Opinion
Index No. 501323/2016
05-08-2023
Chaos Commerce Inc., Plaintiff, v. Choxi.com Inc. f/k/a Nomorerack.com, Inc., Vipesh Agarwal, and Rohit Lalwani, Defendants.
For Plaintiff Joseph Obermeister, Esq. Joseph Obermeister-Attorney at Law For Defendant Rohit Lalwani Aaron Harold Pierce Pierce & Kwok LLP
Unpublished Opinion
For Plaintiff Joseph Obermeister, Esq. Joseph Obermeister-Attorney at Law
For Defendant Rohit Lalwani Aaron Harold Pierce Pierce & Kwok LLP
Richard J. Montelione, J.
After oral argument on the record, the following papers were read on this motion pursuant to CPLR 2219(a): Papers Numbered
Notice of Motion/Order to Show Cause/Affidavits/Affirmations/Exhibits 27-40
Answering Affirmations/Affidavits/Exhibits 42
Reply Affirmations/Affidavits/Exhits NO REPLIES CONSIDERED BECAUSE NO REQUEST TO SUBMIT ONE WAS MADE OR GRANTED.
This is an action where plaintiff claims, inter alia, a breach of contract by defendants for their failure to pay for merchandise provided to defendants, valued in excess of $447,082.10, with a balance due of $142,474.42. A clerk's judgment was entered on default on March 15, 2016.
Defendant Rohit Lalwani ("Lalwani") now moves to vacate his default based on lack of jurisdiction because the summons and complaint were not properly served upon him, and this defendant asserts that he was only an employee of Choxi.com Inc. f/k/a Nomoreerack.com Inc. and not a proper party as there is no individual liability for a corporate debt. The court has reviewed the affidavits of service and finds that the court has jurisdiction over the defendants and defendant has not provided "good cause" under CPLR 5015 (a)(4) to vacate his default. Notwithstanding, an initial review of the summons and complaint indicates that the claims regarding the amount sought under contract is not one where computation can be made certain"' as in actions on money judgments and negotiable instruments,'" (see 21st Mtge. Corp. v Raghu, 197 A.D.3d 1212, 154 N.Y.S.3d 84, 2021 NY Slip Op 05016, 2021 WL 4301662 [2d Dept 2021]). In fact, plaintiff's counsel's affirmation in opposition highlights a dispute raised by defendants regarding the amount due in an email from defendants prior to the commencement of the action (NYSCEF Doc. No.42, ¶30," it is NOT $150,000 but rather an amount significantly less "). At the very least, the clerk's judgment would have to be vacated and an inquest held. However, upon further review of the complaint, this court has determined that the complaint states no viable cause of action by the plaintiff against the individual defendant Lalwani (or defendant Vipesh Agarwal hereinafter "Agarwal"). The defendant Lalwani was an employee of the corporate defendant. There is no allegation of a personal guarantee or any other allegations which would provide a legal basis for a cause of action against this defendant. There is nothing stated in the opposition papers to the motion that provides a legal basis for the personal liability of this defendant for the corporate debt of his employer. Regarding the requirements for stating a viable cause of action, the Court in Katz v Blau, 173 A.D.3d 987, 988, 103 N.Y.S.3d 131, 2019 NY Slip Op 04922, 1, 2019 WL 2518877 [2d Dept 2019] held that:
'A plaintiff must allege enough facts to enable the court to determine that a viable cause of action exists' (Roy v 81E98th KH Gym, LLC, 142 A.D.3d 985, 985 [2016]; see Woodson v Mendon Leasing Corp., 100 N.Y.2d 62, 71 [2003]). "Where a valid cause of action is not stated, the party moving for judgment is not entitled to the requested relief, even on default" (Cardo v Board of Mgrs., Jefferson Vil. Condo 3, 29 A.D.3d 930, 932 [2006], quoting Green v Dolphy Constr. Co., 187 A.D.2d 635, 636 [1992]; see Abrahams v Commonwealth Land Tit. Ins. Co., 120 A.D.3d 1165, 1166 [2014]; Venturella-Ferretti v Ferretti, 74 A.D.3d 792, 793 [2010]).
Moreover, the only causes of action regarding the individual defendants involve claims for unjust enrichment and quantum meruit which cannot be recovered from these defendants when plaintiff seeks a clerk's judgment on a contractual basis with the corporate defendant. See Rayham v Multiplan, Inc., 153 A.D.3d 865, 868-69, 61 N.Y.S.3d 90, 94, 2017 NY Slip Op 06306, 2017 WL 3611693 [2d Dept 2017]," causes of action sounding in unjust enrichment and quantum meruit cannot be maintained if there is a valid, enforceable contract governing the same subject matter underlying the action." Given there was no viable cause of action by the plaintiff against defendant Lalwani (or defendant Agartwal) at the time the clerk entered default judgment, let alone no legal basis to grant the "sum certain" requirements under CPLR 3215(a), the Kings County Clerk did not have the authority to enter a judgment against movant defendant Lalwani or defendant Agarwal. See Freeport Plaza Realty, LLC v Freeport Moon, Inc., 205 A.D.3d 685, 165 N.Y.S.3d 710, 2022 NY Slip Op 02981, 2022 WL 1414591 (2d Dept 2022). Further, there being no viable cause of action regarding the individual defendants, movant defendant Lalwani and non-moving defendant Agarwal, the court will sua sponte vacate the judgment and dismiss the complaint against these defendants. See Aprea v NY State Bd. of Elections, 103 A.D.3d 1059, 1061 (3d Dept 2013):
Even where a defendant has defaulted, a plaintiff is only entitled to a default judgment if the complaint states a viable cause of action (see Walley v Leatherstocking Healthcare, LLC, 79 A.D.3d 1236, 1238, 913 N.Y.S.2d 380 [2010]). If, despite accepting the allegations as true, no viable cause of action is stated, 'the court may sua sponte dismiss a plaintiff's complaint upon his or her motion for a default judgment' (id. at 1238; see Martocci v Bowaskie Ice House, LLC, 31 A.D.3d 1021, 1022, 819 N.Y.S.2d 598 [2006], lv dismissed 7 N.Y.3d 916, 860 N.E.2d 985, 827 N.Y.S.2d 683 [2006], cert denied 552 U.S. 918, 128 S.Ct. 277, 169 L.Ed.2d 202 [2007]).
Based on the foregoing, it is
ORDERED that the clerk's default judgment entered on March 15, 2016 is VACATED; and it is further
ORDERED that defendant Rohit Lalwani's Motion to vacate the default judgment as against him individually is moot as the entire clerk's default judgment has been vacated, but GRANTED (MS#1) to the extent that all causes of action against defendant Rohit Lalwani and Vipesh Agarwal are DISMISSED; and it is further
ORDERED, that all other requests for relief are denied.
This constitutes the decision and order of the Court.