[*1]
Davidson XQ, LLC v Watson
2015 NY Slip Op 50747(U) [47 Misc 3d 1222(A)]
Decided on May 18, 2015
Supreme Court, Queens County
McDonald, J.
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and will not be published in the printed Official Reports.


Decided on May 18, 2015
Supreme Court, Queens County


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.