Nassau Operating Co. v. Desimone

• Decision Date: 22 June 2022
• Docket Number: 2021–00243,Index No. 606237/19
• Citation: 206 A.D.3d 920,171 N.Y.S.3d 528
• Parties: NASSAU OPERATING CO., LLC, etc., respondent, v. Sabrina DESIMONE, appellant.
• Court: New York Supreme Court — Appellate Division

206 A.D.3d 920

171 N.Y.S.3d 528

NASSAU OPERATING CO., LLC, etc., respondent,

v.Sabrina DESIMONE, appellant.

2021–00243

Index No. 606237/19

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

Argued—May 19, 2022

June 22, 2022

McAndrew, Conboy & Prisco, LLP, Melville, NY (Michael J. Prisco of counsel), for appellant.

Abrams, Fensterman, Fensterman, Eisman, Formato, Ferrara, Wolf & Carone, LLP, White Plains, NY (Robert A. Spolzino and David A. House of counsel), for respondent.

COLLEEN D. DUFFY, J.P., ANGELA G. IANNACCI, ROBERT J. MILLER, JOSEPH A. ZAYAS, JJ.

DECISION & ORDER

In an action to recover damages for breach of contract, the defendant appeals from an order of the Supreme Court, Nassau County (Denise L. Sher, J.), entered December 21, 2020. The order, insofar as appealed from, denied those branches of the defendant's motion which were to vacate a judgment of the same court dated July 8, 2020, which, upon an order of the same court entered June 16, 2020, granting the plaintiff's motion for leave to enter a default judgment upon the defendant's failure to appear or answer the complaint, is in favor of the plaintiff and against the defendant in the total sum of $112,791.56, and, thereupon, pursuant to CPLR 5015(d) for restitution of certain funds seized from the defendant's bank account to satisfy the judgment dated July 8, 2020, and pursuant to CPLR 3211(a) to dismiss the complaint.

ORDERED that the order entered December 21, 2020, is reversed, on the law and in the exercise of discretion, with costs, those branches of the defendant's motion which were to vacate the judgment dated July 8, 2020, and, thereupon, pursuant to CPLR 5015(d) for restitution of funds seized from the defendant's bank account, and pursuant to CPLR 3211(a) to dismiss the complaint, are granted, the judgment dated July 8, 2020, and the order entered June 16, 2020, are vacated, and the complaint is dismissed.

The plaintiff is a limited liability company engaged in the business of providing skilled nursing home care services at a certain facility located in Hempstead. The plaintiff alleged that Sebastian Puleo (hereinafter the resident) received room, board, and skilled nursing care at that facility beginning on February 23, 2018.

By order to show cause dated May 28, 2019, the administrator of the plaintiff's facility, Jacob Zimberg (hereinafter the plaintiff's administrator), commenced a special proceeding pursuant to Mental Hygiene Law article 81 to have a guardian of the property appointed for the resident on the ground that he was incapacitated (hereinafter the guardianship proceeding). The resident's granddaughter, Sabrina DeSimone (hereinafter the granddaughter), was notified of the guardianship proceeding.

The petition in the guardianship proceeding requested that the guardian be authorized to exercise certain property management powers, including the authority to apply the resident's "income and resources ... toward any prior outstanding medical and/or nursing home bills not covered by Medicaid and NAMI debt," and the power to "[h]andle all real estate transactions in connection with the premises 1755 Lenox Avenue, East Meadow, New York, including but not limited to eviction proceedings if necessary, and the sale of said premises."

The Supreme Court in the guardianship proceeding appointed a court evaluator. The court evaluator noted, inter alia, that the resident "was denied Medicaid, due to the value of his assets." The court evaluator determined that the resident's "main asset [was] his home, which [was] currently under contract." The court evaluator reported that "[a] closing date [was] expected soon."

On June 5, 2018, the resident executed a certain power of attorney which granted the granddaughter the authority to, among other things, engage in real estate transactions, banking transactions, and health care billing and payment matters on the resident's behalf.

On July 23, 2019, in the guardianship proceeding, the Supreme Court determined, inter alia, that the 92–year–old resident had "certain functional limitations which impair[ed] his ability to manage his own property needs" and that "he may suffer harm and danger if a guardian is not appointed on his behalf." The court stated that it would appoint a guardian with the powers requested in the petition. The court stated that "[t]he power of attorney shall remain in effect until the independent guardian is commissioned."

In August 2019, before a judgment was rendered in the guardianship proceeding, the plaintiff served the granddaughter with the complaint in this breach of contract action, naming the granddaughter as the only defendant. The complaint asserted one cause of action. It alleged that the granddaughter had signed the resident's admissions agreement on February 23, 2018, which thereby obligated her "to remit payment from the Resident's funds and/or secure payment from third[-]party payors to meet the Resident's obligations to the [p]laintiff." The complaint continued: "By reason of the [granddaughter's] default and breach of the [admissions agreement], [the plaintiff] has suffered damages in the sum of $109,875.00 through February 28, 2019, which sum continues to accrue."

Although the complaint was dated March 19, 2019, it was not verified by the plaintiff's administrator until April 17, 2019. The complaint was not served on the granddaughter until August 12, 2019, and the affidavit of service was filed with the court on August 20, 2019. When the granddaughter failed to appear or answer the complaint within the required statutory period, the plaintiff served her with notice of the default (see CPLR 3215[g] ), on or about October 3, 2019.

On October 9, 2019, the Supreme Court in the guardianship proceeding rendered judgment. The judgment granted the petition and appointed a guardian of the property for the resident. As relevant here, the judgment provided that the granddaughter, "as attorney[ ]-in-fact under the [p]ower of [a]ttorney dated June 15, 2018, [was] authorized to proceed with the sale of premises 1755 Lenox Avenue, East Meadow, New York, and the proceeds of the sale [were] to be turned over to the Guardian." However, the court directed that the power of attorney would only remain in effect until the guardian was commissioned, at which time "the Power of Attorney shall be vacated." As requested by the plaintiff's administrator, the judgment gave the guardian the authority to apply the resident's "income and resources ... toward any prior outstanding medical and/or nursing home bills not covered by Medicaid and NAMI debt," and the power to "[h]andle all real estate transactions in connection with the premises 1755 Lenox Avenue, East Meadow, New York, including but not limited to eviction proceedings if necessary, and the sale of said premises."

The resident died on April 14, 2020. By notice of motion dated May 5, 2020, the plaintiff moved for leave to enter a default judgment against the granddaughter in this breach of contract action. The plaintiff asserted that the granddaughter "was appointed [sic] the Resident's Power of Attorney," that the resident lived at the plaintiff's facility from February 23, 2018, until April 14, 2020, and that the resident died with an unpaid balance of $99,350. The plaintiff alleged that the resident's outstanding balance was not $109,875, as alleged in the complaint, because on June 6, 2019, the resident had been approved for Medicaid coverage, retroactive to February 1, 2019. The plaintiff specified that "[the plaintiff's] damages ... are solely for the private charges through January 31, 2019, i.e. prior to the Resident's Medicaid coverage." The plaintiff alleged that the granddaughter was personally liable for the resident's bill for this period because the granddaughter breached the admissions agreement by failing to "timely document and secure Medicaid benefits," and by failing to use the resident's assets to pay the resident's outstanding bill.

The plaintiff's motion was granted in an order entered June 16, 2020. A judgment dated July 8, 2020, was subsequently entered, upon the order entered June 16, 2020, in favor of the plaintiff and against the granddaughter in the principal sum of $99,350, plus interest and costs. The total amount of the judgment was $112,791.56.

After the judgment was entered, the plaintiff seized funds from the granddaughter's personal Bank of America account to satisfy it. The granddaughter subsequently moved to vacate the judgment dated July 8, 2020, which had been entered upon her default. She contended that the Supreme Court had the power to vacate her default pursuant to CPLR 5015(a)(1) and pursuant to the court's "inherent" discretionary authority. She also moved pursuant to CPLR 5015(d) for restitution of the funds that had been seized from her personal bank account to satisfy the judgment dated July 8, 2020, and pursuant to CPLR 3211(a)(7) to dismiss the complaint for failure to state a cause of action.

The granddaughter contended that she was 26 years old, and that she resided with her father in Wantagh, where she cared for him. At the time that the resident (her grandfather) was admitted to the plaintiff's facility, his only asset was his residence at 1755 Lennox Avenue, East Meadow, New York (hereinafter the resident's home). The granddaughter retained a certain law firm in May 2018, which agreed to render elder law planning services to the resident with the understanding that its fee would be paid out of the proceeds of the sale of the resident's home. The law firm prepared the power of attorney which had been executed by the resident in June 2018, and the granddaughter outlined the steps she subsequently undertook to effectuate the sale of the resident's home in the summer of 2018. Although the granddaughter entered into a contract of sale with a prospective purchaser, the sale was eventually cancelled by the purchaser due to the length of time it took to evict a certain holdover...