Costea v. Vemen Mgmt. Corp.
| Docket Number | 2021–06118,Index No. 606601/19 |
| Decision Date | 01 February 2023 |
| Citation | 213 A.D.3d 634,183 N.Y.S.3d 497 |
| Parties | Nicholas COSTEA, etc., respondent, v. VEMEN MANAGEMENT CORP., et al., appellants. |
| Court | New York Supreme Court — Appellate Division |
213 A.D.3d 634
183 N.Y.S.3d 497
Nicholas COSTEA, etc., respondent,
v.
VEMEN MANAGEMENT CORP., et al., appellants.
2021–06118
Index No. 606601/19
Supreme Court, Appellate Division, Second Department, New York.
Argued—October 20, 2022
February 1, 2023
Kordas & Marinis, LLP (Rosenberg Calica & Birney LLP, Garden City, NY [Edward M. Ross ], of counsel), for appellants.
The Law Firm of Elias C. Schwartz PLLC, Great Neck, NY (Jennifer J. Bock and Sarah R. Gitomer of counsel), for respondent.
REINALDO E. RIVERA, J.P., JOSEPH J. MALTESE, WILLIAM G. FORD, JANICE A. TAYLOR, JJ.
DECISION & ORDER
In an action, inter alia, to recover damages for breach of contract, the defendants appeal from a judgment of the Supreme Court, Nassau County (Catherine Rizzo, J.), entered August 12, 2021. The judgment, upon a decision of the same court dated June 25, 2021, as resettled July 20, 2021, made after a nonjury trial, is in favor of the plaintiff and against the defendants on the causes of action alleging breach of contract and violations of the Debtor and Creditor Law in the total sum of $441,489.68.
ORDERED that the judgment is modified, on the law and the facts, (1) by deleting the provision thereof which is in favor of the plaintiff and against the defendants on the causes of action alleging violations of the Debtor and Creditor Law, and substituting therefor a provision dismissing those causes of action, and (2) by reducing the award of attorneys’ fees from the sum of $171,434.01 to the sum of $750; as so modified, the judgment is affirmed insofar as appealed from, without costs or disbursements, and the matter is remitted to the Supreme Court, Nassau County, for the entry of an appropriate amended judgment.
On December 26, 2000, Anna Costea and Andreas Costea (hereinafter together the Costeas) entered into a lease agreement
with 401 Sunrise Corp. (hereinafter Sunrise). Pursuant to the lease agreement, the Costeas leased to Sunrise certain real property located in Lynbrook (hereinafter the subject property), which was used to operate a diner. In July 2018, Sunrise filed for bankruptcy protection under Chapter 11 in the United States Bankruptcy Court for the Eastern District of New York (hereinafter the Bankruptcy Court).
On November 28, 2018, the defendant Vemen Management Corp. (hereinafter Vemen), acting as nominee, purchased the diner from Sunrise at auction for $50,000, which included Sunrise's rights and obligations under the lease agreement. The purchase was directed by the defendant Vassilio Kefalas through his attorney. On January 11, 2019, the Bankruptcy Court approved the assumption and assignment of the lease agreement to Vemen or its assignee. Pursuant to an assignment agreement dated March 29, 2019, Sunrise assigned its obligations under the lease agreement to the defendant Cosmopolitan
Diner, LLC (hereinafter Cosmopolitan), as assignee of Vemen. Cosmopolitan was an entity that Kefalas formed in early 2019, as the sole owner, for the purpose of acquiring the diner and lease from Sunrise. Thereafter, the defendants took possession of the subject property, but did not make monthly rental payments for the months of April, May, and June 2019, and did not pay a security deposit, real estate taxes, or late fees.
In May 2019, Anna Costea commenced this action, inter alia, to recover damages for breach of contract, violations of the Debtor and Creditor Law, and fraud. Anna Costea subsequently died, and the caption was amended by substituting Nicholas Costea, as trustee of the revocable trust agreements of Anna Costea and Andreas Costea, as the plaintiff. In September 2019, the defendants moved, among other things, in effect, pursuant to CPLR 3211(a)(2) to dismiss the complaint for lack of subject matter jurisdiction. In an order entered November 27, 2019, the Supreme Court denied the defendants’ motion. The defendants appealed from the order, and in a related appeal, we have dismissed the appeal from the order pursuant to ( Matter of Aho, 39 N.Y.2d 241, 383 N.Y.S.2d 285, 347 N.E.2d 647 ) ( Costea v. Vemen Mgt. Corp., 213 A.D.3d 633, 180 N.Y.S.3d 913 [Appellate Division; decided herewith] ).
The Supreme Court held a nonjury trial in May and June 2021. In a decision dated June 25, 2021, the court determined, inter alia, that the plaintiff was entitled to recover on the causes of action alleging breach of contract and violations of the Debtor and Creditor Law against each of the defendants,
jointly and severally. A judgment was entered on August 12, 2021, in favor of the plaintiff and against the defendants in the total sum of $441,489.68, which included an award of attorneys’ fees in the sum of $171,434.01. The defendants appeal.
"The Court of Appeals has determined that a nonfinal order ‘necessarily affects’ the final judgment ‘in cases where the prior order str[uck] at the foundation on which the final judgment was predicated,’ such that ‘reversal would inescapably have led to a vacatur of the judgment’ " ( Stanescu v. Stanescu, 206 A.D.3d 1031, 1033, 168 N.Y.S.3d 885, quoting Bonczar v. American Multi–Cinema, Inc., 38 N.Y.3d 1023, 1025, 168 N.Y.S.3d 711, 188 N.E.3d 1000 ). "The Court of Appeals also has determined that a nonfinal order necessarily affects the final judgment where the order ‘necessarily removed [a] legal issue from the case so that there was no further opportunity during the litigation to raise the question decided by the prior non-final order’ " ( Stanescu v. Stanescu, 206 A.D.3d at 1033, 168 N.Y.S.3d 885, 168 N.Y.S.3d, quoting Bonczar v. American Multi–Cinema, Inc., 38 N.Y.3d at 1026, 168 N.Y.S.3d 711, 188 N.E.3d 1000 [internal quotation marks omitted]). Thus, so much of the order entered November 27, 2019, as denied that branch of the defendants’ motion which was, in effect, pursuant to CPLR 3211(a)(2) to dismiss the complaint for lack of subject matter jurisdiction necessarily affected the judgment and is brought up for review by this Court on the appeal from the judgment.
"As a court of original, unlimited and unqualified jurisdiction, the New York State Supreme Court is vested with general original jurisdiction" ( 21st Century Pharm. v. American Intl. Group, 195 A.D.3d 776, 778, 145 N.Y.S.3d 810 [citations and internal quotation marks omitted]; see N.Y. Const, art VI, § 7 [a]). "Congress granted to federal district courts ‘exclusive jurisdiction of all cases under title 11 [of the U.S.Code]’ and ‘original but not...
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