Martian Entertainment, LLC v Harris

[*1] Martian Entertainment, LLC v Harris 2006 NY Slip Op 51517(U) [12 Misc 3d 1190(A)] Decided on July 5, 2006 Supreme Court, New York County Cahn, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 July 5, 2006
Supreme Court, New York County

Martian Entertainment, LLC, Plaintiff,

against

Dede Harris, Defendant.



600384/06

Herman Cahn, J.

Motion Sequence Numbers 001 and 002 are consolidated for disposition.

Defendant Dede Harris moves to dismiss the complaint and amended complaint, CPLR 3211 (a) (1) and (7), and for sanctions, CPLR 8303 - a (c) (i-ii) and 22 NYCRR § 130-1.1, against Peter R. Stern, Esq., a principal of plaintiff, and Andrew L. Schwab, Esq., plaintiff's counsel.

This action arises out of the production of the Off-Broadway play "Dog Sees God: Confessions of a Teenage Blockhead" (DSG), which ran in the Century Center for the Performing Arts in New York City. The show opened on December 15, 2005, and closed on February 20, 2006 after receiving negative reviews. Plaintiff had co-production and marketing agreements with Dede Harris Productions LLC (DHP) and Dog Sees God Company LLC (DSG LLC); it had no contact with the defendant Dede Harris. Rather than sue on the contracts (which contain an arbitration clause) when it was frustrated by the failure of the play, plaintiff brought this tort action against defendant Dede Harris individually, the principal of DHP, alleging fraud and other torts, asserting that she failed to consult with plaintiff as required in the agreements, and that her purportedly sexually obsessive and inappropriate conduct toward the cast members contributed to the failure of the play.

BACKGROUND

The allegations of the Amended Complaint, tell the following story.

Plaintiff Martian Entertainment, LLC (Martian) is engaged in the production and management of theatrical productions. Martian's unincorporated division, Martian Media, is engaged in the marketing and promotion of such productions (Amended Complaint, ¶ 2). One of plaintiff's managing members is Peter R. Stern, Esq. (id., ¶ 3).

Defendant Harris is a producer of theatrical productions (id., ¶ 8).

In early September 2005, plaintiff learned that defendant was working as a lead producer on an Off-Broadway production of Dog Sees God, scheduled to open in late 2005 or early 2006. It sought to participate as a producer and marketer for the production. On September 27, 2005, plaintiff and non-party DHP executed a co-production agreement in which the parties agreed to collaborate and partner in the financing and presentation of the play (id., ¶ 21; see Exhibit 2 to Affidavit of Dede Harris in Support of Motion to Dismiss, dated February 24, 2006). Plaintiff was responsible for raising no less than $200,000.00, and DHP was responsible for raising the [*2]rest of the money, to produce the play (Exhibit 2 to Harris Aff.). The Co-Production Agreement provided, in paragraph 2, that DHP "shall use best efforts to consult with [plaintiff] on any and all major business, financial and artistic decisions" (id., ¶ 2). DHP also agreed to hire Martian Media as a marketing company (id.).

The Co-Production Agreement provided that "[a]ny controversy, claim, dispute, or question, arising under, out of, in connection with or in relation to this Agreement, or its performance or non-performance, or any breach hereof, shall be determined and settled by arbitration in New York City" (id., ¶ 9).

Defendant Harris signed the Co-Production Agreement on DHP's behalf (id.).

On October 18, 2005, plaintiff and non-party DSG LLC executed a marketing agreement (the Marketing Agreement) for Martian Media's services as a marketing agent for the production (Amended Complaint, ¶ 22; see Exhibit 3 to Harris Aff.). Plaintiff provided marketing services in return for a percentage of the production's profits (Amended Complaint, ¶ 24). The Marketing Agreement also required that any controversy or dispute be mediated, and if mediation was not successful, the dispute was to be submitted to arbitration (Exhibit 3, ¶ 7). Defendant Harris signed the Marketing Agreement on DSG LLC's behalf (id.).

On December 3, 2005, the production began preview performances (id., ¶ 30). On December 6, 2005, DSG's advertising agency hosted an ad meeting, to which the producers were invited (id., ¶ 31). On December 15, 2005, the play opened (id., ¶ 33). The press reviews following the opening were mixed, if not negative (id., ¶ 34). On December 16, 2005, January 6 and 20, 2006, the advertising agency held advertising meetings to which the producers were invited (id., ¶¶ 35-36).

On January 6 and January 9, 2006, two of the eight cast members gave the required four-weeks notice that they were leaving the show (id., ¶¶ 37-38). In the weeks thereafter, four more cast members gave such notice (id., ¶ 39).

On January 31, and February 1, 2006, Stern, on plaintiff's behalf, e-mailed defendant Harris, demanding that she cease having personal contact with the cast members (id., ¶¶ 42-43). Defendant Harris did not respond to these e-mails, but then, allegedly, contacted members of the cast "in an effort to intimidate them from speaking about Defendant's conduct" (id., ¶ 46).

On February 7, 2006, plaintiff commenced this action, by complaint including causes of action of fraud, fraud by omission, equitable relief, and gross negligence (Complaint, Exhibit to Notice of Motion).

Plaintiff alleges that on February 9, 2006, defendant telephoned Victoria Lang of Plus Entertainment, with whom plaintiff had a "co-production arrangement" with regard to another play, and disparaged plaintiff, and advised Lang not to work with it (Amended Complaint, ¶¶ 249-251; see also Affidavit of Peter R. Stern, dated March 28, 2006, ¶¶ 67-69). When plaintiff served an amended complaint over a month later, it based a claim for tortious interference with contractual relations on these allegations (Amended Complaint, ¶¶ 247-254).

On February 13, 2006, defendant, unilaterally and without consultation with plaintiff, closed the play with a closing performance date of February 26, 2006 (Amended Complaint, ¶ 63).

On February 17, 2006, the New York Post published the first of four articles (which appeared in the paper on February 17, 18, 19, and 22) about this action upon receiving a copy of the complaint (id., ¶ 64). On that same day, allegedly after seeing the Post article, defendant [*3]unilaterally decided to close the show on February 20, 2006 (id., ¶ 65).

On February 27, 2006, defendant made her initial motion to dismiss the complaint. Plaintiff failed to oppose the motion, but, instead, served an amended complaint on March 17, 2006. In the amended complaint, plaintiff deleted its claim for equitable relief, because the play was already closed, but added claims for "witness tampering/suborning perjury" and for tortious interference with contractual relations.

With regard to the claim for witness tampering, plaintiff alleges that after receiving the cease and desist letters from Stern, defendant contacted various members of the cast, and allegedly sought to have them alter their testimony in this action (Amended Complaint, ¶ 240). She purportedly gave them each a gift, a window card for the production, and she sought to purchase their goodwill by agreeing to pay them more than she was contractually required (id., ¶¶ 241-42). The claim for tortious interference is based on the allegations that defendant called Lang, of Plus Entertainment, and urged her not to do business with plaintiff (id., ¶¶ 249-54).

The amended complaint also contains over 40 paragraphs, providing purportedly background information about defendant's personal life, and makes allegations of her past conduct and misconduct with regard to other theatrical productions in which she was involved (Amended Complaint, ¶¶ 10-12, 64, 66, 146-179). When questioned on oral argument as to the relevance of such allegations, plaintiff's counsel candidly stated that such allegations "were painting a picture of the person we were dealing with", (transcript of oral argument, p. 22, line 7, April 3, 2006).

The Within Motions:

Defendant moves to dismiss on several grounds. First, she contends that the fraudulent inducement claim fails to state a cause of action, because it simply alleges that she did not intend to perform the contract when it was entered into. The amended complaint alleges that while defendant represented that she wanted plaintiff's active participation in the development and management of the play, she made these representations with the preconceived and undisclosed intention of not performing them (Amended Complaint, ¶¶ 72-74). This, defendant urges, cannot form the basis for a fraud claim. Moreover, defendant urges that a fraudulent inducement claim cannot be stated against defendant Harris, who is not herself a party to the agreements with plaintiff.

With regard to the "fraud by omission and gross negligence" claims, defendant asserts that they fail to state claims, because neither sets forth the legal duties owed by defendant to plaintiff that are prerequisites to such claims, and no duties are owed.

As to the new claims set forth in the amended complaint, defendant contends that the witness tampering claim is not a civil cause of action for which damages can be pursued. Further, she urges that no false affidavits or other testimony is alleged to have been proffered by any witness, let alone as a result of any conduct by Harris, and, therefore, the claim fails as a matter of law. It is argued that the tortious interference claim is insufficient for several reasons. First, it fails to allege a breach of contract, so it cannot state a claim for tortious interference with contract. Second, even if it is construed as one for tortious interference with business relations, it fails to state a claim because it fails to assert wrongful means.

Defendant also seeks sanctions against both Stern, a principal of plaintiff and himself an attorney, and plaintiff's counsel, Schwab, on the grounds that both the original complaint and the amended complaint assert claims that are patently frivolous. She contends that even after the [*4]fatal defects to the claims for fraud, fraud by omission, and gross negligence were pointed out to plaintiff in her initial motion to dismiss, plaintiff continued to pursue them, reasserting them in the amended complaint, and then adding claims for witness tampering and tortious interference, both of which have no basis in either fact or law in this case.

Further, defendant urges that the plaintiff has engaged in "vituperative personal attacks" on her (Defendant's Reply Memo, at 8), including in the amended complaint assertions of false, irrelevant and scandalous allegations about her family, financial status, and personal affairs, which conduct was pleaded in the lengthy amended complaint primarily to harass and maliciously injure her. For example, the complaint, amended complaint, and Stern's affidavit in opposition, are full of allegations of defendant's claimed sexual activities, and her prior divorce, the inclusion of which was simply to smear her. Defendant argues that plaintiff's attempts to justify the inclusion of these allegations on the assertion that they are based on press reports and information from independent parties, are transparent. She urges that plaintiff itself admits that it had distributed copies of the complaint to certain persons and to a writer for the New York Post, and that the newspaper articles rely upon the complaint and quote plaintiff's principals, Stern and Carl White. Thus, defendant contends, plaintiff and its counsel have not only brought frivolous claims, they have included allegations that are not relevant, and were clearly crafted to vex, humiliate, and professionally injure her. She seeks sanctions for this conduct.

DISCUSSION

The motion to dismiss is granted, and the amended complaint is dismissed. Defendant is awarded sanctions against plaintiff's principal Peter R. Stern, Esq., in the amount of $5,000.00, and against plaintiff's counsel, Andrew L. Schwab, Esq. in the amount of $5,000.00, on the grounds that the claims and many of the allegations of fact are frivolous, and were asserted and pursued to harass defendant.

On a motion to dismiss, pursuant to CPLR 3211 (a) (7), the pleading is afforded a liberal construction. The court must "accept the facts as alleged in the complaint as true, accord plaintiffs the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory" (Leon v Martinez, 84 NY2d 83, 87-88 [1994]; see EBC I, Inc. v Goldman Sachs & Co., 5 NY3d 11, 19 [2005]; Sokoloff v Harriman Estates Dev. Corp., 96 NY2d 409, 414 [2001]; P.T. Bank Central Asia v ABN AMRO Bank N.V., 301 AD2d 373, 375-6 [1st Dept 2003]). The court's role is limited to ascertaining whether the complaint states a cause of action, not whether there is evidentiary support for the complaint (Guggenheimer v Ginzburg, 43 NY2d 268, 275 [1977]; LoPinto v J.W. Mays, Inc., 170 AD2d 582 [2d Dept 1991]). "[B]are legal conclusions and factual claims, which are either inherently incredible or flatly contradicted by documentary evidence, . . . are not presumed to be true on a motion to dismiss for legal insufficiency" (O'Donnell, Fox & Gartner, P.C. v R-2000 Corp., 198 AD2d 154, 154 [1st Dept 1993] [citation omitted]). A motion pursuant to CPLR 3211 (a) (1) will be granted if the movant presents documentary evidence that "definitively dispose[s] of the claim" (Demas v 325 West End Ave. Corp., 127 AD2d 476, 477 [1st Dept 1987]).

The First Cause of Action:

The amended complaint's first cause of action, denominated as one for "active fraud," alleges that defendant fraudulently induced plaintiff to enter into the Co-Production Agreement and the Marketing Agreement. It is based on allegations that defendant misrepresented to plaintiff that she wanted plaintiff's active participation in the production, development and [*5]management of the play, and that these representations were reflected in the Co-Production Agreement provision requiring DHP, as the producer, to use its best efforts to consult with plaintiff as the co-producer (Amended Complaint, ¶¶ 72-73). It also alleges various instances in which DHP did not consult with plaintiff (id., ¶¶ 49-105). According to the amended complaint, at the time defendant made the representations, she had the preconceived intention of not performing them (id., ¶ 74). Thus, it alleges that defendant's fraudulent inducement consisted of concealing DHP's intention not to consult with plaintiff.

To state a claim for fraud, plaintiff must allege a misrepresentation of a material existing fact, falsity, scienter, deception, and injury (New York Univ. v Continental Ins. Co., 87 NY2d 308, 318 [1995]). A claim for fraud that merely states a breach of contract claim may not be maintained (see Orix Credit Alliance, Inc. v R.E. Hable Co., 256 AD2d 114,115 [1st Dept 1998]). A "viable claim of fraud concerning a contract must allege misrepresentations of present facts (rather than merely of future intent) that were collateral to the contract and which induced the allegedly defrauded party to enter into the contract" (id., citing Deerfield Communications Corp. v Chesebrough-Ponds, Inc., 68 NY2d 954, 956 [1986]).

Allegations that defendant entered into an agreement without the intent to perform it, do not state a fraud claim (New York Univ. v Continental Ins. Co., 87 NY2d 308, supra). The misrepresentation of present facts must be collateral to the contract, and, thus, involve a separate breach of duty (First Bank of Ams. v Motor Car Funding, Inc., 257 AD2d 287 [1st Dept 1999] [a mere insincere promise of future performance cannot support a fraud claim]).

Here, the alleged misrepresentations are that defendant concealed DHP's intention not to consult with plaintiff, that is, not to perform as required under the Co-Production Agreement. This is not collateral to that agreement. Rather these purported misrepresentations were "directly related to a specific provision of the contract" (Orix Credit Alliance, Inc. v R.E. Hable Co., 256 AD2d at 115, quoting Alamo Contr. Bldrs., Inc. v CTF Hotel Co., 242 AD2d 643, 644 [2d Dept 1997]; see also 767 Third Ave. LLC v Greble & Finger, LLP, 8 AD3d 75 [1st Dept 2004]; PSI Intl., Inc. v Ottimo, 272 AD2d 279 [1st Dept 2000]; cf. Amherst Magnetic Imaging Assoc., P.C. v Community Blue (239 AD2d 892 [4th Dept 1997], the provision providing that DHP would use its "best efforts" to consult with plaintiff on all major business and financial decisions. Such alleged misrepresentations are simply allegations that the best efforts provision of the Co-Production Agreement had not been performed that is, that the Co-Production Agreement was breached. That claim of breach is subject to mandatory arbitration under that agreement. Accordingly, the allegations do not support a fraud claim, and this cause of action is dismissed.

The Second Cause of Action:

The second cause of action for "fraud by omission" similarly fails to state a cause of action. This claim alleges, based on information and belief, that defendant failed to disclose certain conduct, such as her alleged "sexually obsessive and compulsive" behavior, her inability to distinguish between harassing third parties and harassing employees and cast members, her intent to delegate all of her duties to one Roy Gabay, and her ongoing battle with the play's author over the content of the play (Amended Complaint, ¶¶ 145-206). It is well settled that in order to allege a fraud based on a failure to disclose or omission, the plaintiff must allege a confidential or fiduciary relationship giving rise to a duty to speak (Goldstein v CIBC World Mkts. Corp., 6 AD3d 295 [1st Dept 2004] [no fraud for failure to disclose where plaintiff fails to [*6]allege a relationship from which duty to speak arises]; SNS Bank, N.V. v Citibank, N.A., 7 AD3d 352 [1st Dept 2004] [no fraud based on omission unless there is a fiduciary relationship between the parties]; Mobil Oil Corp. v Joshi, 202 AD2d 318 [1st Dept 1994] [no duty to disclose in absence of confidential or fiduciary relationship]). The fiduciary relationship must have existed prior to the transaction from which the wrong emanated, and not as a result of it (Elghanian v Harvey, 249 AD2d 206 [1st Dept 1998] [must show fiduciary relationship that existed prior to the transaction]).

Plaintiff admits, in its opposition to these motions, that "there was no confidential or fiduciary relationship between it and Harris" (Plaintiff's Opposition Memo, at 13), an essential element of this claim. Its contention that it can override this element because of the "significance of the subject matter" (id. at 14), lacks merit, and has no basis in law. Moreover, the amended complaint contains no factual, as opposed to conclusory, allegations that defendant acted with an intent to defraud (SNS Bank, N.V. v Citibank, N.A., 7 AD3d at 356). Further, plaintiff fails to show the materiality of the claimed omissions, and it is apparent, upon reading the amended complaint, that most of the allegations about defendant's behavior were not material but were scandalous, and added to harass and embarrass her. Therefore, many, if not all, were stricken by this court, on oral argument pursuant to CPLR 3024 (b); some were withdrawn by plaintiff's counsel himself (Transcript of Oral Argument, dated April 3, 2006, striking as scandalous ¶¶ 146-179). To the extent that a decision on whether to strike the remaining allegations regarding defendant's alleged behavior was reserved on the oral argument, in light of the determination above that this cause of action clearly fails to state a claim, and is dismissed, the issue is moot (see id. at 28-29). Accordingly, the second cause of action is dismissed.

The Third Cause of Action:

The third cause of action, for recklessness and gross negligence, is also deficient. An essential element of such a claim, like that on a claim of fraud by omission, is that the defendant owed a duty to the plaintiff (see, 532 Madison Ave. Gourmet Foods, Ins. v Finlandia Ctr., Inc., 96 NY2d 280, 289 [2001]). Again, there is no relationship giving rise to a duty here. Plaintiff's argument in opposition that defendant owed it a "duty of rational behavior and care" has no basis in law.

The cause of action is dismissed.

The Fourth Cause of Action:

The fourth cause of action for "witness tampering/suborning perjury" fails to state a claim. First, there is no separate civil cause of action for witness tampering (Crouse v McVickar, 207 NY 213, 219 [1912] [no civil action for suborning a witness to testify falsely]; Joseph v Citibank, 271 AD2d 358 [1st Dept 2000] [allegations of perjury committed in prior judicial proceedings do not form basis of separate, subsequent civil action for damages]; Yalkowsky v Shedler, 94 AD2d 684 [1st Dept], appeal dsmd in part, lv denied in part 60 NY2d 700, 60 NY2d 557 [1983] [allegations of perjury and subornation of perjury in prior or still- pending judicial proceedings do not form basis for civil action for damages]). Second, as defendant aptly points out, there has been no testimony in this matter, by affidavit or otherwise, and no conduct of defendant alleged with regard thereto. Accordingly, this cause of action is dismissed.

Fifth Cause of Action:

Finally, the fifth cause of action, for tortious interference with contract (apparently [*7]relating to plaintiff's relation/contract with Plus Entertainment) does not state a claim. To plead a tortious interference claim, the plaintiff must allege: (1) a valid contract between the plaintiff and a third party; (2) defendant's knowledge of that contract; (3) defendant's intentional procurement of a breach of that contract without justification; (4) actual breach; and (5) damages (NBT Bancorp Inc. v Fleet/Norstar Fin. Group, Inc., 87 NY2d 614, 620-21 [1996]). All of the elements must be pleaded in order to avoid dismissal (Bonanni v Straight Arrow Publs., 133 AD2d 585 [1st Dept 1987]).

One of the main considerations for a tortious interference with contract claim is the defendant's knowledge at the time that a breach of a valid contractual obligation is induced (Bogoni v Friedlander, 197 AD2d 281 [1st Dept], lv denied 84 NY2d 803 [1994]). In addition, the plaintiff must allege that there was a breach of a valid contract (Foster v Churchill, 87 NY2d 744 [1996]; NBT Bancorp Inc. v Fleet/Norstar Fin. Group, 87 NY2d 614, supra). To allege a breach of contract, the complaint must set forth the terms of the agreement, either expressly referencing it or attaching a copy of it (see Chrysler Capital Corp. v Hilltop Egg Farms, Inc., 129 AD2d 927, 928 [3d Dept 1987]). Here, plaintiff, fails to allege a breach or knowledge. The amended complaint alleges only that plaintiff was "involved in a co-production arrangement" with Plus Entertainment (Amended Complaint, ¶ 249). It does not expressly reference any provisions of such an alleged agreement, nor is a copy attached. In fact, plaintiff never alleges that its "co-production arrangement" with Plus Entertainment was breached in any way. Thus, it fails to state a claim for tortious interference with contract (see NBT Bancorp Inc. v Fleet/Norstar Fin. Group, 87 NY2d 614, supra; Fluhr v Goldscheider, 264 AD2d 570 [1st Dept 1999]; J & L Am. Enterprises, Ltd. v DSA Direct, LLC, 10 Misc 3d 1076(A) [Sup Ct, NY County 2006] [Fried, J.]). Further, plaintiff has failed to allege that defendant was aware of the terms of plaintiff's agreement with Plus Entertainment (J & L Enterprises, Ltd. v DSA Direct, LLC, 10 Misc 3d 1076(A), supra). Although on a motion to dismiss the complaint must be liberally construed, plaintiff must support its claim with more than mere speculation (Burrowes v Combs, 25 AD3d 370 [1st Dept 2006]). Without allegations of breach and knowledge, plaintiff's tortious interference claim is defective on its face, and must be dismissed.

This cause of action also fails to state a claim for tortious interference with business relations. "Agreements that are terminable at will are classified as only prospective contractual relations, and thus cannot support a claim for tortious interference with existing contracts" (American Preferred Prescription, Inc. v Health Mgt., Inc., 252 AD2d 414, 417 [1st Dept 1998], citing Guard-Life Corp. v S. Parker Hardware Mfg. Corp., 50 NY2d 183, 191-92 [1980]). Where only prospective contractual rights have allegedly been interfered with, the plaintiff must show more culpable conduct (NBT Bancorp. Inc. v Fleet/Norstar Fin. Group, 87 NY2d at 621; Guard-Life Corp. v S. Parker Hardware Mfg. Corp., 50 NY2d at 193-94). Thus, the plaintiff must establish that the interference was accomplished by "wrongful means," consisting of fraud, misrepresentation, physical violence, civil suits, criminal prosecutions and some degree of economic pressure, "but more than simple persuasion is required" (Snyder v Sony Music Entertainment, Inc., 252 AD2d 294, 299-300 [1st Dept 1999], citing Guard-Life Corp. v S. Parker Hardware Mfg. Corp., 50 NY2d at 191), or that defendant acted for the sole purpose of harming the plaintiff (id.; see also Don Buchwald & Assoc., Inc. v Rich, 281 AD2d 329 [1st Dept 2001] [simple persuasion by competitor in inducing a customer to switch is recognized defense]; Jurlique, Inc. v Austral Biolab Pty., Ltd., 187 AD2d 637 [2d Dept 1992]). [*8]

Plaintiff has failed to meet this higher standard of wrongful means. The complaint merely alleges that defendant sought to persuade Ms. Lang to not do business with plaintiff (Amended Complaint, ¶ 251). This alone is clearly not actionable. Moreover, there is no allegation that defendant acted for the sole purpose of harming plaintiff. Accordingly, this fifth cause of action also fails to state a claim, and is dismissed.

The Motions for Sanctions:

The branch of the motions seeking sanctions, is granted as against both Stern, a principal of plaintiff and an attorney, and plaintiff's present counsel, Schwab. Pursuant to 22 NYCRR 130-1.1 (a), costs, in the form of reimbursement for actual expenses and reasonable attorney's fees, and financial sanctions may be imposed upon a party or attorney who engages in frivolous conduct as defined therein. Subsection (c) defines frivolous conduct as "completely without merit in law and cannot be supported by a reasonable argument for an extension, modification or reversal of existing law," undertaken primarily to delay, harass or maliciously injure another, or asserts false material fact statements (22 NYCRR 130-1.1 [c] [1]-[3]). In determining if conduct is frivolous, the court shall consider "whether or not the conduct was continued when its lack of legal or factual basis was apparent, should have been apparent, or was brought to the attention of counsel or the party" (id.; see Minister, Elders and Deacons of the Reformed Protestant Dutch Church of the City of New York v 198 Broadway, Inc., 76 NY2d 411 [1990]). In addition, even where a claim may be colorable, conduct may be found frivolous if the claim was brought for an improper purpose that is, to harass and punish or maliciously injure another (see Levy v Carol Mgt. Corp., 260 AD2d 27, 34 [1st Dept 1999]; Gordon v Marrone, 202 AD2d 104 [2d Dept 1994]). In tort actions, costs and reasonable attorney's fees not exceeding ten thousand dollars may also be awarded pursuant to CPLR § 8303-a, which contains a nearly identical definition of frivolous conduct.

In this case, the court finds two bases for finding that plaintiff and its counsel have engaged in frivolous conduct. First, after receiving the motion to dismiss the original complaint, which set forth the clear legal principles that the fraud, fraud by omission, and recklessness/gross negligence claims, alleged in the original complaint, lacked legal merit, plaintiff went ahead and served an amended complaint containing the identical claims. In addition, plaintiff's opposition papers do not argue for any extension, modification or reversal of existing law. Indeed, it admits, for example, that there is no special relationship which is required for both the fraud by omission and negligence claims, and argues summarily that there is a "duty of rational behavior" without any further argument, clarification, or legal references (Plaintiff's Opposition Memo, at 13-14). The lack of merit of plaintiff's "witness tampering/subornation of perjury" claim, specifically added in the amended complaint, was apparent even to plaintiff, since it did not address or defend defendant's arguments seeking dismissal of it. In sum, the causes of action of the amended complaint were clearly defective as a matter of law, on their face, and plaintiff's counsel should have been aware of this.

Second, upon examining the "broad pattern" of plaintiff's conduct (see Levy v Carol Mgt. Corp., 260 AD2d at 34), it is clear that the action is being pursued primarily to harass and maliciously injure defendant. For example, in an action primarily about DHP's failure to consult with plaintiff regarding the production of the play, plaintiff saw fit to include malicious speculations about the cause of defendant's divorce over ten years ago (Amended Complaint, ¶ 152). Stern, in his affidavit, accuses defendant of being a "pathological liar and sociopath," [*9](Affidavit of Peter R. Stern, dated March 28, 2006, ¶ 28; see also id., ¶ 32, 76; Plaintiff's Memo, at 19, 22). These malicious allegations, among many others, are interposed purportedly on the premise that they support the claim for fraud by omission that defendant had an obligation to tell plaintiff about her allegedly deviant past before plaintiff entered into the contract with DHP. That cause of action, however, as discussed above, completely lacks merit; it is obvious that it was interposed simply to attack defendant's character. Plaintiff's counsel admitted, in essence, to the irrelevant, scandalous nature of at least some of the allegations, at the oral argument of these motions.

Plaintiff's opposition to the request for sanctions attempts to blame defendant for the additional allegations in the amended complaint about her family, financial status, and personal affairs, by asserting that they were "the result of Harris' own conduct subsequent to the filing of the Verified Complaint and Harris' actions undertaken between the sending of the cease and desist letters and the filing of the Complaint" (Plaintiff's Opposition, at 20). This fails to form any basis for justifying the inclusion of the gratuitously malicious allegations clearly designed to embarrass and harass defendant. Finally, its contention that these allegations are appropriate because they are "based on press reports and information obtained by writers from independent third parties" (Stern Aff., ¶ 72), is rejected. The fact that a newspaper has reported on such assertions does not make them relevant to this action. Moreover, plaintiff itself admits that it "proceeded to distribute copies of the Verified Complaint to certain persons, including those believed to have been solicited by Harris. In addition, Martian authorized release of the Verified Complaint to a writer for the New York Post" (Plaintiff's Memo, at 3). The stories in the New York Post rely upon the complaint, and quote Stern and White, plaintiff's principals by name. Thus, plaintiff's justification that most of the allegations in the amended complaint "simply reiterate matters that had already appeared in the public press," apparently implying that this exonerates its actions in including them in the amended complaint, defies reality.

Costs and sanctions are appropriate against both Stern, one of plaintiff's principals, and plaintiff's counsel, Schwab. Stern is a lawyer, and should have been aware of the frivolous nature of the claims. He not only continued in pursuing them nevertheless, but he apparently was a party to their publication in the press. Therefore, sanctions are appropriate against him in the amount of $5,000.00.

Plaintiff's counsel was given the opportunity to withdraw the claims, and did not do so. His obligation as an officer of the court is to avoid commencing and pursuing frivolous and vexatious litigation. Even if his client sought to pursue these claims, plainly devoid of merit and undertaken as a vindictive campaign to harass defendant, his "obligation is to dissuade the client from continuing that course of action. If the client persists in such an ethically and otherwise improper direction, the attorney should refuse to be so engaged" (Heilbut v Heilbut, 18 AD3d 1, 9 [1st Dept 2005]). Accordingly, sanctions are imposed against Schwab as well, also in the sum of $5,000.00.

Accordingly, it is

ORDERED that the motion to dismiss the amended complaint is granted and the amended complaint is dismissed with costs and disbursements to defendant as taxed by the Clerk of the Court; and it is further

ORDERED that the Clerk is directed to enter judgment accordingly; and it is further

ORDERED that the defendant's motion for sanctions is granted and both plaintiff's [*10]principal, Peter R. Stern, Esq., and plaintiff's counsel, Andrew L. Schwab, Esq. shall pay the sum of $5,000.00 each to the Lawyers' Fund for Client Protection, 55 Elk Street, 3rd Floor, Albany, New York 12210; and it is further

ORDERED that written proof of such payment be provided to the Clerk of Part 49 and opposing counsel within 30 days after service of a copy of this order upon plaintiff's counsel, with notice of entry.

Dated: July 5, 2006ENTER:

/s/

J.S.C.