MAGNA EQUITIES II LLC v. WRIT MEDIA GROUP INC (2023)

Order and judgment (one paper), Supreme Court, New York County (O. Peter Sherwood, J.), entered September 1, 2020, which, to the extent appealed from, amended a prior order of the court to eliminate millions of dollars in damages owing to plaintiffs and to extinguish liability as against defendant Signature Stock Transfer, Inc., and awarded attorneys’ fees and costs to plaintiffs, unanimously modified, on the law, to conform the judgment to the court's prior order, dated April 24, 2020, which confirmed the Special Referee's report and recommendation with respect to damages and liability (confirmation order), and otherwise affirmed, without costs.  The Clerk is directed to enter a revised judgment that conforms to the confirmation order with respect to damages and liability.

Order, same court (Jennifer Schecter, J.), entered March 7, 2022, which denied defendants’ motion to renew their prior motion to vacate their 2017 default, unanimously affirmed, without costs.

“A written order [or judgment] must conform strictly to the court's decision, and in the event of an inconsistency between a judgment and a decision or order upon which it is based, the decision or order controls” (Schwartzbard v. Cogan, 192 A.D.3d 523, 524, 140 N.Y.S.3d 413 [1st Dept. 2021] [internal quotation marks omitted]).  A court exceeds its authority when it sua sponte vacates its prior order, as it “has no revisory or appellate jurisdiction, sua sponte, to vacate its own order” (Howell v. City of New York, 165 A.D.3d 567, 567–568, 86 N.Y.S.3d 57 [1st Dept. 2018], lv dismissed 33 N.Y.3d 1121, 108 N.Y.S.3d 110, 132 N.E.3d 142 [2019]).  Here, the court exceeded its authority in entering the judgment, which effectively reversed or vacated its prior confirmation order without notice.  Accordingly, the court is directed to enter a revised judgment that conforms to the confirmation order with respect to damages and liability.

The court providently exercised its discretion in awarding attorneys’ fees and costs to plaintiffs (see 542 E. 14th St. LLC v. Lee, 66 A.D.3d 18, 24, 883 N.Y.S.2d 188 [1st Dept. 2009]).  The underlying report and recommendation thoroughly analyzed all litigation fees, concluded that the large amount of legal fees was largely due to defendants’ posturing, and reduced a substantial amount of the fees.  Accordingly, the amount of litigation fees and costs awarded to plaintiffs were reasonable, particularly considering defendants’ role in the protracted litigation of this matter.

The court correctly denied defendants’ motion to renew their second motion to vacate their default.  Defendants contend that the court should have granted renewal and vacated their earlier default based on the Court of Appeals’ holding in (Adar Bays, LLC v. GeneSYS ID, Inc., 37 N.Y.3d 320, 157 N.Y.S.3d 800, 179 N.E.3d 612 [2021]), which was decided several years after they defaulted in 2017.  Defendants’ arguments are unavailing, however, because Adar Bays — even assuming it did constitute a change in the law — would not have changed the court's determinations on defendants’ prior vacatur motions.  To support vacatur of a default pursuant to CPLR 5015(a)(1), a defendant must show both “a valid excuse for the default and a meritorious defense to the underlying action” (Tandy Computer Leasing v. Video X Home Lib., 124 A.D.2d 530, 531, 508 N.Y.S.2d 190 [1st Dept. 1986]).  The motion court repeatedly found that defendants’ proffered excuse for defaulting did not warrant vacatur.  Regardless, it is uncontested that defendants failed to raise usury as an affirmative defense or move to dismiss based on usury, and thus Adar Bays does not avail them.