[*1]
Lancman v Rappaport, Hertz, Cherson & Rosenthal, P.C.
2014 NY Slip Op 51012(U) [44 Misc 3d 1204(A)]
Decided on June 27, 2014
Civil Court Of The City Of New York, Bronx County
Cannataro, 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This opinion is uncorrected and will not be published in the printed Official Reports.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 June 27, 2014
Civil Court of the City of New York, Bronx County


Deborah M. Lancman, Plaintiff,

against

Rappaport, Hertz, Cherson & Rosenthal, P.C. and SHAEL NORRIS, Defendants.




TS-300055-13



Phillip F. Menna, Esq.



Attorney for Plaintiff



235 Mamaroneck Ave, Ste 402



White Plains, New York 10605



Rappaport, Hertz, Cherson & Rosenthal, P.C.



Named Defendant and Attorney for Defendants



118-35 Queens Blvd, 9th Floor



Forest Hills, New York 11375


Anthony Cannataro, J.

In this breach of contract action, plaintiff Deborah M. Lancman seeks an order pursuant to CPLR 3215 granting her leave to enter a default judgment against defendants Shael Norris and the firm Rappaport, Hertz, Cherson & Rosenthal, P.C. (RHCR). Defendants oppose the motion and cross-move to dismiss the action pursuant to CPLR 3211.



actual Background



On March 8, 2011, Lancman entered into a contract to buy Norris real property located at 293 William Avenue, City Island, New York. At the time of the closing, Lancman discovered that Norris (who was represented by RHCR) failed to obtain a final sign-off from the New York City Department of Buildings on an open alteration application [*2]for the premises.



On April 5, 2011, the parties executed an agreement requiring Norris to deposit $7,500.00 in escrow as security for his promise to obtain the DOB sign-off by October 5, 2011. The escrow agreement named RHCR as the escrow agent responsible for releasing the escrow funds. The agreement also provided that Norris may request a "reasonable extension of time" if the sign-off was not obtained within six months. The recitals portion of the escrow agreement made a single reference to the March 2011 contract of sale and stated that Lancman would not close title until Norris obtained the DOB sign-off.



Norris failed to obtain the sign-off by October 5, 2011. On or around October 14, 2011, Lancman's attorney wrote to defendants advising them of their failure to timely deliver the sign-off and demanded the release of the escrow funds, as required by the agreement. RHCR did not respond to plaintiff's letter until early December 2011. In a response dated December 2, 2011, Norris and RHCR referred to an alleged oral agreement between counsel to extend the deadline and requested a further extension to January 31, 2012. Lancman's attorney wrote back to defendants warning them of impending litigation if the sign-off was not obtained by the end of 2011. Norris eventually obtained the sign-off on April 5, 2012, some six months after the original deadline.

Procedural History

On December 11, 2011, plaintiff filed a summons with notice in Supreme Court, Bronx County alleging breach of the escrow agreement. Plaintiff also prepared a motion for summary judgment in lieu of a complaint pursuant to CPLR 3213 which was not filed with the Clerk. On January 5, 2012, plaintiff served the summons with notice and the unfiled summary judgment motion on Norris at his Rhode Island residence. One day later, plaintiff served the same set of papers on RHCR.



Despite being served with both the filed summons with notice and the unfiled summary judgment motion, defendants did not make a demand for a complaint nor did they serve opposition to plaintiff's motion. Defendants instead wrote a letter to plaintiff demanding that the action be discontinued because plaintiffs papers were procedurally defective.



About two months later, plaintiff moved for a default judgment. Once again, rather than file opposition papers, defendants wrote a letter to Supreme Court claiming that plaintiff's service of the summons with notice, as well as the unfiled motion, amounted to sharp practice.Supreme Court (Brigantti-Hughes, J.) denied the application for a default judgment with leave to renew. The Court found that plaintiff had failed to satisfy the additional mailing requirement of CPLR 3215 (g) (3) and failed to submit a certificate of [*3]conformity pursuant to CPLR 2309 (c) for the out-of-state service on Norris. Notably, the Court did not address defendants' argument that plaintiff's initiatory papers were defective nor did it grant leave to submit opposition or make a late demand for a complaint.



Nevertheless, on September 27, 2012, RHCR entered an appearance on behalf of all defendants and served a demand for a complaint. The demand - made more than eight months after they received the summons with notice - was rejected by plaintiff a week later.



On December 13, 2012, plaintiff renewed his application for a default judgment, however, Supreme Court transferred the matter to this Court pursuant to CPLR 325 (d). The instant motion, which seeks essentially the same relief as the motion made in Supreme Court, was submitted on December 19, 2013. Defendants opposed the motion and have also cross-moved for dismissal.

Arguments

On her motion for a default judgment, plaintiff argues that defendants' time to make a demand for a complaint or otherwise appear has long expired. In compliance with Supreme Court's decision denying a default judgment with leave to renew, plaintiff now annexes the affidavit of mailing required by CPLR 3215 (g) (3) and a certificate of conformity pursuant to CPLR 2309 (c). Additionally, plaintiff attaches the escrow agreement and an affidavit by Deborah Lancman averring to defendants' breach of the agreement and her entitlement to $7,500.[FN1]



Defendants do not dispute that they failed to obtain the DOB sign-off before October 5, 2011 nor do they dispute that they were served with the summons with notice in January, 2012. Defendants contend that the action must nevertheless be dismissed because plaintiff served the unfiled summary judgment motion simultaneously with the summons with notice. The resulting confusion, they argue, renders plaintiff's action jurisdictionally invalid. Defendants also contend that plaintiff abused the judicial process by failing to apprise the Court that she had served the unfiled motion on defendants. Maintaining that service of process was a nullity, defendants argue that they were under no obligation to oppose this motion for a default judgment, yet in an abundance of caution, defendants have submitted papers which, they contend, demonstrate a reasonable excuse and a meritorious defense. As an explanation for the delay, RHCR claims it misplaced plaintiff's October 14, 2011 demand for the escrow funds. Defendants also allege that Lancmans attorney orally agreed to extend the deadline for Norris but it is unclear what the new deadline was and plaintiff's attorney denies ever agreeing to such an extension.



In opposing defendants cross-motion, plaintiff argues that defendants' [*4]reasoning for dismissal based on personal and subject matter jurisdiction is without merit. Plaintiff maintains that service of the unfiled motion on defendants did not render service of the summons with notice defective. To the contrary, plaintiff contends that it was incumbent on defendants to take some affirmative action to respond to the properly served and filed summons with notice. Lastly, plaintiff argues that this Court should reject defendants' contention that they have a reasonable excuse for their default as they took no steps to make a demand or otherwise formally appear in this matter until eight months after they were served with the summons.

Discussion

When an action is commenced by summons with notice, the defendant must appear and demand a complaint within twenty days after service (see CPLR 320(a); CPLR 3012). If the defendant fails to appear, plaintiff is entitled to judgment upon proof of service of the summons with notice, facts constituting the claim, the default, and the amount due (CPLR 3215[f]).



The defaulting party may defeat the motion by establishing a reasonable excuse for the default and meritorious defense to the action (Diederich v Wetzel, 112 AD3d 883 [2d Dept 2013]). While it is the strong preference of the courts to resolve cases on their merits (see Rigieri v Bannister, 22 AD3d 299, 302 [1st Dept 2005]), a pattern of willful neglect and default will not be excused (Bekker v Fleischman, 35 AD3d 334 [2d Dept 2006]) nor will a reasonable excuse be found to exist when the record reveals that defendant deliberately chose to ignore the pleadings (see Figueroa v Luna, 281 AD2d 204, 206-207 [1st Dept 2001]; Baker v E.W. Howell Co., 216 AD2d 242, 244 [1st Dept 1995]).



Here, plaintiff has sufficiently demonstrated her entitlement to a default judgment. Defendants admit they were served in early January, 2012 and their time to appear in the action expired on or around January 26, 2012. Rather than make a demand for a complaint as required by CPLR 3012 (b) or file a notice of appearance, defendants wrote a letter to plaintiff's counsel in an attempt to persuade him to discontinue the action. When plaintiff moved for a default judgment in Supreme Court, defendants had still not responded to the summons. Instead, they chose to send another letter, this time directly to the Court, condemning plaintiff's tactics.



Defendants have failed to demonstrate a reasonable excuse for their default. They were given notice of this action at its inception but neglected to file or serve responsive papers until eight months after their time to answer had expired (see e.g. Heidari v First Advance Funding Corp., 55 AD3d 669, 669 [2d Dept 2008]). Rather than respond in the manner prescribed by the CPLR, defendants embarked on a letter writing campaign to opposing counsel and then the Court. This conduct amounts to a pattern of willful neglect. [*5]Finally, the Court finds no merit in defendants' argument that a reasonable excuse lies in their "confusion" over service of the summons with notice and the unfiled summary judgment motion. This contention might be more persuasive had defendants made some effort to properly respond to either set of initiatory papers.Even assuming arguendo that they have demonstrated a reasonable excuse for their default, defendants have nevertheless failed to show a meritorious defense.Defendants argue that, absent an express or implied "time is of the essence" provision, Norris did not materially breach the escrow agreement. In support of their argument, defendants point to the Court of Appeals' decision in ADC Orange, Inc. v Coyote Acres, Inc. wherein the Court stated that "(t)he mere fixing of a date for performance does not result in the making of time of the essence the contract" (7 NY3d 484, 489 [2006]). In ADC, the plaintiff-buyer sought specific performance under a contract for the sale of land after the defendant-seller claimed that the buyer breached the contract in failing to remit an interim installment payment by a date-certain. The ADC court stated, "[w]e hold that in contracts of this type, time of performance is not normally of the essence unless the contract so states or one of the parties has unequivocally declared it upon proper notice" (id).Since the nature of the contract in ADC is distinguishable from the escrow agreement at bar, defendants' reliance on ADC is misplaced. ADC and other cases like it pertain to a contract for the sale of real estate (ADC, 7 NY3d at 487; e.g. Brum Realty, Inc. v Takeda, 205 AD2d 365, 366 [1st Dept 1994]; Levine v Sarbello, 112 AD2d 197, 199 [2d Dept 1985] affd, 67 NY2d 780, 492 NE2d 130 [1986]). Indeed, the ADC court specifically limited their holding to "contracts of this type". On the other hand, time is implied as essential "where the subject of the sale has a fluctuating value, or where the object of the contract is a commercial enterprise, or the delay in completion would involve one of the parties in a serious loss" (Reddy v Ratnam, 95 AD3d 982, 983 [2d Dept 2012] citing Lusker v Tannen, 90 AD2d 118, 124 [1st Dept 1982]). Other than a statement providing context for the escrow agreement and a single reference to the March 2011 contract of sale, both of which were contained in the recitals portion of the agreement, the terms of the escrow agreement were exclusively limited to Norris' obligation to obtain the DOB sign-off within six months. Time was not merely of the essence, it was the entirety of the parties' agreement. The escrow agreement is not a contract for the sale of real estate but an extrinsic stipulation of a commercial nature that is related, but not essential, to the contract of sale (compare 41-41 51st St. Realty Assoc. v Tura Assoc., 207 AD2d 524, 525 [2d Dept 1994] [promissory notes executed at the time of the contract of sale requiring purchaser to repay seller at closing found to be extrinsic]).As to defendants' cross-motion, the standard applicable to a motion to dismiss for lack of personal jurisdiction is whether the notice given to defendant was reasonably calculated, under all the circumstances, to apprise defendants of the pendency [*6]of the action and afford them an opportunity to present their objections and defenses" (Green v Gross and Levin, LLP, 101 AD3d 1079, 1080 [2d Dept 2012]). Here, defendants were apprised of the action when plaintiff filed and served the summons with notice. Defendants had more than ample opportunity to present their defenses in the intervening eight months but failed to do so. As such, this Court finds no basis to grant defendants' cross-motion.Similarly, this Court finds no merit to defendants' argument that service of the summons with notice along with the unfiled motion constitutes a fatal defect requiring dismissal. Unlike defendants' precedents, which raise jurisdictional concerns when a party fails to comply with the filing fee requirements under CPLR 304, plaintiff here has made no such omission.



This Court has considered the remainder of defendants' arguments and finds them to be without merit.



Accordingly, it is:



Ordered that the motion for a default judgment is granted; and it is further



Ordered that the Clerk of the Court is directed to enter judgment in favor of plaintiff Deborah Lancman in the amount of $7,500.00 with interest and costs from October 5, 2011; and it is further



Ordered that defendants cross-motion to dismiss is denied in its entirety.



Dated: June 27, 2014E N T E R:



____________________________



Anthony Cannataro, JCC

Footnotes


Footnote 1: Unlike the prior motion in Bronx Supreme Court, plaintiff does not appear to be seeking attorney's fees in the instant motion. This Court will therefore not address this issue.