Wall St. Garage Parking Corp. v New York Stock Exch., Inc.

[*1] Wall St. Garage Parking Corp. v New York Stock Exch., Inc. 2004 NY Slip Op 51581(U) Decided on November 3, 2004 Supreme Court, New York County Tolub, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 November 3, 2004
Supreme Court, New York County

Wall Street Garage Parking Corp., Plaintiff,

against

New York Stock Exchange, Inc., Defendant.



103343/04

Walter B. Tolub, J.

Motion sequence 002 and 003 are consolidated for disposition and disposed of in the accompanying memorandum decision.

By motion sequence 002, plaintiff seeks an order pursuant to CPLR 3214(b) lifting the automatic stay of discovery imposed on this matter. By motion sequence 003, defendant seeks dismissal of the instant complaint and action pursuant to CPLR 3211. The motion seeking to lift the imposed stay is denied as moot, and the motion seeking dismissal of the within action is granted.

The instant applications mark the second phase of litigation commenced by plaintiff in response to defendant's alleged blockage of access to Exchange Place in lower Manhattan. Plaintiff owns and operates a parking garage located at 45 Wall Street, with entrance and exit ramps located on Exchange Place between William Street and Broad Street. The defendant is the New York Stock Exchange, Inc. (NYSE), operating offices located at 11 Wall Street, 18 Broad Street, 20 Broad Street and 30 Broad Street.

History

In the aftermath of September 11, 2001, the NYPD, through the closure of numerous streets, effectuated a multi-block "secure zone" surrounding the NYSE in an attempt to prevent potential attacks on the renowned financial institution. As a direct result, the intersections of Wall Street and Broadway; Nassau Street and Pine Street; Wall Street and William Street; William Street and Exchange Place; Broad Street and Beaver Street; Beaver Street and New Street; and Broadway and Exchange Place were closed to all public vehicular traffic.

The initial patrolling of the NYSE "secure zone" was handled entirely by a combination of NYPD officers, NYPD Paid Detail officers, and members of the NYPD elite Hercules Teams. However, at some point, and it remains unclear to this court as to when the actual transition took place, the NYSE security team began maintaining the perimeters of the secure zone, and conducting searches of persons and vehicles. [*2]

Plaintiff's garage, located at the perimeter of the NYSE secure zone,[FN1] had, prior to the events of September 11, 2001, enjoyed a lucrative parking business, housing on average, 150 to 160 vehicles daily. Following the attacks on lower Manhattan and the subsequent security changes, plaintiff sustained significant business losses, claiming that by 2003, only 68 vehicles on average parked in the garage daily.

Procedural History

In March, 2004 plaintiff commenced the instant litigation, moving for injunctive relief after the City of New York began construction at the corner of Exchange Place and William Street. This construction, which was expected to last between six and eight weeks, effectively blocked all public access to plaintiff's garage, forcing potential customers to enter the NYSE secure zone and be subjected to vehicle searches by NYSE security teams prior to entering and exiting plaintiff's garage. Plaintiff contends that during this construction period, the number of vehicles utilizing plaintiff's garage dropped from an average of 65 vehicles daily between February 1-20, 2004, to an average of 38 vehicles daily for the period of February 21 to March 2, 2004. Plaintiff further reported that as of March 3, 2004, only 25 vehicles parked in the garage (Wall Street Garage, 3 Misc 3d 1014, 1018).

On March 12, 2004 this court granted a preliminary injunction in favor of plaintiff, finding that failing evidence of proper authority, the NYSE could not legally maintain the security checkpoints and conduct vehicle searches at the intersections bordering the NYSE secure zone. Defendants appealed, and in the interim, the subject road construction was completed.

On August 5, 2004, the Appellate Division, First Department reversed this court's decision, finding that notwithstanding the questions concerning supervision and control, "the security measures are not alleged to have undergone any substantial change so as to warrant judicial restoration of established procedures. Rather, the precipitous decline in plaintiff's business is attributed to the total closure of the intersection of William Street and Exchange Place due to construction work by the City" (Wall Street Garage Parking Corp. v New York Stock Exchange 781 NYS2d 324, 326 {10 AD3d 223} [1st Dept 2004]). The Appellate Division further concluded that as the offending construction had been completed, the status quo ante had been restored, rendering plaintiff's application for a preliminary injunction academic (Id.).

The Instant Applications

As a primary matter, this court notes that although the Appellate Division reversed this court's initial decision issuing a preliminary injunction, neither the granting of the initial injunction, nor the subsequent reversal reflect an adjudication on the merits or constitute finding of facts, and as such, neither collateral estoppel nor law of the case apply (see, Coinmach Corporation v Fordham Hill Owners Corporation, 3 AD3d 312, 312-313 [1st Dept 2004]; J.A. [*3]Preston Corporation v Fabrication Enterprises, Inc., 68 NY2d 397, 402 [1986]; Papa Gino's of America, Inc., v Plaza at Latham Associates, 135 AD2d 74, 76-77 [3rd Dept 1988]). The court further notes that in light of the Appellate Division's decision with respect to this court's March, 2004 order, motion sequence 002, which sought to lift the automatic stay on discovery imposed by CPLR 3214(b), is denied as moot. This court therefore now only focuses on the instant motion to dismiss.

Motion to Dismiss

It is well established under New York law that on a motion to dismiss, the court is required to accept all of the allegations of the complaint as true, affording the plaintiff all favorable instances to be drawn from them (People v New York City Transit Authority, 59 NY2d 343 at 348 [1983]). The inquiry of the court is therefore severely limited to determining "only whether the facts as alleged fit within any cognizable legal theory" (Leon v Martinez, 84 NY2d 83, 87-88 [1994]), with the goal of the inquiry being to determine whether plaintiff, on any reasonable view of the facts, can succeed on their claims (Campaign for Fiscal Equity, Inc. v State of New York, 86 NY2d 307 at 318 [1995]).

Plaintiff's complaint, comprised of two causes of action, claims a right to preliminary and permanent injunctive relief due to a lack of legal remedy (the first cause of action), and damages (the second cause of action). Both of plaintiff's asserted causes of action are predicated upon the contentions that the "secure zone" as maintained by the NYSE constitutes a public nuisance and that the operation of a private police force that controls and conducts searches on public thoroughfares is illegal.

Defendants contend that dismissal of this action is warranted primarily because the construction project that was the catalyst for this action is now complete, rendering the issue of public access to plaintiff's garage moot. Defendants further argue that dismissal of this action is required because (1) plaintiff failed to join necessary parties to this action; (2) plaintiff can neither prove damages nor their claim of public nuisance; and (3) none of the alleged damages were proximately caused by the NYSE. Defendants additionally argue that even if plaintiff could establish a claim of public nuisance, plaintiff's claims are barred by laches through acquiescence to the NYSE "secure zone" and delay of the instant litigation by over two years.

As a threshold matter, this court must consider whether plaintiff's two-year delay in commencing litigation as against the NYSE renders the action barred by the doctrine of laches. To establish the defense of laches, a defendant must demonstrate that it would suffer injury and/or prejudice, specifically some disadvantage resulting from the delay, should plaintiff obtain the relief sought in their complaint (75A NY Jur.2d, Limitations and Laches § 369). Delay without actual prejudice does not give rise to the defense of laches (Id.; see also Ricciardi v. Johnstown Leather, 1 AD3d 661, 663 [3rd Dept 2003]).

The instant action is not barred by this doctrine. Although defendants claim that this matter should be barred by laches, defendants have not established that the delay in commencement of litigation either already has resulted, or would result, in injury, disadvantage, or prejudice to the NYSE. Moreover, this Court does not agree that plaintiff's inaction for two years is indicative of acquiescence to the secure zone.

Plaintiff, in the months following one of the most tragic events in this City's history, continued to operate its business under the belief that the NYPD had closed and/or restricted [*4]numerous streets surrounding its business. It was simply an accepted fact that the area surrounding the NYSE was, and remains, a prime area for future attacks. Thus, when presented with the initial security plan, plaintiff, and for that matter, all businesses in the area, did not have any choices: if the NYPD closed the streets, then the NYPD closed the streets. However, once it became apparent that the street closures and checkpoints, though perhaps initially created by the NYPD, were actually being maintained and monitored by the NYSE security team, plaintiff acted on the information. Certainly, had plaintiff known earlier that the NYSE had taken over the maintenance and monitoring of the secure zone, this litigation might have been commenced sooner.

This court additionally disagrees with defendant's argument that the completion of the construction at the intersection of William Street and Exchange place renders the instant action moot (see, 518 East 80th Street Co. LLC v Smith, 251 AD2d 215 [1st Dept 1998]; Lukas v Ascher, 299 AD2d 262 [1st Dept 2002]; Kress v West Side Tennis Club, 57 Misc2d 772 [Sup. Ct. Qns. Cty. 1968]). While plaintiff admittedly did not commence this action until after the City began construction at the intersection of the only publicly accessible thoroughfare leading to plaintiff's garage, the access restrictions to plaintiff's garage were not solely created by the subject construction.

It is undisputed that access to plaintiff's garage has been severely limited since September 11, 2001. However, what defendants fail to acknowledge, is that notwithstanding the fact that the NYPD may have initially created the "secure zone" surrounding the NYSE, it was defendant who was independently maintaining the "secure zone", restricting access, and conducting searches of vehicles at the time of the City's construction project. Moreover, it appears to this court, that the NYSE's actions were done without any formal City approval for either closure or access restrictions to the streets in question, and without any formal agreement transferring authority from the NYPD to the NYSE. It therefore quite plausible, that the City's construction project at the intersection of William Street and Exchange Place, though certainly responsible for compounding access issues, was not the sole cause of plaintiff's distress.

This court also disagrees with defendant's position that this action is dismissible for lack of joinder of necessary parties. CPLR 1001 (a) dictates that a person must be joined in an action if that person is either necessary to accord complete relief between the parties or if that person might be inequitably affected by a judgment in the action (CPLR 1001(a); see also Barr, Altman, Lipshie and Gerstman; New York Civil Practice Before Trial [James Publishing 2001-2003] §14:240, §14:241). Although defendant correctly asserts that under certain circumstances, government entities must be included in litigation in order to completely resolve the issues under consideration (see, Town of Brookhaven v Marian Chun Enterprises, Inc., 71 NY2d 953 [1988] (failure to join Commissioner of Social Services and representative of homeless families in action where town sought to enjoin motel from providing lodging to homeless individuals warranted dismissal of action); City of New York v Long Island Airports Limousine Serv. Corp., 48 NY2d 469 [1979] (failure to join State Commissioner of Transportation, responsible for issuing the license required to operate the service in issue, warranted dismissal of action); Catti v W.E. Bryant's, Inc., 107 AD2d 865 [3rd Dept 1985]), it is this court's perception that the instant action, under the aforementioned circumstances, does not require joinder of either the City of New York or the NYPD. [*5]

Plaintiff's business is located immediately adjacent to one portion of the NYSE "secure zone" perimeter. In the days and months following September 11, 2001, plaintiff believed that for security reasons, the NYPD saw fit to order that the streets surrounding the NYSE be closed to public traffic. In February 2004, two events transpired that resulted in litigation: (1) the City of New York commenced construction and blocked the only remaining public access to plaintiff's garage and (2) plaintiff learned that the actions of the NYSE and not the NYPD were behind the continued restrictions and closures of the surrounding streets.

Defendants argue that regardless of who was or was not named in the action, both the NYPD and the City of New York are implicated via plaintiff's assertion that the NYSE lacked the authority to close, patrol, and/or provide security services to the area surrounding the NYSE. Again, this court disagrees with defendant's argument. When initially faced with the prospect of litigation, plaintiff, much like any other litigant in a tort action, had a choice as to whom to sue. Plaintiff could have chosen to sue the City, which was immediately blocking access to the garage. Plaintiff could have also chosen to sue, and did choose, the NYSE, which had also engaged in blocking access to the garage. However, plaintiff was not under any obligation to sue the City or the NYPD, as neither the City nor the NYPD were necessary to accord complete relief between the parties. More importantly, even were this court to conclude that both the City and the NYPD were necessary parties to this action, it could have, and likely would have, remedied the situation pursuant to the powers given to it by CPLR 1001(b).

However, while this court recognizes that plaintiff's business has suffered significant losses at the hands of a private entity, in affording plaintiff the utmost latitude, this court concludes that plaintiff simply is not able to succeed on its asserted claims.

A successful claim of public nuisance requires a plaintiff, by clear and convincing evidence, to establish (1) that a public nuisance exists; (2) that defendant's conduct or omissions created, contributed to, or maintained the public nuisance; and (3) that the harm plaintiff suffered as a result of the public nuisance, constitutes a "special injury" in that the harm suffered by plaintiff is different and beyond that suffered by the community at large (532 Madison Avenue Gourmet Foods, Inc. v. Finlandia Center, Inc., 96 NY2d 280, 292 [2001], reargument denied in, 5th Ave. Chocolatiere, Ltd. v. 540 Acquisition Co., LLC., 96 NY2d 938 [2001]; see also N.A.A.C.P. v. Acusport, Inc., 271 F.Supp2d 435, 482, 483 [EDNY 2003]; Leo v. General Electric Company, 145 AD2d 291 [2nd Dept 1989]; Graceland Corp. v. Consolidated Laundries Corp., 7 AD2d 89 [1st Dept 1958], judgment aff'd, 6 NY2d 900 [1959]).

Plaintiff has no difficulty whatsoever in satisfying the first necessary element, as it is well established by both statute and case law, that the unlawful obstruction of a public street without express authority is tantamount to a public nuisance (See, New York City Administrative Code §19-107; Callanan v Gilman, 107 NY 360, 365 [1887]; O'Neill v City of Port Jervis, 253 NY 423,428 [1930]. See also 532 Madison Avenue Gourmet Foods, Inc., 96 NY2d 280, 292-293; Village of Stillwater v. Hudson Valley Railway Company, 255 NY 144 [1931]; Cassel v City of New York, 167 AD 831, 841 [1st Dept 1915]; The Broad Exchange Co. v The Curb Stock and Bond Market of New York, Inc., 117 Misc 82 [Sup. Ct. NY Co. Special Term 1921]. See also Graceland Corp. v Consolidated Laundries Corp., 7 AD2d 89 [1st Dept 1958], judgment aff'd, 6 NY2d 900 [1959] (nuisance held to exist where obstruction of public street extended beyond reasonable usage)). Nor does this court believe that plaintiff would have any difficulty [*6]establishing the second prong of the test, as it is probable that further discovery would reveal information supporting plaintiff's contention that the NYSE was responsible for at least maintaining the subject street closures.

However, as the Appellate Division noted in their decision,

Plaintiff, which operates a business located outside the security zone, has not demonstrated a special injury beyond the disruption experienced by the community as a whole (532 Madison Ave. Gourmet Foods, 96 NY2d at 293, 727 NYS2d 49, 750 NE2d 1097). Any impediment to plaintiff's right to operate its garage will not support recovery of damages on a public nuisance theory where the same circumstances have impeded the similar rights of a large number of other businesses located in the area (cf. Flynn v Taylor, 127 NY 596, 600, 28 N.2E. 418; Leo v General Elec. Co., 145 AD2d 291, 538 NYS2d 844). (Wall Street Garage Parking Corp., 781 NYS2d 324, 327).

Thus, while it may be that further discovery will yield evidence benefitting plaintiff with respect to its other claims, it is this court's opinion that no amount of discovery that plaintiff may glean from the defendant will be able to establish that plaintiff suffered an injury exceeding that suffered by the community at large. As plaintiff is not able to establish through the aforementioned established test, whether defendant's action or inaction constitutes a public nuisance (see DiPalma v Phelan, 81 NY2d 754 [1992]; Creed v United Hospital, 190 AD2d 489 [2nd Dept 1993]; Stuart v WMHT Educational Telecommunications, Inc., [3rd Dept 1993]), reluctantly, this court must dismiss the action.

Accordingly, it is

ORDERED that defendant's motion to lift the mandatory stay of discovery is denied as moot; and it is further

ORDERED that defendant's motion to dismiss is granted.

This memorandum opinion constitutes the decision and order of the Court.

Dated: November 3, 2004____________________________

HON. WALTER B. TOLUB, J.S.C. Footnotes

Footnote 1: Again, this court emphasizes that plaintiff's business was initially located within the NYSE "secure zone" until April, 2002, at which time the NYSE and NYPD moved the secure zone's perimeter on Exchange Place further west so as not to impede vehicles from using plaintiff's garage. The NYPD also altered the existing traffic pattern on William Street, allowing cars to turn left onto Exchange place and into plaintiff's garage, thereby avoiding the NYSE secure zone in entirety (Wall Street Garage Parking Corp. v New York Stock Exchange, Inc., 3 Misc 3d 1014, 1017 [Sup Ct. NY Co. 2004]).