STAR INDUSTRIES INC v. INNOVATIVE BEVERAGES INC

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Supreme Court, Appellate Division, Second Department, New York.

STAR INDUSTRIES, INC., respondent, v. INNOVATIVE BEVERAGES, INC., d/b/a Gecko Tequila Company, et al., appellants.

Decided: October 28, 2008

REINALDO E. RIVERA, J.P., ROBERT A. LIFSON, HOWARD MILLER, and RANDALL T. ENG, JJ. John P. Bostany, New York, N.Y., for appellants. Steinberg, Fineo, Berger & Fischoff, P.C., Woodbury, N.Y. (Laurie Sayevich Horz of counsel), for respondent.

In an action, inter alia, to recover damages for breach of contract, the defendants appeal (1), as limited by their brief, from so much of an order of the Supreme Court, Nassau County (Austin, J.), dated April 23, 2007, as denied that branch of their motion which was to vacate so much of a judgment of the same court entered June 22, 2005, upon their default in appearing at two scheduled conferences and answering the amended verified complaint, as was in favor of the plaintiff and against them in the principal sum of $602,540.61, (2) from an order of the same court dated July 24, 2007, which denied their motion for leave to renew and reargue their prior motion to vacate the judgment entered June 22, 2005, and (3) from an amended judgment of the same court dated November 1, 2007, which is in favor of the plaintiff and against them in the principal sum of $578,313.74.

ORDERED that the appeals from the orders are dismissed;  and it is further,

ORDERED that the amended judgment is affirmed;  and it is further,

ORDERED that one bill of costs is awarded to the respondent.

The appeals from the intermediate order dated April 23, 2007, and so much of the intermediate order dated July 24, 2007, as denied that branch of the defendants' motion which was for leave to renew their motion to vacate the judgment entered June 22, 2005, must be dismissed because the right of direct appeal therefrom terminated with the entry of the amended judgment in the action (see Matter of Aho, 39 N.Y.2d 241, 248, 383 N.Y.S.2d 285, 347 N.E.2d 647).   The issues raised on these appeals from the orders are brought up for review and have been considered on the appeal from the amended judgment (see CPLR 5501[a][1] ).   The appeal from so much of the intermediate order dated July 24, 2007, as denied that branch of the defendants' motion which was for leave to reargue their motion to vacate the judgment entered June 22, 2005, must be dismissed because no appeal lies from an order denying reargument.

 To prevail on their motion to vacate their default, the defendants were required to demonstrate both a reasonable excuse for the default and the existence of a meritorious defense (see CPLR 5015[a];  Papandrea v. Acevedo, 54 A.D.3d 915, 864 N.Y.S.2d 138;  Vasquez v. New York City Hous. Auth., 51 A.D.3d 781, 859 N.Y.S.2d 195).   The determination of what constitutes a reasonable excuse for a default lies within the sound discretion of the Supreme Court (see Antoine v. Bee, 26 A.D.3d 306, 812 N.Y.S.2d 557;  Matter of Hye-Young Chon v. Country-Wide Ins. Co., 22 A.D.3d 849, 803 N.Y.S.2d 699), and in exercising that discretion, the court may accept law office failure as an excuse (see CPLR 2005;  Papandrea v. Acevedo, 54 A.D.3d 915, 864 N.Y.S.2d 138;  Goldstein v. Meadows Redevelopment Co Owners Corp. I, 46 A.D.3d 509, 511, 846 N.Y.S.2d 384;  Chiarello v. Alessandro, 38 A.D.3d 823, 824, 832 N.Y.S.2d 634).   However, law office failure should not be excused where there is a pattern of willful default and neglect (see Santiago v. New York City Health & Hosps. Corp., 10 A.D.3d 393, 394, 780 N.Y.S.2d 764), or where allegations of law office failure are conclusory and unsubstantiated (see Petersen v. Lysaght, Lysaght & Kramer, P.C., 47 A.D.3d 783, 784, 851 N.Y.S.2d 209;  Wechsler v. First Unum Life Ins. Co., 295 A.D.2d 340, 341, 742 N.Y.S.2d 668).

 Here, the Supreme Court providently exercised its discretion in rejecting the defendants' explanation for their default.   The defendants' proffered excuse of law office failure did not constitute a reasonable excuse for their default (see Petersen v. Lysaght, Lysaght & Kramer, P.C., 47 A.D.3d at 784, 851 N.Y.S.2d 209;  Chiarello v. Alessandro, 38 A.D.3d at 824, 832 N.Y.S.2d 634;  Matter of Hye-Young Chon v. Country-Wide Ins. Co., 22 A.D.3d 849, 803 N.Y.S.2d 699).   In view of the lack of a reasonable excuse, it is unnecessary to consider whether the defendants sufficiently demonstrated the existence of a meritorious defense (see Levi v. Levi, 46 A.D.3d 519, 520, 848 N.Y.S.2d 228;  Mjahdi v. Maguire, 21 A.D.3d 1067, 1068, 802 N.Y.S.2d 700;  Krieger v. Cohan, 18 A.D.3d 823, 824, 796 N.Y.S.2d 633).

The defendants' remaining contentions are without merit.

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