ARMSTRONG TRADING LTD v. MBM ENTERPRISES (2006)

In an action, inter alia, to recover damages for breach of contract, the defendants appeal, by permission, as limited by their brief, from so much of an order of the Supreme Court, Kings County (Kramer, J.), dated January 27, 2005, as, sua sponte, (1) vacated an order of the same court dated October 3, 2003, granting their cross motion to vacate a judgment of the same court dated October 19, 2001, entered upon their default in appearing or answering the complaint, (2) denied their renewed motion to vacate the judgment, (3) reinstated the judgment, and (4) denied as academic their motion for summary judgment dismissing the complaint and the plaintiff's cross motion for partial summary judgment.

ORDERED that the order is reversed insofar as appealed from, on the law, with costs, the order dated October 3, 2003, is reinstated, the proposed answer annexed to the defendants' motion papers is deemed timely served, and the matter is remitted to the Supreme Court, Kings County, for consideration of the defendants' motion for summary judgment dismissing the complaint and the plaintiff's motion for partial summary judgment.

 The Supreme Court erred in sua sponte vacating its prior order dated October 3, 2003, granting the defendants' cross motion to vacate a judgment dated October 19, 2001, entered upon their default in appearing or answering the complaint.   A trial court has the discretion to grant a motion to vacate its own order in the interest of justice (see Alliance Prop. Mgt. & Dev. v. Andrews Ave. Equities, 70 N.Y.2d 831, 523 N.Y.S.2d 441, 517 N.E.2d 1327;  56 Marquis v. Mosello, 239 A.D.2d 544, 658 N.Y.S.2d 86).   Here, however, no motion was made and none of the circumstances set forth in CPLR 5015(a) or 5019(a) were applicable (see Matter of McKenna v. County of Nassau, Off. of County Attorney, 61 N.Y.2d 739, 742, 472 N.Y.S.2d 913, 460 N.E.2d 1348;  Shipkoski v. Watch Case Factory Assoc., 292 A.D.2d 589, 741 N.Y.S.2d 57;  Osamwonyi v. Grigorian, 220 A.D.2d 400, 631 N.Y.S.2d 906).   Furthermore, the Supreme Court's stated lack of recollection as to the reasoning behind its determination did not constitute a sufficient reason for vacating its own order in the interest of justice (cf. Woodson v. Mendon Leasing Corp., 100 N.Y.2d 62, 68, 760 N.Y.S.2d 727, 790 N.E.2d 1156;  Block v. Block, 153 A.D.2d 601, 544 N.Y.S.2d 636;  Government Empls. Ins. Co. v. Employers Commercial Union Ins. Co., 62 A.D.2d 123, 404 N.Y.S.2d 652).   Accordingly, we reverse insofar as appealed from and reinstate the order dated October 3, 2003.

 In the order dated October 3, 2003, the Supreme Court acted within its discretion in effectively permitting the defendants to renew their motion to vacate the judgment in order to attach a proposed answer (see New York Hosp. Med. Ctr. of Queens v. Insurance Co. of State of Pa., 16 A.D.3d 391, 791 N.Y.S.2d 145;  Critchfield v. Lolubar Realty Corp., 23 A.D.2d 822, 258 N.Y.S.2d 821;  Fairfield County Trust Co. v. A.M.D.G. Constr. Corp., 16 A.D.2d 653, 226 N.Y.S.2d 521).   The Supreme Court then correctly granted the renewed motion, after previously finding, in its order dated January 30, 2002, a reasonable excuse for the default and a meritorious defense to the action (see CPLR 5015[a][1];  Eugene Di Lorenzo, Inc. v. Dutton Lbr. Co., 67 N.Y.2d 138, 141, 501 N.Y.S.2d 8, 492 N.E.2d 116;  Weekes v. Karayianakis, 304 A.D.2d 561, 758 N.Y.S.2d 117).   A good faith belief in settlement, supported by substantial evidence, constitutes a reasonable excuse for default (see Scarlett v. McCarthy, 2 A.D.3d 623, 768 N.Y.S.2d 342;  Lehrman v. Lake Katonah Club, 295 A.D.2d 322, 744 N.Y.S.2d 338;  Schutzer v. Suss-Kolyer, 57 A.D.2d 613, 393 N.Y.S.2d 776).   Contrary to the contentions of the plaintiff, Armstrong Trading, Ltd. (hereinafter Armstrong), the decision of the Judicial Hearing Officer, dated May 21, 2003, which found that there was no enforceable settlement between the parties, did not include a finding as to the defendants' good faith belief that the matter was settled, or whether this was a reasonable excuse for default.

The Supreme Court did not consider the defendants' motion for summary judgment dismissing the complaint or Armstrong's cross motion for partial summary judgment, since its reinstatement of the default judgment rendered the motion and cross motion academic.   In light of our determination, the Supreme Court must consider the motion and cross motion upon remittal.

Armstrong's remaining contentions are without merit.