Opinion
10309/2014
10-17-2018
SOUTH SEAS HOLDING CORP., Plaintiff, v. STARINVEST GROUP, INC., Bongiovanni & Associations, PA, Larry O'Donnell, CPA, P.C., Ron Moschetta and Robert Cole, Defendant(s).
GOLD BENES LLP, Attorneys for Plaintiff, 1666 Newbridge Road, Second Floor, Bellmore, NY 11710 GRAHAM & BORGESE, LLP, Attorney for Defendant Ron Moschetta, 1695 Empire Blvd., Suite 140, Webster, NY 14580
GOLD BENES LLP, Attorneys for Plaintiff, 1666 Newbridge Road, Second Floor, Bellmore, NY 11710
GRAHAM & BORGESE, LLP, Attorney for Defendant Ron Moschetta, 1695 Empire Blvd., Suite 140, Webster, NY 14580
Robert F. Quinlan, J.
Upon the following papers numbered 1 to 70 read on this order to show cause for an order vacating the April 28, 2015 order granting default and judgment entered October 8, 2015 ; Notice of Motion/ Order to Show Cause and supporting papers 1 - 39 ; Answering Affidavits and supporting papers 40 - 70 ; Other (Memorandum of Law in Opposition; and Memorandum of Law in Reply and supporting papers); it is,
ORDERED that the motion by defendant Ron Moschetta for an order vacating the April 24, 2015 order (Pines, J.) granting plaintiff's application for default against defendant Ron Moschetta and judgment entered October 8, 2015, and permitting him to defend this action on the merits, is denied.
This is an action to recover damages for, inter alia, fraud and negligent misrepresentation. Plaintiff South Seas Holding Corp. ("plaintiff") commenced this action by filing the summons and complaint on May 21, 2014. Service on defendant Ron Moschetta ("defendant") was effectuated June 2, 2014 by substitute service on Rose Moschetta, identified in the affidavit of service as defendant's wife, served at defendant's home located at 990 Gerry Avenue, Lido Beach, New York. Defendant, appearing pro se, served and filed an undated, unverified answer entitled "Reply & counterclaim" which was filed with the Suffolk County Clerk July 9, 2014.
PROCEDURAL HISTORY
Co-Defendant Bongiovanni & Associates ("co-defendant") moved to dismiss the complaint for lack of personal jurisdiction (# 001) which was granted by order dated February 26, 2015 (Pines, J.). Pursuant to that order a preliminary conference was scheduled for March 23, 2015. Upon defendant's failure to appear on March 23rd the conference was adjourned to April 28, 2015. At the request of the court plaintiff's counsel sent notice of the adjourned date to defendant via certified mail, return receipt requested. At the April 28, 2015 conference defendant again failed to appear, and plaintiff's counsel made an oral application for default. Pursuant to Rule 202.27 of New York Code of Rules and Regulations Justice Pines in a decision issued on the record granted plaintiff's application for default judgment and directed counsel to submit judgment. On May 18, 2015 plaintiff's counsel served defendant with the proposed order and judgment with Notice of Settlement. Judgment against defendants was entered October 8, 2015.
Defendant now moves by order to show cause signed by this court on May 21, 2018, pursuant to CPLR 5015(a) to vacate Justice Pines order placed on the record April 28, 2015 granting plaintiff's application for default, and to vacate the judgment entered October 8, 2015, in the interest of justice or alternatively pursuant to CPLR 5015(a)(3) on the basis of fraud. In support defendant submits his affidavit, the affirmation of counsel and supporting exhibits including inter alia the pleadings, affidavit of service, the February 26, 2015 order (Pines, J.) granting co-defendant's motion to dismiss and scheduling a preliminary conference for March 23, 2015, a copy of plaintiff's counsel's March 23,2 015 letter advising defendants of the April 28, 2015 adjourned date for the preliminary conference, select pages of the transcript from the April 28, 2015 conference, the judgment entered October 8, 2015 and assorted documents purporting to relate to the underlying transaction. Defendant states that "with the intention to fully and completely litigate this matter" he filed an answer, and now claims to have never received any information regarding this action from the court or from plaintiff's counsel, until some unspecified date when he purportedly received a text from plaintiff informing him of the default judgment. Defendant further alleges he never received a copy of the court's February 26, 2015 order and was therefore never aware of the initial preliminary conference, he never received a copy of plaintiff's counsel's letter of March 23, 2015 advising defendants of the adjourned date for the preliminary conference, he denies receipt of the proposed order and judgment with notice of settlement dated May 18, 2015, and finally, he denies receipt of the default judgment entered October 8, 2015. Defendant further states that although he wanted to move to vacate earlier, he was advised by bankruptcy counsel not to do so, though no specific time frame for this advice is given by defendant. He further states that in the summer of 2016 he attempted to file an order to show cause on his own behalf in Nassau County and was told it was the wrong venue, and attempted to re-file in Suffolk County where court records indicate the papers were rejected on August 12, 2016. Defendant made no further attempt to vacate the court's order or judgment until he appeared before this court on May 21, 2018.
In his 2016 order to show cause defendant attempted to move simultaneously to vacate his default in this action and the action known as Cullen v. Moschetta, et al. , Index No. 33608/2012, by simply combining the captions and applying his arguments to vacate his default in both actions. Although Cullen v. Moschetta involves some of the same parties the two actions were never consolidated. That filing was received by the clerk in Suffolk County on August 12, 2016, rejected (likely due to the fact that the two actions had not been consolidated) and placed in the Cullen v. Moschetta file. Then, on May 21, 2018, the same day defendant made the present application to vacate his default in this action, he simultaneously filed an order to show cause to vacate his default in Cullen v. Moschetta. Both applications were assigned to this part and defendant makes many of the same unavailing arguments in each.
Plaintiff opposes the application arguing he is prejudiced by the long delay, and submits among other documents the affidavit of Terry Cullen, an officer of plaintiff, affirmations counsel, including the affirmation of prior counsel who annexes a copy of his March 23, 2015 letter advising defendants of the adjourned date for the preliminary conference with the certified mail receipt and a copy of the postcard, addressed to defendant, with what appears to be defendant's signature acknowledging receipt. Plaintiff further states that defendant's excuse that he did not move to vacate sooner because of bankruptcy is without merit and annexes a copy of the PACER printout from defendant's bankruptcy (USBC EDNY Petition # 8-12-71257) which indicates the bankruptcy petition was filed March 5, 2012 and the action was terminated September 17, 2012, nearly 2 years prior to the commencement of this action. Defendant submits a reply.
Defendant attempts to explain away this inconsistency in his reply affidavit by alleging his statements regarding the bankruptcy were mischaracterized by plaintiff's counsel and were meant to refer to his "2015 Bankruptcy atttempts " (emphasis supplied) rather than his actual 2012 bankruptcy filing. Defendant offers no proof of any attempted filings in support of this argument and the court finds it to be without merit.
VACATUR IN THE INTEREST OF JUSTICE
The court first addresses the fact that pursuant to CPLR 2221(a) and 5015 motions to vacate an order or to renew and/or reargue a motion are to be made to the judge who issued the order. In this case Justice Pines has retired from the bench and is therefore "unable" to hear this motion, and this court having signed the order to show cause must decide this motion by default, and by the long held principle of "he/she who last touched it, gets it."
In addition to those grounds enumerated in section 5015(a), a court may vacate its own judgment for sufficient reason and in the interests of substantial justice (see Woodson v. Mendon Leasing Corp. , 100 NY2d 62 [2003] ; Katz v. Marra , 74 AD3d 888 [2d Dept 2010] ). This discretion is reserved for unique or unusual circumstances that warrant such action (Katz v. Marra , supra ; cf. Wade v. Village of Whitehall , 46 AD3d 1302 [2d Dept 2007] ; Soggs v. Crocco, 247 AD2d 887 [4th Dept 1998] ). A court's inherent power to exercise control over its judgments is not plenary, and should be resorted to only to relieve a party from judgments taken through fraud, mistake, inadvertence, surprise or excusable neglect (see Matter of McKenna v. County of Nassau, Off. of County Attorney , 61 NY2d 739, 742 [1984] ; Wells Fargo Bank Minn., N.A. v. Coletta , 153 AD3d 757 [2017] ). Here defendant argues that after filing his answer he never received any information regarding this action. The court finds defendant's conclusory, self-serving arguments without merit. Further, the proof submitted indicates that plaintiff served defendant with the March 23, 2015 letter by certified mail, return receipt requested, and a copy of the return receipt postcard, addressed to defendant, which when compared with the signature on defendant's answer, looks to be defendant's signature acknowledging receipt of that letter. Further defendant admits the address where plaintiff purportedly mailed the documents is his home and fails to refute any of plaintiff's proof of mailing, other than his bald denial of receipt.
Proof that an item was properly mailed gives rise to a rebuttable presumption that the item was received by the addressee (see Viviane Etienne Med. Care, P.C. v. Country —Wide Ins. Co. , 114 AD3d 33 [2d Dept 2013], aff'd. 25 NY3d 498 [2015] ; Progressive Cas. Ins. Co. v. Metro Psychological Servs., P.C. , 139 AD3d 693 [2d Dept 2016] ). A properly executed affidavit of service raises a presumption that a proper mailing occurred, and a mere denial of receipt is not enough to rebut this presumption ( Kihl v. Pfeffer , 94 NY2d 118 [1999] ; Matter of Rodriguez v. Wing , 251 AD2d 335 (2d Dept 1998]; Facey v. Heyward , 244 AD2d 452 [2d Dept 1997] ; Udell v. Alcamo Supply & Contracting Corp. , 275 AD2d 453 [2d Dept 2000] ). Here, the affidavits of service on defendant created a rebuttable presumption that the many mailings were received by defendant. His bald denial of receipt of those mailings is insufficient to support vacatur. The circumstances presented are not unique or unusual and do not warrant the invocation of a court's inherent power to vacate an order in the interests of substantial justice and the court declines to do so (see Kleynerman v. MJGC Home Care , 153 AD3d 1246 [2d Dept 2017] ; Cox v. Marshall , 161 AD3d 1140 [2d Dept 2018] ).
VACATUR PURSUANT TO CPLR 5015(a)(3)
Where a party seeks to vacate a default pursuant to CPLR 5015(a)(3) based on intrinsic fraud, the party must establish both a reasonable excuse for the default and a potentially meritorious defense (see McNamara v. McNamara , 144 AD3d 1112 [2d Dept 2016] ; U.S. Bank N.A. v. Galloway , 150 AD3d 1174 [2d Dept 2017] ). Where defendant fails to establish a reasonable cause for the default, the court is not to consider whether defendant provided proof of a meritorious defense (see US Bank, NA v. Galloway , supra ). Here defendant, as set forth above, failed to offer a reasonable excuse for his default, nor for his more than 3 year delay in moving to vacate the April 28, 2015 order of Justice Pines granting plaintiff's application for default, and to vacate the judgment entered October 8, 2015, so the court need not determine whether he had a potentially meritorious defense (see Deutsche Bank Natl. Trust Co. v. Karlis , 138 AD3d 915 [2d Dept 2016] ; McNamara v. McNamara , supra.
Notwithstanding the foregoing even if defendant had established a reasonable excuse for his default, defendant failed to establish upon the proof submitted that plaintiff engaged in any fraud to warrant vacatur. Defendant's conclusory allegations of fraud are insufficient to warrant the court ordering vacatur pursuant to CPLR 5015 (a) (3) (see Summitbridge Credit Invs., LLC v. Wallace , 128 AD3d 676 [2d Dept 2015] ; Terekhina v. Terekhin , 155 AD3d 750 [2d Dept 2017] ).
This Court has considered defendant's remaining contentions and finds them to be without merit.
Accordingly defendant's application is denied.
This constitutes the Order and decision of the Court.