HAND BALDACHIN AMBURGEY LLP v. JOHN BARRETT INC LLC (2022)

The following e-filed documents, listed by NYSCEF document number (Motion 004) 82, 83, 84, 85, 86, 87, 88, 89, 90, 91, 92, 93 were read on this motion to/for JUDGMENT - DEFAULT.

In this action for breach of contract, plaintiff Hand Baldachin & Associates, LLP moves, pursuant to CPLR 3215, for entry of a default judgment against defendant Barrett Holdings.

BACKGROUND

Barrett Holdings retained law firm Hand Baldachin & Associates, LLP (“HBA”) to perform legal services, pursuant to an engagement agreement dated February 25, 2015 (the “engagement agreement”), which was signed by both parties. Thereafter, HBA performed certain corporate and litigation services on behalf of Barrett Holdings and its affiliated entity, John Barrett, Inc.¹ HBA performed limited corporate law services in connection with a deal between Barrett Holdings and Saks & Company LLC to open John Barrett salons in Saks Fifth Avenue department stores. HBA also represented John Barrett, Inc., in connection with a lawsuit entitled Red Door Salons, Inc. v. Georges Reus, et al., Index No. 653439/2015 (Sup Ct., New York County 2015).

Thereafter, HBA issued 12 invoices to Barrett Holdings, between April 10, 2015 and April 6, 2016, for legal services rendered and expenses incurred during HBA's representation. As of the last invoice dated April 6, 2016, Barrett Holdings owed HBA $9,246.88 for corporate work and $186,393.50 for litigation work, for a total of $195,640.38. These amounts remain outstanding.

Plaintiff commenced this action against defendant by filling a summons and complaint on November 22, 2016, asserting three causes of action: breach of contract, unjust enrichment quantum meruit and an account stated (NYSCEF Doc. No. 1, complaint, 7). On December 19, 2016, Defendants filed an answer with counterclaims, for legal malpractice, breach of fiduciary duty, and unjust enrichment.

On March 16, 2021, Barrett Holdings’ counsel moved by order to show cause to be relieved as counsel due to non-payment of legal fees and Barrett Holdings’ instruction that counsel take no further action on its behalf (NYSCEF Doc. No. 71). By decision and order dated April 14, 2021, the court granted counsel's application and advised Barrett Holdings that its failure to appear by an attorney on the next scheduled court date may result in the granting of relief against it on default (NYSCEF Doc. No. 75).

Thereafter, the court scheduled a virtual conference for July 1, 2021 at 3:00 pm. When Barrett Holdings did not appear by counsel, this court's principal law clerk authorized plaintiff to move for a default judgment against Barrett Holdings. Since then, plaintiff has served on defendant multiple demands and notices. On July 2, 2021, plaintiff served a CPLR Rule 3216 demand to resume prosecution of counterclaims by certified mail upon Barrett Holdings at 10 West 56th Street, Apt. 10F, New York, New York 10019 (NYSCEF Doc. No. 77). After the notice was returned as undeliverable, on July 20, 2021, plaintiff served an additional copy of the CPLR Rule 3216 demand by certified mail upon Barrett Holdings at 36 East 57th Street, Mezzanine, New York, New York 10022, which is the address that is listed on John Barrett's salon website. The CPLR Rule 3216 demand was delivered (NYSCEF Doc. No. 86).

On September 13, 2021, plaintiff served an additional copy of the CPLR Rule 3216 demand by certified mail upon Barrett Holdings via its registered agent, CT Corporation System, 28 Liberty Street, New York, New York 10005 (NYSCEF Doc. No. 79). That demand was forwarded and delivered to a post office in Columbus, Ohio on September 20, 2021 (NYSCEF Doc. No. 88). Finally, on January 5, 2022, plaintiff served an additional copy of the summons and a notice that service was made pursuant to CPLR § 311-a upon Barrett Holdings via first class mail at its last known address, which is currently listed on the John Barrett Salon website (NYSCEF Doc. No. 81). On January 10, 2022, plaintiff moved for a default judgement. To date, plaintiff has not received any response from Barrett Holdings.

DISCUSSION

On an application for a default judgment, pursuant to CPLR 3215, the plaintiff must submit “proof of service of the summons and the complaint[,] ․ proof of the facts constituting the claim, [and] the default” (CPLR 3215[f]). Upon default, “a defendant admits all traversable allegations contained in the complaint, and thus concedes liability, although not damages” (HF Mgt. Servs. LLC v Dependable Care, LLC, 198 AD3d 457, 458 [1st Dept 2021] [internal quotation marks and citation omitted]; Petty v Law Off. of Robert P. Santoriella, P.C., 200 AD3d 621, 621 [1st Dept 2021] [while plaintiff must submit proof of prima facie viability of its claims, “the standard of proof is minimal”] [internal quotation marks and citation omitted]). Plaintiff has met this burden.

First, plaintiff has demonstrated that defendant's time to appear has expired. Additionally, HBA has submitted proof of service of the summons and complaint (NYSCEF Doc. No. 2), proof of the facts constituting the claim (see affirmation of Douglas Hand dated January 7, 2022 [“Hand Aff.”], 2-4), the default (see Fox Aff., 11), and the amounts due (see Hand Aff., 4). Plaintiff has also demonstrated its compliance with CPLR 3215(g)(4)(i). Plaintiff served defendant with additional notice of the summons and complaint by mail addressed to defendant at its last known address of 36 East 57th Street, Mezzanine, New York, New York 10022 (NYSCEF Doc. No. 81).

As to the merits, HBA has established a valid cause of action against Barrett Holdings. The elements of a cause of action for breach of contract are: “(1) the existence of a contract, (2) the plaintiff's performance, (3) the defendant's breach, and (4) resulting damages.” (Alloy Advisory, LLC v. 503 W. 33rd St. Assoc., Inc., 195 AD3d 436, 436 [1st Dept 2021]). In support of this motion, Douglas Hand of HBA submitted the contract between HBA and Barrett Holdings, as well as an affidavit stating that HBA performed the legal services; incurred the expenses reflected on 12 invoices sent to Barrett Holdings; and that a balance of $195,640.38 remains outstanding. Having proven the elements of its breach of contract claim and satisfied the procedural requirements of CPLR § 3215, HBA is entitled to a default judgment in the amount of $195,640.38, plus statutory interest from Barrett Holdings.

In addition to granting a default judgment in favor of HBA, the court is also dismissing Barrett Holdings’ counterclaims against HBA asserted in the amended answer. CPLR Rule 3216(a) states, in relevant part: “Where a party unreasonably neglects to proceed generally in an action the court, on its own initiative or upon motion, with notice to the parties, may dismiss the party's pleading on terms.” CPLR Rule 3216 may be used to dismiss counterclaims (see Burke, Albright, Harter & Rzepka LLP v. Sills, 187 AD.3d 1507, 1508 [4th Dep't 2020]; Express Shipping, Ltd. v. Gold, 63 AD3d 669, 671 [2d Dep't 2009]).

The conditions precedent to dismissal are: issue must have been joined [CPLR 3216(b)(1)]; one year has passed since the joinder of issue or six months have passed since the issuance of the preliminary conference order, whichever is later [CPLR 3216(b)(2)]; and the movant must serve a 90-day notice by registered or certified mail demanding the resumption of prosecution and stating that failure to do so will serve as the basis for a motion to dismiss [CPLR 3216(b)(3)].

Here, all three conditions have been satisfied. Issue was joined on December 19, 2016, when defendants filed an answer with counterclaims (NYSCEF, Doc. No. 3). It has been more than six months since the court issued the preliminary conference order on June 19, 2019 (NYSCEF, Doc. No. 26). It has been more than 90 days since HBA served a notice upon Barrett Holdings, via its registered agent, to resume prosecution of its counterclaims (NYSCEF, Doc. No. 79). In that notice, HBA explicitly stated that defendant's default in complying with the demand within 90-day period will serve as a basis for a motion by plaintiff to dismiss said counterclaims for unreasonably neglecting to proceed (id.) To date, Barrett Holdings has failed to appear by counsel as previously ordered by the Court on April 16, 2021. (NYSCEF, Doc. No. 75). Therefore, dismissing counterclaims is proper under CPLR Rule 3216(a). However, the dismissal of the counterclaims is not on the merits.

Accordingly, it is

ORDERED that the motion brought by plaintiff Hand Baldachin & Associates, LLP for a default judgment against defendant Barrett Holdings is granted without opposition; and it is further

ORDERED that Barrett Holdings’ counterclaims are dismissed pursuant to CPLR Rule 3216(a); and it is further

ORDERED that the Clerk is directed to enter judgment in favor of plaintiff Hand Baldachin & Associates, LLP in the principal sum of $195,640.38, together with interest at the statutory rate from the date of entry of this judgment and thereafter, together with costs and disbursements as taxed by the Clerk upon the submission of an appropriate bill of costs.

FOOTNOTES

1.   This action is stayed as to John Barrett, Inc., pursuant to a notice of bankruptcy filed on June 12, 2020. (NYSCEF Doc. No. 47)

Robert R. Reed, J.