Opinion
INDEX NO.: 08806/2000
09-30-2019
ROBERT C. BAXTER., Plaintiff, v. MARK JAVIER and CORAZON JAVIER, Defendants.
Attorney for Plaintiff Baxter, Smith & Shapiro, P.C. 200 Mamaroneck Avenue, Suite 601 White Plains, New York 10601 Attorneys for Defendants Lynn Gartner Dunne, LLP 330 Old Country Road, Suite 103 Mineola, New York 11501
PRESENT: Date: September 17, 2019 Motion # 008 Mot D Attorney for Plaintiff
Baxter, Smith & Shapiro, P.C.
200 Mamaroneck Avenue, Suite 601
White Plains, New York 10601 Attorneys for Defendants
Lynn Gartner Dunne, LLP
330 Old Country Road, Suite 103
Mineola, New York 11501 Read upon the following papers numbered 1 to 31 read on this motion by plaintiff
Notice of Motion/Order to Show Cause and Supporting Papers 1-16
Notice of Cross Motion and Supporting Papers
Answering Affidavits and supporting papers 17-30
Replying Affidavits and supporting papers 31
Other
It is hereby
ORDERED, that plaintiff's motion for an award of sanctions against defendants pursuant to CPLR 8303-a, an order vacating the modified amended judgment dated April 29, 2019 pursuant to CPLR 5015 and to extend the time to file post-trial motions is decided as set forth herein.
Plaintiff commenced this action to recover compensation from defendants for property damage to a fish pond and waterfall in the backyard of his property which he alleged was caused by or at the behest of defendants. Plaintiff purchased the residential property at 21 Salem Drive, Stony Brook, New York from defendants and claimed that after the pre-closing inspection, defendant's had retained a handyman to remove fish from the frozen fish pond in the backyard of the property. In the course of the fish removal, plaintiff claims the handyman caused substantial damage to the fish pond and waterfall and removed the water pump. Since removal of the fish by defendants was an unresolved issue at the time, plaintiff claimed that defendants had directed the handyman to undertake the removal on the evening before the closing. At the closing, defendants did not disclose that this had been done, simply advising plaintiff that the fish were no longer an issue. After taking possession of the property following the closing, plaintiff first noticed the damage to the fish pond and waterfall in the rear yard. There had been pre-litigation communications following the closing wherein counsel for defendants' acknowledged that the defendants had sent a handyman to the property to remove the fish but denied that they were responsible for any property damage that the handyman may have caused. The parties traded settlement proposals which were ultimately unsuccessful.
Plaintiff commenced this action in 2000 and alleged multiple causes of action in the complaint and sought compensatory damages in the sum of $3,500 and punitive damages "not less than $50,000" for defendants' alleged "acts of destruction, vandalism and removal" which "were done wilfully and wantonly". It was alleged that these acts occurred after the pre-closing inspection "knowing that plaintiff would not have an opportunity to re-inspect the property".
The closing took place on January 27, 2000 at which time defendants delivered a deed to the premises. Following the closing after discovering the damage to the backyard pond and waterfall, plaintiff stopped payment on a personal check to defendants in the amount of $862.82, which was tendered as part of the purchase price.
Defendants' answer essentially denied the allegations and alleged three counterclaims: first for breach of contract for stopping payment on the $862.82 check; second, for legal fees in defending this action; and third for punitive damages in the sum of $50,000 for plaintiff acting "intentional, wonton, deliberate, willful and with an intent to harass and annoy the defendants" with respect to plaintiff's conduct in bringing this lawsuit. Defendants also alleged: "Plaintiff is an offricer of the Court, and is fully familiar with the contract at hand. Still, plaintiff intentionally breached the contract, canceled the check, and interposed this lawsuit to threaten, harass, annoy and abuse the defendants." In opposition to this motion, defendants claim that these latter allegations constitute a claim for abuse of process, and that the punitive damages claim "is entirely appropriate in a claim for abuse of process" (Affirmation of attorney Santos, ¶5).
Nothing happened in the case until plaintiff filed a motion for summary judgment dated June 4, 2010. Defendants opposed the motion and cross-moved to dismiss the entire action on the grounds of laches, claiming prejudice by the delay in prosecution of the claim and/or for an order dismissing the punitive damages claim and for sanctions on the ground that the punitive damage claim had been alleged solely to force defendants to litigate this claim in the New York State Supreme Court due to the increased damages sought.
The Supreme Court (Gazzillo, J.) denied plaintiff's motion for summary judgment, finding material facts in dispute, granted defendants' cross-motion to dismiss the claim for punitive damages as there was no legal basis to recover such damages on the basis of the claims alleged and also dismissed the entire complaint on the ground of laches. The court denied defendants' claim for sanctions against plaintiff.
Both parties appealed. In a published opinion (109 A.D.3d 493), the Appellate Division, Second Department, based upon a change in the law, reversed the dismissal of the complaint on the ground of laches due to defendant's failure to serve a 90-day demand to resume prosecution. The Court affirmed the denial of plaintiff's motion for summary judgment and affirmed the Supreme Court's dismissal of the punitive damages claim. The Court granted defendants' cross-appeal for an award of costs and attorney's fees pursuant to CPLR 8303-a. The Court remitted the matter "to the Supreme Court to determine the appropriate award of costs and attorney's fees" 109 A.D.3d at 494. With respect to plaintiff's claim for punitive damages, the Court ruled:
The Supreme Court properly granted that branch of the defendants' cross motion which was for summary judgment dismissing the plaintiff's claim for punitive damages. In opposition to the defendants' prima facie showing, the plaintiff failed to raise a trial issue of fact as to whether the defendants' alleged conduct was so gross, wanton, or willful, or of such high moral culpability, as to warrant an award of punitive damages (citations omitted). 109 A.D.3d at 495.
The Supreme Court improvidently exercised its discretion in denying that branch of the defendants' cross motion which was for an award of costs and attorney's fees
pursuant to CPLR 8303-a(c). The plaintiff's claim for punitive damages was asserted solely to harass the defendants. Thus, an award of costs and attorney's fees is warranted (see CPLR 8303-a; Sicignano v. Town of Islip, 41 A.D.3d 830, 831, 838 N.Y.S.2d 655).
On remittal, the Supreme Court (Gazzillo, J.) granted an award of attorney's fees in the amount of $64,565.36 and sanctions in the sum of $6,000. On an appeal from this award, the Appellate Division, Second Department reduced the award to $10,000 per defendant for a total of $20,000, the maximum allowed under CPLR 8303-a. This court granted defendants an amended judgment dated April 29, 2019, in the sum of $13,825 per defendant for a total of $27,650, which includes interest through the date of the judgment. Thereafter, this matter came on for a jury trial which resulted in a jury verdict on August 23, 2019 in favor of defendant on plaintiff's claim for breach of contract (plaintiff's other causes of action having been dismissed by the court based upon a failure of proof) and in favor of defendants on the first counterclaim for breach of contract (the other counterclaims having been dismissed at the conclusion of the trial based upon a failure of proof).
Plaintiff's first request is for an award of sanctions pursuant to CPLR 8303-a. Plaintiff claims that defendants' demand for punitive damages was without any lawful basis and was made for the purpose of harassing plaintiff. In short, plaintiff should be awarded sanctions for the very same reason that defendants were awarded sanctions. Defendants oppose this claim alleging that their claim for punitive damages was based on their allegation of an abuse of process claim as set forth in the third counterclaim where the punitive damage claim is made. Defendants also assert that the plaintiff's claim for abuse of process was based upon plaintiff, an attorney, having brought this claim in Supreme Court rather than a lower court and that the sole purpose of the punitive damage claim was to enable this case to be commenced in the Supreme Court rather than a lower court where the cost of litigation would be less. Furthermore, defendants claim that since plaintiff is an attorney and his law firm is representing him in this litigation, that he incurred no legal fees and that by bringing this action, plaintiff knew that defendants would incur legal fees. Defendants claim that an abuse of process claim is made out based upon these allegations.
Defendants did not explain why they chose not to pursue the punitive damage claim at trial or at any time prior. In the papers in opposition, they vigorously claim merit to the punitive damage claim yet made absolutely no effort to prove this claim at trial. This claim was maintained throughout the entire 19 year history of this litigation yet defendants offer no explanation why it was neglected at trial even though it remained in the answer as a counterclaim. The claim was dismissed after the trial concluded based on the lack of evidence submitted. In fact defendants did not object to dismissal of this claim. Defendants' counsel also asserts that they never "pursued" the claim during the course of the litigation. The court notes that there is no indication that plaintiff ever pursued their punitive damage claims, aside from opposing defendants' motion to dismiss this claim.
A review of the third counterclaim calls into question whether in fact an abuse of process claim is alleged. However, giving defendants the benefit of the doubt, the court will review whether there existed any basis for the defendants to allege such a claim. In Curiano v. Suozzi, 63 N.Y.2d 113 (1984), the Court of Appeals set forth the elements of the cause of action for abuse of process:
Abuse of process has three essential elements: (1) regularly issued process, either
civil or criminal, (2) an intent to do harm without excuse or justification, and (3) use of the process in a perverted manner to obtain a collateral objective (Board of Educ. v. Farmingdale Classroom Teachers Assn., supra, at p. 403, 380 N.Y.S.2d 635, 343 N.E.2d 278). Relevant on this appeal are the first and last of these elements. First, the process used must involve "an unlawful interference with one's person or property" (Williams v. Williams, 23 N.Y.2d 592, 596, 298 N.Y.S.2d 473, 246 N.E.2d 333). Insofar as the only process issued in the Suozzi v. Parente action was a summons, the process necessary to obtain jurisdiction and begin the lawsuit, there was no unlawful interference with plaintiffs' persons or property because the institution of a civil action by summons and complaint is not legally considered process capable of being abused (Hoppenstein v. Zemek, 62 A.D.2d 979, 980, 403 N.Y.S.2d 542; see Drago v. Buonagurio, 61 A.D.2d 282, 285, 402 N.Y.S.2d 250, revd on other grounds 46 N.Y.2d 778, 413 N.Y.S.2d 910, 386 N.E.2d 821; Osinoff v. Muchnick, 53 A.D.2d 858, 859, 385 N.Y.S.2d 583). Moreover, plaintiffs have not alleged the "'gist of the action for abuse of process'", which is "'the improper use of process after it is issued'"(Williams v. Williams, supra at p. 596, 298 N.Y.S.2d 473, 246 N.E.2d 333; Dean v. Kochenforfer, 237 N.Y.384, 390, 143 N.E.229; Miller v. Stem, 262 App.Div.5, 8, 27 N.Y.S.2d 374). They do not contend that the summons issued by defendants was improperly used after it was issued but only that defendants acted maliciously in bringing the action. A malicious motive alone, however, does not give rise to a cause of action for abuse of process (Hauser v. Bartow, 273 N.Y.370, 374, 7 N.E.2d 268).
Defendant cites Bd. Of Ed. of Farmingdale Union Free Sch. Dist. v. Farmingdale Classroom Teachers Ass'n, Inc., 38 N.Y.2d 397 (1975) to support their claim for punitive damages based upon their abuse of process claim. Unfortunately for defendants, the facts and the allegations in Farmingdale are not at all comparable to this case. The process in Farmingdale was the issuance of subpoenas requiring 87 teachers to appear to testify at a hearing on the same day. The abuse of process claim alleged "that the defendants wrongfully and maliciously and with intent to injure and harass the plaintiff issued 87 subpoenas with knowledge that all the teachers could not have possibly testified on the initial hearing date." The defendants refused the request to stagger the appearances. All 87 teachers therefor were required to attend the hearing on the same day at the same time while the school district was compelled to hire 77 substitute teachers for the school to remain open. This abuse of process claim is based upon the issuance of subpoenas that compelled the persons under subpoena to attend a hearing at the same time even thought there was no reason why they had to be there at the same time on the same day. In essence, the teachers union had orchestrated a walkout through the mis-use of a lawful means of process: the subpoena. Clearly, it could be found that the subpoenas were issued for the sole purpose of harassing the the school district. In this way, the process at issue was used in a perverted manner to achieve a collateral result.
In the case at bar, the only process issued was the summons and complaint. As stated by the Court of Appeals, the issuance of a summons and complaint in a civil action "is not legally considered process capable of being abused." 63 N.Y.2d at 116. For there to be an abuse of process, the process must be used in a perverted manner to obtain a collateral objective, not the putative object of the process. The only allegation defendants make is that plaintiff "interposed this lawsuit to threaten, harass, annoy and abuse the defendants" (Affirmation of Santos, ¶5). But it is clear that a malicious motive in commencing a lawsuit, standing alone, is irrelevant. 63 N.Y.2d at 117.
There is no allegation whatsoever that plaintiff issued any process subsequent to commencement of the lawsuit nor that plaintiff perverted process in any way to cause any harm to defendants' persons or property. Of significance is that defendants' never moved to dismiss the plaintiff's claims on the merits, either by summary judgment or other pre-trial motion. Defendants complain that plaintiff commenced this action in Supreme Court rather than a lower court but plaintiff had every right to do so. The Supreme Court is a court of unlimited jurisdiction. There is no minimum monetary amount to bring a lawsuit in Supreme Court. Thus, there was nothing illegal or inherently malicious in commencing this action in the Supreme Court. Moreover, at the trial of this action, plaintiff produced photographic and testimonial evidence concerning the damage done to the waterfall and pond areas of the back yard. Before the lawsuit commenced, defendants' attorneys acknowledged that defendants had sent a handyman to the property on the night before the closing to remove fish from the fish pond. They had even offered to settle this matter by having the pond pump and filter system repaired so that it is functioning. They offered a $100 credit for bathroom fixtures that defendants had removed and replaced with inferior fixtures. (Exhibit B to plaintiff's amended reply affirmation). Plaintiff accepted this proposal but could not reach the person defendants referred them to and thus made a counterproposal (Exhibit C to plaintiff's amended reply affirmation). This counteroffer was rejected by defendants and the lawsuit ensued.
The pre-litigation negotiations by both sides indicate that the plaintiff's claim for damages to repair the fish pond and waterfall were being made in good faith. Defendants were willing to negotiate these claims and did acknowledge that they had retained a handyman to remove the fish on the evening prior to the closing though they never admitted responsibility for causing the damage to the pond and waterfall. At trial, defendants successfully argued to the jury that they were not responsible for the damage to the property because there was no proof that they were personally present or that they had directed or authorized the handyman to cause any damage to the property.
Sanctions may be awarded pursuant to CPLR 8303-a for frivolous claims and counterclaims in actions to recover damages for, inter alia, property damage. CPLR 8303-a(c) requires the court to make certain findings before sanctions may be imposed. First, if the claim was "commenced, used or continued in bad faith, solely to delay or prolong the resolution of the litigation or to harass or maliciously injure another"; or, second, the claim was made and continued "in bad faith without any reasonable basis in law or fact and could not be supported by a good faith argument for an extension, modification or reversal of existing law." The statute permits the court to find that the party or attorney did not act in bad faith if the claim or counterclaim "was promptly discontinued when the party or attorney learned or should have learned that the action, claim, counterclaim, defense or cross claim lacked such a reasonable basis".
While the court can find no basis to support the inclusion of the abuse of process claim and the claim for punitive damages as alleged in the third counterclaim of defendants' answer, it appears that the allegation was made in response to the punitive damage claim made in the complaint. Was it mere coincidence that defendants' punitive damage claim of $50,000 mirrored the same claim by plaintiff? But then after commencement of the lawsuit, nothing happened for ten (10) years. In 2010, defendants successfully cross moved to dismiss the plaintiff's punitive damage claim. Having achieved dismissal of this claim, having briefed the trial and appellate courts on the requirements to maintain a cause of action for punitive damages, defendants nevertheless did not discontinue their punitive damage claim then or at any time thereafter, thereby requiring plaintiff to defend against this claim. Having succeeded on their motion to dismiss plaintiff's punitive damage claim, defendants well knew the standard of proof required for a punitive damages claim. As stated by the Appellate Division, Second Department in this case, to prove a punitive damages claim, it must be established that the "alleged conduct was so gross, wonton, or willful, or of such high moral culpability to warrant an award of punitive damages (citations omitted)" Baxter v. Javier, 109 A.D.3d at 495.
Defendants' maintenance of the abuse of process and punitive damage claims when there existed no good faith to maintain them is clear to the court on this record. The court finds this conduct egregious after the defendants successfully obtained dismissal of plaintiff's counterclaim. Had the defendants discontinued their abuse of process claim and derivative claim for punitive damages at or about the time that the plaintiff's punitive damage claim was dismissed by the Supreme Court, this court would not grant sanctions. The lawsuit had not been prosecuted since its original commencement until the filing of the motion for summary judgment by plaintiff in June of 2010. The attorneys of record for defendants at that time vigorously opposed the motion and, as noted, cross moved for dismissal of the plaintiff's claims, including the punitive damage claim. The case then became active and the defendants' attorneys briefed the law on punitive damages to the court and vigorously fought to obtain dismissal of plaintiff's unfounded punitive damages claim. It is inconceivable to the Court that at that time the defendants had any good faith basis to maintain their own punitive damages claim and abuse of process claim.
In sum after careful review of the submissions of both parties, the relevant law and the claims made in this lawsuit, the Court finds that defendants' purported claim of abuse of process and derivative punitive damage claims were frivolous and should have been promptly discontinued in 2010 after Judge Gazzillo rendered his decision granting the motion to dismiss plaintiff's punitive damage claim. As noted, given the history of this lawsuit and the discretion the court has when a frivolous claim is promptly discontinued "when the party or the attorney learned or should have learned that the action, claim, counterclaim, defense or cross claim lacked such a reasonable basis..." CPLR 8303-a(c)(ii) (emphasis added) and giving defendants' counsel the full benefit of this provision, the court finds that counsel acted in bad faith by maintaining this action after Judge Gazzillo's decision in 2010 and even after the affirmance of that portion of Judge Gazzillo's decision by the Appellate Division in 2013. The court would not have found bad faith had defense counsel promptly discontinued the unfounded punitive damages claim alleged in the third counterclaim at or about that time. Having failed to do so, the court finds that defense counsel acted in bad faith and awards plaintiff sanctions and attorney's fees against defendants' current counsel, in the total sum of $10,000.00, the same per party sanction imposed against plaintiff for virtually the same conduct. Plaintiff is directed to settle judgment on ten (10) days' notice.
Plaintiff also moves pursuant to CPLR 5015 to vacate the award of sanctions as embodied in the amended modified judgment of this court dated April 29, 2019, The court finds that there are no grounds to vacate the amended modified judgment. The Appellate Division, Second Department decision to award defendants sanctions and attorney's fees is the law of the case. This court must not upset this determination unless there is a subsequent circumstance to warrant this relief as set forth in CPLR 5015. No such circumstance exists.
Finally, plaintiff seeks additional time in which to serve post trial motions. The time to make any such motions is extended to and including October 15, 2019. No further extensions will be granted. Dated: September 30, 2019
Riverhead, New York
/s/_________
JAMES F. MATTHEWS
A.J.C.C. Check one: X Final Disposition Non-final Disposition