Bontempts v. Aude Constr. Corp.

• Decision Date: 26 September 2012
• Parties: William BONTEMPTS, et al., respondents, v. AUDE CONSTRUCTION CORP., appellant.
• Court: New York Supreme Court — Appellate Division

98 A.D.3d 1071

951 N.Y.S.2d 561

2012 N.Y. Slip Op. 06274

William BONTEMPTS, et al., respondents,

v.AUDE CONSTRUCTION CORP., appellant.

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

Sept. 26, 2012.

Rabinowitz & Galina, Mineola, N.Y. (Michael R. Galina of counsel), for appellant.

Stein, Wiener & Roth, LLP, Carle Place, N.Y. (Jonathan M. Cohen of counsel), for respondents.

PETER B. SKELOS, J.P., RUTH C. BALKIN, JOHN M. LEVENTHAL, and JEFFREY A. COHEN, JJ.

In an action, inter alia, to foreclose a mortgage, the defendant appeals from an order of the Supreme Court, Suffolk County (Rebolini, J.), dated November 30, 2010, which denied its motion, in effect, pursuant to CPLR 5015(a)(1) and 317 to vacate an order of the same court dated November 17, 2009, granting the plaintiff's motion pursuant to CPLR 3215 for leave to enter a default judgment against it.

ORDERED that the order dated November 30, 2010, is affirmed, with costs.

To vacate a default in answering or appearing pursuant to CPLR 5015(a)(1), a defendant must demonstrate a reasonable excuse for the default and a potentially meritorious defense to the action ( seeCPLR 5015 [a][1]; U.S. Bank N.A. v. Stewart, 97 A.D.3d 740, 948 N.Y.S.2d 411;People's United Bank v. Latini Tuxedo Mgt., LLC, 95 A.D.3d 1285, 944 N.Y.S.2d 909). Here, the Supreme Court properly concluded that the defendant, a corporation, which seeks to vacate its default in answering or appearing in this action, failed to establish a reasonable excuse for its default. Under the circumstances of this case, the defendant's failure to keep a current address on file with the Secretary of State did not constitute a reasonable excuse for its failure to appear or answer the complaint ( see Castle v. Avanti, Ltd., 86 A.D.3d 531, 926 N.Y.S.2d 169;Yellow Book of N.Y., Inc. v. Weiss, 44 A.D.3d 755, 756, 843 N.Y.S.2d 190;see generally Eugene Di Lorenzo, Inc. v. A.C. Dutton Lbr. Co., 67 N.Y.2d 138, 143, 501 N.Y.S.2d 8, 492 N.E.2d 116). Accordingly, the Supreme Court properly denied that branch of the defendant's motion which was pursuant to CPLR 5015(a)(1) to vacate its default in answering or appearing ( see Matter of Gustave–Francois v. Francois, 88 A.D.3d 881, 931 N.Y.S.2d 259;Matter of Proctor–Shields v. Shields, 74 A.D.3d 1347, 904 N.Y.S.2d 183).

The defendant also moved to vacate its default pursuant to CPLR 317, which does not require a reasonable excuse for a party's default ( see Deutsche Bank Natl. Trust Co. v. DaCosta, 97 A.D.3d 630, 949 N.Y.S.2d 393;Wassertheil v. Elburg, LLC, 94 A.D.3d 753, 941 N.Y.S.2d 679). Nonetheless, despite having shown that it did not receive actual notice of the summons and complaint ( see generally Eugene Di Lorenzo, Inc. v. A.C. Dutton Lbr. Co., 67 N.Y.2d at 142, 501 N.Y.S.2d 8, 492 N.E.2d 116), the defendant failed to demonstrate the existence of a potentially meritorious defense to the action, as is required under CPLR 317. Specifically, the defendant's proffered defense to the action, which sought, inter alia, to foreclose a mortgage given to secure a note, both of which were executed by the defendant, was that the terms of the note and the mortgage concerning the payment of principal and the accrual of interest did not reflect the parties' prior oral agreement in that regard, and were fraudulently inserted into the documents by the drafting attorney before the defendant signed the document. “[E]vidence of what may have been agreed orally between the parties prior to the execution of an integrated written instrument cannot be received to vary the terms of the writing” ( Braten v. Bankers Trust Co., 60 N.Y.2d 155, 162, 468 N.Y.S.2d 861, 456 N.E.2d 802;see Gill v. Bowne Global Solutions, Inc., 8 A.D.3d 339, 340, 777 N.Y.S.2d 712;Del Vecchio v. Cohen, 288 A.D.2d 426, 427, 733 N.Y.S.2d 479). Therefore, the defendant would not be permitted to submit proof at a trial that, pursuant to the alleged oral agreement, it was not required to make payment on the note, or that it was not liable for any interest accruing, prior to the occurrence of certain conditions, as this agreement was not reflected in the written documents ( see Braten v. Bankers Trust Co., 60 N.Y.2d at 161–162, 468 N.Y.S.2d 861, 456 N.E.2d 802;M & T Mtge. Corp. v. Ethridge, 300 A.D.2d 286, 287, 751 N.Y.S.2d 741;North Fork Bank & Trust Co. v. Bernstein & Gershman, 201 A.D.2d 472, 472–473, 607 N.Y.S.2d 135).

Further, the defendant could not potentially establish a fraud defense because a “reading of the simple, straightforward document[s] would have readily advised” the defendant's president, an experiencedreal estate developer who signed the documents on the defendant's behalf, of the relevant terms of the note and the mortgage ( Morby v. Di Siena Assoc., 291 A.D.2d 604, 605, 737 N.Y.S.2d 678). As such, the defendant could not potentially establish the justifiable reliance necessary to prove...