P. Zaccaro, Co., Inc. v DHA Capital, LLC 2017 NY Slip Op 30640(U) April 4, 2017 Supreme Court, New York County Docket Number: /2015 Judge:

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1 P. Zaccaro, Co., Inc. v DHA Capital, LLC 217 NY Slip Op 364(U) April 4, 217 Supreme Court, Ne York County Docket Number: /215 Judge: Manuel J. Mdez Cases posted ith a "3" idtifier, i.e., 213 NY Slip Op 31(U), are republished from various state and local governmt ebsites. These include the Ne York State Unified Court Systems E-Courts Service, and the Bronx County Clerks office. This opinion is uncorrected and not selected for official publication.

2 [* FILED: 1] NEW YORK COUNTY CLERK 4/5/217 2:26 PM INDEX NO /215 SUPREME COURT OF THE STATE OF NEW YORK- NEW YORK COUNTY PRESENT: MANUELJ.MENDEZ Justice PART 13 P. ZACCARO, CO., INC. and NEW GOLDEN AGE REAL TY, INC., Plaintiffs, -against- DHA CAPITAL, LLC, JHM DEVELOPMENT, LLC, FIRST ATLANTIC REAL ESTATE, LLC, DING K. WAI A/KIA JOHN WAI, SENTRY OPERATING CORP., and NEST SEEKERS, LLC, Defdants. INDEX NO. MOTION DATE MOTION SEQ. NO. MOTION CAL. NO /215 3/8/17 4 The folloing papers, numbered 1 to _1L ere read on this motion for a default judgmt. PAPERS NUMBERED Notice of Motion/ Order to Sho Cause - Affidavits - Exhibits Ansering Affidavits - Exhibits cross motion Replying Affidavits 8-9; z _ <t I- a::: C>.., :::> -z 3: 1-Q c...j...j a::: ::: LL WW LL J: l- a::: a::: >-...J LL...J :::> LL l- o Q.. a::: <t ~ z ~ ::i Cross-Motion: X Yes D No Upon a reading of the foregoing cited papers, it is ordered that Plaintiffs motion for a default judgmt pursuant to CPLR 3215 and motion to compel discovery pursuant to CPLR 3124 are died. Defdants Stry Operating Corp. and Ding K. Wai a/k/a John Wais cross-motion to dismiss the Amded Complaint pursuant to CPLR 3211 [a][7] is granted. P. Zaccaro Co. Inc. (herein "Zaccaro") is a licsed real estate brokerage firm. Ne Age Gold Realty, Inc. (herein "Ne Age"), is a licsed real estate brokera~e firm and a franchisee of non-party Ctury 21. Stry Operating Corp. (herein "Stry", is the oner of property located at 75 Kmare Street, Ne York, Ne York (herein t e "Property"). Ding Wai a/k/a John Wai (herein "Mr. Wai") is a principal of Stry. Plaintiffs allege that Mr. Zaccaro allegedly met ith Mr. Wai in February of 214 to discuss the sale of the Property. It is alleged that Mr. Wai provided criteria necessary for the sale to transpire and Mr. Zaccaro tered into a brokerage agreemt ith Stry for the production of a buyer ready, illing and able to purchase the Property. Plaintiffs allege that the sale of the Property bete DHA Capital, LLC and Stry took place solely as a result of Plaintiffs efforts and that their oral or implied contract requires that Plaintiffs receive a one perct commission. On June 16, 215, Plaintiffs commced this instant action. On July 31, 215, Stry and Mr. Wai (herein the "Sellers") appeared via the filing of an Anser ith crossclaims. On October 3, 215, Plaintiffs served Defdant Sellers First Demand for Production of Documts along ith Notices of Deposition. On November 2, 215, former Defdant DHA Capital, LLC moved to dismiss the action against it (herein "Mot. Seq. 3"), hich effectively stayed discovery until the motion as decided by this court on September 23, 216. On February 3, 216, Plaintiffs filed and served an Amded Complaint. Defdant Sellers have failed to file an Anser to the Amded Complaint and have failed to respond to Plaintiffs Discovery Demands. Plaintiffs no move for an Order granting default judgmt against the Defdant Sellers for failing to appear and anser the Amded Complaint. Plaintiffs also move for an Order to compel discovery against Defdant Sellers for failure to respond to Plaintiffs Discovery Demands. Defdant Sellers oppose the motion and cross-move to dismiss the Amded 1 of 4

3 [* FILED: 2] NEW YORK COUNTY CLERK 4/5/217 2:26 PM INDEX NO /215 Complaint based upon this courts reasonin9 in Mot. Seq. 3. In the alternative, Defdant Sellers move for an extsion of time to file and serve their respective Ansers to the Amded Complaint. Once a "complaint as formally amded and served, it superseded the original complaint, became the only complaint in the case, and therefore required that a ne responsive pleading be substituted for the original superseded anser" (Hoppfield v. Hoppfield, 22 A.D.2d 32, 632 N.Y.S.2d 558 [1st Dept. 1995)), citing St. Larce Explosives Corp. v. La Bros. Contracting Corp., 17 A.D.2d 957, 566 N.Y.S.2d 127 [4th Dept. 1991)). A defdant opposing try of a default judgmt must demonstrate both a reasonable excuse and meritorious defse (Ne Media Holdina Co. LLC v. Kagalovsky, 97 AD3d 463, 949 NYS2d 22 [1st Dept 212)). Whether an excuse 1s reasonable is a determination committed to the sound discretion of the court (Matter of Hye-Young Chon v. Country-Wide Ins. Co., 22 AD3d 849, 83 NYS2d 699 [25]]). La office failure is an excusable delay (CPLR 25). Moreover, courts have the inhert poer to forgive ev an unexplained default "in the interest of justice" (B.U.D. Sheetmetal v. Massachusetts Bay Ins. Co., 248 AD2d 856, 67 NYS2d 228 [1998]]). It is important to note that the Defdant Sellers originally ansered the Complaint and have shon a illingness to litigate. Defdant Sellers aaited the determination of Mot. Seq. 3 as the legal theory for dismissal is idtical to their cross-motion herein. Defdant Sellers have offered la office failure as a reason for the delay in filing an Anser after the determination of Mot. Seq. 3. Defdant Sellers also contd that Plaintiffs filed this motion prior to the date Defdant Sellers signified they ould file an Anser(Opposition Papers Ex. C). The legal theories outlined in Defdant Sellers cross-motion represt a meritorious defse. Under these circumstances, "giv the questions of fact as to merit... the lack of inttion on Defdants part to default, the failure of Plaintiff to demonstrate any prejudice attributable to the delay and the policy preferce in favor of resolving disputes on the merits, e conclude that Defdants untimeliness should be excused in this instance" (Cerrone v. Fasulo, 245 AD2d 793, 794, 665 NYS2d 761 [1997]). Applying Ne Yorks principles, this is not an appropriate case for departure from this States preferce for resolving controversies on the merits and the interests of justice arrant an exercise of discretion in favor of excusing the delay in ansering (Zanelli v. JMM Raceay, LLC, 83 AD3d 697, 919 NYS2d 878 [21]). CPLR 3214(b) provides that "[s]ervice of a notice of motion... stays disclosure until determination of the motion unless the court orders otherise." Discovery Demands served on October 3, 215, ere stayed as of November 2, 215, until this court issued a determination for Mot. Seq. 3 on September 23, 216. Furthermore, Defdant Sellerss cross-motion pursuant to CPLR 3211 has further stayed discovery until its resolution. Dismissal pursuant to CPLR ~3211 [a][7] requires a readinq of the pleadings to determine hether a legally recognizable cause of action can be idtified and it is properly pied. A cause of action does not have to be skillfully prepared but it does have to prest facts so that it can be idtified and establish a pottially meritorious claim (Leon v. Martinez, 84 NY2d 83, 638 NE2d 511, 614 NYS2d 972 [1994)). Pleadings that consist of bare legal conclusions and factual assertions hich are clearly contradicted by documtary evidce ill not be presumed to be true and are susceptible to dismissal (Dragon Head LLC v. Elkman, 12 AD3d 552, 958 NYS2d 134 [1st Dept., 213)). "The doctrine of the "la of the case" is a rule of practice, an articulation of sound policy that, h an issue is once judicially determined, that should be the d of the matter (Clark v. Clark, 117 AD3d 668, 669, 985 NYS2d 276 [214), quoting Martin v. City of Cohoes, 37 NY2d 162, 165, 332 NE2d 867, 371 NYS2d 681 [197]). " mhe "la of the case" operates to foreclose re-examination of [the] question abst a shoing of subsequt evidce or change of la " (J-Mar Serv. Ctr., Inc. v. Mahoney, Connor & Hussey, 45 AD3d 89, 89, 847 NYS2d 13 [27), quoting Matter of Yeampierre v. Gutman, 57 AD2d 898, 899, 394 NYS2d 45 [1971)). "The doctrine applies only to legal determinations that ere necessarily resolved on the merits in [a) prior decision " (Erickson v. Cross Ready Mix, Inc., 98 AD3d at 717, quoting Baldasano v. Bank of N.Y., 199 AD2d 184, 185, 65 NYS2d 293 [1993)). Here, the issue disputed on the cross-motion 2 of 4

4 [* FILED: 3] NEW YORK COUNTY CLERK 4/5/217 2:26 PM INDEX NO /215 has already be decided in Mot. Seq. 3 and Plaintiffs have failed to provide subsequt evidce or change of la to arrant a differt ruling. Sellers contd that Zaccaro never disclosed that they ere acting as agts on behalf of DHA as buyer, or on behalf of the Sellers, until the Amded Complaint (See Mot. Ex. D, p. 24 & 25). Sellers argue that Zaccaro together ith Ne Age and Ctury 21 s knoing assistance acted as a dual a9t for the sale of the property, and the failure to ever disclose the dual agcy or obtam Sellers const, arrants forfeiture of the right to collect any commission and dismissal of the amded complaint. Real estate brokers have a fiduciary relationship ith their clit and an affirmative duty not to act for a party ith adverse interests unless const is obtained from the principal after being provided ith full knoledge of the facts. A broker, "cannot act as agt for both seller and purchaser of the property" (Trylon Realty of Great Neck, Inc. v. Roth, 187 AD2d 715, 187 AD2d 715 [2"d Dept., 1992J, Ques Structure Corp. v. Jay Larce Assoc., 34 AD2d 736, 758 NY2d 664 (2" Dept., 23]). A real estate broker forfeits the right to a commission regardless of the damages incurred if the fiduciary duty is breached (Douglas Elliman LLC v. Tretter, 84 AD3d 446, 922 NYS2d 74 [1st Dept. 211] affd 2 NY3d 875, 979 NE2d 1178, 955 NYS2d 851 (212]). Plaintiffs oppose dismissal arguing that they simply introduced DHA Capital, LLC to Stry, ithout bemg called upon to do anything more, and thus acted as a traditional finder, and not a fiducia~ (Plaintiffs Opposition P. 7). Hoever, Plaintiffs on Amded Complaint states "Plaintiffs and DHA tered into an oral agreemt herein the Plaintiffs ere authorized by DHA to act as the licsed real estate brokers" and "Plaintiffs disclosed to DHA the fact that Zaccaro had be retained by the Seller to market and sell the Premises, the affidavits submitted hereith leave no question that DHA as, at all times, aare of the dual agcy" (Plaintiffs Memorandum of La NYSCEF No. 54, P. 13). The court is unpersuaded by Plaintiffs ne theory that they merely acted as a traditional finder and therefore agree ith Defdant Sellers that the doctrine of the "la of the case" applies to Sellers cross-motion to dismiss. Accordingly, it is ORDERED that Plaintiffs motion in its tirety is died, and it is further, ORDERED that Defdants DING K. WAI A/KIA JOHN WAI and SENTRY OPERATING CORP.s motion to dismiss this action pursuant to CPLR 3211[a][7], is granted, and it is further, ORDERED, that the Plaintiffs causes of action asserted in the Amded Complaint a9ainst DING K. WAI A/KIA JOHN WAI and SENTRY OPERATING CORP. are severed and dismissed, and it is further, ORDERED, that the causes of action in the Complaint asserted against Defdant NEST SEEKERS, LLC, remain in effect, and it is further, ORDERED, that the caption in this action is amded and shall read as follos: P. ZACCARO, co., INC. and NEW GOLDEN AGE REAL TY, INC., Plaintiffs, -against- NEST SEEKERS, LLC, and it is further, Defdant. ORDERED, that ithin twty (2) days from the date of try of this Order the cross-moving party shall serve a copy of this Order ith Notice of Entry on all parties appearing, ancf it is further, 3 of 4

5 [* FILED: 4] NEW!. YORK COUNTY CLERK 4/5/217 2:26 PM INDEX NO /215 _ ORDERED, that ithin tty (2)days from the date of try of this Order, 1 the cross-moving party shall also serve a copy of this Order ith Notice of Entry upon the Trial Support Clerk located in the G~ral Clerks Office (Room _119) and upon the County Clerk (Room 1418), ho are directed to amd the caption and the courts records accordingly, and it is further, ORDERED that the Clerk of the Court ter judgme~t accordingly. I! I. I i Dated: April 4, 217 ENTER: MANUQND~Z, J.S.C. MANUEL J. MENDEL JoS.C. Check one: [] FINAL DISPOSITION X NON-FINAL DISPOSITION ;:. Check if approp_riate: [1 DO NOT POST D REFERENCE 1: \ i - ; 1 4 of 4