Kapitus Servicing, Inc. v. Temple Bldrs., LLC

2025 NY Slip Op 31696(U)

• Court: New York Supreme Court, New York County
• Decided: May 8, 2025
• Docket: Index No. 656932/2019
• Status: Unpublished

Opinion

Kapitus Servicing, Inc. v Temple Bldrs., LLC 2025 NY Slip Op 31696(U) May 8, 2025 Supreme Court, New York County Docket Number: Index No. 656932/2019 Judge: Nicholas W. Moyne 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. FILED: NEW YORK COUNTY CLERK 05/09/2025 12:19 PM INDEX NO. 656932/2019 NYSCEF DOC. NO. 21 RECEIVED NYSCEF: 05/08/2025

SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: HON. NICHOLAS W. MOYNE PART 41M Justice ---------------------------------------------------------------------------------X INDEX NO. 656932/2019 KAPITUS SERVICING, INC., MOTION DATE 11/06/2024 Plaintiff, MOTION SEQ. NO. 001 -v- TEMPLE BUILDERS, LLC,DENISE SMITH, RICHARD DECISION + ORDER ON ANDREW SMITH MOTION Defendant. ---------------------------------------------------------------------------------X

The following e-filed documents, listed by NYSCEF document number (Motion 001) 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20 were read on this motion to/for JUDGMENT - DEFAULT .

Upon the foregoing documents, it is

Plaintiff, Kapitus Servicing, Inc. f/k/a Colonial Funding Network, Inc. as servicing

provider New York Business Banc (“Kapitus Servicing”), commenced the underlying action

against defendants, Temple Builders, LLC d/b/a Temple Builders and Denise Smith (a/k/a

Denise D. Smith) and Richard Andrew Smith (a/k/a Richard Smith a/k/a Richard A. Smith), to

recover amounts allegedly owed pursuant to a Merchant Cash Advance Agreement for the

Purchase and Sale of Future Receivables and asserting claims for breach of contract, account

stated, breach of guaranty, and attorneys’ fees. Plaintiff now moves for an order, pursuant to

CPLR § 3215, directing entry of a default judgment against defendants in the amount of

$45,354.00, plus costs and interest, said amount consisting of: $35,779.00, the unpaid balance of

receivables, $2,075.00 in ACH debit fees incurred, $2,500.00 for “Blocked Account” fees and

$5,000.00 in “Default” fees. For the reasons set forth below, the motion is denied, and the action

is dismissed.

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Plaintiff commenced the underlying action on or around November 21, 2019, by filing

copies of the summons and complaint (NYSCEF Doc. No. 1). Thereafter, on or around

December 10, 2019, plaintiff, in accordance with the methods of services authorized by CPLR

§§ 311(a) and 308(1) and (2), served the defendants with the summons and complaint for this

action (NYSCEF Doc. No. 4-6). Therefore, the applicable time periods in which defendants

ought to have answered or otherwise appeared have passed and the defendants have failed to do

so (see CPLR § 320[a]). However, plaintiff’s application seeking entry of a default judgment was

not made until November 6, 2024, well after the expiration of the statutorily proscribed one-year

period (NYSCEF Doc. No. 7).

Considering, pursuant to CPLR § 3215(c), if a plaintiff fails to take proceedings for the

entry of judgment within one year after the default, the court shall not enter judgment but shall

dismiss the complaint as abandoned, upon its own initiative or on motion, unless sufficient cause

is shown why the complaint should not be dismissed. This CPLR § 3215(c) language requiring

dismissal is not discretionary but mandatory, with the statute excepting cases where sufficient

cause has been shown (Deutsche Bank Natl. Tr. Co. v Cruz, 173 AD3d 610, 610 [1st Dept

2019]). To establish sufficient cause, the plaintiff is required to set forth both a reasonable

excuse for the delay and demonstrate that it has a meritorious cause of action (Selective Auto Ins.

Co. of New Jersey v Nesbitt, 161 AD3d 560 [1st Dept 2018]; HSBC Bank USA, N.A. v Slone, 174

AD3d 866, 867 [2d Dept 2019]). The determination of whether an excuse is reasonable in any

given instance is committed to the sound discretion of the motion court (Pipinias v J. Sackaris &

Sons, Inc., 116 AD3d 749, 752 [2d Dept 2014]).

Plaintiff’s motion for a default judgment was filed more than four years after the

defendants first defaulted in answering the complaint or appearing in the action. Upon certain

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terms or in certain circumstances, law office failure may constitute a reasonable excuse (Hertz

Vehicles, LLC v Mollo, 171 AD3d 651 [1st Dept 2019]; Rivera v New York City Dept. of

Sanitation, 142 AD3d 463, 464 [1st Dept 2016]). Plaintiff seemingly relies on law office failure

in an attempt to demonstrate a reasonable excuse, alleging that it “has a process in place to track

the status of its litigations and conducts periodic review of its case files. As part of conducting

that review, [p]laintiff discovered that a motion for default in this case had not been filed. Upon

discovering this error, [p]laintiff promptly drafted and filed this motion” (NYSCEF Doc. No.

17).

However, the plaintiff’s allegations do not establish a reasonable excuse for the four-year

delay in seeking entry of judgment as they fail to identify any specifics of the supposed law

office failure (Doe v Garfinkel, 234 AD3d 929, 931 [2d Dept 2025]) and fail to sufficiently

address the extensive period of inactivity (Cabral v Mueses, 234 AD3d 475, 476 [1st Dept

2025]). These allegations, which are vague, conclusory, and entirely unsubstantiated, do not

sufficiently set forth a viable excuse based on law office failure (Zayas v Montefiore Med. Ctr.,

188 AD3d 551, 552 [1st Dept 2020]; Seide v Calderon, 126 AD3d 417 [1st Dept 2015]; compare

Park v Kim, 205 AD3d 429, 429 [1st Dept 2022]). Thus, as “the plaintiff failed to proffer a

reasonable excuse, this Court need not consider whether it had a potentially meritorious cause of

action” (U.S. Bank, Nat. Ass'n v Dorvelus, 140 AD3d 850, 852 [2d Dept 2016]).

Accordingly, it is hereby

ORDERED that the motion by plaintiff, Kapitus Servicing, Inc. f/k/a Colonial Funding

Network, Inc. as servicing provider New York Business Banc, is DENIED in its entirety; and it is

further

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ORDERED that the above-entitled action and complaint are dismissed, without costs and

disbursements; and it is further

ORDERED that plaintiff, Kapitus Servicing, Inc. f/k/a Colonial Funding Network, Inc. as

servicing provider New York Business Banc, serve a copy of this order with notice of its entry on

defendants and on the Office of the County Clerk, who shall enter judgment accordingly; and it is

ORDERED that such service upon the County 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).

This constitutes the decision and order of the court.

, ~~ 5/8/2025 DATE NICHOLAS W. MOYNE, J.S.C. CHECK ONE: X CASE DISPOSED NON-FINAL DISPOSITION

□ □ GRANTED X DENIED GRANTED IN PART OTHER

APPLICATION: SETTLE ORDER SUBMIT ORDER

□ CHECK IF APPROPRIATE: INCLUDES TRANSFER/REASSIGN FIDUCIARY APPOINTMENT REFERENCE

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