Opinion
Index No. 650810/2014
03-06-2024
MOORE STREET BUILDING CORP., Plaintiff, v. ABBOTT RESOURCE SERVICES COMPANY, Defendant.
Unpublished Opinion
DECISION/ORDER ON MOTION TO VACATE DECISION/ORDER AFTER TRIAL
J. PERRY, P.
The Court considered the following e-filed documents in deciding this Motion #003: NYSCEF Document Nos. 217, 218, 219, 220, 221, 222, 223, 224, 225, 226, 230, 231, 232, 233, 234, 235, 236, 237, 238, 239, 240, 241, 242, 243, 244, 245, 246, 247, 248, 249, 250, 251, 252, 253, 254, 255, 256, 257, 258, 259, 261, 262, 263, 264, &265.
Defendant Abbott Resource Services Company (Abbott) moves pursuant to NYS CPLR §§ 4404, 4405, 5015 and NY Const art I, § 6, seeking to vacate the decision and order of this Court dated September 14, 2023, (Trial Decision). Defendant seeks vacatur of the Trial Decision and any related judgment and the granting of a new trial. For the reasons discussed below, the motion by Abbott is denied.
BACKGROUND
The underlying matter was originally brought in 2014, by Plaintiff, Moore Street Building Corp., (Moore Street), and its' Principal Steven Corelli (Corelli) against Defendant Abbott and its' Principal, Susan Davison (Davison) for the dissolution of a Joint Venture Agreement (JVA) to develop real property into legal condominiums.
In 2001, Abbott and Moore entered into the JVA for the purpose of converting a six-story loft building located at 42 North Moore Street, New York, New York (Building), to condominium ownership. The JVA provided that the Building would be conveyed to the joint venture (JV), Abbott would fund its development (up to an agreed limit of $300,000), and the parties would receive designated condominium units once the Building was converted to a condominium. Corelli, a registered architect, and a residential real estate developer, was to provide the experience and expertise for the development and conversion, and Davison was to provide the financial backing for the condominium conversion. For reasons that were discussed in the Trial Decision, the condominium conversion never occurred. Plaintiff brought an action for the dissolution of the JVA on March 13, 2014. Sometime in November 2022, the case was set down for a bench trial which was scheduled to begin on July 10, 2023, and this Court was assigned the trial.
The Courts' Principal Court Attorney conferenced the case with the attorneys on the afternoon of July 10, 2023. At that conference, Defendant's counsel requested a one-week adjournment explaining that Davison had informed them that due to the storm that occurred on July 9, 2023, the connecting flight scheduled to arrive in New York that evening had been cancelled and that Davison was able to get a flight back to her residence in the Bahamas. Plaintiffs counsel Mr. Rishi Bandari, Esq. objected, arguing that Davison had requested numerous adjournments, which had all been denied including the same one-week adjournment request in the Trial Part before the Hon. Adam Silvera. Judge Silvera denied the one-week adjournment request but granted a one-day adjournment and ordered Davison to appear the next day on July 11th for trial. The Principal Court Attorney denied the request for a one-week adjournment and instructed counsel to appear in court the following morning (July 11) to begin the trial.
On July 11, prior to going on the record, Defendant's counsel, Mr. Charles Small, Esq., informed the Court that (although directed to appear) Davison was not present because her flight was canceled due to the storm that occurred on July 9th and she was unable to get another flight from the Bahamas to New York. He then asked whether she could appear via telephone or videoconference. The Court asked the part clerk if it would be possible to get the equipment needed for a video conference. After several minutes of speaking off the record with the clerk, the Court admonished Defendant's counsel and told them the Court would allow Davison to appear by telephone to listen in on Plaintiffs case and that she had to appear in person (as directed) the next day. Immediately after the Court granted Defendant's application to appear via phone, Defendant's counselor Attorney Small, advised the Court that Davison, as Principal for Abbot, had discharged them by telephone, several minutes prior. The Court immediately went on the record:
The clerk informed the court that it would take some time as the request had not been made earlier and the IT Department would have to either bring equipment from their location at 60 Centre, or find equipment available at this Courts' location, 111 Centre Street. The Clerk believed that either way, it would take time for the late request.
MR. SMALL: Charles Small, I'm the outgoing attorney for the defendant. Your Honor, I apologize. To me it came as a shock, a complete shock. Within the past half hour I got a phone call from Ms. Davison, who is the principal of Abbott Resource Services Company, and she discharged me as her attorney. So that's all I could say. (TR page 2, 8-12}
Co-counsel Mr. [name] Shutz, Esq., stated:
MR. SCHULTZ: Your Honor, I'm speaking as an Officer of the Court. There is a disagreement about strategy. She's not - she's declined - without going into detail because we would never violate a confidence or prejudice her, she does not agree with the strategy which we have outlined for her in certain aspects of the case. I shouldn't go into it; it would be inappropriate and unethical. But we cannot function where she says she wants to discharge us and get another attorney. That's not our decision to make, and it came as a surprise to us, Judge. We had no control over it, but here we are. And as soon as Charles got this call we have an obligation. If we knew this yesterday, Judge, which we didn't, we would have contacted someone yesterday. I was up till three o'clock this morning going through exhibits. (Tr page 3-4,19-25 1-9)
Petitioner's Counsel Attorney Bhandari objected to the firing the day of the trial:
MR, BHANDARI: My name is Rishi Bhandari from Mandel Bhandari LLP. I'm here with my colleagues, Evan Mandel, Brice Jastrow, and also with us is our client, Stephen Corelli. Your Honor, as you I'm sure know, you cannot fire your attorney on the day of a trial in the hope of trying to get an adjournment that has been denied three times previously. As Mr. Small said at the beginning right before we went on the record, she said she didn't want the trial to go forward. She said how could this happen. And then 30 minutes before this trial was supposed to commence, she requested - she tried to discharge him. The Court has discretion on deciding whether or not a discharge is allowed on the day of a trial and we, of course, implore the Court not to allow the discharge at this time. We have significant evidence showing misleading statements that were made by Ms. Davison about coming here. She said, for example, that there was no flights from Miami to New York on July 9th. We have printouts showing that there were numerous flights, nine flights after 4:30 p.m. that day. She said yesterday that there was no flights from Freeport, which is the airport in the Grand Bahamas to Miami. We have evidence that there was a 5:33 flight on American Airlines coming from Freeport to Miami, which would then have allowed her to catch a connecting flight from there. So she's trying very hard to not appear. (TR Page 4-5,18-25,1-20).
Thereafter, the Court had Attorney Small call Davidson to find out if she intended to fire her attorneys.
THE COURT: Bring the phone.
COURT OFFICER: (Handing.)
THE COURT: Ms. Davison?
Ms. Davison?
MS. DAVISON: Yes. I can barely hear you. I mean, I can hear you but not understand that well, but go ahead.
THE COURT: Okay. So, two things. Today we are scheduled for a trial.
MS. DAVISON: Yes.
THE COURT: Okay. So I understand you want to fire your attorney?
MS. DAVISON: I guess so.
THE COURT: Why? I don't know what that means, "I guess so." What does that mean?
MS. DAVISON: Who am I speaking with, please?
THE COURT: I'm the judge. This is Judge Perry, ma'am.
MS. DAVISON: Hi, Judge Perry. Nice to meet you.
THE COURT: Nice to meet you too.
MS. DAVISON: I am sitting here, you know, trying to find out if he's trying to hook me into Microsoft Teams. If I have to continue on the phone call, I will, but I don't know what we're doing here. (Tr page 6-7. 5-25,1).
THE COURT: Okay. Hold on, hold on, hold on one second.
THE COURT: So the Teams is something that's not going to happen right now, because - well, what I told your attorney, who is still your attorney, by the way, is that I would allow you to listen in virtually today, and then after that - if you're going to testify, you have to come in. It's just that simple.
MS. DAVISON: Judge, let me just say to you, for me, I tried so hard to get there. I tried my very, very best to get there, and I was halfway there when they cancelled all the flights into New York. So
THE COURT: All right. Well, I have
MS. DAVISON: - I really want to be there.
THE COURT: Ms. Davison, I have counsel here who says otherwise. He says that there were flights that -
MS. DAVISON: What do you mean?
THE COURT: I'm going to tell you. Wait a minute. He said that there were flights that were - that you could have caught. But you know what, that's beside the point. You're not here and the case is going to go forward. Today we're going forward with this case.
MS. DAVISON: Okay.
THE COURT: So you can listen In; hopefully, you will be able to hear. But when it comes time for you to testify or if you have to lay some sort of foundation, you have to be here. This is your case. Don't you want this case to go forward? What am I missing?
MS. DAVISON: I totally want it to go forward. My flight cancelled. You know, they closed New York Kennedy Airport and they closed LaGuardia Airport because of the bad weather, and I suppose it was also because of the G5 interference with landing in the bad weather. So I had no choice. I was stuck in the middle of my trip. Anyway, I do want to be there. If you can schedule me to be there, go forward with today as you need to. And I will be there, you know, next week any time from -(emphasis mine)
THE COURT: Next week? Whoa, whoa, whoa, whoa. The case is going forward today, tomorrow MS. DAVISON: Yes.
THE COURT: - Thursday and Friday, and that's it. So you can get on a plane tomorrow perhaps, or I don't know when counsel is going to put you on, but I would imagine sooner than later, so -MS. DAVISON: All right. So I will -1 will book a trip to get to New York as soon as I can.
THE COURT: Okay. You need to do that, okay.
MS. DAVISON: Okay.
THE COURT: It's going forward. And you're not firing your attorney on the day of the trial. I'm not allowing that to happen. So you can listen in today on the phone, that's fine. But bring yourself in so that you can testify. This case has been going on for a long time. I have attorneys staring at me. I have a court officer and my two court - and I have my clerk looking at me. We're going forward with this case. So listen in today. Get yourself here. You should try to get here by tomorrow, if I were you. So make it happen. (Tr: page 9-10 25,1-9)
Davison left the call, and the Court was prepared to begin the trial with the Court allowing Davison to listen in by telephone and her representing that she would book a trip to New York to appear for the trial. However, Attorney Schultz believing Davison had effectively fired them several minutes earlier argued that they could not proceed with the trial because they no longer represented Davison. Plaintiff continued to object to Davison firing her attorney on the day of trial. The court directed Davison's attorney to call her back.
THE COURT: What's her full name, your client?
MR. SMALL: Susan Davison, D-A-V-l-S-O-N. But, your Honor, I'm looking at the Rules of Professional Conduct. A client has a right to discharge a lawyer. She's discharged me. I'm not her lawyer anymore.
THE COURT: You are her lawyer.
MR. SMALL: I don't know what to do.
THE COURT: She didn't say
MR. SMALL: I don't think it's discretionary with the Court.
THE COURT: She said she's coming in tomorrow. So as far as I'm concerned, she didn't say - she said, "I guess so." Is that what you heard? What did you hear? (Tr: pg 10:13-25)
MR. BHANDARI: Yes, that is exactly what I heard.
THE COURT: She said, "I guess so." Well, I mean, I don't know. I'm trying to find out what's going on. I believe those were her exact words. So now you don't want - okay, guys, this is -
MR. SMALL: I have to call her up. I don't know.
MR. SCHULTZ: Excuse me.
MR. SMALL: 45 minutes ago I was discharged.
THE COURT: Hold on. Step outside and call her up. We're going forward. This case is going forward.
I stayed up all night reading those documents. This case is going forward. This is ridiculous. This is ridiculous.
MR. SCHULTZ: Your Honor, there's no basis, and I'm sure the Court isn't questioning my good faith or Charles' good faith.
THE COURT: I'm not questioning your good faith.
MR. SCHULTZ: But at the same time, Judge, if we have no attorney/client relationship, she doesn't accept our advice, and she says she's discharging us, we're not phantoms and we're not puppets. (Tr: Pg 11:1-20)
THE COURT: Did you hear what she said on the phone? Did you hear what she said on the phone?
MR. SCHULTZ: I did, but I also heard what she told Charles.
THE COURT: Call her back, please. Call her back. (Tr: Pg 11,21-25)
MR. SCHULTZ: There's no attorney/client relationship right now. We can't function as
THE COURT: Did you hear what she said? I'm saying she said that your still her client - her attorneys.
MR. SCHULTZ: She declined to accept our advice, and she told Charles this morning she wants us discharged.
THE COURT: Well, that's not what she told me.
MR. SCHULTZ: Well, we're not in a position to communicate with her anymore. We have no relationship.
THE COURT: Counsel, let's find out. Counsel, let's find out. I'm getting the feeling now you guys don't want to try it. This is crazy.
MR. SCHULTZ: Your Honor, with all due respect, we have acted in total good faith.
THE COURT: And I'm not questioning your good faith.
MR. SCHULTZ: And we are blindsided by this development more than your Honor is.
THE COURT: Okay, fine. So let's find out. If she says you're her attorneys, then you're her attorneys.
I mean, I don't
MR. SCHULTZ: But she declined to accept our advice. (Tr: pg 12 1-15)
MR. SCHULTZ: Your Honor, we didn't expect this development to occur.
THE COURT: And I didn't either, but this is where we are. So let's see what we can do about it. I mean, I would think you guys would want this case to go forward, honestly, I would think so. If you don't want to go forward, then settle.
MR. SMALL: This case should be settled.
THE COURT: It should. It really should from what I see. It should. But you guys wanted to have a Bench trial, so here we are. (Tr: pg 13:12-22).
MR. SMALL: The attorney for the plaintiff and I wanted mediation, but my then client Susan Davison she adamantly refused mediation.
THE COURT: Your then client, okay.
MR. SMALL: She refused mediation until we had the last settlement conference, a virtual conference last week when I convinced her we have to go to mediation, and then it was too late because the trial was scheduled for the 10th of July.
MR. SCHULTZ: We had previously
MR. BHANDARI: They're calling the client?
THE COURT: They're calling her now.
MR. SCHULTZ: Your Honor, we previously, without going into attorney/client communications, recommended that Ms. Davison go with mediation. I can say that to the Court. And for whatever reason she declined at the time. (Tr: pg. 14:1-16}.
THE COURT: It's Judge Perry again, Ms. Davison.
MS. DAVISON: Yes, ma'am.
THE COURT: Okay. So you're trying to get a flight here tomorrow, correct?
MS. DAVISON: I'm trying.
THE COURT: Okay. Wait, wait, wait. Okay, fine.
As far as your attorneys, do you want them to represent you? MS. DAVISON: No. (Trp. 14:17-25). (emphasis mine)
THE COURT: Why?
MS. DAVISON: So what now?
THE COURT: Why don't you want them - I said why?
MS. DAVISON: Because they haven't been able to get a continuance under these dire circumstances.
THE COURT: They're not magicians. It's up to the judge - strike that last line. It's up to the judge, and I said no. Actually, Judge Silvera said no, and I agreed with him. Based on the record that I saw, there have been continuations. There have been adjournments on this case for reasons, and so the case has to go -MS. DAVISON: Ma'am.
THE COURT: Let me finish, please. There have been numerous adjournments. So I would think you would want this case to go forward so you can get your day in court and you can find out what's going to happen. I mean, you know, kicking the can down the road is not helping anybody in this case.
MS. DAVISON: Ma'am, I am not kicking, and I have never in my life adjourned the case. I don't know if a lawyer has, but if they did it, they did it without my knowledge.
THE COURT: Well, I don't know. I can't tell you.
MS. DAVISON: I've only wanted this case to go forward, and when I asked - when I asked Charles Small last night or the other day did he ever ask for a continuance or an adjournment, he said no, he doesn't know what they're talking about. (Tr pg 15:1-3).
THE COURT: Okay, whatever. That doesn't matter. I'm talking about now. I'm talking about this case right now, here and now. What you just said to me is that you wanted to discharge your attorney because he was unable to get a continuance.
MS. DAVISON: Well, not only that, but I don't know if he's prepared to go forward.
THE COURT: He's prepared to go forward. He has a list of papers and exhibits. He was ready to give a long opening statement.
MS. DAVISON: All right. So I don't - you know, he had no conference with me whatsoever, and I have no idea what he's going to say. I think he's a competent lawyer, but I have not been included in any loop of what's going on, and I'm very upset with it and, you know, I'm trying to do my best. I'm trying to get there. But if you keep calling me, what am I going to do? The phone doesn't work. I'm trying to rebook a plane. I'm trying to take a bath. I'm trying to pack a bag.
THE COURT: And I'm trying to do a case, your case, by the way. I could be doing another case, all right. So I don't want to be here anymore than you do. First of all, my question is, if you're coming here and you fired your attorney, then what's the point of coming here?
MS. DAVISON: I agree.
THE COURT: Right. So, okay. Normally, you don't fire your attorney on the day of the trial.
MS. DAVISON: You know, I don't know. I mean, I talked to my friend who is a judge last night and that's what she told me that, you know, I can - I can fire him and I can, you know, do that. She said I could. Now, you know, she's just a friend. I mean, she's a retired judge, but
THE COURT: This would be your fourth - this is your third attorney, ma'am, or your fourth attorney?
MS. DAVISON: Yeah, in 25 years, yes.
THE COURT: Which one? Yes, what? Yes, he's your third or your fourth? Which one?
MS. DAVISON: I don't know. I lost track. (Tr: Pg 16:23-25, Pg 17:1-25)
THE COURT: Me either. So you're going to get another attorney and start this whole process again, really?
MS. DAVISON: Well, one of them retired. You know, a couple of them retired. I mean, this case is 25 years old.
THE COURT: Exactly, exactly. (Tr: Pg 18:1-6)
THE COURT: Ms. Davison, you've got to stop talking for a second. Your attorney is here ready to go forward.
MS. DAVISON: You know, I told him to do whatever is best. You know, I think it would be best if I got new counsel but, you know, I think he's - I just don't know. I like him very much.
MR. SMALL: I can't go forward. She discharged us.
I can't deal with this. And I'm looking at the
(Id. At 18-21)
This argument continued for a few more minutes, with Defendant's counsel emphatically arguing that they could no longer represent Defendant, that she had effectively fired them prior to the trial and that she did not agree with or listen to their strategy going forward and thus, the parties had a breakdown in communication. Plaintiffs counsel argued that her firing was a dilatory tactic based on her continuous, and failed attempts to procure an adjournment. Plaintiffs counsel also argued that if the court allowed Davison to fire her attorney on the day of the trial that this Court should default the Defendant because of the failure of any anyone appearing for the Defendant. Plaintiffs counsel argued:
MR. BANDHARI: But let's just say she has the right to fire her attorney, then the alternative would be for them to default because no one has appeared. Today is the trial date. Everybody knows today is the trial date. If she decides to fire her attorneys today, which if she says that's her right and the Court approves it, then they do not have anyone appearing, and she defaults. That's the reason why she doesn't get a continuance, just because she came up with this idea of firing her attorneys in the morning. (Tr: p. 20-21, 23-25,1-6).
Davison who was still present on the phone, heard the arguments on both sides, and made no comments with respect to the arguments made by attorneys. She did however feel it important to comment on a totally irrelevant and unrelated issue. The Court then went off the record to speak with Judge Silvera regarding the background of the adjournment requests made to him and to conduct a quick search of the case Plaintiff s counsel referenced in his argument.
This Court went back on the record and noted that Davison had effectively discharged her attorneys, and that the trial would proceed as scheduled. The Court noted that Judge Silvera confirmed that he granted a one-day adjournment only and directed her to appear for trial the next day, and that Judge Silvera was not made aware that Davison was having difficulties getting a flight because of the weather. In addition, the Court noted that Davison admitted that she had not spoken to her attorneys and did not know if they were ready to proceed and had expressed on the record that she did not want the attorneys' representation. The Court also noted that Davison stated that a retired judge friend told her that she could fire her attorney on the day of the trial.
The Court again notes that Davison was present for the entirety of the attorney's argument and never expressed that she wanted her attorneys to continue their representation, or that she wanted an adjournment to retain new counsel. The Court then ruled that Davison had discharged her attorneys, allowed the Plaintiff to proceed with their case and expected Davison to appear before the Court the next day. She did not appear, nor did any counsel appear on behalf of her company.
A Decision and Order was rendered on September 14, 2023. The court found that the JVA had been dissolved as of the filing of the Petition on March 13, 2014, that Moore Street continued to own the premises and Abbott continued to hold the mortgages to the property. This Court dismissed Defendant's counterclaims without prejudice.
The Defendant now moves to vacate this Court's Decision and Order pursuant to NY CPLR §§ 4404, 4405 and 5015 and in the interests of justice.
DEFENDANT'S ARGUMENTS
Defendant argues that a trial court may set aside a verdict and order a new trial where it is in the interest of justice. CPLR § 4404(b). Defendant argues that it was an improvident exercise of discretion and a miscarriage of justice to refuse Defendant a one-week adjournment so that Davison, Abbot's principal, could appear and provide testimony. Defendant argues that the adjournment request was not a dilatory litigation tactic but the result of the storm.
The Defendant claims that the Court sua sponte discharged Abbott's attorneys and that left Defendant subject to automatic default. Defendant argues that Davison was not informed of the discharge or advised that a corporation may not appear without counsel and that the Court allowing the Plaintiff to proceed with an Inquest and failing to give sufficient time for Defendant to obtain new counsel are sufficient grounds to set aside a verdict and grant a new trial.
In addition, Defendant argues that the trial decision should be vacated pursuant to CPLR 5015(a)(1) which provides in relevant part:
(a) On Motion. The court which rendered a judgment or order may relieve a party from it upon such terms as may be just, on motion of any interested person with such notice as the court may direct, upon the ground of:
1. excusable default, if such motion is made within one year after service of a copy of the judgment or order with written notice of its entry upon the moving party, or, if the moving party has entered the judgment or order, within one year after such entry.
Defendant argues that there is a strong preference for matters to be decided on the merits, that vacatur is regularly granted and that Davison has demonstrated an "Excusable Default" under CPLR § 5015(a)(1). Counsel argues that Defendant requested a one (1) week adjournment of the trial, in addition to requesting for permission to appear via Teams or phone, which they claim was rejected by the Court. Defendant argues that Davison continued to make every attempt to get to New York the next day with the understanding that Defendant was represented by counsel, and that Defendant's default is excusable because Davison's delay was beyond her control. They also allege that Defendant had numerous meritorious claims and defenses, and that Defendant is entitled to reimbursement for paying the debts of the building and funding its expenses in excess of $2 million. Counsel further claims that Defendant has been damaged in an amount in excess of $5 million as a result of Plaintiff's and Corelli's failure and refusal to provide rents to Abbott. Lastly, they argue that Defendant had a constitutional right to appear and defend this matter, pursuant to NY Const art. I, § 6 and that Defendant was improperly denied that right. They contend that absent an express waiver or unusual circumstances a party has a right to be present at all stages of a trial.
In her affidavit, Davison stated that on July 9, 2023, she traveled from the Bahamas to Miami enroute to New York. She stated that her connecting flight from Miami to New York was canceled as a result of a "devastating storm." She claimed that she proceeded to another gate to attempt to catch a different flight to JFK and that that flight had also been cancelled due to the weather. She concluded that because of the devastating storm, she would not be able to obtain a flight to New York on July 9, 2023. She decided that her best option was to seek an adjournment of the trial, return to the Bahamas and wait to hear when the trial was rescheduled. (Davison Aff., p. 5)
She further stated that she called Attorney Small and told him she needed to return to the Bahamas, and that based on their conversation, she understood him to be planning to seek an adjournment of at least one week. She stated that on July 10th she received a communication from Attorney Small. She claims that because of an earlier misunderstanding in communication, Attorney Small made an application for a one-day adjournment of the trial instead of a one-week adjournment and that the application had been granted to July 11th. She also claims that before she left for the Bahamas, she received confirmation from American Airlines personnel that both LaGuardia and JFK airports were closed. (Id. at 6, 26-28).
She stated that on the morning of the trial on July 11, 2023, she spoke with Attorney Small again while he was in the courthouse waiting for the trial to begin and that during the call, they discussed him making a motion to withdraw, for Abbott to receive time to obtain new counsel, and for her to participate in the trial remotely via Microsoft Teams or telephone. (Id. at 7, 31). She claims that while she was on her way to the airport the Court sua sponte discharged Abbott's counsel and moved forward with the trial leaving Abbott with no counsel. (Id. at 15, 57)
PLAINTIFF'S ARGUMENTS
Plaintiff argues that Defendant's motion is premised on several misrepresentations to the Court and the misrepresentations present a genuine concern that the instant motion is premised on perjured testimony.
Plaintiff argues that between Fall 2022 and the July 10, 2023, trial date, Plaintiff repeatedly proposed mediation in an attempt to settle the case and that Defendant refused to mediate until the week of June 26, 2023. That week, Davison said she was willing to mediate the case and Plaintiff attempted to identify potential mediators and dates to schedule the mediation for the week of July 3. On the morning of June 28, the parties agreed that the mediation would be held remotely to accommodate Davison. The Last Clear Chance Conference was held at 1:00 pm on June 28, 2023. At that conference Defendant's counsel explained that the parties were trying to mediate the case and asked that the July 10, 2023, trial be adjourned. Plaintiff opposed the adjournment, the Court agreed, and denied the adjournment, explaining that the parties could have mediated this case at any time during the nine years it had been pending. The Court ordered both parties' principals to appear in the Trial Assignment Part on July 10, 2023. Plaintiff alleges that the next day, on June 29, 2023, Defendant's counsel emailed Plaintiff's counsel to cancel the mediation stating that Davidson was allegedly having difficulty getting a flight to New York during the week of July 3rd. Plaintiff's counsel reminded counsel that Plaintiff had agreed that the mediation would be conducted remotely making it unnecessary for Davison to fly to New York for the mediation conference. The mediation did not go forward because Davison declined to participate. In that same email, Defense counsel also explained that because of the difficulty Davidson allegedly had in finding a flight, counsel would again make an application to adjourn the July 10th trial.
Plaintiff alleges that while waiting for the case to be called on July 10,2023, at the Trial Assignment Part, Defendant's counsel advised Plaintiff's counsel that Davison had secured a flight to New York that would arrive later that day. Defendant's counsel allowed Plaintiffs counsel to see the flight confirmation on his phone which purported to show a flight from Miami to New York through Raleigh-Durham. Defendant's counsel noted that Davison was only willing to fly first class. When the case was called before Judge Silvera, Defendant's Counsel requested an adjournment longer than a day and the Plaintiff's counsel objected citing the flight confirmation which showed Davison scheduled to arrive later that day. Judge Silvera rejected a longer adjournment, granted a one-day adjournment, directed the principals appear in court for the trial and assigned the trial to this court.
Plaintiff argues that Davison claimed that "they cancelled all the flights into New York" on July 9 (Tr. 7:13) but Plaintiff identified numerous flights into New York on July 9 and at least one of the flights had available tickets. Plaintiff argues that Davison also claimed that is was impossible to get a flight to New York on July 10, because "there were no flights available" (DX5 at 1) but Defendant's counsel had previously represented to Plaintiffs counsel that Davison had secured a flight on that date and showed purported flight information on his cellphone.
The Plaintiff claims that the post-trial decision should not be vacated because (a) Defendant's misconduct here was willful as opposed to excusable neglect, (b) Defendant lacks any meritorious claims or defenses, and (c) Plaintiff would be prejudiced by the vacatur of the default. Specifically, they argue that Davison voluntarily refused to appear at the trial, evidenced by her not effectuating any of the following options which have allowed her to appear and testify at the Trial. They argue she could have:
(I) flown to New York before the thunderstorm about which she knew or should have known for days before hand, (II) taken one of the July 9 flights from Miami International Airport to New York, (III) remained in Miami when she arrived there on July 9 so she could have taken a flight to New York on July 10, (IV) taken the July 10 flight to New York she had booked (or secured another one if the booked flight was actually cancelled) ratherthan waiting until 4:47 pm to search for a new flight (DX 5 at 2), or
(V) traveled to New York on July 11, 12, or 13. The Court explained to Ms. Davison that the trial was going to be conducted July 11, 12, 13 and 14. (Tr. at 8:14-22.) Ms. Davison responded by promising to "book a trip to get to New York as soon as I can." (Id.) Had Defendant participated in the trial, it would have continued through July 14. Plaintiff argues that if Ms. Davison wanted to appear at the trial, she had ample opportunity to do so.
Plaintiff contends that if Defendant had a legitimate basis for seeking a second adjournment, she failed to provide any grounds for such an adjournment or the documentation necessary to support those grounds, and that without such evidence, the Court lacked the discretion to even grant a second adjournment.
Further, Plaintiff argues that Defendant's default was voluntary because the Defendant discharged its own counsel and that Defendant was well aware that as a corporation, Defendant needed to be represented by an attorney.
LEGAL ANALYSIS
The Court having rendered a judgment or order may relieve a party from it upon the ground of excusable default within one year after such entry. CPLR § 5015(a)[1.] What constitutes a reasonable excuse for a default generally lies within the sound discretion of the motion court. (Chevalier v. 368 E. 148th Street Associates, LLC, 80 A.D.3d 411 [1st Dept. 2011]). Additionally, case law has established that absent a meritorious claim or defense, there is no purpose served in merely vacating a default. (See Leader v. Parkside Group, 174 A.D.3d 420, 421 [1st Dept 2019], Iv dismissed 33 N.Y.3d 1111 [2019]; and Soffer v. Montanez, 198 A.D.3d 606 [1st Dept. 2021]).
In New York, there is a strong policy in favor of resolving disputes on the merits rather than on the default of a party. (See Chevalier v 368 E. 148th Street Associates, LLC, and Picinicv Seatrain Lines, Inc., 117 A.D.2d 504, 508 [1st Dept 1986].) "A determination of the sufficiency of the proffered excuse and the statement of merits rests within the sound discretion of the court" (Marquez v 171 Tenants Corp., 161 A.D.3d 646, 647 [1st Dept 2018]. (See also Rivera v Shypri Realty Corp., 198 A.D.3d 448,448 [1st Dept 2021]). However, where the record demonstrates a pattern of default or neglect, the default should be considered intentional and, therefore, not excusable (Eretz Funding v Shalosh Assocs., 266 A.D.2d 184 ; Roussodimou v Zafiriadis, 238 A.D.2d 568 ; Inc. Vill. of Hempstead v. Jablonsky, 283 A.D.2d 553, 554 Under the circumstances of the instant case, the Court cannot simply reference the preference for deciding cases on the merits. (Leader v Parkside Group, 174 A.D.3d 420, 421, 103 N.Y.S.3d 427 [1st Dept 2019].
The record shows that the July 10, 2023, trial date was scheduled in November 2022 and that between fall 2022 and July 10' 2023, Plaintiff proposed that the parties hold a mediation to attempt to settle the matter. Defendant refused to do so until the week of June 26, 2023. That week, Defendant expressed a willingness to participate in mediation and Plaintiff began identifying potential mediators and dates to schedule the mediation for the week of July 3,2023. On the morning of June 28,2023, the parties agreed that the mediation would be held remotely. Later that day, at the Last Clear Chance Conference, Defendant asked to adjourn the trial based on the parties agreeing to mediate. Plaintiff objected, the adjournment request was denied, and the Court ordered both parties' principals to appear in the Trial Assignment Part on July 10, 2023. The next day on June 29, 2023, Defendant's counsel sent an email to Plaintiff's counsel:
Evan, My client resides in the Bahamas. She reports that she is having difficulty getting a flight to NY as next week is a holiday week. Therefore I don't think we can have mediation next week and as of now I am not sure if she can appear in court on Monday 7/10. I may have to make application [sic] for a short adjournment. (PX105 at 1).
Plaintiff's counsel responded:
Yesterday, we agreed that the mediation would be conducted remotely. So, any supposed difficulty getting plane flights could not interfere with it. If your client purported to agree to a mediation in order to secure an adjournment, your client wasted a lot of my teams' time yesterday identifying mediators who would be available on short notice. If your client is interested in mediating the case, the date and mediator should be secured today because it will be extremely difficult if not impossible to schedule after today.
At yesterday's conference, the Court rejected your client's application for an adjournment. There simply is no basis for an adjournment. (PX105 at 1)
Plaintiff alleges that between Defendant's June 29 email and July 10th, Defendant's attorneys gave no indication as to whether Davison would appear at the trial. The news was forecasting thunderstorms in New York several days before the July 9th storm and what is certain is that Davison made no attempt to arrive in New York before the storm hit New York.
At 6:15pm on July 9, 2023, Defendant's counsel sent an email stating:
Evan Mandel, I received an email this afternoon from my client. Susan Davison. She was at the Miami airport and her flight to NYC was cancelled. She said there were no flights to NY until tomorrow night. (Emphasis mine). A few minutes ago I received another email from Susan stating that she was flying back to her home in the Bahamas. Therefore, tomorrow morning I will be making an application for an adjournment... (PX 115).
Plaintiff immediately began researching and found through public flight information that nine flights took off from Miami International Airport at or after 4:40pm on July 9 and landed at a New York City Airport and at least one of them had available seats (PX103).
Plaintiffs counsel responded at 7:12pm:
Charles, this is the third time Defendant has requested an adjournment. This request is as meritless as the last two requests. She should arrive in NY as quickly as she possible can, ideally no later than tomorrow afternoon. We note that, at this time, there are still flights today from Miami to NY that have yet to take-off. Please provide documentation showing precisely the flight she took and the flight that was supposedly cancelled, (id.)
Plaintiffs counsel followed up that email at 8:18pm:
Charles, I am disappointed though not surprised that we have not received Defendant's flight confirmation. Let me be blunt. We do not believe your client. Please immediately provide us with her flight confirmation.
It does not appear that such information was ever provided to the Plaintiff.
On July 10, 2023, in the Trial Assignment Part, an adjournment for a week was requested by Defendant before Judge Silvera. Judge Silvera denied that request, granted a one-day adjournment and ordered the principals appear for the trial. Thereafter, the trial was assigned to this Court and the case was conferenced later that afternoon, with the Court Attorney. At the conference, Defendant's counsel requested a one-week adjournment explaining that Davison booked a flight to arrive in New York that evening, and it too had been cancelled. The Defendant did not provide any proof, the Plaintiff objected, citing the recent adjournment requests made by the Defendant. The Court Attorney advised that Judge Silvera had previously denied their request for an adjournment and that this Court would do the same. The Court directed Davison to appear the next day on July 11, 2023.
In her Affidavit, Davison claims that when she spoke to Defendant's attorney Mr. Small on July 11, 2023, she was "upset because of the severe storm, the flight cancelations, the stress of this important case and most of all the miscommunication I had had with him regarding the fact that I had returned to the Bahamas and hence that I would be unable to be in Court until the following week." (Davison Aff. at 7, 31). Interestingly, aside from stating that she had returned to the Bahamas and would be unable to be in Court until the following week, she fails to explain why she needed a week to return to New York. This is especially confusing as one of her exhibits purports to show that a ticket was purchased for Davison to arrive on July 11, 2023, at 11:00pm. (DX 6). Moreover, Davison never addressed why she failed to pursue one of the many options she had, specifically, why she didn't stay in Miami instead and get on one of the several flights that took off from Miami and arrived in New York on July 9, 2023, why if truly unable to leave on July 9, 2023, she did not immediately book a flight for July 10, 2023, why or why she declined to mediate the case in the nine years this matter had been going on. In addition, she fails to explain why she didn't attempt to arrive in New York on an earlier date, since the news had predicted the storm several days before it arrived in New York. Instead, and rather to deflect away from her own decisions, she puts forth baseless arguments about the Court's failure to grant her a last-minute adjournment and how the Court allegedly discharged her attorneys. This court again notes that this trial date was scheduled in November 2022. If that date was not convenient for Davison, her attorneys could have made an earlier application to change the date.
Davison continues to argue that the Court denied her attorneys request to appear via Microsoft Teams link. This argument, like all other arguments made by Davison, are completely baseless. As discussed earlier, the Court allowed Davison to appear via telephone, however, the Court did not have the necessary equipment available in the part and, according to the Part Clerk, it was unclear if or when the IT Department, located in another building, would be able to access the equipment on such short notice. The trial, originally scheduled for July 10, 2023, was already a day behind schedule and the Court did not want to delay the trial any further. The Court allowed Davison to appear via telephone on July 11th' but she was directed again to appear in Court the next day to testify or the day after.
The trial was scheduled from July 10th through July 14th.
It is clear to this Court, based on the record and the history of the case, that Davidson had no plans to attend the July 10th trial and the bad weather provided her with the excuse she needed. She represented to the Court on July 11, 2023, on the record that she was unable to get to New York because "they cancelled all the flights to New York." (Tr. at 7:12-13) That is simply untrue. Plaintiff's exhibits (PX 103 and 106), clearly reflect that the airports in New York were not closed and that flights landed in New York on July 9th and 10th.
What is even more perplexing is how Davison, as if in an alternate reality, claims that the Court sua sponte fired its attorneys. Davison, unequivocally stated on the record that she did not want Abbott's Attorneys to represent her, and that her retired judge friend told her she could fire her attorneys on the day of trial. When the Court asked Davison on the record if she wished to have the attorneys represent her, she clearly stated "no" which she conveniently dances around in her affidavit. Moreover, towards the end of the 2nd phone call with Davison, the Court explained to her that:
"you just threw a whole monkey wrench into this. We were ready to go forward with this case and then you fired your attorney at the second we were about to start the trial, Ma'am, (tr. 21:12-13)."
Notably, Davison did not attempt to refute that statement, instead, she interjected on an unrelated, and irrelevant point. Nevertheless, no matter how Davison attempts to deflect, the record is clear that Davison fired Abbotts' attorneys on the day of the trial after they were unable to procure a one-week adjournment. A continuance is inappropriate when a party chooses to terminate its counsel on the date of trial. Matter of Arc on 4th St. Inc. v. Quesada, 112 A.D.3d 431 [1st Dept 2013]. The Court also notes that upon Davison allegedly finding out that "Abbotts' lawyers Mr. small and Mr. Schultz had been dismissed from the case by the Judge" doesn't state that she called them right away to inquire what happened, or that she wanted them to continue to represent her. Ironically, she goes on to state in her affidavit, that she reached out to Attorney Small for recommendations for new counsel. (Davison Aff. ¶ 20; 76). Davison bares the blame for Abbotts' default; but for her actions, and the firing of her attorneys on the day of the trial after a further adjournment request was made, the trial would have proceeded and would have included Abbott.
To the extent that Davison argues that no one told her that Abbot would be in default if she fired its attorneys, Davison, as Abbotts's Principal had retained several attorneys throughout the nine years this matter was proceeding and always appeared by counsel. Further, Davison was present on the phone throughout the entirety of the attorneys' arguments, and specifically during Plaintiff's statements that Abbott would be in default if the Court allowed Davison to fire the attorneys on the day of trial and allow the case to go forward. At no point did Davison ever state that she did not fire her attorneys, that she wanted them to proceed with the trial or in the alternative, that she wanted an adjournment to retain new counsel. Indeed, the only thing of concern to her appeared to be securing a one-week adjournment at any cost. Davison had no problem distorting the truth to make it fit into the narrative she wanted to create no matter how false or misguided it might have been.
Davison, a savvy experienced businesswoman who entered into a JVA and agreed to finance this venture, paints herself as a victim, and a helpless, overwhelmed, non-lawyer sitting in a foreign country, not in great health who had just contended with a severe storm. (Davison Aff. ¶ 20: 76) She indicates that she was caught offguard by the bad weather rendering her unable to travel. This too is disingenuous. Indeed, she is a victim of her own actions which caused Abbott to default. She had many viable options, all of which would have resulted in the case going forward. Davison's explanations are not credible considering all the circumstances.
As such, this Court finds that Defendant has failed to proffer a reasonable excuse for the default.
As defendant failed to provide a reasonable excuse, this Court need not consider whether it established a potentially meritorious defense. (See New Globaltex Co., Ltd. v Lin, 198 A.D.3d 573, 574,152 N.Y.S.3d 900 [1st Dept 2021]).
Assuming arguendo that Defendant met the reasonable excuse threshold, this Court determined in its Decision/Order After Trial that the JV dissolved as of the filing of the complaint on March 13, 2014 when the Plaintiff filed its Verified Complaint, unequivocally stating therein, "If the joint venture has not been otherwise terminated, plaintiff elects to terminate the joint venture as of the date of filing of this complaint and seeks the immediate winding up of all joint venture matters".
Finally, Defendant's argument that substantial justice weighs in favor of having this Court vacate its Decision/Order After Trial is equally without merit. "Although the Supreme Court retains the inherent discretionary power to relieve a party from a judgment for sufficient reason and in the interest of substantial justice, this power is not plenary and should only be exercised to grant relief where a judgment was taken through fraud, mistake, inadvertence, surprise, or excusable neglect." Wells Fargo Bank, N.A. v Hyun Jung Kim, 189 A.D.3d 1673,1674 . (citations omitted)
Here, as in Wells Fargo v Kim, "the defendant failed to provide any evidence that the default orders entered in this action were the result of fraud, mistake, inadvertence, surprise, or excusable neglect that would warrant vacatur in the interest of substantial justice." Id.
Accordingly, it is
ORDERED that Defendant's motion to vacate the Trial Decision and schedule a new trial pursuant to CPLR §§ 4404, 4405, 5015 and NY Const Art I § 6, is denied.
This constitutes the Court's decision and order.