This action arises from efforts—or lack thereof—to obtain a revised certificate of occupancy (COO) for a residential building in Manhattan. Plaintiff is the Board of Managers of 11 East Sixty-Eighth Street Condominium. Defendants are 11 East 68th Street LLC (the condominium's sponsor) and Ziel Feldman (the sponsor's principal). Under the condominium's offering plan, sponsor is required to obtain a revised COO for the building.

Feldman timely appeared in this action. Sponsor defaulted. Plaintiff moved for a default judgment solely against sponsor. (See NYSCEF No. 8 at 1.) In May 2024, this court granted the motion against condominium sponsor without opposition and awarded plaintiff a money judgment and a permanent injunction directing sponsor to obtain a revised COO from the Department of Buildings (DOB), "including all sign-offs, and covering all costs to obtain the revised COO." (NYSCEF No. 17 [handwritten order on mot seq 001].)

Plaintiff now moves under Judiciary Law § 753 to hold defendants in civil contempt for failing to comply with this court's May 2024 order. Plaintiff seeks an order compelling defendants to purge their contempt or face incarceration; requiring sponsor to pay a fine of $250 a day running from the date this court issued its order; and awarding plaintiff attorney fees and costs incurred due to defendants' asserted misconduct. (NYSCEF No. 28 at 1-2 [notice of [*2]motion].) The motion is granted in part and denied in part.

Sponsor also cross-moves under CPLR 317 and 5015 to vacate the May 2024 default judgment. The cross-motion is denied.

Because the resolution on the cross-motion will affect resolving the motion itself, the court addresses the cross-motion first.

Sponsor seeks to vacate this court's May 2024 order under CPLR 317 or 5015 (a) (1).^[FN1] When a party moves to vacate a default under CPLR 317 or 5015 (a) (1), it must establish both a reasonable excuse for its default and a potentially meritorious claim or defense.

Even assuming that sponsor that has a reasonable excuse, sponsor raises no meritorious defense to plaintiff's underlying claims. Sponsor provides no support to rebut plaintiff's claim that sponsor breached the offering plan—the claim at the crux of this action—or authority to suggest that sponsor was not required to obtain a revised COO.

Sponsor's cross-motion is denied.

Feldman argues that he may not be held in contempt for noncompliance with this court's default-judgment order against sponsor. This court disagrees.

The principal of a limited-liability company (LLC) may be held in contempt for the LLC's noncompliance with a court order, even if that order was not issued against the principal himself. (See Board of Mgrs. of Colonnade Condominium v 32F at 347 W. 57th St., LLC, 171 AD3d 682, 682 [1st Dept 2019] [holding that principal of an LLC may be held in contempt for the LLC's noncompliance with court order issued solely against the LLC, "'upon such notice as the court deems appropriate and accords with due process'"], quoting Lipstick, Ltd. v Grupo Tribasa, S.A. de C.V., 304 AD2d 482, 483 [1st Dept 2003].)

This court issued its default-judgment order only against sponsor, not Feldman. Nonetheless, Feldman is sponsor's principal, and Feldman knew about this court's default-judgment order (as explained below). This court concludes that Feldman "can be punished for [sponsor's] contempt." (Lipstick, 304 AD2d at 483.)

In moving to hold a party in civil contempt under Judiciary Law § 753, a movant must [*3]establish by clear and convincing evidence (1) "that a lawful order of the court, clearly expressing an unequivocal mandate, was in effect"; (2) that the alleged contemnor disobeyed the court's order with reasonable certainty; (3) that the alleged contemnor "had knowledge of the court's order, although it is not necessary that the order actually have been served upon the party"; and (4) that the alleged contemnor "prejudice[d] . . . the right of a party to the litigation." (El-Dehdan v El-Dehdan, 26 NY3d 19, 29 [2015] [internal quotation marks omitted].) Plaintiff has satisfied all four criteria.

First, the May 2024 order is clear and unequivocal. This court directed sponsor to obtain a revised COO for the building.

Second, it is undisputed that defendants have not complied with this court's order: They have not procured a revised COO since this court issued its May 2024 default-judgment order.

Third, defendants were aware of the court's order. Even assuming, as defendants contend, that plaintiff did not serve the order on defendants, it is undisputed that plaintiff's counsel sent Feldman an email attaching the order and reminded Feldman of sponsor's obligation to obtain a revised COO. (NYSCEF No. 25 [July 2024 email].).

Fourth, plaintiff has been prejudiced by defendants' noncompliance. A movant is prejudiced when the alleged contemnor's "actions were calculated to or actually did defeat, impair, impede, or prejudice the rights or remedies of [that] party." (Tedesco v Elio, 211 AD3d 1074, 1076 [2d Dept 2022] [internal quotation marks omitted].) Plaintiff argues that without a revised COO, the Department of Buildings (DOB) might order the building's residents to vacate the building. (NYSCEF No. 27 at 7.) Plaintiff also contends that unit owners cannot sell or refinance their units without the revised COO. (Id.) Feldman argues that the building has a COO, and that sponsor and plaintiff have obtained temporary certificates of occupancy (TCO) instead. (NYSCEF No. 30 at 2.)

Plaintiff has not shown that the absence of a revised COO has impeded unit sales and refinancing. And Feldman represents that "[s]ales and refinancing have been occurring regularly every year, without any negative impact of the Building having a TCO." (NYSCEF No. 30 at 6.)

But the court agrees that the risk of eviction due to the absence of a revised COO is sufficiently prejudicial. (See Orange County-Poughkeepsie Ltd. Partnership v Bonte, 37 AD3d 684, 686 [2d Dept 2007] [holding that commencing court action in contravention of a TRO granting a filing injunction is prejudicial when it could result in eviction of tenant]; Cf. Town of Lloyd v Moreno, 297 AD2d 403, 405 [3d Dept 2002] [holding that plaintiff had not shown prejudice when it failed to show that "defendant's activities resulted in at least one civil lawsuit against plaintiff"].)

Plaintiff has shown that defendants' noncompliance with this court's order has prejudiced its rights.

Because plaintiff has met its burden to prove defendants' contempt, the remaining question is whether defendants have a valid defense that refutes plaintiff's showing. (See Shemtov v Shemtov, 153 AD3d 1295, 1296 [2d Dept 2017] [holding that once a showing of contempt has been made, "the burden shifts to the alleged contemnor to refute the movant's showing, or to offer evidence of a defense, such as an inability to comply with the order"].)

Defendants' defense is that they do not have the financial wherewithal to comply with [*4]this court's order directing sponsor to secure a revised COO. But they make this assertion only by memorandum of law (see NYSCEF No. 31) and through unsubstantiated statements in Feldman's affidavit (see NYSCEF No. 30). And they provide no supporting evidence corroborating that they currently have no financial resources to obtain the revised COO. (See El-Dehdan, 26 NY3d at 36 [holding that "[v]ague and conclusory allegations of . . . inability to pay or perform are not acceptable" and that "courts have required a more specific showing of the contemnor's economic status"] [internal quotations marks omitted].) Defendants' defense is unavailing.

Judiciary Law § 773 provides that "[i]f an actual loss or injury has been caused to a party . . . by reason of the misconduct proved against the offender[,] . . . a fine, sufficient to indemnify the aggrieved party, must be imposed upon the offender." But "[w]here it is not shown that such an actual loss or injury has been caused, a fine may be imposed, not exceeding the amount of the complainant's costs and expenses, and two hundred and fifty dollars in addition thereto, and must be collected and paid, in like manner." (Id.)

Plaintiff claims that "[t]he absence of a revised COO puts the Unit Owners' health, safety, and wellbeing at catastrophic risk, as the DOB could issue a vacate order requiring the Building's residents to leave their homes until a revised COO is issued. (NYSCEF No. 27 at 7.) Plaintiff also claims that "the lack of a revised COO also irreparably obstructs the Unit Owners from selling their units and refinancing their mortgages." (Id.) But these allegations do not reflect that plaintiff incurred actual damages. Therefore, plaintiff is entitled to no more than $250, plus attorney fees and costs incurred in proving defendants' contempt. (See People v L. G., 238 AD3d 568, 570 [1st Dept 2025] [holding that when a party does "not provide evidence quantifying the losses or injuries" suffered from the contempt, that party may recover only "costs and expenses in proving the contempt and a fine of $250"].)

Contrary to plaintiff's request, Judiciary Law § 773 does not permit a court to impose a fine of $250 a day against defendants until they purge their contempt. (See Page v Cheung On Mansion, Inc., 138 AD2d 324, 325 [1st Dept 1988] [holding that "since no actual damages were shown . . . only a fine not exceeding $250 could be imposed," and thus the trial court "was erroneous to conclude" that Judiciary Law § 773 "permitted a daily fine of $250"].)

Accordingly, it is

ORDERED that sponsor's cross-motion to vacate this court's default-judgment order entered May 13, 2024, is denied; and it is further

ORDERED that plaintiff's motion to hold defendants in contempt is granted; and defendants within 60 days must purge their contempt by securing a revised COO; and it is further

ORDERED that if defendants do not purge their contempt within 60 days of entry of this order, then plaintiff may move again for further contempt sanctions; and it is further

ORDERED that plaintiff may enter a supplemental judgment against defendants, jointly and severally, for $250 plus the reasonable attorney fees and costs incurred by plaintiff in proving defendants' contempt, with the amount of those fees and costs to be determined by motion made on notice; and it is further

ORDERED that plaintiff serve a copy of this order with notice of its entry on defendants by e-filing on NYSCEF and by certified mail, return receipt requested, directed to defendants' respective last-known addresses.