Preview
FILED: NEW YORK COUNTY CLERK 10/11/2017 11:31 AM INDEX NO. 650325/2017
NYSCEF DOC. NO. 25 RECEIVED NYSCEF: 10/13/2017
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
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USPA ACCESSORIES, LLC d/b/a CONCEPT ONE
ACCESSORIES and FUL ACCESSORIES, LLC
Index No: 650325/2017
Plaintiff,
vs.
AMERICAN CAP EXCHANGE, INC. AFFIRMATION IN SUPPORT
OF ORDER TO SHOW CAUSE
Defendant.
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I, M. Salman Ravala, Esq., an attorney duly admitted to practice law in the Courts of the
State of New York, hereby affirm the following to be true under the penalties provided by law:
1. I am a member of the law firm Criscione Ravala, LLP, counsel for Defendant American
Cap Exchange, Inc. and as such I am fully familiar with the facts and circumstances stated herein
based on the documents and information contained in the files maintained by my office.
2. I respectfully submit this Affirmation in support of the Defendant’s instant Order to
Show Cause which seeks the following relief:
a) Order vacating the Default Judgment entered with the Clerk on September 20, 2017
pursuant to CPLR §5015(a)(1) and §5015 (a)(4); and dismissing the action for failure to state a
claim pursuant to CPLR § 3211(a)(7) and lack of personal jurisdiction under CPLR §3211(a)(8);
or in the alternative, permitting this action to proceed on the merits upon the grounds set forth in
the annexed Answer, marked as Exhibit “A”;
b) Order removing any execution of income or property against the Defendant;
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c) Order pending the hearing of this Order to Show Cause, all proceedings be stayed on
the part of the Plaintiff, Plaintiff’s counsel, and agents and any Sheriff or other Enforcement
Officer for the enforcement of the said judgment be stayed;
d) Order dismissing the Complaint; and
e) such other and further relief as this Court deems just and proper.
PRELIMINARY STATEMENT
3. Plaintiffs-Judgment Creditors, USPA Accessories, LLC d/b/a Concept One Accessories
and FUL Accessories, LLC (hereinafter collectively, “Plaintiffs”) improperly obtained a default
judgment in an amount of $58,737.90 against Defendant American Cap Exchange, Inc.
(hereinafter, “Defendant”) on September 19 2017, which judgment was entered and docketed in
the Office of the Clerk of the County of New York on September 20, 2017.
4. Under the facts of this action, Defendant was not properly served with a Summons and
Complaint in this matter.
5. Under the facts of this action, this Court lacks personal jurisdiction over Defendant.
6. Under the facts of this action, Plaintiffs lack standing to sue Defendant.
7. Under the facts of this action, Defendant has excusable delay and meritorious defenses,
including that Defendant disputes that it owes the amount of monies stated in the default
judgment entered against it.
BACKGROUND
8. On or about January 19, 2017, Plaintiffs filed an action against Defendant, allegedly for
unpaid purchase orders resulting from the of sale goods between October 2015 and June 2016.
See Exhibit “B”.
9. On or about January 30, 2017, Plaintiff’s improperly served the Defendant. See Exhibit
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“C”.
10. On September 19, 2017, Plaintiffs obtained a default judgment against Defendant, which
default judgment was entered on September 20, 2017.
THE DEFAULT SHOULD BE VACATED DUE TO IMPROPER SERVICE
11. It is well-settled law in New York that failure to serve process in an action leaves the
court without personal jurisdiction, and all subsequent proceedings are thereby rendered null and
void. Such a defect is not cured by defendant’s subsequent receipt of actual notice of the action.
Krisilas v. Mount Sinai Hospital, 63 A.D.3d 887, 889, 882 N.Y.S.2d 186, 188 (2d Dep’t, 2009).
12. Under CPLR §5015(a)(4), the Court may relieve a party from a judgment upon the
ground of “lack of jurisdiction to render the judgment or order.” Service of Process is a
threshold matter and the court is required to consider it before discretionary relief under CPLR
§5015(a)(1). Marble v. Williams, 718 N.Y.S.2d 400 (2d Dep’t, 2000). The sequence in which
the court must dispose of the two grounds is jurisdiction first, and a mere opening of the default
second, for the obvious reason that if jurisdiction is lacking the court has no jurisdiction to do
anything but to vacate the judgment and dismiss the action. Siegel, Practice Commentaries
(McKinney’s Cons. Laws of New York CPLR C5015.9).
13. In other words, when a defendant moves to vacate a default judgment and raises a
jurisdictional objection pursuant to CPLR 3211(8) and CPLR 5015(a)(4) and, alternatively, seeks
discretionary vacatur pursuant to CPLR 5015(a)(1), the court must resolve the jurisdictional
question before determining whether to grant a discretionary vacatur of the default under CPLR
5015(a)(1). HSBC Bank USA, Nat. Ass'n v. Miller, 121 AD3d 1044, 1045 (2014); Canelas v.
Flores, 112 AD3d 871, 871 (2013).
14. Any default judgment procured in the absence of valid service is a nullity. Adames v New
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York City Transit Authority, 126 AD2d 462, 510 NYS2d 610 (1st Dep’t, 1987). “If jurisdiction
is found to be lacking, the default judgment, as well as all subsequent proceedings, would be
rendered null and void” State of New York Higher Educ. Servs. Corp. v King, 232 A.D.2d 842,
843 (1996). “The issue of whether a defendant has a meritorious defense is irrelevant to the
question of whether a judgment should be vacated for lack of jurisdiction, defendant, having
shown lack of personal jurisdiction, would normally be entitled to vacatur of the default pursuant
to CPLR 50515(a)(4).” Ariowtsch v. Johnson, 114 AD2d at 186 (3rd Dep’t, 1986). Where
Plaintiff fails to properly serve Defendant, the default judgment must be vacated pursuant to
CPLR §5015(a)(4) for lack of personal jurisdiction and the Complaint must be dismissed.
Cortese v. Panzanella, 32 Misc 3d 507, 510 (Sup. Ct. Cortland Co. 2011).
15. Here, service was improper in this matter under at least two separate defects.
16. Under CPLR §311, personal service upon a corporation shall be made by delivering
the summons to an officer, director, managing or general agent, or cashier or assistant cashier or
to any other agent authorized by appointment or by law to receive service.
17. A Summons and Complaint in the instant action was served on January 30, 2017 by
delivery to a “Sherif Elhaddad.” who was neither an officer/director nor an authorized agent of
said Defendant at the time of service, because the company was dissolved in 1998, and the
individual upon whom service of process was made resigned from his role as an officer/director
and authorized agent of the Defendant in 1998.
18. Further, CPLR §313 provides that a Plaintiff seeking to commence a New York State
action against an out-of-state corporation must properly serve a foreign corporate defendant,
which service must be completed in one of the following three ways: 1) By a New York State
resident over the age of 18 who is not a party to the action; 2) By an attorney licensed in the
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State in which service is to be made; or 3) By a person authorized to make service pursuant to
the laws of the State in which service is to be made.
19. In the instant action, service was improperly made in Florida by an independent process
server who does not meet any one of the three requirements outlined in Paragraph “18” above.
20. Under Florida Statutes §48.021, service of process shall be served by a Sheriff or by an
independent process server authorized by the Sheriff in the county where service is to occur.
This rule is strictly enforced and if service of process is accomplished by a person not authorized
by the rules to serve process, service is invalid and the court may not sustain the service by
treating it as defective, even when a defendant is not prejudiced by it.
21. Upon examination of the Affidavit of Service filed by Plaintiffs, and verification of a list
of authorized independent process servers maintained by the Sheriff’s office, it is clear that the
process server retained by the Plaintiffs in his matter is 1) not a resident of the State of New
York; 2) not a licensed attorney in the State of Florida; and 3) not authorized to serve process in
Broward County, Florida, where service purportedly took place in the instant action. See Exhibit
“D”.
22. Here, Defendant disputes service of process. It was not properly effectuated, therefore
the default judgment should be vacated and the complaint in this action should be dismissed.
DEFENDANT HAS EXCUSABLE DELAY & MERITORIOUS DEFENSE
23. Under CPLR §5015(a)(1), the Court may relieve a party from a judgment upon the
ground of excusable default.
24. Service of process was defective in this matter. Even if the Court finds that service was
proper and personal jurisdiction exists over Defendant, the Court should vacate the default
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judgment in this action because Defendant had both a reasonable excuse and a valid meritorious
defense exists.
25. A strong public policy exists in favor of resolving cases on their merits rather than
through a default. Orwell Building Corp. v. Bessaha, 5 AD3d 573, 773 NYS2d 126 (2nd Dep’t,
2004). See also, Smith v. Daca Taxi, 222 A.D.2d 209, 634 N.Y.S.2d 476 (1st Dep’t, 1995). It is
preferable to vacate the default to allow for a disposition of the case on its merits. Price v.
Polisner, 172 A.D.2d 422, 568 N.Y.S.2d 796 (1st Dep’t, 1991).
26. The determination of what constitutes a reasonable excuse is left to the sound discretion
of the Court. Scarlett v. McCarthy, 2 AD3d 623, 768 NYS2d 342 (2nd Dep’t., 2003), however,
“the meritorious defense requirement does not present a particularly high barrier.” Brookdale
Medical Center v Lewis, 8 Misc 3d 1019(A), 803 NYS2d 17.
27. Here, subsequent to Defendant being improperly served with the Summons and
Complaint, Defendant’s former principal, a Pro Se party, deeply concerned about the lawsuit,
had several communications with Plaintiff’s counsel via email in February 2017. Defendant’s
former principal even made several inquiries about the lawsuit in an attempt to resolve the
matter.
28. As he was Pro Se at the time and attempting to resolve the matter on an ongoing basis,
Defendant’s principal had no expectation that Plaintiffs would in bad faith file a Motion for
Default judgment during ongoing discussions. As an unrepresented party at the time,
Defendant’s former principal has no legal knowledge and would not have known the difference
between responding to a lawsuit via a filed Answer and responding via email in an attempt to
resolve the issue. Further, as a Florida resident with no ties to the State of New York,
Defendant’s former principal would not have knowledge of New York legal rules or procedure.
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29. Plaintiffs clearly took advantage of an unrepresented party when they filed a Motion for
Default Judgment in the middle of such a dialogue.
30. Once the Motion for Default Judgment was filed, Defendant, despite being the incorrect
party – a dissolved Florida corporation, promptly took additional steps and sought counsel to
resolve this matter in good-faith.
31. Subsequently, Defendant’s counsel then communicated to Plaintiffs’ counsel that they
have sued an incorrect party, yet, to date, Plaintiffs continued with its frivolous application for
default judgment, failed to amend the Complaint, or alternatively dismiss its Complaint in its
entirety for incorrectly suing a wrong party.
32. In fact, Defendant argues that Plaintiffs lack standing because there is no privity of
contract between Plaintiffs and Defendant.
33. Lack of standing renders the litigation a nullity, subject to dismissal without prejudice.
Pullman Group LLC v. Prudential Ins. Co. of America 297 AD2d 578 (1st Dep’t, 2003).
34. Here, as stated previously, the Complaint alleges non-payment on purchase orders from
2015 and 2016. Defendant, American Cap Exchange, Inc. (the old corporation) was dissolved in
1998. It has conducted no business since that time, let alone in 2015 and 2016, as the Complaint
incorrectly alleges. See Exhibit “E”.
35. Given that the Plaintiff’s Complaint makes allegations of non-payment for purchase
orders for the sale of goods from “October 2015 to June 2016” Defendant presumes that
Plaintiffs intended to sue his new corporation, American Cap Exchange, II, Inc. which has in fact
conducted business with Plaintiff in 2015 and 2016,
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36. However, the default judgment obtained in this matter states an incorrect amount
erroneously calculated by the Plaintiffs as it does not offer any credit for payments already made
by American Cap Exchange II, Inc.
37. Lastly, but importantly, Defendant has no ties whatsoever to the State of New York.
38. Plaintiffs’ Motion recites the basis for jurisdiction is a result of Defendant committing a
tortious act causing injury to Plaintiffs within the State of New York, Defendant regularly doing
business in the State of New York, Defendant traveling to New York in order to conduct
business related to this matter, and Defendant maintaining a webpage offering goods to
consumers nationwide. None of these statements are true.
39. As stated earlier, Defendant is a dissolved Florida corporation that has not done business
since 1998 and therefore it is not possible for Defendant to have conducted any business in the
State of New York at any point in recent time, let alone with Plaintiffs in 2015 – 2016.
40. Given that Defendant was not properly served in this action, this Court lacks personal
jurisdiction, Plaintiff’s lack standing, and Defendant has an excusable delay and several
meritorious defenses, this Court should vacate the default judgment and dismiss this action in its
entirety.
41. Defendant requests the interim relief sought herein because the Plaintiff will pursue a
levy in support of the judgment against the Defendant, who was improperly sued, improperly
served, and this Court lacks jurisdiction upon said Defendant. Importantly, the amount of
damages in the default judgment are incorrect and do not account for partial payment already
made to Plaintiffs.
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42. Pursuant to §202.7(f) of the Uniform Civil Rules for the Supreme and County Courts, I
have made a good faith effort and provided notice by electronic mail and facsimile to Plaintiffs’
counsel on October 13, 2017 that I would be requesting the relief sought herein.
43. Defendant has not previously made a prior request for vacatur in this action.
WHEREFORE, Defendant American Cap Exchange, Inc. respectfully requests that this
Court grant the relief sought as follows:
a) Order vacating the Default Judgment entered with the Clerk on September 20, 2017
pursuant to CPLR §5015(a)(1) and CPLR §5015(a)(4); and dismissing the action for failure to
state a claim pursuant to CPLR § 3211(a)(7) and lack of personal jurisdiction under CPLR
§3211(a)(8); or in the alternative, permitting this action to proceed on the merits upon the
grounds set forth in the annexed Answer;
b) Order removing any execution of income or property against the Defendant;
c) Order pending the hearing of this Order to Show Cause, all proceedings be stayed on
the part of the Plaintiff, Plaintiff’s counsel, and agents and any Sheriff or other Enforcement
Officer for the enforcement of the said judgment be stayed;
d) Order dismissing the Complaint; and
e) such other and further relief as this Court deems just and proper.
Dated: New York, New York
October 13, 2017
Respectfully submitted,
CRISCIONE RAVALA, LLP
_________________________
M. Salman Ravala, Esq.
Attorneys for Defendant
90 Park Avenue, Suite 1700
New York, NY 10016
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Tel: (800) 583-1780
Fax: (800) 583-1787
sravala@lawcrt.com
TO: Lazarus & Lazarus, P.C.
Attorneys for Plaintiffs
240 Madison Avenue, 8th Floor
New York, NY 10016
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Index No.: 650325/2017
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK
USPA ACCESSORIES, LLC d/b/a CONCEPT ONE
ACCESSORIES and FUL ACCESSORIES, LLC
Plaintiff,
- Against-
AMERICAN CAP EXCHANGE, INC.
Defendant.
DEFENDANT’S ORDER TO SHOW CAUSE TO VACATE DEFAULT JUDGMENT
CRISCIONE RAVALA, LLP
BY:
M. Salman Ravala, Esq.
Attorneys for Defendant
90 PARK AVENUE, SUITE 1700
NEW YORK, NY 10016
Tel.: (800) 583-1780
Fax: (800) 583-1787
TO:
Lazarus & Lazarus, P.C.
Attorneys for Plaintiffs
240 Madison Avenue, 8th Floor
New York, NY 10016
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Preview
FILED: NEW YORK COUNTY CLERK 10/11/2017 11:31 AM INDEX NO. 650325/2017 NYSCEF DOC. NO. 25 RECEIVED NYSCEF: 10/13/2017 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK ------------------------------------------------------------------x USPA ACCESSORIES, LLC d/b/a CONCEPT ONE ACCESSORIES and FUL ACCESSORIES, LLC Index No: 650325/2017 Plaintiff, vs. AMERICAN CAP EXCHANGE, INC. AFFIRMATION IN SUPPORT OF ORDER TO SHOW CAUSE Defendant. ------------------------------------------------------------------x I, M. Salman Ravala, Esq., an attorney duly admitted to practice law in the Courts of the State of New York, hereby affirm the following to be true under the penalties provided by law: 1. I am a member of the law firm Criscione Ravala, LLP, counsel for Defendant American Cap Exchange, Inc. and as such I am fully familiar with the facts and circumstances stated herein based on the documents and information contained in the files maintained by my office. 2. I respectfully submit this Affirmation in support of the Defendant’s instant Order to Show Cause which seeks the following relief: a) Order vacating the Default Judgment entered with the Clerk on September 20, 2017 pursuant to CPLR §5015(a)(1) and §5015 (a)(4); and dismissing the action for failure to state a claim pursuant to CPLR § 3211(a)(7) and lack of personal jurisdiction under CPLR §3211(a)(8); or in the alternative, permitting this action to proceed on the merits upon the grounds set forth in the annexed Answer, marked as Exhibit “A”; b) Order removing any execution of income or property against the Defendant; 1 of 11 FILED: NEW YORK COUNTY CLERK 10/11/2017 11:31 AM INDEX NO. 650325/2017 NYSCEF DOC. NO. 25 RECEIVED NYSCEF: 10/13/2017 c) Order pending the hearing of this Order to Show Cause, all proceedings be stayed on the part of the Plaintiff, Plaintiff’s counsel, and agents and any Sheriff or other Enforcement Officer for the enforcement of the said judgment be stayed; d) Order dismissing the Complaint; and e) such other and further relief as this Court deems just and proper. PRELIMINARY STATEMENT 3. Plaintiffs-Judgment Creditors, USPA Accessories, LLC d/b/a Concept One Accessories and FUL Accessories, LLC (hereinafter collectively, “Plaintiffs”) improperly obtained a default judgment in an amount of $58,737.90 against Defendant American Cap Exchange, Inc. (hereinafter, “Defendant”) on September 19 2017, which judgment was entered and docketed in the Office of the Clerk of the County of New York on September 20, 2017. 4. Under the facts of this action, Defendant was not properly served with a Summons and Complaint in this matter. 5. Under the facts of this action, this Court lacks personal jurisdiction over Defendant. 6. Under the facts of this action, Plaintiffs lack standing to sue Defendant. 7. Under the facts of this action, Defendant has excusable delay and meritorious defenses, including that Defendant disputes that it owes the amount of monies stated in the default judgment entered against it. BACKGROUND 8. On or about January 19, 2017, Plaintiffs filed an action against Defendant, allegedly for unpaid purchase orders resulting from the of sale goods between October 2015 and June 2016. See Exhibit “B”. 9. On or about January 30, 2017, Plaintiff’s improperly served the Defendant. See Exhibit 2 of 11 FILED: NEW YORK COUNTY CLERK 10/11/2017 11:31 AM INDEX NO. 650325/2017 NYSCEF DOC. NO. 25 RECEIVED NYSCEF: 10/13/2017 “C”. 10. On September 19, 2017, Plaintiffs obtained a default judgment against Defendant, which default judgment was entered on September 20, 2017. THE DEFAULT SHOULD BE VACATED DUE TO IMPROPER SERVICE 11. It is well-settled law in New York that failure to serve process in an action leaves the court without personal jurisdiction, and all subsequent proceedings are thereby rendered null and void. Such a defect is not cured by defendant’s subsequent receipt of actual notice of the action. Krisilas v. Mount Sinai Hospital, 63 A.D.3d 887, 889, 882 N.Y.S.2d 186, 188 (2d Dep’t, 2009). 12. Under CPLR §5015(a)(4), the Court may relieve a party from a judgment upon the ground of “lack of jurisdiction to render the judgment or order.” Service of Process is a threshold matter and the court is required to consider it before discretionary relief under CPLR §5015(a)(1). Marble v. Williams, 718 N.Y.S.2d 400 (2d Dep’t, 2000). The sequence in which the court must dispose of the two grounds is jurisdiction first, and a mere opening of the default second, for the obvious reason that if jurisdiction is lacking the court has no jurisdiction to do anything but to vacate the judgment and dismiss the action. Siegel, Practice Commentaries (McKinney’s Cons. Laws of New York CPLR C5015.9). 13. In other words, when a defendant moves to vacate a default judgment and raises a jurisdictional objection pursuant to CPLR 3211(8) and CPLR 5015(a)(4) and, alternatively, seeks discretionary vacatur pursuant to CPLR 5015(a)(1), the court must resolve the jurisdictional question before determining whether to grant a discretionary vacatur of the default under CPLR 5015(a)(1). HSBC Bank USA, Nat. Ass'n v. Miller, 121 AD3d 1044, 1045 (2014); Canelas v. Flores, 112 AD3d 871, 871 (2013). 14. Any default judgment procured in the absence of valid service is a nullity. Adames v New 3 of 11 FILED: NEW YORK COUNTY CLERK 10/11/2017 11:31 AM INDEX NO. 650325/2017 NYSCEF DOC. NO. 25 RECEIVED NYSCEF: 10/13/2017 York City Transit Authority, 126 AD2d 462, 510 NYS2d 610 (1st Dep’t, 1987). “If jurisdiction is found to be lacking, the default judgment, as well as all subsequent proceedings, would be rendered null and void” State of New York Higher Educ. Servs. Corp. v King, 232 A.D.2d 842, 843 (1996). “The issue of whether a defendant has a meritorious defense is irrelevant to the question of whether a judgment should be vacated for lack of jurisdiction, defendant, having shown lack of personal jurisdiction, would normally be entitled to vacatur of the default pursuant to CPLR 50515(a)(4).” Ariowtsch v. Johnson, 114 AD2d at 186 (3rd Dep’t, 1986). Where Plaintiff fails to properly serve Defendant, the default judgment must be vacated pursuant to CPLR §5015(a)(4) for lack of personal jurisdiction and the Complaint must be dismissed. Cortese v. Panzanella, 32 Misc 3d 507, 510 (Sup. Ct. Cortland Co. 2011). 15. Here, service was improper in this matter under at least two separate defects. 16. Under CPLR §311, personal service upon a corporation shall be made by delivering the summons to an officer, director, managing or general agent, or cashier or assistant cashier or to any other agent authorized by appointment or by law to receive service. 17. A Summons and Complaint in the instant action was served on January 30, 2017 by delivery to a “Sherif Elhaddad.” who was neither an officer/director nor an authorized agent of said Defendant at the time of service, because the company was dissolved in 1998, and the individual upon whom service of process was made resigned from his role as an officer/director and authorized agent of the Defendant in 1998. 18. Further, CPLR §313 provides that a Plaintiff seeking to commence a New York State action against an out-of-state corporation must properly serve a foreign corporate defendant, which service must be completed in one of the following three ways: 1) By a New York State resident over the age of 18 who is not a party to the action; 2) By an attorney licensed in the 4 of 11 FILED: NEW YORK COUNTY CLERK 10/11/2017 11:31 AM INDEX NO. 650325/2017 NYSCEF DOC. NO. 25 RECEIVED NYSCEF: 10/13/2017 State in which service is to be made; or 3) By a person authorized to make service pursuant to the laws of the State in which service is to be made. 19. In the instant action, service was improperly made in Florida by an independent process server who does not meet any one of the three requirements outlined in Paragraph “18” above. 20. Under Florida Statutes §48.021, service of process shall be served by a Sheriff or by an independent process server authorized by the Sheriff in the county where service is to occur. This rule is strictly enforced and if service of process is accomplished by a person not authorized by the rules to serve process, service is invalid and the court may not sustain the service by treating it as defective, even when a defendant is not prejudiced by it. 21. Upon examination of the Affidavit of Service filed by Plaintiffs, and verification of a list of authorized independent process servers maintained by the Sheriff’s office, it is clear that the process server retained by the Plaintiffs in his matter is 1) not a resident of the State of New York; 2) not a licensed attorney in the State of Florida; and 3) not authorized to serve process in Broward County, Florida, where service purportedly took place in the instant action. See Exhibit “D”. 22. Here, Defendant disputes service of process. It was not properly effectuated, therefore the default judgment should be vacated and the complaint in this action should be dismissed. DEFENDANT HAS EXCUSABLE DELAY & MERITORIOUS DEFENSE 23. Under CPLR §5015(a)(1), the Court may relieve a party from a judgment upon the ground of excusable default. 24. Service of process was defective in this matter. Even if the Court finds that service was proper and personal jurisdiction exists over Defendant, the Court should vacate the default 5 of 11 FILED: NEW YORK COUNTY CLERK 10/11/2017 11:31 AM INDEX NO. 650325/2017 NYSCEF DOC. NO. 25 RECEIVED NYSCEF: 10/13/2017 judgment in this action because Defendant had both a reasonable excuse and a valid meritorious defense exists. 25. A strong public policy exists in favor of resolving cases on their merits rather than through a default. Orwell Building Corp. v. Bessaha, 5 AD3d 573, 773 NYS2d 126 (2nd Dep’t, 2004). See also, Smith v. Daca Taxi, 222 A.D.2d 209, 634 N.Y.S.2d 476 (1st Dep’t, 1995). It is preferable to vacate the default to allow for a disposition of the case on its merits. Price v. Polisner, 172 A.D.2d 422, 568 N.Y.S.2d 796 (1st Dep’t, 1991). 26. The determination of what constitutes a reasonable excuse is left to the sound discretion of the Court. Scarlett v. McCarthy, 2 AD3d 623, 768 NYS2d 342 (2nd Dep’t., 2003), however, “the meritorious defense requirement does not present a particularly high barrier.” Brookdale Medical Center v Lewis, 8 Misc 3d 1019(A), 803 NYS2d 17. 27. Here, subsequent to Defendant being improperly served with the Summons and Complaint, Defendant’s former principal, a Pro Se party, deeply concerned about the lawsuit, had several communications with Plaintiff’s counsel via email in February 2017. Defendant’s former principal even made several inquiries about the lawsuit in an attempt to resolve the matter. 28. As he was Pro Se at the time and attempting to resolve the matter on an ongoing basis, Defendant’s principal had no expectation that Plaintiffs would in bad faith file a Motion for Default judgment during ongoing discussions. As an unrepresented party at the time, Defendant’s former principal has no legal knowledge and would not have known the difference between responding to a lawsuit via a filed Answer and responding via email in an attempt to resolve the issue. Further, as a Florida resident with no ties to the State of New York, Defendant’s former principal would not have knowledge of New York legal rules or procedure. 6 of 11 FILED: NEW YORK COUNTY CLERK 10/11/2017 11:31 AM INDEX NO. 650325/2017 NYSCEF DOC. NO. 25 RECEIVED NYSCEF: 10/13/2017 29. Plaintiffs clearly took advantage of an unrepresented party when they filed a Motion for Default Judgment in the middle of such a dialogue. 30. Once the Motion for Default Judgment was filed, Defendant, despite being the incorrect party – a dissolved Florida corporation, promptly took additional steps and sought counsel to resolve this matter in good-faith. 31. Subsequently, Defendant’s counsel then communicated to Plaintiffs’ counsel that they have sued an incorrect party, yet, to date, Plaintiffs continued with its frivolous application for default judgment, failed to amend the Complaint, or alternatively dismiss its Complaint in its entirety for incorrectly suing a wrong party. 32. In fact, Defendant argues that Plaintiffs lack standing because there is no privity of contract between Plaintiffs and Defendant. 33. Lack of standing renders the litigation a nullity, subject to dismissal without prejudice. Pullman Group LLC v. Prudential Ins. Co. of America 297 AD2d 578 (1st Dep’t, 2003). 34. Here, as stated previously, the Complaint alleges non-payment on purchase orders from 2015 and 2016. Defendant, American Cap Exchange, Inc. (the old corporation) was dissolved in 1998. It has conducted no business since that time, let alone in 2015 and 2016, as the Complaint incorrectly alleges. See Exhibit “E”. 35. Given that the Plaintiff’s Complaint makes allegations of non-payment for purchase orders for the sale of goods from “October 2015 to June 2016” Defendant presumes that Plaintiffs intended to sue his new corporation, American Cap Exchange, II, Inc. which has in fact conducted business with Plaintiff in 2015 and 2016, 7 of 11 FILED: NEW YORK COUNTY CLERK 10/11/2017 11:31 AM INDEX NO. 650325/2017 NYSCEF DOC. NO. 25 RECEIVED NYSCEF: 10/13/2017 36. However, the default judgment obtained in this matter states an incorrect amount erroneously calculated by the Plaintiffs as it does not offer any credit for payments already made by American Cap Exchange II, Inc. 37. Lastly, but importantly, Defendant has no ties whatsoever to the State of New York. 38. Plaintiffs’ Motion recites the basis for jurisdiction is a result of Defendant committing a tortious act causing injury to Plaintiffs within the State of New York, Defendant regularly doing business in the State of New York, Defendant traveling to New York in order to conduct business related to this matter, and Defendant maintaining a webpage offering goods to consumers nationwide. None of these statements are true. 39. As stated earlier, Defendant is a dissolved Florida corporation that has not done business since 1998 and therefore it is not possible for Defendant to have conducted any business in the State of New York at any point in recent time, let alone with Plaintiffs in 2015 – 2016. 40. Given that Defendant was not properly served in this action, this Court lacks personal jurisdiction, Plaintiff’s lack standing, and Defendant has an excusable delay and several meritorious defenses, this Court should vacate the default judgment and dismiss this action in its entirety. 41. Defendant requests the interim relief sought herein because the Plaintiff will pursue a levy in support of the judgment against the Defendant, who was improperly sued, improperly served, and this Court lacks jurisdiction upon said Defendant. Importantly, the amount of damages in the default judgment are incorrect and do not account for partial payment already made to Plaintiffs. 8 of 11 FILED: NEW YORK COUNTY CLERK 10/11/2017 11:31 AM INDEX NO. 650325/2017 NYSCEF DOC. NO. 25 RECEIVED NYSCEF: 10/13/2017 42. Pursuant to §202.7(f) of the Uniform Civil Rules for the Supreme and County Courts, I have made a good faith effort and provided notice by electronic mail and facsimile to Plaintiffs’ counsel on October 13, 2017 that I would be requesting the relief sought herein. 43. Defendant has not previously made a prior request for vacatur in this action. WHEREFORE, Defendant American Cap Exchange, Inc. respectfully requests that this Court grant the relief sought as follows: a) Order vacating the Default Judgment entered with the Clerk on September 20, 2017 pursuant to CPLR §5015(a)(1) and CPLR §5015(a)(4); and dismissing the action for failure to state a claim pursuant to CPLR § 3211(a)(7) and lack of personal jurisdiction under CPLR §3211(a)(8); or in the alternative, permitting this action to proceed on the merits upon the grounds set forth in the annexed Answer; b) Order removing any execution of income or property against the Defendant; c) Order pending the hearing of this Order to Show Cause, all proceedings be stayed on the part of the Plaintiff, Plaintiff’s counsel, and agents and any Sheriff or other Enforcement Officer for the enforcement of the said judgment be stayed; d) Order dismissing the Complaint; and e) such other and further relief as this Court deems just and proper. Dated: New York, New York October 13, 2017 Respectfully submitted, CRISCIONE RAVALA, LLP _________________________ M. Salman Ravala, Esq. Attorneys for Defendant 90 Park Avenue, Suite 1700 New York, NY 10016 9 of 11 FILED: NEW YORK COUNTY CLERK 10/11/2017 11:31 AM INDEX NO. 650325/2017 NYSCEF DOC. NO. 25 RECEIVED NYSCEF: 10/13/2017 Tel: (800) 583-1780 Fax: (800) 583-1787 sravala@lawcrt.com TO: Lazarus & Lazarus, P.C. Attorneys for Plaintiffs 240 Madison Avenue, 8th Floor New York, NY 10016 10 of 11 FILED: NEW YORK COUNTY CLERK 10/11/2017 11:31 AM INDEX NO. 650325/2017 NYSCEF DOC. NO. 25 RECEIVED NYSCEF: 10/13/2017 Index No.: 650325/2017 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK USPA ACCESSORIES, LLC d/b/a CONCEPT ONE ACCESSORIES and FUL ACCESSORIES, LLC Plaintiff, - Against- AMERICAN CAP EXCHANGE, INC. Defendant. DEFENDANT’S ORDER TO SHOW CAUSE TO VACATE DEFAULT JUDGMENT CRISCIONE RAVALA, LLP BY: M. Salman Ravala, Esq. Attorneys for Defendant 90 PARK AVENUE, SUITE 1700 NEW YORK, NY 10016 Tel.: (800) 583-1780 Fax: (800) 583-1787 TO: Lazarus & Lazarus, P.C. Attorneys for Plaintiffs 240 Madison Avenue, 8th Floor New York, NY 10016 11 of 11