38 Holding Corp. v. City of New York

• Decision Date: 16 January 1992
• Citation: 578 N.Y.S.2d 174,179 A.D.2d 486
• Parties: 38 HOLDING CORP., Plaintiff-Respondent, v. The CITY OF NEW YORK, Defendant-Appellant.
• Court: New York Supreme Court — Appellate Division

Page 174

578 N.Y.S.2d 174

179 A.D.2d 486

38 HOLDING CORP., Plaintiff-Respondent, v. The CITY OF NEW YORK, Defendant-Appellant.

Supreme Court, Appellate Division First Department.

Jan. 16, 1992.

Before ROSENBERGER, J.P., and WALLACH, ROSS and SMITH, JJ.

MEMORANDUM DECISION.

Order, Supreme Court, Bronx County (Lewis R. Friedman, J.), entered March 1, 1991, which denied defendant's motion to vacate a default judgment, is unanimously affirmed, without costs.

Order, same Court and Justice, entered July 18, 1991, which denied defendant's motion to renew and upon renewal, to vacate the default judgment, is unanimously reversed, on the law, the facts, and in the exercise of discretion, the motion for renewal is granted, and upon renewal, the default judgment is vacated, and the defendant is granted leave to interpose an answer within ten days of the date of entry of this order, without costs.

Pursuant to a written lease, in 1985, the 38 Holding Corp. (landlord), as landlord, leased to the City of New York (City), as tenant, the third and fourth floors of a commercial building (premises), located in 519-531 Cortlandt Avenue, Bronx County.

In December 1989, by summons and complaint, the landlord (plaintiff) commenced an action against the City (defendant) to recover rent for use and occupancy of those premises, and for the costs to repair them. The complaint alleges, in substance, that, although the lease terminated on March 31, 1989, the defendant improperly held over, failed to pay use and occupancy in the amount of $59,852.00 for the period March 31, 1989 through August 31, 1989, and owes landlord $12,000.00 for the cost of removing debris from those premises.

Since the defendant failed to interpose an answer, plaintiff moved, in February 1990, for a default judgment. After that motion had been adjourned seven times, a default judgment was entered, December 5, 1990, in favor of plaintiff and against defendant in the amount of $59,852.00.

Thereafter, by order, entered March 1, 1991, the IAS Court denied defendant's motion to vacate the default, and also, by order, entered July 18, 1991, that Court denied defendant's motion to renew. Defendant appeals from both orders.

An application to vacate an order of default may be granted, if the movant can establish that his or her default was excusable and that he or she has a meritorious defense to the action (see, Barasch v. Micucci, 49 N.Y.2d 594, 599, 427 N.Y.S.2d 732, 404 N.E.2d 1275 (1980), and CPLR Rule 5015, subdivision (a)). A determination of what constitutes a reasonable excuse for a default lies within the sound discretion of the court (Perellie v. Crimson's Restaurant, Ltd., 108 A.D.2d 903, 904, 485 N.Y.S.2d 789 (1985)). Repeatedly, it has been held that "[i]t is the general policy of the courts to permit actions to be determined by a trial on the merits wherever possible and for that purpose a liberal policy is adopted with respect to opening default judgments in furtherance of justice to the end that the parties may have their day in court to litigate the issues ..." (Matter of Raichle, Moore, Banning & Weiss v. Commonwealth Fin. Corp., 14 A.D.2d 830, 831, 220 N.Y.S.2d 619 (1961); Cappel v. RKO Stanley Warner Theaters, 61 A.D.2d 936, 937, 403 N.Y.S.2d 31 (1st Dept.1978); Aces Mechanical Corp. v. Cohen Bros. Realty & Constr. Corp., 99 A.D.2d 455, 456, 471 N.Y.S.2d 283 (1st Dept.1984); and Scott v. Allstate Ins. Co., 124 A.D.2d 481, 484, 507 N.Y.S.2d 629 (1st Dept.1986)).

Our examination of the record indicates that the principal reason for defendant's delay in submitting an answer was the terminal illness of the father of the Assistant Corporation Counsel handling the matter, and the reliance of that counsel upon the...