HUSSEIN v. RATCHER

ORDERED that the judgment is reversed, on the law, with costs, the complaint is reinstated, and the matter is remitted to the Supreme Court, Nassau County, for a new hearing on the issue of damages.

It is well settled that "a defendant whose answer is stricken as a result of a default admits all traversable allegations in the complaint, including the basic allegation of liability, but does not admit the plaintiff's conclusion as to damages" (Rokina Opt. Co. v. Camera King, 63 N.Y.2d 728, 730; see also, Amusement Business Underwriters v. American Intl. Group, 66 N.Y.2d 878; Lavi v. Lavi, 256 A.D.2d 602; Rich-Haven Motor Sales v. National Bank of N.Y. City, 163 A.D.2d 288). Accordingly, at a hearing to determine the amount of the plaintiff's damages, the defendant will not be allowed to introduce evidence tending to defeat the plaintiff's cause of action, but may introduce evidence of "circumstances intrinsic to the transactions at issue that, if proven, will be determinative of the plaintiff's real damages, which cannot be established by the mere fact of the defendant's default" (Rokina Opt. Co. v. Camera King, supra, at 730-731).

Here, the Referee improperly dismissed the complaint after admitting evidence which he felt defeated the plaintiff's cause of action. The matter must therefore be remitted to the Supreme Court for a new hearing on the issue of damages.

O'BRIEN, J.P., ALTMAN, FRIEDMANN, McGINITY and SMITH, JJ., concur.