| Express Shipping, Ltd. v Gold |
| 2009 NY Slip Op 04374 [63 AD3d 669] |
| June 2, 2009 |
| Appellate Division, Second Department |
| Express Shipping, Ltd., et al., Respondents, v Mark Gold,Appellant. |
—[*1] Roman Popik, P.C., New York, N.Y., for respondents.
In an action, inter alia, to recover damages for breach of contract, the defendant appeals froman order of the Supreme Court, Richmond County (Fusco, J.), dated November 25, 2008, whichdenied his motion to restore the action to the court's calendar and for summary judgment in hisfavor on the first and fourth counterclaims, and, in effect, directed the dismissal of thedefendant's first and fourth counterclaims.
Ordered that the order is modified, on the law, (1) by deleting the provisions thereof denyingthose branches of the defendant's motion which were to restore the action to the court's calendarand for summary judgment on the first counterclaim, and substituting therefor provisionsgranting those branches of the defendant's motion, and (2) by adding thereto a provisionsearching the record and upon searching the record, awarding the plaintiffs summary judgmentdismissing the defendant's fourth counterclaim; as so modified, the order is affirmed, with coststo the defendant.
The plaintiffs and the defendant entered into a stock sale agreement (hereinafter SSA)pursuant to which the individual plaintiffs Michael Aronov and Michael Gorodetsky purchasedthe defendant's shares of stock in the plaintiff corporation Express Shipping, Ltd., for $100,000.The individual plaintiffs each signed a guaranty unconditionally guaranteeing the payment of thepurchase price to the defendant and agreeing to forgo all defenses to any action brought pursuantto the guaranties. After paying the initial $25,000 installment towards the purchase price, theindividual plaintiffs made no further payments and the plaintiffs commenced this action, [*2]inter alia, to recover damages for breach of contract, in which theyallege that the defendant violated a noncompetition clause in the SSA.
By order dated May 11, 2005, the Supreme Court granted the defendant's motion forsummary judgment dismissing the complaint. The plaintiffs appealed and by decision and orderdated October 24, 2006, this Court affirmed the order (see Express Shipping, Ltd. v Gold, 33 AD3d 847 [2006]).
Although the defendant interposed six counterclaims against the plaintiffs in his answer, aclerk in the Supreme Court, Richmond County, marked the matter disposed as of May 12, 2005,one day after the date of the Supreme Court's order dismissing the complaint. Neither party hadfiled a note of issue. The defendant did not discover that the matter had been marked disposeduntil August 2008. By notice of motion dated August 11, 2008, the defendant moved to restorethe counterclaims to the court's calendar and for summary judgment in his favor on the firstcounterclaim alleging breach of contract and the fourth counterclaim seeking specificperformance of the SSA. The Supreme Court denied the defendant's motion to restore upon theground that the defendant failed to offer any reason for the 39-month delay in prosecuting thecounterclaims, and, in effect, directed the dismissal of the counterclaims for want of prosecutionwithout reaching the merits of those branches of the defendant's motion which were for summaryjudgment in his favor on the first and fourth counterclaims.
An action may be dismissed for want of prosecution pursuant to either CPLR 3216 or 3404.The procedural mechanism for dismissal for want of prosecution depends on whether a note ofissue has been filed (see Lopez v Imperial Delivery Serv., 282 AD2d 190 [2001]). CPLR3404 does not apply to pre-note of issue actions and cannot provide a basis for dismissal of suchactions (see Sellitto v Women's HealthCare Specialists, 58 AD3d 828 [2009]; Dokaj v Ruxton Tower Ltd. Partnership, 55 AD3d 661 [2008]; Suburban Restoration Co., Inc. v Viglotti,54 AD3d 750 [2008]; Lopez v Imperial Delivery Serv., 282 AD2d at 199). Inactions such as this, where a note of issue has not been filed, CPLR 3216 provides the proceduralmechanism for dismissal for want of prosecution (see Baczkowski v Collins Constr. Co.,89 NY2d 499 [1997]; Sellitto vWomen's Health Care Specialists, 58 AD3d 828 [2009]; Suburban Restoration Co.,Inc. v Viglotti, 54 AD3d at 751; Delgado v New York City Hous. Auth., 21 AD3d 522 [2005]),provided certain statutory prerequisites are met (see CPLR 3216; Baczkowski vCollins Constr. Co., 89 NY2d 499 [1997]; Sellitto v Women's Health Care Specialists, 58 AD3d 828 [2009];Suburban Restoration Co., Inc. v Viglotti, 54 AD3d at 751; Delgado v New YorkCity Hous. Auth., 21 AD3d at 523). Here, the defendant established that the clerk erred bymarking the case disposed. In opposition, the plaintiffs failed to establish that they timely serveda 90-day notice demanding that the defendant resume prosecution of the counterclaims or risktheir dismissal (see CPLR 3216 [b]). Absent proof of compliance with CPLR 3216 (b), itwas error to deny the defendant's motion to restore the counterclaims to the calendar (seeBaczkowski v Collins Constr. Co., 89 NY2d at 503; Delgado v New York City Hous. Auth., 21 AD3d 522 [2005]).
As noted above, the Supreme Court denied the defendant's motion, in effect, directed thedismissal of the defendant's counterclaims, and did not determine the merits of those branches ofthe defendant's motion which were for summary judgment on the first and fourth counterclaims.Under the circumstances, and in the interest of judicial economy, we determine the merits ofthose branches of the defendant's motion (see Mobil Oil Corp. v Christian Oil & GasDistribs., 95 AD2d 772, 773 [1983]; Osserman v Osserman, 92 AD2d 932, 933[1983]).[*3]
The defendant established his prima facie entitlement tojudgment as a matter of law on his first counterclaim alleging breach of contract by submittingcopies of the SSA and the guaranties, and proof of the plaintiffs' failure to make the paymentsrequired by their terms (see Verela vCitrus Lake Dev., Inc., 53 AD3d 574 [2008]; Northport Car Wash, Inc. v Northport Car Care, LLC, 52 AD3d794 [2008]; E.D.S. Sec. Sys. v Allyn, 262 AD2d 351 [1999]). In opposition, theplaintiffs failed to raise a triable issue of fact with respect to a bona fide defense (see Verela v Citrus Lake Dev., Inc., 53AD3d 574 [2008]; Northport CarWash, Inc. v Northport Car Care, LLC, 52 AD3d 794 [2008]; Korea Exch. Bank v A.A. Trading Co.,8 AD3d 344, 345 [2004]; Kowalski Enters. v Sem Intl., 250 AD2d 648 [1998].Accordingly, that branch of the defendant's motion which was for summary judgment on his firstcounterclaim should have been granted.
With respect to defendant's fourth counterclaim seeking specific performance, the defendantcould not make a prima facie showing of entitlement to judgment as a matter of law since"money damages 'would be adequate to protect the expectation interest of the injured' "(Sokoloff v Harriman Estates Dev. Corp., 96 NY2d 409, 415 [2001], quotingRestatement [Second] of Contracts § 359 [1]). Since, as a matter of law, the defendantcannot recover under the fourth counterclaim, we search the record and award summaryjudgment to the plaintiffs dismissing that counterclaim. Mastro, J.P., Skelos, Dickerson and Lott,JJ., concur.