Opinion
012200/2005.
Decided September 19, 2008.
Giamo Associates, LLP, NY, Attorney for Plaintiffs.
Anthony Conte (pro se), NY, Defendant Third-Party Plaintiff.
Defendant, County of Nassau:Lorna B. Goodman, County Attorney, Nassau County, Attn.: Andrew R. Scott, Esq., Deputy County Attorney, Attorney for Third-Party.
Motion by third party defendants County of Nassau, Nassau County District Attorney's Office, former Nassau County District Attorney Dennis Dillon, Assistant District Attorneys Bob Emmons, Philip Wasilansky, William Wallace and Special Investigator Mike Falzarano to dismiss the third party complaint pursuant to CPLR 3211 (a)(4), (a)(5), (a)(7) and (a)(8) is granted as hereinafter provided.
FACTUAL BACKGROUND
The underlying class action lawsuit arises out of the alleged breach of home distributorship agreements between defendant/third-party plaintiff Anthony Conte d/b/a I-Media Corporation and the individual plaintiff class members who allege that they were fraudulently induced to purchase home delivery routes for the delivery of TV Time, a magazine purportedly published/distributed by I-Media Corporation. The original purchase price of fifty (50¢) cents per household was gradually increased to $1.50 as the number of distributorship agreements increased. According to plaintiffs, defendant/third-party plaintiff Anthony Conte, using various alter-ego corporate entities under which he did business, engaged in a pyramid scheme to defraud the plaintiff class, used the funds received from them for his own benefit and had neither the financial wherewithal nor expertise to publish and distribute the subject magazine. Moreover, plaintiffs allege that defendant/third-party plaintiff Anthony Conte never delivered a full supply of the subject magazine to plaintiffs and, beginning in April 2005, failed to make fee payments.
Plaintiff class members were to be paid twenty (20¢) cents for each copy of TV Time Magazine delivered to a household within their respective routes.
The class action complaint alleges six causes of action arising from the alleged widespread and pervasive fraud committed by defendants. The first cause of action seeks recovery of monies paid as and for non existent distributorship routes. The second cause of action asserts a punitive damages claim predicated on defendants' alleged malicious and wanton conduct. The third cause of action claims treble damages for violation of the General Business Law including deceptive business practices [§ 349] and false advertising [§ 350-a] . The fourth, fifth and sixth causes of action allege breach of contract, unjust enrichment and conversion of plaintiffs' monies respectively.
On or about April 8, 2008, approximately three years after the class action litigation was filed, a third party action was commenced by defendant/third-party plaintiff Anthony Conte predicated on allegations that third-party defendants engaged, inter alia, in an ongoing and continuous campaign to concoct and disseminate, to numerous vendors and route distributors who had contracted with Mr. Conte and I Media, false accusations that he was a "crook", "fraud" and "scam artist" for the purposes of fomenting and soliciting complaints against Conte and his publishing business as a result of which his business was ruined.
The matter is now before the court on a pre-answer motion to dismiss by third-party defendants County of Nassau, Nassau County District Attorney's Office, former District Attorney Dennis E. Dillon, Assistant District Attorneys Bob Emmons, Philip Wasilansky, William Wallace and Special Investigator Mike Falzarano on the grounds, inter alia, that:
1)the first cause of action for indemnification fails to state a cause of action;
2)the claims asserted in the second through sixth causes of action may not be properly asserted by way of a third party action as they are not related to the issue of whether defendant third-party plaintiff is liable to plaintiffs in the main action;
3)newly asserted direct claims are barred by the applicable statute of limitations;
4)a prior action, in which Anthony Conte is the sole plaintiff, based upon substantially the same facts as those set forth in the third-party complaint, is currently pending in the United States District Court: Eastern District of New York under Case Number CV-06-4746 wherein Anthony Conte has alleged causes of action for false arrest, abuse of process and malicious prosecution under 42 U.S.C. § 1983; conspiracy; tortious interference with contractual relations defamation and violations of the First, Fourth, Fifth and Fourteenth amendments of the federal Constitution.
Pursuant to the order of the Honorable J. F. Bianco, District Judge, dated March 31, 2008, the federal court action was dismissed as to the Nassau County District Attorney's Office, as to defendant District Attorney Dennis Dillon, in both his official and personal capacities, and as to the other County defendants sued in their official capacities. Claims against Nassau County and defendants Emmons, Wasilansky, Wallace and Falzarano, individually, for false arrest/false imprisonment, malicious prosecution, first amendment violations, section 1983 conspiracy, abuse of process as well as various state law claims were sustained.
Before a defendant can implead a third party, he or she must show that such person is or may be liable to him or her for all or part of the plaintiffs' claim. CPLR 1007. The third-party claim "must be sufficiently related to the main action to at least raise the question of whether the third-party defendant may be liable to the third-party plaintiff, for whatever reason, for the damages for which the latter may be liable to the main plaintiffs.'" Rausch v Garland, 88 AD2d 1021, 1022 [3rd Dept. 1982] quoting Norman Co., Inc. v County of Nassau, 63 Misc 2d 965, 969 [Sup. Ct. Nassau County, 1970], rev'd on other grounds 27 AD2d 936 [2nd Dept. 1967]. It is not enough merely that the two claims arise out of the same set of facts; the liability of the third-party defendant must in some way arise from or be conditioned upon the liability of the defendant/third-party to the plaintiff in the main action.
In considering whether defendant/third-party plaintiff Anthony Conte can properly implead the moving defendants the following issue must be addressed: whether the injuries alleged by the class action plaintiffs were the result of the moving defendants' alleged dissemination of defamatory statements to distributors and vendors accusing Mr. Conte and his business of fraud and passing a bad check. The answer, in the view of the court, is no. The third-party claims are predicated on entirely independent theories of recovery arising from factual claims bearing no claim over relation to plaintiffs' main theories of recovery.
In the first cause of action of the third-party complaint, defendant/third-party plaintiff, while denying any fraud on his part, alleges that, should plaintiffs be successful in establishing liability against him in their class action suit, he is entitled to judgment against the third-party defendants for spreading falsehoods about him which prevented him, inter alia, from performing his contract obligations to the class members thereby exposing him to liability.
Although defendant/third-party plaintiff alleges he was surreptitiously investigated by the Nassau County District Attorney's Office, arrested and criminally prosecuted on a false bad check complaint, which was ultimately dismissed in June of 2006, the injury for which the class action members seek damage is the direct result of defendant/third-party plaintiff's own alleged wrongful actions in converting to his own use payments made by the class action plaintiffs for the purchase of distribution routes which never materialized. The defendant/third-party plaintiff's purported liability in the main action is neither a function of nor related to any of the alleged wrongdoing committed by defendant/third-party defendants.
Indemnity involves an attempt to shift the entire loss from one who is compelled to pay for a loss, without regard to his own fault, to another party who should more properly bear responsibility for that loss because it is the actual wrongdoer. Raquet v Braun, 90 NY2d 177, 183; Nelson v Chelsea GCA , 18 AD3d 838 , 840 [2nd Dept. 2005]. The predicate of common law indemnity is vicarious liability without actual fault on the part of the proposed indemnitee. That being so, it follows that a party who has actually participated in the wrongdoing cannot receive the benefit of the doctrine. Trump Village Section 3, Inc. v New York State Housing Finance Agency, 307 AD2d 891, 895 [2nd Dept. 2003], lv to appeal denied 1 NY3d 504. Since Mr. Conte's liability in the main action is predicated on its own alleged wrongdoing vis a vis his business relations with the class members, a claim for indemnification against the moving third-party defendants alleging defamation, etc. cannot be sustained. Sterling Nat. Bank v Israel Discount Bank of New York, 305 AD2d 184, 185 [1st Dept. 2003].
Further, there is no basis under the facts pled to sustain a claim for contribution which is inappropriate where the party from whom it is sought owes a duty neither to the party seeking it, nor to the plaintiff ( Sommer v Federal Signal Corp., 79 NY2d 540, 559), or does not share a common liability to the plaintiff. Garrett v Holiday Inns, Inc., 86 AD2d 469 [4th Dept. 1982], order modified 58 NY2d 253. The critical requirement of a valid third-party claim for contribution is that the breach of duty by the contributing party had a part in causing or augmenting the injury for which contribution is sought. Nassau Roofing Sheet Metal Co., Inc. v Facilities Development Corp., 71 NY2d 599, 603.
Here, the movants owe no duty to the defendant third-party plaintiff, nor to the class action plaintiffs, with respect to the monies Mr. Conte received from them, for his alleged malicious and wanton conduct or for any of the other claims asserted in the class action complaint. Where there is no duty running from the third-party defendant to the plaintiffs vis a vis the alleged injury, contribution will not lie. Breen v Law Office of Bruce A. Barket, P.C. , 52 AD3d 635 [2nd Dept. 2008]. Contribution is similarly not available where any duty breached by the proposed contributor was not a cause of the injury complained of. Ferlisi v Jackrel, Kopelman Raskin, 167 AD2d 502 [2nd Dept. 1990].
Even affording the defendant third-party plaintiff's pleading the benefit of every favorable inference as is appropriate on a dismissal request under CPLR 3211(a)(7) ( Riback v Margulis , 43 AD3d 1023 [2nd Dept. 2007]; Gershon v Goldberg , 30 AD3d 372 , 373 [2nd Dept. 2006]), the court fails to discern a cognizable claim for either indemnification or contribution under the facts alleged.
In the second through sixth causes of action of the third-party complaint, defendant/third-party plaintiff alleges that the movants negligently conducted an investigation of defendant third-party plaintiff and his publishing business, knowingly maligned his reputation with false statements about him and his business and violated Article 1 §§ 8 and 6 of the New York State Constitution in the process.
The fourth third-party cause of action makes no specific allegations vis a vis the moving third-party defendants and is not at issue in this motion.
A fair reading of the second amended complaint in the federal action, filed April 5, 2007, establishes that, regardless of the title ascribed to a particular cause of action, all of the claims asserted by Anthony Conte in the third-party complaint, and those asserted in the previously commenced federal action, arise out of the same actionable wrongs allegedly committed by the moving defendants.
Pursuant to CPLR 3211(a)(4), the court has broad discretion to dismiss an action predicated on the grounds of a prior pending action and may dismiss one of the actions where there is a substantial identity of the parties and causes of action. Nakazawa v Horowitz , 50 AD3d 985 , 986 [2nd Dept. 2008]; Montalvo v Air Dock Systems , 37 AD3d 567 [2nd Dept. 2007]. The presence of additional parties will not necessarily defeat dismissal where both suits arise out of the same subject matter. White Light Productions, Inc. v On the Scene Productions, Inc., 231 AD2d 90, 94 [1st Dept. 1997]. This is not a situation in which the relief sought is antagonistic and inconsistent or in which the purpose of the two actions is entirely different such that dismissal would be improper. Arred Enterprises Corp. v Indemnity Ins. Co. of North America, 108 AD2d 624, 627 [1st Dept. 1985]. Further, it is not necessary that the precise legal theories presented in the prior proceeding also be presented in the second proceeding. Rather, it is necessary that both suits arise out of the same subject matter or series of alleged wrongs. Simonetti v Larson , 44 AD3d 1028 , 1029 [2nd Dept. 2007]; Schaller v Vacco, 241 AD2d 663 [3rd Dept. 1997]. Where, as here, the two actions at issue are sufficiently similar, and the relief sought is the same or substantially the same, dismissal is warranted.
Inasmuch as the pleadings in both the federal action and the third-party complaint herein arise out of the same alleged actionable wrongs, there is substantial identity of the parties and the nature of the relief sought is substantially the same, there is no reason to maintain the third-party complaint as well as the federal court action. As the moving third-party defendants assert, they had no duty to either plaintiffs or defendant/third-party plaintiff vis a vis any of the claims for which the class action plaintiffs seek recovery in the main action.
Despite the fact that the federal action was dismissed as to the Nassau County District Attorney's Office, former District Attorney Dennis E. Dillon (in both his official and individual capacities), Assistant District Attorneys Bob Emmons, Philip Wasilansky, William Wallace and Special Investigator Mike Falzarano (in their official capacities), defendant/third-party plaintiff has named them as third-party defendants in this action in both their official and individual capacities. Notwithstanding defendant/third-party plaintiff's contention to the contrary, justice for both the class member plaintiffs and defendant/third-party plaintiff will not be foreclosed if the third-party complaint were dismissed on the basis that a prior action is presently pending in federal court against the very same parties that defendant/third-party plaintiff seeks to implead in the main action. Nor is there any basis to conclude, as defendant/third-party plaintiff urges, that there would be a better and fairer resolution to the main action if the third-party complaint were allowed to proceed to trial.
It bears noting that the ninth through fifteenth causes of action of the second amended complaint in the federal action allege multiple pendent state law claims against the moving third-party defendants including tortious interference with contract, slander, libel, injurious falsehood, malicious prosecution, abuse of process and intentional infliction of emotional distress respectively. All of these second, third, fifth and sixth causes of action, all arising out of the same operative facts, allege gross negligence, fraud and violations of defendant/third-party plaintiff's constitutional right to free speech and due process. All of the aforementioned claims are asserted in the federal complaint in one form or another. While defendant/third-party plaintiff attempts to distinguish the claims raised under the New York State Constitution in the fifth and sixth causes of action of the third-party complaint, they are, in fact, a repetition of the federal constitutional tort claims. The federal constitutional provisions under which Mr. Conte seeks redress are essentially, if not completely, identical to the state constitutional provisions under which Mr. Conte seeks to redress the alleged violations of the right of freedom of speech/press and unconstitutional taking of property without due process, all of which claims have been, or will be, addressed in the federal action.
Res judicata bars litigation of a claim that was either raised or could have been raised in a prior action provided that the party to be barred had a full and fair opportunity to litigate the claim and the disposition was on the merits. Sosa v JP Morgan Chase Bank , 33 AD3d 609 , 611 [2nd Dept. 2006]. The argument advanced by defendant/third-party plaintiff that the issues complained of in the third-party complaint are totally different from the issues decided on the federal court dismissal motion is devoid of merit. Defendant/third-party plaintiff had a full and fair opportunity in the federal court action to contest the issues raised on the dismissal motion brought by the defendants in that action pursuant to Fed.R.Civ.P. 12(c). As such, the claims which defendant/third-party plaintiff seeks to assert against the Nassau County District Attorney's Office, District Attorney Dennis Dillon in his individual and official capacities, and Assistant District Attorneys Bob Emmons, Philip Wasilansky, William Wallace and Special Investigator Mike Falzarano, in their official capacities, are barred on the ground of res judicata where the complaint in a second lawsuit is identical to one dismissed for insufficiency in the first lawsuit, res judicata will be a basis for dismissal of the second lawsuit. Flynn v Sinclair Oil Co., 20 AD2d 636, 637 [1st Dept. 1964], aff'd 14 NY2d 853. Moreover, the doctrine of collateral estoppel precludes a party from relitigating, in a subsequent action or proceeding, an issue clearly raised in a prior action or proceeding and decided against that party or those in privity, whether or not the tribunals or causes of action are the same. Ryan v New York Telephone, 62 NY2d 494, 500.
Accordingly, assuming without deciding that the third-party claims are not time barred, for the reasons heretofore set forth, third-party defendants' motion to dismiss the third-party complaint as to said movants is granted pursuant to CPLR 3211(a)(4), (a)(5) and (a)(7).