Opinion
161237/2014
04-22-2016
MGI Repetti LLP, Plaintiff, v. The Estate of Phyllis Millstein and ROBERT J. RANDELL, as Executor of the Estate of Phyllis Millstein, Defendants.
Harrington, Ocko & Monk LLP (Kevin J. Harrington and John T.A. Rosenthal of counsel), for plaintiff. Meltzer, Lippe, Goldstein & Breitstone, LLP (Jason K. Blasberg of counsel), for defendant.
Harrington, Ocko & Monk LLP (Kevin J. Harrington and John T.A. Rosenthal of counsel), for plaintiff. Meltzer, Lippe, Goldstein & Breitstone, LLP (Jason K. Blasberg of counsel), for defendant. Gerald Lebovits, J.
Recitation, as required by CPLR 2219 (a), of the papers considered in reviewing defendants' motion to dismiss or, alternatively, to remove this action to Surrogate's Court and to stay this action pending that removal.
PapersNumbered
Defendants' Notice of Motion1 Defendants' Memorandum of Law2 Plaintiff's Memorandum of Law3 Plaintiff's Affirmation in Opposition4 Defendants' Reply Affirmation5 Gerald Lebovits, J.
Ordered that the court's order dated March 28, 2016, issued on motion sequence 1 denying the motion, is vacated.
Plaintiff is an accounting firm that defendants hired to provide accounting services from January 2010 to June 2013. During this period, plaintiff allegedly performed $104,345.75 worth of accounting services and billed defendants accordingly. Defendants refused to pay, alleging that the services were rendered in a grossly negligent manner. Plaintiff submitted a verified claim to defendants under SCPA 1803. Defendants failed to allow the claim within 90 days and therefore plaintiff deemed the claim rejected under SCPA 1806. Plaintiff filed the summons and complaint in Supreme Court on November 12, 2014, and served defendants on November 19, 2014. Also on November 19, defendants filed a verified petition against plaintiff in Surrogate's Court. The estate is valued at $26 million.
Defendants move to dismiss this action under CPLR 3211 (a) (4) or, alternatively, to remove this action to Surrogate's Court under CPLR 325 (e) and to stay this action under CPLR 326 pending that removal.
A.Motion to Dismiss Under CPLR 3211 (a) (4)
Defendants' motion to dismiss is denied. An action in Supreme Court is commenced when the summons and complaint or summons with notice is filed. (CPLR 304 [a].) An action in Surrogate's Court is commenced upon filing a petition. (SCPA 302 [a].) New York courts generally follow the "first-in-time" rule, which provides that " the court which has first taken jurisdiction is the one in which the matter should be determined and it is a violation of the rules of comity to interfere.'" (City Trade & Indus. v New Cent. Jute Mills Co., 25 NY2d 49, 58 [1969], quoting Hamilton & Co. v American Home Assur. Co., 21 AD2d 500, 506 [1st Dept 1964, Steuer, J., dissenting], affd 15 NY2d 595 [1964].) A court may not mechanically apply the first-in-time rule without "reviewing all pertinent competing considerations." (White Light Prods., Inc. v On the Scene Prods., Inc., 231 AD2d 90, 100 [1st Dept 1997].) The case should be heard by the court "with the most reason to hear the case." (Id. at 99.)
Plaintiff was the first to commence the action, and this court has the most reason to hear the case. Plaintiff filed the summons and complaint on November 12, 2014, and defendants filed the verified petition on November 19, 2014. The court is not persuaded by defendants' argument that their petition is first in time. Although Surrogate's Court obtained jurisdiction over the estate and its matters in 2009 when the administration began, this general jurisdiction is insufficient for the first-in-time rule. For the first-in-time rule to apply, the parties must first commence an action in court regarding their specific dispute. An action is commenced in Supreme Court when a summons and complaint is filed or, for Surrogate's Court, when a verified petition is filed. Plaintiff's verified claim under SCPA 1803 did not commence the action in Surrogate's Court. It merely gave plaintiff a statutory ground to bring a claim. Because this court was the first to obtain jurisdiction over the current dispute, plaintiff's action was first in time.
Furthermore, this court has the most reason to hear the case. This case involves allegations of malpractice. This court is better suited than Surrogate's Court to hear a trial over that claim.
Additionally, no "pertinent competing considerations" weigh against the first-in-time rule. (See White Light Prods., 231 AD2d at 100.) This is a new claim with which neither court has much litigation history. Although both parties allege that their opponent is forum shopping, neither side has presented sufficient evidence to support this allegation.
B.Motion to Remove and Stay Under CPLR 325 (e) and CPLR 326
Defendant's motion to remove this case to Surrogate's Court is also denied. A court must consider several factors in determining whether removal to Surrogate's Court is appropriate. Removal is proper when Surrogate's Court had extensive litigation history with the case and therefore is in a "unique position" to rule. (Rosenman & Colin v Winston, 205 AD2d 451, 451 [1st Dept 1994].) Removal is also proper when the matter is "so intimately connected with the estate that the dispute necessarily affects the administration of the estate." (Benjamin v Morgan Guar. Trust Co., 173 AD2d 373, 374 [1st Dept 1991].) Removal is further proper when the matter concerns a major asset of the estate, such as ownership of a professional corporation. (Birnbaum v Cent. Trust Co., 156 AD2d 309, 309 [1st Dept 1989].)
Removing the case to Surrogate's Court would be improper. Although this court and Surrogate's Court have concurrent jurisdiction over this case, this court is better suited to hear a trial on a malpractice claim, and neither court has much litigation history regarding the dispute. Therefore, Surrogate's Court is not in a "unique position" to hear this case. (See Rosenman & Colin, 205 AD2d at 451.) Furthermore, the dispute is not so "intimately connected with the estate" as to warrant removal to Surrogate's Court. (See Benjamin, 173 AD2d at 374.) This court is not persuaded that the final estate accounting would be delayed or incomplete in a significant manner just because this court rather than Surrogate's Court hears the case. Lastly, the amount in dispute does not constitute a major asset of the estate. Plaintiff's claim is for less than half of one percent of the estate, which is valued at $26 million.
Because the motion to remove is denied, the motion to stay pending the removal is also denied.
Accordingly, it is hereby ORDERED that the court's order dated March 28, 2016, issued on motion sequence 1 denying the motion, is vacated; and it is further
ORDERED that defendants' motion to dismiss or to remove and stay is denied.
Counsel for plaintiff is directed to serve a copy of this order with notice of entry on all parties.
This opinion is the court's decision and order. Dated: April 22, 2016 J.S.C.