YES CONTRACTING INC v. Sterling National Funding Corp., et al., Defendants. (2021)

Order, Supreme Court, New York County (Gerald Lebovits, J.), entered on or about January 27, 2020, which denied the motion of defendants CLST Enterprises LLC, Carl L Thomson, Jr., and Margaret Mary Thomson to vacate an order, upon defendants' default, granting plaintiff's motion to strike their answer and counterclaims and for a default judgment as to liability on plaintiff's claims against them, unanimously affirmed, with costs.

Contrary to plaintiff's contention, the order denying defendants' motion to vacate the order striking defendants' answer and counterclaims and entering default judgment is appealable.  Since the underlying order was decided upon defendants default, that order was not itself appealable (CPLR 5511), and the proper procedure was for defendants to move to vacate pursuant to CPLR 5015 (see Kamen v. Weithorn, 83 A.D.3d 560, 920 N.Y.S.2d 668 [1st Dept. 2011];  M & C Bros., Inc. v. Torum, 75 A.D.3d 869, 870, 907 N.Y.S.2d 78 [3d Dept. 2010]).

The court properly denied defendants' motion to vacate the underlying order because defendants failed to provide a reasonable excuse for their default on the motion, or a meritorious defense to the action (see Marquez v. 171 Tenants Corp., 161 A.D.3d 646, 647, 78 N.Y.S.3d 103 [1st Dept. 2018];  Youni Gems Corp. v. Bassco Creations Inc., 70 A.D.3d 454, 455, 896 N.Y.S.2d 315 [1st Dept. 2010], lv dismissed 15 N.Y.3d 863, 909 N.Y.S.2d 693, 936 N.E.2d 460 [2010]).  The record amply supports the court's finding that defendants willfully refused to comply with numerous court orders directing discovery, and in particular refused to produce Margaret Mary Thomson for a deposition, warranting discovery sanctions pursuant to CPLR 3126 (see Brown v. Astoria Fed. Sav., 51 A.D.3d 961, 962, 858 N.Y.S.2d 793 [1st Dept. 2008], lv denied 11 N.Y.3d 703, 864 N.Y.S.2d 807, 894 N.E.2d 1198 [2008];  Jones v. Green, 34 A.D.3d 260, 825 N.Y.S.2d 446 [1st Dept. 2006]).  Defendants provided only conclusory statements regarding the merit of their defense and counterclaims (see Matter of Giovanni Maurice D. [Wilner B.], 99 A.D.3d 631, 631–632, 953 N.Y.S.2d 565 [1st Dept. 2012]).

Defendants' assertion that plaintiff failed to provide evidence in support of the merits of its claim, as required by CPLR 3215(f), is unpreserved (see Wilson v. Galicia Contr. & Restoration Corp., 10 N.Y.3d 827, 829, 860 N.Y.S.2d 417, 890 N.E.2d 179 [2008]).  In any event, such defect is not jurisdictional and does not provide a basis to vacate the default judgment where defendants failed to demonstrate a reasonable excuse for their default (see Frazier v. 811 E. 178th St. Realty Corp., 183 A.D.3d 413, 414, 121 N.Y.S.3d 596 [1st Dept. 2020]).

Defendants' additional new argument, that plaintiff's motion to strike was made while the case was stayed following the withdrawal of their counsel, is unavailing.  The record demonstrates that following counsel's withdrawal, the court ordered the action be stayed for 30 days and that outgoing counsel serve defendants with notice directing them to retain new counsel within 30 days (see CPLR 321[c]).  Plaintiff's motion to strike the pleadings was made when the order to show cause was served on defendants (CPLR 2211), which was after the stay had elapsed.