COURT HIT BROTHER WITH $2 MILLION JUDGMENT
Two brothers – V.C. and J.C. -- owned 50% of a corporation which held an ownership interest in a piece of property located in Long Island City.
And after V.C. transferred the property to a company that he exclusively owned, J.C. filed suit seeking to recover damages and alleging “breach of fiduciary duty and conversion,” and seeking “rescission of the deed transferring the subject property.”
During the course of the litigation, when V.C. and his entity failed to appear for a conference, a Queens County Supreme Court judge struck their answer and set the matter down for an inquest.
When those defendants later sought to vacate their default, that request was denied, and a money judgment in the amount of $1,991,559.64 was entered against them.
On appeal, the Appellate Division, Second Department, noted that a party seeking to vacate a default, must show “both a reasonable excuse for the default and a potentially meritorious defense to the action.” In this instance, however, the appellate court noted that the defendants’ paperwork was woefully deficient, characterizing their application for relief as “conclusory, undetailed, and uncorroborated and thus, insufficient to establish a reasonable excuse of the defendants' default.”
The AD2 thus concluded that the court below had “properly denied” the defendants’ request, and left the outcome undisturbed.
Talk about bad judgment ….
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DECISION