Balboa Capital Corp. v. CKO Kick Boxing Mamaroneck LLC

75 Misc.3d 402

167 N.Y.S.3d 743

BALBOA CAPITAL CORPORATION, a California Corporation, Plaintiff,

v.CKO KICK BOXING MAMARONECK LLC, a New York limited liability company dba CKO Yonkers, Nicholas Vurchio, an individual; Frank DeMichele, an individual; and Does 1 through 10, inclusive, Defendants.

Index No. 66715/2021

Supreme Court, Westchester County, New York.

Decided on April 11, 2022

For Plaintiff: Barry Scott Crane, Esq., Becker, LLC, 2 Park Avenue, 20th Floor, Suite 2006, New York, New York 10016

For Defendants: No Appearances

Damaris E. Torrent, J. Unopposed motion by plaintiff for an order granting summary judgment in lieu of complaint pursuant to CPLR 3213 and 5401, directing the entry of judgment for plaintiff in the amount of $38,249.73 based on a judgment entered in the State of California, awarding attorney's fees and costs related to this motion, and for such other and further relief as this Court deems just and proper.¹

Plaintiff commenced this action by motion for summary judgment in lieu of complaint to enforce an unsatisfied foreign judgment secured by plaintiff against defendant CKO Kick Boxing Mamaroneck LLC d/b/a CKO Yonkers, Nicholas Vurchio and Frank DeMichele. Plaintiff seeks to enforce and collect upon said judgment out of defendants’ New York assets. Plaintiff submits the default judgment, dated September 28, 2021, in favor of plaintiff and against defendants in the amount of $38,249.73 in the California action (Exhibit A). The lease agreement dated August 31, 2018 provides that the lessee agrees to reimburse the lessor for all costs, expenses and attorney's fees paid to enforce the lease or collect on the obligations under the lease and in any related legal proceeding (Reyes Affirmation, Exhibit B, paragraph 13). Plaintiff asserts that by lease agreement the parties consented to the jurisdiction of the Courts in Orange County, California, which is plaintiff's place of residence (Reyes Affirmation, Exhibit B, paragraph 20). Plaintiff avers that the California judgment remains unpaid in its entirety.

Pursuant to CPLR 3213, when an action is based upon an instrument for the payment of money only or upon any judgment, plaintiff may serve a summons with notice of motion for summary judgment and supporting papers in lieu of a complaint. The defendant is to submit answering papers on the motion within the time provided in the notice of motion ( CPLR 3213 ). This statute provides an expedited method to resolve disputes on presumptively meritorious claims. Furthermore, the full faith and credit clause of the United States Constitution requires a state to recognize the foreign judgment of another state, giving it res judicata effect and avoiding the relitigation of issues in one State that have already been decided in another. "Absent a challenge to the jurisdiction of the issuing court, New York is required to give the same preclusive effect to a judgment from another state as it would have in the issuing state, and it is precluded from inquiring into the merits of the judgment" (see Balboa Capital Corp. v. Plaza Auto Care, Inc. , 178 A.D.3d 646, 114 N.Y.S.3d 91 [2d Dept. 2019] [internal citations and quotations omitted]; Madjar v. Rosa , 83 A.D.3d 1011, 923 N.Y.S.2d 561 [2d Dept. 2011] ).

Here, plaintiff established its prima facie entitlement to judgment as a matter of law by submitting the lease agreement and the judgment, which obligated defendants to pay the amount set forth in the judgment, including prejudgment interest at a rate of 10%, attorney's fees, and costs. Plaintiff submits the affidavit of Jesus Reyes, the Legal Collector for plaintiff, demonstrating that the judgment remains unpaid (see Balboa Capital Corp. , 178 A.D.3d at 646, 114 N.Y.S.3d 91 ). Despite proper service, defendants have defaulted on the motion, failing to submit any answering papers as required by CPLR 3213 or request additional time to do so (see Rogers McCarron & Habas, P.C. v. Acker , 189 A.D.3d 1487, 134 N.Y.S.3d 756 [2d Dept. 2020] ).

One last issue is the appropriate rate of interest following the entry of judgment. In Hospital Service Plan of New Jersey v. Warehouse Production & Sales Employees Union , the Second Department determined that "a judgment rendered in a sister State which is filed in this State pursuant to CPLR article 54 is entitled, under the principles of full faith and credit, to enforcement together with the rate of interest applicable in the State in which it was originally rendered. Therefore, in the instant matter, in order to satisfy the judgment, appellants must pay interest on it at the 8% New Jersey rate rather than the 6% New York rate" (76 A.D.2d 882, 882, 429 N.Y.S.2d 31 [2d Dept. 1980] ) [emphasis added]).

Nevertheless, in an early case, the Court of Appeals held that where a judgment was rendered in the territory of Utah in 1877 for a fixed sum with interest at the rate of ten per cent per annum, which was the lawful interest rate where the rate was not stated or agreed upon, New York law nevertheless governed as to the amount of interest ( Wells Fargo & Co. v. Davis , 105 N.Y. 670, 670, 12 N.E. 42 [1887] ). This ancient case continues to be cited as controlling. Thus, in Abu Dhabi Commercial Bank PJSC v. Saad Trading , in an action seeking recognition and enforcement of a foreign country money judgment pursuant to CPLR article 53, the First Department stated: "Postjudgment interest is a procedural matter governed by the law of the forum. Thus, the court properly concluded that New York's statutory postjudgment interest rate should apply to the English judgment" ( 117 A.D.3d 609, 609, 986 N.Y.S.2d 454 [1st Dept. 2014], citing Wells Fargo & Co. , 105 N.Y. at 672, 12 N.E. 42 [1887] ; De Nunez v. Bartels , 264 A.D.2d 565, 695 N.Y.S.2d 31 [1st Dept. 1999] )." (See also, John Galliano, S.A. v. Stallion, Inc. , 62 A.D.3d 415, 879 N.Y.S.2d 400 [1st Dept. 2009] [plaintiff would have been entitled to interest at New York rate on French judgment but waived the higher rate by failing to request it]; Buckeye Retirement Co., L.L.C., Ltd. v. Lee , 41 A.D.3d 183, 183, 837 N.Y.S.2d 641 [1st Dept. 2007] [on plaintiff's motion for summary judgment in lieu of complaint to domesticate a Florida default judgment, New York interest rate applied]).

Lower court decisions generally follow the reasoning of the Court of Appeals and apply the New York interest rate to foreign judgments. An early Bronx County case noted the conflict between Hospital Service Plan and Wells Fargo & Co. and declined to follow Hospital Service Plan ( Cahn v. Cahn , 119 Misc. 2d 150, 462 N.Y.S.2d 535 [Sup. Ct., Bronx County 1983] ). The validity of Hospital Service Plan was called into question in a recent lower court case in which plaintiff sought judgment based on an earlier judgment obtained in Colorado:

Plaintiff relies upon Hospital Serv. Plan of N.J. v. Warehouse Prod. & Sales Empls. Union in support of its request that interest should continue at the Colorado rate. There, the Appellate Division, Second Department found that "[a] judgment rendered in a sister State ... is entitled, under the principles of full faith and credit, to enforcement together with the rate of

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