Preview
INDEX NO. EFO00066-2022
FILED: ORANGE COUNTY CLERK 08/21/2023 03:22 PM
NYSCEF DOC. NO. 27 RECEIVED NYSCEF: 08/21/2023
To commence the statutory time period
For appeals as of right (CPLR § 5513[a]),
you are advised to serve a copy of this
order, with notice of entry,
upon all parties.
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF ORANGE
mene n enn n en en ene en en en nn en nnn nn nn ne ne ne neem nen en nen en ee nen en nennenenenenee
VICTORY BLVD ASSOCIATE, LLC,
DECISION AND ORDER
Plaintiff;
-against-
Index No.: EF000066-2022
PILLARS FUNDING LLC, BIZ BUZZ CAPITALS, LLC
and ITIEL COHEN
Defendants
enn
ee ee en ne ee eee
Hon, Elena Goldberg-Velazquez, J.S.C.
The following papers, numbered 1 to 3, were considered in connection with Defendants’
Notice of Motion for an Order (i) vacating the judgment entered against defendants on March 4,
2022 pursuant to Civil Practice Law and Rules §§ 5015(a)(1) and 317, and upon such vacatur, (ii)
dismissing the complaint pursuant to Civil Practice Law and Rules § 3211(a)(1) based upon
documentary evidence; (iii) dismissing the complaint pursuant to Civil Practice Law and Rules §
3211(a)(7) for failure to state a cause of action; (iv) dismissing this action pursuant to Civil
Practice
Law and Rules § 3211(a)(8) for lack of personal jurisdiction ; and (v) granting Defendants
such other and further relief that is just and proper:
PAPERS NUMBER
Notice of Motion/Affirmation of Itel Cohen/Exhibit A/
1
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Memorandum of Law in Support
Affirmation of Moses Freund in Opposition to Defendants’ Motion to Vacate
Judgment and Dismiss the Action/Exhibit A/Affirmation of Bracha Gefen, Esq./
Exhibits B-D
Reply Memorandum of Law in Further Support of Defendants’ Application to
Vacate the Judgment and to Dismiss the Action
Upon a careful and detailed review of the foregoing papers, the Court now rules as follows:
The instant action was commenced by Plaintiff with the filing of a Summons and Verified
Complaint through the NYSCEF system on January 03,2022. According to an affidavit of service
filed by Plaintiffs counsel on January 19, 2022, Defendant ITEL COHEN [hereinafter COHEN]
was served on January 12, 2022, pursuant to Civil Practice Law and Rules § 308(2) at 99 Rupert
Avenue, Staten Island, New York 10314. Further, Plaintiff filed an Affidavit of Service on January
19, 2022, stating that a copy of the Summons and Verified Complaint were mailed to Defendant
ITEL COHEN on January 12, 2022. According to affidavits of service filed by Plaintiff's counsel
on January 23, 2022, Defendants PILLARS FUNDING LLC [hereinafter PILLARS] and BIZ
BUZZ CAPITAL, LLC [hereinafter BIZ BUZZ] were served on January 13, 2022, pursuant to
Limited Liability Company Law § 303 by serving the Office of the Secretary of State in the State
of New York. All Defendants failed to join issue; no answers were filed.
Plaintiff sought a judgment against Defendants for $211,125.80 on March 4, 2022, with
the Orange County Clerk’s Office. Along with the proposed Judgment the Plaintiff filed the
Affidavit of Moses Freund, a schedule of payments, and a bill of costs. The Judgment was signed
by the Orange County Acting Deputy County Clerk on March 4, 2022. Subsequently, on March
6, 2023, Defendants filed the instant motion seeking to vacate the default judgments and dismiss
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the underlying complaint.
VACATUR OF DEFAULT JUDGMENT PURSUANT TO CIVIL PRACTICE LAW AND
RULES § 5015(a)(1)
Defendants argues that the instant default judgment should be vacated pursuant to Civil
Practice Law and Rules § 5015(a)(1) as the Defendants have a reasonable excuse for default and
a meritorious defense, As to the reasonable excuse for default, Defendant COHEN submits that
he never received the papers in the instant action despite Plaintiffs claim that the Summons and
Complaint were served on a person of suitable age and discretion at 99 Rupert Avenue, Staten
Island, New York. Specifically, Defendant COHEN contends that at the time of the service at 99
Rupert Avenue, October 2021, he no longer resided at that address. Defendant COHEN asserts
that in October 2021 he was residing at 123 Linden Boulevard, Apt 19H, Brooklyn, New York
11226 and annexed a lease demonstrating same. According to Defendant COHEN the 99 Rupert
Avenue address was also not his principal place of business. As a result, Defendant COHEN
Contends he did not become aware of the Judgment until it was entered. The Defendant argues
that the meritorious defense to the instant action is that the complaint should be dismissed for
failure to state a claim, in that the premises that is the subject of the lease was unusable as an office
because it did not have the required Certificate of Occupancy and “defendants had the absolute
right to vacate the premises.”
In opposition Plaintiff's counsel submits an Affirmation along with an Affirmation of
Moses Freund, a managing member of Plaintiff, a copy of the alleged lease, a copy of Defendant
PILLAR’s registration with the New York State Office of the Secretary of State, an affidavit of
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service on Defendant COHEN in a separate New York County matter and Defendant COHEN’s
appearance in that separate New York County matter. As to Defendant COHEN’s excuse for
default Plaintiffs counsel states that COHEN’s address on the “executed Guaranty” is 99 Rupert
Avenue, Staten Island, New York 10314, and he never provided Plaintiff with any other address
for notice or service. Further, Plaintiff asserts that the affidavit of service as to Defendant COHEN
asserts that he was served by a registered process server by service on a person of suitable age and
discretion, “RUBEN DOE REFUSED TO GIVE LAST NAME, FATHER” and who verified that
Defendant COHEN resided at the location. Additionally, Plaintiff notes that the process server
also completed an affidavit that he mailed Defendant COHEN a copy of the Summons and
Complaint to 99 Rupert Avenue, Staten Island, New York. Plaintiff contends the service on
Defendant COHEN at 99 Rupert was proper because that was the address COHEN listed as his
place of residence on his guaranty to the subject lease, which was his last known residence. The
Plaintiff also argues that Defendant COHEN was served on a separate unrelated New York County
matter at 99 Rupert Avenue in April 2022, three (3) months after service in the instant action and
Defendant COHEN did not object to that service or file a motion to dismiss based upon failure to
obtain personal jurisdiction. Plaintiff challenges Defendant COHEN’s assertion that he resided
in Brooklyn at the time of service stating that the lease offered by Defendant COHEN is not
dispositive of the issue of his residence being at 99 Rupert Avenue, Staten Island, New York.
According to Plaintiff, Defendant COHEN has not offered any evidence that he “actually” moved
from 99 Rupert Avenue to 123 Linden Boulevard in Brooklyn and therefore has not demonstrated
that he no longer resided at 99 Rupert Avenue, Staten Island, New York. Based upon the
foregoing Plaintiff contends that 99 Rupert Avenue was Defendant COHEN’s last “actual dwelling
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place or usual place of abode” and as such the service on him in January 2022 was proper.
Turning next to Defendants PILLARS and BIZ BUZZ’s challenge to the validity of the
service on them. According to Defendant COHEN he is a “member” of both Defendant PILLARS
and BIZ BUZZ and as a “member” he asserts that neither business resided at the addresses on file
with the Secretary of State at the time that the Plaintiff served them through the New York Office
of the Secretary of State. Defendants aver that the default judgment against them should be vacated
because service on corporate defendants through the secretary of state where the wrong address
was on file with the secretary of state and resulting in no actual notice of the action on the corporate
defendants is insufficient service.
Plaintiff contends that they were both properly served through the New York Office of the
Secretary of State pursuant to New York Limited Liability Law § 303.
In general “the failure to keep a current address with the Secretary of State is not a
reasonable excuse for default under CPLR 5015(A)(1).” Sanchez v. Avuben Realty, LLC, 78
AD3d 589, 589 (1st Dept 2010). However, if a court finds that a defendant did not “personally
receive a notice of the summons in time to defend and has a meritorious defense” then relief from
the default may be permitted. Jd. citing Civil Practice
Law and Rules § 317. The Court of Appeals
stated in Di Lorenzo that “there is no per se rule that a corporation served through the Secretary of
State, and which failed to update its address on file there, cannot demonstrate an “excusable
default.” Eugene Dilorenzo, Inc. v, A.C. Dutton Lumber Co., Inc.,67 NY2d 138, 142 (1986). The
Court indicated that in considering excusable default when a corporation’s address was not updated
with the secretary of state several factors must be considered including the length of time that the
address has not been kept current. See ld; See also Top Notch Drywall Corp. v. All Mine of Orange,
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Inc., 55 Misc3d 25, 49 NYS3d 815 (NY App Term 2017). In the instant matter there is no
explanation within the COHEN Affirmation as a member of Defendants PILLARS and BIZ BUZZ
how long it has been since the updated the address on file with the Secretary of State. However,
there is also no evidence presented by the Plaintiff that Defendants PILLARS and BIZ BUZZ
received actual notice of the summons delivered to the Secretary of State in time to defend the
instant action, and delivery through the Secretary of State does not constitute personal delivery.
See Berardi Stone Setting, Inc. v. Stonewall Contracting Corp., 170 AD3d 934 (2d Dept 2019).
Defendants PILLARS and BIZ BUZZ did not provide any explanation as to the failure to update
its address with the Secretary of State, but their failure is of no moment since a defendant moving
pursuant to Civil Practice Law and Rules § 317 does not need to provide a reasonable excuse for
delay. See Id at 936. The Plaintiff in opposition argues that at the time they opposed Defendants
motion in April 2023 the address listed with the Secretary of State for Defendant PILLARS
remained 99 Rupert Avenue, Staten Island, New York, indicating that the address had been left
unchanged at least since the commencement of the instant action in January 2022, over twelve (12)
months. No argument or address was provided by Plaintiff as to Defendant BIZ BUZZ. Plaintiff
also did not provide any evidence upon which the Court can conclude that Defendants PILLARS
and BIZ BUZZ deliberately attempted to avoid service, or that they were on notice that the address
on file with the Secretary of State was incorrect.
As to the Defendants’ meritorious defenses, the Plaintiff asserts that the “tenants”
[Defendant COHEN and Defendant PILLARS] signed a lease and failed to make any payments as
agreed in the lease and that four (4) claimed defenses all fail. Specifically, Plaintiff contends that
the Complaint upon which the instant action was commenced is not dismissible due to a failure to
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annex a copy of the lease because the caselaw does not require the attachment of the contract when
the complaint alleging the breach contains the terms of the agreement upon which liability is
predicated and references the relevant portions of the contract. However, Plaintiffs included a
copy of the subject lease annexed to the Affidavit of a member of Plaintiff, Moses Freund. As to
the defense that the instant Complaint is not plead with particularity, Plaintiff asserts that argument
fails since the Complaint alleges the date of the contract, the name of the parties to the contract,
the relevant terms of the contract, the details and nature of Defendants’ breach and the amount
owed. Finally, as to the Defendants’ defense that the Plaintiffs failed to secure a certificate of
occupancy the Plaintiff contends that it is “well established that a certificate of occupancy is not
required in a commercial lease and the mere absence of a certificate of occupancy does not relieve
the tenant of its fundamental obligation to pay.” Finally, as to Defendants final argument that
Plaintiff has failed to allege that Defendant BIZ BUZZ is an alter ego the Plaintiff cites to the
doctrine of piercing the corporate veil and the factors required to be alleged. Plaintiff asserts that
the instant Complaint properly alleges that there is no individual separateness between Defendants
PILLARS and BIZZ BUZZ such that PILLARS has become a shell for BIZ BUZZ citing paragraph
thirty (30) of the Complaint.
A party seeking to vacate a default in appearing and answering on the grounds of excusable
neglect pursuant to Civil Practice
Law and Rules § 5015(a)(1) must show both a reasonable excuse
for the default and the existence of a potentially meritorious defense. See Ramirez v. Islandia
Executive Plaza, LLC, 92 A.D.3d 747 (2d Dept. 2012); Gerdes v. Canales, 74 A.D.3d 1017 (2d
Dept. 2010); See Needleman v. Tornheim, 106 A.D.3d 707 (2d Dept. 2013); Toll Brothers, Inc. v.
Dorsch, 91 A.D.3d 755 (2d Dept. 2012); Dimitriadis v. Visiting Nurse Service of New York, 84
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A.D.3d 1150 (2d Dept. 2011). The decision of whether to vacate a default judgment rests within
the sound discretion of the trial court. Gerdes v. Canales, 74 A.D.3d 1017 (2d Dept. 2010)].
Civil Practice Law and Rules § 5015(a), titled “Relief from judgment or order,” states:
(a) On motion. The court which rendered a judgment or order may relieve a party
from it upon such terms as may be just, on motion of any interested person with such notice as the
court may direct, upon the ground of:
1 excusable default, if such motion is made within one year after service of a copy of
the judgment or order with written notice of its entry upon the moving party, or, if
the moving party has entered the judgment or order, within a year after such entry;
or
newly discovered evidence which, if introduced at the trial, would probably have
produced a different result and which could not have been discovered in time to
move for a new trial under section 4404; or
fraud, misrepresentation, or other misconduct of an adverse party; or
lack of jurisdiction to render the judgment or order; or
reversal, modification or vacatur of a prior judgment or order upon which it is
based.
In this matter the Court finds that the excuse offered by Defendants is timely, as it is within
one (1) year of the judgment, contemplating that the instant vacatur was sought by Defendants on
the next business day after the one (1) year time period. Further, the Court finds that the basis for
the default is reasonable as the Defendants have demonstrated that they were not personally served
and that Defendant COHEN has demonstrated that his residence at the time of service was in
Brooklyn, New York not at 99 Rupert Avenue, Staten Island, New York. Additionally, the
Defendants have offered several meritorious defenses which the Plaintiff has failed to demonstrate
lack merit. Therefore, the Defendant’s application to vacate the judgment pursuant to Civil
Practice Law and Rules § 5015 is granted.
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VACATUR OF DEFAULT JUDGMENT PURSUANT TO CIVIL PRACTICE LAW AND
RULES §317
Pursuant to Civil Practice Law and Rules § 317 where process is served upon a party by
some method other than personal delivery that party need not show a reasonable excuse for the
delay and “may be allowed to defend the action” by seeking to vacate the default judgment within
one (1) year after learning of the judgment upon demonstrating a potentially meritorious defense.
Matter of Rockland Bakery, Inc. v. B.M. Baking Co., Inc., 83 AD3d 1080, 1081 (2d Dept 2011);
Eugene DiLorenzo, Inc. y. Dulton Lbr. Co., 67 NY2d at 141-142; Acqua Capital, LLC y. 510 West
Boston Post Rd., LLC, 164 AD3d 1195 (2d Dept 2018). However, for relief to be granted under
Civil Practice Law and Rules § 317, a Defendant must still demonstrate, and court must find that
the defendant “did not receive actual notice of the summons and complaint in time to defend the
action.” 399 Lefferts Partners, LLC. v. New York Ave. at Lefferts, LLC, 68 AD3d 976, 977 (2d
Dept 2005); Eugene DiLorenzo, Inc. v. Dulton Lbr. Co., 67 NY2d at 142; Clover M. Barrett, P.C.
v. Gordon, 90 AD3d 973 (2d Dept 2011). There is no necessity for a defendant moving pursuant
to Civil Practice Law and Rules § 317 to show a reasonable excuse for its delay. Solomon
Abrahams, P.C. v. Peddlers Pond Holding Corp., 125 AD2d 355, 356 (2d Dept 1986).
Nonetheless, a mere denial of receipt of the Summons and Complaint is insufficient “to establish
lack of actual notice for the purpose of CPLR 317.” Matter of Rockland Bakery, Inc. v. B.M. Baking
Co., Inc., 83 AD3d at 1081-1082; Levine v. Forgotson’s Cent. Auto & Elec Inc.,41 AD3d 552 (2d
Dept 2007); Talieb v. Hilton Hotels Corp., 60 NY2d 725 (1983). Further, as to service on a
corporation, service through delivery of process to the Secretary of State is not personal delivery
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to the corporation or to an agent designated under Civil Practice Law and Rules § 318. See Talieb
v. Hilton Hotels Corp., 60 NY2d at 725; Ceceilia v. Colonial Sand & Stone Co., 85 AD2d 56 (3d
Dept 1982); Meyer v. Chas. Fisher & Sons Dental laboratory, Inc., 90 AD2d 889 (3d Dept 1982).
In the instant action the Defendant need not provide a reasonable excuse for delay in
answering, but also mere denial of receipt of the Summons and Complaint fails to establish that a
defendant did not receive actual notice as defined in Civil Practice Law and Rules § 317. The
purpose of Civil Practice Law and Rules § 317 is not to serve as a method by which a defendant
can ignore notice or provide a conclusory denial of receipt. Since Defendant COHEN and
Defendants PILLARS and BIZ BUZZ in the instant action demonstrated by way of the Affidavits
of Service that each of them did not personally receive notice of the summons in time to defend
,the Court is constrained to grant each Defendants relief under Civil Practice Law and Rules § 317.
Therefore, Defendants application pursuant to Civil Practice Law and Rules § 317 to vacate the
default judgment is granted.
MOTION TO DISMISS PURSUANT TO CIVIL PRACTICE LAW AND RULES §
3211(a
In considering a motion to dismiss for failure to state a cause of action pursuant to Civil
Practice Law and Rules § 3211(a)(7) the pleadings must be liberally construed, and the sole
criterion is whether from within the complaint's four corners factual allegations are discerned
which taken together manifest any cause of action cognizable at law. The facts pleaded are to be
presumed to be true and are to be accorded every favorable inference. See Gershon v Goldberg,
30 AD3d 372 (2d Dept 2006); See also Fitzgerald v. Federal Signal Corp., 63 AD3d 994 (2d Dept
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2009). When a party moves to dismiss a complaint under this sub-section the standard is whether
the pleading states a cause of action, not whether the proponent of the pleading has a cause of
action, and, in considering such a motion the court must determine only whether the facts as alleged
fit within any cognizable legal theory. Whether a plaintiff can ultimately establish its allegations
is not part of the calculus. See Sokol v Leader, 74 AD3d 1180 (2d Dept 2010.
Upon a motion to dismiss for failure to state a cause of action under Civil Practice Law
and Rules §3211(a)(7), the court must determine whether from the four corners of the pleading
factual allegations are discerned which taken together manifest any cause of action cognizable at
Jaw. The Court should view the allegations in the complaint as true and accord plaintiffs the benefit
of every reasonable inference and in determining such a motion. See Fitzgerald v. Federal Signal
Corp., 63 AD3d 994 (2d Dept 2009). The Court also recognizes plaintiff's right to seek redress,
and not have the courthouse doors closed at the very inception of the action, where the pleadings
need meet only a minimal standard necessary to resist dismissal of a complaint. See Campaign
for Fiscal Equity v. State of New York, 86 NY2d 307 (1995).
Nonetheless, the Court has reviewed the complaint and based upon the foregoing, the
Defendants have not demonstrated their entitlement to the requested relief under Civil Practice
Law and Rules § 3211(a)(7).
MOTION TO DISMISS PURSUANT TO CIVIL PRACTICE LAW AND RULES
§$§ 3211(a)(8) and 3211 (a)(1)
Upon review of Defendants’ application, the Court notes that the Defendants have failed
to include any specific arguments in their Memorandum of Law, Affirmation of counsel and
Affidavit of Moses Freund in support of a dismissal pursuant to Civil Practice Law and Rules §§
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3211(a)(8) and (a)(1).
Generally, the Plaintiff bears the burden of proving the basis for jurisdiction. See Daniel
B. Katz & Assoc. Corp. V. Midland Rushmore, LLC, 98 AD3d 977, 978 (2d Dept 2011) quoting
Cornely v. Dynamic HVAC Supply, LLC, 44 AD3d 986 (2d Dept 2007); Waggaman v. Arauzo, 117
AD3d 724 (2d Dept 2014); Paterne v. Laser Spine Inst., 112 AD3d 34, 39 (2d Dept 2013).
However, to defeat a Motion to Dismiss a Complaint for lack of personal jurisdiction pursuant to
Civil Practice Law and Rules § 3211(a){8), a plaintiff need only make a prima facie showing that
a defendant is subject to personal jurisdiction. See Whitecraft v. Runyon, 123 AD3d 811, 812 (2d
Dept 2014) citing Weitz v. Weitz, 85 AD3d 1153 (2d Dept 2011); Cornely v. Dynamic HVAC
Supply, LLC, 44 AD3d at 986. Further, facts that are alleged in a complaint and affidavits in
opposition to a Defendant’s Motion to Dismiss for lack of personal jurisdiction are “deemed true
and construed in the light most favorable to the plaintiff, and all doubts are to be resolved in her
favor.” Weitz v. Weitz, 85 AD3d at 1153-1554; Brandt v. Toraby, 273 AD2d 429, 430 (2d Dept
2000).
Defendants motion to dismiss pursuant to Civil Practice Law and Rules §§ 3211(a)(8) and
(a)(1) are denied as to all Defendants.
In arriving at this decision the Court has reviewed, evaluated, and considered all of the
issues framed by these motion papers and the failure of the Court to specifically mention any
particular issue in this Decision and Order does not mean that it has not been considered by the
Court in light of the appropriate legal authority.
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Accordingly, it is hereby
ORDERED that Defendants motion is granted in part and denied in part consistent with
the foregoing; and it is further
ORDERED that Defendants motion to vacate the default judgment pursuant to Civil
Practice Law and Rules §§ 5015(a)(1) and 317 is granted; and it is further
ORDERED that the default judgment filed against all three Defendants is vacated; and it
is further
ORDERED that Defendants’ application to dismiss the instant action pursuant to Civil
Practice Law and Rules §§ 3211(a)(1), (a)(7) and (a)(8) is denied
The foregoing is the Decision and Order of the Court as to Motion # 1.
Dated: Goshen, New York
August 21, 2023
[ime fliss Vlog
Hon. Elena Goldberg-Velazquez, JS.C,
To:
BRACHA GEFEN
ROSENBERG & STEINMETZ, P.C.
Attorney for Plaintiff
(Via NYSCEF)
ELLIOT HAHN
HAHN EISENBERGER PLLC
Attorney for Defendants
(Via NYSCEF)
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