City of Albany Indus. Development Agency v. Garg

Decision Date14 May 1998
Citation250 A.D.2d 991,672 N.Y.S.2d 541
Parties, 1998 N.Y. Slip Op. 4592 CITY OF ALBANY INDUSTRIAL DEVELOPMENT AGENCY, Respondent, v. Jagadish GARG et al., Appellants.
CourtNew York Supreme Court — Appellate Division

Spring & Raghavan LLP (Latha Raghavan, of counsel), Albany, for appellants.

McNamee, Lochner, Titus & Williams (Joseph M. Gaug, of counsel), Albany, for respondent.


CARDONA, Presiding Justice.

Appeal from an order of the Supreme Court (Graffeo, J.), entered March 27, 1997 in Albany County, which denied defendants' motion to vacate the default judgment entered against them.

This appeal arises out of a commercial loan transaction that became unsuccessful when Thruway Investments, a limited partnership in which defendants Jagadish Garg and Pushpa Garg are the general partners, defaulted on a $500,000 loan made to it by plaintiff in July 1989. In exchange for the loan, Thruway Investments gave plaintiff a third mortgage on its interest in a 99-year ground lease covering property located at 1375 Washington Avenue in the City of Albany, known as the Thruway House Hotel. In addition, the Gargs and defendant P & JG Enterprises, now a defunct corporation of which the Gargs are the principal officers, personally guaranteed payment of the loan.

In 1991, Thruway Investments filed a chapter 11 petition in bankruptcy which was subsequently converted into a chapter 7 proceeding. In connection with the bankruptcy proceeding, the bankruptcy trustee offered the lease for sale and it was purchased by plaintiff and the two senior mortgagees for $25,000, the lease arrears and the release of their secured debts.

Thereafter, plaintiff commenced this action against defendants for summary judgment in lieu of complaint pursuant to CPLR 3213, by notice of motion returnable November 20, 1992, seeking to recover the balance of the debt under the personal guarantee of payment. Following the failure by defendants' attorney to timely respond to the action, judgment was granted against defendants in the amount of $704,570.99, plus costs. 1 After obtaining new counsel, defendants made application in January 1993 to vacate the judgment. The application was denied due to defendants' failure to comply with the service requirements set forth in the order to show cause. In April 1993, defendants made a second application to vacate the default judgment which was denied for defendant's failure to demonstrate a justifiable excuse for the default. Defendants sought appellate review of the denial of the second application; the appeal, however, was dismissed due to defendants' failure to timely perfect it.

In 1995, plaintiff commenced another action seeking to set aside certain allegedly fraudulent transfers of property by defendants. In the context of that action, defendants again sought to vacate the judgment. The application was denied on the basis that it was improperly brought and, thereafter, defendants filed a notice of appeal but again failed to perfect the appeal. In August 1996, defendants made the instant application to vacate the judgment which was denied by Supreme Court. Defendants appeal.

Defendants set forth various grounds in support of their present application, namely, excusable default, newly discovered evidence, fraud/misrepresentation and the interest of justice. Their primary contention is that their failure to timely respond to plaintiff's motion for summary judgment in lieu of complaint was attributable to the inaction of their former attorney, who had a substance abuse problem and was subsequently disbarred in February 1994. While the record supports this claim, defendants have not set forth any reason for their failure to timely seek vacatur of the judgment on that basis. The record discloses that defendants were aware of their attorney's substance abuse problem and disbarment as early as August 1994, when they...

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9 cases
  • Henderson-Jones v. City of N.Y.
    • United States
    • New York Supreme Court
    • 27 d3 Abril d3 2016
    ...Maspeth Fed. Sav. & Loan Assn. v. Sloup, 123 A.D.3d 672, 674, 998 N.Y.S.2d 409 (2d Dep't 2014) ; City of Albany Indus. Dev. Agency v. Garg, 250 A.D.2d 991, 994, 672 N.Y.S.2d 541 (3d Dep't 1998). Van Orden's identity was known at least by June 8, 2008, when Van Orden was deposed with represe......
  • In re 114 Tenth Ave. Assoc., Inc.
    • United States
    • U.S. District Court — Southern District of New York
    • 15 d3 Dezembro d3 2010
    ...See Debtor's Obj. ¶ 19. 96 See N.Y. Civil Practice Law and Rules ("CPLR") § 5015(a)(3). 97 See City of Albany Indus. Dev. Agency v. Garg, 250 A.D.2d 991, 672 N.Y.S.2d 541, 543(3d Dep't 1998). 98 See Rizzo v. St. Lawrence Univ., 24 A.D.3d 983, 805 N.Y.S.2d 479, 480 (3d Dep't 2005) ("Given th......
  • Bond v. Giebel
    • United States
    • New York Supreme Court — Appellate Division
    • 13 d4 Dezembro d4 2012
    ...agreement ( compare Rizzo v. St. Lawrence Univ., 24 A.D.3d 983, 984, 805 N.Y.S.2d 479 [2005];City of Albany Indus. Dev. Agency v. Garg, 250 A.D.2d 991, 993, 672 N.Y.S.2d 541 [1998];B.U.D. Sheetmetal v. Massachusetts Bay Ins. Co., 248 A.D.2d 856, 856–857, 670 N.Y.S.2d 228 [1998] ). Furthermo......
  • Hayes v. Vill. of Middleburgh
    • United States
    • New York Supreme Court — Appellate Division
    • 9 d4 Junho d4 2016
    ...1087, 28 N.Y.S.3d 695 [2016] ; Yung Chong Ho v. Uppal, 130 A.D.3d 811, 812, 12 N.Y.S.3d 560 [2015] ; City of Albany Indus. Dev. Agency v. Garg, 250 A.D.2d 991, 993, 672 N.Y.S.2d 541 [1998] )—provided the defaulting party demonstrates both a reasonable excuse for the default and the existenc......
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