Court Opinion

ID: 9930965
Source: CourtListenerOpinion
Date Created: 2024-02-07 21:09:04.764279+00
Date Added: 2024-06-11T12:09:32.281851
License: Public Domain

BD15 LLC v MLHB, LLC
               2024 NY Slip Op 30385(U)
                    February 1, 2024
           Supreme Court, New York County
        Docket Number: Index No. 655392/2021
                  Judge: Sabrina Kraus
Cases posted with a "30000" identifier, i.e., 2013 NY Slip
 Op 30001(U), are republished from various New York
 State and local government sources, including the New
  York State Unified Court System's eCourts Service.
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                       publication.
                                                                                                                      INDEX NO. 655392/2021
  NYSCEF DOC. NO. 124                                                                                           RECEIVED NYSCEF: 02/01/2024

                                   SUPREME COURT OF THE STATE OF NEW YORK
                                             NEW YORK COUNTY
            PRESENT:             HON. SABRINA KRAUS                                               PART                             57M
                                                                                      Justice
            ----------------------------------------------------------------- ----------------X
                                                                                                  INDEX NO.          655392/2021
             BD15 LLC,
                                                                                                  MOTION DATE         12/29/2023
                                                         Plaintiff,
                                                                                                  MOTION SEQ. NO.         003
                                                 - V -

             MLHB, LLC, MONEY-PENNY HOLDING LLC                                                     DECISION + ORDER ON
                                                                                                          MOTION
                                                         Defendants.
            ------------------------------------------------------------------- --------------X

            The following e-filed documents, listed by NYSCEF document number (Motion 003) 54, 55, 56, 57, 58,
            59, 60, 61, 62,63, 64,65,66,67, 68, 69, 70, 71, 72, 73, 74, 75, 76, 77, 78, 79,80,81, 82,83, 84, 85, 86,
            87, 88, 89, 90, 91, 92, 93, 94, 95, 96, 97, 98, 99, 100, 101, 102, 103, 104, 105, 106, 107, 108, 109, 110,
            111,112,113,114,115,116,117,118,119,120,121,122,123
            were read on this motion to/for                                  VACATE - DECISION/ORDER/JUDGMENT/AWARD.

                                                           BACKGROUND

                      Plaintiff commenced this action seeking damages based on its allegation that it was

            defrauded out of millions of dollars by Defendants through a scheme to buy and re-sell a famous

            and rare diamond, once owned by Shirley Temple (the "Blue Diamond"). Defendants failed to

            appear and pursuant to a decision and order dated June 24, 2022, this Court granted Plaintiff a

            default judgment in the amount of $2,610,826.28.

                      MLHB, LLC has now appeared and moved to vacate the default judgment. For the

            reasons set forth below, the motion is granted.

                                                                 DISCUSSION

                      CPLR § 317 provides in pertinent part:

                      A person served with a summons other than by personal delivery to him or to his agent
                      for service designated under rule 318 ... who does not appear may be allowed to defend
                      the action within one year after he obtains knowledge of entry of the judgment, but in no

             655392/2021 8D15 LLC vs. MLHB, LLC ET AL                                                                 Page 1 of4
             Motion No. 003

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                                                                                                  INDEX NO. 655392/2021
  NYSCEF DOC. NO. 124                                                                     RECEIVED NYSCEF: 02/01/2024

                   event more than five years after such entry, upon a finding of the court that he did not
                   personally receive notice of the summons in time to defend and has a meritorious
                   defense. If the defense is successful, the court may direct and enforce restitution in the
                   same manner and subject to the same conditions as where a judgment is reversed or
                   modified on appeal.

                   Personal service on a corporation means in-hand delivery to a corporate representative

            such as an officer, director or managing agent. CPLR §3 ll(a)(l). Delivery to the New York

            Secretary of State is not personal delivery to the corporation. See Rivera v. Triangle Excavators

            of New York, LLC, 173 a.d.3D 1088 (2d Dept 2019); Fleetwood Park Corp. v. Jerrick

            Waterproofing Corp., 203 A.D.2d 238,239, 615 N.Y.S.2d 695, 697 (2d Dept. 1994).

                   Movant submits the affidavit of Marianne Lafiteau ("ML") in support of the motion. ML

            is the sole member ofMLHB LLC, and the Executrix of the Estate of Henri Barguirdjan ("HB").

            ML married HB in March 2018. On October 13, 2020, HB hung himself at the parties'

            Southampton home. Shortly after his suicide, ML learned that her marriage was a sham and HB

            had never divorced his previous wife. ML also began to discover a series of frauds and

            deceptions HB allegedly engaged in and was faced with several litigations in that regard.

                   ML asserts she first learned of this action in January 2023, when Plaintiff executed on

            part of the judgment herein as against some $50,000.00 in a bank account.

                   ML also asserts that a meritorious defense to this action. She asserts that HB acted in his

            individual capacity regarding the sale of the diamond. ML acknowledges that MLHB did

            receive a portion of the Blue Diamond investment in its account, but asserts that MLHB

            discharged any obligation it had, if any, with respect to those funds when the funds were

            transferred to Windsor in payment of HB and the investors' interest in the Blue Diamond. ML

            asserts that MLHB retained none of the investor funds, nor did MLHB benefit from the investor

            funds. ML asserts that those initial funds came into the MLHB account and were

             655392/2021 8D15 LLC vs. MLHB, LLC ET AL                                             Page 2 of 4
             Motion No. 003

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                                                                                                   INDEX NO. 655392/2021
  NYSCEF DOC. NO. 124                                                                      RECEIVED NYSCEF: 02/01/2024

            contemporaneously transferred out of that account, and that MLHB acted as nothing more than a

            conduit to facilitate the transaction between HB and Duke Buchan for their purchase of their

            interest in the Blue Diamond. MLHB received nothing on the sale of the Blue Diamond and has

            no retained property of any of the creditors.

                    Finally, it is undisputed that Plaintiff never filed proof of service of the motion which

            resulted in the judgment being entered with the Court, and that many of the mailings made in

            connection in this action were addressed to HB, whom ML alleges Plaintiff knew to be deceased.

                    Movant does not contest that this court has personal jurisdiction over MLHB.

                    Based on the foregoing, the Court finds that movant has established a basis to vacate the

           judgment pursuant to CPLR § 317. The Court notes the strong preference for cases to be

            disposed of on their merits rather than on default and for each party to have their day in court.

            Navarro v. A. Trenkman Estate, Inc., 279 A.D.2d 257 [1st Dept. 2000].

                    WHEREFORE it is hereby:

                    ORDERED that defendant's motion to vacate its default herein is granted on condition that

            defendant serve and file an answer to the complaint herein within 20 days from the date of this

            order; and it is further

                    ORDERED that judgment entered herein is hereby vacated as to MLHB, LLC only and

            shall remain in full force and effect as to Money-Penny Holding, LLC ; and it is further

                    ORDERED that any further executions on said judgment as against MLHB, LLC be

            deemed null and void; and it is further

                    ORDERED that the portion of the motion seeking to direct plaintiff to return funds

            already collected on the judgment to ML is denied without prejudice to MLHB' s rights to make

            claims in regard to same at trial; and it is further

             655392/2021 8D15 LLC vs. MLHB, LLC ET AL                                              Page 3 of 4
             Motion No. 003

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                                                                                                     INDEX NO. 655392/2021
  NYSCEF DOC. NO. 124                                                                          RECEIVED NYSCEF: 02/01/2024

                      ORDERED that counsel appear for a virtual preliminary conference on February 28,

            2024, at 11 :00am; and it is further

                      ORDERED that any relief not specifically addressed herein has been considered and is

            denied; and it is further

                      OREDERD that the Clerk is directed to restore this action to the active calendar; and it is

            further

                      ORDERED that defendant shall serve a copy of this order with notice of entry on the Clerk

            of the General Clerk's Office; and it is further

                      ORDERED that such service upon the Clerk shall be made in accordance with the

            procedures set forth in the Protocol on Courthouse and County Clerk Procedures for

           Electronically Filed Cases (accessible at the "E-Filing" page on the court's website at the

            addresswww.nycourts.gov/supctmanh);].

                      This constitutes the decision and order of this Court.

                      2/1/2024
                       DATE                                                        SABRINA KRAUS, J.S.C.

                                        ~
             CHECK ONE:                     CASE DISPOSED                  NON-FINAL DISPOSITION

                                            GRANTED         □ DENIED       GRANTED IN PART          □ OTHER
             APPLICATION:                   SETTLE ORDER                   SUBMIT ORDER

             CHECK IF APPROPRIATE:          INCLUDES TRANSFER/REASSIGN     FIDUCIARY APPOINTMENT    □ REFERENCE

             655392/2021 8D15 LLC vs. MLHB, LLC ET AL                                                Page4 of 4
             Motion No. 003

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