DOWN EAST SEAFOOD, INC., Plaintiff, v. SIBLING FUEL COMPANY INC., a/k/a, Pullum/Sibling Fuel Co., Inc., Defendant.
Plaintiff commenced this action pursuant to a summons and verified complaint filed on August 18, 2017, seeking a judgment for $16,772.91, based on alleged breach of contract. Defendant failed to answer or appear, and on November 8, 2017, Plaintiff applied for a default judgment. On February 2, 2018, a default judgment was entered against Defendant in the amount of $18,633.09.
On March 9, 2018, Defendant appeared by counsel and moved by order to show cause, for a judgment vacating the default. The motion was returnable on March 28, 2018. While the relief sought included a stay on execution of the judgment, no interim relief was properly requested. The motion was adjourned to April 26, 2018.
On March 29, 2018, Defendant again sought to move by order to show cause for a stay on enforcement of the judgment, pending determination of the first order to show cause to vacate the judgment. The court declined to sign the order to show cause, holding that a motion for said relief was already pending.
On April 2, 2018, Plaintiff executed on the judgment and filed a satisfaction of judgment with the Court.
On April 26, 2018, the Court denied Defendant's motion to vacate the default judgment pursuant to a decision and order which held in pertinent part :
Defendant's order to show cause to vacate the default judgment is denied as moot. Defendant moved to vacate the default by way of order to show cause which did not contain any temporary restraining orders (TRO's) enjoining Plaintiff from collecting on its judgment. Moreover, the judgment was fully satisfied, and proof thereof was filed with the court on April 2, 2018.
Defendant appealed and on February 28, 2019, the Appellate Term issued an order reversing Civil Court and vacating the default judgment [ Down E. Seafood, Inc. v. Sibling Fuel Co., Inc., 62 Misc 3d 148(A) (NY App. Term. 2019]. The Appellate Term noted the strong policy favoring resolution of cases on the merits, and held that the default was the result of excusable law office failure. The Appellate Term further held:
Civil Court should not have denied defendant's vacatur motion as moot on the ground that the judgment was satisfied. Inasmuch as plaintiff levied the judgement amount by execution while defendant's CPLR 5015 motion was pending, the Court retained jurisdiction to vacate the default judgment.
The Appellate Term remanded to Civil Court for further proceedings.
THE PENDING MOTIONS
Although the judgment was vacated, Plaintiff did not return the funds collected.
On May 30, 2019, Defendant moved for an order pursuant to CPLR § 5015(d) and CPLR § 5523 granting Defendant restitution of the collected funds.
On July 29, 2019, Plaintiff cross-moved for an order consolidating this action for joint trial with another pending action between the parties in Bronx County under Index Number CV-015672-17 (Bronx County Action).
On July 29, 2019, the court heard oral argument and reserved decision.
The two motions are consolidated herein for disposition.
Defendant's Motion for Restitution Is Granted
CPLR § 5015(d) addresses restitution and provides “(w)here a judgment ․ is ․ vacated, the court may direct and enforce restitution in like manner and subject to the same conditions as where a judgment is reversed or modified on appeal.” The reference to appeals is a reference to CPLR § 5523.
CPLR § 5523 provides in pertinent part “(a) court reversing or modifying a final judgment or order or affirming such a reversal or modification may order restitution of property or rights lost by the judgment or order ․”.
The statute recognizes that a court correcting an error requires the power to grant full relief in order to restore the parties to their prior position before the error was made. Without it, reversal or vacatur would leave the winner with only a pyrrhic victory, and the loser in continued possession of erroneously gotten gains․ (T)he court can direct the parties already before it to do the right thing.
Moreover, the statute does not limit when the restitution must be sought. While it may be more efficient and expedient to seek both vacatur and restitution in the same motion, the failure to do so should not bar an entitled party from doing so by a later motion. (See, Siegel, NY Prac § 433 [2d ed].)
Chase Manhattan Bank, U.S.A., N.A. v. Kassam, 167 Misc 2d 933, 935, 640 N.Y.S.2d 1001 (Civ. Ct. 1996)
“When money is collected upon (a) ․ judgment which, subsequent to the payment, is reversed, the legal conclusion is that the money belongs to the person from whom it was collected ․ [M.S. Berkoff Co. v. McGuire, 54 Misc 3d 82, 8389 (NY App. Term. 2017)].”
Additionally, Plaintiff's argument that this court lacks power to order restitution is without merit. As held by the Appellate Term, Second Department “․ the New York City Civil Court has ‘all of the powers that supreme court would have in like actions and proceedings’ (CCA 212) [ Ladco Fin. Grp., Inc. v. Andrew Thomas Enterprises, 10 Misc 3d 135(A) (App. Term 2005)].”
Given that Plaintiff was aware at the time it executed on the judgment that Defendant had appeared by counsel and promptly moved to vacate the default, and that said application was in fact pending before the court, it would have been better practice to refrain from collecting upon the judgment until the court had made a ruling, notwithstanding the fact that Plaintiff had inadvertently failed to include a request for an interim stay.
Based on the foregoing, the motion for restitution is granted and Plaintiff is directed to make restitution to Defendant within 30 days of service of this order with notice of entry, in the sum of $18,633.09 plus interest from April 2, 2018. Defendant's Motion for a Joint Trial Is Granted
Both parties agree that a joint trial of this action with the Bronx County Action is appropriate. The parties disagree as to whether Bronx County or New York County is the more appropriate venue.
Given that both counties are a proper forum, the court will follow the rule of choosing the county in which the first action was commenced, and designates New York County as the appropriate venue for the joint trial (see Matco Elec. Co. v. Beacon Constr. Co., 52 AD2d 1084; Padilla v. Greyhound Lines, 29 AD2d 495; Perinton Assocs. v. Heicklen Farms, Inc., 67 AD2d 832, 833).
Based on the foregoing, it is ordered that Defendant's motion for restitution is granted and Plaintiff is directed to make restitution to Defendant within 30 days of service of this order with notice of entry, in the sum of $18,633.09 plus interest from April 2, 2018;
And it is further ordered that the Bronx County Action, Pullum/Sibling Fuel Co., Inc. v. Down East Seafood, Inc. DBA Down East Seafood and Edward Taylor shall be jointly tried with this action and that New York County is the venue designated for the joint trial.
This constitutes the decision and order of the Court.
Sabrina B. Kraus, J.
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