Opinion
70468/2003.
Decided April 12, 2004.
Higinio C. Luna, pro se, [No appearance on this motion], Newburgh, New York, the Plaintiff.
Lou Pierro, pro se, White Plains, New York, the Defendant.
Lawrence N. Rogak, LLC, by Steven D. Rhoads and
Rebecca M. Wenner, Esqs., Oceanside New York, for Nemet Motors.
The present focus of this unusual controversy surrounding the purchase of a vehicle is a motion by the law firm representing the insurer of the corporate employer, Nemet Motors ("Nemet"), an automobile sales dealership in Queens County, to be relieved as counsel from representing a company employee, who sold the car. Although the present motion to withdraw as counsel appears innocuous, both the fact pattern and the legal issue are novel. Specifically, this Court's research of cases around the country has not revealed another case where an employer, litigating possible liability for a bailment, has left an employee naked, exposing him to the defense of an action and liability personally.
Plaintiff Higinio C. Luna ("Luna'), on June 4, 2003, filed a summons and endorsed complaint with the Clerk of this Court. In his complaint, Luna alleged that he sustained $8,000 in damages for a failure by Nemet and its employee, defendant Lou Pierro ("Pierro"), to deliver a 1996 Dodge vehicle claimed to have been left, on October 7, 2002, in Nemet's custody. The alleged damages are for impounding fees, parking tickets, and property damage to a vehicle. Luna's pro se action names Pierro personally and does not allege a cause of action against Nemet.
The law firm of Lawrence N. Rogak, LLC ("the Rogak firm") is Nemet's retained counsel. The Rogak firm previously served and filed an answer to the complaint, together with multiple and voluminous discovery requests. Alleging that it "[m]istakenly believ[ed]" that Pierro was sued as Nemet's employee, the Rogak firm, by the present motion, seeks to withdraw as counsel. The Rogak firm maintains, on behalf of its regularly retained client, Nemet, that Pierro is being sued personally and should defend this case himself.
On the return date of the present motion, January 15, 2004, Nemet and Pierro provided the undersigned a signed stipulation purporting to grant the motion to withdraw and staying the action. Rather than agreeing to "so order" the signed stipulation, as a rubberstamp, this Court questioned the parties as to the underlying circumstances. Based on the facts that emerged at the conference, the Court directed Steven D. Rhoads, Esq., in his capacity as an officer of the Court, to provide the Court with a letter as to the underlying facts. Mr. Rhoads complied, responding by a letter dated February 24, 2004, with copies sent to Luna and Pierro. Neither Luna nor Pierro have sent a responsive letter to the Court. The Court indicated, at the January 15 conference, that it would consider all the circumstances and the purported stipulation, which, it warned, might be rejected.
This Court, at the outset, observes that no discovery in this case has yet occurred. No party has submitted an affidavit setting forth the facts. The only available facts are derived from the complaint's skeletal averments and Mr. Rhoads's letter. The true facts are yet to be explored, and nothing in this decision and order should thus be construed as an expression of fact-finding or attribution of fault.
The underlying facts are that, on or about October 7, 2002, Luna purchased a new vehicle from Nemet for the sum of approximately $20,000. Intending to use his old vehicle, the 1996 Dodge, as a trade-in toward the purchase of the new vehicle, Luna was rebuffed because of the Dodge's age and condition. Luna was advised, presumably by Pierro, acting on behalf of Nemet, that he might get more money by trying to sell the Dodge car himself rather than using it as a trade-in. Although the facts are sketchy, Luna then explained to Nemet's employees that he had no way of getting his old vehicle back to his house in Newburgh, in Orange County.
Luna, accordingly, allegedly requested that Pierro, as an accommodation for his patronage of Nemet, either arrange for the vehicle to be transported to Orange County or, at least, store it. Pierro declined both requests, but allegedly advised Luna that he could keep the Dodge vehicle on the Nemet lot only until the following Monday, October 13, 2003, Columbus Day, a legal holiday. On October 13, Luna failed to pick up the 1996 Dodge. It reportedly remained on the Nemet lot for eight to twelve weeks, and Luna allegedly also failed to respond to numerous messages left by Nemet employees demanding its removal from Nemet's property. Pierro maintains that, following the orders given to him by his superiors at Nemet, he arranged for Jamaica Towing, Inc. to tow the Dodge car to an unnamed storage facility at or near John F. Kennedy International Airport in Queens County.
What then happened to the 1996 Dodge car remains a factual issue. According to Pierro, the vehicle received four tickets in Bronx County for parking by a fire hydrant and also for missing or improper plates. Pierro posits or speculates that an employee or employees of the storage facility to which Jamaica Towing transported the 1996 Dodge must have converted the car to his or their own use, resulting in the tickets, and that he was not involved in any conversion of the vehicle.
Luna, however, allegedly advised Nemet that, aside from getting parking tickets subsequent to its removal from the Nemet lot, the 1996 Dodge was also involved in an automobile accident. Luna allegedly contended that, upon advising Pierro that his car had been stolen and damaged in an accident by the thief, Pierro apologized profusely, promised that it would be fixed, and gave him $100 in cash towards the payment of one parking ticket. None of these alleged statements are offered to the Court in admissible form, and, obviously, at this pre-discovery stage, no determination of the facts would be proper.
As a result of these events and the dispute with Luna, Nemet terminated Pierro's employment.
On the present motion to withdraw as Pierro's counsel, the Rogak firm argues that Luna's alleged, prior statements that Pierro paid him for a parking ticket and promised that the used vehicle would be repaired are consistent with a theory that "the vehicle was converted to Mr. Pierro's private use." The Rogak firm also contends that Luna's lawsuit naming solely Pierro personally is consistent with Pierro's individual liability.
The Rogak firm's argument is mere bootstrapping. The fact that a pro se plaintiff names a corporate employee as the sole defendant in a lawsuit does not, of course, mean that the worker is individually responsible. As to Luna's other allegations, neither he nor Nemet claims, thus far, that Pierro stole the car or was implicated in any manner in its disappearance, damage, or vandalism. Luna's sole claim is predicated upon Pierro's alleged apology, promise that the car would be fixed, and payment of $100 from his own pocket to pay for a parking ticket. These gestures, even they were to be credited as true, contrary to Nemet's argument, do not equate with a conversion of the vehicle by Pierro. Indeed, to this Court, they are consistent with a symbolic act of good will toward a customer or merely indicate Pierro's lack of self-assertion and ready submissiveness to demands, no matter how unjust, as shown by his ready signature to the subject stipulation consenting to the withdrawal of counsel.
The Rogak firm states, at any rate, that Nemet will not retain its services to defend Pierro for claims outside of the scope of his employment and, accordingly, it was compelled to make the instant motion to withdraw as counsel for Pierro.
The papers of the Rogak firm are devoid of any legal discussion or analysis. As a legal matter, the position of Nemet and the Rogak firm is not well-founded. The relationship between Luna and Nemet was that of bailor and bailee, at least at the outset, under a "mutual benefit bailment." Specifically, Luna would buy a new car from Nemet and, in return, would be allowed to leave his old car on its property for a reasonable time ( see, Nierenberg v. Wursteria, Inc., 189 AD2d 571 [1st Dept.], lv. to appeal denied, 82 NY2d 651 [guarding property of restaurant patron]; Wilson v. Hooser, 573 SW2d 601, 602-603 [Tex. Civ. App. 1978] [bailee held liable, even though bailor admitted that he did not expect to pay the car dealer anything for selling his consigned automobile]; 9 NY Jur. 2d "Bailments and Chattel Leases" § 89 [1980]; 8 Am. Jur. 2d "Bailments" §§ 206-208 [1963] [regarding bailments for mutual benefit]; see, e.g., Ryan v. Aer Lingus, 878 F. Supp. 461, 464 [SDNY 1994] [applying New York law]; Aviation Assocs. of Puerto Rico v. Dixon Co., 333 F. Supp. 982, 986 [M.D. Pa. 1971]; Hinkle v. Perry, 296 Ark. 114, 121, 752 SW2d 267, 270; Hartmann v. Black Decker Mfg. Co., 16 Conn. App. 1, 7-8, 547 A2d 38, 42 [1988] [mutual benefit bailment was created by the promotion of good will, even though no money or other tangible consideration was exchanged]).
The difference between a mutual benefit bailment, on the one hand, and a gratuitous bailment or a "bailment without reward," on the other hand, is significant with regard to the duty of care that the bailee must provide. A mutual benefit bailee is liable for ordinary negligence. A gratuitous bailee is, however, liable only for gross negligence ( Rosen v. Village Chevrolet, Inc., 63 Misc 2d 174, 176 [NYC Civ Ct Queens County 1970]; see, Fireman's Fund Ins. Co. v. Dollar Syss., Inc., 699 So. 2d 1028, 1031 [Fla. App. 1997], review denied, 707 So. 2d 1124 [Fla. 1998]; Andrews v. Allen, 724 SW2d 893, 895 [Tex. App. 1987] ["The test is whether the bailment was made as an incident of a business in which the bailee makes a profit."]; Waggoner v. Gen. Motors Corp., 771 P2d 1195, 1198-1199 [Wyo. 1989]).
The issue of whether a bailment is gratuitous or of mutual benefit is a factual one to be determined at trial ( Fili v. Matson Motors, Inc., 183 AD2d 324, 328 [4th Dept. 1992]; accord, Lakeside Ford Inc v. White, 159 Ga. App. 182, 283 SE2d 47; Stuart v. D.N. Kelley Son, 331 Mass. 76, 117 NE2d 160; Douglas v. Reymont Props., Inc., 86 NYS2d 60 [App T 1st Dept. 1949] [N.O.R.]; Arkwright Mills v. Clearwater Mfg. Co., 217 S.C. 530, 61 SE2d 165, 173 ["the facts of each case must determine the issue"]).
As to the critical issue of respondeat superior as applied to bailments, the cases in New York and in other jurisdictions do not exempt an employer from liability for an employee's lapses ( see, Gilchrist v. Winmar J. Ford, Inc., 77 Misc 2d 847, 848 [Dist Ct. Nassau County 1974] ["New York courts hold that the doctrine of respondeat superior applies in determining the liability of a bailee for damage to or loss of the thing bailed as a result of the acts of his servant."]; accord, Truck Leasing Corp. v. Esquire Laundry Dry Cleaning Co., 252 SW2d 108, 112-114 [Mo. App. 1952]).
Even assuming arguendo that Pierro were culpable of some misappropriation, and Nemet, at this early stage of the litigation, has not provided any firm, substantial evidence to such effect other than his claimed submissiveness to various demands, it cannot disclaim legal responsibility. As the appellate court in Metzger v. Downtown Garage Corp. ( 169 Pa. Super. 384, 387, 82 A2d 507, 508), in pertinent part, stated:
When a bailor delivers his car to a bailee and pays the required consideration, and later seeks to regain his car, the bailee should not be permitted to escape liability simply by the pious statement that he is sorry (but not liable) because his servant stole the car.
( Accord, Giannetto v. General Exch. Ins. Co., 10 AD2d 442 [4th Dept. 1960] [used car salesman, without consent of his employer, filled in title to vehicle for himself]; Stephens v. Katz Parking Sys., Inc., 75 Misc 2d 690 [NYC Civ Ct New York County 1973] [theft of car from parking lot]; Aetna Ins. Co. of Hartford, Conn. v. Marble Hill Garage, Inc., 146 Misc 377 [App. T. 1st Dept. 1933] [theft of car from storage facility for which bailor had monthly contract]).
The fact that a bailment began as one of mutual benefit does not prevent its metamorphosis into a gratuitous one. In Rosen v. Village Chevrolet, Inc. ( 63 Misc 2d 174, supra), for example, the plaintiff brought his automobile to the defendant dealer initially for servicing and then, upon the work's completion, later asked the dealer to hold it for purposes of selling it. The plaintiff left the car with the defendant for a possible sale and never removed it. The plaintiff's vehicle was subsequently reported to be missing. The court in Rosen stated: "The Court holds that the Plaintiff established initially a mutual benefit bailment when he brought his car in for service and that possibly this bailment was later changed to a gratuitous one when he asked the Defendant to hold his car for the purposes of sale" ( id. at 177).
In the present case, no discovery has been exchanged. Under the alleged facts thus far available, but not necessarily accurate, Pierro stated to Luna that the 1996 Dodge could remain on the Nemet lot for only a few days and that numerous, but unspecified, unsuccessful efforts by Nemet employees to get a response from Luna, during the subsequent eight to twelve weeks, led to a decision by a Nemet manager authorizing Jamaica Towing to tow the vehicle. If these contentions are ultimately credited by a trier of fact, Luna's negligent failure to retrieve his old vehicle or to make arrangements with Nemet within a reasonable time might, as in the Rosen case, have converted the mutual benefit bailment into a gratuitous bailment.
A bailor is required to give the bailee reasonable notice and time to remove the property ( Dupont v. Joedon Co., 107 AD2d 369, 372 [1st Dept. 1985]; 8 Am Jur. 2d "Bailments" § 278, supra). Two cases of the Appellate Term, First Department, both over a century old, are persuasive precedents. In Emerald Phoenix Brewing Co v. Leonard ( 22 Misc 120, 48 NYS 706 [App T 1897]), the bailor acknowledged that he was advised to remove his property from defendant's premises. The court held that, after providing the bailor reasonable time to remove the property, "[t]he bailment was therefore effectually terminated by the notice given" ( id. at 121, 48 NYS at 707).
Similarly, in De Lemos v. Cohen, 28 Misc 579, 59 NYS 498 [App T 1899], the bailor did not deny receiving notice to remove his property. The Appellate Term, First Department, stated that the defendants were at most gratuitous bailees and discharged their obligation of exercising the slight care incumbent on them. They terminated the deposit by giving due notice to the depositor, "who, failing to remove his property in compliance therewith, must bear the loss subsequently occurring." ( id. at 580, 59 NYS at 499; accord, Salisbury v. St. Regis-Sheraton Hotel Corp., 490 F. Supp. 449 [SDNY 1980]; 9 NY Jur. 2d "Bailments and Chattel Leases" §§ 135-136, supra).
Assuming arguendo, in the present case, that a trier of fact determines that Nemet provided Luna with both notice and a reasonable opportunity to remove the property and that the mutual benefit bailment changed to a gratuitous one, a bailee should not be able to thrust liability upon a bailor when the "property is practically abandoned" ( see, Meyer v. Galland, 157 NYS 62, 64 [Att T. 1st Dept. 1916] [dissenting opinion]; accord, Jack Boles Servs., Inc. v. Stavely, 906 SW2d 185, 188 [Tex Civ App 1995], quoting Ampco Auto Parks, Inc. v. Williams, 517 SW2d 401, 404 [Tex Civ App 1974] ["duty and liability ordinarily cannot be thrust upon a bailee without its knowledge or consent, but must be voluntarily assumed."]).
No admissible proof has been offered, at this early stage of the lawsuit, as to the types of notices allegedly afforded to Luna, whether oral or written, to remove his old vehicle from the Nemet lot. Assuming that a mutual benefit bailment was initially created, the issue of the types of notice thus remains to be litigated. Luna, in turn, might contest the claim of notice and contend that the purported bailment was of a continuing nature.
In short, neither Nemet nor the Rogak firm has provided the Court any reason, let alone sufficient reason, other than their economic imperative, why respondeat superior should not apply and why Nemet should be absolved from defending its former employee.
The Court determines that the present motion to withdraw is nothing less than a transparent attempt by a corporate employer to shift its own potential legal and economic responsibility to a former employee. The Court thus not only refuses to "so order" the purported stipulation, even though consented to by Pierro, but strikes it.
The next pressing question is whether this Court should compel the Rogak firm to stay in the case and defend Pierro or whether such representation is impossible in light of an accusation made by it against Pierro of conversion of the vehicle. Indeed, the affirmation by the Rogak firm, in support of the motion to withdraw, speculates that there may be a conflict of interest between Nemet, the client that pays the Rogak firm's retainer, and Pierro. Although counsel fails to specify the nature of any disagreement, the Court agrees that a conflict of interest is likely. Pierro states that he contacted Jamaica Towing only upon being instructed to do so by his superiors at Nemet, a contention that Nemet might deny. Pierro and his bosses also might clash on the manner, nature, and frequency of the notices given to Luna to remove his vehicle. Certainly, in light of the position taken in Mr. Rhoads's letter, that Pierro should be deemed to have converted the vehicle, and the offer of a stipulation evidencing that Pierro no longer wishes to be represented by the Rogak firm, the wise course is for Pierro to retain counsel.
The entire cost of Pierro's legal representation, including reasonable disbursements, accordingly, should be borne by Nemet, in light of the conflict admitted by the Rogak firm and the position taken by it against Pierro ( see, Northland Ins. Co v. Heck's Serv. Co., Inc., 620 F Supp 107 [ED Ark 1985]).
The Rogak firm owes its chief loyalty to Nemet, its client. Especially because Nemet discharged Pierro, the Rogak firm should not be placed in the terrible bind of divided loyalties. The obligation to pay the cost, expenses, and disbursements of Pierro's legal defense is to be borne by Nemet. Under the law of bailments, analyzed above, it is clear that Nemet has an obligation to provide Pierro with a defense to this lawsuit, and it is further possible that Nemet may have to indemnify Pierro, in the event he is found liable. Whether Nemet is insured for the cost of Pierro's defense may be, if so advised, the subject of an action for a declaratory judgment in Supreme Court between Nemet and its insurer.
Luna, as pointed out in the papers by the Rogak firm, was not present for the hearing on the motion to withdraw and, in fact, has not been present for the last several court appearances. Luna, moreover, according to the Rogak firm, has ignored its discovery requests. The Court has reviewed the many discovery requests attached collectively as an exhibit to the motion by the Rogak firm. They are voluminous and would appear formidable to any pro se litigant. The discovery notices are not all entirely proper, such as the demand for a bill of particulars that requires numerous evidentiary materials or a demand for discovery and inspection that requires proof of lost wages and a "[f]ire marshal's report" — not relevant to this case. The Court notes that, despite technological breakthroughs, such as the word processor, it is irresponsible for an attorney to tap buttons on a keyboard and spew an irrelevant document or discovery notice without having personally reviewed it for pertinence.
This Court, accordingly, orders and directs the following relief:
1. The stipulation handed to the Court purporting to grant the motion to withdraw is stricken;
2. the present motion to withdraw as counsel is granted only to the extent that Pierro is to search and retain new counsel to defend him in this action;
3. the entire cost of the aforementioned legal representation by Pierro's new counsel, including reasonable disbursements, as a matter of law, shall be borne by Nemet, without prejudice to a declaratory judgment action in Supreme Court by Nemet to recoup such expense from its insurer;
4. the action is stayed for all purposes until July 14, 2004, for the purpose of Pierro hiring new counsel;
5. all discovery notices that were served on Luna, on the Court's motion, except for the demand for an examination before trial, to be discussed below, are hereby stricken;
6. Luna, in his discretion, is given permission to amend his complaint, that must be mailed to all parties and filed with the Clerk of the Court on or before August 11, 2004, or he may rest upon his present pleading;
7. any answers or amended answers shall be served on or before September 16, 2004;
8. in the event that Luna does not amend his complaint, Pierro's new counsel, shall serve an amended answer that, if so advised, shall assert any counterclaims against Luna and/or a third-party action against Nemet ( see CPLR 1001), the unnamed storage facility near the airport to which the 1996 Dodge was towed, and/or Jamaica Towing ( see CPLR 1002);
9. Luna is directed to be present at his examination before trial on October 7, 2004, at 10 AM, at a site in Queens County to be arranged by the Rogak firm, which presumably will remain in the case to defend the interests of Nemet, with full rights of cross-examination permitted to the other parties, and the deposition shall not be adjourned without the undersigned's written consent; and
10. the Rogak firm shall retain priority of discovery and, if it serves such requests and demands, shall specifically tailor them.
The Court also notes that on January 12, 2004, this action was marked off the trial calendar. When discovery is complete, the parties shall notify the Pro Se Clerk of the Court, stating that all discovery is complete, and, upon such notification, the Clerk shall notify all parties of the trial date.
This Court also warns any party, prior to the service of any amended pleadings, that, if after this litigation's outcome, it is determined, upon motion or notice, that a position was asserted frivolously, it will conduct a hearing pursuant to Part 130 of the Unified Rules and issue sanctions to the maximum amount, taking into account the expenses to be borne by the parties.
The Rogak firm shall serve copies of this order upon all parties with notice of entry and send a copy to the principal of its client Nemet.
The foregoing constitutes the decision, order, and opinion of the Court.