| Wei Hong Hu v Sadiqi |
| 2011 NY Slip Op 03051 [83 AD3d 820] |
| April 12, 2011 |
| Appellate Division, Second Department |
| Wei Hong Hu, Plaintiff, v Mohammed F. Sadiqi et al.,Appellants, and AAE Holdings, Inc., Respondent. |
—[*1] Law Office of George T. Lewis, Jr., P.C., Syosset, N.Y. (Matthew A. Kaufman of counsel),for respondent.
In an action for a judgment declaring the rights and obligations of the parties with respect tothe sale of real property pursuant to a right of first refusal contained in a lease, the defendantsMohammed F. Sadiqi and Unique Dollar Store, Inc., appeal from an order of the Supreme Court,Queens County (Kitzes, J.), entered October 9, 2009, which denied their motion to restore theaction to the trial calendar and granted the cross motion of the defendant AAE Holdings, Inc., todismiss their cross claims pursuant to CPLR 3126.
Ordered that the order is affirmed, with costs.
The defendants Mohammed F. Sadiqi and Unique Dollar Store, Inc. (hereinafter together thetenants), rented certain real property (hereinafter the premises) from the defendant AAEHoldings, Inc. (hereinafter AAE), pursuant to a 10-year lease commencing October 1, 2004(hereinafter the lease). The lease gave the tenants the right of first refusal if AAE decided to sellthe premises. The plaintiff purchased the premises in January 2006 for the sum of $1.7 million.The tenants objected to the sale, and the plaintiff commenced this action on March 16, 2006,seeking a judgment declaring the rights and obligations of the parties under the right of firstrefusal.
In its answer, AAE alleged, inter alia, that the tenants, in breach of the covenants and termsof the lease, had assigned the premises to a third party in September 2005, and issued aninsufficient funds check for rent in January 2006 and, accordingly, had "waived and forfeited allrights" under the lease. In their answer, the tenants asserted cross claims against AAE, seeking atleast $5 million in damages on causes of action alleging fraud and breach of contract. In February2007 AAE served discovery demands upon the tenants.
In an order dated May 31, 2007, the Supreme Court directed all parties to completeoutstanding discovery by June 30, 2007. That order (hereinafter the conditional order ofpreclusion) also recited that "[a]ny party who fails to comply shall be precluded from offeringevidence or testifying at the time of trial."
On June 19, 2007, the tenants changed counsel. On July 11, 2007, AAE's counsel [*2]forwarded copies of its outstanding discovery demands to thetenants' new attorney. Thereafter, all parties stipulated to mark the matter off the trial calendar,and agreed the matter could be restored by stipulation or motion.
On May 27, 2009, the tenants moved to restore the action to the trial calendar. AAEcross-moved pursuant to CPLR 3216 to dismiss the tenants' cross claims with prejudice, based onthe tenants' failure to comply with the conditional order of preclusion. On July 14, 2009, thetenants finally responded to AAE's discovery demands. In an order dated October 5, 2009, theSupreme Court denied the tenants' motion to restore the action to the trial calendar, and grantedAAE's cross motion to dismiss the tenants' cross claims against it. The tenants appeal.
The Supreme Court properly granted AAE's cross motion to dismiss the tenants' cross claimsagainst it. A conditional order of preclusion requires a party to provide certain discovery by adate certain, or face the sanctions specified in the order (see Gibbs v St. Barnabas Hosp., 16 NY3d 74 [2010]; Zouev v City of New York, 32 AD3d850 [2006]). If the party fails to produce the discovery by the specified date, the conditionalorder becomes absolute (see Zouev vCity of New York, 32 AD3d 850 [2006]). To be relieved of the adverse impact of theorder, the defaulting party must demonstrate a reasonable excuse for its failure to produce therequested items by the court-ordered deadline and the existence of a potentially meritoriousdefense or claim (id.; see also Lopez v Imperial Delivery Serv., 282 AD2d 190,196 [2001]).
In order to establish that their cross claims against AAE were meritorious, the tenants wererequired to demonstrate that they were ready, willing, and able to purchase the premises pursuantto the right of first refusal (see Ciprianov Glen Cove Lodge # 1458, B.P.O.E., 1 NY3d 53, 61 [2003]). However, in his affidavitof merit, Sadiqi stated only that he had invested heavily in the premises. He failed to state thatthe tenants were actually ready, willing, and able to purchase the premises, and failed to refuteAAE's allegations that the tenants were in default of the lease at the time the plaintiff purchasedthe premises and thereby waived and forfeited all their rights under the lease (see Schultz v Ljungqvist, 1 AD3d498, 499 [2003]). Likewise, the Supreme Court properly found that the tenants failed todemonstrate a reasonable excuse for their default. The tenants' attorney stated that he wasunaware of the conditional order of preclusion because the tenants' prior attorneys had failed toinform him of it. However, "bare allegations of incompetence on the part of prior counsel" areinsufficient to excuse a default (Spatz v Bajramoski, 214 AD2d 436, 436 [1995]; see also Huggins v Parkset Supply,Ltd., 24 AD3d 610, 611 [2005]; Beale v Yepes, 309 AD2d 886 [2003]) and, inany event, the record contains no evidence that the tenants' new attorney attempted to review thestatus of the case when he was substituted.
Since the conditional order of preclusion precluded the tenants from offering any evidence ortestimony at trial, they would be unable to establish a prima facie case on their cross claims.Accordingly, the Supreme Court properly granted AAE's motion to dismiss the tenants' crossclaims (see e.g. Koslosky vKhorramian, 31 AD3d 716 [2006]; Gavrielatos v Vienna Hotel, 31 AD3d 496 [2006]; Echevarria v Pathmark Stores, Inc., 7AD3d 750, 751 [2004]; Clissuras v Concord Vil. Owners, 233 AD2d 475 [1996]).
The tenants' remaining contentions either are without merit or have been rendered academic.Skelos, J.P., Eng, Austin and Cohen, JJ., concur.