| 333 Cherry LLC v Northern Resorts, Inc. |
| 2009 NY Slip Op 07544 [66 AD3d 1176] |
| October 22, 2009 |
| Appellate Division, Third Department |
| 333 Cherry LLC et al., Respondents, v Northern Resorts, Inc.,Appellant. |
—[*1] Briggs Norfolk, L.L.P., Lake Placid (Michael J. Hutter of counsel), forrespondents.
Spain, J. Appeal from an order of the Supreme Court (Dawson, J.), entered August 28, 2008in Essex County, which denied defendant's cross motion for permission to file a late answer andgranted plaintiffs' motion for a default judgment.
Plaintiffs are the owners of a hotel complex known as Northwoods Inn located in the Villageof Lake Placid, Essex County. Plaintiffs are successors in interest to Northern HotelsCorporation which had entered into a lease with defendant in 1998. The lease permitteddefendant to sell timeshares in Northwoods Inn in exchange for a base rent and pro rata share oftaxes, insurance, utilities and other costs. Having allegedly received no rent or lease paymentsfrom defendant, plaintiffs, in March 2008, sent defendant a notice to pay rent claiming adeficiency of $512,789. Defendant requested an accounting and then plaintiffs commenced anaction for a declaration of the parties' rights under the lease, effecting service on defendant byserving the Secretary of State on April 10, 2008 (see Business Corporation Law §306 [b]). After defendant unsuccessfully moved to disqualify plaintiffs' counsel,[FN1]plaintiffs served a notice of default upon defendant with copies of the summons and complaint(see CPLR 3215 [g] [4] [i]). [*2]Defendant served ananswer with counterclaims on June 28, 2008. Plaintiffs rejected the answer and moved for adefault judgment; defendant opposed, cross-moving to file a late answer, although failing to filea notice of motion. Supreme Court granted plaintiffs' motion for a default judgment and denieddefendant's cross motion, citing defendant's failures, among others, to deny that it was in defaultof the lease or to proffer a reasonable excuse for its late answer. Defendant appeals.
Initially, defendant argues that Supreme Court abused its discretion in denying its motion forleave to serve a late answer. A court may grant an extension of time to serve an answer "uponsuch terms as may be just and upon a showing of reasonable excuse for delay or default" (CPLR3012 [d]; see Watson v Pollacchi,32 AD3d 565, 565 [2006]). Notably, defendant was required to serve an answer by May 10,2008[FN2](see CPLR 320 [a]; 3012 [c]; Business Corporation Law § 306 [b] [1]), but did notrequest an extension of time (see CPLR 3012 [d]) or attempt to serve an answer untilJune 28, 2008; in fact, defendant waited until July 17, 2008, after plaintiffs moved for a defaultjudgment, to move to compel acceptance of its untimely answer (see CPLR 3012 [d]).Defendant neither made a proper motion to dismiss (see CPLR 3211 [a] [1]-[11]; [f]) nora motion to correct the pleadings (see CPLR 3024 [c]) so as to extend its time to answer.Defendant's motion to disqualify plaintiffs' counsel was not a proper ground for a CPLR 3211motion to dismiss and, given that "what constitutes a reasonable excuse for the delay lies withinthe sound discretion of the [trial] court" (Amodeo v Gellert & Quartararo, P.C., 26 AD3d 705, 706 [2006]),we discern no reason to disturb Supreme Court's rejection of defendant's unsupported excuse thatit believed its motion to disqualify would extend its time to answer (see Rickert v Chestara, 56 AD3d941, 942 [2008]).
Further, while defendant opposed plaintiffs' motion for a default judgment by asserting thatplaintiffs had collected some lease rents and fees directly from the time share occupants,defendant never alleged that it had paid any rent or fees under the lease or that any paymentswere made for taxes or insurance due on the lease. Defendant thereby failed to establish theexistence of a meritorious defense to plaintiffs' action, which exclusively sought a declarationthat defendant was in default of the terms of the lease and did not seek damages. In view of theforegoing, we cannot conclude that Supreme Court improvidently declined defendant's request tocompel plaintiffs to accept its very untimely answer (see Harcztark v Drive Variety, Inc., 21 AD3d 876, 876-877[2005]; see also Aquilar v NassauHealth Care Corp., 40 AD3d 788, 789 [2007]).
Likewise, we are not persuaded by defendant's challenges to Supreme Court's determinationto award plaintiffs a default judgment.[FN3]Initially, while generally no appeal lies [*3]from an order enteredupon a default (see CPLR 5511) where, as here, defendant appeared and contested entryof the default judgment, the prohibition is inapplicable and the order is appealable (seeRobert Marini Bldr. v Rao, 263 AD2d 846, 848 [1999]; see also ABS 1200, LLC v Kudriashova, 60 AD3d 1164, 1165 n 3[2009]). Upon review, we agree that plaintiffs adequately supported their application for adefault judgment with "proof of service of the summons and the complaint, . . .proof of the facts constituting the claim, the default and . . . [p]roof of mailing thenotice required by [CPLR 3215 (g) (4) (i)]" (CPLR 3215 [f]). The affidavit of plaintiffs' counselestablished the proof of service requirements, as well as defendant's default and plaintiffs'mailing of the notice required by CPLR 3215 (g). Contrary to defendant's claim, service on theSecretary of State pursuant to Business Corporation Law § 306 (b) (1) is a valid method;defendant's uncorroborated denial that it never received notice in time to defend is insufficient torebut the presumption that it received a properly mailed letter, and is belied by defendant'smotion to disqualify plaintiffs' counsel in this action, a motion made within its time to answer(see Brightly v Florida N., Inc., 54AD3d 1127, 1128 [2008]).
While defendant is correct that the affidavit and complaint verified by plaintiffs' counsel,who lacked personal knowledge, were not sufficient to establish "proof of the facts constitutingthe claim" (CPLR 3215 [f]; see DeVivo v Sparago, 287 AD2d 535, 536 [2001]), theaffidavit of plaintiffs' managers sufficiently established that, despite demands, between 2005 and2007 defendant failed to pay rents and its share of other expenses due under the lease. Theseaffidavits, based upon personal knowledge, alleged sufficient "facts to enable a court todetermine that a viable cause of action exists" (Woodson v Mendon Leasing Corp., 100NY2d 62, 71 [2003]) and, thus, satisfied plaintiffs' burden of submitting nonhearsay proofconfirming the factual basis for their claim in support of their motion for a default judgment(see CPLR 3215 [f]; State ofNew York v Williams, 44 AD3d 1149, 1151-1152 [2007]). While these affidavits insupport of plaintiffs' default motion were first submitted responsively with plaintiffs' oppositionto defendant's cross motion, we cannot say that Supreme Court erred in considering them insupport of plaintiffs' motion, particularly given the court's consideration of defendant's replyaffidavit thereto. Having reviewed defendant's remaining contentions, and satisfied that plaintiffsmade the requisite showing entitling them to a default judgment (see CPLR 3215 [f]), weaffirm the order.
Cardona, P.J., Mercure, Kavanagh and Garry, JJ., concur. Ordered that the order is affirmed,with costs.
Footnote 1: Defendant's motion todisqualify was premised upon the fact that a member of the firm representing plaintiffs hadpreviously represented defendant and Northern Hotels Corporation in a mortgage foreclosureaction.
Footnote 2: Service on defendant wascomplete on April 10, 2008 when the Secretary of State was served, giving defendant 30 days toanswer.
Footnote 3: As ripeness and justiciabilityare matters pertaining to subject matter jurisdiction which can be raised at any time (see Police Benevolent Assn. of N.Y. StateTroopers, Inc. v New York State Div. of State Police, 40 AD3d 1350, 1352 n 2 [2007],appeal dismissed and lv denied 9 NY3d 942 [2007]), we have considered them suasponte but do not find that paragraph 16 of the subject lease, which confers rights on the landlordin the event of the tenant's (defendant's) default, required plaintiffs to delay commencing thisdeclaratory judgment action or otherwise limited plaintiffs' rights (see Kalisch-Jarcho, Inc. vCity of New York, 72 NY2d 727, 731-732 [1988]).