Opinion
11-15-2017
Albert TORAIN and Sondra Torain, individually and as husband and wife, Plaintiffs, v. AG–METROPOLITAN 711 STEWART AVENUE, LLC and BJS Wholesale Club, Defendants.
Cellino & Barnes, P.C. by David E. Silverman, Melville, Attorneys for Plaintiffs. Goldberg Segalla LLP by Alexi T. Poulianos, Esq., Garden City, Attorneys for Defendant BJ'S Wholesale Club, Inc. Duval & Stachenfeld LLP by Russell Gallaro, Esq., New York, Attorneys for Defendant AG–Metropolitan 711 Stewart Avenue, LLC.
Cellino & Barnes, P.C. by David E. Silverman, Melville, Attorneys for Plaintiffs.
Goldberg Segalla LLP by Alexi T. Poulianos, Esq., Garden City, Attorneys for Defendant BJ'S Wholesale Club, Inc.
Duval & Stachenfeld LLP by Russell Gallaro, Esq., New York, Attorneys for Defendant AG–Metropolitan 711 Stewart Avenue, LLC.
DANIEL R. PALMIERI, J. The motion by the defendant AG Metropolitan Stewart Avenue, LLC ("AG") pursuant to CPLR 3211(a)(1) and 22 NYCRR Part 130–1 to dismiss the complaint and for sanctions for frivolous conduct, is granted. The complaint is dismissed as to this defendant, and a hearing will be held to determine the reasonable costs, including attorney's fees, to be paid as sanctions by counsel to the plaintiffs to the moving defendant.
The cross motion by the plaintiff pursuant to 22 NYCRR Part 130–1 for sanctions for frivolous conduct against AG is denied in its entirety.
This is a slip/trip and fall case where the plaintiff Albert Toraine alleges that he was caused to fall, allegedly on defendants' premises at 711 Stewart Avenue in Garden City, New York, on July 22, 2014. Defendant AG moves to dismiss based on documentary evidence that it no longer owned, occupied or managed the premises by the time of the alleged accident. It also moves for sanctions based on its counsel's contacts with plaintiffs' attorney in which he demonstrated that fact under a series of documents.
By letter received from plaintiff's counsel on March 20, 2017, AG was informed that plaintiffs had retained counsel based on a fall at the subject premises. On March 21, counsel for AG wrote to counsel to plaintiffs advising him that AG did not own the property at the time of the alleged injury in July, 2014, sending with the letter several transaction documents evidencing sale of the property by AG well beforehand. There was no response to this letter and its attachments.
On April 21, 2017 AG was served with the summons and complaint in this action, which, among other allegations, stated at paragraphs 15 through 22 that AG owned, operated, and controlled the subject premises. On May 8, counsel for AG spoke to plaintiffs' attorney, the latter of whom confirmed that he had received the March 21 letter, but could not confirm that he had reviewed it, and agreed to extend AG's time to respond to the complaint. Thereafter, counsel for AG made several attempts to contact plaintiffs' attorney about the contents of the March 21 letter, ending with a message that if he did not hear from him he would move to dismiss and for sanctions.
The Court need not address the merits of the motion to dismiss, as the absence of a viable claim against AG effectively has been conceded by plaintiffs. Its attorney offered a stipulation of discontinuance against AG dated August 7, 2017, and has not here rescinded it nor offered any argument against this defendant's documentary showings, constituting prima facie proof that it no longer had any interest in the premises by the time of the accident. CPLR 3211(a)(1). Accordingly, that branch of the motion that is for dismissal of the complaint as against AG is granted. What remains is the request for sanctions, and the cross motion by plaintiffs for sanctions.
The Court finds that the plaintiffs proceeded with their action against AG in the face of uncontroverted proof in the hands of their attorney that AG no longer owned, controlled or had any other connection to 711 Stewart Avenue that might ground liability. The document plaintiffs' attorney claims gave him a good faith basis for going forward with the suit against AG, in that it indicated an ownership interest in AG, was dated the year before the accident and did not contradict the documents supplied by AG's counsel regarding the sale of the asset, which occurred at essentially the same time as the transaction relied upon by plaintiffs.
The document plaintiffs present is a condominium recognition and attornment agreement between two other entities, citing AG as owner of "Unit 1." This agreement concerned subordination of a lease one party had as a tenant of AG to the condominium documents. This agreement, however, did not contradict the documents presented by AG to plaintiffs. Among those documents is an assignment of AG's rights under a lease for Unit 1 to HUH Hempstead BJ 2012, LLC. Further, under the recognition and attornment agreement relied upon by plaintiffs, HUH was to receive notices as the "Landlord." The recognition and attornment agreement is dated March 26, and the assignment March 27, 2013, over a year before the accident.
Further, and perhaps more important here, even assuming that the single reference to AG in the document noted above created some question as to AG's ownership, the stipulation of discontinuance later offered by plaintiffs is not stated to be based on any further information in counsel's hands obtained after the commencement of the action. This means that any question of AG's ownership had been resolved by the documents in plaintiffs' hands before the summons and complaint were served. Nevertheless, the action was not offered to be withdrawn until after the present motion was made. Sanctions and/or costs may be awarded for frivolous conduct pursuant to 22 NYCRR § 130–1.1, which is defined as conduct 1) which is completely without merit in law and cannot be supported by a reasonable argument for an extension, modification or reversal of existing law, 2) is undertaken primarily to delay or prolong the resolution of the litigation, or to harass or maliciously injure another, or 3) asserts material factual allegations that are false. 22 NYCRR § 130–1.1(c). It also includes the making of a frivolous motion for sanctions under this section. Id. A motion under this section can be directed to a party or to an attorney, or to both. The circumstances set forth above can result in a sanction against plaintiffs' counsel because attorneys have a duty to analyze a case and to make a determination of merit independent of the client. Heilbut v. Heilbut, 18 A.D.3d 1, 792 N.Y.S.2d 419 (1st Dept.2005).
In this case, the Court finds that counsel for plaintiffs engaged in frivolous conduct by commencing the action against AG in the face of clear documentary evidence that AG no longer owned or had any further connection to the property where Albert Toraine fell, and then not attempting to discontinue until after the present motion was made. Although simply failing to respond to defense counsel prior to putting the case in suit does not amount to such conduct, permitting a meritless action to proceed, and then failing to withdraw it until after AG was placed in the position of having to make the present motion, does. According to the affidavit of service, AG's motion was made on June 15, 2017, and the proposed discontinuance is dated August 7. It also should be noted that plaintiffs did not even need AG's consent to discontinue the action before the motion was made. CPLR 3217(a)(1).
The explanation offered by plaintiffs' counsel for offering the discontinuance when he did was that the documents proferred by AG were not authenticated, and that if after such discontinuance plaintiffs discovered that they were not authentic a fraud claim could be made and thus revive the plaintiffs' claim. However, there is no evidence in the record that plaintiffs' counsel ever expressed any doubts about the authenticity of what he had received from his adversary until the present motion practice, much less requested any supporting proof (and the Court does not thereby find that any such proof was necessary in this case), and does not deny that he had not fully reviewed the documents until after the lawsuit was begun. The Court thus rejects the explanation. Under these circumstances, including the prompt response of AG's counsel in providing documentary evidence regarding AG's sale of the premises and severance of any further connection thereto over a year before the accident, the Court finds it appropriate to have plaintiffs' counsel pay AG its costs, including attorney's fees, in connection with the making of AG's motion. See Mascia v. Maresco, 39 A.D.3d 504, 833 N.Y.S.2d 207 (2d Dept.2007) ; Bennett v. Towers, 43 Misc.3d 661, 671–672, 982 N.Y.S.2d 843 (Sup.Ct., Nassau County 2014) ; cf., Sanders v. Aqua Chlor Enters., Inc., 90 A.D.3d 521, 934 N.Y.S.2d 406 (1st Dept.2011) [fees and sanctions against attorney inappropriate where question existed as to where client fell]. The cross motion is denied in its entirety.
Accordingly, a hearing shall be held to ascertain the reasonable costs plaintiffs' counsel, Cellino & Barnes, P.C., ‘shall pay to compensate AG in connection for the making of this motion and in responding to the cross motion.
Subject to the approval of the Justice there presiding and provided a Note of Issue has been filed by AG at least 10 days prior thereto, this matter is referred to the Calendar Control Part (CCP) for a hearing on January 10, 2018, at 9:30 A.M.
A copy of this order shall be served on the Calendar Clerk and accompany the Note of Issue when filed. The failure to file a Note of Issue or appear as directed may be deemed an abandonment of the claims giving rise to the hearing.
The directive with respect to a hearing is subject to the right of the Justice presiding in CCP to refer the matter to a Justice, Judicial Hearing Officer or a Court Attorney/Referee as he or she deems appropriate.
Should counsel agree on a figure and resolve the matter between them, the hearing may be cancelled.