment dismissing Big J 1978's complaint as against Big J 2004, Isaac, Abraham, and Rushmore is granted.
This constitutes the decision and order of the court.