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BD15 LLC v. MLHB, LLC
BD15 LLC v MLHB, LLC 2024 NY Slip Op 30385(U) February 1, 2024 Supreme Court, New York County Docket Number: Index No. 655392/2021 Judge: Sabrina Kraus Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication.
INDEX NO. 655392/2021 NYSCEF DOC. NO. 124 RECEIVED NYSCEF: 02/01/2024
SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: HON. SABRINA KRAUS PART 57M Justice ----------------------------------------------------------------- ----------------X INDEX NO. 655392/2021 BD15 LLC, MOTION DATE 12/29/2023 Plaintiff, MOTION SEQ. NO. 003 - V -
MLHB, LLC, MONEY-PENNY HOLDING LLC DECISION + ORDER ON MOTION Defendants. ------------------------------------------------------------------- --------------X
The following e-filed documents, listed by NYSCEF document number (Motion 003) 54, 55, 56, 57, 58, 59, 60, 61, 62,63, 64,65,66,67, 68, 69, 70, 71, 72, 73, 74, 75, 76, 77, 78, 79,80,81, 82,83, 84, 85, 86, 87, 88, 89, 90, 91, 92, 93, 94, 95, 96, 97, 98, 99, 100, 101, 102, 103, 104, 105, 106, 107, 108, 109, 110, 111,112,113,114,115,116,117,118,119,120,121,122,123 were read on this motion to/for VACATE - DECISION/ORDER/JUDGMENT/AWARD.
BACKGROUND
Plaintiff commenced this action seeking damages based on its allegation that it was
defrauded out of millions of dollars by Defendants through a scheme to buy and re-sell a famous
and rare diamond, once owned by Shirley Temple (the "Blue Diamond"). Defendants failed to
appear and pursuant to a decision and order dated June 24, 2022, this Court granted Plaintiff a
default judgment in the amount of $2,610,826.28.
MLHB, LLC has now appeared and moved to vacate the default judgment. For the
reasons set forth below, the motion is granted.
DISCUSSION
CPLR § 317 provides in pertinent part:
A person served with a summons other than by personal delivery to him or to his agent for service designated under rule 318 ... who does not appear may be allowed to defend the action within one year after he obtains knowledge of entry of the judgment, but in no
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event more than five years after such entry, upon a finding of the court that he did not personally receive notice of the summons in time to defend and has a meritorious defense. If the defense is successful, the court may direct and enforce restitution in the same manner and subject to the same conditions as where a judgment is reversed or modified on appeal.
Personal service on a corporation means in-hand delivery to a corporate representative
such as an officer, director or managing agent. CPLR §3 ll(a)(l). Delivery to the New York
Secretary of State is not personal delivery to the corporation. See Rivera v. Triangle Excavators
of New York, LLC, 173 a.d.3D 1088 (2d Dept 2019); Fleetwood Park Corp. v. Jerrick
Waterproofing Corp., 203 A.D.2d 238,239, 615 N.Y.S.2d 695, 697 (2d Dept. 1994).
Movant submits the affidavit of Marianne Lafiteau ("ML") in support of the motion. ML
is the sole member ofMLHB LLC, and the Executrix of the Estate of Henri Barguirdjan ("HB").
ML married HB in March 2018. On October 13, 2020, HB hung himself at the parties'
Southampton home. Shortly after his suicide, ML learned that her marriage was a sham and HB
had never divorced his previous wife. ML also began to discover a series of frauds and
deceptions HB allegedly engaged in and was faced with several litigations in that regard.
ML asserts she first learned of this action in January 2023, when Plaintiff executed on
part of the judgment herein as against some $50,000.00 in a bank account.
ML also asserts that a meritorious defense to this action. She asserts that HB acted in his
individual capacity regarding the sale of the diamond. ML acknowledges that MLHB did
receive a portion of the Blue Diamond investment in its account, but asserts that MLHB
discharged any obligation it had, if any, with respect to those funds when the funds were
transferred to Windsor in payment of HB and the investors' interest in the Blue Diamond. ML
asserts that MLHB retained none of the investor funds, nor did MLHB benefit from the investor
funds. ML asserts that those initial funds came into the MLHB account and were
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contemporaneously transferred out of that account, and that MLHB acted as nothing more than a
conduit to facilitate the transaction between HB and Duke Buchan for their purchase of their
interest in the Blue Diamond. MLHB received nothing on the sale of the Blue Diamond and has
no retained property of any of the creditors.
Finally, it is undisputed that Plaintiff never filed proof of service of the motion which
resulted in the judgment being entered with the Court, and that many of the mailings made in
connection in this action were addressed to HB, whom ML alleges Plaintiff knew to be deceased.
Movant does not contest that this court has personal jurisdiction over MLHB.
Based on the foregoing, the Court finds that movant has established a basis to vacate the
judgment pursuant to CPLR § 317. The Court notes the strong preference for cases to be
disposed of on their merits rather than on default and for each party to have their day in court.
Navarro v. A. Trenkman Estate, Inc., 279 A.D.2d 257 [1st Dept. 2000].
WHEREFORE it is hereby:
ORDERED that defendant's motion to vacate its default herein is granted on condition that
defendant serve and file an answer to the complaint herein within 20 days from the date of this
order; and it is further
ORDERED that judgment entered herein is hereby vacated as to MLHB, LLC only and
shall remain in full force and effect as to Money-Penny Holding, LLC ; and it is further
ORDERED that any further executions on said judgment as against MLHB, LLC be
deemed null and void; and it is further
ORDERED that the portion of the motion seeking to direct plaintiff to return funds
already collected on the judgment to ML is denied without prejudice to MLHB' s rights to make
claims in regard to same at trial; and it is further
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ORDERED that counsel appear for a virtual preliminary conference on February 28,
2024, at 11 :00am; and it is further
ORDERED that any relief not specifically addressed herein has been considered and is
denied; and it is further
OREDERD that the Clerk is directed to restore this action to the active calendar; and it is
further
ORDERED that defendant shall serve a copy of this order with notice of entry on the Clerk
of the General Clerk's Office; and it is further
ORDERED that such service upon the Clerk shall be made in accordance with the
procedures set forth in the Protocol on Courthouse and County Clerk Procedures for
Electronically Filed Cases (accessible at the "E-Filing" page on the court's website at the
addresswww.nycourts.gov/supctmanh);].
This constitutes the decision and order of this Court.
2/1/2024 DATE SABRINA KRAUS, J.S.C.
~ CHECK ONE: CASE DISPOSED NON-FINAL DISPOSITION
GRANTED □ DENIED GRANTED IN PART □ OTHER APPLICATION: SETTLE ORDER SUBMIT ORDER
CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT □ REFERENCE
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