| Richter v Sportsmans Props., Inc. |
| 2011 NY Slip Op 01636 [82 AD3d 733] |
| March 1, 2011 |
| Appellate Division, Second Department |
| Suzanne Richter, Respondent, v Sportsmans Properties,Inc., et al., Defendants, and Peter Barniak, Appellant. |
—[*1] Jules A. Epstein, P.C., Garden City, N.Y., for respondent.
In an action to foreclose a mortgage, the defendant Peter Barniak appeals from an order ofthe Supreme Court, Nassau County (McCabe, J.), dated May 27, 2009, which granted theplaintiff's motion, inter alia, for summary judgment on the complaint, and denied his crossmotion pursuant to CPLR 3211 (a) (5) to dismiss the complaint insofar as asserted against him.
Ordered that the order is reversed, on the law, with costs, the plaintiff's motion, inter alia, forsummary judgment on the complaint is denied, and the cross motion of the defendant PeterBarniak pursuant to CPLR 3211 (a) (5) to dismiss the complaint insofar as asserted against him isgranted.
The defendant Peter Barniak entered into a contract with the defendant SportsmansProperties, Inc. (hereinafter Sportsmans), for the construction and sale of a single-family house.In March 2001 Barniak commenced an action to recover damages for breach of contract againstSportsmans, alleging that the house had been constructed in an unworkmanlike manner. Barniakprevailed in his breach of contract action, and a judgment in his favor and against Sportsmans, inthe principal sum of $91,650.12, was entered on November 8, 2004. After obtaining thejudgment, Barniak learned that, while the breach of contract action was still pending, BarryRichter, in his capacity as president and principal shareholder of Sportmans, had transferred titleto premises known as 209 Sportmans Avenue (hereinafter the subject property) from Sportmansto his wife, the plaintiff, Suzanne Richter. Thereafter, on March 7, 2005, Barniak commenced asecond action against Barry Richter, Suzanne Richter, and Sportsmans (hereinafter collectivelythe defendants in the second action) alleging, among other things, that the transfer was afraudulent conveyance in violation of Debtor and Creditor Law § 273-a because it wasmade without fair consideration at a time when Sportsmans was a defendant in the breach ofcontract action. The defendants in the second action denied the allegations in the complaint andasserted, as an affirmative defense, that the property had been transferred to Suzanne Richter tosatisfy a $150,000 mortgage debt which Sportsmans owed to her, and that satisfaction of thisantecedent debt constituted fair consideration for the transfer. After the defendants in the secondaction failed to comply with certain discovery orders, Barniak moved pursuant to CPLR 3126 toresolve all issues in his favor, preclude the defendants in the second action from offering anydocumentary evidence, and strike their answer and affirmative defense. The Supreme Court inthe second action granted Barniak's motion and entered a judgment, inter alia, striking the answerand [*2]affirmative defense, resolving all issues in favor ofBarniak, and setting aside the conveyance of the subject property as fraudulent. The judgment infavor of Barniak in the second action was affirmed by this Court in June 2008 (see Barniak v Richter, 52 AD3d629 [2008]).
Suzanne Richter subsequently commenced the instant action to foreclose her mortgage on thesame real property that Sportsmans had previously transferred to her in satisfaction of the allegedantecedent debt, which transfer had been set aside in the second action, naming, among others,Sportsmans and Barniak as defendants. Suzanne Richter subsequently moved, inter alia, forsummary judgment on the complaint, and Barniak cross-moved pursuant to CPLR 3211 (a) (5) todismiss the action insofar as asserted against him on the ground that it was barred by the doctrineof res judicata. By order dated August 27, 2009, the Supreme Court granted Suzanne Richter'smotion, and denied Barniak's cross motion.
On appeal, Barniak continues to maintain that the instant action insofar as asserted againsthim is barred by the doctrine of res judicata. We agree. "Entry of an order pursuant to CPLR3126 striking an answer is the equivalent of a default in answering" (Fappiano v City of New York, 5 AD3d627, 628 [2004]; see Rokina Opt. Co. v Camera King, 63 NY2d 728 [1984]; Pisciotta v Lifestyle Designs, Inc., 62AD3d 850, 852 [2009]). A judgment by default which has not been vacated is conclusive forres judicata purposes, and encompasses both issues which were raised or could have been raisedin the prior action (see Lazides v P & GEnters., 58 AD3d 607, 609 [2009]; Perkins v Allstate Ins. Co., 51 AD3d 647, 648 [2008]; Zayatz v Collins, 48 AD3d 1287,1289 [2008]; 83-17 Broadway Corp. vDebcon Fin. Servs., Inc., 39 AD3d 583, 585 [2007]). Furthermore, "under New York'stransactional analysis approach to res judicata, 'once a claim is brought to a final conclusion, allother claims arising out of the same transaction or series of transactions are barred, even if basedupon different theories or if seeking a different remedy' " (Matter of Hunter, 4 NY3d 260, 269 [2005], quoting O'Brien vCity of Syracuse, 54 NY2d 353, 357 [1981]). Here, the existence of a valid antecedent debtconsisting of the mortgage upon which this foreclosure action is predicated was raised as adefense in the second action, and that action resulted in a judgment on the merits setting aside theconveyance of the subject property as fraudulent. Under these circumstances, the doctrine of resjudicata bars Richter from maintaining this foreclosure action, which has the potential to impairrights conclusively established in the prior action (see Matter of People v Applied Card Sys., Inc., 11 NY3d 105, 125[2008], cert denied sub nom. Cross Country Bank, Inc. v New York, 555 US —,129 S Ct 999 [2009]; Lazides v P & G Enters., 58 AD3d at 609; 83-17 BroadwayCorp. v Debcon Fin. Servs., Inc., 39 AD3d at 585; Million Gold Realty Co. v S.E. & K. Corp., 4 AD3d 196, 197[2004]; Rizzo v Ippolito, 137 AD2d 511 [1988]), and the Supreme Court should havegranted Barniak's cross motion pursuant to CPLR 3211 (a) (5) to dismiss the complaint insofar asasserted against him.
In light of our determination, we need not address Barniak's remaining contentions. Skelos,J.P., Balkin, Eng and Austin, JJ., concur.