Kohn v Grigoli

[*1] Kohn v Grigoli 2005 NY Slip Op 52225(U) Decided on October 5, 2005 Supreme Court, New York County Ramos, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on October 5, 2005
Supreme Court, New York County

DAVID KOHN as Assignee of M.K. MODERN TECHNOLOGIES INC., Plaintiff,

against

JEROME R. GRIGOLI, JOHN A. VERACCHI and FALLS VILLAGE GOLF GROUP LLC, Defendants.



603394/02

Charles Edward Ramos, J.

In this action for breach of contract, defendants Jerome R. Grigoli and John A. Veracchi move for an order of preclusion pursuant to CPLR 3126 preventing plaintiff from submitting any affidavits in support of his claims, and for summary judgment pursuant to CPLR 3212.

In September 2002, plaintiff, assignee of M.K. Modern Technologies, Inc. (hereinafter "MK") commenced this action for an alleged breach of contract between MK and defendants, controlling members of Falls Village Golf Group, LLC (hereinafter "Falls Village"). Plaintiff alleges that the agreement between the parties called for defendants to pay plaintiff a 4% commission on any investment procured by the plaintiff for defendants' golf course development project. Plaintiff further alleges that he procured an initial investment of $770,000 from Romulus Holding, Inc. (hereinafter "Romulus") which allegedly led to a re-negotiation of the commission rate by the parties from 4% to 2%, which plaintiff accepted. After being paid the 2% commission on the initial investment, plaintiff brought this action to recover an additional 2% in commission fees, that plaintiff alleges is due, following Romulus' subsequent $8,000,000 investment.

The undated, but signed Financial Brokerage Agreement does not a contain a commission percentage and does not list Romulus in the Agreement or any of its schedules of entities of which plaintiff had the exclusive right to represent.

At a compliance conference in August 2004, the Court ordered discovery to be completed by the end of September 2004 and set the next conference for October 6, 2004. During this time, defendants made repeated attempts to depose plaintiff to no avail. At the October 2004 conference, plaintiff's attorney notified the Court that the reason for the delay was that plaintiff's wife was gravely ill. The parties agreed to meet on November 4, 2004, with the explicit understanding that if the meeting failed to yield a settlement, plaintiff would appear the next day for a deposition. The settlement conference was adjourned to December 3, 2004 and plaintiff participated in that conference. According to Grigoli's May 3, 2005 affidavit, in December and January, 2005 plaintiff and defendant discussed settlement on a number of occasions and plaintiff described various deals in which he was engaged. The Court thereafter postponed discovery to allow plaintiff to concentrate on caring for his wife and rescheduled the conference for January 18, 2005. Between October and January, plaintiff's counsel failed to respond to defendants' request for dates that plaintiff would be available for deposition. Plaintiff's counsel then failed to appear for the January 2005 conference, which was rescheduled for February 17, 2005. At this conference, the parties disputed whether plaintiff's wife was ill or had actually died long before counsel represented that she was ill. The Court thereafter ruled that if plaintiff's wife died more than six months prior to the October 6, 2004 representation, defendants could move for preclusion. Thereafter it was revealed that plaintiff's wife died on February 19, 2004. [*2]

The order of preclusion is granted and plaintiff is prevented from submitting an affidavit opposing defendants' motion for summary judgment or in support of any claim. Therefore, plaintiff's April 25, 2005 affidavit shall be disregarded here.

CPLR 3126(2) states that if any party refuses to obey an order for disclosure or willfully fails to disclose information which the court finds ought to have been disclosed, the court may make an order prohibiting the disobedient party from supporting or opposing designated claims or defenses or from producing in evidence designated things or items of testimony. "The nature and degree of the penalty to be imposed pursuant to CPLR 3126(2) against a party who has refused to obey an order or willfully fails to disclose information which should be disclosed is a matter within the discretion of the court." Jaffe v Hubbard, 299 AD2d 395, 396 (2d Dept 2002).

"In order to invoke the remedy of preclusion, the court must determine that the offending party's lack of cooperation with disclosure was willful, deliberate, and contumacious." Maillard v Maillard, 243 AD2d 448 (2d Dept 1997). Willful and contumacious conduct can be inferred from continued adjournment of depositions over time, repeated failures to comply with stipulations and orders directing that the deposition be completed by a certain date and by inadequate excuses offered to explain noncompliance. Caccioppoli v Long Island Jewish Med. Ctr., 271 AD2d 565, 566 (2d Dept 2000).

The Court is loath to preclude plaintiff following the death of his wife, but plaintiff initiated this action, while his wife of 24 years was suffering from a lengthy illness. Once plaintiff decided to pursue this contract claim despite his emotional condition in caring for her, he had a responsibility to prosecute the claim. Instead he acted in a contumacious manner by repeatedly failing to schedule his deposition.

Additionally, plaintiff has failed to offer sufficient justifications for the delay in prosecuting this 2002 case. Plaintiff claims that he was too emotional following his wife's February 2004 death to appear for a deposition until February 2005, one year later. Simultaneously, plaintiff claims that a one year mourning period prevented him from appearing. Plaintiff's attorney implies in his April 26, 2005 affirmation that plaintiff was not able to proceed because of a one year mourning period imposed by the Jewish faith. However, the Jewish Way in Death and Mourning by Rabbi Maurice Lamm, annexed to defendant's reply affirmation, provides that Jewish mourners are prohibited from working only during shivah, the seven day period following death. This exaggeration of Jewish Law combined with plaintiff misleading either the court or his attorney regarding plaintiff's wife's health, further warrant the imposition of preclusion. Plaintiff undermined his claim of grief when he simultaneously participated in settlement negotiations in November 2004 and boasted about deals he was working on during his alleged one year of mourning. Indeed, the negotiation was contingent upon plaintiff's promise to appear the next day for a deposition, which was then cancelled following the unsuccessful negotiation. This inconsistent conduct proves that plaintiff was acting intentionally in not complying with the discovery schedule set by the Court. For these reasons, preclusion is granted. It would be unfair to defendants for the Court to render a judgment relying on its sympathy for plaintiff's loss. Rather, plaintiff may not use this tragic situation to perpetuate this action and improve his bargaining position.

Defendants' motion for summary judgment is granted as well.

Summary judgment may be granted solely on the basis of an order of preclusion. Le Frois Foods Corp. v Policy Advancing Corp., 59 AD2d 1013, 1014 (4th Dept 1977); Vandoros v Kovacevic, 79 Misc 2d 238 (App Term, 2d Dept 1974). However, summary judgment based on an order of preclusion is not automatic in the First Department. See, Israel v Drei Corp., 5 AD2d 987, rehearing denied, 6 AD2d 1005 (1st Dept 1958). Rather, the Court must analyze the effect of the preclusion order in each particular case. See e.g. Crump v New York, 67 AD2d 634 (1st Dept 1979); Jawitz v British Leyland Motor, Inc., 42 AD2d 536 (1st Dept 1973). Here, without plaintiff's deposition, defendant is at a disadvantage in defending the action. Although the plaintiff's affidavit is precluded for the reasons discussed above, were it to be accepted, it changes plaintiff's theory of the case from breach of contract to unwritten modification of the [*3]written agreement or quantum meruit, but defendants have had no discovery on these theories. Moreover, defendants' answer only raises defenses to plaintiff's breach of contract claim, not to his newly minted theories. For example, defendants have a statute of frauds defense. Therefore, summary judgment will be granted.

Alternatively, applying the summary judgment standard under CPLR 3212 yields dismissal of the action as well. The moving party establishes entitlement to judgment in its favor when it provides sufficient evidence to eliminate any material issues of fact from the case and when the non-movant fails to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact. Jeffcoat v Andrade, 205 AD2d 374 (1st Dept 1994). "A shadowy semblance of an issue or bold conclusory assertions, even if believable, are not enough to defeat a motion for summary judgment." Id. at 375.

Plaintiff's complaint and accompanying papers, demonstrate that the record is devoid of evidence necessary to support plaintiff's claim for breach of contract. While the Complaint alleges that there was an agreement for defendants to pay plaintiff a commission for procuring investment from Romulus, the Financial Brokerage Agreement, the only agreement submitted to the Court, does not establish a contractual obligation on behalf of defendants to pay any commission as a result of an investment by Romulus. Rather, the Agreement is silent on the percent commission and does not list Romulus among the potential investors. Furthermore, in plaintiff's counter statement of material facts, signed by plaintiff's attorney, plaintiff concedes that no other written agreement exists. Therefore, based on the only cause of action in the complaint, it must be dismissed.

In plaintiff's attorney's affirmation and memo of law in opposition to defendants' motion, plaintiff alleges that there was an oral agreement that modified the written contract and that he has alleged sufficient facts regarding this modification that warrant a denial of summary judgment. Plaintiff claims that the original agreement between the parties was amended by the parties' actions and conduct, unequivocally referable to the agreement. When plaintiff procured Romulus' investment and defendants accepted it by partially paying plaintiff, the agreement was thereby modified. Plaintiff raises a quantum meruit claim. However, plaintiff has submitted no proof in support of his contention that Romulus actually made an $8 million investment. Moreover, plaintiff fails to allege that the alleged $8 million investment was the result of his efforts. Although these new claims may raise material issues of fact that would require a trial, summary judgment should still be granted in favor of the defendants.

Plaintiff cannot defeat summary judgment with causes of action not alleged in the complaint when defendant has conclusively demonstrated the allegations of the complaint are without merit. See Central State Bank v American Appraisal Co., 33 AD2d 1009, 1010 (1st Dept 1970). While leave to amend is freely given under CPLR 3025, plaintiff has not even requested such leave. Alvord & Swift v Stewart M. Muller Constr. Co., 46 NY2d 276, 281 (1978). Permitting plaintiff to amend now would only perpetuate an already stalled action. Since plaintiff concedes that his original cause of action lacks merit, and plaintiff will not now be permitted to amend his complaint, summary judgment must be granted.

Even assuming that plaintiff was granted leave to amend his complaint as to allege these new theories of recovery, these two claims are barred by the Statute of Frauds. According to General Obligations Law § 5-701(a)(10), any agreements for finder's fees must be in writing in order to be enforceable. Herkert v Temco Servs. Indus., 272 AD2d 161, 162 (1st Dept 2000). Likewise, plaintiff's claim for a finders fee und the quantum meruit theory is barred. Howard-Sloan Legal Search, Inc., v Todtman, Young, Tunick, Nachamie, Hendler & Spizz, P. C., 193 AD2d 404, 405 (1st Dept 1993). As there is admittedly no written agreement to that effect in this action, these two claims would be barred.

Although there is a very narrow exception to the Statue of Frauds that allows a plaintiff to overcome this defense, this exception will not help plaintiff. "The doctrine of part performance may be invoked only if plaintiff's actions can be characterized as unequivocally referable to the [*4]agreement alleged. The actions alone must be unintelligible or at least extraordinary, explainable only with reference to the oral agreement. The acts performed must be clear, certain and definite to remove an oral agreement from the Statute of Frauds." James v Western NY Computing Sys., 273 AD2d 853, 854 (4th Dept 2000). Plaintiff does not allege facts sufficient to show how the acts performed by the parties are unequivocally referable to the agreement. The agreement is silent on the percentage of commission and Romulus is not listed on any of its schedules as a potential investor. Therefore, the action is dismissed against defendants Grigoli and Veracchi, but the action otherwise continues against Falls Village Golf Group, LLC.

Accordingly, it is

ORDERED, that defendants' motion for summary judgment is granted and the clerk of this court is hereby directed to enter judgment severing the claim against the moving defendants and entering judgment in their favor.

Dated: October 5, 2005 _________________________

J.S.C.

Counsel are hereby directed to obtain an accurate copy of this Court's opinion from the record room and not to rely on decisions obtained from the internet which have been altered in the scanning process.