Global Bus. Inst. v. Rivkin Radler LLP

Full title: GLOBAL BUSINESS INSTITUTE v. RIVKIN RADLER LLP

Court: Supreme Court of the State of New York, New York County

Date published: Aug 26, 2008

2008 N.Y. Slip Op. 32454 (N.Y. Sup. Ct. 2008)

Opinion

0104918/2006.

August 26, 2008.

[EDITOR'S NOTE: This case is unpublished as indicated by the issuing court.] DORIS LING-COHAN, Judge.

Upon the foregoing papers, It Is ordered that

The following papers (1 to ) were read on this motion to/for

Papers Numbered

Notice of Motion/Order to Show Cause — Affidavits — Exhibits ______ Answering Affidavits — Exhibits ______ Replying Affidavits ______

Background

Plaintiff Global Business Institute (plaintiff or GBI), a not-for profit post secondary vocational school, brings this legal malpractice action against defendant, Rivkin Radler LLP (defendant or Rivkin Radler). Plaintiff alleges that defendant was negligent in negotiating the lease for for GBI's new Manhattan location, causing plaintiff to sustain damages resulting, among other things, from the delay in occupancy of the new premises.

The action was commenced by filing the summons and complaint on or about April 10, 2006 (Affirmation of Martin Stein, Esq. in Support of Motion [Stein Aff. in Support], Ex. 1 [Complaint]). On June 15, 2007, a compliance conference was held at which time the attorneys for the parties entered into a stipulation regarding a discovery schedule, which was signed by the Court (Stein Aff. in Support, Ex. 4). On the same date, this Court issued an order pursuant to CPLR § 325 (d), transferring this action to the Civil Court of the City of New York, New York County (Stein Aff. in Support, Ex. 5).

Plaintiff brings this motion to obtain: (1) an order pursuant to CPLR 3025 (b), for leave to amend the complaint, increasing the ad damnum clause from $2.5 million to $3.5 million; and (2) an order pursuant to CPLR § 325 (b), transferring this case from the Civil Court to this Court. Plaintiff originally brought this motion by order to show cause, which this Court declined to sign without prejudice to resubmit on or about January 2, 2008, in a decision stating, in pertinent part:

"Further to the extent that movant complains that CPLR 325 (d) transfer cannot be made without being raised in a conference with counsel by Judge/Court attorney, counsel shall supply statutory case law to that effect. To extent movant merely seeks to adjust damages claim, movant may submit stipulation of consent and Court will accept retransfer for limited purpose."

(Stein Aff. in Support, Ex. 6).

This motion was brought approximately one year after the case was transferred to Civil Court on June 15, 2007. Defendant consents to the re-transfer of this matter to this Court, pursuant to CPLR § 325 (b), but declines to consent to plaintiff's proposed increase in the ad damnum clause. For the reasons discussed below, this Court accepts re-transfer of this matter, on consent, for the limited purpose of deciding the branch of plaintiff's motion to increase the ad damnum clause, and denies the application for leave to grant the increase. The Civil Court has jurisdiction, pursuant to CPLR § 325 (d), to conduct further proceedings in this matter within the monetary jurisdiction of this Court, up to the amount of the existing ad damnum clause.

Discussion 1. Re-Transfer to this Court Pursuant to CPLR § 325 (b)

CPLR § 325 (b) provides, in pertinent part," Where it appears that the court in which an action is pending does not have jurisdiction to grant the relief to which the parties are entitled, a court having such jurisdiction may remove the action to itself upon motion." The Civil Court lacks jurisdiction to increase the ad damnum clause in this case. Accordingly, this Court can entertain a motion for the re-transfer of this case, pursuant to CPLR § 325 (b), for the limited purpose of deciding the branch of plaintiff's motion to increase the ad damnum clause ( see Bess v Fordham Rd. Stor. Partners, LLC, 195 Misc 2d 674, 677 [Sup Ct, Bronx County 2003]; Gordon v Board of Educ. of City of New York, 134 Misc 2d 284, 286 [Civil Ct, Kings County 1987]; see also Yuan Zhai v Chemical Bank, 180 Misc 2d 442 [Civil Ct, New York County 1999]). In accordance with this Court's prior decision on plaintiff's order to show cause, this Court will allow the re-transfer of this action pursuant to CPLR § 325 (b), for the limited purpose of deciding the branch of plaintiff's motion seeking to increase the ad damnum clause.

2. Amendment of Complaint to Increase Ad Damnum Clause

Generally, leave to amend pleadings is freely granted, absent prejudice ( see Edenwald Contr. Co. v City of New York, 60 NY2d 957, 959). However, leave to amend should be denied where the proposed amendment is not properly substantiated or clearly lacks merit ( see B.J. Hoppe v. Board of Directors of 51-78 Owners Corp., 49 AD3d 477 [1^st Dept 2008]; Spitzer v. Schussel, 48 AD3d 233 [1^st Dept 2008]; Posner v Central Synagogue, 201 AD2d 284, 285 [1^stDept 1994], l v dismissed 83 NY2d 953). Plaintiff supports its application to increase the ad damnum clause with the conclusory affidavit of GBI's president, Michael J. Hatten, who asserts that the primary negligence of Rivkin Radler was its failure to negotiate with the landlord and insert into the work letter annexed to the lease, a deadline for the substantial completion of the landlord's work on the new premises and a penalty for failing to complete the work on time (Affidavit of Michael J. Hatten in Support of Motion [Hatten Aff. in Support], at ¶ 6). Mr. Hatten asserts that he advised Rivkin Radler that GBI wanted to be fully operational in the new premises by the fall of 2005 ( id. at ¶ 4). According to Mr. Hatten, GBI was not able to move into the new premises until the fall of 2008 and, hence, the major element of the increased damages plaintiff seeks was the alleged loss of the net revenue from the additional students that the new space could have accommodated in the fall semester of 2007 ( id. at ¶¶ 7-10).

Defendant asserts, however, that, in order to establish liability for legal malpractice based on the delay in occupancy of the new premises, plaintiff must establish that the landlord would have agreed to provisions in the lease and the annexed work letter, that both guaranteed completion of the required work by a given date and allowed the tenant to recover damages due to any delay in occupancy (Affirmation of Peter C. Contino, Esq. in Partial Opposition [Contino Aff.], at ¶ 8). Defendant demonstrates that the evidence produced in the course of discovery in this matter refutes, rather than supports, the position that the landlord would have agreed to such provisions. Indeed, the lease states that the landlord is not subject to liability for failure to give possession to the tenant on a specific date, except that the tenant's obligation to pay rent does not commence until the landlord gives written notice that the premises are substantially ready for occupancy (Contino Aff., at ¶ 8). Additionally, in his deposition, Mr. Hatten acknowledged that he did not have a discussion with anyone form the landlord about putting in the lease both a deadline for the completion of the work on the new premises and consequences for the landlord if the work was not completed by that date (Contino Aff., Ex. E [Hatten Dep.], at 351). Mr. Hatten further admitted that he did not recall any discussions with anyone from Rivkin Radler about putting in the lease a deadline for the completion of the work and consequences for the landlord if the work was not timely completed ( id. at 352). Lastly, defendant notes that plaintiff has failed to respond to its discovery request for documents concerning the number of students turned away from GBI due to its inability to occupy the new premises, giving rise to plaintiff's claim for damages (Contino Aff., at ¶ 13).

Accordingly, plaintiff has failed to provide a sufficient factual basis to substantiate defendant's negligence and liability, as well as to establish that the damages actually sustained exceed the sum of $2.5 million sought in the original ad damnum clause. Therefore, plaintiff's motion for leave to amend the ad damnum clause is denied ( see Samuels v Cauldwell-Wingate Co., Inc., 262 AD2d 178 [1^st Dept 1999]; Mui v Miller, 226 AD2d 182 [1^st Dept 1996]; Posner v Central Synagogue, 202 AD2d at 285).

Lastly, Plaintiff cannot be deemed to be prejudiced by the transfer of this case to Civil Court for further proceedings, as CPLR § 325 (d) provides that if an action is removed to Civil Court from Supreme Court "then the verdict or judgment shall be subject to the limitation of monetary jurisdiction of the court in which the action was originally commenced and shall be lawful to the extent of the amount demanded within such limitation." Accordingly, plaintiff's potential recovery in Civil Court is governed by the monetary jurisdiction of the Supreme Court, in which this action was originally commenced, up to the amount of the ad damnum clause, or $2.5 million in this case ( see Tobias v New York Hosp., 279 AD2d 374 [1^st Dept 2001]; Samuels v Cauldwell-Wingate Co., Inc., 262 AD2d 178; Mui v Miller, 226 AD2d 182; Bess v Fordham Rd. Stor. Partners, LLC, 195 Misc 2d at 676).

Accordingly, it is

ORDERED that the branch of plaintiff's motion to re-transfer this case from the Civil Court of the City of New York, New York County to this Court, pursuant to CPLR § 325 (b), is granted, on consent, for the limited purpose of deciding plaintiff's motion for leave to amend the complaint to increase the ad damnum clause; and it is further

ORDERED that the branch of plaintiff's motion for an order, pursuant to CPLR 3025 (b), for leave to amend the complaint to increase the ad damnum clause, is denied; and it is further

ORDERED that further proceedings in this action shall continue in the Civil Court of the City of New York, County of New York.