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Katz v. Marra

June 8, 2010

JACOB KATZ, RESPONDENT,
v.
BENEDETTO MARRA, APPELLANT.



In an action for specific performance of a contract for the sale of real property, the defendant appeals from (1) an order of the Supreme Court, Kings County (Vaughan, J.), dated September 10, 2008, which denied his motion to vacate an order and judgment (one paper) of the same court dated November 20, 2006, granting the plaintiff's unopposed motion for summary judgment on the complaint and awarding the plaintiff specific performance of the contract, and (2) an order of the same court, also dated September 10, 2008, which denied his motion to vacate an order of the same court dated January 3, 2008, granting the plaintiff's unopposed motion for the appointment of a special referee to sign a deed transferring the subject real property to the plaintiff.

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and subject to revision before publication in the Official Reports.

A. GAIL PRUDENTI, P.J., REINALDO E. RIVERA, STEVEN W. FISHER, ARIEL E. BELEN and LEONARD B. AUSTIN, JJ.

(Index No. 19016/03)

DECISION & ORDER

ORDERED that the orders dated September 10, 2008, are affirmed, with one bill of costs.

In September 1997 the plaintiff entered into a contract for the purchase of the defendant's apartment building in Brooklyn. The contract price relating thereto was $270,000. As required by the contract, the plaintiff tendered the sum of $20,700 as a down payment.

The original closing date was set for November 21, 1997. On the consent of the parties, the closing date apparently was extended in order to permit the plaintiff additional time to obtain financing through a mortgage loan. On December 12, 1997, Greenpoint Savings Bank issued a mortgage loan commitment to 3615-15 Realty Corp. (hereinafter Realty Corp.), a corporation wholly owned by the plaintiff. On December 18, 1997, the plaintiff assigned to Realty Corp. his rights under the subject contract of sale. The last mortgage commitment extension granted to Realty Corp. by Greenpoint expired on April 10, 1998. The record does not reveal that any further mortgage loan commitments were obtained in connection with the transaction. The closing did not take place.

In 1999, the plaintiff commenced an action in the Supreme Court, Kings County, by summons with notice. The plaintiff, however, failed to file a complaint. Thereafter, in 2003, the plaintiff commenced the instant action for specific performance of the subject contract.

In May 2006, the plaintiff moved for summary judgment on the complaint. By order and judgment dated October 17, 2006, the Supreme Court granted the plaintiff's motion, upon the defendant's default. In September 2007, the plaintiff moved for the appointment of a special referee to sign a deed conveying the property to him. The defendant similarly did not oppose that motion. By order dated January 3, 2008, the Supreme Court granted the plaintiff's motion for the appointment of a special referee to sign a deed conveying to the plaintiff the subject property.

In 2008, the defendant moved to vacate the order and judgment dated October 17, 2006, as well as the order dated January 3, 2008. The Supreme Court denied the defendant's motions. We affirm.

Pursuant to CPLR 5015(a), "[t]he court which rendered a judgment or order may relieve a party from it upon such terms as may be just." This statute sets forth certain grounds for vacatur, including excusable default, newly-discovered evidence, fraud, misrepresentation, and lack of jurisdiction. As recognized by the Court of Appeals, the drafters of CPLR 5015 did not envision that this statute would provide an exhaustive list of the grounds for vacatur (see Woodson v Mendon Leasing Corp., 100 NY2d 62, 68). Instead, a court retains "its discretionary power to vacate its own judgment for sufficient reason and in the interests of substantial justice'" (Goldman v Cotter, 10 AD3d 289, 293, quoting Woodson v Mendon Leasing Corp., 100 NY2d at 68; see Ladd v Stevenson, 112 NY 325, 332). However, "[a] court's inherent power to exercise control over its judgment is not plenary, and should be resorted to only to relieve a party from judgments taken through [fraud,] mistake, inadvertence, surprise or excusable neglect" (Matter of McKenna v County of Nassau Off. of County Attorney, 61 NY2d 739, 742 [internal quotation marks omitted]; see Long Is. Light Co. v Century Indem. Co., 52 AD3d 383, 384; Quinn v Guerra, 26 AD3d 872, 873).

Here, the defendant failed to establish grounds warranting relief under CPLR 5015(a)(1). A defendant seeking to vacate an order entered upon his or her default in opposing a motion pursuant to CPLR 5015(a)(1) must demonstrate both a reasonable excuse and a potentially meritorious defense (see Newell v Hirsch, 65 AD3d 1108, 1109; Pisciotta v Lifestyle Designs, Inc., 62 AD3d 850, 853; Simpson v Town of Southampton, 43 AD3d 1033, 1033-1034). In this regard, as acknowledged by our dissenting colleagues, the defendant did not set forth a reasonable excuse for his defaults. Indeed, he essentially offered no excuse whatsoever. Further, although the defendant moved to vacate the order and judgment pursuant to CPLR 5015(a)(3), he failed to establish that the plaintiff procured that order and judgment by fraud, misrepresentation, or other misconduct (see CPLR 5015[a][3]; Citicorp Vendor Fin., Inc. v Island Garden Basketball, Inc., 27 AD3d 608, 609; Badgett v Badgett, 2 AD3d 379). There is no support in the record for the position of the dissent that the plaintiff appears to have obtained summary judgment through an affirmative misrepresentation or that he made implicit affirmations to mislead the court.

In our view, this case does not warrant the invocation of a court's inherent power to vacate its orders and judgment in the interest of substantial justice. Notwithstanding the dissent's characterization, there is nothing unique or unusual about this case. This Court has previously found that claims of financial distress are not sufficient to justify the exercise of the court's inherent discretionary power to vacate its own judgment in the interests of substantial justice (see Matter of Dayton Towers Corp. v Gethers, 24 AD3d 663, 664). Simply stated, this is not an appropriate case in which to exercise the broad equity power of a court to vacate its own orders and judgment. We note that the cases cited by the dissent for the proposition that vacatur is warranted in the interest of substantial justice are inapposite and/or distinguishable. For instance, in Ruben v American and Foreign Ins. Co. (185 AD2d 63), the court vacated a judgment, upon the "joint" motion and consent of the ...


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