An objection that the summons and complaint was not properly served is waived if, having raised such an objection in a pleading, the objecting party does not move for judgment on that ground within 60 days after serving the pleading, unless the court extends the time upon the ground of undue hardship.
US Bank, N.A. v. Orlando, NY Slip Op 02078 (2d Dep't April 17, 2024)
Legal Brief
Defendant sufficiently demonstrated a reasonable excuse in support of its motion to vacate the default judgment entered against it. Its counsel abandoned his duties to file an answer and respond to the default judgment motion, despite having advised defendant that he was being paid by defendant's surety to appear on defendant's behalf. The record does not indicate a pattern of willful default and neglect, and there is no claim of prejudice.
JDS Constr. Group LLC v. Copper Servs., LLC, NY Slip Op 02097 (1st Dep't April 18, 2024)
Legal Brief
Pursuant to CPLR 2103, parties who have appeared in an action involving the sale of real property pursuant to a judgment, and who have not waived service, are entitled to service of all papers, including a notice of sale. However, a party who defaults in appearing in a foreclosure action is not entitled to notice of a judicial sale, and, therefore, the lack of notice is not the basis for a motion to vacate and set aside a foreclosure sale.
U.S. Bank N.A. v. Ashon, NY Slip Op 0277 (2d Dep't April 17, 2024)
Legal Brief
Plaintiff previously litigated whether defendants were entitled to a fee in her matrimonial action. In support of her motion to vacate defendants' charging lien, plaintiff asserted that defendants' failure to present expert evidence regarding domestic abuse and the valuation of the family's closely held company constituted malpractice. At the hearing on the motion, plaintiff agreed by stipulation to withdraw with prejudice her motion to vacate the charging lien and to authorize the fee at issue to be withdrawn from counsel's Divorce IOLA account. However, in her amended complaint in this action, plaintiff reasserted the claim for malpractice. Where a client has challenged and lost on the issue of whether counsel is entitled to a fee, that determination collaterally estops a subsequent claim for legal malpractice. The resolution of the matter by stipulation does not make a difference because a withdrawal with prejudice has preclusive effect.
Rothman v. Sandra Radna, P.C., NY Slip Op 02102 (1st Dep't April 18, 2024)
When one action sounds in contract and the other in tort, the court should not grant consolidation. Here, the breach of contract and fraudulent conveyance actions present different questions of law and fact. Moreover, the fraudulent conveyance action will be moot if plaintiffs fail to win the breach of contract action. Finally, the two actions are at different stages, so that consolidation would lead to a delay in trying the breach of contract action.
3B Assoc. LLC v. Ecommission Solutions, LLC, NY Slip Op 02086 (1st Dep't April 18, 2024)
Stipulations of settlement are favored by the courts and are not lightly set aside. A stipulation of settlement that is fair on its face will be enforced according to its terms unless there is proof of fraud, duress, overreaching, or unconscionability. The stipulation will not be vacated simply because, after the fact, a party believes that the agreement was improvident in some respect or that it constituted a bad bargain.
Tsikhiseli v. Colombo, NY Slip Op 02075 (2d Dep't April 17, 2024)
The default judgment was not vacated pursuant to CPLR 5015(a)(1) because defendant failed to establish a reasonable excuse for its default. The withdrawal order at issue was properly served on the Secretary of State as defendant's agent, pursuant to LLC Law § 303[a]. The failure to keep a current address on file with the Secretary of State is not a reasonable excuse for a default. Defendant concedes that the order was sent to its representative's correct email address. The ensuing default order and judgment were mailed to defendant at its admitted address. Its failure to take any steps to vacate the default until over three months later, after its assets were restrained, is not excusable.
San-Dar Assoc. v. Corporate Habitat NY, LLC, NY Slip Op 02028 (1st Dep't April 16, 2024)
A plaintiff seeking to pierce the corporate veil must show that (1) the owners exercised complete domination of the corporation in respect to the transaction attacked; and (2) that the domination was used to commit a fraud or wrong against the plaintiff, resulting an injury to the plaintiff. In addition to complete domination of the corporation, the pleading must allege abuse of the privilege of doing business in the corporate form to perpetrate a wrong or injustice. Thus, in order to survive a motion to dismiss the complaint pursuant to CPLR 3211(a)(7), the plaintiff must allege facts that, if taken as true and accorded every favorable inference, would support a finding that the defendant abused the corporate form, such as the failure to adhere to corporate or LLC formalities, inadequate capitalization, commingling of assets, or the personal use of corporate or LLC funds.
Board of Mgrs. of the Brighton Tower II Condominium v. Brighton Bldr., LLC, NY Slip Op 01903 (2d Dep't April 10, 2024)
The favorable allocation of risks to one party is not an implied duty inherent in an agreement, nor would it be reasonable for a promisee to believe that allocating risks in its favor is an inherent obligation of a promisor. Any claim concerning the allocation of the risk of a plaintiff's up-front investment costs could arise only from a negotiated contractual term or some other legal basis for undertaking the obligation.
Mayville Engg. Co., Inc. v. Peloton Interactive, Inc., NY Slip Op 01990 (1st Dep't April 11, 2024)
Rulings directed to an examination before trial, whether made upon motion papers or not, are not appealable as of right.
Ward v. City of New York, NY Slip Op 02001 (1st Dep't April 11, 2024)
A court has the inherent power to disqualify an expert witness in order to preserve the fairness and integrity of the judicial process. Disqualification based on a conflict of interest is required when the court finds both: (1) that it was objectively reasonable for a party claiming to have initially retained the expert to conclude that a confidential relationship existed between them, and (2) that confidential or privileged information was disclosed by the party to the expert.
Here, Supreme Court providently exercised its discretion in granting the motion to disqualify plaintiff's damages expert, due to the conflict of interest created when his firm hired an employee who worked for defendants' expert during the pendency of this action. Defendants demonstrated that the employee actively participated in the preparation of defense litigation strategies. The employee admittedly reviewed and analyzed plaintiff's documents on defendants' behalf, prepared or had input in drafting documents summarizing plaintiff's financial data, and communicated with and attended meetings with defendants' counsel. Accordingly, defendants had a reasonable expectation of a confidential relationship with the employee, and confidences were actually exchanged with him, satisfying both prongs of the disqualification test.
Manna Amsterdam Ave. LLC v. West 73rd Tenants Corp., NY Slip Op 01892 (1st Dep't April 9, 2024)