Opinion
No. 132 CA 22-01116
05-05-2023
FUSION FUNDING, PLAINTIFF-RESPONDENT, v. LOFTTI INC., DOING BUSINESS AS LOFTTI CAFÉ, DEFENDANT AND PAUL KIM, DEFENDANT-APPELLANT. (APPEAL NO. 1.)
THE LINDEN LAW GROUP, P.C., NEW YORK CITY (JEFFREY BENJAMIN OF COUNSEL), FOR DEFENDANT-APPELLANT. WELLS LAW P.C., LANCASTER (JAMES M. SPECYAL OF COUNSEL), FOR PLAINTIFF-RESPONDENT.
THE LINDEN LAW GROUP, P.C., NEW YORK CITY (JEFFREY BENJAMIN OF COUNSEL), FOR DEFENDANT-APPELLANT.
WELLS LAW P.C., LANCASTER (JAMES M. SPECYAL OF COUNSEL), FOR PLAINTIFF-RESPONDENT.
PRESENT: SMITH, J.P., PERADOTTO, CURRAN, MONTOUR, AND OGDEN, JJ.
Appeal from an order of the Supreme Court, Erie County (Timothy J. Walker, A.J.), entered May 13, 2022. The order denied the motion of defendant Paul Kim to vacate a default judgment.
It is hereby ORDERED that the order so appealed from is unanimously affirmed without costs.
Memorandum: In appeal No. 1, Paul Kim (defendant) appeals from an order denying his motion to vacate a default judgment granted against him and defendant Loftti Inc., doing business as Loftti Café. In appeal No. 2, defendant appeals from an order and judgment denying his second motion to vacate the default judgment and granting plaintiff's request for sanctions against defendant.
In appeal No. 1, we reject defendant's contention that he established that he was not properly served with the summons and complaint and therefore Supreme Court abused its discretion in denying his first motion to vacate the default judgment. "The determination whether to vacate an order entered upon default is left to the sound discretion of the court" (Matter of Oneida County Dept. of Social Servs. v Russell R., 175 A.D.3d 1793, 1793 [4th Dept 2019], lv dismissed 35 N.Y.3d 949 [2020]; see Butchello v Terhaar, 176 A.D.3d 1579, 1580 [4th Dept 2019]; Matter of Troy D.B. v Jefferson County Dept. of Social Servs., 42 A.D.3d 964, 965 [4th Dept 2007]). "Pursuant to CPLR 5015 (a) (1), a court may vacate a judgment or order entered upon default if it determines that there is a reasonable excuse for the default and a meritorious defense" (Russell R., 175 A.D.3d at 1794 [internal quotation marks omitted]). "Ordinarily, a process server's affidavit of service establishes a prima facie case as to the method of service and, therefore, gives rise to a presumption of proper service" (Wells Fargo Bank, N.A. v Leonardo, 167 A.D.3d 816, 817 [2d Dept 2018] [internal quotation marks omitted]). "Bare and unsubstantiated denials [of receipt of service] are insufficient to rebut the presumption of service" (U.S. Bank N.A. v Rauff, 205 A.D.3d 963, 965 [2d Dept 2022] [internal quotation marks omitted]; see LeChase Constr. Servs., LLC v JM Bus. Assoc. Corp., 181 A.D.3d 1294, 1296 [4th Dept 2020]).
Here, in his first motion to vacate the default judgment, defendant failed to rebut the presumption of proper service. Defendant's conclusory assertion in his affidavit in support of the motion that he was not present in Nevada, where the summons and complaint had allegedly been served, at the time service was effected was unsubstantiated (see U.S. Bank N.A., 205 A.D.3d at 965; HSBC Bank USA, N.A. v Rahmanan, 194 A.D.3d 792, 794 [2d Dept 2021]; Nationstar Mtge., LLC v Cohen, 185 A.D.3d 1039, 1041 [2d Dept 2020]). Further, the alleged differences between defendant's physical appearance and the description in the affidavit of service of the person served "were either too minor or insufficiently substantiated to warrant a hearing" (U.S. Bank N.A., 205 A.D.3d at 965; see One W. Bank, FSB v Rotondaro, 188 A.D.3d 710, 712 [2d Dept 2020]).
In appeal No. 2, we conclude that defendant's second motion was, in substance, a motion for leave to renew his original motion to vacate the default judgment and, contrary to defendant's contention, the court did not abuse its discretion in denying his motion for leave to renew. "[A] motion for leave to renew must be based upon new facts not offered on the prior motion that would change the prior determination, and shall contain reasonable justification for the failure to present such facts on the prior motion" (2006905 Ontario Inc. v Goodrich Aerospace Can., Ltd., 206 A.D.3d 1607, 1607-1608 [4th Dept 2022] [internal quotation marks omitted]). As the moving party, defendant "bore the burden of proving that the new evidence [he] sought to present could not have been discovered earlier with due diligence and would have led to a different result" (Centerline/Fleet Hous. Partnership, L.P.-Series B v Hopkins Ct. Apts., LLC, 176 A.D.3d 1596, 1598 [4th Dept 2019] [internal quotation marks omitted]). Here, defendant's motion for leave to renew was not based upon new facts not offered on the prior motion, but rather on evidence corroborating the facts alleged in support of the prior motion. Further, defendant provided no reasonable justification for the failure to provide such evidence in his first motion. "[A] motion for leave to renew is not a second chance freely given to parties who have not exercised due diligence in making their first factual presentation" (Heltz v Barratt, 115 A.D.3d 1298, 1300 [4th Dept 2014], affd 24 N.Y.3d 1185 [2014] [internal quotation marks omitted]; see Welch Foods v Wilson, 247 A.D.2d 830, 831 [4th Dept 1998]).
We agree with defendant in appeal No. 2, however, that the court abused its discretion in granting plaintiff's request to assess sanctions pursuant to 22 NYCRR 130-1.1. "The court, in its discretion, may award to any party or attorney in any civil action ... costs in the form of reimbursement for actual expenses reasonably incurred and reasonable attorney's fees, resulting from frivolous conduct" (22 NYCRR 130-1.1 [a]). "In addition to or in lieu of awarding costs, the court, in its discretion may impose financial sanctions upon any party or attorney in a civil action... who engages in frivolous conduct" (id.). "[C]onduct is frivolous if: (1) it is completely without merit in law and cannot be supported by a reasonable argument for an extension, modification or reversal of existing law; (2) it is undertaken primarily to delay or prolong the resolution of the litigation, or to harass or maliciously injure another; or (3) it asserts material factual statements that are false" (22 NYCRR 130-1.1 [c]). Here, although defendant's motion for leave to renew was without merit, it is clear that defendant was attempting to provide the court with additional support for the factual assertions made in his first motion, which the court had concluded was lacking in evidentiary support. Thus, defendant's motion was not frivolous, and we therefore modify the order and judgment in appeal No. 2 by vacating that part granting plaintiff's request for sanctions.