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RECOVERY CONSULTANTS v. MARILAN SHIH-HSIEH ET AL. (11/22/88)

SUPREME COURT OF NEW YORK, APPELLATE DIVISION, FIRST DEPARTMENT 1988.NY.52545 <http://www.versuslaw.com>; 534 N.Y.S.2d 374; 141 A.D.2d 272 November 22, 1988 RECOVERY CONSULTANTS, INC., AS ASSIGNEE OF THE SANDS HOTEL, RESPONDENT-APPELLANT,v.MARILAN SHIH-HSIEH ET AL., APPELLANTS-RESPONDENTS Cross appeals from so much of an order of the Supreme Court (Beatrice Shainswit, J.), entered February 4, 1988 in New York County, as denied a motion by defendants to dismiss the amended complaint, and as granted the motion of defendant Nelson Shih-Hsieh to vacate a default judgment entered against him. Arnold Koenig of counsel (Margolies & Koenig, attorneys), for respondent-appellant. Elliot B. Pasik of counsel (Rivkin, Radler, Dunne & Bayh, attorneys), for appellants-respondents. Sullivan, J. P. Carro, Milonas, Rosenberger and Wallach, JJ., concur. Author: Sullivan


Cross appeals from so much of an order of the Supreme Court (Beatrice Shainswit, J.), entered February 4, 1988 in New York County, as denied a motion by defendants to dismiss the amended complaint, and as granted the motion of defendant Nelson Shih-Hsieh to vacate a default judgment entered against him.

Sullivan, J. P. Carro, Milonas, Rosenberger and Wallach, JJ., concur.

Author: Sullivan

 Opinion OF THE COURT

Recovery Consultants, Inc., as assignee of the Sands Hotel, seeks the recovery of $1,000,000 and accrued interest from March 1982 against Marilan Shih-Hsieh and her son, Nelson, who were guests of the hotel at the time the alleged debt was incurred. The original complaint alleged a single cause of action against Marilan, based on 20 checks drawn by her, each in the amount of $50,000, totaling $1,000,000, payable to the Sands Hotel. A second cause of action was asserted against Nelson, based on his execution of a $1,000,000 check, also payable to the Sands Hotel. Their pro se answer alleged that "[the] cheques (markers) were for the sole purpose of gambling" and that "[gambling] debts are unenforceable in the State of New York and in the State of Nevada." The answer also asserted that Nelson was "not [a] principal" in the transaction.

Recovery eventually served an amended complaint, which is at issue here, asserting three causes of action against Marilan and one against Nelson. The first cause of action alleges a $1,000,000 loan to Marilan, while the second is based on the 20 $50,000 counter checks or markers which she signed. The third cause of action alleges breach of contract. The cause of action against Nelson is based on his $1,000,000 check.

Shortly after service of the amended complaint, which was timely answered, Marilan was exhaustively deposed. Although a notice to take his deposition was also served upon Nelson, he refused to appear, complaining to plaintiff's counsel, prior to the date set for deposition, that as a mere "bystander", whose sole involvement in the transaction at issue was the gratuitous giving of a personal $1,000,000 check to the Sands Hotel "as a gesture of appreciation," his testimony would be "wasteful and unnecessary". As a result of his nonappearance, Nelson's answer was, over his opposition, stricken and a judgment in the sum of $1,468,672.50, representing principal and interest, entered against him.

After retaining counsel, the Shih-Hsiehs moved to vacate the default judgment and for summary judgment dismissing the amended complaint, arguing that the amount in dispute represented an unenforceable Nevada gambling debt. In her affidavit in support of summary judgment, opposed solely by an attorney's affirmation, not made on personal knowledge and advancing a legal argument only, Marilan described the underlying incident in detail. She was a guest at the hotel with her two adult children from March 23 through March 28, 1982. Upon her arrival, she applied for and received a $1,000,000 line of credit, which was arranged by Mr. Smythe, the hotel president, so that she could play blackjack at the hotel's casino. In exchange for her $50,000 "marker", know also as a counter check, she received a stack of chips of a similar value. In all, she signed 20 markers, each in the sum of $50,000, receiving commensurate value in chips, all of which she lost at the blackjack tables. The ...


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