Abbott v. Crown Mill Restoration Dev., LLC

• Decision Date: 27 September 2013
• Citation: 109 A.D.3d 1097,972 N.Y.S.2d 117,2013 N.Y. Slip Op. 06116
• Parties: Jonathan ABBOTT, Plaintiff–Respondent, v. CROWN MILL RESTORATION DEVELOPMENT, LLC, Defendant–Appellant. (Appeal No. 3.)
• Court: New York Supreme Court — Appellate Division

109 A.D.3d 1097
972 N.Y.S.2d 117
2013 N.Y. Slip Op. 06116

Jonathan ABBOTT, Plaintiff–Respondent,
v.
CROWN MILL RESTORATION DEVELOPMENT, LLC, Defendant–Appellant. (Appeal No. 3.)

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

Sept. 27, 2013.

[972 N.Y.S.2d 119]

Cerio Law Offices, Syracuse (David W. Herkala of Counsel), for Defendant–Appellant.

Kenny & Kenny, PLLC, Syracuse (Justin D. Howland of Counsel), for Plaintiff–Respondent.

PRESENT: SCUDDER, P.J., SMITH, FAHEY, AND PERADOTTO, JJ.

MEMORANDUM:

[109 A.D.3d 1098]The plaintiff in appeal Nos. 1 through 3 commenced a Labor Law and common-law negligence action (underlying action) against Crown Mill Restoration Development, LLC (Crown Mill), a defendant in appeal Nos. 1 and 2 and the defendant in appeal No. 3, seeking damages for injuries he allegedly sustained when he fell from a ladder while working on premises owned by Crown Mill. After Crown Mill failed to appear at a damages inquest, Supreme Court entered a default judgment against Crown Mill. Plaintiff thereafter commenced an action seeking to enforce the judgment against the defendants in appeal Nos. 1 and 2 (hereafter, defendants), including Crown Mill's owner, Vito William Lucchetti, Jr., and various other entities owned by Lucchetti, based upon a theory of piercing the corporate veil (enforcement action). Defendants moved to dismiss the amended complaint in the enforcement action for failure to state a cause of action, contending that the exclusivity provisions of the Workers' Compensation Law precluded recovery against them, and they sought to stay discovery pending the determination of the motion. Crown Mill thereafter moved to vacate the default judgment in the underlying action, contending, inter alia, that it had a reasonable excuse for its default, i.e., law office failure, and several meritorious defenses, including that the Workers' Compensation Law barred recovery against it. In appeal No. 1, defendants appeal from an order that, inter alia, denied their motion to dismiss the amended complaint in the enforcement action except as to defendant Marcellus Group, LLC and, in appeal No. 2, they appeal from an order denying their motion for a stay of discovery and for a protective order in the same action. In appeal No. 3, Crown Mill appeals from an order that, inter alia, denied its motion to vacate the default judgment and to dismiss the amended complaint in the underlying action.

Addressing first appeal No. 3, we conclude that the court properly denied Crown Mill's motion insofar as it sought to vacate the default judgment pursuant to CPLR 5015(a)(1)[109 A.D.3d 1099]because Crown Mill failed to establish a reasonable excuse for its default ( see generally Matter of County of Livingston [Mort], 101 A.D.3d 1755, 1755, 957 N.Y.S.2d 794,lv. denied20 N.Y.3d 862, 2013 WL 1235498;Fremming v. Niedzialowski, 93 A.D.3d 1336, 1336, 940 N.Y.S.2d 764). Although “[t]he determination whether an excuse is reasonable lies within the sound discretion of the motion court” ( Lauer v. City of Buffalo, 53 A.D.3d 213, 217, 862 N.Y.S.2d 675;see Diaz v. Diaz, 71 A.D.3d 947, 948, 896 N.Y.S.2d 891) and the court may under appropriate circumstances accept law office failure as a reasonable excuse for a

[972 N.Y.S.2d 120]

default ( see Lauer, 53 A.D.3d at 217, 862 N.Y.S.2d 675;Montefiore Med. Ctr. v. Hartford Acc. & Indem. Co., 37 A.D.3d 673, 673–674, 830 N.Y.S.2d 336;Hageman v. Home Depot U.S.A., Inc., 25 A.D.3d 760, 761, 808 N.Y.S.2d 763), a pattern of willful default or neglect should not be excused as law office failure ( see Santiago v. New York City Health & Hosp. Corp., 10 A.D.3d 393, 394, 780 N.Y.S.2d 764;Shouse v. Lyons, 265 A.D.2d 901, 902, 695 N.Y.S.2d 821;see also Edwards v. Feliz, 28 A.D.3d 512, 513, 813 N.Y.S.2d 494). Further, a party's failure to retain counsel when provided sufficient time in which to do so does not constitute a reasonable excuse for a default ( see Diaz, 71 A.D.3d at 948, 896 N.Y.S.2d 891;City of New York v. Simmonds, 172 A.D.2d 1081, 1081, 569 N.Y.S.2d 258;Mauro v. Mauro, 148 A.D.2d 684, 685, 539 N.Y.S.2d 432).

Here, the damages inquest was initially scheduled for March 2008, and then adjourned to July 2008. On the day before the scheduled inquest, Crown Mill filed a chapter 7 bankruptcy petition, thus automatically staying the underlying action. Plaintiff, the court, and Crown Mill's own attorneys, who did not represent Crown Mill with respect to the bankruptcy and were named as creditors, were not advised of the petition until the morning of the inquest. After the bankruptcy petition was dismissed in December 2008 based on Crown Mill's failure to cooperate with the bankruptcy trustee, Crown Mill's attorneys sought permission to withdraw as counsel based upon a conflict of interest, i.e., Crown Mill's failure to pay for legal services rendered. The court granted the motion on Crown Mill's default, providing in its order that Crown Mill had 30 days from the date of service of the order with notice of entry within which to obtain new counsel...