Opinion
Index EF2019-67594
03-15-2022
T.C. Murphy Lumber Co., Inc., Plaintiff, v. Top Ridge, LLC and "John Doe No.1" through "John Doe #12" the last twelve names being fictitious and unknown to plaintiff, the persons or parties intended being the tenants, occupants, persons or corporations, if any, having or claiming an interest in or lien upon the premises described in the complaint, Defendant. Top Ridge, LLC, Third-Party Plaintiff, v. George R. Van Voorhis, III and T.C. Murphy Lumber Co., Inc., Third-Party Defendant.
Hodgson Russ LLP, Albany (Sarah N. Miller and Christian J. Soller of counsel) Law Office of Newell & Klingebiel, Glens Falls (David C. Klingebiel of counsel), for defendant/third-party plaintiff.
Unpublished Opinion
Hodgson Russ LLP, Albany (Sarah N. Miller and Christian J. Soller of counsel)
Law Office of Newell & Klingebiel, Glens Falls (David C. Klingebiel of counsel), for defendant/third-party plaintiff.
ROBERT J. MULLER, J.S.C.
Plaintiff/third-party defendant T.C. Murphy Lumber, Co., Inc. (hereinafter T.C. Murphy)-with a principal place of business at 3911 New York State Route 8 in the hamlet of Wevertown, Warren County-sells products to contractors and homeowners in the Adirondack region, including lumber, building materials, tools, and hardware. T.C. Murphy also offers equipment rentals, as well as plumbing, electric, masonry and other services to its clients. Third-party defendant George Van Voorhis, III is the president and sole shareholder of T.C. Murphy.
Defendant/third-party plaintiff Top Ridge, LLC (hereinafter Top Ridge)-also with a principal place of business at 3911 New York State Route 8 in Wevertown-owns certain real property in the Town of Johnsburg, Warren County. Eric Piper and Van Voorhis formed the company in 2004, with each having a 50% interest. In October 2007, Top Ridge obtained two loans from Manufacturers and Traders Trust Company (hereinafter M & T Bank)-one in the amount of $2,500,000.00 and the other in the amount of $1,400,000.00-for the purpose of building a residential development on the property. The loans were evidenced by promissory notes and secured by mortgages on the property, as well as by guaranties executed by Piper, Van Voorhis and T.C. Murphy.
Top Ridge entered into a loan modification agreement with M & T Bank in October 2010, at which time it executed restated and amended notes in the amounts of $919,333.00 and $695,000.00, respectively. Top Ridge then signed a forbearance agreement with M & T Bank in November 2012. Piper, Van Voorhis and T.C. Murphy countersigned both the loan modification and forbearance agreements, with each reaffirming their respective guaranties. Top Ridge subsequently failed to make certain payments and, in January 2015, M & T Bank commenced an action against Top Ridge, T.C. Murphy, Van Voorhis and Piper to collect the indebtedness due under the loan documents.
On September 23, 2015, Van Voorhis loaned $600,000.00 to T.C. Murphy. This loan was evidenced by a promissory note-signed by Van Voorhis as president of T.C. Murphy-which stated, in pertinent part:
"This is a demand note and all amounts due hereunder shall become immediately due and payable upon demand by [Van Voorhis.] Notwithstanding the foregoing, the amount of $210,000.00 shall become due and payable upon the sale of each Unit in the Top Ridge Development...."
To the extent that Piper-the other member of Top Ridge-did not countersign this promissory note or otherwise agree to its terms, the requirement that Top Ridge pay $210,000.00 upon the sale of each unit is likely unenforceable. Indeed, § 4.3 of the operating agreement provides that "[u]nless authorized to do so..., no person shall have any power or authority to bind the [c]ompany." This is likely irrelevant, however, as Piper agreed to such payments in settlement of a later action, as set forth hereinbelow.
T.C. Murphy then executed a loan sale agreement on that same date whereby it purchased the loan documents executed by Top Ridge-in conjunction with Piper, Van Voorhis and itself-from M & T Bank for $675,000.00. The mortgages were assigned to T.C. Murphy by assignments dated March 9, 2015 and recorded September 29, 2015. A stipulation of discontinuance was then filed on October 6, 2015 in the M & T Bank action.
It is unclear why these assignments was executed on March 9, 2015, six months prior to execution of the loan sale agreement.
On October 14, 2015, T.C. Murphy commenced a foreclosure action against Top Ridge. The action was subsequently settled with T.C. Murphy agreeing to "complete and/or fund the completion of Unit No's. [sic] 15, 16 and 17 in the Top Ridge Subdivision subject to reimbursement... of the costs incurred," and Top Ridge agreeing to pay, inter alia, $210,000.00 to T.C. Murphy upon the sale of each unit in order "to satisfy the debt [T.C. Murphy] incurred to payoff the debt owed by Top Ridge... to M & T Bank." A stipulation of discontinuance was filed in that action on January 4, 2016.
T.C. Murphy commenced the instant foreclosure action on December 23, 2019. T.C. Murphy alleges that, as of December 23, 2019, Top Ridges owes (1) $379,991.47 in principal and $65,681.27 in interest on the first note; and (2) $99,362.89 in principal and $17,174.81 in interest on the second note. Issue has now been joined with Top Ridge serving a "verified answer with affirmative defenses and counterclaims and third-party complaint" (hereinafter the answer/third-party complaint) naming T.C. Murphy and Van Voorhis as third-party defendants. The answer/third-party complaint sets forth nine "affirmative defense[s] and counterclaim[s] and third party complaint[s]":
(1) T.C. Murphy and Van Voorhis acted in bad faith;
(2) T.C. Murphy and Van Voorhis acted in collusion with M & T Bank to defraud Top Ridge;
(3) T.C. Murphy and Van Voorhis defrauded Top Ridge;
(4) Van Voorhis breached his fiduciary duty to Top Ridge;
(5) the conduct of Van Voorhis and M & T Bank was collusive in nature and defrauded Top Ridge;
(6) Piper's signature was forged on the October 2010 loan modification agreement and corresponding restated and amended notes;
(7) Van Voorhis converted certain property belonging to Top Ridge, namely a Skid Steer, Loader Bucket, and two Steel Containers;
(8) Van Voorhis prevented Piper from inspecting the books and records of Top Ridge; and
(9) Van Voorhis breached his duty to deal fairly with Piper and act in the best interest of Top Ridge.
Presently before the Court is T.C. Murphy's motion for an Order (1) granting summary judgment for the relief requested in the complaint; (2) dismissing Top Ridge's affirmative defenses and striking its answer; (3) dismissing Top Ridge's counterclaims or, alternatively, severing the counterclaims; (4) appointing a referee to compute the amount due and owing; and (5) amending the caption to remove all "John Doe" defendants. Each aspect of the motion will be addressed ad seriatim.
This is the second motion filed by T.C. Murphy seeking this relief. The first motion was filed on May 12, 2020. At that time the case was assigned to the Hon. Paulette M. Kershko, A.J.S.C., and her Chambers inexplicably sent correspondence to counsel for T.C. Murphy on November 17, 2020 advising that the motion had been marked "off" - notwithstanding that it had never been entertained. Counsel for T.C. Murphy subsequently inquired how to proceed and Judge Kershko directed that the motion be re-filed, which it was on May 4, 2021. She then recused in September 2021 because counsel for one of the parties represented her in a real estate transaction. Incidentally, the same law firms have been involved in this action since it was commenced. The case was re-assigned to this Court in early October 2021 and, after ensuring compliance with the COVID-19 Protect Our Small Business Act of 2021, as extended by Chapter 147 of the Laws of 2021, argument on the motion was scheduled.
Turning first to that aspect of the motion which seeks summary judgment, in a foreclosure action "[a] plaintiff can establish entitlement to summary judgment by producing evidence of the mortgage, the unpaid note and the [borrower's] default" (Wells Fargo Bank, N.A. v Walker, 141 A.D.3d 986, 987 [2016]; see Deutsche Bank Natl. Trust Co. v Monica, 131 A.D.3d 737, 738 [2015]; Wells Fargo Bank, NA v Ostiguy, 127 A.D.3d 1375, 1376 [2015]).
Here, T.C. Murphy has provided copies of all the loan documents, as well as proof of Top Ridge's default. The Court thus finds that it has established its prima facie entitlement to judgment. Indeed, Top Ridge "agrees that [T.C. Murphy] has made a prima facie showing of the elements of [a] foreclosure action." That being said, Top Ridge contends that it "has stated bona fide defenses to the foreclosure claim, namely bad faith, including breach of fiduciary duty and breach of the implied covenant of good faith and fair dealing, and there are genuine issues of material fact with respect to these defenses and claims."
In support of this contention, Piper has submitted an affidavit stating as follows:
"At no time prior to entering into the Loan Sale Agreement with M & T Bank did Van Voorhis, a 50% member of Top Ridge, make any effort to cure the default with M & T Bank.
"At no time prior to entering into the Loan Sale Agreement with M & T Bank did Van Voorhis, [as] guarantor of Top Ridge's obligations to M & T Bank, or as the sole shareholder of guarantor T.C. Murphy, make any effort to satisfy the obligations of Top Ridge to M & T Bank....
"On or about November 26, 2014, when Top Ridge was in default of the M & T Bank notes, mortgages and forbearance agreement, but prior to the foreclosure action, I negotiated a second forbearance agreement... with M & T Bank whereby M & T would agree to forbear acting on the defaults under certain terms and conditions.
"Said terms and conditions included M & T Bank making an additional $300,000.00 loan to Top Ridge for the purpose of creating a model condominium unit to show prospective purchasers to attempt to increase sales, and to finish two additional condominium units which units would be sold and the net proceeds of which would be paid over to M & T [B]ank to be applied against Top Ridge's indebtedness.
"When I presented the forbearance agreement to Van Voorhis, he refused to sign without explanation."
"It is well established that a mortgagor is bound by the terms of the mortgage and cannot be relieved from a default in the absence of waiver by the mortgagee, estoppel, bad faith, fraud, or oppressive or unconscionable conduct by the mortgagee" (River Bank Am. v Daniel Equities Corp., 213 A.D.2d 929, 930 [1995]; see Nassau Trust Co. v Montrose Concrete Prods. Corp., 56 N.Y.2d 175, 183 [1982]). "It is also well established that implicit in all contracts is an implied covenant of fair dealing and good faith" (River Bank Am. v Daniel Equities Corp., 213 A.D.2d at 930; see Van Valkenburgh, Nooger & Neville v Hayden Publ. Co., 30 N.Y.2d 34, 45 [1972], cert. denied 409 U.S. 875 [1972]).
Typically in a foreclosure the Court would look first to the language of the loan documents. This, however, is not a typical foreclosure. This is a dispute between the members of Top Ridge that has culminated in a foreclosure. With that in mind, the Court begins its analysis with the language of the operating agreement for Top Ridge. This agreement-signed by both Piper and Van Voorhis-provides, in pertinent part:
"4.4 Liability for Certain Acts. The Members shall perform their duties in good faith, in a manner he or she reasonably believes to be in the best interests of the Company and with such care as an ordinarily prudent person in a similar position would use under similar circumstances. A Member who so performs such duties shall not have any liability by reason [of] being or having been a Member. The Member shall not be liable to the Company or any Member for any loss or damage sustained by the Company or any Member unless the loss or damage shall have been the result of gross negligence or willful misconduct of the Member. Without limiting the generality of the preceding sentence, a Member does not in any way guaranty the return of any capital contribution to a Member or a profit for the Members from the operations of the Company.
"4.5 No Exclusive Duty to Company. The Members shall not be required to manage the Company as their sole and exclusive function and they may have other business interests and may engage in other activities in addition to those relating to the Company. Neither the Company nor any Member shall have any right pursuant to this Agreement to share or participate in such other business interests or activities or to the income or proceeds derived therefrom. The Member shall incur no liability to the Company or any Member as a result of engaging in any other business interests or activities."
Turning now to the loan documents, both the 2007 guaranty signed by Van Voorhis individually and that signed by him as president and sole shareholder of T.C. Murphy provide that the "[g]uarantor, intending to be legally bound, ... unconditionally guarantees the full and prompt payment and performance of any and all of [the b]orrower's obligations... to the [b]ank when due." They further provide that the "[g]uarantor shall not transfer, reinvest or otherwise dispose of his or her assets in a manner or to an extent that would or might impair [g]uarantor's ability to perform his or her obligations under this [g]uaranty." As noted above, these 2007 guaranties were reaffirmed in both the loan modification and the forbearance agreements.
Under the circumstances, the Court finds that Top Ridge has succeeded in raising triable issues of fact as to whether Van Voorhis and T.C. Murphy acted in bad faith and breached the implied covenant of good faith and fair dealing, as well as to whether Van Voorhis breached his fiduciary duty to Top Ridge.
The express terms of the operating agreement for Top Ridge provide that the members-namely, Piper and Van Voorhis-must perform their duties in good faith and in a manner they reasonably believe to be in the best interest of the company. Here, Van Voorhis readily admits that his conduct was not in the best interest of Top Ridge but, rather, in the best interest of T.C. Murphy. Specifically, Van Voorhis states as follows:
"Since 2014 Eric Piper and I have been at odds over the operation of Top Ridge such that without the intervention of our respective counsel, we cannot agree on anything.
"The disagreements between Eric Piper and I stem from the fact that... to keep the Top Ridge Development moving forward an infusion of capital was required and Eric Piper was unable to make a capital contribution.
"Additionally, Top Ridge owed T.C. Murphy over $363,000.00 and Eric Piper owed T.C. Murphy over $87,000.00. This indebtedness was in addition to the indebtedness at issue in this action.
"On account of Piper's inability to make further capital contributions and the substantial debt owed by Top Ridge to T.C. Murphy, I decided not to invest any further funds in Top Ridge....
"Based on the above, I, as a member of Top Ridge and a guarantor of the M & T Bank loans, did not cure the default with M & T Bank, satisfy the obligations of Top Ridge to M & T Bank, or agree to further funding from M & T Bank....
"With T.C. Murphy being sued by M & T Bank for $890,641.44 together with per diem interest and reasonable attorney's fees and expenses of collection, Top Ridge owing T.C. Murphy more than $363,000.00, and the members of Top Ridge being deadlocked, the only appropriate response for T.C. Murphy to the M & T [Bank a]ction was for T.C. Murphy to purchase the loan from M & T Bank.
"And that is exactly what T.C. Murphy did...."
T.C. Murphy's purchase of the loans from M & T Bank and subsequent foreclosure on Top Ridge was not "the only appropriate response." Indeed, if Van Voorhis was able to loan $600,000.00 to T.C. Murphy to purchase the loans from M & T Bank, he presumably could have settled the M & T Bank action by paying $600,000.00 in full satisfaction of the loans. He could then have commenced a dissolution action to address his remaining concerns. Such response would have conformed with his duties under both the operating agreement and the guaranties. Instead, he chose to protect T.C. Murphy at the expense of Top Ridge, which is sufficient to at least raise a question of fact as to whether he acted in bad faith. Indeed, § 4.4 of the operating agreement expressly provides that the members of Top Ridge are in no way guaranteed a profit or even a return on their capital contributions.
There likewise exist questions of fact as to whether Van Voorhis and T.C. Murphy acted in contravention of their respective guaranties, which prohibited them from transferring or otherwise disposing of their assets in a manner that might impair their ability to perform under the guaranties.
Before proceeding to the next aspect of the motion, several arguments made by T.C. Murphy in support of summary judgment warrant discussion. At the outset, T.C. Murphy contends that Van Voorhis was permitted to undertake his course of action under § 4.5 of the operating agreement, which authorizes him to pursue other business ventures simultaneous with Top Ridge. This contention, however, is without merit. § 4.5 of the operating agreement does permit the members of Top Ridge to pursue outside business ventures - but nowhere does it say that in doing so they may disregard the good faith requirements of § 4.4 of the agreement. Indeed, the rules of contractual interpretation require these two provisions to be read in harmony (see Beal Sav. Bank v Sommer, 8 N.Y.3d 318, 324-325 [2007]; Mid-State Indus., Ltd. v State of New York, 117 A.D.3d 1255, 1257 [2014]).
T.C. Murphy next contends that it is separate and distinct from Van Voorhis, and that its purchase of the loan documents from M & T Bank is unrelated to Van Voorhis and his obligations to Top Ridge. In opposition, Top Ridge contends that "T.C. Murphy is the alter ego of Van Voorhis" and, as such, "Van Voorhis cannot circumvent his fiduciary duty and covenant of good faith and fair dealing to Top Ridge by the use of T.C. Murphy and his efforts to do so constitute further bad faith toward Top Ridge."
"An alter ego will be established 'when either (1) there is complete domination of a corporation by an individual... with respect to the transaction being attacked that resulted in a fraud or wrong against the complaining party, or (2) when a corporation has been so dominated by an individual... that it primarily transacts the dominator's business instead of its own" (Piller v Princeton Realty Assoc. LLC, 173 A.D.3d 1298, 1300 [2019], quoting Belair Care Ctr., Inc. v Cool Insuring Agency, Inc., 161 A.D.3d 1263, 1270, 77 N.Y.S.3d 171 [2018] [internal quotation marks and citation omitted]).
Here, T.C. Murphy states that "[o]n September 23, 2015, while the M & T Bank [a]ction was pending, the Board of Directors and Shareholders of T.C. Murphy held a special meeting at which Van Voorhis was present in his capacity as its President and sole shareholder[, and b]y motions duly made, T.C. Murphy approved two resolutions" with respect to the purchase of the loan documents. T.C. Murphy then attaches the minutes from this meeting, which provide as follows:
"The President... called the meeting to order and stated the object of the meeting.
"The Secretary called the roll and... presented and read to the meeting a Waiver of Notice of Meeting, subscribed by all of the Shareholders and the Directors of the Corporation, ....
"The President then stated that a quorum was present and the meeting was ready to transact business."
Notwithstanding this elaborate language, a careful reading of the minutes reveals that only one person is present-"George R. Van Voorhis III." He is the President who calls the meeting to order. He is the Secretary who calls the roll. He is the sole Shareholder and Director, and the Waiver of Notice of Meeting bares only his signature. He is the quorum. Indeed, he has signed every single loan document on behalf of T.C. Murphy. Under the circumstances, there is certainly a question of fact as to whether Van Voorhis exerted complete domination over T.C. Murphy such that it can be deemed his alter ego-at least with respect to the transactions under consideration here.
T.C. Murphy next contends that Christopher's Partner, LLC v Christopher's of Colonie, LLC (69 A.D.3d 1275 [2010]) (hereinafter Christopher's of Colonie) stands for the proposition that-even if T.C. Murphy is deemed the alter ego of Van Voorhis-Van Voorhis' status as a secured creditor is not inconsistent with any fiduciary obligation he might have owed Top Ridge as a member of the company. The Court, however, is not persuaded.
In Christopher's of Colonie, defendant limited liability company-which operated a men's clothing store-was owned by two members, plaintiff and another individual. In October 2007, plaintiff loaned $125,000.00 to defendant and, in return, received a promissory note. The terms of the note provided, inter alia, "that plaintiff had a floating interest in defendant's inventory, accounts receivables, cash, chattel paper, equipment and general intangibles. Asserting that defendant failed to make payments required by the note, plaintiff commenced [an] action in July 2008 seeking the amount due on the note and a judgment awarding it possession of defendant's assets" (id. at 1275). Plaintiff's motion to seize these assets was subsequently granted and an appeal ensued, with the Court stating as follows:
"[D]efendant argues that plaintiff's application for an order to seize its assets should have been denied because such action is at odds with a provision in the company's operating agreement that bars any member from performing any act that would make it impossible [for defendant] to carry on [its] ordinary business. However, this agreement does allow members of the company to loan it money and defendant, in accepting the loan, agreed to a provision that allowed plaintiff to unilaterally accelerate all that was due and owing on the promissory note upon the occurrence of a default. Moreover, any member of a limited liability company who becomes a creditor has the same rights and obligations with respect thereto as a person who is not a member. Given plaintiff's status as a secured creditor, it had the legal right under its agreement to seize defendant's assets to protect its financial interest and such action was not inconsistent with any fiduciary obligation it might have owed defendant as a member of the company (Christopher's Partner, LLC v Christopher's of Colonie, LLC, 69 A.D.3d at 1276-1277; see Limited Liability Company Law § 611 [internal quotation marks and citations omitted]).
That being said, contrary to T.C. Murphy's contentions Christopher's of Colonie stands for the proposition that, where defendant limited liability company accepts a loan from a member-and executes a promissory note relative thereto-then a subsequent action by that member to enforce the note is not inconsistent with his fiduciary obligations to the company. Here, however, Top Ridge never executed a promissory note to either T.C. Murphy or Van Voorhis. Rather, Top Ridge executed promissory notes to M & T Bank and T.C. Murphy then purchased these notes, unbeknownst to Top Ridge. The Court thus finds Christopher's of Colonie to be inapposite.
The Court does not discount the possibility that Top Ridge ratified the purchase of the loan documents from M & T Bank in settling the first foreclosure action brought by T.C. Murphy. That being said, the terms of this settlement agreement are not presently before the Court.
In its opposition Top Ridge relies heavily on the case of 192 Sheridan Corp. v O'Brien (252 A.D.2d 934 [1998]) (hereinafter 192 Sheridan). There, five individuals-Michael O'Brien, Daniel O'Brien, Bruce MacAffer, Bruce Backer and Ronald Backer-formed a partnership for the purpose of owning and managing real estate. In December 1988, the partners executed a note in the amount of $120,000.00 to Home and City Savings Bank, which note was secured by a mortgage on the partnership property. The Backers then commenced an action against the O'Briens and MacAffer in January 1995, alleging that the partnership had experienced an operating loss with respect to its property and defendants had failed to contribute their pro rata share of the loss. In February 1996, the note and mortgage was assigned to 192 Sheridan Corp.-a shell corporation whose sole officer was Bruce Backer's wife-and 192 Sheridan Corp. commenced a foreclosure action against the partnership in March 1996.
192 Sheridan Corp. moved for summary judgment in the foreclosure action, and the O'Briens and MacAffer opposed the motion and cross-moved for consolidation with the partnership action. Summary judgment was denied and this was affirmed on appeal, with the Court finding that "[w]hile plaintiff accurately contends that it presented a prima facie case of entitlement to summary judgment by establishing existence of the unpaid note and mortgage and default thereon, defendants clearly established the existence of triable issues of fact to vitiate plaintiff's entitlement to the relief sought" (id. at 935-936). In this regard, the Court quoted the same rule quoted above that "bad faith, fraud, or oppressive or unconscionable conduct by the mortgagee" will operate to relieve a default (id. at 936, quoting River Bank Am. v Daniel Equities Corp., 213 A.D.2d at 930). Top Ridge contends that the instant case is very much like that before the Court in 192 Sheridan and summary judgment must therefore be denied.
T.C. Murphy, on the other hand, contends that 192 Sheridan is inapposite because it involved a shell corporation "serving only to facilitate the Backers' plan to oust defendants from the partnership and acquire their interest in its real property by acquiring and foreclosing upon the mortgage whose default the Backers precipitated for that purpose" (192 Sheridan Corp. v O'Brien, 252 A.D.2d at 936). Indeed, T.C. Murphy is not a shell corporation-there is no dispute in this regard. There is, however, a dispute with respect to whether Van Voorhis and T.C. Murphy acted in bad faith, thus relieving Top Ridge's default under the loan documents. The Court therefore finds that-while the facts in 192 Sheridan are somewhat distinguishable from the facts in this case-it is nonetheless instructive.
Finally, T.C. Murphy contends that Top Ridge is barred from disputing the default under the terms of the forbearance agreement, which provides as follows:
"Borrower has no defense, offset, or counterclaim against Lender or the exercise of remedies by Lender with respect to the Indebtedness. Borrower and each Guarantor hereby waives and releases, to the extent that any such defense, offset, or counterclaim may exist, each and every such defense, offset, and counterclaim."
To the extent that the lender in the forbearance agreement was M & T Bank, and the actions complained of had not yet occurred, the Court declines to find that this provision bars Top Ridge from disputing the default alleged here.
Under the circumstances, the first aspect of the motion seeking summary judgment for the relief requested in the complaint is denied.
Turning now to that aspect of the motion which seeks to dismiss Top Ridge's affirmative defenses and strike its answer, Top Ridge has agreed to withdraw its second, third, fifth and sixth affirmative defenses-leaving only the first, fourth, seventh, eighth and ninth for consideration.
The first, fourth and ninth affirmative defenses allege bad faith, breach of fiduciary duty and breach of the implied covenant of good faith and fair dealing, respectively. In accordance with the discussion set forth above, the Court finds triable issues of fact relative to these defenses and declines to dismiss them.
The seventh and eighth affirmative defenses are more akin to counterclaims. Specifically, in the seventh affirmative defense Top Ridge alleges conversion as against Van Voorhis and in the eighth it alleges that Van Voorhis has prevented Piper from inspecting the books and records of Top Ridge. T.C. Murphy contends that these defenses must be dismissed because they are irrelevant to this action. The Court finds, however, that their irrelevance is immaterial. It is well settled that "a counterclaim may be any cause of action in favor of a defendant, 'even if such claims do not arise out of the transaction or occurrence from which [the] plaintiff's claim arises'" (Crawford v Burkey, 93 A.D.3d 1134, 1135 [2012], quoting W. Joseph McPhillips, Inc. v Ellis, 278 A.D.2d 682, 683 [2000]; see CPLR 3019 [a]).
Accordingly, the second aspect of the motion seeking to dismiss Top Ridge's affirmative defenses and strike its answer is granted to the extent that the second, third, fifth and sixth affirmative defenses are dismissed-on consent-and this aspect of the motion is otherwise denied.
Turning now to the third aspect of the motion and in accordance with the discussion set forth above, T.C. Murphy is not entitled to dismissal of Top Ridge's counterclaims nor is it necessary to sever the counterclaims.
With respect to the fourth aspect of the motion, to the extent that T.C. Murphy has failed to demonstrate its entitlement to summary judgment, it is not entitled to the appointment of a referee.
Finally, Top Ridge has not opposed the last aspect of the motion seeking to remove all "John Doe" defendants. Indeed, it appears that all necessary parties have been named. This aspect of the motion is thus granted, and the caption amended accordingly.
Based on the foregoing, T.C. Murphy's motion is granted to the extent that (1) Top Ridge's second, third, fifth and sixth affirmative defenses are dismissed, on consent; and (2) the caption is amended to remove all "John Doe" defendants. The motion otherwise be denied.
To the extent not specifically addressed herein, the parties' remaining contentions have been examined and are either academic or without merit.
Counsel for the parties are hereby directed to appear for a conference on April 15, 2022 at 11:00 A.M. at the Warren County Courthouse.
Therefore, having considered NYSCEF document Nos. 94 through 132, and 137 through 140, and oral argument having been heard on March 3, 2022 with Christian J. Soller, Esq. appearing on behalf of plaintiff/third-party defendants and David C. Klingebiel, Esq. appearing on behalf of defendant/third-party plaintiff, it is hereby
ORDERED that T.C. Murphy's motion is granted to the extent that (1) Top Ridge's second, third, fifth and sixth affirmative defenses are dismissed, on consent; and (2) the caption is amended to remove all "John Doe" defendants; and it is further
ORDERED that the caption shall hereinafter appear as follows:
and it is further
ORDERED that T.C. Murphy's motion is otherwise denied.
The original of this Decision and Order has been e-filed by the Court. Counsel for Top Ridge is hereby directed to serve a copy of the Decision and Order with notice of entry in accordance with CPLR 5513.