Dixon v Roy

[*1] Dixon v Roy 2008 NY Slip Op 52086(U) [21 Misc 3d 1117(A)] Decided on October 21, 2008 Supreme Court, Kings County Demarest, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 21, 2008
Supreme Court, Kings County

Teryl Dixon and Frank Rosemberg, Plaintiffs,

against

Emmanuel A. Roy, Defendant.



41346/07



Attorney for Plaintiffs

Jacob Rabinowitz, Esq.

30 Vesey Street, 15th Floor

New York, NY 10007

Attorney for Defendant

Emmanuel Roy, Esq.

26 Court Street, Suite 1503

Brooklyn, NY 11242

Carolyn E. Demarest, J.

In this action by plaintiffs Teryl Dixon (Dixon) and Frank Rosemberg (Rosemberg) (collectively, plaintiffs) alleging a claim for abuse of process, defendant Emmanuel A. Roy, Esq. (Roy) moves for summary judgment dismissing plaintiffs' complaint as against him or, in the alternative, for an order vacating plaintiffs' note of issue and certificate of readiness, which was filed on May 28, 2008. Plaintiffs cross-move for summary judgment in their favor, together with attorney's fees and costs.

Dixon was the owner of premises located at 599 Vanderbilt Avenue, in Brooklyn, New York (the 599 Vanderbilt Avenue premises). Pursuant to a commercial real estate lease dated June 1, 2004, Dixon, as the landlord, leased the ground floor and basement of the 599 Vanderbilt Avenue premises to Luis A. Brens (Brens), as the tenant, for use as a restaurant. The lease was for a 10-year term, beginning on June 1, 2004, and was to terminate on June 1, 2014. The lease contained a provision entitled "Termination upon Sale of Premises," which provided that [*2]"[n]otwithstanding any other provision of this [l]ease, [l]andlord may terminate this lease upon [30] days' written notice to [t]enant that the [p]remises have been sold." The lease did not permit Dixon to terminate it under any other conditions.

In December 2006, Dixon decided to perform major construction work at the 599 Vanderbilt Avenue premises, and at the property adjacent to those premises, which is owned by him and is located at 597 Vanderbilt Avenue (the 597 Vanderbilt Avenue premises). This major construction work allegedly required that the entire premises be vacant for a period of approximately three months. Dixon attempted to reach an agreement with Brens, whereby he would pay Brens a sum of money if Brens would voluntarily vacate the restaurant and relocate during the renovations period. In March 2007, Dixon set forth, in a writing, his intent to renovate the 599 Vanderbilt Avenue premises and to compensate Brens for three months' loss of business during the time that the restaurant was to be closed while he performed these renovations.

In May 2007, Dixon filed documents with the New York City Department of Finance, registering the 599 Vanderbilt Avenue premises as "vacant" residential land. A draft of a proposed agreement, dated August 2007, further sets forth Dixon's desire to reach an agreement with Brens, whereby he would compensate Brens for lost business during the period of renovations in which construction work would be performed at the 599 Vanderbilt Avenue premises. No agreement, however, was reached between Dixon and Brens, and Brens refused to relocate.

By a contract of sale dated August 24, 2007, Dixon agreed to sell the 599 Vanderbilt Avenue premises to Rosemberg, with whom he had a prior business relationship. The purchase price, which was listed in this contract as $800,000, was to be paid "in kind," by the execution and delivery of a deed from Rosemberg to Dixon of property located at 3043 Brighton 1st Street, in Brooklyn, New York (the 3043 Brighton 1st Street premises). On September 27, 2007, Dixon executed a deed, transferring his ownership of the 599 Vanderbilt Avenue premises to Rosemberg. On the same date, the 3043 Brighton 1st Street premises was transferred from Rosemberg to Dixon. No cash was exchanged for the transfer of the 599 Vanderbilt Avenue premises. While one Real Property Transfer Report for the 599 Vanderbilt Avenue premises reflects no consideration, another such report reflects a $800,000 consideration with payment of City transfer taxes, but no payment of State transfer taxes. While one Real Property Transfer Report for the 3043 Brighton 1st Street premises shows no consideration, another such report shows a $450,000 consideration. Dixon allegedly obtained, among other things, a construction loan, blue prints, and surveys, and paid other construction expenses from February 16, 2007 to September 27, 2007 (the date of the purported transfer of the 599 Vanderbilt Avenue premises to Rosemberg).

On October 3, 2007, Roy, as the attorney for Brens, filed a summons and complaint, on behalf of Brens, as plaintiff, in an action against Dixon (Brens v Dixon, Sup Ct, Kings County, index No. 36836/07) (the Brens action), alleging claims of fraud and breach of contract with respect to his lease of the 599 Vanderbilt Avenue premises. Dixon claims that Roy notified him and his attorney, Jacob Rabinowitz, Esq. (Rabinowitz), that he would apply for an ex parte order to show cause containing a temporary restraining order on October 4, 2007 at 11:00 A.M., but did not appear at that time, and was then told by Roy that he would present his order to show [*3]cause at 4:00 P.M. on that day. Rosemberg and Rabinowitz waited for Roy until 4:40 P.M., but Roy did not appear to present his order to show cause. On October 5, 2007, Rabinowitz was told by Roy that he would submit the order to show cause on October 9, 2007, and Rabinowitz advised Roy that he would not be available to appear on that date. Rabinowitz claims that during his conversation with Roy on October 5, 2007, he notified Roy that Dixon had transferred title to the 599 Vanderbilt Avenue premises to Rosemberg on September 27, 2007, that no demolition work was actually then in progress at the 599 Vanderbilt Avenue premises or the 597 Vanderbilt Avenue premises, and that Brens was operating the restaurant at the 599 Vanderbilt Avenue premises at that time without interference.

On October 9, 2007, Roy presented an order to show cause to the ex parte part of the court, without the appearance of Rabinowitz. The order to show cause in Index No. 36836/07 sought a preliminary injunction, enjoining and restraining Dixon from ordering or performing any further demolition or construction work, or any procedures or operations related to demolition and related work on the 597 Vanderbilt Avenue premises and the 599 Vanderbilt Avenue premises, pending the resolution of the Brens action or a court order for permission to continue, resume, or initiate such work. The court, on October 9, 2007, signed the temporary restraining order contained in the order to show cause, temporarily restraining Dixon from ordering, performing, or continuing any further demolition or related work, or any activities related to the same, pending the hearing of Bren's application, which was scheduled for October 31, 2007.

By order to show cause dated October 11, 2007, which was also made returnable on October 31, 2007, Dixon moved to vacate the October 9, 2007 temporary restraining order granted against him on the grounds that it was based on a false statement of facts and was submitted for signature without the requisite notice to him or Rabinowitz. On October 17, and 18, 2007, Rosemberg, as the new owner and landlord of the 599 Vanderbilt Avenue premises, served Brens with written notice that his lease was being terminated pursuant to the termination clause (as set forth above) contained in the lease. Brens was directed to remove himself from the 599 Vanderbilt Avenue premises by November 30, 2007. On October 31, 2007, after oral argument, this court granted Dixon's motion to vacate the temporary restraining order.

On November 8, 2007, plaintiffs filed this action against Roy. Plaintiffs' complaint in this action alleges that Brens' complaint in the Brens action falsely alleged that Dixon was the owner of the 599 Vanderbilt Avenue premises; that demolition work was then in progress at the 597 Vanderbilt Avenue premises and the 599 Vanderbilt Avenue premises; that the past removal of personal property from the upper floors of the two buildings, formerly occupied by residential tenants, interfered with the business operations of Brens' restaurant, even though it is located at the street level of the 599 Vanderbilt Avenue premises, it remained in business operation, and it had a separate ingress and egress to its premises; and that Brens' restaurant would be obstructed by any future renovation, demolition, or removal of personal property on the upper floors of the 597 Vanderbilt Avenue premises, or on the upper floors of the 599 Vanderbilt Avenue premises which were completely vacant and not occupied by Brens. Plaintiffs' complaint asserts that the October 9, 2007 order to show cause, with the temporary restraining order, was granted upon these false and improper allegations. Plaintiffs' complaint also alleges that Roy failed to comply with the rules of the court which require that opposing counsel be notified of a specific [*4]appearance date for submission of an order to show cause containing a temporary restraint (see Uniform Civil Rules for Sup Ct and County Ct [22 NYCRR] § 202.7 [f]).

Plaintiffs, in their complaint, assert that as a result of the issuance of the temporary restraining order, Dixon was temporarily enjoined from performing renovation, cleanup, and demolition work that he had projected for the 597 Vanderbilt Avenue premises despite the fact that those premises were vacant and that this work would not have interfered with Roy's client, Brens. Dixon claims that due to the constraints of the temporary restraining order from October 9, 2007 to the present, he has sustained substantial losses and damages at the 597 Vanderbilt Avenue premises because he had already advanced monies to the residential tenants of the 597 Vanderbilt Avenue premises to obtain possession of their apartments, and had signed contracts for relocation and partial demolition of the 597 Vanderbilt Avenue premises. Rosemberg claims that he has sustained damages by reason of the temporary restraining order because of its interference with his ownership of the 599 Vanderbilt Avenue premises. Dixon and Rosemberg assert that Roy's issuance of process, on behalf of Brens, and his prosecution of Brens' claims in the Brens action were malicious and constituted an abuse of process, damaging them in their respective ownership and maintenance of the 597 Vanderbilt Avenue premises and the 599 Vanderbilt Avenue premises. Both Dixon and Rosemberg demand a judgment in the amount of $500,000.

Since Brens continued in possession past November 30, 2007, Rosemberg (while this action and the Brens action were pending) commenced a commercial holdover proceeding in the Civil Court, Kings County (the Civil Court proceeding), to recover possession of the leased restaurant premises from Brens. Brens, who was represented by Roy, as his attorney, argued, as a defense in the Civil Court proceeding, that the transfer of ownership of the 599 Vanderbilt Avenue premises from Dixon to Rosemberg was a sham transaction, designed to remove him from the leased premises. While the Civil Court proceeding was pending, this court (Kramer, J.), by order dated February 22, 2008, granted, on default, a motion by plaintiffs to dismiss Roy's counterclaims and affirmative defenses in this action. A trial was conducted in the Civil Court proceeding before Judge Peter P. Sweeney on March 31, April 1, and April 7, 2008. Plaintiffs filed their note of issue in the present action on May 28, 2008.

By a decision and order dated June 4, 2008 in the Civil Court proceeding, Judge Sweeney, after considering and evaluating the testimony and evidence presented at the trial of that proceeding, determined that the termination clause in the lease to Brens only gave Dixon, as the landlord who was selling the 599 Vanderbilt Avenue premises, the right to terminate the existing lease, and did not confer upon Rosemberg the option to terminate Brens' lease in connection with his own purchase of the 599 Vanderbilt Avenue premises. Judge Sweeney ruled that the termination clause in the lease only conferred upon Rosemberg the option to terminate the lease in the event of his subsequent sale of the 599 Vanderbilt Avenue premises, and that if Rosemberg had wanted the 599 Vanderbilt Avenue premises vacant at the time that he acquired title to them, he would have had to have insisted upon a cancellation of the lease by Dixon at the time of the sale. In so ruling, Judge Sweeney found it unnecessary to address the issue of whether the transfer of title of the 599 Vanderbilt Avenue premises from Dixon to Rosemberg was a sham transaction. [*5]

In addressing the instant motion and cross motion, the court notes that "[i]n its broadest sense, abuse of process may be defined as misuse or perversion of regularly issued legal process for a purpose not justified by the nature of the process" (Board of Educ. of Farmingdale Union Free School Dist. v Farmingdale Classroom Teachers Assn., Local 1889, AFT AFL-CIO, 38 NY2d 397, 400 [1975]; see also Curiano v Suozzi, 63 NY2d 113, 116 [1984]; Sipsas v Vaz, 50 AD3d 878, 879 [2008]; W.I.L.D. W.A.T.E.R.S. v Martinez, 152 AD2d 799, 799 [1989]). "Abuse of process has three essential elements: (1) regularly issued process, either civil or criminal, (2) an intent to do harm without excuse or justification, and (3) use of the process in a perverted manner to obtain a collateral objective" (Curiano, 63 NY2d at 116; see also Minasian v Lubow, 49 AD3d 1033, 1035-1036 [2008]; Plataniotis v TWE-Advance/Newhouse Partnership, 270 AD2d 627, 630 [2000]).

"[T]he process used must involve an unlawful interference with one's person or property'" (Curiano, 63 NY2d at 116, quoting Williams v Williams, 23 NY2d 592, 596 [1969]). The "gist of the action for abuse of process. . . is the improper use of process after it is issued" (Curiano, 63 NY2d at 117 [internal quotation marks and citations omitted]). Thus, "[i]n general, a claim of abuse of process will only lie for improperly using process after it is issued" (Minasian, 49 AD3d at 1036).

Here, the temporary restraining order constituted a regularly issued process which compelled the forbearance of a prescribed act, satisfying the first element to establish an abuse of process (see Hornstein v Wolf, 109 AD2d 129, 133 [1985], affd 67 NY2d 721 [1986]). With respect to the second element of this tort, plaintiffs have not shown that Roy was motivated by an intent to do harm without economic or social excuse or justification (see Curiano, 63 NY2d at 116; Hornstein, 109 AD2d at 133). Roy has shown, based upon the June 4, 2008 decision and order in the Civil Court proceeding, that his client, Brens, had a meritorious claim with respect to plaintiffs' attempt to terminate his lease. Roy has also presented documentary evidence (i.e., the transfer tax reports; Department of State records, naming Rosemberg as the principal for corporations listed on Dixon's spreadsheets as the source and/or recipient of "stock advances"; affidavits by Dixon and Rosemberg, admitting to a long-standing business relationship, "stock advances," and loans; and spreadsheets showing that boring tests were ordered and that Dixon paid Rosemberg a fee on September 27, 2007 for "eviction of the rest[aurant]") with respect to his allegations that the transfer of the leased property by Dixon to Rosemberg may have been a fraudulent or sham transaction, without adequate consideration, designed to evict his client, Brens, from the leased premises.

Furthermore, Roy sought the temporary restraining order, on behalf of his client, Brens, for a legitimate purpose, to prevent Dixon from demolishing the subject premises and frustrating his client's alleged entitlement to lease the restaurant premises (see W.I.L.D. W.A.T.E.R.S.,152 AD2d at 800; Anderson v Pegalis, 150 AD2d 315, 316 [1989]). Moreover, Roy sought the temporary restraining order to preserve the status quo pending a hearing, which occurred on October 31, 2007, three weeks later.

With respect to the third element which is a necessary prerequisite to establish the tort of abuse of process, there is no allegation that Brens sought to obtain some collateral advantage over Dixon or Rosemberg, or to obtain some corresponding detriment to them, which was outside the legitimate end of the temporary restraining order (see W.I.L.D W.AT.E.R.S., 152 [*6]AD2d at 800). Plaintiffs fail to allege that the temporary restraining order issued by the court was used to accomplish anything beyond its lawful purpose (see Sipsas, 50 AD3d at 879). There is no proof that Roy "utilized the process in a manner inconsistent with the purpose for which it was designed" (Minasian, 49 AD3d at 1036). Rather, plaintiffs contend that Roy acted maliciously in obtaining the temporary restraining order. "[A] malicious motive without more does not give rise to a cause of action to recover damages for abuse of process" (Anderson, 150 AD2d at 317; see also Curiano, 63 NY2d at 117).

Plaintiffs do not allege that the temporary restraining order was actually improperly used after it was issued (see Curiano, 63 NY2d at 117). Plaintiffs have not asserted that there was "any actual misuse of the process to obtain an end outside its proper scope" (Hornstein v Wolf, 67 NY2d 721, 723 [1986]).

Thus, plaintiffs have failed to allege how process was improperly used after its issuance or how they were specifically harmed by it (see W.I.L.D. W.A.T.E.R.S., 152 AD2d at 800). Indeed, while plaintiffs assert that the temporary restraining order restrained Rosemberg from continuing his efforts to renovate the second story of the 599 Vanderbilt Avenue premises over the restaurant and Dixon's efforts to renovate the entire building at the 597 Vanderbilt Avenue premises, the temporary restraining order was only in effect for three weeks (from October 9 to October 31, 2007). In this regard, Rabinowitz, in his affirmation, attests that he personally knows that there was "no demolition in progress" at the time of the filing of the complaint in the Brens action, or at the time of Roy's obtaining the temporary restraining order with respect to the 599 Vanderbilt Avenue premises or the 597 Vanderbilt Avenue premises. He states that there was only a prior removal of abandoned property by former residential occupants of the second floor of the 597 Vanderbilt Avenue premises. Dixon has also submitted his sworn affidavit, wherein he attests that at the time that the temporary restraining order was issued, the 597 Vanderbilt Avenue premises was "undergoing no renovation, removal of personal property or other work."

Consequently, inasmuch as there is no evidence that Roy sought to accomplish an unlawful purpose not justified by the nature of the process or to achieve some improper collateral advantage, no cause of action has been stated to recover damages for abuse of process (see Hornstein, 67 NY2d at 723; Curiano, 63 NY2d at 116; Anderson, 150 AD2d at 316). Summary judgment dismissing plaintiffs' complaint as against Roy must, therefore, be granted (see CPLR 3212 [b]; Curiano, 63 NY2d at 116; Sipsas, 50 AD3d at 879; W.I.L.D. W.A.T.E.R.S. 152 AD2d at 800; Anderson, 150 AD2d at 316-317).

Plaintiffs, in their cross motion, however, assert that Roy has engaged in frivolous conduct, and they seek the payment of their attorney's fees and costs by Roy. Rules of the Chief Administrator (22 NYCRR) § 130-1.1 (a) provides that "[t]he court, in its discretion, may award to any party or attorney in any civil action . . . before the court . . . costs in the form of reimbursement for actual expenses reasonably incurred and reasonable attorney's fees, resulting from frivolous conduct as defined in this Part." "For purposes of . . . Part [130], conduct is frivolous if . . . it is undertaken primarily . . . to harass or maliciously injure another" (22 NYCRR 130.1.1 [c] [2]) or if "it asserts material factual statements that are false" (22 NYCRR 130.1.1 [c] [3]). [*7]

In this action, plaintiffs assert that Roy obtained the October 9, 2007 temporary restraining order to harass and maliciously injure them. They also assert that Roy's order to show cause and supporting papers asserted material false factual statements since Rabinowitz had informed Roy that Dixon was no longer the owner of the 599 Vanderbilt Avenue premises and that no demolition work was in progress at the 599 Vanderbilt Avenue premises or the 597 Vanderbilt Avenue premises at that time.

In response, Roy states that his actions were not undertaken to harass or maliciously injure plaintiffs, but to protect the rights of his client, Brens, with respect to the subject lease. He points to the fact that (as discussed above) the Civil Court proceeding resolved the issue of Rosemberg's attempted eviction of Brens in Brens' favor. As to the issue of Roy's representations as to the ownership of the 599 Vanderbilt Avenue premises, Roy states that plaintiffs had not presented his law office with proof of the conveyance by Dixon to Rosemberg at the time of the October 9, 2007 order to show cause. Specifically, Roy claims that neither Dixon, Rosemberg, nor Rabinowitz served lawful notice of the transfer of title upon him or Brens at the time that he submitted Brens' order to show cause to the court, and that they did not furnish any evidence of this transfer of title until they submitted a copy of the September 27, 2007 deed in their cross motion by order to show cause. As to Roy's representations as to the status of the demolition work, Roy states that if plaintiffs had no intention to demolish their buildings, the temporary restraining order had no effect upon them.

Plaintiffs additionally assert, however, that Roy, in obtaining the October 9, 2007 temporary restraining order, failed to comply with Uniform Civil Rules for the Supreme Court and County Court (22 NYCRR) § 202.7 (f), which provides that in moving for a temporary restraining order, in the absence of a showing of significant prejudice to the party seeking the temporary restraining order, the affirmation submitted by the movant in support of the temporary restraining order "must demonstrate that a good faith effort has been made to notify the party against whom the temporary restraining order is sought of the time, date and place that the application will be made in a manner sufficient to permit the party an opportunity to appear in response to the application."

Roy does not deny that he was specifically informed by Rabinowitz that he was unavailable to appear on October 9, 2007, and, thus, that he did not make a good faith effort to make the application for the temporary restraining order in a manner sufficient to permit Dixon, by his attorney, Rabinowitz, to have an opportunity to appear in response to the application. Roy also does not deny that he did not advise the court that Rabinowitz had informed him that he was unable to appear on that date. Thus, it has been established that the application, made by Roy, for a temporary restraining order violated Uniform Rules for the Supreme Court and County Court (22 NYCRR) § 202.7 (f), and that Roy falsely represented that a good faith effort to permit Dixon to appear had been made.

As set forth above, conduct is frivolous where it involves the assertion of misleading factual statements (see 22 NYCRR 130-1.1 [c] [1], [3]; Curcio v Hogan Coring & Sawing Corp., 303 AD2d 357, 358 [2003]). The lack of compliance with a court rule is sanctionable (see generally, 22 NYCRR 130-1.1; Matter of Edward Shapiro P.C., 9 Misc 3d 369, 379 [2005]). Plaintiffs have incurred attorney's fees in their successful effort to vacate the improperly obtained ex parte temporary restraining order (see generally Shu Yiu Louie v David & Chiu Place Rest., [*8]261 AD2d 150, 152 [1999]; Hanley v Fox, 90 AD2d 662, 662-663 [1982]). As previously noted, 22 NYCRR 130-1.1 provides that sanctions may take the form of reimbursement of another party's reasonable attorney's fees. An award of reasonable attorney's fees, under these circumstances, will address Roy's sharp practices in giving incorrect notice to plaintiffs of the date and time for presentation of the Order to Show Cause and will compensate plaintiffs for expenses that they legitimately incurred in responding to, and vacating the temporary restraining order.

Accordingly, Roy's motion for summary judgment dismissing plaintiffs' complaint as against him, is granted. In view of this determination, Roy's alternative motion for an order vacating plaintiffs' note of issue and certificate of readiness, is rendered moot. Plaintiffs' cross motion is denied insofar as it seeks summary judgment in their favor, and is granted to the extent that it seeks an award of the reasonable attorney's fees and costs incurred by them in connection with the temporary restraining order. Such award is properly entered in the case Brens v Dixon, which is scheduled to be heard on December 10, 2008. On that date, counsel for Dixon and Rosemburg shall present evidence of the reasonable attorney's fees, costs, and disbursements incurred by plaintiffs in vacating the temporary restraining order.

This constitutes the decision, order and judgment of the court.

E N T E R,

J. S. C.