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Seidler v. Knopf

Supreme Court of New York, Second Department

August 23, 2017

Steven Seidler, et al., appellants,
v.
Jacob Knopf, also known as Jack Knopf, also known as Yakov Knopf, also known as Yaakov Knopf, also known as Jay Knopf, et al., defendants, Ashburton 70, LLC, et al., respondents. Index No. 506453/14

          Argued - June 5, 2017

         D53181 H/htr

          Doron Zanani, New York, NY, for appellants.

          Ginsberg & Wolf, P.C., New York, NY (Martin Wolf of counsel), for respondents.

          CHERYL E. CHAMBERS, J.P. ROBERT J. MILLER BETSY BARROS FRANCESCA E. CONNOLLY, JJ.

          DECISION & ORDER

         In an action, inter alia, to recover damages for breach of contract and securities law violations, the plaintiffs appeal, as limited by their brief, from so much of an order of the Supreme Court, Kings County (Solomon, J.), dated August 6, 2015, as denied that branch of their motion which was for leave to enter a default judgment against the defendants Ashburton 70, LLC, and AAR Group Holding, LLC, on the first, third, and twelfth causes of action, upon those defendants' failure to appear or answer the complaint, and granted that branch of the cross motion of the defendants Ashburton 70, LLC, and AAR Group Holding, LLC, which was to compel the plaintiffs to accept a late answer.

         ORDERED that the order is reversed insofar as appealed from, on the law, with costs, that branch of the plaintiffs' motion which was for leave to enter a default judgment against the defendants Ashburton 70, LLC, and AAR Group Holding, LLC, on the first, third, and twelfth causes of action is granted, that branch of the cross motion of the defendants Ashburton 70, LLC, and AAR Group Holding, LLC, which was to compel the plaintiffs to accept a late answer is denied, and the matter is remitted to the Supreme Court, Kings County, for an inquest on the issue of damages with respect to the first, third, and twelfth causes of action.

         The plaintiffs commenced this action, inter alia, to recover damages for breach of contract and securities law violations. The defendants Ashburton 70, LLC, and AAR Group Holding, LLC (hereinafter together the defendants), were served with process via the Secretary of State on September 9, 2014, pursuant to Limited Liability Company Law § 303, and therefore were required to appear and/or respond to the complaint on or before October 9, 2014 (see CPLR 320[a]; 3012[c]).

         The plaintiffs moved, inter alia, for leave to enter a default judgment against the defendants on the first, third, and twelfth causes of action, upon those defendants' failure to appear or answer the complaint. The defendants cross-moved, among other things, to compel the plaintiffs to accept a late answer. In an order dated August 6, 2015, the Supreme Court, inter alia, granted that branch of the defendants' cross motion which was to compel the plaintiffs to accept a late answer, and denied that branch of the plaintiffs' motion which was for leave to enter a default judgment against the defendants on the first, third, and twelfth causes of action. We reverse the order insofar as appealed from.

         The plaintiffs established their entitlement to a default judgment against the defendants on the first, third, and twelfth causes of action by submitting proof of service of the summons and complaint, proof of the facts constituting those causes of action, and proof of the defendants' default in appearing or answering the complaint (see CPLR 3215[f], [g]; Jing Shan Chen v R & K 51 Realty, Inc., 148 A.D.3d 689, 690; Cruz v Keter Residence, LLC, 115 A.D.3d 700, 700; Triangle Props. # 2, LLC v Narang, 73 A.D.3d 1030, 1032).

         "To successfully oppose a motion for leave to enter a default judgment based on the failure to appear or timely serve an answer, a defendant must demonstrate a reasonable excuse for its default and the existence of a potentially meritorious defense" (Cruz v Keter Residence, LLC, 115 A.D.3d at 700-701; see Jing Shan Chen v R & K 51 Realty, Inc., 148 A.D.3d at 690; Wassertheil v Elburg, LLC, 94 A.D.3d 753, 753). Here, the defendants failed to demonstrate a reasonable excuse for their delay in appearing or answering the complaint. The individual defendants' unsuccessful attempt to appear on behalf of the defendant limited liability companies in violation of CPLR 321(a) (see Michael Reilly Design, Inc. v Houraney, 40 A.D.3d 592) did not constitute a reasonable excuse (see Pisciotta v Lifestyle Designs, Inc., 62 A.D.3d 850, 853; Jimenez v Brenillee Corp., 48 A.D.3d 351, 352).

         Similarly unavailing is the assertion that the delay in appearing or answering was due to the mistaken belief that the parties would arbitrate the dispute, since the arbitration agreement cited by the defendants did not involve them.

         Since the defendants failed to demonstrate a reasonable excuse for their default, we need not reach the issue of whether they demonstrated the existence of a potentially meritorious defense (see Jing Shan Chen v R & K 51 Realty, Inc., 148 A.D.3d at 691; Bernstein v Geiss, 111 A.D.3d 774, 775). In light of the foregoing, that branch of the plaintiffs' motion which was for leave to enter a default judgment against the defendants on the first, third, and twelfth causes of action should have been granted, and that branch of the defendants' cross motion which was to compel the plaintiffs to accept a late answer should have been denied. ...


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