SOFFER v. Mario Novogrodski et al., Defendants. (2021)

Order, Supreme Court, New York County (Nancy M. Bannon, J.), entered on or about January 12, 2021, which denied defendant Danny Montanez's motion to vacate a default judgment, same court and Justice, entered October 7, 2019, in plaintiffs’ favor against defendant in the amount of $192,450, after an inquest, and an order, same court and Justice, entered August 14, 2017, directing entry of a default judgment against defendant following his counsel's failure to appear for mandatory compliance conferences, unanimously affirmed, without costs.

A party seeking to vacate a judgment entered upon default under CPLR 5015(a)(1) must show a reasonable excuse for the default as well as a potentially meritorious defense (see Leader v. Parkside Group, 174 A.D.3d 420, 103 N.Y.S.3d 427 [1st Dept. 2019], lv dismissed 33 N.Y.3d 1111, 106 N.Y.S.3d 703, 130 N.E.3d 1313 [2019]).  Here, we find that defendant provided a reasonable excuse for his failure to appear for compliance conferences scheduled in the action, which led to his answer being stricken, based on the neglect of his attorney, who was suspended and then disbarred from the practice of law during the pendency of the proceedings based in part on complaints concerning counsel's neglect of matters and failure to communicate with other clients (see Perez v. Table Run Estates, Inc., 191 A.D.3d 416, 137 N.Y.S.3d 683 [1st Dept. 2021]).  Although defendant's defaults were more than isolated incidents, it cannot be said based on this record, that they constituted a pattern of willful default and neglect, and there was no claim of prejudice (see Bobet v. Rockefeller Ctr., N., Inc., 78 A.D.3d 475, 475, 911 N.Y.S.2d 43 [1st Dept. 2010];  Hageman v. Home Depot U.S.A., Inc., 25 A.D.3d 760, 761, 808 N.Y.S.2d 763 [2d Dept. 2006]).

However, Supreme Court properly denied defendant's motion to vacate because he failed to set forth a meritorious defense to the action.  Defendant's affidavit of merit does not dispute the complaint's allegations that he and codefendants misappropriated the funds plaintiffs gave them pursuant to their agreement, and his assertion that he never engaged in the day-to-day operations or handled any finances of the business is insufficient to show a defense to the claims being asserted (see Ap X–Power Media, Inc. v. Ocean Bridge, Inc., 83 A.D.3d 612, 612, 922 N.Y.S.2d 326 [1st Dept. 2011]).  That defendant answered the complaint does not demonstrate a meritorious defense, because it was verified by his attorney and not by defendant himself (see 60 E. 9th St. Owners Corp. v. Zihenni, 111 A.D.3d 511, 513, 975 N.Y.S.2d 32 [1st Dept. 2013]).  Furthermore, defendant's claim that the parties’ agreement is unsigned lacks merit because he admitted in his answer that he entered into the agreement.