GOOD GATEWAY LLC v. THAKKAR (2019)

Judgment, Supreme Court, New York County (Paul A. Goetz, J.), entered April 17, 2019, awarding plaintiffs a sum of money against defendant, unanimously affirmed, with costs.  Appeals from orders, Supreme Court, New York County (Paul A. Goetz, J.;  Philip S. Straniere, J.H.O.), entered February 7, 2019, on or about March 26, 2019, on or about April 8, 2019, on or about April 16, 2019, and April 30, 2019, unanimously dismissed, without costs, as subsumed in the appeal from the judgment.

Defendant waived his defense of lack of personal jurisdiction by failing to raise it until after he had filed a notice of appearance, attended numerous court conferences, consented to a “hear and determine” damages inquest, and cross-examined a witness at the inquest, following the grant of plaintiffs' motion for a default judgment against him (see CIBC Mellon Trust Co. v. Mora Hotel Corp., 100 N.Y.2d 215, 225–226, 762 N.Y.S.2d 5, 792 N.E.2d 155 [2003], cert denied 540 U.S. 948, 124 S.Ct. 399, 157 L.Ed.2d 279 [2003];  Urena v. NYNEX, Inc., 223 A.D.2d 442, 443, 637 N.Y.S.2d 49 [1st Dept. 1996];  see also Matter of Fry v. Village of Tarrytown, 89 N.Y.2d 714, 720 n. 2, 658 N.Y.S.2d 205, 680 N.E.2d 578 [1997] [“service of process can be waived by respondent simply by appearing in the proceeding and submitting to the court's jurisdiction”] ).

In moving to vacate his default, defendant failed to demonstrate a meritorious defense.  As this Court determined on an appeal from the order that decided plaintiffs' motion for a default judgment, under the circumstances in which defendant's father executed a document forgiving a debt of $2,720,849.63 owed him by defendant, the debt forgiveness was a conveyance made with actual intent to hinder or delay creditors, including plaintiffs, who obtained final judgments in the amount of $14.5 million against him in a Florida lawsuit (Good Gateway, LLC v. Thakkar, 163 A.D.3d 449, 81 N.Y.S.3d 38 [1st Dept. 2018] ).  We set aside the loan forgiveness document and remanded for a hearing on the appropriate remedy.

Defendant's assertion that his father was solvent at the time of the transfer fails to establish a meritorious defense.  As a preliminary matter, solvency is merely one badge of fraud to be considered;  on the prior appeal, this Court found numerous badges of fraud in the documentary evidence (Thakkar, 163 A.D.3d at 449, 81 N.Y.S.3d 38, citing General Elec. Co. v. Chuly Intl., LLC, 118 So. 3d 325, 328 [Fla. Dist. Ct. App. 2013];  Fla Stat § 726.105).

Moreover, in support, defendant offered only a conclusory affidavit by his father asserting that he was worth $142 million as of December 2012, the time of the debt forgiveness, and attaching personal financial statements.  This evidence is questionable on its face.  It does not show who prepared the personal financial statements.  However, even assuming their accuracy, the statements show that the majority of the $142 million consisted of real estate assets owned by corporations in which there is no evidence that defendant's father had any ownership interest.  The statements also show that $24 million in liabilities disappeared from March 2012 to December 2012 and that defendant's father holds securities valued at more than $30 million.  However, no explanation is provided for the disappearance of the liabilities, and no list of the securities defendant's father purports to hold is attached.

We have considered defendant's other arguments and find them unavailing.