Kucker Marino Winiarsky & Bittens LLP v Nabatian |
2023 NY Slip Op 50111(U) [77 Misc 3d 1236(A)] |
Decided on February 17, 2023 |
Supreme Court, New York County |
Lebovits, J. |
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. |
This opinion is uncorrected and will not be published in the printed Official Reports. |
Kucker
Marino Winiarsky & Bittens LLP, Plaintiff,
against Fariba Nabatian, Defendant. |
This is an attorney-fee collection action. Plaintiff, Kucker Marino Winiarsky & Bittens LLP, previously obtained a fee award in Part 137 fee arbitration with nonparty NAB 2000 Realty LLC. (See NYSCEF No. 6.) This court (Lyle E. Frank, J.) issued an order in December 2021 granting plaintiff's motion to confirm the arbitration award. (See NYSCEF No. 7.) Judgment against NAB 2000 Realty was entered on the court's order, also in December 2021. (See NYSCEF No. 9.)
In March 2022, plaintiff brought the current action under CPLR 3213 for summary judgment in lieu of complaint against defendant, Fariba Nabatian. Plaintiff claimed that it was entitled to collect from Nabatian pursuant to its judgment against NAB 2000 Realty because she is the LLC's principal member. (See NYSCEF No. 3 [affirmation in support of motion].) This court granted plaintiff's motion without opposition in July 2022. (NYSCEF No. 15.) Judgment was entered on the motion on August 10, 2022. (NYSCEF No. 20.) Plaintiff apparently restrained Nabatian's bank account in late August 2022. (See NYSCEF No. 31 at ¶ 13 [attorney affirmation in opposition].) Nabatian promptly brought this motion, in which she seeks to vacate [*2]the judgment under CPLR 5015 (a) (1), and to compel plaintiff to accept an untimely answer under CPLR 3012 (d).
Nabatian's request to vacate this court's July 2022 order and the judgment against her is granted. Plaintiff's motion for summary judgment in lieu of complaint is denied, and this motion-action is converted into a plenary action. Nabatian is afforded 20 days to serve and file an answer or responsive motion.
To vacate a default judgment under CPLR 5015 (a) (1), defendant must "demonstrate a reasonable excuse for the delay and a meritorious defense to the action." (Kapoor v Interzan LLC, 172 AD3d 519, 520 [1st Dept 2019].)
With respect to reasonable excuse, Nabatian asserts that "it was my understanding that my attorney fell ill and had asked for an extension of time" to respond to the action. (NYSCEF No. 26 at ¶ 4.) And Nabatian's counsel represents that "[r]ealizing that my medical issues would further delay a proper response I reached out to opposing counsel by phone; however, it appears that message was not received by opposing counsel, as the matter continued forward without a reply." (NYSCEF No. 25 at ¶ 4.) Plaintiff's counsel puts forward a somewhat different version of events. According to plaintiff's counsel, one of his colleagues received a call from Nabatian's attorney, during which the attorney "explained that he might be appearing to defend the 3213 motion, and inquired whether an extension of time to file opposition papers would be granted." (NYSCEF No. 31 at ¶ 19 [emphasis in original].) Plaintiff's counsel states that his colleague told Nabatian's attorney that plaintiff would be willing to extend the time to reply if defendant consented to personal jurisdiction; that defendant's attorney was sent a stipulation for review; but that plaintiff did not hear further from defendant. (Id. at ¶ 10.)
This court is not in a position, absent a hearing, to resolve the discrepancies between these two accounts. But no hearing is needed. It is undisputed that defendant's attorney was in contact with plaintiff about the CPLR 3213 motion; but that, whether due to illness or some other cause, defendant's attorney failed nonetheless to file opposition papers—in effect, law-office failure. Although counsel's excuse is perhaps not the strongest, the court concludes under the circumstances that it is sufficient, particularly given the strength of Nabatian's proffered defense.
Nabatian argues that she is not liable under the judgment on which plaintiff relies, because both that judgment and the underlying arbitration award are directed against NAB 2000 Realty, not Nabatian personally. Nabatian is correct that the award and judgment name only NAB 2000 Realty and do not mention her. (See NYSCEF No. 6 at 1; NYSCEF No. 9 at 1.) Plaintiff argues that the omission of Nabatian from the award and judgment are irrelevant, because the underlying retainer agreement includes a paragraph providing that "[i]n the event payment is not timely made, it is understood that the Firm has a claim against the directors and officers of the corporation or members of the entity in their individual capacities for the entire amount. . . ." (NYSCEF No. 9 at 3.) This court is not persuaded that the language on which plaintiff relies forecloses a defense by Nabatian to plaintiff's CPLR 3213 motion.
The court is somewhat skeptical of plaintiff's contention that this language in the retainer agreement would be sufficient to make Nabatian liable in addition to NAB 2000 Realty. The agreement's signature block reflects that it is between plaintiff and NAB 2000 Realty, and that [*3]Nabatian signed the agreement only as an "Authorized Member" of the LLC. (NYSCEF No. 9 at 4.) If the parties to a contract wish to make a corporate officer personally liable under the contract, "the nearly universal practice is that the officer signs twice—once as an officer and again as an individual." (Salzman Sign Co. v Beck, 10 NY2d 63, 67 [1961].) For that reason, this court (Verna L. Saunders, J.) recently held that the same language in another retainer agreement between this plaintiff and a different LLC client was insufficient to render the LLC's sole member personally liable, given that "the signature block in the Retainer contain[] only a single line for [the client's] signature as [the LLC's] member." (Kucker Marino Winiarsky & Bittens, LLP v Nuevo Modern, LLC, 2023 NY Slip Op 30281[U], at *6 [Sup Ct, NY County Jan. 25, 2023].[FN1] )
This court need not definitively resolve, though, whether the retainer-agreement language at issue would be enough to make Nabatian personally liable to satisfy a judgment entered against NAB 2000 Realty. Plaintiff brought its claim under CPLR 3213, seeking summary judgment in lieu of complaint. CPLR 3213 applies only if the movant's claim "is based upon an instrument for the payment of money only or upon any judgment." Here, plaintiff's claim is not based merely on the judgment, which on its face only applies to NAB 2000 Realty. Rather, plaintiff is relying on the combination of the judgment and the retainer agreement. And the retainer agreement is not an instrument for the payment of money only: It is not limited to an unconditional promise to pay a fixed (or readily calculable) sum of money. (See Weissman v Sinorm Deli, Inc., 88 NY2d 437, 444 [1996].)
Thus, regardless of how the ultimate question of Nabatian's liability should be resolved, it is clear that Nabatian is not liable under CPLR 3213. This court's July 2022 order granting without opposition plaintiff's CPLR 3213 motion, and the judgment entered on that motion, must therefore be vacated. Upon vacatur, plaintiff's CPLR 3213 motion is denied, and the action converted into a plenary action, with plaintiff's motion papers deemed a complaint and supporting exhibits. Nabatian will be granted 20 days to file an answer or responsive motion.
Accordingly, it is
ORDERED that the branch of Nabatian's motion under CPLR 5015 (a) (1) seeking to vacate this court's July 2022 default-judgment order, and the judgment entered on that order on August 10, 2022, is granted; and it is further
ORDERED that plaintiff's motion under CPLR 3213 for summary judgment in lieu of complaint is denied, and this action is converted into a plenary action, with plaintiff's motion papers deemed a complaint and supporting exhibits; and it is further
ORDERED that Nabatian may, within 20 days of entry of this order, serve and file an answer or [*4]responsive motion; and it is further
ORDERED that Nabatian serve a copy of this order with notice of its entry on plaintiff; on the office of the General Clerk, which is directed to restore this action to active status and to update its records accordingly; and on the office of the County Clerk, which shall update its records accordingly.