Bennett v King of Tech. NY, Inc.
Annotate this CaseDecided on June 21, 2005
Supreme Court, Kings County
Leslie Bennett, agent of 462 Pulaski Corp., MARY MCIVER, president of 462 Pulaski Corp., and 462 PULASKI CORP., Plaintiffs,
against
King of Technology NY, Inc., NATHAN FRIEDMAN, and JOSEPH FICHMANN , Defendants
14265/03
Francois A. Rivera, J.
Defendant Joseph Fichmann (hereinafter Fichmann) moves to dismiss the complaint on the basis that the plaintiffs lack standing to sue and that the complaint fails to include necessary parties. In the alternative, he moves to vacate the note of issue on the basis that discovery has not been completed. Plaintiffs opposes the motion.
On April 16, 2003, plaintiffs commenced this action by filing a summons, verified complaint and notice of pendency with the King's County Clerk's Office. The complaint contains seven allegations of fact and seeks reconveyance of certain real property, a money judgment, and other relief. Defendant's answer either denies plaintiffs' allegations of fact or denies knowledge and information sufficient to form a belief regarding the allegations. The answer asserts six affirmative defenses and a cross-claim against the co-defendants.
By the instant motion, filed on May 24, 2004, Fichmann alleges that plaintiffs lack standing to maintain the action because the plaintiff corporation has been dissolved by proclamation of the Secretary of State of New York. He further alleges that on March 13, 2004, 462 Pulaski Realty Corp. conveyed to King of Technology USA, Inc. the property which is the subject of the cause of action. He contends that these entities are necessary parties, that neither one has been properly named or served in the action and that these facts warrant dismissal.
Plaintiffs, in opposition, assert that Fichmann neither claims these defenses in his answer nor has he made a motion to dismiss the complaint on these grounds before answering the complaint. Plaintiffs contend that pursuant to CPLR §3211(e), the defendant has waived these defenses. Indeed, there is no dispute that Fichmann's answer to the complaint does not state affirmative defenses based on either documentary evidence or on plaintiffs' lack of standing to [*2]sue. The fifth affirmative defense, however, asserts the failure to join a necessary party. It is undisputed that Fishman did not move to dismiss the complaint on these grounds or seek leave to amend his answer to add the missing affirmative defenses before making the instant motion.
Although the defendant's motion does not cite the statutory provisions relied upon to support the motion to dismiss, the annexed exhibits and asserted allegations of facts make the specific provisions obvious. Therefore, the court will look past this procedural deficiency and violation of CPLR § 2214 to address the points raised by the parties.
CPLR § 2214 (a) provides that a notice of motion shall specify the time and place of the hearing on the motion, the supporting papers upon which the motion is based, the relief demanded and the grounds therefor.
Defendant's motion to dismiss the complaint based on documentary evidence and lack of capacity to sue is pursuant to CPLR § 3211(a)(1) and (3), respectively. Defendant's motion to dismiss based on failure to join a necessary party is pursuant to CPLR §3211(a)(10). CPLR § 3211 (a) provides in pertinent part that a party may move for judgment dismissing one or more causes of action asserted against him on the ground that: (1) a defense is founded upon documentary evidence; or (3) the party asserting the cause of action has not legal capacity to sue; or...the cause of action may not be maintained because...(10) the court should not proceed in the absence of a person who should be a party.
CPLR § 3211 (e) provides in pertinent part:
At any time before service of the responsive pleading is required, a party may move on one or more of the grounds set forth in subdivision (a), and no more than one such motion shall be permitted. Any objection or defense based upon a ground set forth in paragraphs one, three, four, five and six of subdivision (a) is waived unless raised either by such motion or in the responsive pleading. ...A motion based upon a ground specified in paragraphs two, seven or ten of subdivision (a) may be made at any subsequent time or in a later pleading, if one is permitted.
Defendant relies heavily on exhibit E, annexed to his instant motion, which purports to prove the dissolution of the corporate plaintiff by the Secretary of State of New York for failure to pay franchise taxes and fees. This exhibit states therein that it is not an official record of the Department of State or the State of New York and that the Department of State disclaims all express or implied warranties regarding the information provided therein. The document contains no reference regarding franchise taxes and fees. Defendant submits on the strength of this document that the corporate plaintiff lacks capacity to sue as a dissolved corporation.
Defendant Fichmann's motion to dismiss based on documentary evidence and lack of capacity to sue is waived pursuant to CPLR 3211(e). Furthermore, the annexed document in [*3]support of the motion is not in admissible form and not reliable. Therefore, even if defendant had not waived these defenses, the document and supporting allegations of fact could not establish defendant's entitlement to an accelerated judgment of dismissal as a matter of law. Moreover, even if the corporate plaintiff was indeed dissolved by proclamation of the Secretary of State of New York, that factor alone is not a per se bar to bringing an action. A dissolved corporation may continue to carry on business for the purpose of winding up its affairs. What is prohibited is new business (Metered Appliances, Inc. v. 75 Owners Corp., 225 AD2d 338 [1st Dept. 1996]). For all the foregoing reasons, defendant's motion to dismiss the complaint based on plaintiffs' alleged incapacity to sue and upon documentary evidence is denied.
The court now turns to Fichmann's request to dismiss the complaint for failure to join necessary parties. Plaintiffs' contention that defendant waived his right to assert this basis for dismissal is incorrect. This basis may be asserted by an application made at any subsequent time or in a later pleading pursuant to CPLR 3211(e). Here, once again, the defendant fails to cite the statutory legal authority relied upon contrary to the requirements of CPLR §2214. Furthermore, he failed to show adequate grounds for this requested relief. The controlling statutory provisions governing joinder is CPLR §1001.
CPLR § 1001 (a) provides: Necessary joinder of parties. Parties who should be joined. Persons who ought to be parties if complete relief is to be accorded between the persons who are parties to the action or who might be inequitably affected by a judgment in the action shall be made plaintiffs or defendants. When a person who should join as a plaintiff refuses to do so he may be made a defendant.
Fichmann alleges that 462 Pulaski Realty Corp. and King of Technology USA, Inc. are the parties who should be joined to the action and that they are not properly named or served. The claim is premised on the allegation that 462 Pulaski Realty Corp. and King of Technology USA, Inc. were parties to a conveyance of the property which is the subject of the action. Fichmann is not claiming, however, any deficiency in service of the summons and complaint upon him.
Fichmann's motion does not allege sufficient facts for the court to assess whether 462 Pulaski Realty Corp. and King of Technology USA, Inc. are necessary parties. To meet this burden Fichmann's allegations of fact should demonstrate that these parties are not added to the action and their addition is needed to give complete relief to the parties already in the action or to avoid an inequitable effect upon those parties not joined. It is unclear whether they are already added to the action. Fichmann apparently contends that they are not added because their names are not properly stated in the caption. The caption, however, contains as parties 462 Pulaski Corp., and King of Technology NY, Inc. If the problem is a misspelling of the name of the proper parties, this creates at best a technical irregularity which may be disregarded (Schwartzberg v. State 121 Misc 2d 1095-1098 [NY Ct. Cl. 1983]). Also lacking are allegations of fact which demonstrate that the parties, if not already joined to the action, are necessary parties. Rather, than speculate on the grounds for this requested relief, the motion to dismiss the complaint on this ground is denied based on the procedural deficiencies in the moving papers.
The court now turns to defendant's application to strike the note of issue on the basis that the case is not ready for trial due to outstanding discovery. The defendant alleges that plaintiffs have not appeared for an examination before trial as directed by Justice Ruditsky's compliance [*4]conference order of February 24, 2004. The order is annexed as exhibit G to defendant's motion. He further alleges that plaintiff has not served any discovery demands on the defendants. Plaintiffs contend that although the order requires that plaintiffs be deposed before May 1, 2004, the defendant took no action to initiate plaintiffs' examination before trial. Defendant does not deny this contention.
After the filing of a note of issue, there are two separate and distinct methods to obtain further disclosure. The first, pursuant to the Uniform Rules for Trial Courts (hereinafter the Uniform Rules) (22 NYCRR) §202.21(d) provides, in pertinent part: "Where unusual or unanticipated circumstances develop subsequent to the filing of a note of issue and certificate of readiness which require additional pretrial proceedings to prevent substantial prejudice, the court, upon motion supported by affidavit, may grant permission to conduct such necessary proceedings." The second, pursuant to 22 NYCRR §202.21(e) provides, in pertinent part: "within 20 days after service of a note of issue and certificate of readiness, any party to the action or special proceeding may move to vacate the note of issue, upon affidavit showing in what respects the case is not ready for trial, and the court may vacate the note of issue if it appears that a material fact in the certificate of readiness is incorrect, or that the certificate of readiness fails to comply with the requirements of this section in some material respect." (Audiovox Corp. v. Benyamini 265 AD2d 135-139 [2nd Dept 2000]).
The more difficult standard is that provided by 22 NYCRR §202.21(d) because it requires the movant to demonstrate unusual or unanticipated circumstances and substantial prejudice, whereas a timely motion to vacate the note of issue pursuant to 22 NYCRR §202.21(e) need only demonstrate in what respects the case is not ready for trial (Mosley v. Flavius 13 AD 3rd 346 [2nd Dept. 2004]; see also Audiovox Corp. v. Benyamini 265 AD2d 135-139 [2nd Dept 2000]).
Plaintiffs filed a note of issue and certificate of readiness on May 19, 2004. Defendant's instant motion to strike the note of issue was timely filed on May 24, 2004. The provision which controls here is therefore 22 NYCRR §202.21(e) which requires defendant's mere showing that the case is not trial ready. The claim of lack of trial readiness, however, is premised on the defendant's failure to initiate a deposition of the plaintiffs before the court imposed deadline of May 1, 2004 expired. The defendant did not seek leave of the court to extend the deadline. Therefore, the court finds that defendant has waived his right to depose the plaintiffs (Quintana v. Rogers, 306 AD2d 167 [1st Dept. 2003]; see also James v. New York City Transit Authority, 294 AD2d 471 [2nd Dept. 2002]. Inasmuch as plaintiffs may waive their right to seek discovery of the defendant, their decision to do so may not be used by the defendant to support a claim of lack of trial readiness. The defendant has failed to demonstrate that the case is not ready for trial or that any factual allegation in the plaintiffs' certificate of readiness is erroneous. Thus defendant's application to strike the note of issue is denied.
The foregoing constitutes the decision and order of this court.
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J.S.C.
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