Opinion
Index No. 650866/2019
01-25-2022
GORDON LAW FIRM, P.C., Plaintiff, v. Syed DOHA, Dawts Inc., Alta LLC, Bdfflare Inc., BDF Integrated Corporation, Joa Freidrich, and the Syed Doha Trust, Defendants.
MarksDiPalermo PLLC, New York, NY (Cabot Marks of counsel), attorney for plaintiff. No appearance for defendants.
MarksDiPalermo PLLC, New York, NY (Cabot Marks of counsel), attorney for plaintiff.
No appearance for defendants.
Gerald Lebovits, J.
In this action, plaintiff, a law firm, has sued former clients who allegedly did not pay their legal bills. Plaintiff seeks $42,000 in unjust enrichment for unpaid legal services; $200,000 in compensatory damages for defendants' having allegedly fraudulently induced plaintiff to provide legal services while never intending to pay; $200,000 in compensatory damages for defendants' having allegedly accepted legal services with no intent to pay; and $600,000 in punitive damages for defendants' alleged frauds.
Defendants have not appeared in the action. Plaintiff now moves for default judgment on these claims. The motion is denied.
DISCUSSION
A plaintiff moving for default judgment must establish service, default, and the facts constituting plaintiff's claim. (See CPLR 3215 [f].) Plaintiff's affidavits of service all reflect "nail-and-mail" substituted service under CPLR 308 (4). (See NYSCEF Nos. 2-6, 11.)
Plaintiff properly employed substituted service on defendants Syed Doha and the Syed Doha Trust. (See Barclays Bank PLC v Skulsky Trust , 287 AD2d 365, 366 [1st Dept 2001] [holding, in action against a trust, that defendant's trustee was properly served by substituted service under CPLR 308 [4] ]. ) But service on Doha and the Doha Trust was complete in April 2019; and plaintiff did not move for default judgment until December 2021. As a result, absent good cause shown this court is required to dismiss the action as abandoned as against Doha and the Doha Trust. (See CPLR 3215 [c].) Plaintiff asserts that it was unable to move for default judgment in March 2020, as it had intended, because of the COVID-19 pandemic. (See NYSCEF No. 9 at ¶¶ 14-16.) That reason might establish why plaintiff did not file this motion in March 2020. But it neither explains nor justifies plaintiff's waiting to move until December 2021.
Plaintiff's complaint alleges that defendant Doha is the trustee of the Doha Trust. (See NYSCEF No. 1 at ¶ 23.)
The COVID-related toll on legal-filing deadlines was in place only from March 7, 2020, until November 4, 2020. (See Executive Orders 202.8 [Mar. 7, 2020], 202.72 [Nov. 3, 2020]; see also Brash v Richards , 195 AD3d 582, 584-585 [2d Dept 2021] [discussing effect on filing deadlines of these executive orders].)
Defendants Dawts Inc. and Bdfflare Inc. are corporations (see NYSCEF No. 1 at ¶¶ 10, 17 [complaint]), making nail-and-mail service on them under CPLR 308 (4) ineffective. (See Knopf v Sanford , 132 AD3d 416, 417 [1st Dept 2015], citing Lakeside Concrete Corp. v Pine Hollow Bldg. Corp. , 104 AD2d 551 [2d Dept 1984], affd 65 NY2d 865 [1985].) This court therefore lacks personal jurisdiction over these defendants.
Defendant Alta LLC appears to be a limited liability company. (See NYSCEF No. 1 at ¶¶ 14-15.) The law is unsettled about whether substituted service on a limited-liability company's agent is proper service on the LLC. (See e.g. Tetteh v Infinite Beauty NYC, LLC , 2017 NY Slip Op 32452[U], at *2-*5 [Sup Ct, NY County Nov. 27, 2017] [Kalish, J.] [discussing this issue and collecting cases].) If service was proper, Alta, like Doha and the Doha Trust, was in default more than a year before plaintiff moved for default judgment. If service was not proper, this court lacks personal jurisdiction over Alta, as with Dawts Inc. and Bdfflare Inc.
It is unclear whether plaintiff is seeking default judgment against defendants BDF Integrated Corporation and Joa Freidrich. (Compare NYSCEF No. 8 at 1 [notice of motion] and NYSCEF No. 9 at ¶ 2 [attorney affirmation] [reflecting motion for default judgment against these defendants], with NYSCEF No. 12 at ¶ 2 [client affidavit] [reflecting motion for default judgment only as against the other defendants].) If plaintiff is moving against them, the motion must be denied: Plaintiff did not file affidavits of service for BDF Integrated Corporation and Freidrich. This court cannot discern from the record whether service ever occurred. (See NYSCEF Nos. 2-6, 11.) If service did not occur, the deadline for service set by CPLR 306-b has long since passed; but this court may not dismiss an action sua sponte for failure to comply with CPLR 306-b, even on a default-judgment motion. (See Daniels v King Chicken & Stuff, Inc. , 35 AD3d 345, 345 [2d Dept 2006].)
Regardless, given the absence of an affidavit of service, it is unclear whether Freidrich is in default. (Compare CPLR 308 [1] [no requirement of filing of proof of service], with CPLR 308 [2], [4] [requiring filing of proof of service and providing that service is complete 10 days after filing], and CPLR 320 [a] [providing that when service is made under CPLR 308 [2] or 308 [4], an individual defendant's time to appear runs from the completion of service].)
With respect to plaintiff's damages claims, plaintiff's unjust enrichment claim is based on allegations that plaintiff performed $42,000 in unpaid legal services for defendants. (See NYSCEF No. 12 at ¶¶ 21-22.) But plaintiff has not provided the engagement letter referenced in its principal's affidavit (see id. at ¶ 7); nor bills, invoices, or communications with defendants.
Plaintiff additionally seeks two increments of $200,000 in compensatory damages plus $300,000 in punitive damages for fraud, based on what appears from its principal's affidavit to be the same assertedly fraudulent conduct—and the same alleged injuries. Plaintiff's affidavit does not explain how defendants' alleged fraud could have inflicted $200,000 in damages on plaintiff when plaintiff assertedly performed only $42,000 in unpaid legal work. With only limited exceptions (see NYSCEF No. 12 at ¶¶ 12-14, 20 ), the affidavit also does not identify any particular statements by any of the defendants to plaintiffs, as CPLR 3016 requires for fraud claims. Even the identified statements are alleged to have been made only by defendant Doha and his employees. (See Total Asset Recovery Servs. LLC v Metlife, Inc. , 189 AD3d 519, 523 [1st Dept 2020] [holding that plaintiff's general assertion "that all defendants engaged in all of the alleged conduct ... is insufficiently particular" to satisfy CPLR 3016 ].)
Finally, plaintiff's affidavit does not establish that defendant's conduct, even if knowingly wrongful, was so egregious as to warrant imposing $300,000 in punitive damages. (See Ross v Louise Wise Servs., Inc. , 8 NY3d 478, 489 [2007] [explaining that punitive damages "are permitted when the defendant's wrongdoing is not simply intentional but evince[s] a high degree of moral turpitude and demonstrate[s] such wanton dishonesty as to imply a criminal indifference to civil obligations"] [internal quotation marks omitted; alterations in original].)
Accordingly, for the foregoing reasons, it is hereby
ORDERED that plaintiff's motion for default judgment under CPLR 3215 is denied as against all defendants; and it is further
ORDERED that the action is dismissed as to defendants Doha, Dawts Inc., Alta LLC, Bdfflare Inc., and the Doha Trust, but not as to defendants BDF Integrated Corporation and Freidrich; and it is further
ORDERED that plaintiff shall within 30 days of entry inform this court by letter (both e-filed on NYSCEF and emailed to mhshawha@nycourts.gov) whether, when, and how it served defendants BDF Integrated Corporation and Freidrich, or the action will be administratively dismissed as to those defendants; and it is further
ORDERED that plaintiff shall serve a copy of this order with notice of its entry on all defendants.