Opinion
Index No. 650528/2020
10-17-2023
Kathleen Pisano, Plaintiff, v. Philip Pisano, 109 EAST 12TH STREET CORPORATION, JOHN DOE, JANE DOE, Defendant.
Plaintiff Kathleen Pisano: Fox Rothschild LLP; Matthew Schenker, Esq. Defendants Philip Pisano: Vernon & Ginsburg LLP; Mel Ginsburg, Esq. Defendant 109 East 12th Street Corporation: Moss & Kalish; James Schwartzman The Estate of Paul Pisano: Capehart Scatchard; Sheila M. Mints, Esq.; Vincent Cieslik, Esq.
Unpublished Opinion
MOTION DECISION
Plaintiff Kathleen Pisano: Fox Rothschild LLP; Matthew Schenker, Esq.
Defendants Philip Pisano: Vernon & Ginsburg LLP; Mel Ginsburg, Esq.
Defendant 109 East 12th Street Corporation: Moss & Kalish; James Schwartzman
The Estate of Paul Pisano: Capehart Scatchard; Sheila M. Mints, Esq.; Vincent Cieslik, Esq.
Dakota D. Ramseur, J.
The following e-filed documents, listed by NYSCEF document number (Motion 006) 94, 95, 96, 97, 98, 99, 100, 101, 102, 103, 104, 105, 106, 107, 108, 109, 110, 111, 112, 113, 114, 115, 116, 117, 118, 119, 120, 121, 122, 123, 124, 125, 126, 127, 128, 129, 130, 131, 132, 133, 134, 135, 136, 137, 138, 139, 140, 141, 142, 143, 144, 145, 146, 147, 148, 149, 150, 151, 152, 153, 154, 155, 156, 157, 158, 159, 160, 164, 168, 170 were read on this motion to/for PARTIAL SUMMARY JUDGMENT.
Plaintiff Kathleen Pisano, through her daughter and attorney-in-fact Joyce Henion, commenced this declaratory judgment action against Philip Pisano and 109 East 12th Street Corporation, asserting ownership of Unit 2 of a co-op located at 109 East 12th Street, New York, New York. Plaintiff asserts that she and her late husband, Paul Pisano, owned the apartment as joint tenants with a right of survivorship, and as such, upon his death, ownership of the apartment passes to her. In this motion sequence (006), plaintiff moves for (1) summary judgment pursuant to CPLR 3212 declaring her to be the owner of the co-op shares appurtenant to Unit 2, (2) dismissal of Philip Pisano's counterclaims and affirmative defenses pursuant to CPLR 3211 and/or 3212, (3) dismissal of ownership claims by the Estate of Paul Pisano (hereinafter, "the Estate"), who intervened in this matter in 2022, and (4) sanctions against Philip pursuant to NYCRR 130-1.1 for allegedly creating a fraudulent stock certificate. Both Philip Pisano and the Estate oppose. For the following reasons, the Court grants plaintiff's motion in part.
Plaintiff is 88 years old and suffers from dementia. Through a durable power of attorney executed by Kathleen Pisano and Joyce Henion on October 12, 2015, Henion has become her attorney-in-fact. (NYSCEF doc. no. 116.) Joyce Henion is plaintiff's daughter from a previous marriage. Considering plaintiff's medical condition, she was not deposed.
BACKGROUND
In 1986, several tenants residing in 109 East 12th Street entered into a shareholder agreement to create the 109 East 12th Street Corporation ("109 East 12th" or the "corporation") with the intent to jointly own and operate the property. (NYSCEF doc. no. 117, shareholder agreement.) The agreement purports to be between Nicole Janssen, Paul Pisano, Mark Ricci, Anthony Santuoso, Rosanne Schaffer, and Frank Torgerson. (Id. at 1.) Plaintiff's name was not included among those the agreement specifically referenced and was not expressly mentioned in Schedule A as a shareholder. (Id. at 1, 23.) Nonetheless, plaintiff's signature appears to be included among the named parties' signatures below paragraph 13 (e), which states, in pertinent part, "Each Shareholder has entered into the Agreement voluntarily and with full knowledge of the meaning of its terms." (Id. at 22.) Schedule B of the shareholder agreement lists Paul Pisano as having 15 shares in the corporation. (Id. at 24.)
In or around 1996, 109 East 12th repurchased the stock and proprietary lease of Mark Ricci and redistributed the 30 shares appurtenant to his store-front premise between the remaining shareholders. Plaintiff and Paul Pisano acquired an additional 6.43 shares, increasing their total shares to 21.43. (NYSCEF doc. no. 99, schedule of rents.) The schedule of rents, provided to plaintiff by the corporation during discovery, describes the relative number of shares before and after 109 East 12 purchased Mark Ricci's stock and proprietary lease. Significantly, whereas Schedule B of the shareholder agreement solely described Paul Pisano as owning the 15 shares, this schedule of rents lists Paul Pisano and Kathleen Pisano as the "owners" of the 21.43 shares. In 2016, the corporation extended each shareholder's proprietary lease through June 15, 2066. (NYSCEF doc. no. 100, rider to proprietary lease.) Both plaintiff and Paul Pisano signed the new lease. (Id. at 1.)
Although the schedule of rents is undated, the schedule must have been created sometime after 2018 when Frederick Becker, as described infra, was retained to reissue stock certificates.
In or around 2017-2018, Anthony Santuoso, the corporation's president, discovered that most shareholders had lost their original stock certificates from 1986 and that Paul Pisano, as 109 East 12th's Treasurer, had lost the corporation's copies of those certificates. (Only Santuoso and Schaffer retained their original certificates.) Thereafter, the corporation began the process of reallocating stock certificates. Pursuant to a unanimous vote of the corporation's shareholders and Board of Directors held in October 2018, they approved a reallocation plan, which redistributed to the Pisanos their 21.43 shares. (NYSCEF doc. no. 101, corp. resolution dated 8.29.2018.) The resulting resolution, which plaintiff signed, states, "It [sic] witness thereof, all of the shareholders have signed this Resolution as of the day and date set forth herein above." (Id.)
As counsel to 109 East 12th, Frederick Becker required shareholders to sign an "Affidavit of Lost Proprietary Lease and/or Stock Certificate." (NYSCEF doc. no. 98 at 17, Becker dep. transcript.) The affidavit that plaintiff and Paul Pisano signed provided, in pertinent part:
We are the holders of 21.43 shares of capital stock of 109 East 12th Steet Corporation and the proprietary lease for the apartment Second Floor in the premise known as 109 East 12th Street, New York, New York. The stock certificate and proprietary lease has [sic] been inadvertently lost or misplaced and after due and diligent search, we have been unable to locate same.
...
We make this affidavit for the purpose of inducing 109 East 12th Street Corporation to issue a new proprietary lease and stock certificate in the names of Kathleen Pisano and Paul Pisano knowing that said corporation relies upon my statement aforesaid in issuing a new proprietary lease and stock certificate. (NYSCEF doc. no. 103, 104, affidavit of lost lease/certificate.)
In September 2019, before Becker could reissue the stock certificates, Paul Pisano died. (NYSCEF doc. no. 115 at ¶ 9, Henion affidavit.)
In January 2020, plaintiff commenced this action under Real Property Actions and Proceedings Law, Article 15 to determine the ownership of the 21.43 shares appurtenant to the co-op. She alleges that she and Paul Pisano owned the shares as joint tenants with a right of survivorship such that sole ownership passed to her upon his death. Thereafter, in May of 2020, Philip Pisano answered and asserted counterclaims, in which he claimed ownership over 50% of the outstanding stock with the rest running to the Estate. (NYSCEF doc. no. 25, Philip Pisano answer.) In 2022, the Estate intervened and asserted claims against Philip and Kathleen Pisano, alleging that it is the proper owner of the corporation's stock. (NYSCEF doc. no. 78 at ¶15, the Estate's complaint.) In this motion sequence, plaintiff moves for summary judgment as to her ownership claim, for dismissal of both Philip Pisano's and the Estate's claim on the shares, and for sanctions against Philip Pisano for allegedly creating a fraudulent stock certificate.
Several other pieces of evidence are critical to this motion. In support of summary judgment, Joyce Henion avers that she discovered plaintiff and Paul Pisano's original stock certificate in 2015 before it was lost. (Id. at ¶7.) In her affidavit, she attaches three photos of different portions of the alleged stock certificate. One is a photo of text, reading "Paul Pisano & Kathleen Pisano as Joint Tenants with Right of Survivorship," although the "Paul Pisano" typeface appears different from the rest. (NYSCEF doc. no. 118 at 1.) The second is of Mark Ricci's signature dated December 16, 1987, although both Santuoso and Schaffer's certificates were signed by Ricci but dated May 5, 1989. (Compare NYSCEF doc. no. 118 at 2 with NYSCEF doc. no. 106 at 1, 2, Santuoso and Schaffer original certificates.) The final image shows the certificate being for 15 shares. (Id. at 3.) The small, visible portion of the background in the three images appears to be identical to the two enduring certificates. Despite the photographs, Henion admitted in her deposition that she had initially requested Becker reissue the stock certificates with plaintiff and Paul Pisano listed as "joint tenants in common." (NYSCEF doc. no. 151 at 43, 94, and 99, Henion dep. transcript.)
Henion admits that she did not take a photo of the entire certificate.
In his affidavit in opposition, Philip Pisano, Paul Pisano's son from a different marriage, attaches the corporation's contract of sale for the property at 109 East 12th Street, dated March 31, 1986, and the corporation's mortgage, both of which list Paul Pisano and the other shareholders as purchasers but omit any mention of plaintiff. (NYSCEF doc. no. 154 at 10; NYSCEF doc. no. 155 at 8.)
Additionally, Philip Pisano submits what he contends is the 1987 stock certificate he found among his father's papers after he died. According to this undated certificate (NYSCEF doc. no. 119), signed by Paul Pisano as the corporation's secretary and Santuoso as its president, "Paul Pisano and/or Philip Pisano" own the 21.43 shares of stock. As plaintiff and Henion point out, this certificate bears striking stylistic differences to Santuoso's and Schaffer's. For example, compared to the originals, the certificate lacks the large eagle image with the corporation's name underneath, the rather intricate and ornate pattern along the border, the square in the upper right corner that lists the number of shares owned, and the circular pattern located lower-center. (Compare NYSCEF doc. no. 119 with NYSCEF doc. no. 118.) Further, the certificate contains rather obvious errors: Paul Pisano was never the corporation's secretary (NYSCEF doc. no. 97 at 146, Santuoso dep. transcript), and, under the shareholder agreement, in 1986-87, he initially only owned 15 shares. (See NYSCEF doc. no. 117 at 22-24.) To this latter point, Becker testified:
I had the original stock certificate from Mr. Santuoso. I'm basing [my opinion] that I was also given - I had sole control from approximately 2018 until 2019 of the stock book that the certificate I issued in 2019 or prepared is identical in form to the original stock certificate. This is a totally different form. That the fact is that there is no one else who was issuing stock certificates on behalf of the corporation from 2018 to the present time. That the 21.43 is a number that only came about in 2018 after my involvement with the corporation and would never have existed prior to my handling - my sole control of the document. So that's - on those bases, it's a certificate that bears no relationship to anything issued by the corporation to the best of my knowledge and especially with this information on it and the fact is, I did not issue it. I think it all points to - and the number has no bearing to any of the certificates issued by the corporation. (emphasis added). (NYSCEF doc. no. 98 at 52-53.)
Lastly, when asked whether the signature on this certificate was his, Santuoso responded, "I wouldn't feel right saying no and I wouldn't feel right saying yes." (NYSCEF doc no. 97 at 102.) Immediately thereafter, Santuoso testified that he did not remember signing the certificate. (Id.)
DISCUSSION
Summary judgment is appropriate where "the proponent makes a 'prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of material issues of fact' and the opponent fails to rebut that showing." (Brandy B. v Eden Cent. School Dist., 15 N.Y.3d 297, 302 [2010], quoting Alvarez v prospect Hosp., 68 N.Y.2d 320, 324; see also CPLR 3212 [b].) Once the proponent has made the prima facie showing through admissible evidence, the burden shifts to the opposing party to demonstrate, through admissible evidence, factual issues requiring a trial. (Zuckerman v City of New York, 49 N.Y.2d 557, 562 [1980].) Since summary judgment is an extreme remedy, the Court must draw all reasonable inferences in favor of the non-moving party. (Vega v Restani Constr. Corp., 18 N.Y.3d 499, 503 [2012].) Where there is doubt as to the existence of material facts or where different conclusions can reasonably be drawn from the evidence, summary judgment should be denied. (Santos v Temco Serv. Indus., 295 A.D.2d 218, 218-219 [1st Dept 2002].)
Plaintiff's Prima Facie Evidence of Ownership
Plaintiff's evidence of her ownership interest in the 21.43 shares of stock includes: (1) the original shareholder agreement that she signed, (2) the rider to the proprietary lease that she also signed that extended their right to live in the co-op through 2066, (3) the Affidavit of Lost Stock Certificate that Paul Pisano executed, in which he affirmed" We are the holders of 21.43 shares of capital stock," (4) the unanimous resolution approving the reallocation plan, which both she and Paul Pisano explicitly signed as shareholders, (5) photographs of a stock certificate that appears to have been issued from the same form as the other original stock certificates and which confirms her as a joint tenant, (6) records of her attendance at shareholder meetings (NYSCEF doc. no. 113, meeting minutes), which, per the corporate bylaws (NYSCEF doc. no. 112, bylaws), is obviously restricted to shareholders, and (7) testimony that she was at certain times either the corporation's secretary or treasurer, positions which, again per the bylaws, are restricted to shareholders.
The Estate's Opposition
In opposition, the Estate raises various evidentiary grounds regarding why these pieces of evidence may not be considered on summary judgment. The Court discusses each argument in turn.
First, the Estate argues that the doctrine of judicial estoppel prevents plaintiff from even asserting that she was a joint tenant with Paul Pisano as Henion admitted in her deposition testimony that she asked Becker to reissue the stock shares as tenants in common. In Becerril v City of NY Dept of Health & Mental Hygiene, the First Department explained that the doctrine prevents a party who assumed a certain position in a prior proceeding and secured a ruling in their favor from advancing a contrary position in another action simply because their interests have changed. (110 A.D.3d 517, 519, [1st Dept. 2013]; see also Flanders v E.W. Howell Co., 193 A.D.3d 822, 823 [2d Dept 2021] [recognizing that the twin purpose of the doctrine is to protect the integrity of the judicial process and to avoid the risk of inconsistent results in two proceedings].) The problem with applying the doctrine here is that Henion's admission-that she asked Becker to reissue stock certificates as tenants in common-cannot be considered as a position she advanced in a previous court proceeding (or even this one), which by definition demonstrates she never "secured a ruling" in her favor such that there would be a risk of inconsistent determinations.
Even if the Court accepted the Estate's argument, it would only limit the type of ownership interest to a tenant in common. Such an argument does not preclude plaintiff from asserting any ownership.
Furthermore, even under the slightly different formulation of the doctrine-where a party is precluded from adopting a position directly contrary or inconsistent with a position previously taken in the same proceeding (Nestor v Britt, 270 A.D.2d 192, 193 [1st Dept 2000])-plaintiff is not precluded from asserting she was a joint tenant. Again, at no point has either she or Henion taken the position that plaintiff has a tenant-in-common interest in the apartment in this action. (See New Hampshire Ins. Co. v MF Global Fin. USA Inc., 204 A.D.3d 141, 155 [1st Dept 2022] [finding plaintiffs judicially estopped from arguing worker was "employee" where they asserted in their complaint and argued in previous summary judgment motions that the worker should be categorized under the contract as "any other person"].)
The Estate next contends that CPLR 4519 (New York's Dead Man Statute) precludes plaintiff and Henion, as interested parties in this matter, from introducing statements plaintiff made "about her intent and her husband's intent at the time they purchased the Unit back in 1986, about what was said about Kathleen signing the agreement, about why her name was not listed on the agreement" since Paul Pisano is no longer alive to refute the factual allegations. (NYSCEF doc. no. 123 at 24, memo of law in opp.) More precisely, the Estate argues that the statute precludes the Court from considering plaintiff's assertion, by way of Henion, that "her name was inadvertently left out of the agreement by counsel, who directed her to write her name and sign it, which she did that day." (See Kuznitz v Funk, 187 A.D.3d 1006, 1008 [2d Dept 2020] [explaining that while evidence subject to the Dead Man's Statute may be considered in opposition, such evidence should not be used to support a motion for summary judgment].)
CPLR 4519 provides:
"Upon the trial of an action... a party or person interested in the event... shall not be examined as a witness in his own behalf or interest... against the executor, administrator or survivor of a deceased person... concerning a personal transaction or communication between the witness and the deceased person." (CPLR 4519.)
The Court finds that plaintiff and Henion's averment is subject to the Dead Man's statute. It clearly concerns a "personal transaction between her and the deceased person" since she is, in essence, alleging in the statement that she is a contractual party between and among the named parties specifically referenced in the shareholder agreement, including Paul Pisano. It is nonetheless unclear what effect this should have since the Court does not rely upon the statement. CPLR 4519 does not bar the introduction of documentary evidence against a deceased's estate so long as the evidence is authenticated by a source other than the interested witness's testimony (see Wright v Morning State Ambulette Servs., Inc. 170 A.D.3d 1249, 1251-1252 [2d Dept 2019]; Stathis v Estate of Donald Karas, 193 A.D.3d 897, 900 [2d Dept 2021]). And since Santuoso authenticated the shareholder agreement (NYSCEF doc. no. 97 at 17) and the Affidavits of Lost Stock Certificates are certified in the manner prescribed by CPLR 4538 and Real Property Law § 309-a, the Court may still consider both pieces of evidence, including plaintiff's signature in the agreement, on this summary judgment motion.
Though other individuals were parties to the agreement, it appears none know why her name was omitted if she was intended to be a named party. Nor has the corporation's counsel testified concerning such matters.
Plaintiff argues that she did not testify about a "personal transaction" between her and Paul Pisano. The point is immaterial: the Estate correctly argues that Henion's allegation-that her mother informed her of the corporation counsel's error-is hearsay and cannot support a motion for summary judgment.
In an attempt to raise issues of fact as to the interpretation of those affidavits, the Estate argues that, since Paul Pisano can no longer give testimony as to his intent when entering the shareholder agreement, "the complete lack of context as to these affidavits... deprives the Court of any foundation upon which it may give credibility to the Lost Stock Certificates." (NYSCEF doc. no. 123 at 25.) The Court finds otherwise: the affidavits' plain meaning is entirely straightforward and express plaintiff's ownership interest in the 21.43 stock shares.
As to the three photographs Henion took of the alleged original certificate, the Estate contends they are inadmissible under the rule against hearsay. According to the Estate, for them to be admissible under the business records exception to hearsay, they must have been authenticated by someone who can testify that thephotographs were maintained within the regular course of business and pursuant to regular business procedures. (NYSCEF doc. no. 123 at 25, citing People v Rosa, 156 A.D.2d 733, 734 [2d Dept 1989]; see also People v Gentle, 245 A.D.2d 463, 464 [2d Dept 1997].) The Court agrees that the photographs are not in admissible form but for slightly different reasons.
In Estate of Anna K. Essig v 5670 58 St. Holdings Corp., the Second Department held that the Estate of Anna Essig had demonstrated ownership of certain shares of capital stock by submitting two stock certificates. (50 A.D.3d 948, 949 [2d Dept 2008].) Critically, the stock certificates were admissible because they were more than 30 years old and free from any indication of fraud or invalidity, meaning the certificates themselves were considered self-authenticating pursuant to the ancient documents rule. (Id.) Put differently, for the certificates to be admissible, the only problem was whether they could be authenticated-not whether they contained hearsay. (Id.) Similarly, here, the problem is not one of hearsay but authenticity: none of the parties have come forward with the 1987 certificate, which would itself need to be authenticated to be in admissible form, and the photographs contain only fragments of the original. The issue of authenticity is compounded when those fragments also contain discrepancies, even if minor, with those that are authenticated as original certificates, i.e., Santuoso's and Schaffer's certificates. That the stock certificates in Estate of Anna K Essig were self-authenticating in a way that neither plaintiff's photographs nor Philip Pisano's certificate are implicates the applicability of the best evidence rule.
Though the First Department did not expound on this issue, the stock certificates were likely admissible either as business records or because they retain independent legal significance such that they do not need to meet any hearsay exception. (See 830 Eight Ave. LLC v Global at 8th LLC, 198 A.D.3d 404, 404 [1st Dept 2021].)
Protecting against fraud, perjury, and inaccurate or faulty memory (Schozer v William Penn Life Ins. Co., 84 N.Y.2d 639, 644 [1994]), this rule requires the production of an original writing where its contents are in dispute and are sought to be proven. (Estate of Donald Karas, 193 A.D.3d 897 at 899.) Under an exception, secondary evidence may be used upon a threshold factual finding that its proponent has sufficiently explained the unavailability of the primary evidence and has not procured its loss in bad faith. Even assuming plaintiff satisfies these prerequisites, to be admissible under the exception, the proponent of secondary evidence must establish, among other things, that the original writing "has been in existence [and] that it is genuine." (See Glatter v Borten, 233 A.D.2d 166, 168 [1st Dept 1996].) Here, the fragments captured in Henion's photos do not sufficiently establish that she photographed the authentic, genuine 1987 certificate. Since the photographs are reproductions of a document that must, but cannot, be authenticated, plaintiff is not entitled to use the exception to the best evidence rule. Plaintiff's argument that "a photograph is generally admissible as a depiction of a fact in issue upon proof of its accuracy by the photographer" misses the point. The issue is not whether images themselves are authentic but whether the stock certificate, as photographed, was.
Lastly, the Estate argues that the proprietary lease, the Affidavits of Lost Stock Certificates, the corporation's unanimous resolution dated 8.29.2018, and the records of plaintiff's attendance at shareholder meetings all contain hearsay and do not fit under the business records exception. This argument has no merit. The shareholder agreement and proprietary lease were both authenticated by Santuoso and have independent legal significance, such that they do not need to meet the business records exception to hearsay. (See 830 Eighth Ave. LLC, 198 A.D.3d at 405). Likewise, the Affidavits, both of which were authenticated by Becker. Moreover, the Estate's argument-that the corporation's records were not reliably kept, and no one can lay a foundation for these records-is, at best, applicable before corporation retained Becker to reallocate the stock share, but the Affidavits of Lost Stock Certificates were executed after he became counsel. Furthermore, the Court's reliance on plaintiff's attendance at shareholder meetings and her positions as the corporation's treasurer or secretary is proper, as Santuoso explicitly testifies to these facts. (NYSCEF doc. no. 97 at 34.)
Philip Pisano's Opposition
In opposition to summary judgment, Philip Pisano submitted a fact affidavit in which he avers that Paul Pisano was the sole owner of the shares appurtenant to the apartment. Though the Court has described the relevant allegations contained in the affidavit elsewhere, it will provide a brief recap. Attached to his affidavit are the corporation's purchase agreement for the property at 109 East 12th Street and mortgage agreement, neither of which reference plaintiff as a purchaser. He notes that Henion produced a photograph of a purported stock certificate in which the name "Paul Pisano" is printed in a different typeface from "Kathleen Pisano as joint tenants with right of survivorship," suggesting that she produced a fraudulent certificate. This is confirmed, he alleges, by the fact that Henion originally asked Becker to reissue stock certificates as tenants in common. Lastly, he denies having created a fraudulent certificate. Philip Pisano did not submit a memorandum of law in support of his position and, as such, does not advance arguments as to why the Court should not dismiss his affirmative defenses or grant plaintiff's request for sanctions.
Though much of Philip Pisano's affidavit is a recitation of facts not personally known to him, the affidavit does attach evidentiary proof in admissible form, and as such, contrary to plaintiff's suggestion, the Court may consider it in opposition.
The Court's Findings
A review of the evidence plaintiff put forth reveals she has made a prima facie showing that she has an ownership interest in the shares of stock. Though the Estate correctly argues that the Court cannot consider certain evidence, the conclusion is still warranted. Plaintiff bears her burden through admissible evidence in one form or another: she signed the corporation shareholder agreement, irrespective of why she was not included in it; Paul Pisano acknowledged her ownership interest both in his executed Affidavit of Lost Stock Certificate ("We are the holders of 21.43 shares of capital stock") and through his conduct as he and the corporation treated her as a shareholder for nearly 30 years. To this latter point, she participated in shareholder meetings, including the one at which she and Paul Pisano signed the unanimous resolution to redistribute the certificates, and at various points, she served as treasurer and secretary.
It is equally clear that neither the Estate nor Philip Pisano has rebutted plaintiff's showing. The Estate's entire opposition is based on excluding the evidence upon which she relies, offering no evidence that either Paul Pisano or the Corporation refused to acknowledge plaintiff as a shareholder. Further, though Philip Pisano's affidavit attaches the corporation's purchase agreement, mortgage, and a purported original stock certificate, none create an issue of fact. The purchase agreement and mortgage pre-date Paul Pisano's Affidavit and the subsequent conduct confirming her interest as a shareholder, and the purported stock certificate bears almost no evidentiary value. As Becker testified, the certificate indicates that "Paul Pisano and/or Philip Pisano" own 21.43 shares in the corporation, but when the shares were issued after it purchased the property, Paul Pisano only owned 15 shares; the 21.43 figure only arose after the corporation retained Becker as counsel to redistribute certificates in or around 2018. Becker then explained that he had exclusive access to the corporation's records, including the certificate book from which the originals had been produced, and that the certificate that Philip Pisano now represents as authentic was from a different certificate book. Though plaintiff's moving papers raised these issues, Philip Pisano does not address these deficiencies in any meaningful respect in his affidavit in opposition. Since Philip Pisano's only evidence of his interest in the share appurtenant to the apartment is this stock certificate, plaintiff is entitled to summary judgment dismissing his second counterclaim for ownership of the shares.
Nonetheless, since Henion's photographs were the only evidentiary support for plaintiff's assertion that she was a joint tenant, and since plaintiff cannot rely upon them on this motion for summary judgment, there are issues of fact as to whether she owns the shares as a tenant in common or joint tenant. Accordingly, she is not entitled to summary judgment dismissing the Estate's counterclaim as owner of the shares.
Plaintiff's Motions for Sanctions
Plaintiff asserts that Philip Pisano should be sanctioned pursuant to 22 NYCRR §130-1.1. This statute gives the Court discretion to award "costs, in the form of reimbursement for actual expenses reasonably incurred and reasonable attorney's fees, resulting from frivolous conduct." (New York Codes, Rules, and Regulations § 130-1.1 [a].) The statute defines conduct as frivolous where: (1) it is completely without merit in law and cannot be supported by a reasonable argument for an extension, modification, or reversal of existing law; (2) it is undertaken primarily to delay or prolong the resolution of the litigation, or to harass or maliciously injure another; or (3) it asserts material factual statements that are false. (§ 130-1.1 [c] [1]-[3].) Plaintiff contends that Philip Pisano frivolously continued to press his claim for declaratory relief based upon the fraudulent certificate, even after it became apparent that there was no reason to believe it was authentic. Since Philip Pisano does not address plaintiff's motion for sanctions in his affidavit or offer a legal argument why sanctions should not be granted, and since the Court finds that the certificate offered by Philip Pisano bears no relationship to the authentic, original certificates in evidence, the Court finds an evidentiary hearing appropriate to determine the amount in costs and expenses, including legal fees, plaintiff incurred in defending Philip Pisano's claim for relief.
Accordingly, for the foregoing reasons, it is hereby
ORDERED that plaintiff Kathleen Pisano's motion for summary judgment pursuant to CPLR 3212 on her declaratory judgment action is denied; and it is further
ORDERED that plaintiff's motion for summary judgment pursuant to CPLR 3212 dismissing Philip Pisano's complaint with crossclaims is granted; and it is further
ORDERED that plaintiff's motion for summary judgment dismissing the Estate of Paul Pisano's crossclaim for ownership of the 21.43 shares appurtenant to 109 East 12th Street Apartment Unit 2 is denied; and it is further
ORDERED that plaintiff's motion for sanctions against Philip Pisano is granted; and it is further
ORDERED that this matter is hereby referred to the Special Referee Clerk (Room 119, 646-386-3028 or spref@nycourts.gov) for placement at the earliest possible date upon the calendar of the Special Referees Part (Part SRP), which, in accordance with the Rules of that Part (which are posted on the website of this court at www.nycourts.gov/supctmanh at the "References" link), shall assign this matter at the initial appearance to an available JHO/Special Referee to determine the appropriate award of reasonable attorneys' fees and cost incurred in connection with Philip Pisano's frivolous conduct as defined by 22 NYCRR § 130-1.1; and it is further
ORDERED that counsel for plaintiff shall serve a copy of this order along with notice of entry, on all parties within ten (10) days.
This constitutes the Decision and Order of the Court.