Opinion
Index No. E2022-2493 Motions Nos. 1112
10-13-2023
Walkoff Holdings LLC, Plaintiff, v. Waverly Homes Development, LLC, et al, Defendants.
Mark E. Duckstein, Esq. Joshua N. Howley, Esq. Sill Cummis & Gross PC For Plaintiff Yehuda C. Morgenstern, Esq. Ainsworth, Gorkin PLLC For Defendants Waverly Homes Development LLC, Eli Katz & Chaya Padwa Levi Huebner, Esq. For Defendants L Vacation LLC, Wavery SF LLC, Wavery 15 LLC, Waverly Garden Unit LLC, 25 Waverly Garden LLC, Waive 27 LLC, 52 Waverly LLC, and 50 Waverly LLC (Phase 1 Answering Defendants)
Unpublished Opinion
Documents considered: NYSCEF 441-450; 462; 464-472; 474, 476-480
Mark E. Duckstein, Esq. Joshua N. Howley, Esq. Sill Cummis & Gross PC For Plaintiff
Yehuda C. Morgenstern, Esq. Ainsworth, Gorkin PLLC For Defendants Waverly Homes Development LLC, Eli Katz & Chaya Padwa
Levi Huebner, Esq. For Defendants L Vacation LLC, Wavery SF LLC, Wavery 15 LLC, Waverly Garden Unit LLC, 25 Waverly Garden LLC, Waive 27 LLC, 52 Waverly LLC, and 50 Waverly LLC ("Phase 1 Answering Defendants")
Present: Galligan, J.
DECISION & ORDER
Hon. Meagan K. Galligan, JSC
Plaintiff moves pursuant to CPLR 3217(b) for an order discontinuing its claims asserted herein as against defendants L Vacation LLC, Waverly SF LLC, Waverly 15 LLC, Waverly Garden Unit LLC. 25 Waverly Garden LLC, Waive 27 LLC, 52 Waverly LLC and 50 Waverly LLC. being the same entities referred to throughout this litigation as the "Phase 1 Answering Defendants" (hereinafter, "defendants"). Defendants oppose plaintiff's motion and cross-move for an order pursuant to 22 NYCRR 130-1.1(c) awarding sanctions, costs, and attorney's fees against plaintiff and its counsel.
Motion to Discontinue
The court first considers whether to discontinue this action against defendants over their objection.
Defendants observe that plaintiff's notice of motion is entitled "***motion to dismiss***" and seeks "an Order dismissing the claims" against them. Defendants argue that "dismissal" pursuant to CPLR 3211(a) is unavailable to a plaintiff against its own action and, further, that none of the eleven grounds specified by Section 3211 (a) apply to this case.
Relying upon Burstin v Pub. Serv. Mut. Ins. Co, 98 A.D.2d 928, 929 [3d Dept. 1983], defendants argue that pursuant to CPLR 2214(a) this court cannot consider relief not requested by plaintiffs notice of motion. In support of their argument against the instant motion, defendants observe that the affirmation in support of the notice of motion is entitled "motion to dismiss" rather than motion to discontinue, as is found in CPLR 3217. The court, however, notes that plaintiff's legal argument, at Paragraph 28 thereof, cites CPLR 3217(b) as justification for its prayer for relief to discontinue the action insofar as it is pending against defendants. The defect at issue in Burstin, a party's failure to indicate any motion return date, was jurisdictional. Matter of Gabriel v Morse, 145 A.D.3d 1401 [3d Dept 2016] (failure to serve); see also Lewis v Fischer, 2012 NY Misc. Lexis 2316 [Sup. Ct. Albany Co. 2012] (failure to set forth return date and provide appropriate notice). Burstin and its progeny do not turn upon a party's mischaracterization of relief sought as "dismissal" rather than "discontinuance."
"The civil practice law and rules shall be liberally construed to secure the just, speedy and inexpensive determination of every civil judicial proceeding." CPLR § 104. Defendants' construction of the instant motion would simply compel plaintiff to refile the same motion, engendering the same arguments already filed, calling upon the court to determine the substantive merits of the issue thereupon, in contravention of a core tenet of the Civil Practice Law and Rules. Plaintiff explicitly referenced CPLR 3217 and used the word "discontinue" in its legal argument, such that defendants were appropriately on notice of the argument advanced by plaintiff herein. Indeed, defendants advanced arguments in support of their opposition to discontinuance.
Defendants contend plaintiff's motion should be denied because plaintiff continues to seek relief against defendants, pointing to Page 27 of the complaint and asserting that plaintiff seeks foreclosure of collateral securing the loans, including all common areas or elements of the premises.
Real Property Law 339-i(1) &(2) affords defendants a common interest which may not be separated from their units; moreover, defendants' "mortgage releases include 'the hereditaments and appurtenances thereunto belonging[.]'which are their respective interests in the common elements." A necessary consequence of plaintiff's prayer for relief is its disavowal of any entitlement to the relief apparently sought against the instant defendants.
While plaintiff contends it learned that defendants satisfied their mortgage obligations during post-commencement discovery, the same "discovery" was on public file of the Sullivan County Clerk, and reference to those filings appears in its own complaint. The court is troubled that plaintiff seeks now to discontinue an action against these defendants based upon the same documents that were previously and publicly available to it when it initiated suit. Additionally, and equally perplexingly, defendants oppose this motion to discontinue the same action they previously, by their filed answer, requested the court to dismiss. Ultimately, the court confronts a simple question: whether to discontinue plaintiff's action as it cannot and could not possibly result in any award of relief to plaintiff against these defendants.
A party asserting a claim may discontinue an action only upon order of the court fixing appropriate terms and conditions. CPLR § 3217(b).
Continuation of this action is futile, as plaintiff is foreclosed from obtaining any relief herein against these defendants; therefore, the court elects to grant plaintiff's motion to discontinue this action, with prejudice, insofar as it is pending against defendants L Vacation LLC, Waverly SF LLC, Waverly 15 LLC, Waverly Garden Unit LLC, 25 Waverly Garden LLC, Waive 27 LLC, 52 Waverly LLC and 50 Waverly LLC.
The court further considers defendants' application for costs and attorney's fees.
Cross-Motion for Costs. Fees and Sanctions
This action should never have been commenced against defendants L Vacation LLC, Waverly SF LLC, Waverly 15 LLC, Waverly Garden Unit LLC, 25 Waverly Garden LLC, Waive 27 LLC, 52 Waverly LLC and 50 Waverly LLC.
Plaintiff's argument that it sought to discontinue upon production of defendants' mortgage releases during discovery does not square with the provisions of its complaint noting that these same defendants had been released from their mortgage obligations. The court is satisfied beyond any doubt that plaintiff knew these defendants had been released when it filed suit. Moreover, plaintiff knew or should have known, since Real Property Law 339-i was last amended in in 1974, that it could not foreclose upon just defendants' interests in the common areas, Plaintiff's claim, by its affirmation in opposition to defendants' cross-motion, that it acted out of "an abundance of caution, and as is common in a mortgage foreclosure action." by naming as defendants all parties with any connection to the development, is unpersuasive. An attempt to square plaintiff's knowing suit of persons with absolutely no liability and its assertion of acts taken with an abundance of caution would be undertaken in vain. Plaintiff cannot offer any satisfactory resolution of that incongruity.
Plaintiff's assertion that defendants somehow misunderstood its allegations against them, raised by their own foreclosure complaint, flies in the face of its own prayers for relief and discounts the reasonable and logical anxiety occasioned by ordinary persons, particularly those who have responsibly repaid and satisfied their mortgage obligations, upon the filing of litigation against them. To paraphrase plaintiff, out of an abundance of caution, the court notes that expenditure of attorney's fees and other litigation costs is a foreseeable consequence of a legally baseless lawsuit.
Nonetheless, and at the same time, the court is confounded at defendants' litigation strategy, particularly in opposing a motion that would achieve for them the termination of this action against them, consistent with the relief sought by their answer.
The court has observed the contentious and personal nature of this litigation that has, to date, resulted in more than five hundred electronic filings. On June 23, 2023, the court granted a motion to dismiss upon presentment by owners of two other units of their mortgage releases. NYSCEF 314. It should have been apparent by then, if it had not been already, that the instant defendants could summarily end the instant litigation, insofar as it has been pending against them, by filing a substantively identical motion, consistent with the subsequent filing by another defendant, whose mortgage had also been released, who achieved dismissal on consent. NYSCEF 385.
Rather than filing that very simple motion to dismiss or returning the calls of counsel for plaintiff seeking an end to this unfortunate litigation by stipulation, counsel for the instant defendants instead propagated a round of "scorched earth" style litigation by issuing a subpoena compelling return of escrow account records of lawyers no longer involved in the litigation, which, if answered, would have included records completely unrelated to the instant litigation.
Counsel for the instant defendants denies the allegation that the subpoena was issued by stealth.
A byproduct of the litigation strategy of counsel for the instant defendants has been the unnecessary inflation of legal fees incurred by all parties hereto.
Defendants' motion for legal fees does not include a necessary affidavit of services. It merely asserts legal fees of more than $50,000.
Frivolous conduct is conduct "completely without merit in law [that] cannot be supported by a reasonable argument for an extension, modification or reversal of existing law," conduct that is "undertaken primarily to delay or prolong the resolution of the litigation, or to harass or maliciously injure another." or conduct that "asserts material factual statements that are false." 22 NYSCRR 131-1.1.
The action against the instant defendants "is completely without merit in law and cannot be supported by a reasonable argument for an extension, modification or reversal of existing law." For their frivolous conduct, counsel for plaintiff, not plaintiff, is to pay reasonable attorney's fees. The court fixes the amount of such fees at $2500, to be paid within thirty days hereof to counsel for defendants.
The court need not aw ait an affirmation of services, as any fees and costs in excess of $2500 incurred by defendants resulted from the unreasonable decision of their counsel to withhold a motion to dismiss and the unreasonable decision of defendants' counsel to engage in his own brand of frivolous conduct. 22 NYSCRR 131-1.1 (2).
The court has considered the application for leave to submit a reply affirmation, which is denied as unnecessary. The court will not contribute to additional delay and the accumulation of further unnecessary fees.
Determination
Accordingly, it is hereby ORDERED that the complaint against defendants is discontinued with prejudice; and it is further
As set forth above "defendants," as used herein, are the "Phase 1 Answering Defendants," L Vacation LLC, Waverly SF LLC, Waverly 15 LLC, Waverly Garden Unit LLC, 25 Waverly Garden LLC, Waive 27 LLC, 52 Waverly LLC and 50 Waverly LLC.
ORDERED that within thirty days hereof, the law firm of Sills Cummis & Gross P.C. shall pay to Levi Huebner & Associates, as attorneys for defendants, the sum of $2500, to be remitted by Levi Huebner & Associates to each of the instant defendants proportionately in repayment of fees received from or owing by said defendants; and it is further
ORDERED that the letter application requesting permission to file an additional reply is denied; and it is further
ORDERED that all discovery demands by or to defendants are hereby vacated; and it is further
ORDERED that all pending requests to extend the disclosure schedule among the remaining parties are denied, the deadline for depositions remains October 31,2023, and note of issue shall be filed no later than December 31, 2023; and it is further
ORDERED that counsel for all remaining parties shall appear for a Teams conference on November 15, 2023, at 2:00 p.m., at which time the parties shall confirm that all discovery is complete.
The foregoing constitutes the Decision and Order of the Court. The signing of this decision and order shall not constitute entry or filing under CPLR § 2220. Counsel is not relieved from the applicable provisions of that rule regarding notice of entry.
Pursuant to CPLR § 5513, an appeal as of right must be taken within thirty (30) days after service by a party upon the appellant of a copy of the judgment or order appealed from and written notice of its entry, except that when appellant has served a copy of the judgment or order and written notice of its entry, the appeal must be taken within thirty (30) days thereof.