Strategic Funding Source, Inc. v. Sti-Ny, LLC (Aug. 26, 2025)

Case details
Country
United States
Jurisdiction
New York (NY)
Court
New York Court of Appeals
Decided
Aug. 26, 2025
Disposition
Motion Denied
Panel
Hon; Frank (Justice)
Strategic Funding Source, Inc. v. STI-NY, LLC, 2026 WL 1587346 (2026) WESTLAW   © 2026 Thomson Reuters. No claim to original U.S. Government Works.12026 WL 1587346 (N.Y.Sup.) (Trial Order)Supreme Court of New York.New York CountySTRATEGIC FUNDING SOURCE, INC., Plaintiff,v.STI-NY, LLC,Blue Seabreeze LLC,Adam Bauman, Defendant.No. 651711/2019.May 28, 2026.*1 Editor's Note: This document contains discussion of unverified citations, likely generatedby AI tools used by a party or counsel. These citations are not attributable to the Court. Theunverified citations have been preserved as part of the official record, but links are unavailable.Part 11MMotion Date 02/12/2026Motion Seq. No. 002Decision + Order on MotionPresent: Hon. Lyle E. Frank, Justice.The following e-filed documents, listed by NYSCEF document number (Motion 002) 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43,44, 45, 46, 47, 48, 49, 50, 51, 52, 53, 54, 55, 56, 57, 58, 59, 60, 61, 62 were read on this motion to/for VACATE - DECISION/ORDER/JUDGMENT/AWARD.Upon the foregoing documents, defendants' motion to vacate is denied and plaintiff's cross-motion is denied as moot.Defendants move to vacate a default judgment entered on or about August 21, 2025, notice of entry was filed August 26, 2025,based on an Order dated October 31, 2019 signed by the Honorable Alan Marin. Plaintiff opposes the instant application andcross-moves seeking an order to extend the time to refile the proposed judgment and deeming the refilled judgment timelyfiled nunc pro tunc.To vacate the default judgment under CPLR § 5105 [a] [1], it is well-settled that the movant must demonstrate “a justifiableexcuse for the default and a meritorious cause of action or defense” (Cipriano v Hank, 197 AD2d 295, 297 [1st Dept 1994]).Generally, the discretion to vacate a default lies with the motion court. (White v Incorporated Village of Hempstead, 41 AD3d709 [2nd Dept 2007]).Defendants contend that vacatur is warranted based on prejudice by the delay between the time of the granting of the defaultjudgment motion and the entry of the judgment with the County Clerk.Defendants' arguments for vacatur based on prejudice are unpersuasive. Defendants were aware of the motion for defaultjudgment and even sought an adjournment of the motion, NYSCEF Doc. 21, which was granted, in order to obtain counsel,however counsel was not obtained nor was any opposition to the motion submitted. The repeated contentions of prejudice basedon the unavailability of older records and faded memories are not applicable as those arguments deal with the merits of theunderlying granting of the default motion, which is not disputed here. Without any legal basis, defendants contend that the
Strategic Funding Source, Inc. v. STI-NY, LLC, 2026 WL 1587346 (2026) WESTLAW   © 2026 Thomson Reuters. No claim to original U.S. Government Works.2County Clerk lacked the authority to enter the judgment. It appears undisputed that the complaint does not require dismissalpursuant to CPLR § 3215(c) and that contrary to its moving papers, it is also conceded on reply that 22 NYCRR 202.48 isinapplicable.Defendants have simply failed to establish entitlement to the relief it seeks. The argument that it is somehow prejudiced now, 6years after default judgment was awarded by an Order and Decision of this Court, by plaintiff's enforcement actions is withoutmerit. The procedural posture of this matter is no different than if plaintiff's initial proposed judgment was entered by the clerkand plaintiff waited 6 years to enforce it, as the judgment is valid for 20 years, defendants would be in the same position.During oral argument, plaintiff raised the issue of erroneous citations in defendants' papers. Defendant acknowledged that AIis used in drafting the motion papers, and stated that a paralegal or a law student reviews the case citations. This Court alloweddefendants counsel 24 hours from the time of the oral argument, which was held at 11:30 a,m. on May 27, 2026, to submita response addressing the citations identified by plaintiff. As of 3:00 p.m. on May 28, 2026, counsel for defendants has notsubmitted a single document, whether through NYSCEF or email.*2 A review of defendants' submissions confirms plaintiff's allegations that defendants memorandum contains multipleerroneous citations. To start defendants cite to, Citibank, N.A. v Velazquez, 150 AD3d 813, 814 [2d Dept 2017] for the propositionthat plaintiff application by failing to timely submit judgment under § 202.48 requires dismissal, that citation however is forCitibank, N.A. v Wood, 150 AD3d 813, 814 [2d Dept 2017] that involves a motion for summary judgment and failure to complywith RPAPL § 1304.Further, defendants cite to Deutsche Bank Natl. Trust Co. v Guevara, 137 AD3d 460, 461 [1st Dept 2016], that citation doesnot correspond to the captioned matter nor does it stand for the proposition that defendants assert, rather D. Penguin Bros.Ltd. v Natl. Black United Fund, Inc., 137 AD3d 460, 461 [1st Dept 2016] is the appropriate citation and does not, contraryto defendants assertions, stand for the proposition that dismissal is warranted where plaintiff failed to timely proceed towardentry of a default judgment without an adequate excuse, rather the decision involves a motion to dismiss pursuant to CPLR§ 3211 and CPLR § 3016 (b).Yet another incorrect citation, Fidelity Natl. Title, Ins. Co. v Valtech Research, Inc., 73 AD3d 521, 522 [1st Dept 2010], whichdoes not yield any results and in both Lexis and Westlaw corrects the cite to Popowich v Korman, 73 AD3d 515, 522 [1st Dept2010], and does not at all address a clerk's authority to enter judgment, rather the decision involves equitable distribution ina matrimonial action.Another incorrect cite Deutsche Bank Natl. Trust Co. v Russo, 121 AD3d 506, 507 [1st Dept 2014], defendant contends thatthis case stands for the proposition “recognizing prejudice arising from delay and enforcing strict compliance with proceduralrequirements governing defaults and enforcement”, this however is not mentioned at all in Sari v Alishaev Bros., Inc., 121 AD3d506, 506 [1st Dept 2014], a decision involving summary judgment and dismissal of counterclaims in a contract action.The fifth incorrect citation identified in defendants' papers is OneWestBank, FSB v Kanapathipillai, 188 AD3d 982, 984 [2dDept 2020] again, that citation does not correspond to the captioned matter, rather Citimortgage, Inc. v Zaibak, 188 AD3d 982,983 [2d Dept 2020] is the appropriate citation, while the latter does address CPLR § 3215(c), it has already been conceded thatprovision of the CPLR is inapplicable.Defense counsel's admitted lack of diligence and ignoring of this Court's directive to submit a response to the allegations warrantssanctions. Furthermore, the use of AI without confirmation of the cases and arguments it presents constitutes misconduct underthe New York Rules of Professional Conduct. See, e.g., In re Zareh, 2026 N.Y. App. Div. LEXIS 689, *5 [1st Dept. 2026].Pursuant to 22 NYCRR § 130-1.1(a), a court has the discretion to award costs or impose financial sanctions against an attorneyfor frivolous conduct. Frivolous conduct is defined in part as asserting “material factual statements that are false.” 22 NYCRR §
Strategic Funding Source, Inc. v. STI-NY, LLC, 2026 WL 1587346 (2026) WESTLAW   © 2026 Thomson Reuters. No claim to original U.S. Government Works.3130-1.1(c)(3). Here, the Court finds it appropriate to sanction counsel for defendants in the form of reimbursement of plaintiff'scosts in responding to this motion.As to the cross-motion it is denied as moot, as the Couty Clerk has entered judgment, thus an order of this Court is not necessaryor required. Accordingly, it is hereby*3 ADJUDGED that the motion is denied; and it is furtherORDERED that counsel for the defendant, Jerome G. Lee, Jr., shall, without charge to their client, reimburse plaintiff for actualexpenses reasonably incurred and reasonable counsel fees in responding to this motion not to exceed $2,000.00.5/28/2026DATE<<signature>>LYLE E. FRANK, J.S.C.End of Document© 2026 Thomson Reuters. No claim to original U.S. Government Works.
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