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Castle Restoration & Construction, Inc. v. Castle Restoration, LLC

Supreme Court of New York, Second Department

November 8, 2017

Castle Restoration & Construction, Inc., et al., appellants-respondents,
v.
Castle Restoration, LLC, et al., respondents-appellants. Index No. 9187/13

          Argued - November 4, 2016

         D53800 C/htr

          MARK C. DILLON, J.P. JOHN M. LEVENTHAL JEFFREY A. COHEN ROBERT J. MILLER, JJ.

          DECISION & ORDER ON MOTION

         Motion by the appellants-respondents, inter alia, for leave to reargue an appeal from a judgment of the Supreme Court, Nassau County (Bucaria, J.), entered May 18, 2015, which was determined by decision and order of this Court dated April 5, 2017.

         Upon the papers filed in support of the motion and the papers filed in opposition thereto, it is, ORDERED that the branch of the motion which is for leave to reargue is granted; and it is further, ORDERED that the motion is otherwise denied; and it is further, ORDERED that, upon reargument, the decision and order of this Court dated April 5, 2017 (see Castle Restoration & Constr., Inc. v Castle Restoration, LLC, 149 A.D.3d 692), is recalled and vacated, and the following decision and order is substituted therefor:

Forchelli, Curto, Deegan, Schwartz, Mineo & Terrana, LLP, Uniondale, NY (David A. Loglisci of counsel), for appellants-respondents.
Abrams, Fensterman, Fensterman, Eisman, Formato, Ferrara & Wolf, LLP, Lake Success, NY (Matthew F. Didora of counsel), for respondents-appellants.

         In an action to recover on a promissory note, commenced by motion for summary judgment in lieu of complaint pursuant to CPLR 3213, (1) the plaintiffs appeal from so much of an order of the Supreme Court, Nassau County (Bucaria, J.), entered May 18, 2015, as, upon renewal and reargument of that branch of the defendants' motion which was to stay entry of a judgment in favor of the plaintiffs, which had been granted in an order of the same court entered February 9, 2015, in effect, vacated its prior determination and thereupon granted that branch of the defendants' motion to the extent of staying enforcement of the judgment, and the defendants cross-appeal from the order entered May 18, 2015, and (2) the plaintiffs appeal from so much of a judgment of the same court entered May 29, 2015, as awarded them prejudgment interest only on the principal and only at the contract rate of 3%, and failed to award them prejudgment interest at the statutory rate on unpaid principal and interest due under the promissory note and awarded them the sum of only $200, 000 in attorneys' fees, and the defendants cross-appeal, as limited by their brief, from so much of the same judgment as, upon the order entered February 9, 2015, is in favor of the plaintiffs and against them in the principal sum of $1, 100, 000.

         ORDERED that the appeal and the cross appeal from the order entered May 18, 2015, are dismissed; and it is further, ORDERED that the judgment is modified, on the law, by deleting the provision thereof awarding the plaintiffs prejudgment interest on the principal at the contract rate of 3% until the date of entry; as so modified, the judgment is affirmed insofar as appealed and cross-appealed from, upon renewal and reargument, the determination in the order entered February 9, 2015, is vacated, and that branch of the defendants' motion which was to stay entry of the judgment is denied, the order entered May 18, 2015, is modified accordingly, so much of the order entered May 18, 2015, as stayed enforcement of the judgment is vacated, and the matter is remitted to the Supreme Court, Nassau County, for the calculation of interest due in accordance herewith and the entry of an appropriate amended judgment thereafter; and it is further, ORDERED that one bill of costs is awarded to the plaintiffs.

         The appeal and the cross appeal from the order entered May 18, 2015, must be dismissed because the right of direct appeal therefrom terminated with the entry of the judgment in the action (see Matter of Aho, 39 N.Y.2d 241, 248). The issues raised on the appeal from that order are brought up for review and have been considered on the appeal from the judgment (see CPLR 5501[a][1]). In addition, the cross appeal from that order must be dismissed as abandoned since the defendants did not raise any argument in their brief with respect to their cross appeal from that order.

         The plaintiff Castle Restoration & Construction, Inc. (hereinafter Castle, Inc.), entered into an asset sale agreement with the defendant Castle Restoration, LLC (hereinafter the LLC), and its principal, the defendant Anthony Colao (hereinafter together the defendants), whereby the LLC purchased certain of Castle, Inc.'s business assets for the sum of $1.2 million. The LLC made a down payment of $100, 000 and gave Castle, Inc., a promissory note for the remaining $1.1 million. Pursuant to the terms of the note, the LLC was to make a certain number of monthly payments in specified sums, with the final payment due on June 15, 2017. Thereafter, Castle, Inc., assigned payments, beginning with the installment due on December 15, 2014, to its principal, Robert P. Castaldi, and his wife (hereinafter together the Castaldis). Colao signed the notice of assignment to acknowledge receipt of the notice on behalf of the LLC.

         The LLC failed to make the payments as agreed, and, in June 2013, Castle, Inc., commenced this action to recover on the promissory note by motion for summary judgment in lieu of complaint pursuant to CPLR 3213. In an order entered November 14, 2013, the Supreme Court denied Castle, Inc.' s motion for summary judgment in lieu of complaint. Castle, Inc., appealed, and this Court, in a decision and order dated November 19, 2014, reversed and granted Castle, Inc.'s motion for summary judgment in lieu of complaint (see Castle Restoration & Constr., Inc. v Castle Restoration, LLC, 122 A.D.3d 789). This Court found that the defendants failed to demonstrate that their claims under an alleged oral construction management agreement were "'inextricably intertwined' with the promissory note" (id. at 790, quoting New York Community Bank v Fessler, 88 A.D.3d 667, 668).

         Meanwhile, Castle, Inc., served a supplemental summons and complaint, adding Robert P. Castaldi as a plaintiff (hereinafter together the plaintiffs). The defendants answered and asserted various counterclaims. In addition, Castle, Inc., and the Castaldis entered into an agreement dated December 10, 2014, terminating the assignment of payments to the Castaldis.

         Following this Court's decision and order, the plaintiffs submitted a proposed judgment. The defendants opposed the proposed judgment and moved for leave to renew their opposition to Castle, Inc.'s motion for summary judgment in lieu of complaint. The defendants contended that, because Castle, Inc., assigned certain installment payments under the note to the Castaldis, Castle, Inc., lacked standing to commence this action, or, alternatively, lacked standing as to those assigned installment payments. The ...


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