State of New York

Supreme Court, Appellate Division

Third Judicial Department

Decided and Entered: December 8, 2016 522301 

________________________________

135 BOWERY LLC,

Respondent,

v MEMORANDUM AND ORDER

10717 LLC,

Appellant,

et al.,

Defendant.

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Calendar Date: October 19, 2016

Before: Peters, P.J., Garry, Egan Jr., Rose and Mulvey, JJ.

__________

Lindenbaum & Young PC, Long Island City (Catherine P.

McGovern of counsel), for appellant.

Stein Riso Mantel McDonough, LLP, New York City (Gerard A.

Riso of counsel), for respondent.

__________

Egan Jr., J.

Appeal from an order of the Supreme Court (Schick, J.),

entered February 9, 2015 in Sullivan County, which denied a

motion by defendant 10717 LLC to vacate a default judgment

entered against it.

In July 2011, plaintiff commenced this action seeking to

impose a constructive trust upon certain real property located in

the Town of Thompson, Sullivan County. Specifically, plaintiff

alleged that Alan Young1 and Charles Petri, who were – at all

1 Young died in March 2011.
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times relevant – the owners of defendant 10717 LLC (hereinafter

defendant), misappropriated $1.8 million from plaintiff and used

such funds to acquire the subject parcels.2 Following joinder of

issue, plaintiff moved for summary judgment seeking, among other

things, the imposition of a constructive trust and a declaration

that defendant had no right, title or interest in the properties

at issue. Plaintiff's motion was returnable on March 23, 2012,

and defendant's papers in opposition were due on or before March

16, 2012. Prior to the return date, however, defendant filed for

bankruptcy, thereby triggering an automatic stay. Numerous

adjournments of the return date were granted during the pendency

of the automatic stay but, after defendant's bankruptcy petition

was dismissed, the return date of plaintiff's summary judgment

motion was set for August 30, 2013.

On August 28, 2013, Petri sent a letter to Supreme Court

(Cahill, J.), wherein he indicated that he was appearing "[p]ro

[s]e" on behalf of defendant and requested an adjournment in

order to allow defendant "sufficient time to retain counsel and

respond to the [m]otion." Plaintiff opposed that request, noting

that it had duly served defendant's attorney of record, Ronald

Litchman, with the subject motion and that Petri, who was not an

attorney, could not – consistent with the provisions of CPLR 321

(a) – properly appear on behalf of defendant. Supreme Court

granted defendant's request and adjourned the return date until

October 4, 2013.

Defendant did not file any papers in opposition to

plaintiff's motion for summary judgment or otherwise respond

thereto by the return date. Instead, on that date, Litchman

transmitted to Supreme Court a substitution of counsel form

2 Plaintiff also commenced a related action in New York

County against, among others, defendant, Petri, the executors of

Young's estate and Robert Young (a licensed attorney and Young's

brother) seeking money damages for the same allegedly fraudulent

scheme. After defendant failed to respond to the complaint in

that action, a default judgment was entered against it (135

Bowery LLC v Sofer, 2016 NY Slip Op 31012[U], *22 [Sup Ct, NY

County 2016]).
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purporting to designate Petri as counsel of record for defendant. 

Three days later, Petri apparently sent a "voluminous

communication" to Supreme Court seeking an additional 60-day

adjournment. Supreme Court denied the requested adjournment and

returned what it deemed to be defendant's ex parte submission. 

Thereafter, by order entered December 17, 2013, Supreme Court

granted plaintiff's motion for summary judgment upon defendant's

default.

In March 2014, defendant moved by order to show cause

seeking to vacate the default judgment entered against it,

contending that it had a reasonable excuse for failing to respond

to plaintiff's motion – namely, a lack of counsel – as well as a

meritorious defense to the action. Supreme Court (Schick, J.)

denied defendant's request finding, among other things, that

defendant was "derelict in timely acquiring counsel" to represent

it for the purpose of responding to plaintiff's motion. This

appeal by defendant ensued.

We affirm. "A party seeking to vacate a judgment of

default must demonstrate a reasonable excuse for the default and

the existence of a meritorious defense" (Passeri v Tomlins, 141

AD3d 816, 817 [2016] [citations omitted]; see CPLR 5015 [a] [1];

Hayes v Village of Middleburgh, 140 AD3d 1359, 1361-1362 [2016];

Rutnik & Corr CPA's, P.C. v Guptill Farms, Inc., 127 AD3d 1531,

1531 [2015]). Further, whether to vacate a default judgment is a

determination that lies within the sound discretion of the trial

court, "subject to reversal only where there has been a clear

abuse of that discretion" (Hayes v Village of Middleburgh, 140

AD3d at 1362 [internal quotation marks and citations omitted];

see Doane v Kiwanis Club of Rotterdam, N.Y., Inc., 128 AD3d 1309,

1310 [2015]). We discern no abuse of that discretion here.

Defendant's present assertion – that it was confused

regarding or otherwise was unaware of the need to be represented

by a licensed attorney – is belied by the record. Notably,

Petri's August 28, 2013 request for an adjournment was sought for

the express purpose of affording defendant "sufficient time to

retain counsel" to respond to plaintiff's motion for summary

judgment. Despite the fact that Supreme Court (Cahill, J.)

granted defendant a five-week adjournment for that very purpose,
-4- 522301 

defendant failed to do so. Instead, on the return date of the

motion, Litchman, who was counsel of record at the time that

defendant's answer was filed, transmitted a substitution of

counsel form that purported to designate Petri – a layperson – as

counsel of record. Three days after defendant already had

defaulted on plaintiff's motion, Petri transmitted various

documents to Supreme Court and requested another 60-day

adjournment. One week after Supreme Court denied the requested

stay/adjournment (and nearly three weeks after the October 4,

2013 return date), Petri again sought another "60-day stay on the

written [motion] so that [he could] attempt to find new counsel

or be prepared to respond to the pending motion pro se."

Given defendant's repeated failures to obtain counsel

despite ample opportunity to do so, Supreme Court (Schick, J.)

acted well within its discretion in concluding that defendant

indeed was aware of the pending motion "but was derelict in

timely acquiring counsel" to oppose plaintiff's motion for

summary judgment.3 Indeed, "[a] corporate defendant's failure to

comply with CPLR 321 provides no basis for vacating a judgment

entered against that defendant, since the rule is not intended to

penalize an adverse party for the corporation's improper

appearance, but is rather to ensure that the corporation has a

licensed representative who is answerable to the court and other

parties for his or her own conduct in the matter" (Jimenez v

Brenillee Corp., 48 AD3d 351, 352 [2008] [internal quotation

marks and citations omitted]; see Pisciotta v Lifestyle Designs,

Inc., 62 AD3d 850, 853 [2009]; Lake George Park Commn. v

Salvador, 245 AD2d 605, 607 [1997], lv dismissed and denied 91

NY2d 939 [1998]). Accordingly, defendant's failure to retain

counsel prior to the return date of the motion did not constitute

a reasonable excuse for its default. Absent a reasonable excuse,

we need not consider whether defendant proffered a potentially

3 In this regard, the record reflects that defendant was

represented by Litchman at the time that its answer was

interposed, was represented by counsel during the course of the

bankruptcy proceeding and was represented by Robert Young on the

motion to vacate, thereby evidencing defendant's access to and

ability to retain counsel.
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meritorious defense (see Federal Natl. Mtge. Assn. v Zapata, 143

AD3d 857, 858 [2016]; Rutnik & Corr CPA's, P.C. v Guptill Farms,

Inc., 127 AD3d at 1532), nor do we find it necessary to address

plaintiff's alternative grounds for affirmance.

Peters, P.J., Garry, Rose and Mulvey, JJ., concur.

ORDERED that the order is affirmed, with costs.

ENTER:

Robert D. Mayberger

Clerk of the Court