Naso v 1994 BA Leasing Corp.

[*1] Naso v 1994 BA Leasing Corp. 2006 NY Slip Op 52064(U) [13 Misc 3d 1230(A)] Decided on September 22, 2006 Supreme Court, New York County Edmead, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 September 22, 2006
Supreme Court, New York County

Salvatore Naso, Carol Nardi, and Jack Desario as Executors of the Estate of Thomas Monachino and Trustees of the Trust under the Will of Thomas Monachino, Plaintiffs,

against

1994 BA Leasing Corp.; 77 Broadway Corp.; Poonam Kapoor; Usha Kumar; 35 Street Blimpie, Inc.; Blimpie Associates, Ltd.; and Blimpie International, Inc., Defendants.



601833/2004

Carol Robinson Edmead, J.

Defendants 1994 BA Leasing Corp., 35 Street Blimpie, Inc. and Blimpie Associates, Ltd., move for an order finding that Nicholas Lagano, Jr. ("Mr. Lagano") is unable to testify at trial in court, thereby excusing his attendance at trial, intimating that the deposition testimony of Mr. Lagano may be offered in lieu of Mr. Lagano's live testimony. Said defendants argue that Mr. Lagano suffers from "acute anxiety syndrome," which renders him "incompetent to testify at trial."

Factual Background

In this action, plaintiffs Salvatore Naso, Carol Nardi and Jack Desario, as Executors of the Estate of Thomas Monachino and Trustees of the Trust under the Will of Thomas Monachino (collectively "plaintiffs") seek to pierce the corporate veil of defendants 77 Broadway ("77 Broadway") and 1994 BA Leasing Corp. ("1994"), and hold defendants Poonam Kapoor, Usha Kumar, and Blimpie Inc. and Blimpie Associates, Ltd. personally liable to plaintiffs for unpaid rent, additional rent, and collection costs.

35 Street Blimpie, Inc. and Blimpie Associates, Ltd. (collectively, "Blimpie") formed defendant 1994, which entered into a lease with plaintiffs for the location of 2190 Broadway in Manhattan (the "subject premises"). 1994 sublet the subject premises to 77 Broadway, and partners of 77 Broadway, Kapoor and Kumar, operated a Blimpie's Restaurant franchise at the subject premises. [*2]

Blimpie Associates Ltd. is a New York corporation and a licensor of the trademark "Blimpie" and "Blimpie Subs and Salads" in the County of New York, State of New York. Based on a recent press release issued by Nicholas Lagano, President, Blimpie Associates, Ltd., is an expanding operation: "PHILADELPHIA, PA, Sept. 8, 2006 Nicholas Lagano, president of Blimpie Associates, Ltd., announced the awarding of franchise development rights for BLIMPIE branded restaurants throughout the greater Philadelphia metropolitan area to Franchise Edge, Inc."

Subsequent to the commencement of this action, Mr. Lagano was deposed on August 30, 2005 from 10:10 a.m. until 2:15 p.m. The Court notes that Mr. Lagano managed to testify for four hours, without a lunch break and apparently without any "anxiety" attacks.

Mr. Lagano is the owner of both Blimpie Associates Ltd. and Metropolitan Blimpie Inc.[FN1] Mr. Lagano is the sole shareholder of both entities, and has been the sole shareholder of Blimpie Associates Ltd. since about 1991 or 1992.

Blimpie Associates Ltd. was formed as a licensee of Metropolitan Blimpie Inc. on or about 1992, at which point Mr. Lagano became the sole shareholder (Mr. Lagano dep. p. 15, lines 7-25). Metropolitan Blimpie Inc. holds the rights to the trademark Blimpie [FN2] within a certain geographic area including New York, New Jersey, Virginia, Delaware, Maryland, Washington, D.C., Kansas, Missouri, Iowa, North and South Dakota. Metropolitan Blimpie Inc. has licensed Blimpie Associates, Ltd. to use the Blimpie trademark in New York State (Mr. Lagano dep. pp. 22-23; lines 24-25, 1-21). There are about one hundred Blimpie Associates Ltd. franchisees in New York City (Mr. Lagano dep. pp. 43-44; lines 23-25, 1-6).[FN3]

After the close of discovery, this case came before this Court for trial.

At the trial conference, defendants 1994 and Blimpie advised the Court and the parties that Mr. Lagano was unable to appear in court on that date to offer testimony, pursuant to a subpoena served by plaintiff. The Court directed counsel to have Mr. Lagano appear on the next day.

On the next date, counsel for 1994 and Blimpie presented a letter from Mr. Lagano's treating psychologist, Dr. Neil Goldman, in support of an application to declare Mr. Lagano "unavailable" or incompetent to give testimony for trial due to Mr. Lagano's anxiety condition. The letter indicated that treatment of Mr. Lagano's condition would continue for the next ten days, and that "the acute stress reaction and the effects of the medication [FN4] on Mr. Lagano make it medically inappropriate and inadvisable for him to testify in court at this time." After oral [*3]argument, the Court rejected the application and ordered that Mr. Lagano appear on September 11, 2006, at 9:30 a.m. to give testimony. The Court also directed that the failure of Mr. Lagano to appear on September 11th "shall result in the striking of the answer, counterclaims, affirmative defenses and cross claims of defendants 1994 and Blimpie, Inc. and Blimpie Associates, Ltd." The Court also indicated that the letter dated September 7, 2006, submitted by Dr. Goldman in support of 1994 and Blimpie's application was insufficient to excuse Mr. Lagano from appearing at trial, and that in order to vacate the sanction noted above, Dr. Goldman must appear on September 11th with medical records for a hearing as to the sufficiency of Mr. Lagano's claim that he was unable to testify.

On September 11th, instead of appearing in court, Mr. Lagano went to the emergency room in a Brooklyn hospital, and Dr. Goldman did not appear.

The Court adjourned the matter to permit Dr. Goldman to offer testimony, with supporting medical records, to support the request that Mr. Lagano's appearance be excused.

Analysis

After a hearing was held before this Court on September 18, 2006, and reviewing the testimony of Dr. Goldman, documents admitted into evidence, and the parties' arguments, the Court determines the following:

The first issue before this Court is whether it is within the Court's discretion to determine Mr. Lagano's availability to testify at trial. It is a well-settled principle that a trial Court is empowered to ensure the orderly and fair administration of justice at trial (see Feldsberg v Nitschke, 49 NY2d 636,643, 404 NE2d 1293 [1980]). "This power to control the case necessarily is of a discretionary nature, and its exercise is not reviewable save for a clear abuse of discretion (Feldsberg, 49 NY2d at 643; Richardson, Evidence (10th ed. Prince), s 459, pp. 449-450). In an effort to control the case before it, it is within the sound discretion of a trial Court to determine the order of evidence and when it may be introduced, the method and duration of the examination of witnesses, the use of depositions at trial, and to deviate from the general rules of the conduct of trials when necessary due to the complexities of a particular case (Id).

It is also within a trial Court's discretion to determine the competency of a witness. "With respect to witnesses, the term [competency] refers to the eligibility of a witness to testify" (Barker and Alexander, 5 N.Y.Prac., Evidence in New York State and Federal Courts § 6:7 [2005]). Whenever the issue of competency arises, it is the trial judge alone who determines the question based on their inherent authority to examine the witness (People v Parks, 41 NY2d 36, 46, 390 NYS2d 848, 856, 359 NE2d 258, 266 [1976]). "It is the trial judge who has the opportunity to view the witness, to observe manner, demeanor and presence of mind, and to undertake such inquiries as are effective to disclose the witness' capacity and intelligence" (Id. at 46]). This includes taking testimony from the witness' doctor to ascertain whether the witness is capable of testifying (Id.). A witness must be free of characteristics which would prevent him from giving testimony before a Court of law (Barker and Alexander, 5 N.Y.Prac., Evidence in New York State and Federal Courts § 6:2 [2005]).

Given the considerable body of law recognizing the trial Court's discretionary power to [*4]control the case before it, this Court finds that it is well within its authority determine whether Mr. Lagano is incompetent/unavailable to testify.

The second issue is whether Mr. Lagano is available to testify despite his protestations that he is not competent to testify as a result of "acute anxiety syndrome." A hearing has been held by this Court to determine whether the personal attendance of Mr. Lagano as a witness is excused because of illness or incapacity.

At the hearing before this Court on September 18, 2006, testimony was received from Dr. Neil S. Goldman, a psychiatrist, who has been treating Mr. Lagano continuously since April 2001. Dr. Goldman diagnosed Mr. Lagano as suffering from "acute anxiety syndrome," which results in panic attacks. He has also been treating Mr. Lagano for alcoholism. The physical symptoms of Mr. Lagano's condition include difficulty breathing, vomiting, and at times temper tantrums and outbursts.

Treatment for Mr. Lagano's condition has included supportive therapy and prescription medications, including anti-anxiety drugs, anti-depressants, and tranquilizers, which he takes as needed. Some of the medications prescribed by Dr. Goldman have been recommended by Mr. Lagano based upon his own research. According to Dr. Goldman, "[Mr. Lagano] is an avid reader, and I [Dr. Goldman] have to keep up with the [medical] literature just to keep up with his keeping up with the [medical] literature" (pg. 8, lines 23-25). Ironically, Mr. Lagano has suffered further anxiety while taking the medications because of what he has read in the literature.

Dr. Goldman further testified that Mr. Lagano has seen other physicians and received other treatments. According to Dr. Goldman, Mr. Lagano has gone to the emergency room on several occasions and has gotten the "million dollar work up" when his physical symptoms have manifested. At Mr. Lagano's most recent visit to the emergency room on September 11, 2006, all tests for physical ailments came back normal and his interview showed that he had a panic disorder. Mr. Lagano has also been to internists, infectious disease doctors, and neurologists when his physical symptoms have manifested. In each instance, Mr. Lagano has been discharged with the doctors telling him that he "has no physical problems" and that the physical manifestations are a result of his anxiety.

Dr. Goldman also testified regarding an affidavit by Dr. Michael Rosenbluth regarding Dr. Rosenbluth's examination of Mr. Lagano on September 11, 2006. On that occasion, Dr. Rosenbluth was able to calm Mr. Lagano down after one hour of talking. In this regard, Dr. Goldman has also been able to utilize "supportive psychotherapy," which helps Mr. Lagano feel "more calm and more put together and collected with or without medication."

When asked to describe if Mr. Lagano is able to work, Dr. Goldman testified that Mr. Lagano misses many days of work and when he does go to work, he goes early in the morning when no one is there. Mr. Lagano most recently missed work because of his trip to the emergency room on September 11, 2006, and he returned to work on September 14, 2006. Mr. Lagano also works from home via telephone, away from the stresses of the office. According to Dr. Goldman, Mr. Lagano is "able to think more clearly, review documents, make a phone call, and give the opinion as to what needs to be done" when he is away from the office. Mr. Lagano routinely makes decisions in the ordinary course of business despite his fear that those decisions [*5]will cause harm to others. Dr. Goldman also testified that Mr. Lagano is capable of driving a car and has driven to his appointments with Dr. Goldman on past occasions. In summarizing Mr. Lagano's reliability, Dr. Goldman stated that Mr. Lagano has difficulty with certain appointments, and attends some meetings, while avoiding others.

Dr. Goldman also testified that Mr. Lagano has been party to lawsuits in the past and has attended some of those trials, dealing with the stress of them as best he could. Moreover, Dr. Goldman stated that he has never advised Mr. Lagano against participating in a deposition or trial during the course of his treatment. However, both the anxiety and his current medications interfere with his ability to reason and think clearly. As such, Dr. Goldman stated that it is his opinion, to a reasonable degree of medical certainty, that Mr. Lagano is not currently capable of testifying in the instant case.

The CPLR provides some guidance as to the issue of unavailability due to infirmity. Though not cited by the defendants, CPLR § 3117 provides that a deposition can only be put into evidence by an adverse party,[FN5] unless one of the limited exceptions, such as unavailability of the witness due to infirmity, applies [FN6] (see Wojtas v Fifth Avenue Coach Corp., 23 AD2d 685, 257 NYS2d 404 [2d Dept 1965]). The Court notes that CPLR § 3117 offers as a remedy, the use of an "unavailable" witness' deposition testimony by an adverse party, when such witness is found by the Court to be "unavailable" for trial.

However, in order to rely upon CPLR § 3117, an adequate foundation must be laid to establish that Mr. Lagano was unable to attend the trial because of sickness (Cutler v Konover, 81 AD2d 571, 437 NYS2d 423 [2d Dept 1981]). Except as to setting forth this general standard, the case law addressing unavailability due to an infirmity such as the one suffered by Mr. Lagano is sparse. The area of law where it has most often arisen is in the criminal context. Though the CPL [FN7] differs from the CPLR, the Court still looks to these cases for direction and instructive [*6]guidance as to a decision on this issue.

In People v Slaughter (163 AD2d 342, 344, 557 NYS2d 926 [2nd Dept 1990]) the trial court conducted a hearing at which a psychologist who had been treating the witness testified that the witness was suffering from anxiety and depression and that the strain of trial would be detrimental to him. The psychologist acknowledged that the witness' condition did not require him to be hospitalized nor did it prevent him from working. Despite this, the trial Court declared the witness unavailable and allowed his prior testimony to be admitted as an exception to the hearsay rule. The appellate division reversed and stated that the problems from which the witness was alleged to be suffering were strictly emotional and exhibited no physical component. The Court further stated that there was insufficient evidence to demonstrate that the witness' physical and mental health would have been seriously jeopardized had he been required to testify.Similarly, in People v Del Mastro (72 Misc 2d 809, 339 NYS2d 389 [2nd Dept 1973]) the prosecution sought to have the witness declared unavailable and to use her deposition in lieu of live testimony. The witness suffered from anxiety that resulted in numbness in her extremities, chest pains, hyperventilation, and fainting. The Court held that the witness was required to testify because there was no evidence that she suffered from any heart condition or any organic ailment. Moreover, the Court stated that the evidence did not suggest that any sort of attack, that might be induced from testifying, would result in serious injury or death. The Court concluded that it was not satisfied that the illness, of which the witness complained, was a serious one.

This Court is satisfied that Mr. Lagano's situation is sufficiently similar to the aforementioned cases. Although testifying in court may be stressful for Mr. Lagano, as it may be for many witnesses, there is no testimony indicating that his appearance to testify in court is life-threatening or that Mr. Lagano is "incompetent." Mr. Lagano has not been diagnosed as suffering from an actual heart condition or organic ailment. His doctors have not declared him unable to function on a daily basis. There is no record of a prolonged hospital stay or that he does not partake in the day to day affairs of his business. He is neither dead nor absent from the jurisdiction. If anything, Mr. Lagano has been portrayed as an individual who, despite his condition, is cognitive enough to grasp the complexities of medical literature to the point that he suggests to his doctor which medications he should be prescribed. Moreover, he remains "President" of the Blimpie corporation, routinely works from his office and his home, drives a car, and takes his medication "as needed" rather than at prescribed times. Most importantly, Mr. [*7]Lagano has taken part in previous depositions and trials and has never been advised not to. Mr. Lagano was deposed for this case on August 30, 2005, from 10:10 a.m. until 2:15 p.m. The Court notes that Mr. Lagano managed to testify for four hours, without a lunch break and apparently without any "anxiety" attacks. Further, as Mr. Lagano's condition and the medications do not sufficiently interfere with his ability to operate his business, it cannot be said that the medications or his condition sufficiently interferes with his ability to testify in court concerning his business.

Drawing from the aforementioned facts and case law, defendants failed to establish with sufficient testimony and admissible evidence that Mr. Lagano is incompetent/unavailable to testify at trial.

In the words of the late Hon. Irving Younger early in his career as a Civil Court Judge, Our statute permits the hearsay use of a deposition such as Jobse's when the deponent is unavailable CPLR Rule 3117(a)(3). Sometimes described as the deposition exception to the hearsay rule, such use might more compactly be classified as an application of the exception for prior reported testimony. 5 Wigmore, Evidence, sec. 1401 (3d ed. 1940); compare CPLR Rule 4517. To invoke the latter exception, it must appear not only that the declarant is unavailable but also that his absence is not due to the act or neglect of the hearsay's proponent. Ibid. The statute does not explicitly attach this condition to a party's right to use the deposition of an unavailable deponent. CPLR Rule 3117(a)(3). I have no doubt, however, that the legislature's silence signifies nothing. In general, a party will not be permitted to benefit by his own misconduct. In particular, a party will not be permitted to put in evidence the deposition of a person whose unavailability is the party's doing. A contrary rule would hardly be just, and we are directed to construe the statute to secure the just * * * determination of every civil judicial proceeding.' CPLR sec. 104.

(Jobse v Connolly, 60 Misc 2d 69, 302 NYS2d 35 [NYC Civ Ct. 1969] [plaintiff failed to prosecute personal injury action and his unavailability for testimony at trial was by reason of his failure to proceed with "dispatch;" thus, offer of plaintiff's deposition in evidence on ground of plaintiff's absence was an attempt to profit by his own fault]).

Based on the foregoing, it is hereby

ORDERED that the parties, including Nicholas Lagano, Jr., shall appear for trial on November 6, 2006, Part 40.[FN8][FN9] And it is further

ORDERED that the failure of Nicholas Lagano, Jr., to appear on Monday, November 6, 2006, at 9:30 a.m. shall result in the striking of the answer, counterclaims, affirmative defenses and cross claims of defendants 1994 and Blimpie, Inc. and Blimpie Associates, Ltd. And it is further

ORDERED that there will be no allowance for a doctor's note excusing Mr. Lagano. [*8]

This constitutes the decision and order of the Court.

Dated: September 22, 2006___________________________________

Hon. Carol Robinson Edmead, J.S.C.

In accordance with the accompanying Memorandum Decision, it is hereby

ORDERED that the parties, including Mr. Lagano, shall appear for trial on November 6, 2006, Part 40. And it is further

ORDERED that the failure of Nicholas Lagano, Jr., to appear on Monday, November 6, 2006, at 9:30 a.m. shall result in the striking of the answer, counterclaims, affirmative defenses and cross claims of defendants 1994 and Blimpie, Inc. and Blimpie Associates, Ltd. And it is further

ORDERED that there will be no allowance for a doctor's note excusing Mr. Lagano. And it is further [*9]

ORDERED that defendants 1994 BA Leasing Corp., 35 Street Blimpie, Inc. and Blimpie Associates, Ltd. shall serve a copy of this order with notice of entry upon all parties within 20 days of entry. Footnotes

Footnote 1: Deposition transcript of Nicholas Mr. Lagano dated August 30, 1005 (hereinafter referred to as "Mr. Lagano dep. p. ____, lines_____"); Mr. Lagano dep. p. 7, lines 6-7.

Footnote 2: Metropolitan Blimpie Inc. co-owns the Blimpie trademark with Blimpie International, in which Mr. Lagano has no shareholding interest.

Footnote 3: Mr. Lagano "sign[s] a thousand checks a week (Mr. Lagano dep. p. 38, lines 14-15).

Footnote 4: Mr. Lagano is being treated with Valium, Xanax, and Wellbutrin.

Footnote 5: CPLR § 3117(a)(2): "the deposition testimony of a party ... may be used for any purpose by any party who was adversely interested when the deposition testimony was given or who is adversely interested when the deposition testimony is offered in evidence."

Footnote 6: CPLR § 3117(a)(3)(iii): "the deposition of any person may be used by any party for any purpose against any other party who was present or represented at the taking of the deposition or who had the notice required under these rules, provided that the witness is unable to attend or testify because of age, sickness, infirmity, or imprisonment."

Footnote 7: CPL § 670.10 Use in a criminal proceeding of testimony given in a previous proceeding; when authorized: 1. Under circumstances prescribed in this article, testimony given by a witness at (a) a trial of an accusatory instrument, or (b) a hearing upon a felony complaint conducted pursuant to section 180.60, or (c) an examination of such witness conditionally, conducted pursuant to article six hundred sixty, may, where otherwise admissible, be received into evidence at a subsequent proceeding in or relating to the action involved when at the time of such subsequent proceeding the witness is unable to attend the same by reason of death, illness or incapacity, or cannot with due diligence be found, or is outside the state or in federal custody and cannot with due diligence be brought before the Court. Upon being received into evidence, such testimony may be read and any videotape or photographic recording thereof played. Where any recording is received into evidence, the stenographic transcript of that examination shall also be received.

2. The subsequent proceedings at which such testimony may be received in evidence consist of: (a) Any proceeding constituting a part of a criminal action based upon the charge or charges which were pending against the defendant at the time of the witness's testimony and to which such testimony related; and (b) Any post-judgment proceeding in which a judgment of conviction upon a charge specified in paragraph (a) is challenged.

Footnote 8:(Omitted for purposes of publication.)

Footnote 9: If Mr. Lagano refuses to testify, the plaintiff is not precluded to later move pursuant to CPLR § 3117 for the admission of Mr. Lagano's deposition testimony.