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200-36 Holding Corp. v. Fergusson

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200-36 Holding Corp. v. Fergusson

Postby TenantNet » Sat Nov 18, 2017 12:20 pm

Tags: holdover, excusable default, order to show cause, renewal motion, fraud, invalid deed

Summary: Vacatur of Default for Reasonable Excuse, Meritorious Defense Granted But Dismissal Denied

200-36 Holding Corp. v. Fergusson
Court: Civil Court, Queens
Attorneys: for plaintiff: The Law Offices of Perry Ian Tischler, P.C., Bayside, NY.;
Attorneys: for defendant: The Legal Aid Society, Attn: Katherine Redmon, Esq., Kew Gardens, NY.
Judge: Judge Joel Kullas
Docket Number: 76046/16

Recitation, as required by CPLR section 2219(a), of the papers considered in the review of this motion to renew and reargue this court’s March 27, 2017 order and for further relief:

Papers Numbered

Order to show cause, affidavit and exhibits annexed 1
Affirmation in opposition 2
Affirmation in Reply to petitioner’s opposition 3
Notice of Cross-motion 4
Sur-reply 5

DECISION/ORDER AFTER ARGUMENT

Petitioner commenced this summary holdover proceeding in October 2016 seeking possession of the premises located at 200-36 46th Avenue, Bayside, New York 11361 (the “subject premises”). Respondent, Eric Fergusson (hereinafter “respondent”) appeared by counsel and the case was adjourned to January 11, 2017. Neither respondent nor respondent’s counsel appeared on January 11, 2017. A friend of respondent appeared on January 11, 2017 and informed the court that respondent was not feeling well. The case was adjourned to January 12, 2017 for respondent to appear. On January 12, 2017, again neither respondent nor his counsel appeared. The court conducted an inquest and awarded petitioner a final judgment of possession against all respondents. Respondent filed an order to show cause (“OSC”) returnable on March 27, 2017 seeking to vacate the default judgment. Respondent submitted a letter discharging his attorney on that date. Respondent argued that he had an excusable default because he was sick on January 11th and 12th and a meritorious defense due to fraud by the petitioner. The court denied respondent’s order to show cause because respondent failed to provide any evidence supporting his allegations of fraud.

Respondent retained new counsel and filed an OSC seeking to renew and reargue the court’s denial of the March 27, 2017 OSC. That OSC was denied without prejudice to renew because the OSC was not accompanied by an affidavit of anyone with personal knowledge regarding the allegations. On April 27, 2017, respondent filed a second OSC seeking to renew and reargue the court’s denial of the March 27, 2017 OSC. That OSC was denied by order dated June 9, 2017, because the affidavit supporting it was not submitted in proper form. On June 30, 2017, respondent filed the instant OSC again seeking to renew and reargue the court’s denial of the March 27, 2017 OSC.

Respondent’s OSC does not state whether respondent is seeking to renew or reargue the prior Order dated March 27, 2017. Given that respondent’s arguments were based on evidence not presented at the time the prior OSC was argued, this OSC will be treated as a motion to renew pursuant to CPLR §2221(e). A motion to renew pursuant to CPLR §2221(e) “shall be based upon new facts not offered on the prior motion that would change the prior determination…and…shall contain reasonable justification for the failure to present such facts on the prior motion.” Although renewal motions generally should be based on newly discovered facts that could not be offered on the prior motion, courts have discretion to relax this requirement and grant such a motion in the interest of justice. Marcelo v. Sapkovski, 39 Misc.3d 144(A), 972 N.Y.S.2d 144 (App. Term 1st Dept. 2013).

In order to vacate a default judgment and warrant, respondent must present an excusable default and a meritorious defense. (CPLR 5015(a)(1); Di Lorenzo, Inc. v. A.C. Dutton Lumber Co., Inc., et al., 67 NY2d 138 [Ct App 1986]; Gerdes v. Canales, 74 AD3d 1017 [2nd Dept 2010].) It is within the court’s discretion to determine whether an excusable default exists. (Harris v. S.A.S Accounting & Mgt., Inc., 15 Misc3d 145[A] *1 [App Term, 2nd & 11th Jud Dist [2007]). Respondent argues that he has an excusable default because he was sick on January 12, 2017 and was unable to come to court. He had not provided evidence to support this in his prior OSCs. Respondent now provides a letter from his doctor’s office recommending that he rest for the period of January 5, 2017 through January 12, 2017 (Exhibit 3 to Resp. OSC). Respondent also provides a 2nd letter from his doctor’s office indicating that he has been treated since January 2017, but that he was only recently diagnosed with a serious medical condition (Exhibit A to Aff. in Reply). Petitioner argues that this letter was not included with the OSC, so it should not be considered. However, the diagnosis was not made until after the instant OSC was filed, so the information was not known at such time and, as such, could not have been included with the instant OSC. Based on these two letters, respondent has shown a reasonable excuse for failing to appear on January 12, 2017.

Respondent argues that he has a meritorious defense in this proceeding because petitioner lacks standing to bring this proceeding. The deed presented by petitioner at inquest indicates that petitioner obtained the property from George Koronatos (Exhibit 9 to Resp. OSC). Respondent presents an order issued in a federal court case in which the court found that George Koronatos was a “nonexistent strawman” created to facilitate a bank fraud scheme (Exhibit 5 to Resp. OSC). Respondent argues that this renders the deed invalid. Petitioner argues that George Koronatos is a real person living in Greece (Aff. of Perry Ian Tischler

12). In support of this allegation, petitioner attaches a letter sent by petitioner’s attorney to an attorney in Greece who supposedly represents Mr. Koronatos (Exhibit I to Aff. In Opp.). Petitioner also notes that the federal case involving bank fraud was decided in 2008, but no effort was ever made by any governmental authority to obtain control of the subject premises. Petitioner also notes that the deed by which petitioner obtained the property was executed eight years after the conclusion of the federal case. Petitioner cites Stein v. Doukas for the proposition that a court must presume a recorded deed is valid. 98 AD3d 1026 (2012). Based on the documents submitted, there appears to a question of fact regarding whether petitioner’s deed is valid. Respondent has not shown sufficient evidence to entitle respondent to summary judgment, but respondent has certainly raised a potentially meritorious defense to this proceeding.

Based on the above, respondent’s OSC is granted to the extent of vacating the default judgment and warrant; respondent’s request for dismissal is denied. The court notes its prior order denying respondent’s previous OSC indicated that petitioner may be entitled to costs in connection with any future attempts to seek the same relief. Petitioner cross-moved seeking costs pursuant to CPLR §8106. CPLR §8106 provides: “Costs upon a motion may be awarded to any party, in the discretion of the court…” However, the court notes, upon review of the relevant statutory provisions, that CPLR §8202 states: “Costs awarded on a motion shall be in an amount fixed by the court, not exceeding one hundred dollars.” Petitioner’s cross-motion for costs pursuant to CPLR §8106 is granted to the extent of awarding it costs in the amount of $100.00. Petitioner reserves all claims to legal fees should petitioner be the prevailing party at trial.

The parties are directed to appear on in Part E, Room 404, on December 6, 2017 at 9:30am for trial. This constitutes the decision and order of this court.

Date: 11-2-17
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