GFI Brokers, LLC v Tradition (North America) Inc.
Annotate this CaseDecided on April 2, 2009
Supreme Court, New York County
GFI Brokers, LLC, Plaintiff,
against
Tradition (North America) Inc. et al., Defendants.
600967/08
The plaintiff was represented by the Manhattan law firm Carter Ledyard & Milburn. The defendants were represented by the Manhattan law firm Schnader Harrison Segal & Lewis.
Marylin G. Diamond, J.
In this action, the plaintiff alleges that five of its employees breached their employment contract with the plaintiff by resigning without providing plaintiff with the proper notice, by working for a competitor and/or by soliciting plaintiff's employees for employment with a competitor. This action has been brought against the competitor, Tradition (North America) Inc. ("Tradition NA") and two related corporations, Tradition Asiel Securities, Inc. and TFS Derivatives Corporation. Only three of the five employees have been named as employees herein, Hector Sanchez, Kathleen Veloroso DeSouza and Karol Rothemberg. The complaint asserts causes of action against the corporate defendants for tortious interference with contract, unfair competition and tortious interference with employment relations and prospective business advantage. It asserts a cause of action for breach of contract against each of the three individual defendants.
As to the two employees who are not named as defendants herein, the plaintiff has brought separate actions against them, one in federal court and the other in state court. The federal court action was brought against John Santana and asserts causes of action for breach of contract, breach of fiduciary duty and misappropriation of trade secrets. This action has been consolidated with a related federal action brought against two foreign companies which are affiliated with Tradition NA, Ofir Elias Filho and Tradition Brasil Consultoria Empresarial, Ltda., asserting claims for tortious interference with Santana's contract and misappropriation of trade secrets. As to the state court action, it was brought against Victor Giardina and Tradition NA. It asserts a claim against Giardina for breach of contract and against Tradition NA for tortious interference with contract.
The defendants herein have now moved, pursuant to CPLR 2201, for a stay of this proceeding until the federal action and the other state court action are resolved. CPLR 2201 authorizes a court to stay another proceeding "in a proper case, upon such terms as may be just." The First Department has held that despite the broad language of this statute, it is generally only "where the decision in one [*2]action will determine all the questions in the other action....that a case for a stay is presented....What is required is complete identity of parties, causes of action and judgment sought." Abrams v. Xenon Industries, Inc., 145 AD2d 362, 363 (1st Dept 1988). See also Fewer v. GFI Group, 59 AD3d 271 (1st Dept 2009); Somoza v. Pechnik, 3 AD3d 394 (1st Dept 2004). However, the First Department has also recognized that, absent such identity, an action may nevertheless be stayed pending the outcome of an earlier case which presents overlapping issues where doing so would preserve judicial resources by disposing of and/or limiting the issues involved in the subsequent action. See Belopolsky v. Renew Data Corp.; Asher v. Abbott Laboratories, 307 AD2d 211 (1st Dept 2003).
Here, there is no complete identity of parties and issues between this case and the consolidated federal action. Although the federal action, as here, involves an allegation that Santana was tortiously induced to breach his employment contract with the plaintiff, the resolution of this issue in the federal action would be far from dispositive of the claims raised herein since the foreign corporate defendants in that case are different from the domestic corporate defendants in this case. Although all of these defendants appear to be closely affiliated, the defendants herein have not suggested that they and the foreign defendants are alter egos. Indeed, the defendants have noted that the federal court has issued a decision specifically stating that it was not making any finding that Tradition NA and the foreign Tradition defendants constitute a single entity. The court therefore declines to stay this action pending the outcome of the consolidated federal action.
As to the other state action, it involves the same claim as here that Tradition NA tortiously interfered with Giardina's contract with plaintiff. Although plaintiff argues that Giardina is just one of five former employees on whom the claim herein is based, the complaint notably devotes two full pages to allegations about Giardina. Since the plaintiff's claim is thus based considerably on the allegation that Tradition NA tortiously interfered with Giardina's contract, the resolution of this very issue between these same two parties in the other state court action may have a significant impact on the action before this court and could, indeed, result in conflicting results. Under the circumstances, the court is persuaded that this action should be stayed pending the outcome of the other state court action.
Accordingly, the defendants' motion for a stay is granted to the extent that the proceedings herein are hereby stayed pending the final disposition of the pending action brought by plaintiff against Giardina and Tradition NA in this court (GFI Brokers, LLC v. Giardina et al., NY Co Index No. 600927/07). The motion is otherwise denied. In the event the plaintiff decides to withdraw all claims against the corporate defendants insofar as they are based on Giardina, the court and the defendants should be so advised and the stay will be lifted.
ENTER ORDER
Dated: 4/2/09Marylin G. Diamond, J.S.C.
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