Opinion
0114829/2003.
July 12, 2006.
Defendants move for an order granting them (1) leave to amend their answer pursuant to CPLR 3025(b) to add the defenses of collateral estoppel and res judicata, and (2) summary judgment dismissing plaintiff's remaining causes of action for breach of contract, money had and received, and the intentional infliction of emotional distress. Plaintiffs oppose the motion, which is denied in part and granted in part.
BACKGROUND
Defendant Vito Sacchetti ("Sacchetti") is the owner of the building located at 330 East 43rd Street, New York, NY ("the building"), and defendant TMS Management Co. is the building's managing agent (together "Sacchetti"). Plaintiff World City Foundation ("World City") is a not-for-profit organization that is a tenant of certain apartments in the building. Decedent John Rogers ("Rogers") was the Chief Executive Officer of World City, and occupied an apartment in the building as his personal residence. Rogers, who was an attorney practicing maritime law, founded World City and related entities for the purpose of promoting the creation of a American cruise ship industry, and these efforts came to be known as the American Flagship Project.
In May 1987, a Master Lease was executed by Sacchetti's predecessor-in-interest and plaintiffs for certain apartments at the building for a one-year term. Paragraph 12 of the "Supplemental Rider #2," to the Master Lease, the renewal option, provided for future renewals upon the expiration of the Master Lease term, "at a renewal rate to be agreed upon but in no case shall the rent increase more than 5% per annum." Another provision of the lease provided for options for additional apartments in the building as they became available. By letter agreement dated October 20, 1987, Rogers and Sacchetti's predecessor-in-interest agreed that the landlord would have the right to terminate the leases subject to the Master Lease, upon giving the tenant one-year's advance written notice, and paying the tenant the liquidated amount of $150,000 for the costs of the tenant's improvements to the leased apartments and common areas of the building.
The letter agreement, provided in pertinent part, that:
In view of my plans to convert the building to a cooperative or condominium, Landlord may wish to reclaim possession of apartments covered by our lease on fair and appropriate terms, and consistent with Clause #1 of the Supplemental Rider #2 (i.e. the renewal option). This will therefore confirm our agreement at our meeting last week and constitute an Amendment to (the Master Lease).
In the event Landlord should at any time decide to sell the building. . ., convert the same to a condominium or cooperative, or for any other reason, Landlord shall have the right at any time during the pendency of this lease, including as same may be renewed and/or extended to other apartments under the options clause, to terminate the lease on one year's advance written notice served on tenant . . . or effective at the end of the rental term in effect at the time of such notice, whichever date is later, on payment to tenant of a lump sum covering tenant's costs of improvements to the premises and to common areas in the building and the tenant's cost of relocation, which combined sum shall be liquidated at One Hundred Fifty Thousand ($150,000). Such amount shall be paid to the tenant not less than three(3) months prior to the termination date specified under this provision.
In or about July 1993, the building was purchased by Sacchetti. The documentary evidence submitted with the motion indicates that at the time of July 1993 purchase, plaintiffs possessed Apartments 102, 204, and 205 pursuant to the Master Lease, as well as Apartments 206 and 201 pursuant to lease agreements dated March 1, 1991 and September 1, 1991, respectively. The record indicates that plaintiffs came to occupy Apartment 203 sometime in 1993, although there apparently is no separate lease agreement for this Apartment but only an October 1996 lease renewal. The record also contains two year renewal forms for Apartment 105 for the period from October 1, 1996 to October 1, 1998 and from October 1, 2000 to October 1, 2002, and no separate lease agreement. Plaintiffs also came to occupy Apartments 101 and 202 pursuant to lease agreements with Sacchetti dated November 1, 1997, and May 1, 1998.
The is no renewal form in the record for the time period from October 1, 1998 to October 1, 2000.
With the exception of Apartment 201, which was used as Roger's personal residence, the Apartments were leased for the purpose of serving as offices for World City. Plaintiffs assert that they invested approximately $125,000 in making initial improvements to the apartments, and subsequently invested further funds to making substantial improvements to the building itself to upgrade public areas. The apartments were, at least initially, subject to the rent stabilization laws.
Although the apartments were used for non-residential purposes, Housing Court Judge Cyril K. Bedford held in a decision and order dated July 21, 2004, that such use does not remove the apartments from rent stabilization protection.
Following Sacchetti's purchase of the building, various disputes arose between the parties. In this action, plaintiffs seek to recover damages in connection with Sacchetti's alleged campaign of harassment aimed at depriving plaintiffs of their rights under the Master Lease. Specifically, the complaint alleges, and Rogers states in his affidavit, that between 1996 and 2001, Sacchetti appeared at the building to request that plaintiffs pay additional rents in excess of the rental rates provided for in the lease and in the renewals. In November 2, 1999, Rogers suffered a major stroke and underwent an extended hospitalization and rehabilitation, and plaintiffs assert that despite Rogers' illness, Sacchetti continued to make demands for additional rent in 2000 and 2001 and for return of space. Plaintiffs maintain that under pressure from Sacchetti, plaintiffs agreed to vacate one unit, even though they invested over $25,000 in improvements. Nonetheless, plaintiffs claim that Sacchetti continued to demand additional rent equivalent to a 49% increase for all units occupied by plaintiffs.
The complaint alleges that "[i]n retaliation for Plaintiffs' refusal to submit to his wrongful demand for rent increases, Sacchetti embarked on a brutal, oppressive and continuous campaign of harassment with the clear intention to inflict economic damage and injury on Plaintiffs without excuse or justification." These efforts purportedly included serving 245 Notices of Termination and Intention to Evict upon plaintiffs, the wrongful refusal to renew the leases on six units in accordance with the Master Lease, and commencing 23 purportedly baseless legal proceedings. In October 2002, Rogers was diagnosed with multiple myeloma, and plaintiffs allege that Sacchetti's outrageous conduct caused severe psychological stress and the onset or exacerbation this disease which resulted in Roger's death.
The complaint initially included causes of action for (i) breach of contract, (ii) money had and received in connection with Sacchetti's retention of a security deposit for Apartment 102, (iii) willful and malicious interference with plaintiffs' business, (iv) intentional infliction of emotional distress and harm, (v) malicious prosecution, and (vi) slander. By decision and order dated April 12, 2004, the court granted Sacchetti's motion to dismiss to the extent of dismissing plaintiffs' claims for willful and malicious interference with plaintiffs' business, malicious prosecution and slander.
The court, however, found that the breach of contract claim, which alleged, inter alia, that Sacchetti repeatedly demanded rent above the amount in the Master Lease and wrongfully refused to renew the leases on certain units, was sufficient to state a cause of action for breach of the contract, including the breach implied covenant of good faith and fair dealing and of quiet enjoyment. See, Super Workout, Inc. v. Samson Associates, 269 AD2d 281 (1st Dept 2000); Zuckerwise v. Sorceron Inc., 289 AD2d 114 (1st Dept 2001).
The court further found that the cause of action for money had and received, seeking the return of plaintiffs' security deposit for Apartment 102, was not precluded based on the parties' stipulation in connection with a summary proceeding in Civil Court under which plaintiffs agreed to waive their right to the deposit, since plaintiffs alleged that Sacchetti breached the stipulation.
Furthermore, the court rejected Sacchetti's position that his alleged conduct was not so outrageous as to state a claim for intentional infliction of emotional distress, and found that allegations in the complaint that Sacchetti knowingly and maliciously demanded excessive rent with the intention of coercing plaintiffs to give up valuable leasehold rights, and commenced baseless summary proceedings were sufficient to state a cause of action for intentional infliction of emotional distress.
After discovery was complete and note of issue was filed, Sacchetti made this motion to amend and for summary judgment dismissing plaintiffs' remaining claims. Sacchetti argues that he should be permitted to amend the answer to include the defenses of res judicata and collateral estoppel, and that pursuant to these doctrines, plaintiffs' claims for breach of contract and for money had and received seeking the return of the security deposit for Apartment 102 should be dismissed as the issues relating to these claims have been litigated and necessarily decided in favor of Sacchetti and/or arise out of the same transaction or occurrence as the summary proceedings pursued in the Housing part of the Civil Court. Sacchetti also argues that the record is insufficient to support any claim for damages arising out of the breach of contract claim.
After plaintiffs submitted their opposition, and while this motion was pending Rogers, who represented World City and himself pro se, died. These proceedings were stayed pending the substitution of a duly appointed representative for Rogers. After this was accomplished and an attorney appeared for plaintiffs, this motion was restored to my motion calendar.
With respect to the intentional infliction of emotional distress claim, Sacchetti asserts that as the summary proceedings were not baseless, he his immune from liability based on the so-calledNoerr-Pennington doctrine. Sacchetti further asserts that plaintiffs cannot establish on this record that his conduct in connection with the summary proceedings was extreme and outrageous, or that such conduct caused Rogers to contract multiple myeloma, since there is no general acceptance in the scientific community that stress can cause the disease.
In support of their motion, Sacchetti relies, inter alia, on Sacchetti's affidavit, the pleadings and court decisions in connection with the summary proceedings commenced in the Civil Court of the City of New York, various correspondence from Rogers, and World City's Vice President Stephanie Gallagher ("Gallagher") and the deposition testimony of Rogers and Gallagher. With respect to their argument that there is no general acceptance in scientific community that stress can cause multiple myeloma, defendants submit the expert affidavit of Jeffrey Schneider, M.D.
Plaintiffs oppose the motion and submit, inter alia, Rogers' affidavit and copies of their pleadings in the summary proceedings. Plaintiffs argue that a review of the pleadings and other documents relating to the summary proceedings indicate that although the issues regarding the renewal of the Master Lease, and the security deposit were raised in these prior proceedings, these issues were not litigated or necessarily decided and therefore are not barred by collateral estoppel or res judicata. Plaintiffs next argue that the Noerr-Pennington doctrine is inapplicable to their intentional infliction of emotional distress claim, which elements have been met here. With respect to the causation issue, plaintiffs submit the expert affidavit of Brian G.M. Durie, M.D. who states opines that there is a "strong correlation" between stress and myeloma.
A review of the record indicates that an issue concerning plaintiffs' failure to timely pay their rent first arose in or around April 1999, and that the issue arose again after Rogers was hospitalized in November 1999 following a stroke. In 2000, there is correspondence from Rogers and Gallagher to Sacchetti, which suggests that the parties were still on good terms. In a letter dated September 30, 2000, Rogers notified Sacchetti that October rent would be a few weeks late, and agreed to pay a late fee of $500 per month for each month that rent was paid late. In a letter dated November 1, 2000, Rogers and Gallagher wrote to Sacchetti thanking him for his understanding in connection with the late payment of rent, and stated that starting with January 1, 2001, all rent would be paid on time and, if not, one of the Apartments under lease would be given up, and that commencing on January 1, 2001, they "voluntarily agree[d] to a 20% ("vacancy") increase" on Apartments 105 and 102, and a 5% increase on the other apartments (i.e. Apartments 204, 205, 203, 206, 201, 202 and 101). Gallagher states in her affidavit that the concessions given to Sacchetti were intended to appease him in response to his persistent demands for additional rent.
Under paragraph 47 of the Master Lease, the Landlord is entitled to interest on late rent payments in the amount of 18% per annum which shall be added as additional rent and shall be due upon the next rent date.
In November 2001, Sacchetti informed Rogers that he was considering taking legal action against plaintiffs. A letter dated November 6, 2001 from Rogers to Sacchetti indicates that Sacchetti was seeking an "across the board" rent increase, including a 49% increase for Apartment 202, that Sacchetti's attorney notified Rogers that the apartments were not subject to rent stabilization, and that the parties were involved in a dispute concerning the return of a security deposit for Apartment 102.
Summary Proceedings Initiated by Sacchetti in the Civil Court
In December 2001, Sacchetti commenced a holdover proceeding against World City to obtain possession of Apartment 101 on the ground that the lease had expired and was not subject to renewal under the rent stabilization laws since the rent exceeded $2,000 per month. Rogers states in his affidavit that this proceeding was brought only after he refused to a 49% increase in rent on this apartment following the expiration of the lease on November 14, 2001. This proceeding was dismissed after trial on June 12, 2002, upon a finding that Sacchetti had failed to prove that the rent exceeded $2,000 per month when it became vacate prior to World City's occupancy and that, in fact, the evidence showed the rent was substantially less than $2,000 per month at that time.
On or about January 30, 2002, while the holdover proceeding relating to Apartment 101 was still pending, Sacchetti brought six separate holdover proceedings relating to Apartments 105, 201, 203, 204, 205, and 206. Sacchetti states in his affidavit that these proceedings were commenced after plaintiffs withheld rent. In his affidavit, Rogers denies that rent was withheld, and states that Sacchetti simply refused to cash rent checks for January 2002, claiming that the checks had not been received, which required him to seek stop payments orders for these checks, and to send replacement checks, which were not deposited by Sacchetti.
In support of his statements, Rogers submits documentary evidence, including stop payment documents from the bank, copies of checks for January 2002 rent and replacement checks for these checks after stop payment orders were issued. According to Rogers, he subsequently sent all checks by certified mail, return receipt requested to demonstrated payment to the court. The six proceedings, which were before Judge Shlomo Hagler, were discontinued without prejudice after all rent due and owing was paid, and all counterclaims were dismissed and severed, without prejudice to their assertion in a plenary action .
In February 2002, Sacchetti commenced a separate holdover proceeding to obtain possession of Apartment 202. The proceeding was resolved by stipulation dated April 29, 2002, which was so-ordered by Judge Douglas E. Hoffman in which the parties agreed, inter alia, that the lease would be renewed commencing on June 1, 2002, for a two-year term at a monthly rent of $2,550, that the Apartment was not subject to rent regulation, including rent stabilization, and that the stipulation settled any claim for the return of the security deposit for Apartment 102, which apparently was surrendered in January 2001. Rogers subsequently moved to vacate the stipulation, and by decision dated August 20, 2002, Judge Hoffman denied the motion.
In April 2002, Sacchetti commenced six non-payments proceedings against Rogers in connection with the same six apartments that were the subject of the holdover proceedings before Judge Hagler. In his affidavit, Sacchetti states that the proceedings were necessary due to plaintiffs' continued failure to pay rent, and Rogers denies these allegations in his affidavit, and states that the rent had been paid. Rogers answered and asserted various affirmative defenses and counterclaims. Of relevance to Sacchetti's assertions of the defenses of collateral estoppel and res judicata, in response to certain petitions, Rogers alleged in his second and third affirmative defenses that Sacchetti breached of the Master Lease by escalating his demands for payment of rent beyond that permitted under the Master Lease.
The six proceedings were consolidated for trial, which was held before the Judge Ernest Cavallo. In his decisions and orders dated October 10, 2002, Judge Cavallo dismissed the proceedings, finding that Sacchetti had not met his burden of showing that Rogers owes rent, and specifically rejected Sacchetti's assertions that Rogers was making deposits into Sacchetti's account without his knowledge. Judge Cavallo also found that Sacchetti failed to credit payments made by Rogers in 2001 and 2002. Notably, Judge Cavallo did not make any determination with respect to Rogers' allegations concerning the Master Lease.
In March 2003, Sacchetti filed seven nonpayment proceedings against Rogers concerning the same six apartments and Apartment 202, and these proceedings were assigned to Judge Cavallo. Rogers answered and asserted various affirmative defenses and counterclaims, including in certain of the proceedings, a third affirmative defense, for retaliatory eviction, which included allegations that Sacchetti failed to renew the lease in accordance with the terms of the Master Lease, and demanded rent far in excess of that permitted under the Master Lease, and a fourth affirmative defenses alleging that Sacchetti breached his contract with Rogers by, inter alia, failing to renew the various leases in accordance with the Master Lease. The first counterclaim alleged that Sacchetti embarked on a campaign of harassment to drive Rogers out of the building and breached his right to quiet enjoyment of the premises.
The proceeding regarding Apartment 105 was also commenced against Rebecca Ramirez as an undertenant.
Rogers moved for summary judgment seeking dismissal of five of the seven proceedings on the grounds that the leases under which rent was due had expired and there was no longer any landlord-tenant relationship. Sacchetti opposed the motion and cross-moved, inter alia, to strike certain of Rogers' affirmative defenses, and the first counterclaim. By decision and order dated September 30, 2003, Judge Cavallo denied Rogers' motion for summary judgment, finding that as the apartments were subject to rent stabilization, they were subject to renewal and had not expired. Judge Cavallo dismissed the third and fourth affirmative defenses, which contained allegations related to the Master Lease. With respect to the third affirmative defense. Judge Cavallo found that retaliatory eviction is not available as a defense to a non-payment proceeding, and dismissed the allegations in the fourth affirmative defense related to Rogers' alleged entitlement to a lease renewal on the same ground. He further found that the first counterclaim was without merit to the extent that a claim for breach of the covenant of quiet enjoyment is not viable in the absence of any evidence of an actual or constructive eviction, and that New York does not recognize a cause of action for harassment. By decision and order dated January 24, 2004, Judge Cavallo denied Rogers' motion to reargue.
A trial of the seven consolidated non-payment proceedings was held before Judge Cyril K. Bedford in May and June 2004. By decision after trial dated July 21, 2004, Judge Bedford awarded costs, money judgments for outstanding rent in favor of Sacchetti and against plaintiffs in the total sum of $234,221.57, and final judgments of possession but stayed the warrants for five days in each proceeding. The rent award included amounts due and owing for Apartment 202 at a monthly rate of $2,550, which is consistent with the amount agreed to by the parties in the April 29, 2002 stipulation. In addition, Judge Bedford found that all the Apartments, other than Apartment 202, were rent stabilized, except for those with monthly rents exceeding $2,000 a month.
It appears from Judge Bedford's decision that Apartments 201, 204, and 205 had monthly rents exceeding $2,000.
Rogers subsequently moved to schedule a hearing to correct certain mathematical errors in the judgment and to stay the issuance of a warrant. By decision and order dated November 23, 2004, Judge Cavallo denied Rogers' motion. With respect to Apartment 202, Judge Cavallo rejected Rogers' argument that Judge Bedford should not have concluded that there was an agreement between the parties to pay $2,550 monthly, writing that "Judge Bedford's determination was based upon the stipulation of April 29, 2002 between the parties which set $2,550 as the rate of monthly rent, as well as (Roger's and World City's) admission that rent in that amount was tendered for six months from June 2002 through November 2002." Rogers subsequently paid the judgment, including $179,716.24, which was deposited into the court at Sacchetti's request pursuant to RPAPL section 745.
Judge Cavallo was assigned the case after Judge Bedford's retirement.
In December 2004, Sacchetti brought a holdover proceeding for possession of Apartment 202. Rogers and World City asserted as a defense that their possession was pursuant to the Master Lease under which they were entitled to renewal upon the expiration of the lease at a rate not to exceed 5% and that Sacchetti did not offer them a renewal. After World City vacated the apartment, Sacchetti moved for use and occupancy for the period between the expiration of the lease and the time that the apartment was vacated. By decision and order dated April 21, 2005, Judge Ulysses Leveret, held that lease was not subject to renewal since pursuant to the parties' stipulation, the apartment was not rent stabilized, and rejected that the renewal option in the Master Lease could be enforced since the parties entered into subsequent leases "which did not mention or incorporate by reference the renewal terms of the purported Master lease."
Supreme Court Actions Regarding the Master Lease
Sacchetti brought two actions in the Supreme Court seeking to void the renewal options in the Master Lease. Both were unsuccessful. The first action sought a declaration that the renewal option in the Master Lease was unenforceable (Sacchetti v. World City America, Inc., et al; Index No. 106883/03). By decision and order dated December 18, 2003, Justice Harold Beeler dismissed the complaint on statute of limitations grounds since the action was commenced more than six years after the lease was renewed for the first time, and also rejected Sacchetti's arguments that the renewal option was too indefinite to enforce or violated the rule against perpetuities.
The second action, which was commenced on June 21, 2004, contained a cause of action to quiet title under section 15 of Real Property Actions and Proceeding Law, and to void the Master Lease against public policy since it "runs in perpetuity" and does not require the World City defendants to occupy the premises as their primary residence, or for residential purposes as required the Rent Stabilization Code. By decision and order dated June 14, 2005, this court dismissed the action as barred by res judicata, since the action arose out of the same transaction as the action before Justice Beeler, and also found that the claims asserted failed to state a cause of action.
DISCUSSION
Under CPLR 3025(b) motions to amend are freely granted in the absence of prejudice or unfair surprise resulting from delay, unless the proposed amendment is plainly lacking in merit. Thomas Crimmins Contracting Co., Inc. v. City of New York, 74 NY2d 166 (1989). Here, plaintiffs do not claim prejudice and unfair surprise in their opposition to Sachetti's motion to amend. Therefore, the issue is whether the proposed amendments are of sufficient merit.
To demonstrate merit, "proponent must allege legally sufficient facts to establish a prima facie cause of action or defense in the proposed amended pleading. If the facts alleged are incongruent with the legal theory relied on by the proponent the proposed amendment must fail as matter of law." Daniels v. Empire-Orr, Inc., 151 AD2d 370, 371 (1st Dept. 1989) (citations omitted). When the proponent meets this initial burden, "the merit of the alleged pleading must be sustained . . . unless the alleged insufficiency or lack of merit is clear and free from doubt." Id.
The doctrine of res judicata or "claim preclusion" provides that ?'as to parties in a litigation . . . a judgment on the merits by a court of competent jurisdiction is conclusive of the issues of fact and questions of law necessarily decided therein in any subsequent action.'" Singleton Management, Inc. v Compere, 243 AD2d 213, 215 (1st Dept 1998) (citation omitted). Under the transactional approach to res judicata adopted by New York courts, "'once a claim is brought to a final conclusion, all other claims arising out of the same transaction or series of transactions are barred, even if based upon different theories or if seeking a different remedy.'" Marinelli Associates v Helmsley-Noyes Co., Inc., 265 AD2d 1, 5 (1st Dept 2000)(quoting, O'Brien v City of Syracuse, 54 NY2d 353, 357 (1981), citing Matter of Reilly v Reid, 45 NY2d 24, 29-30). At the same time, however, the Court of Appeals has held that "even when two successive actions arise from an identical course of dealing, the second may not be barred if the requisite elements of proof and evidence necessary to sustain recovery vary materially."Matter of Reilly v Reid, 45 NY2d at 30.
The related doctrine of collateral estoppel or "issue preclusion" prevents a party from relitigating an identical issue which has previously been decided against it in a prior action in which it had a fair opportunity to fully litigate the issue. See Allied Chemical v Niagara Mohawk Power Corp., 72 NY2d 271 (1988), cert denied, 488 US 1005 (1989).
Here, Sacchetti asserts that he should be permitted to add the defenses of res judicata and collateral estoppel to bar plaintiffs' claim for breach of contract and money had and received with respect to the security deposit for Apartment 102, based on the determinations in the summary proceedings.
Breach of Contract Claim
As indicated in this court's decision and order regarding Sacchetti's motion to dismiss, the gravamen of plaintiffs' breach of contract claim is that Sacchetti repeatedly demanded rent above the amount in the Master Lease and wrongfully refused to renew the leases on certain apartments, and that these allegations were sufficient to state a claim including for breach of the Master Lease and the implied covenant of good faith and fair dealing and of quiet enjoyment. First, to the extent plaintiffs' breach of contract claim is based on allegations that Sachetti breached the covenant of quiet enjoyment, it is barred by Justice Cavallo's decision and order dated September 30, 2003, finding that such a claim is not actionable in the absence of evidence that Rogers or World City was actually or constructively evicted, which, in any event, would be the same conclusion reached by this court. See Jacobs v 200 East 36 th Owners Corp., 281 AD2d 281 (1st Dept 2001).
That being said, however, that aspect of the breach of contract claim based on allegations that Sacchetti breached the Master Lease and the implied covenant of good faith and fair dealing by, inter alia, demanding rent over the amounts permitted under the lease, refusing to renew the leases on certain apartment subject to the Master Lease, and failing to terminate the leases pursuant to the termination provision which paid plaintiffs for improvements to the apartments and the building, is actionable. Contrary to Sacchetti's position, a review of the record in connection with the summary proceedings indicates, with one exception delineated below, that the issues surrounding the Master Lease were not litigated or necessarily decided during the summary proceedings.
Although Rogers asserted affirmative defenses and made other allegations related to the issues concerning the Master Lease in the summary proceedings, the record shows that these defenses and allegations were either not addressed or were stricken on the ground that they were not properly asserted in a summary proceeding. Thus, for example, although Judge Bedford granted Sacchetti a judgment for unpaid rent, the trial decision does not mention any of Rogers' allegations that he was being charged excess rent in view of the Master Lease. In fact, the record shows that prior to trial, Judge Cavallo struck Rogers' affirmative defenses and allegations related to the Master Lease including those that Sacchetti was demanding more rent than permitted under the lease on the grounds that such defenses and allegations were not properly asserted in a summary proceeding. While the parties are bound by the amount of legal rent determined by Judge Bedford, the defenses and allegations, other than the legal rent, regarding the Master Lease were not fully litigated or necessarily decided during the summary proceedings as required under the doctrine of collateral estoppel, nor should they be barred by res judicata since the courts struck the allegations and defenses relating to the Master Lease. Moreover, Sacchetti was unsuccessful in his attempts obtain relief in this court through actions seeking to void the Master Lease's renewal provision.
Specifically, a review Rogers' answer together with Judge Cavallo's September 30, 2003 decision indicates that Rogers raised affirmative defenses and asserted allegations regarding the Master Lease in the numerous special proceedings commenced by Sacchetti which, with the following exception, were not addressed. In the seven non-payment proceedings commenced by Sacchetti in March 2003, Rogers asserted a fourth affirmative defense alleging breach of the Master Lease for failure to renew it and a third affirmative defense for retaliatory eviction, which included allegations related to the Master Lease. Judge Cavallo dismissed the retaliatory eviction defense and the fourth affirmative defense regarding the Master Lease as not properly asserted as defenses to a non-payment proceeding.
Under these circumstances, the doctrines of collateral estoppel and res judicata do not bar plaintiffs from litigating their breach of contract claim insofar as it is based on a theory that Sachetti breached the Master Lease and the implied covenant of good faith and fair dealing. See e.g. Lukowsky v. Shalit, 110 AD2d 563 (1st Dept 1985) (holding that sublessor's prior non-payment and holdover proceedings against sublessee did not preclude sublessor based on the doctrines of collateral estoppel or res judicata from bringing an action against sublessee for fraud in the inducement).
However, the doctrine of collateral estoppel prevents plaintiffs' from litigating their breach of contract claim with respect to Apartment 202, since Judge Leverett determined that this apartment was not subject to the Master Lease.
Sacchetti next argues that the breach of contract claim must be dismissed as Rogers has not adequately established the alleged $2 million in damages arising out of the breach. In support of this argument, Sacchetti points, inter alia, to plaintiffs' Bill of Particulars indicating that plaintiffs are not seeking lost profits. Sacchetti also relies on Rogers' deposition testimony indicating that the World City is a not-for-profit organization and any of the profits would have obtained through a separate entity World City America ("WCA"), which was formed to own the project, and that WCA was never funded, so that the failure of the project cannot be attributed to Sacchetti.
In his affidavit in opposition, Rogers states that by November 2001, a month before Sacchetti brought the first summary proceeding against plaintiffs, the American Flagship project was well underway and the remaining steps required included the securing of a so-called Letter of Commitment for a Title XI loan guarantee from the United States Secretary of Transportation. He states that obtaining this commitment required his full time and effort as well as that of Gallagher, the other key project executive, and these efforts included "meetings with key governmental officials, development of an understanding of the proposal among members of Congress, and marshaling and coordination of support in Washington by corporations, builders, suppliers and maritime unions involved in the project." According to Rogers, since the litigation commenced by Sacchetti in 2001 consumed his time and efforts as well as those of Gallagher, and required him to stay in New York, he was unable take the necessary steps to advance the project in Washington DC.
Rogers also states that Sacchetti was aware that World City used the Apartments at issue to support and implement all phases of the American Flagship project, and that Sacchetti was made aware of the use of the space on numerous occasions, was periodically given documents evidencing the status of the project, and promised shares in the project. Rogers also states that Sacchetti's demands that plaintiffs pay amounts significantly beyond the rent permitted under the Master Lease were aimed at evicting plaintiffs and destroying the Flagship project.
"In actions for breach of contract, the nonbreaching party may recover damages which are a natural and probable consequence of the breach."Kenford Co., Inc. v. County of Erie, 73 NY2d 312, 319 (1989). These damages are known as "general damages" while "special damages are extraordinary in that they do not so directly flow from the breach."American List Corp. v. U.S. News and World Report, Inc., 75 NY2d 38, 42-43 (1989). To impose liability for special damages, "'such unusual or extraordinary damages must have been brought within the contemplation of the parties as the probable result of the breach prior to contracting.'"Kenford Co., Inc. v. County of Erie, 73 NY2d at 319, quoting, Chapman v. Fargo, 223 NY 32, 36 (1918). To determine what the parties contemplated, "the nature, purpose, and particular circumstances of the contract known by the parties should be considered. . . . as well as what liability the defendant fairly may be supposed to assume consciously, or to have warranted the plaintiff reasonably to suppose it assumed, when the contract was made." Id. (citations and internal quotations omitted).
Here, plaintiffs may be able to establish that their entitlement general damages which were a natural and probable consequence of Sacchetti's alleged breach of the Master Lease and the implied duty of good faith and fair dealing. It appears that plaintiff's argument is that Sacchetti's breach included opting to bring meritless special proceedings instead of utilizing the termination provision of the Master Lease to end the landlord tenant relationship, and failing to renew the Master Lease in accordance with its terms, including the provision which limited rent increases to 5% per annum. Thus, plaintiffs' general damages would potentially include moneys expended to improve the apartments and the building and any additional rent amounts beyond 5% per annum permitted under the Master Lease paid in connection with apartments not subject to Judge Bedford's decision.
In contrast, plaintiffs have not demonstrated that they are entitled to contract damages beyond those which are a natural and probable consequence of the alleged breach of the Master Lease, which would include losses resulting from the failure to obtain financing for the Flagship project. First, the Master Lease was intended to govern the landlord-tenant relationship between the parties, and nothing in the lease suggests that the Sacchetti's failure to abide by its terms would result in his liability for damages arising out of set backs with the Flagship project. Furthermore, although Sacchetti understood that the Apartments were used as offices for the project, such understanding is insufficient to demonstrate that the parties contemplated that Sacchetti would assume liability in the event the Flagship project did not come to fruition. See e.g. Kenford Co., Inc. v. County of Erie, 73 NY2d at 319-320 (holding that although at the time that the contract for a new stadium was executed the parties contemplated an economic boom would result in increase land values and property taxes, it cannot be concluded that from this expectation, that defendant agreed to assume liability for plaintiff's loss of the anticipated value of the peripheral lands if the stadium was not built).
Likewise, to the extent it appears that plaintiffs are seeking profits that may have been earned in the event that the Flagship project had been realized, plaintiffs has not established entitlement to such damages. Damages for lost profits are recoverable upon a showing that "(1) the damages were caused by the breach; (2) the alleged loss [is] capable of proof with reasonable certainty, and (3) the particular damages are within the contemplation of the parties to the contract at the time it was made. Ashland Management Inc. v. Janien, 82 NY2d 395, 404 (1993).
As indicated above, it cannot be shown that such damages were contemplated by the parties. In addition, although Rogers asserts that the purported losses were caused by Sacchetti's failure to abide by the terms of the Master Lease, which prevented him and Gallagher from pursuing the Flagship project, the record indicates that there were numerous other factors that may have contributed to the losses, including the need to a loan commitment from the federal government, or other financing, as well as Rogers' poor health and his decision to represent himself in the summary proceedings. In any event, plaintiffs have not shown that the alleged losses are capable of proof with reasonable certainty, particularly as plaintiffs' provide no basis for calculation of any losses resulting from the failure to obtain the loan commitment in 2003. Claim for Money had and Received
The next issue concerns whether the plaintiffs are precluded from litigating their claim for money had and received, which relates to the security deposit for Apartment 102. As indicated herein, after Sachetti brought a holdover proceeding related to Apartment 202, the parties settled the proceeding by stipulation dated April 29, 2002, in which the parties agreed that Apartment 202 would not be subject to the rent stabilization law, that plaintiffs would pay a monthly rent for the Apartment of $2,550, and that their dispute regarding the security deposit for Apartment 102 was resolved. Rogers subsequently moved to vacate the stipulation, but the motion was denied by the judge who so-ordered it. Subsequently, in awarding rent to Sacchetti, Judge Bedford relied on the $2,550 monthly rent amount contained in the parties' April 29, 2002 stipulation.
In its decision and order dated April 12, 2004, this court relied on allegations that Sacchetti breached the April 29, 2002 stipulation when it denied Sacchetti's pre-discovery motion to dismiss the claim for money had and received. The allegations that Sacchetti breached the stipulation are based on Sacchetti's alleged failure to deliver an executed copy of the lease for Apartment 202 after Rogers made certain changes to it. The record indicates that Sacchetti executed the lease sent to Rogers but failed to executed it again after Rogers included the changes, and the changes made by Rogers were not specifically agreed to in the April 29, 2002 stipulation. Despite Sacchetti's failure to execute the revised lease, World City maintained possession of the Apartment and paid rent based on the stipulation, which was accepted by Sacchetti.
Under New York law, delivery of a lease is required in order for it to be effective. See 219 Broadway Corp. v. Alexander's, Inc., 46 NY2d 506, 511 (1979). However, physical delivery of the lease is not necessary, and in determining whether a delivery of a lease or other interest in real property has occurred the court looks at whether the "acts or words or both acts and words (of the parties) . . . clearly manifest that it is the intent of the parties that an interest in land is, in fact, being conveyed." Id.; see also, Shulkin v. Dealy, 148 Misc2d 486 (Sup Ct. N.Y. Co. 1990). In this case, the record indicates that both parties manifested an intent that Apartment 202 was to be leased to World City, which occupied the space and paid a monthly rent based on the stipulation. Under these circumstances, it cannot be said that Sacchetti breached the stipulation by failing to deliver an executed lease. Accordingly, as the terms of the April 29, 2002 stipulation, including the provision relating to the security deposit for Apartment 102, are enforceable, the claim for money had and received must be dismissed.
Intentional Infliction of Emotional Distress
Sacchetti challenges the viability of plaintiffs' claim for intentional infliction of emotional distress on several grounds.
As a preliminary matter, Sacchetti argues that plaintiffs' claim for the intentional infliction of emotional distress is barred by the Noerr-Pennington doctrine, which "essentially holds that parties may not be subjected to liability for petitioning the government." I.G. Second Generation Partners, L.P. v. Duane Reade, 17 AD3d 206, 207 (1st Dept 2005). "Although the Noerr-Pennington doctrine initially arose in the antitrust field, the courts have expanded it to protect First Amendment petitioning of the government from claims brought under Federal and State law, including claims asserted pursuant to 42 U.S.C. § 1983 and common-law tortious interference with contract relations." Alfred Weissman Real Estate, Inc. v. Big V. Supermarkets, 268 AD2d 101, 107 (1st Dept 2000). Moreover, it has been held that "the right to petition extends to all branches of government and that 'it would be destructive of the rights of association and of petition to hold that groups of common interests may not . . . use the channels and procedures of state and federal agencies and courts to advocate their causes and points of view.'" Concourse Nursing Home v. Engelstein, 181 Misc2d 85, 90 (Sup Ct New York Co 1999), aff'd, 278 AD2d 35 (1st Dept 2000), quoting,California Motor Transp. Co. v. Trucking Unlimited, 404 US 508, 510-511 (1972).
However, not every court action which challenges the basis for a prior litigation is subject to the Noerr-Pennington doctrine. Instead, for the doctrine to apply, the protected conduct must involve speech by the defendant directed at petitioning the government rather than a garden-variety lawsuit directed at the plaintiff. See e.g. Arts4all Ltd v. Hancock, 25 AD3d 453 (1st Dept 2006), lv dismissed, ____ NY2d ____ (2006) (holding that prima facie tort claim related to statements made to government official is barred by the Noerr-Pennington doctrine); Alfred Weissman Real Estate, Inc. v. Big V. Supermarkets, 268 AD2d 101 (1st Dept 2000)(Noerr-Pennington doctrine applied to claim for tortious interference with contract which was based on allegations that store manipulated governmental process to prevent plaintiff's development from gaining necessary approvals); compare, Vilanova Estates, Inc. v. Fieldston Property Owners Association, Inc., 23 AD3d 160 (1st Dept 2005) (holding that trial court erred in dismissing claim for prima facie tort under the Noerr-Pennington doctrine since the alleged conduct was directed toward plaintiff and was not addressed to any public official). Here, the Noerr-Pennington doctrine does not apply to plaintiffs' intentional infliction of emotional distress claim, which is not based on any conduct involving speech aimed at petitioning the government, but rather Sacchetti's allegedly wrongful use of the courts in a filing an action to force plaintiffs to vacate the apartments.
Sacchetti next argues that plaintiffs have failed to establish that the alleged conduct in connection with underlying landlord-tenant dispute was sufficiently extreme and outrageous so as to support a claim for the intentional infliction of emotional distress.
To demonstrate outrageous conduct sufficient to support such a claim, it must be shown that the alleged conduct was "so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious and utterly intolerable in a civilized society."Murphy v American Home Products Corp., 58 NY2d 293, 303 (1983). In applying this standard to landlord-tenant disputes, the courts have found outrageous conduct when the defendant landlord engages in "a deliberate, continuous course of conduct" (Carter v. Andriani, 84 AD2d 513 (1st Dept 1981), appeal dismissed, 55 NY2d 877 (1982)), as opposed to situations where the complained of conduct involves "isolated" incidents. Graupner v. Roth, 293 AD2d 408, 410 (1st Dept 2002). For instance, while a single lawsuit by the landlord is usually inadequate to support a finding of outrageous conduct (Fischer v. Maloney, 43 NY2d 553 (1978); Artzt v. Greenburger, 161 AD2d 389 (1st Dept 1990), the courts have reached the opposite conclusion when the landlord engages in a pattern of bringing multiple actions combined with other harassing conduct. Green v. Fischbein Olivieri Rozenholc Badillo, 119 AD2d 345 (1st Dept 1986) (allegations that landlord and its law firm engaged in a course of conduct designed to "harass, intimidate, and interfere with plaintiff's tenancy" including the instituted five baseless eviction proceedings were sufficient to state a claim for the intentional infliction of emotional distress); see also Meyer v. Park South Associates, 159 AD2d 337 (1stDept 1990) (longstanding landlord tenant dispute alleging long-term campaign of harassment, reciting a litany of abuse stated a cause of action for intentional infliction of emotional distress).
Next, even when a tenant bases its claim for the intentional infliction of emotional distress on allegations that the landlord brought multiple and abusive actions, such a claim is not viable when the record establishes that the actions were justified. See Hartman v. 536/540 E. 5 th]Equities, Inc., 19 AD3d 240, 241 (1st Dept 2005); Rosario v. 288 St. Nick LLC, 10 Misc3d 146(A) (App Term, 1st Dept 2006).
On a motion for summary judgment, the proponent "must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to eliminate any material issues of fact from the case. . ." Winegrad v. New York Univ. Med. Center, 64 N.Y.2d 851, 852 (1985). Once the proponent has made this showing, the burden of proof shifts to the party opposing the motion to produce evidentiary proof in admissible form to establish that material issues of fact exist which require a trial. Alvarez v. Prospect Hospital, 68 N.Y.2d 320, 324 (1986).
In arguing that the record does not demonstrate outrageous conduct, Sacchetti asserts that the summary proceedings he brought against plaintiffs were justified in view of plaintiffs' failure to pay rent, and in support of his assertion, he points to the statements in his affidavit, and to Judge Bedford's decision awarding an approximately $250,000 judgment against Sacchetti plaintiffs in the last set of non-payment proceedings. Sacchetti also asserts that allegations that plaintiffs' were forced by his conduct to vacate Apartments 102 is belied by the record which shows that the apartment was voluntarily relinquished by plaintiffs.
Assuming arguendo that based on the above-cited evidence Sacchetti has met his burden of demonstrating, as matter of law, that the alleged conduct was not outrageous, the plaintiffs have controverted this showing by submitting evidence raising a triable issue of material fact. For instance, while Sachetti states in his affidavit that the proceedings were justified based on plaintiffs' withholding of rent, Rogers counters in his affidavit that plaintiffs had paid the rent, and supports his statements with documentary evidence. In fact, the outcomes of the first twelve summary proceedings based on plaintiffs' alleged failure to pay rent appear to support Rogers' position. Likewise, the first holdover proceeding brought by Sacchetti based on allegations that Apartment 101 was not subject to rent stabilization was found to be without merit. In addition, while the final set of summary proceedings before Judge Bedford resulted in a finding that rent was owed, as the thirteen previously commenced summary proceedings were either dismissed, discontinued or resolved against Sacchetti, a reasonable fact finder could draw an inference from the record of the unsuccessful proceedings, together with other evidence in the record, that there was no justifiable basis for bringing them. Furthermore, it appears that plaintiffs paid rent into the court in connection with the final set of summary proceedings, and it is unclear from the record the basis for Judge Bedford's calculation of the rent owed.
Moreover, there is evidence in the record from which it could be reasonable inferred that Sacchetti made unreasonable requests to increase the rent on at least certain of the apartments, that such requests were beyond the amounts permitted under either the Master Lease or the rent stabilization laws, and that the purportedly unreasonable rent requests were intend to force plaintiffs to vacate the apartments. Next, while it appears that plaintiffs relinquished Apartment 102, it is unclear from the record whether such action was voluntary or the result of the pressures exerted on plaintiffs by Sacchetti. Furthermore, Sacchetti fails to provide evidence to refute plaintiffs' allegations regarding a harassing conduct perpetuated by Sacchetti in a purported effort to cause plaintiffs to vacate the apartments.
Thus, the record raises triable issues of fact as to whether Sachetti's conduct towards plaintiffs was sufficiently extreme and outrageous so as to support a claim for the intentional infliction of emotional distress.
Sacchetti next argues that the intentional infliction of emotional distress claim is without merit since plaintiffs have failed to submit adequate evidence to establish that the purported conduct resulted in severe emotional distress. See Elbogen v. Esikoff, 266 AD2d 15 (1st Dept 1999) (dismissing intentional infliction of emotional distress claim where plaintiff never made an evidentiary showing that the alleged conduct caused any mental or physical symptoms); Walentas v. Johnes, 257 AD2d 352 (1st Dept), lv dismissed, 93 NY2d 958 (1999) (holding that plaintiff is required to establish that severe emotional distress was suffered through medical evidence).
This argument is unavailing as plaintiffs have submitted both an affidavit from Rogers and medical evidence to support their assertion that Sacchetti's conduct resulted in severe emotional distress to Rogers. Thus, for example, Rogers states that:
The stress was continuous and devoid of any avenue of relief. I was unable to sleep or even think or plan constructively or creatively. I was utterly depressed since there was no relief in sight, and all I had worked for, and in which I have invested my life savings, property and retirement funds, was being destroyed before my eyes. Defendants' observation that I did not consult a psychiatrist during this period in no way detracts from the impact on me of the proven events to which defendants subjected me. . . . As for me at the time, not only would consultation with a psychiatrist solve nothing, it would have only contributed to my frustration by requiring time that I did not have available.
In addition, plaintiffs rely on the affidavit of Dr. Brian Durie, a license physician specializing in multiple myeloma and related diseases, who is also the Chairman and Medical Director of the International Myeloma Foundation, a not-for-profit foundation dedicated to fighting the disease. Dr. Durie states that he has written 200 research papers relating to myeloma and co-authored five books on the topic including a text book.
Dr. Durie states that:
When placed in the context of [Rogers'] investment and commitment, over a period of fifteen years to the American Flagship Project and the Build America initiative, the distressing events which are the subject of the within action could be expected to have a devastating drain on Rogers' time, energies, and resources and on his ability to advance the project to which he has devoted his life in recent years. Rogers describes the resulting stress from these events, which placed the entire project at risk, as "severe," "debilitating," "depressing," "unrelenting," and "unbearable." Could such "severe" "debilitating," "depressing," "unrelenting," and "unbearable" emotional distress trigger illness? There is no question in my mind but that the answer is "yes," particularly for a patient who was already vulnerable as the result of a debilitating stroke in 1999 and with a diagnosis of MGUS (which is a marker indicating an increase risk for multiple myeloma) during the same period.
Accordingly, the intentional infliction of emotional distress claim cannot be dismissed based on the failure to submit sufficient evidence of severe emotional distress.
Novel Scientific Evidence
Sacchetti argues that Rogers cannot establish his allegations that Sacchetti's conduct caused him to contract multiple myeloma or exacerbated the disease since there is no general acceptance in the scientific community that a cause and effect relationship exists between stress and multiple myeloma. In support of this argument, Sacchetti relies on the affidavit of Jeffrey Schneider, M.D., a board certified physician specializing in Oncology and Hematology. Dr. Schneider, who reviewed Roger's medical records, plaintiffs' Bill of Particulars and deposition testimony opines that, to a reasonable degree of medical certainty, "Rogers could not and did not develop multiple myeloma as a result of any stress purportedly induced by Defendants' alleged conduct." In support of his position, Dr. Schneider focuses on Rogers' medical records indicating that in November 1999, which was two years before the outset of the legal dispute between the parties, Rogers was diagnosed with MGUS which is a marker for an increased risk of multiple myeloma. He notes that the records indicate that Rogers was diagnosed with multiple myeloma in October 2002, and asserts that the disease developed sometime between November 1999 and October 2002 . He then states that "since the acts alleged in the Verified Complaint (commencing in November 2001) occurred after Rogers' development of MGUS (diagnosed in November 1999) Defendants' conduct (as alleged in the Verified Complaint) has no relationship to Rogers' prior development of MGUS."
Notably, the complaint alleges wrongful conduct by Sacchetti dating back to 1996, although the record suggests that the legal dispute between the parties did not arise until November 2001.
Dr. Schneider also opines that with a reasonable degree of medical certainty, "stress cannot cause multiple myeloma" and asserts that his opinion is supported by his review of several "authoritative text books" and a "Pub Med literature search" conducted to ascertain whether there is any relationship between multiple myeloma and stress. According to Dr. Schneider, the results of this search indicate a relationship between the disease and "oxidative stress," which has nothing to emotional stress, but refers to physical damage caused to a tissue by the metabolic products of oxygen breakdown. He also states that no relationship between emotional stress and multiple myeloma "was even eluded to in any of the sources, let alone found to exist." In support of his opinion, Dr. Schneider submits a July 27, 2001 article, apparently from an on-line publication known as "Psych Central" which quotes a National Cancer Institute statement that "'[a]lthough studies have shown that stress factors . . . alter the way the immune system functions, they have not provided scientific evidence of a direct cause-and-effect relationship between those immune system changes and the development of cancer.'"
In opposition, plaintiffs rely on the affidavit of Dr. Durie who, as previously indicated, specializes in multiple myeloma and related diseases, is the Chairman and Medical Director of the International Myeloma Foundation, has written 200 research papers relating to myeloma, and co-authored five books on the topic including a text book. Dr. Durie states that "based on my 30 years of my myeloma practice . . . I believe there is a strong correlation between stress and the breakdown of the immune system and between stress and myeloma." He further states that through his diagnosis, treatment and personal interviews with hundreds of patients, "[i]n the great preponderance of cases, I have established from patients' personal testimonies that the onset of myeloma or disease progression followed period or events of intense psychological distress."
With respect to Rogers' case, Dr. Durie concludes that, based on both his interviews with Rogers in which Rogers described the stress resulting from events underlying this action and his experience diagnosing and treating myeloma patients, "the link between stress which John Rogers describes and the progression of his case from MGUS to myeloma which occurred during the same period is clear and medically predictable."
Dr. Durie states that he is prepared to testify at trial in support of his opinion, as are two of his colleagues, Dr. Ronald Glaser, and Dr. Janice Kiecolt-Glaser, who he describes as "world recognized experts in stress and immune dysfunction." He also submits a "summary of the clinical and scientific basis" for his opinion regarding the correlation between Rogers' development of multiple myeloma and stress, which references 22 scientific articles.
In reply, Dr. Schneider asserts that Dr. Durie's personal opinion is without weight as it is contrary to the published conclusions reached by the medical community. In support of this assertion, Dr. Schneider submits (1) the July 2001 article containing the statement from National Cancer Institute which was made in connection with his original affidavit, (2) a 1998 article from the National Cancer Institute stating that "[i]t has not been shown that stress-induced changes in the immune system directly cause cancer," (3) an undated article in a periodical published in Ireland citing several studies indicating that stress weakens disease resistance but does not cause cancer, (4) an article from an October, 1999 British Medical Journal citing studies which found a correlation between stress and cancer and other studies which found no such correlation, and (5) a Boston Globe article dated March 18, 1996 which calls into question any link between stress and cancer.
Dr. Schneider also asserts that Dr. Durie's own writings refute his position, and attaches an article 2001 published by Dr. Durie in which he wrote that "the exact gene-environment interactions which contribute to the etiology of myeloma remain elusive." He also points out that although Dr. Durie states that he has written 200 research papers on multiple myeloma, he does not quote one reference in his work regarding any correlation between stress and the disease. Dr. Schneider also asserts that Dr. Durie's textbook does not mention psychological stress even in the context of discussing certain risk factors for the disease.
The issue before this court is whether based on the expert affidavits and other evidence submitted by the parties, there is sufficient evidence to support plaintiffs' claim for damages based on a theory that Rogers' contracted multiple myeloma or that the disease was exacerbated as the result of psychological stress caused by the conduct alleged in this action.
New York courts apply the standard established by Frye v United States, 293 F 1013 (1923) for screening of novel scientific evidence. Under the rule in Frye, scientific evidence, including expert testimony, must be based on "a principle or procedure [which] has 'gained general acceptance' in its specified field." People v Wesley, 83 N.Y.2d 417, 422 (1994) (quoting Frye, supra, at 1014).
Contrary to plaintiffs' argument, the Frye rule as applied in New York differs from the more "liberal" federal standard established by the United States Supreme Court in Daubert v Merrill Dow Pharmaceuticals, Inc., 509 U.S. 579 (1993), in which the high court rejected the Frye rule in favor of a "reliability standard" derived from Rule 702 of the Federal Rules of Evidence. Under the Daubert standard, the court makes "a preliminary assessment of whether the reasoning and methodology underlying the testimony are scientifically valid" ( 509 U.S., at 592), while underFrye the court does not determine whether a scientific technique is reliable but, instead, "whether there is a consensus in the scientific community as to its reliability," and thus focuses on ?'counting scientists' votes, rather than on verifying the soundness of a scientists' conclusion'" id. (citations omitted). People v Wesley, 83 NY2d at 439. (concurring opinion, Kaye, J.).
Under the rule in Frye, "[t]he particular procedure need not be 'unanimously endorsed' by the scientific community but must be 'generally accepted as reliable.'" (Id. at 423, (quoting People v Middleton, 54 N.Y.2d 42, 49). In addition, "the proponent of scientific evidence must establish that the theory and method used by a particular witness is generally accepted in the scientific community." Nonnon v. City of New York, ___ AD2d ____ 2006 WL 1529293, *6 (1st Dept, June 6, 2006). When, as here, the issue concerns a casual connection, a plaintiff's expert must set forth scientific evidence based on generally accepted principles showing such a casual link. Selig v. Pfizer, Inc., 290 AD2d 319, 320 (1st Dept), lv denied, 98 NY2d 603 (2002). Such a showing can be made "through judicial opinions, texts, laboratory standards or scholarly articles'" Marsh v. Smythe, 12 AD3d 307, 311 (1st Dept 2004), quoting, People v Wesley, 83 N.Y.2d at 437(concurring opinion, Kaye, J.).
Furthermore, when an expert offers an opinion as to whether a defendant's conduct caused a plaintiff's injury, courts have found that "it is not necessary that the underlying support for the theory of causation consist of cases or studies considering circumstances exactly parallel to those under consideration in the litigation. It is sufficient if a synthesis of various studies and cases reasonably permits the conclusion reached by plaintiff's expert.'"Zito v. Zabarsky, 28 AD3d 42, 44 (2nd Dept 2006), quoting Marsh v. Smyth, 12 AD3d at 312-313 (concurring opinion, Saxe, J.).
Under the above standard, it cannot be determined on the record before the court whether the scientific community has generally accepted that there is a casual connection between stress and multiple myeloma, or whether Dr. Durie's opinion that Rogers developed the disease due to stress is based on principles and procedures that have gained general acceptance in the medical community. Although Sacchetti's expert, Dr. Schneider, states in his affidavit that stress does not cause cancer, he supports these statements primarily with articles that provide no scientific methodologies or procedures supporting their conclusions, and lack a basis for finding that such conclusions represent the consensus of opinion in the scientific community. In addition, Dr. Schneider's selective quotations from a single article by Dr. Durie and one of his textbooks is insufficient to controvert Dr. Durie's statements in his affidavit. Furthermore, Dr. Schneider's assertion that Rogers could not have contracted multiple myeloma due to stress since he had a marker for the disease in 1999, before beginning of the dispute which provides the basis of this action, is not dispositive in view of Dr. Durie's opinion that MGUS marker for myeloma indicated a susceptibility to the disease, but that its onset or exacerbation was caused by the stress which occurred in the years that followed.
Next, while Dr. Durie fails to explain the specific scientific basis for his opinion, the summary of the clinical support regarding the correlation between Rogers' disease and stress, which references 22 scientific articles, potentially provides a scientific basis for his opinion which may satisfy the Frye standard. Likewise, the testimony of two other experts may also provide further scientific support for Dr. Durie's opinion.
Under these circumstances, a Frye hearing is necessary to determine whether plaintiffs can demonstrate through general accepted scientific evidence that the psychological stress caused Roger to develop multiple myeloma or exacerbated the disease.
CONCLUSION
In view of the above, it is
ORDERED that defendants' motion to amend the complaint to add the defenses of collateral estoppel and res judicata is granted; and it is further
ORDERED that defendants' motion for summary judgment is granted to the extent of dismissing (1) plaintiffs' claim for money had and received, and (2) plaintiffs' breach of contract claim insofar as it seeks recover damages in connection with Apartment 202, or is based on an alleged breach of the covenant of quiet enjoyment, or seeks special damages and/or lost profits arising out of losses incurred in connection with the Flagship project; and it is further
ORDERED that defendants' motion for summary judgment is otherwise denied, and the remainder of the action shall continue; and it is further
ORDERED that the parties shall appear in Part 11, 60 Centre Street, room 351, on July 13, 2006 at 9:30 am for a pre-trial conference, at which time the court will address the scheduling of the Frye hearing directed herein.