Fang Realty Corp. v. Prime Six, Inc.

Fang Realty Corp. v Prime Six, Inc. (2022 NY Slip Op 51214(U)) [*1] Fang Realty Corp. v Prime Six, Inc. 2022 NY Slip Op 51214(U) [77 Misc 3d 129(A)] Decided on December 9, 2022 Appellate Term, Second Department Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports. Decided on December 9, 2022 SUPREME COURT, APPELLATE TERM, SECOND DEPARTMENT, 2d, 11th and 13th JUDICIAL DISTRICTS PRESENT: : THOMAS P. ALIOTTA, P.J., MICHELLE WESTON, WAVNY TOUSSAINT, JJ 2021-539 K C Fang Realty Corp., Appellant-Respondent, against Prime Six, Inc., Respondent-Appellant. Wenig Saltiel, LLP (Dan M. Blumenthal of counsel), for appellant-respondent. Edelstein & Grossman (Jonathan I. Edelstein of counsel), for respondent-appellant. Appeal and cross appeal from an order of the Civil Court of the City of New York, Kings County (Consuelo Mallafre Melendez, J.), dated August 31, 2021. The order, insofar as appealed from by landlord, granted the branch of tenant's motion seeking to vacate a default final judgment entered June 7, 2021. The order, insofar as cross-appealed from by tenant, denied the branch of its motion seeking to dismiss the petition in a commercial holdover summary proceeding. ORDERED that the order is affirmed, without costs. Landlord commenced this commercial holdover proceeding in September 2020. Landlord obtained a default final judgment on June 7, 2021 following conspicuous-place service of the notice of petition and petition at the premises and mailings to the premises' address. On July 15, 2021, tenant was evicted. By order to show cause dated July 21, 2021, tenant moved to, among other things, vacate the default final judgment (see CPLR 5015 [a] [1], [4]) and, upon such vacatur, dismiss the petition based on a lack of proper service of process. By order dated August 31, 2021, the Civil Court (Consuelo Mallafre Melendez, J.) granted the branch of tenant's motion seeking to vacate the default final judgment, finding a reasonable excuse for the default and a potentially meritorious defense to the proceeding (see CPLR 5015 [a] [1]), but denied the branch seeking to dismiss the petition. Landlord appeals from so much of the order as granted [*2]the aforementioned branch of tenant's motion and tenant cross-appeals from so much of the order as denied the other branch. "Whether or not service was properly effectuated is a threshold issue to be determined before consideration of discretionary relief pursuant to CPLR 5015 (a) (1)" (Marable v Williams, 278 AD2d 459, 459 [2000]). "Pursuant to RPAPL 735, conspicuous-place service is permitted only where the landlord has attempted personal or substituted service and failed after having made a 'reasonable application,' which requires that there is 'at least a reasonable expectation of success in finding a person on the premises to whom delivery may be made' " (Doji Bak, LLC v Alta Plastics, 51 Misc 3d 148[A], 2016 NY Slip Op 50792[U], *1 [App Term, 2d Dept, 9th & 10th Jud Dists 2016], quoting 809-811 Kings Hwy., LLC v Pulse Laser Skin Care, 25 Misc 3d 130[A], 2009 NY Slip Op 52121[U], *2 [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2009]; see Brooklyn Hgts. Realty Co. v Gliwa, 92 AD2d 602, 602 [1983]). "While the effort the process server must make is less than that required under CPLR 308 (4) ('due diligence'), the effort must have some expectation of success" (Brooklyn Hgts. Realty Co. v Gliwa, 92 AD2d at 602; see Palumbo v Estate of Clark, 94 Misc 2d 1, 3 [Civ Ct, Bronx County 1978]). We agree with the Civil Court's determination that tenant was properly served with process. Service attempts were made on September 16, 2020 and September 22, 2020 before the process server resorted to conspicuous place service. While the store had been closed since March of 2020 due to the COVID-19 pandemic, we agree with the Civil Court's conclusion that tenant maintained a presence in the store and that there is no indication that tenant "abandoned the premises" such that conspicuous place service would be invalid. Consequently, there is no basis to vacate the default final judgment pursuant to CPLR 5015 (a) (4) and dismiss the petition. To be relieved of its default pursuant to CPLR 5015 (a) (1), tenant was required to demonstrate both a reasonable excuse for the default and a potentially meritorious defense to the proceeding (see Eugene Di Lorenzo, Inc. v A.C. Dutton Lbr. Co., 67 NY2d 138, 141 [1986]; Torres v DeJesus, 197 AD3d 1260 [2021]; Hawthorne Gardens Owners Corp. v Jacobs, 47 Misc 3d 148[A], 2015 NY Slip Op 50822[U] [App Term, 2d Dept, 9th & 10th Jud Dists 2015]). The determination of what constitutes a reasonable excuse sufficient to open a default lies within the sound discretion of the motion court (see Matter of Gambardella v Ortov Light., 278 AD2d 494 [2000]; see also Harcztark v Drive Variety, Inc., 21 AD3d 876, 876-877 [2005]). In this case, we find that the Civil Court did not improvidently exercise its discretion in determining that tenant demonstrated a reasonable excuse for its default. We also agree that tenant demonstrated a potentially meritorious defense to the proceeding. However, contrary to tenant's contention, its motion papers offer no basis to dismiss the petition at this juncture. Accordingly, the order is affirmed. WESTON and TOUSSAINT, JJ., concur. ALIOTTA, P.J., concurs in part and dissents in part and votes to modify the order by [*3]granting the branch of tenant's motion seeking to dismiss the petition. I would vacate the default final judgment pursuant to CPLR 5015 (a) (4) and dismiss the petition on the ground that conspicuous place service was not effectuated and, thus, that the court lacks personal jurisdiction over tenant. Pursuant to RPAPL 735 (1), it is only permissible to resort to conspicuous place service if, upon reasonable application, admittance cannot be obtained and a person who can accept service cannot be found. Neither was the case here. For both attempts at personal service, the affidavit of service of the notice of petition and petition states: "Attempts made: 9/16/20 @ 1:17 PM; 9/22/20 @ 9:43 AM - Commercial location closed. Brown paper on all windows, signage removed." Since the restaurant was obviously not in operation, any attempts that may have been made to both gain admittance and find a person to accept service fell far short of meeting the "reasonable application" requirement of RPAPL 735 (1) (see ZOT, LLC v Crown Assoc., 22 Misc 3d 133[A], 2009 NY Slip Op 50215[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2009]). Indeed, such attempts would have had no "expectation of success" (Brooklyn Hgts. Realty Co. v Gliwa, 92 AD2d 602, 602 [1983]), but rather would have been "predestined to failure" (Palumbo v Estate of Clark, 94 Misc 2d 1, 4 [Civ Ct, Bronx County 1978]). Consequently, the affidavit of service does not constitute prima facie evidence of proper service. I would note that tenant's admission, in its motion papers, of a periodic presence at the restaurant to check mail, relied upon by the Civil Court, does not cure the infirmities in the affidavit of service. Nor does tenant's failure to demonstrate that it had abandoned the premises. The issue is whether, upon reasonable application, admittance could be obtained and a person found there such that the attempts at personal service were likely to be successful. There is nothing in the record that suggests that it was likely that someone would be present to accept service of process at a restaurant that was closed for business or, even if someone was present, that a process server would be able to obtain admittance let alone to find such person there. While an occasional presence to check for mail may have increased the likelihood that the notice of petition would eventually be discovered affixed, as stated in the affidavit of service, "upon a conspicuous part of the property sought to be recovered," it does not, in my opinion, provide a basis for the process server to believe, under the circumstances presented, that there would be a person on the premises to whom delivery could be made, let alone increase the likelihood that the process server would be able to gain admittance to find such a person (see Doji Bak, LLC v Alta Plastics, 51 Misc 3d 148[A], 2016 NY Slip Op 50792[U] [App Term, 2d Dept, 9th & 10th Jud Dists 2016]; see Brooklyn Hgts. Realty Co. v Gliwa, 92 AD2d 602, 602 [1983]). Therefore, I would modify the order by granting the branch of tenant's motion seeking to vacate the default final judgment pursuant to CPLR 5015 (a) (4) and, upon such vacatur, granting the branch of the motion seeking to dismiss the petition for lack of personal jurisdiction. ENTER: Paul Kenny Chief Clerk Decision Date: December 9, 2022