Aponte v. Raychuk

• Court: New York Supreme Court — Appellate Division
• Writing for the Court: Before ROSENBERGER
• Citation: Aponte v. Raychuk, 568 N.Y.S.2d 735, 172 A.D.2d 280 (N.Y. App. Div. 1991)
• Decision Date: 16 April 1991
• Parties: Angelo J. APONTE, as Commissioner of the Department of Consumer Affairs of the City of New York and the City of New York, Plaintiffs-Respondents, v. Leo RAYCHUK, Defendant-Appellant.

Page 735

568 N.Y.S.2d 735

172 A.D.2d 280

Angelo J. APONTE, as Commissioner of the Department of Consumer Affairs of the City of New York and the City of New York, Plaintiffs-Respondents, v. Leo RAYCHUK, Defendant-Appellant.

Supreme Court, Appellate Division First Department.

April 16, 1991.

Before ROSENBERGER, J.P., and WALLACH, ASCH, KASSAL and SMITH, JJ.

MEMORANDUM DECISION.

Order, Supreme Court, New York County (Karla Moskowitz, J.), entered October 31, 1989, which denied defendant-appellant's motion to vacate a default judgment entered March 21, 1989; and judgment of said court, entered March 13, 1990, which, following a hearing, imposed penalties against defendant-appellant in the amount of $206,600 and awarded investigatory costs in the amount of $275 to plaintiffs-respondents, unanimously affirmed, without costs.

In January 1987, defendant-appellant, an attorney, began advertising his services in two newspapers, The New York Post and El Diario, as follows:

Divorce

Low Fee

Possible 10 Days

Green Card

L. Raychuk, Atty. at Law

250 W. 57th St., Rm. 1417, N.Y.C.

212-581-6800

By Notice of Violation dated March 5, 1987, the Department of Consumer Affairs charged that defendant was in violation of the New York City Consumer Protection Law (Administrative Code Section 20-701), in that his advertisements "contained false and misleading written statements, which have the capacity, tendency or effect of deceiving or misleading consumers ...". Despite the issuance of this notice by the City's watchdog consumer agency, defendant continued to run the ads.

When subpoenaed by Consumer Affairs on December 2, 1987, to provide copies of all ads placed after March 3, 1987, defendant answered by letter dated January 12, 1988, which established that the offending ads had appeared in two newspapers, four days per week, from January 1, 1987 through January 8, 1988, except for a few specified holidays. Defendant continued to run the ads until Consumer Affairs commenced litigation and obtained a temporary restraining order on March 25, 1988.

On April 4, 1988, the IAS part heard argument on plaintiffs' motion for a preliminary injunction, and granted relief to the extent of enjoining defendant from using the words "Possible 10 Days" unless the advertisements were revised so as to include "all material restrictions, limitations and exceptions to his being able to procure a divorce in such a period of time". ¹

Thereafter, plaintiffs served an amended complaint, dated August 1, 1988 and, upon defendant's failure to file an amended answer, moved for, and were granted, a default judgment. Defendant now appeals from an order denying his motion to vacate the default judgment and from a judgment which assessed penalties and costs totalling $206,875 against him, following a hearing at which he declined to introduce evidence, make a closing statement, or otherwise offer rebuttal. We affirm.

It is well-established that a party seeking vacatur of a default judgment must demonstrate both a reasonable excuse for his default and a meritorious defense to the action. Eugene Di Lorenzo, Inc. v. A.C. Dutton Lumber Co., Inc., 67 N.Y.2d 138, 141, 501 N.Y.S.2d 8, 492 N.E.2d 116; Tandy Computer Leasing v. Video X Home Library, 124 A.D.2d 530, 531, 508 N.Y.S.2d 190. In the case at bar, defendant argued that a timely amended answer was not filed due to law office failure. Specifically, defendant stated that the amended complaint had inadvertently been filed before it could be diaried for service of an amended answer.

Pursuant to CPLR § 2005, a court is not precluded as a matter of law "from exercising its discretion in the interests of justice to excuse delay or default resulting from law office failure." This section was enacted in 1983 to overcome the restrictions arising from Barasch v. Micucci, 49 N.Y.2d 594, 599, 427 N.Y.S.2d 732, 404 N.E.2d 1275 and Eaton v. Equitable Life Assurance Society of the U.S., 56 N.Y.2d 900, 453 N.Y.S.2d 404, 438 N.E.2d 1119, which held that a court was without such discretion. The statute's salutary purpose does not, however, "guarantee that a default will be excused in all cases". Grosso v. Hauck, 99 A.D.2d 750, 471 N.Y.S.2d 662. Rather, the determination is one which is left to the sound discretion of the trial court.

The within defendant argues that "the lower court erred, as a matter of law, in concluding that it lacked the power to vacate the default judgment". However, we discern no such error in this record. Indeed, prior to granting plaintiffs' motion, the IAS part observed that there was no absolute rule entitling plaintiffs to a default judgment for law office failure, and that such a determination was to be based upon the weighing of various factors, among them the particular excuse for the failure. County of Nassau v. Cedric Construction Corp., 100 A.D.2d 890, 891-92, 474 N.Y.S.2d 549; La Buda v. Brookhaven Memorial Hospital, 98 A.D.2d 711, 469 N.Y.S.2d 112, aff'd, 62 N.Y.2d 1014, 479 N.Y.S.2d 493, 468 N.E.2d 675. In applying these standards, the IAS part concluded that the failure to properly diary was an inadequate excuse, see Verre v. Rosas, 47 N.Y.2d 795, 796, 417 N.Y.S.2d 929, 391 N.E.2d 1010, and, additionally, that defendant had failed to demonstrate a meritorious defense to the action. Our examination of this record leads us to agree.

Defendant continued to run the offending ad despite the notice of violation by the Department of Consumer Affairs, and despite the ambiguity inherent on the face of the ad. As previously determined by this Court, defendant's claim that his advertising was exclusively regulated under the Judiciary Law--which presumably served as the basis for his ignoring of the violation and his repeated failure to respond and/or defend ²--was without merit. Defendant took this risk when he remained undeterred from running the advertisement.

Finally, having chosen to take no action to defend himself at the hearing on damages and to accept, without objection or rebuttal, all of the evidence and arguments submitted by the Department of Consumer Affairs regarding penalties, defendant may not now be heard to claim that the penalties ultimately imposed were excessive. We note, indeed, that the penalties imposed were the minimum which could be meted out for the uncontested violations which defendant committed. See Administrative Code Section 20-703.

ATTACHMENT A

3/5/87 Consumer Affairs notified defendant that his ad violated Consumer Protection Law (Administrative Code of City of New York) § 20-700 through its "false and misleading written statements, which have the capacity, tendency or effect of deceiving or misleading consumers in that you state a divorce can be obtained in possibly ten (10) days."

[Defendant continued to place the ads.]

12/2/87 Consumer Affairs issued a subpoena seeking copies of all ads offering defendant's legal services appearing in New York City newspapers after March 3, 1987.

1/12/88 Defendant responded to the subpoena by letter providing the dates and the names of the two newspapers. His letter established that the ads were placed four days per week in two newspapers from January 1, 1978 through January 8, 1988 (right up to the time of the letter), with the exception of certain holidays.

2/18/88 Consumer Affairs informed defendant that he was found to have engaged in repeated, multiple, and persistent violations of ...