| Vallario v 25 W. 24th St. Flatiron, LLC |
| 2017 NY Slip Op 02690 [149 AD3d 791] |
| April 5, 2017 |
| Appellate Division, Second Department |
[*1]
| George H. Vallario, Jr., et al., Appellants, v 25 West24th Street Flatiron, LLC, Respondent, et al., Defendant. |
Jacob S. Feinzeig, Brooklyn, NY, for appellant-respondent.
Alexander M. Dudelson, Brooklyn, NY, for respondents-appellants.
In an action to retain a down payment on a stock purchase agreement, the defendant 25 West24th Street Flatiron, LLC, appeals, as limited by its brief, from so much of an order of theSupreme Court, Kings County (Baynes, J.), dated May 28, 2015, as denied its motion for leave toenter a default judgment upon the plaintiffs' failure to reply to its counterclaims to recoverdamages for breach of the agreement, and the plaintiffs cross-appeal, as limited by their brief,from so much of the order as denied their cross motion, in effect, for summary judgment on thecomplaint.
Ordered that the order is affirmed insofar as appealed and cross-appealed from, without costsor disbursements.
In July 2013, the plaintiffs and the defendant 25 West 24th Street Flatiron, LLC (hereinafterFlatiron), entered into an agreement for the sale by the plaintiffs to Flatiron of 100 shares of stockin 25 West 24th Street Realty Corp. (hereinafter the corporation). The 100 shares constitutedtwo-thirds of the stock of the corporation.
Flatiron made a down payment of $100,000, which the plaintiffs placed in escrow. Flatironasked for several extensions of the closing date for additional due diligence investigation. WhenFlatiron failed to close, the plaintiffs declared Flatiron in default and terminated the contract.Flatiron demanded return of the down payment. On December 5, 2014, the plaintiffs commencedthis action to retain the down payment.
In January 2015, Flatiron counterclaimed for damages of more than $5,000,000, alleging thatits due diligence revealed that the property was encumbered by numerous judgments andviolations. The answer and counterclaims were served and filed on January 26, 2015.
By notice of motion dated March 10, 2015, Flatiron moved for leave to enter a defaultjudgment upon the plaintiffs' failure to reply to its counterclaims. The plaintiffs opposed themotion and cross-moved, in effect, for summary judgment on the complaint. The plaintiffs'attorney attributed his failure to reply to the counterclaims to law office failure, based upon amistake in the law (see Betty v City ofNew York, 12 AD3d 472 [2004], citing Meyerson v John A. Lynch, Inc., 29AD2d 761 [1968]). The order appealed from denied both the motion and the crossmotion.
[*2] The general rule is that in order tovacate a default, a party must demonstrate a reasonable excuse for the default and a potentiallymeritorious defense (see CPLR 5015 [a] [1]). However, the sufficiency of an excuse isnot as significant where the default is short—such as the approximately three-week delayin this case (see Chakmakian vMaroney, 78 AD3d 1103 [2010]; Giha v Giannos Enters., Inc., 69 AD3d 564 [2010]). Here the delaywas brief, and was neither intentional nor part of a pattern of neglect. Moreover, the plaintiffsestablished a potentially meritorious defense to the counterclaims. Accordingly, the denial ofFlatiron's motion for leave to enter a default judgment upon the plaintiffs' failure to reply to itscounterclaims was a provident exercise of discretion (see Adolph H. Schreiber Hebrew Academy of Rockland, Inc. vNeedleman, 90 AD3d 791 [2011]).
Furthermore, in support of their cross motion, in effect, for summary judgment on thecomplaint, the plaintiffs failed to establish their prima facie entitlement to judgment as a matterof law. Accordingly, the Supreme Court properly denied the cross motion, regardless of thesufficiency of the papers submitted in opposition (see Winegrad v New York Univ. Med.Ctr., 64 NY2d 851, 853 [1985]). Dillon, J.P., Austin, Hinds-Radix and Maltese, JJ.,concur.