Davidson XQ,
LLC, Plaintiff,
against
Kevin Watson, MP3NY and SHARON ATIAS,
Defendants.
|
11090/13
Robert J. McDonald, J.
This is an action in which the plaintiff, Davidson XQ, LLC invested and transferred
the sum of $144,000 to the defendants pursuant to the terms of a written Production
Agreement. According to the terms of the agreement in consideration of [*2]plaintiff's investment of $144,000, defendant Watson the
owner of MP3NY agreed to facilitate the production of a reality television show that
would be purchased by Viacom. Defendant Atias who was the attorney for the
defendants was to act as an escrow agent. The monies were transferred by plaintiff to the
escrow account of attorney Sharon Atias. It is alleged that Atias agreed be responsible for
ensuring that defendants were accountable for their spending of the funds. The complaint
asserts that Watson failed to produce the show. It is also alleged that the defendants
including Ms. Atias failed to give an accurate accounting of the disbursement of the
funds in the escrow account. It is alleged that the defendants refused to return the
plaintiff's funds as agreed upon in the production agreement in the event that the
television show was not produced and not purchased by Viacom by a specified date. The
complaint, which seeks a money judgment against the defendants in the amount of
$144,000 plus interest, punitive damages, and counsel fees alleges causes of action
against Watson and MP3NY for breach of contract and against all the defendants for
fraud, conversion, and unjust enrichment. The complaint asserts a cause of action against
Ms. Atias for breach of fiduciary duty and aiding and abetting fraud. It is alleged that Ms.
Atias released the escrow funds to Watson with knowledge that he planned to use the
funds in a manner inconsistent with the Production Agreement.
The plaintiff commenced the instant action by filing a summons and
complaint on June 10, 2013. An affidavit of service for defendant Atias, signed by
process server Michael Gorman, and dated June 4, 2013, states that Ms. Atias was served
at her actual place of business at 60 Madison Avenue, Suite 909, New York. NY 10010
on June 11, 2013 pursuant to CPLR 308(2). The affidavit states that the summons and
complaint were hand delivered to Itamar "Doe" a secretary and person of suitable age and
discretion at the defendant's business office. The summons and verified complaint were
also mailed by regular, first class mail on June 14, 2013 addressed to Sharon Atias at 60
Madison Avenue, Suite 909, New York, NY 10010. Thereafter, defendant Atias as well
as defendants Watson and MP3NY failed to appear or answer.
Upon defendant's failure to appear in the action, plaintiff moved for a default
judgment against Sharon Atias which was granted by order of the court dated September
23, 2013 and entered on September 27 2013. On January 27, 2014, a default judgment
was granted as to Kevin Watson and MP3NY and the matter was set down for an
assessment of damages. On March 12, 2014, an inquest on damages was held before
Justice Ritholtz. The Court ruled in plaintiff's favor entitling plaintiff to a money [*3]judgment against the defendants in the amount of
$144,000.00 together with accrued interest from May 15, 2012, and attorneys fees in the
amount of $14,750. A judgment was entered on May 28, 2014 against the three
defendants, jointly and severally in the amount of $186,272.09.
Defendant Sharon Atias, now moves by order to show cause, for an order,
pursuant to CPLR § 5015(a)(4) and in the interests of justice, vacating and setting
aside orders of this Court dated September 23, 2013 and the money judgment entered on
May 28, 2014 upon defendant's default due to the failure of proper service of process;
and for an order, pursuant to CPLR 3211(a)(8), dismissing the action as the Court did not
have jurisdiction of defendant, rendering said orders invalid.
Plaintiff, by notice of cross-motion opposes the motion to vacate the default
judgment and requests that if defendant's motion is granted plaintiff be granted leave to
re-serve defendant pursuant to CPLR 306-b.
In support of defendant's motion, counsel Anthony C. Giordano, Esq.
submits his own affirmation; the affidavit of defendant Atias; a copy of the money
judgment; copies of this court's decisions dated September 23, 2013 and January 27,
2014; two forms purportedly demonstrating Israeli identification for Ms. Atias; and a
proposed answer with counterclaims.
Defendant Atias submits an affidavit stating that although she had a law
office in Manhattan over two years ago, she now resides in Israel and has resided there
consistently since February 7, 2013 because of family reasons. Defendant indicates that
proof of her residency are annexed as Exhibit C, however none have been attached to her
motion. Two unidentified forms of Israeli identification are submitted in support of her
claim. However, the documents are in Hebrew and have not been submitted with a
translation as required by CPLR 2101(b). Defendant further maintains that she was never
served with the pleadings, because although they were likely served at her old office, she
left for Israel four months prior to service of the summons and complaint.
Defendant contends that 60 Madison Avenue, Suite 909, New York, NY
10010, the location where service was made, was not her actual place of business
pursuant to the statute. Defendant maintains that a person's "actual place of business"
contemplates and requires regular physical presence and the regular transaction of
business. That defendant asserts that because she moved out of the country she was
neither an occasional visitor nor maintained a regular presence at her [*4]office at the time she was allegedly served. Defendant's
counsel asserts that there is no evidence in the record that Ms. Atias maintained a regular
presence at her office during the time she was served or transacted any business there
sufficient to meet the requirements of the statute.
In support of plaintiff's affirmation in opposition and cross motion, plaintiff
submits a copy of the affidavit of service; a print out of Atias Enterprises, Inc.'s internet
home page; a print out of defendant's Office of Court Administration Attorney
Registration page; a photo of the 60 Madison Avenue lobby wall directory, indicating a
listing for Sharon Atias, Attorney at Law, Suite 909; and, a copy of the summons and
verified complaint.
Plaintiff argues that it is undisputed that the process server, Michael Gorman
appeared at Suite 909 at 60 Madison Avenue, New York on June 11, 2013 and service of
the summons and verified complaint was effectuated by serving a secretary named
"Itamar" who accepted service. Pursuant to the affidavit of service, the summons and
verified complaint were also mailed by regular, first class mail on June 14, 2013,
addressed to Ms. Atias at 60 Madison Avenue, Suite 909, New York, NY 10010 in an
envelope marked "Personal and Confidential." The affidavit of service was executed and
filed with the Queens County Clerk on July 1, 2013.
Plaintiff further argues that Atias' sole argument in support of her motion is
that she relocated to Israel in February 2013 and therefore 60 Madison Avenue was no
longer her actual place of business when service was made. Also, plaintiff argues that
pursuant to CPLR 308(6), an actual place of business for purposes of service includes
"any location that the defendant, through regular solicitation or advertisement has held
out as its place of business." Counsel contends that even if Ms. Atias left for Israel, she
continues to hold out the Madison Avenue address as the location of her law
practice.
Counsel claims that Ms. Atias maintains her name and suite number on the
60 Madison Avenue building directory. In that regard plaintiff submits an affidavit from
one, Michelle Kim, stating that on February 17, 2015 she went to the office building
located at 60 Madison Avenue and located Ms. Atias' name on the building directory as
"Sharon Atias Attorney at Law PLLC" with the suite number 909. Counsel also states
that Ms. Atias is presently registered as an attorney in New York with the New York
[*5]State Office of Court Administration. Her OCA
registration, which was most recently updated in March 2015, lists 60 Madison Avenue
as her current business address. She has not notified the Office of Court Administration
of a change of her business address since the time she moved to Israel in February 2013.
Plaintiff also submits a copy of a full page advertisement from the New York County
Yellow Pages listing Ms. Atias as an attorney with an office address at 60 Madison
Avenue. Therefore, plaintiff argues that service is proper pursuant to CPLR 308(6) as the
defendant, through solicitation and advertisement continues to hold out 60 Madison
Avenue, where she was served, as her business address and as such should be estopped
from claiming that service of process at 60 Madison Avenue was improper.
In reply defendant maintains that the defendant has been living and
employed in Israel from prior to the date of service and continuing to the present and she
cannot be held responsible if the building management company did not remove her
name from the building directory.
CPLR 308(2) provides that personal service upon a natural person may be
made "by delivering the summons within the state to a person of suitable age and
discretion at the actual place of business, dwelling place or usual place of abode of the
person to be served by either mailing the summons to the person to be served at this or
her actual place of business."
CPLR 308(6) provides for the purposes of CPLR 308, "actual place of
business" shall include any location that the defendant through regular solicitation, has
held out as its place of business.
This Court finds that the affidavit of the plaintiff's process server constituted
prima facie evidence of proper service of the summons and complaint upon the
defendant pursuant to CPLR 308(4) (see Duran v Milord, 126 AD3d 932 [2d Dept. 2015]; Youngstown Tube Co. v
Russo, 120 AD3d 1409 [2d Dept. 2014]).
The defendant has failed to provide sufficient facts to rebut the statements in
the process server's affidavit of service. Although the defendant states that she moved to
Israel four months prior to the service of the pleadings, she does not provide any
competent documentary evidence showing proof of residence or employment in Israel
during the period in question. As stated above the only documents submitted are
photocopies of defendant's purported Israeli identification which are completely in
Hebrew and unaccompanied by a sworn English translation (see CPLR 2101(b); Reyes v Arco Wentworth Mgt.
Corp., 83 AD3d 47 [2d [*6]Dept. 2011]).
Further, the Court finds that plaintiff has demonstrated that Atias held out
the address at which she was served as her actual place of business within the meaning of
CPLR 308(6), and that service was valid upon her pursuant to CPLR 308(4) (see Robeck v Prasad, 6 AD3d
690 [2d Dept 2004]; Vid v Kaufman, 282 AD2d 739 [2d dept. 2001];
Gibson, Dunn & Crutcher v Global Nuclear Servs. & Supply, 280
AD2d 360, [2001]). In view of evidence that Atias continues to register 60 Madison as
her business address with the OCA, maintains a current telephone directory containing a
listing for her at the subject address, keeps her name on the directory at 60 Madison, and
holds out the place of service as her address, she may not now reasonably claim she was
not properly served (see CPLR 308 [6]; Central City Brokerage Corp. v Acosta, 49 AD3d 455 [1st
Dept. 2008]; Gibson, Dunn & Crutcher v Global Nuclear Servs. &
Supply, supra; Melton v Brotman Foot Care Group, 198 AD2d 481
[2d Dept. 1993]). Although having had the opportunity to change her address in the over
two years since she moved, defendant has not stated what efforts she has made, if any, to
cease holding out 60 Madison Avenue as her business address. She has not provided
proof that she has retired from practicing in New York or vacated her office. The
evidence is sufficient to satisfy the plaintiff's burden of demonstrating that the defendant
held out the address where service was effected as an actual place of business within the
meaning of CPLR 308(6) and that service therefore was valid and the court therefore
obtained personal jurisdiction.
Further, even though the defendant provided a proposed answer with
defenses to the complaint, the defendant is not entitled to discretionary vacatur pursuant
to CPLR 5015(a)(1), as she failed to set forth a reasonable excuse for her default (see Youngstown Tube Co. v
Russo, 120 AD3d 1409 [2d dept. 2014]).
Accordingly, for all of the above stated reasons the motion by defendant
Atias for an order vacating the judgment entered against her on default dated May 28,
2014 is denied.
In addition, it is hereby ordered that the stay of enforcement of the judgment
contained in the order to show cause dated December 17, 2014 is vacated forthwith.
Dated: Long Island City, NY
May 18, 2015
______________________________
ROBERT J. McDONALD
J.S.C.