794 LEXINGTON REALTY LLC v. 794 LEXINGTON INC NYC (2022)

In this action, plaintiff-landlord, 794 Lexington Realty LLC, sought to recoup rent payments and damages from defendant-corporate tenant, 794 Lexington Inc., defendant-transferee, New York City Language, Inc., and defendant-owner of corporate tenant, Kevin Matuszak. Plaintiff's complaint alleged breach-of-contract, fraudulent-conveyance, successor-liability, and unjust-enrichment claims against all defendants. Plaintiff premised Matuszak's personal liability on an alter-ego/veil-piercing theory based on his alleged fraudulent and wrongful acts perpetrated on plaintiff.

After defendants did not respond timely to plaintiff's complaint, plaintiff moved for default judgment under CPLR 3215 against Matuszak and New York City Language. In then opposing the default-judgment motion, defendants argued that plaintiff had failed to serve Matuszak properly. This court rejected that argument and granted plaintiff's motion on April 7, 2022. (NYSCEF No. 34.)

Defendants now move under CPLR 2221 for leave to renew this court's prior order and seek vacatur under CPLR 5015 (a) (4) of the default judgment. Plaintiff cross-moves for an order fixing the amount of damages due under the default judgment and for several forms of post-judgment relief. Defendants’ motion is granted as to Matuszak and otherwise denied; plaintiff's cross-motion is denied without prejudice.

CPLR 2221 (e) requires that a motion for leave to renew “be identified specifically as such,” rely on “new facts not offered on the prior motion that would change the prior determination,” and “contain reasonable justification for the failure to present such facts on the prior motion.”

Here, defendants has presented new facts sufficient to warrant renewal as to Matuszak. To support their argument that Matuszak moved to Florida prior to service on his former New York address, defendants offer copies of a warranty deed (NYSCEF No. 45), an application for utility services (id.), and an insurance bill (id.), all listing a Florida address for Matuszak at the time of service. Defendants have also presented a reasonable justification for not presenting this evidence on their earlier motion—namely, that their prior counsel had not asked Matuszak to provide these documents in support of defendants’ challenge to service on that motion. (See NYSCEF No. 73 at 7-9; NYSCEF No. 76.)

Plaintiff does not provide any contrary reason on this motion to believe that Matuszak was living in New York at the time of service. Instead, plaintiff emphasizes that granting leave to renew generally entails submission of newly presented facts that were unknown to the movant at the time of the original motion—which is not the case here.¹ (See William P. Pahl Equip. Corp. v Kassis, 182 AD2d 22, 27 [1st Dept 1992].) A court may, however, “grant renewal, in the interest of justice, upon facts which were known to the movant where the movant offers a reasonable justification for failing to submit them on the earlier motion.” (Heaven v McGowan, 40 AD3d 583, 586 [2d Dept 2007]; accord Mejia v Nanni, 307 AD2d 870, 871 [1st Dept 2003] [same].)

Given defendants’ persuasive showing that Matuszak was no longer living in New York at the time of service—and therefore that this court lacks personal jurisdiction over him due to invalid service—this court concludes that the interests of justice warrant considering the new facts that defendants offer on this motion. Absent personal jurisdiction, this court must not only vacate the default judgment against Matuszak, but also dismiss the action as against him. And in light of the dismissal of the action as against Matuszak, it is premature to consider plaintiff's cross-motion for post-judgment relief against defendants. The cross-motion is therefore denied without prejudice.

Accordingly, it is

ORDERED that defendants’ motion for leave to renew is granted as to defendant Matuszak, and otherwise denied; and it is further

ORDERED that on renewal, the court's grant of default judgment against defendant Matuszak in this court's order entered April 8, 2022, is vacated; and it is further

ORDERED that this action is dismissed as against defendant Matuszak for lack of personal jurisdiction due to improper service; and it is further

ORDERED that plaintiff's cross-motion is denied without prejudice; and it is further

ORDERED that Matuszak serve a copy of this order with notice of its entry on all parties and on the office of the County Clerk, which shall update its records accordingly.

FOOTNOTES

1.   Plaintiff also rejected defendants’ cross-opposition papers as untimely. But that delay was minimal: Defendant filed its opposition papers only two days after the seven-day advance deadline set by plaintiff's cross-motion. Plaintiff does not argue it suffered prejudice from this brief delay. This court exercises its discretion under CPLR 2001 to disregard the untimeliness of defendant's opposition papers.

Gerald Lebovits, J.