CRI Holdings Inc. v Red Hook 160 LLC 2024 NY Slip Op 34200(U) November 26, 2024 Supreme Court, New York County Docket Number: Index No. 652624/2022 Judge: Suzanne J. Adams 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. 652624/2022 NYSCEF DOC. NO. 136 RECEIVED NYSCEF: 11/26/2024
SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: HON.SUZAN NEJ.ADAMS PART 39M Justice ------------ ------------ ------------ -----------X INDEX NO. 652624/2022 CRI HOLDINGS INC., MOTION DATE NIA Plaintiff, MOTION SEQ. NO. 006 -v- RED HOOK 160 LLC, EST4E FOUR CAPITAL LLC a/k/a ESTATE FOUR LLC, DECISION + ORDER ON MOTION Defendants. --------------------------- -------------- -------X
The following e-filed documents, listed by NYSCEF document number (Motion 006) 116, 117, 118, 119, 120,121,122,1 24, 125,126,127, 128,129,130, 131, 132,133,134, 135 were read on this motion to/for VACATE - DECISION/ORDER/JUDGMENT/AWARD.
Upon the foregoing documents, it is ordered that plaintiffs motion to reargue two prior
motions is granted, and upon reargument, plaintiffs defaults are vacated and this court's prior
orders are reinstated as discussed hereinbelow. This matter arises out of the renovation and
construction of a residential and commercial property located in Brooklyn, New York. By decision
and order dated June 30, 2023, this court denied plaintiffs motion (mot. seq. 001) for a default
judgment against defendant Red Hook 160 LLC ("Red Hook") and granted Red Hook's cross-
motion for arbitration. By order of the same date this court also denied defendant Est4e Four ' Capital LLC a/k/a/ Estate Four LLC's ("Estate Four") motion to dismiss (mot. seq. 002).
Thereafter, Estate Four moved pursuant to CPLR 2221 to reargue the denial of its motion to
dismiss (mot. seq. 004) and plaintiff moved pursuant to CPLR 2221 to reargue the denial of its
motion for a default against Red Hook and the granting of Red Hook's cross-motion for arbitration
(mot. seq. 005). Plaintiff failed to appear at the December 4, 2023, oral argument of both motions,
and by the decision and orders dated December 4, 2Q23 (and amended on December 11, 2023) this
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court granted, on default, Estate Four's motion to reargue, and dismissed plaintiffs complaint as
to Estate Four (mot. seq. 004); and denied, on default, plaintiffs motion to renew and re-argue the
order denying entry of default as to Red Hook and directing plaintiff and Red Hook to proceed to
arbitration (mot. seq. 005). Plaintiff now moves pursuant to CPLR 5015 (a) (1) to vacate the orders
on mot. seqs. 004 and 005 dated December 4, 2023, and amended December 11, 2023, and to
reargue the court's decisions on mot. seqs. 001 and 002. Both defendants oppose the motion.
Plaintiff claims a reasonable excuse of law office failure on the part of its prior counsel that
resulted in its default in appearance at the December 4, 2023, oral argument of the motions to
renew and/or reargue. In support, plaintiff submits the affirmation of its prior counsel who states I
that his one-time failure to appear on said date was not willful, but due to the downsizing of his
firm, struggling to practice as a solo practitioner, and confusion of the appearance date (see (NY
St Cts Elec Filing [NYSCEF] Doc No. 120, Affirmation of Friedlander). A party seeking to vacate
a default pursuant to CPLR 5015 (a) (1) must demonstrate a reasonable excuse for failing to appear
and a meritorious claim (see Brown v Suggs, 38 AD3d 329, 329 [1st Dept 2007] [citations
omitted]). Given the strong public policy of this State to dispose of cases on their merits, absent
evidence of any willful or contumacious conduct, it is well-settled that one reasonable excuse for
failing to answer, appear, or otherwise respond is law office failure (see Alliance for Progress, Inc.
v Blondell Realty Corp., 114 NYS3d 656, 656 [1st Dept 2024]; see also Cornwall Warehousing,
Inc. v Lerner, 171 AD3d 540, 541 [1st Dept 2019] ["[p]laintiffs demonstrated a reasonable excuse
for their default ... based on law office failure, as detailed in the affirmation of their former counsel
who miscalendared the motion"]).
Here, the court finds that plaintiffs one-time failure to appear on December 4, 2023, based
on law office failure constitutes a reasonable excuse. The moving papers include detailed and
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credible explanations of the default by reason of law office failure on the part of plaintiffs prior
counsel (see cf Crudele v Price, 218 AD3d 534,535 [2d Dept 2023]). Plaintiff has established its
conduct was not willful or contumacious, and defendant has failed to refute that plaintiffs failure
to appear was plaintiffs first instance of nonappearance in this case. In addition, plaintiffs
factually detailed affidavit is sufficient to establish a potentially meritorious cause of action. As
such the motion to reargue mot. seqs. 004 and 005 is granted.
With respect to mot. seq. 005, this court's decision and order of December 4, 2023, and
amended December 11, 2023, is vacated, as it reflects plaintiffs default. However, upon
reargument of the court's decision and order of June 30, 2023 (mot. seq. 001), said order is
reinstated, such that plaintiffs motion for a default judgment against Red Hook is denied, and Red
Hook's cross-motion is granted to the extent that this matter is stayed as against Red Hook, and
plaintiff and Red Hook shall proceed to arbitration. There is no question that said parties entered
into valid and enforceable agreements to arbitrate the claims being alleged in the action. The plain
language of the arbitration provisions in the April and July agreements, which states that "both
parties hereby agree that any controversy or claim that either party may claim relating and/or
arising from this Agreement and/or Project shall be settled exclusively by binding arbitration ... "
is a "[r]equisite clear and unambiguous expression that the parties intended to mandate arbitration
of their dispute" (see Muriel Siebert & Co. v Intuit, Inc., 11 AD3d 415, 415 [1st Dept 2004]
[citations omitted]). Additionally, "New York has a long and strong public policy favoring
arbitration ... " (Adams v Kent Sec. of NY., Inc., 156 AD3d 588, 589 [1st Dept 2017] [internal
quotation marks and citations omitted]). Plaintiffs arguments of waiver are unavailing as the
record demonstrates it did not oppose Red Hook's cross-motion to compel arbitration and are
improperly raised for the first time. Regardless, arbitration is not waived by submission of a pre-
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answer motion to dismiss (see Matter of Long Is. Power Aitth. Hurricane Sandy Litg., 165 AD3d
1138, 1143 [2d Dept 2018]); see also Flynn v Labor Ready, Inc., 6AD3d 492 [2d Dept2004]).
With respect to mot. seq.
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CRI Holdings Inc. v Red Hook 160 LLC 2024 NY Slip Op 34200(U) November 26, 2024 Supreme Court, New York County Docket Number: Index No. 652624/2022 Judge: Suzanne J. Adams 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. 652624/2022 NYSCEF DOC. NO. 136 RECEIVED NYSCEF: 11/26/2024
SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: HON.SUZAN NEJ.ADAMS PART 39M Justice ------------ ------------ ------------ -----------X INDEX NO. 652624/2022 CRI HOLDINGS INC., MOTION DATE NIA Plaintiff, MOTION SEQ. NO. 006 -v- RED HOOK 160 LLC, EST4E FOUR CAPITAL LLC a/k/a ESTATE FOUR LLC, DECISION + ORDER ON MOTION Defendants. --------------------------- -------------- -------X
The following e-filed documents, listed by NYSCEF document number (Motion 006) 116, 117, 118, 119, 120,121,122,1 24, 125,126,127, 128,129,130, 131, 132,133,134, 135 were read on this motion to/for VACATE - DECISION/ORDER/JUDGMENT/AWARD.
Upon the foregoing documents, it is ordered that plaintiffs motion to reargue two prior
motions is granted, and upon reargument, plaintiffs defaults are vacated and this court's prior
orders are reinstated as discussed hereinbelow. This matter arises out of the renovation and
construction of a residential and commercial property located in Brooklyn, New York. By decision
and order dated June 30, 2023, this court denied plaintiffs motion (mot. seq. 001) for a default
judgment against defendant Red Hook 160 LLC ("Red Hook") and granted Red Hook's cross-
motion for arbitration. By order of the same date this court also denied defendant Est4e Four ' Capital LLC a/k/a/ Estate Four LLC's ("Estate Four") motion to dismiss (mot. seq. 002).
Thereafter, Estate Four moved pursuant to CPLR 2221 to reargue the denial of its motion to
dismiss (mot. seq. 004) and plaintiff moved pursuant to CPLR 2221 to reargue the denial of its
motion for a default against Red Hook and the granting of Red Hook's cross-motion for arbitration
(mot. seq. 005). Plaintiff failed to appear at the December 4, 2023, oral argument of both motions,
and by the decision and orders dated December 4, 2Q23 (and amended on December 11, 2023) this
652624/2022 CRI HOLDINGS INC. vs. RED HOOK 160 LLC ET AL Page 1 of5 Motion No. 006
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court granted, on default, Estate Four's motion to reargue, and dismissed plaintiffs complaint as
to Estate Four (mot. seq. 004); and denied, on default, plaintiffs motion to renew and re-argue the
order denying entry of default as to Red Hook and directing plaintiff and Red Hook to proceed to
arbitration (mot. seq. 005). Plaintiff now moves pursuant to CPLR 5015 (a) (1) to vacate the orders
on mot. seqs. 004 and 005 dated December 4, 2023, and amended December 11, 2023, and to
reargue the court's decisions on mot. seqs. 001 and 002. Both defendants oppose the motion.
Plaintiff claims a reasonable excuse of law office failure on the part of its prior counsel that
resulted in its default in appearance at the December 4, 2023, oral argument of the motions to
renew and/or reargue. In support, plaintiff submits the affirmation of its prior counsel who states I
that his one-time failure to appear on said date was not willful, but due to the downsizing of his
firm, struggling to practice as a solo practitioner, and confusion of the appearance date (see (NY
St Cts Elec Filing [NYSCEF] Doc No. 120, Affirmation of Friedlander). A party seeking to vacate
a default pursuant to CPLR 5015 (a) (1) must demonstrate a reasonable excuse for failing to appear
and a meritorious claim (see Brown v Suggs, 38 AD3d 329, 329 [1st Dept 2007] [citations
omitted]). Given the strong public policy of this State to dispose of cases on their merits, absent
evidence of any willful or contumacious conduct, it is well-settled that one reasonable excuse for
failing to answer, appear, or otherwise respond is law office failure (see Alliance for Progress, Inc.
v Blondell Realty Corp., 114 NYS3d 656, 656 [1st Dept 2024]; see also Cornwall Warehousing,
Inc. v Lerner, 171 AD3d 540, 541 [1st Dept 2019] ["[p]laintiffs demonstrated a reasonable excuse
for their default ... based on law office failure, as detailed in the affirmation of their former counsel
who miscalendared the motion"]).
Here, the court finds that plaintiffs one-time failure to appear on December 4, 2023, based
on law office failure constitutes a reasonable excuse. The moving papers include detailed and
652624/2022 CRI HOLDINGS INC. vs. RED HOOK 160 LLC ET AL Page 2 of 5 Motion No. 006 ·
2 of 5 [* 2] INDEX NO. 652624/2022 NYSCEF DOC. NO. 136 RECEIVED NYSCEF: 11/26/2024
credible explanations of the default by reason of law office failure on the part of plaintiffs prior
counsel (see cf Crudele v Price, 218 AD3d 534,535 [2d Dept 2023]). Plaintiff has established its
conduct was not willful or contumacious, and defendant has failed to refute that plaintiffs failure
to appear was plaintiffs first instance of nonappearance in this case. In addition, plaintiffs
factually detailed affidavit is sufficient to establish a potentially meritorious cause of action. As
such the motion to reargue mot. seqs. 004 and 005 is granted.
With respect to mot. seq. 005, this court's decision and order of December 4, 2023, and
amended December 11, 2023, is vacated, as it reflects plaintiffs default. However, upon
reargument of the court's decision and order of June 30, 2023 (mot. seq. 001), said order is
reinstated, such that plaintiffs motion for a default judgment against Red Hook is denied, and Red
Hook's cross-motion is granted to the extent that this matter is stayed as against Red Hook, and
plaintiff and Red Hook shall proceed to arbitration. There is no question that said parties entered
into valid and enforceable agreements to arbitrate the claims being alleged in the action. The plain
language of the arbitration provisions in the April and July agreements, which states that "both
parties hereby agree that any controversy or claim that either party may claim relating and/or
arising from this Agreement and/or Project shall be settled exclusively by binding arbitration ... "
is a "[r]equisite clear and unambiguous expression that the parties intended to mandate arbitration
of their dispute" (see Muriel Siebert & Co. v Intuit, Inc., 11 AD3d 415, 415 [1st Dept 2004]
[citations omitted]). Additionally, "New York has a long and strong public policy favoring
arbitration ... " (Adams v Kent Sec. of NY., Inc., 156 AD3d 588, 589 [1st Dept 2017] [internal
quotation marks and citations omitted]). Plaintiffs arguments of waiver are unavailing as the
record demonstrates it did not oppose Red Hook's cross-motion to compel arbitration and are
improperly raised for the first time. Regardless, arbitration is not waived by submission of a pre-
652624/2022 CRI HOLDINGS INC. vs. RED HOOK 160 LLC ET AL Page 3 of 5 Motion No. 006
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answer motion to dismiss (see Matter of Long Is. Power Aitth. Hurricane Sandy Litg., 165 AD3d
1138, 1143 [2d Dept 2018]); see also Flynn v Labor Ready, Inc., 6AD3d 492 [2d Dept2004]).
With respect to mot. seq. 004, this court's decision and order of December 4, 2023, and
. amended December 11, 2023, is vacated in its entirety, and upon reargument of the court's decision
and order of June 30, 2023 (mot. seq. 002), the motion to reargue is denied and said decision and
order is reinstated, such that the dismissal of plaintiffs action as to Estate Four is vacated. As
discussed in the June 30, 2023, decision (mot. seq. 002), the record before the court does not
support dismissal of the action as against Estate Four. Plaintiffs indemnification claim is
enforceable because a finding of an intent to injure was not made in the Federal action, therefore,
"[n]othing in the public policy of this State precludes indemnity for compensatory damages from
a defendant's volitional act" (see Public Serv. Mut. Ins. Co. v Goldfarb, 53 NY2d 392, 399-401
[1981]). The indemnification agreement in essence indemnifies plaintiffs agent "[i]ncluding all
of its attorney and defense fees and expenses arising from any and all claims ... " (see NYSCEF
Doc No. 122, Indemnification Agreement). This is similar to the indemnification provisions in the
April and July agreements, which indemnifies and holds plaintiff harmless "without exception
from any and all claims ... including all reasonable attorney and defense fees arising from any
and claims related to the agreement and/or arising from and all claims related to the project and/or
client." The agreements are interwoven and must be read together, as part of the same transaction
(see Markowits v Friedman, 144 AD3d 993, 997 [2d Dept 2016], citing Matter of Hendrick
Hudson Cent. Sch. Dist. v Fafinski, 71 AD3d 769, 769 [2d Dept 2010] ["Although the instant
dispute arose from a s~parately executed indemnification agreement that contained no arbitration
clause, the Supreme Court properly read the two agreements together"]).
Accordingly, it is hereby
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ORDERED that plaintiff CRI Holdings Inc.' s motion to vacate its default herein is hereby
granted and the decision and orders of this court dated December 4, 2023, and amended December
11, 2023, granting Est4e Four Capital LLC a/k/a Estate Four LLC's motion (mot. seq. 004) and
denying plaintiff CRI Holding Inc.' s motion (mot. seq. 005), are hereby vacated; and it is further
ORDERED that this court's decision and orders dated June 30, 2023, pertaining to mot.
seqs. 001 and 002 are hereby reinstated, such that plll;intiff and defendant Red Hook 160 LLC are
directed to proceed to arbitration, and defendant Est4e Four Capital LLC a/k/a Estate Four LLC's
motion to dismiss is denied.
This constitutes the decision and order of the court.
11/26/2024 DATE SUZANNE J. ADAMS, J.S.C.
CHECK ONE: . ~ CASE DISPOSED N. ON-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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