Bal v Flaherty

[*1] Bal v Flaherty 2004 NY Slip Op 51895(U) Decided on July 16, 2004 Civil Court Of The City Of New York, New York County Cooper, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 16, 2004
Civil Court of the City of New York, New York County

John Bal, d/b/a Mergent Services, Claimant,

against

Marie Flaherty, Defendant.



S.C. 5599/03

Matthew F. Cooper, J.

This is a Small Claims case in which the litigation has reached near-epic proportions. Claimant now moves to vacate an order that dismissed his claim against defendant. Defendant cross-moves for a variety of relief, including sanctions, an order barring claimant from bringing further cases in the Small Claims Part and a clarification of the order dismissing the claim.

Background

Whereas motions are generally limited in the Small Claims Part, the motion practice in this case is every bit as extensive as that encountered in the regular part of the Civil Court. The file is inches thick, and, as can be seen from the recitation of the papers submitted, there are twelve separate pleadings to consider in connection with this motion sequence alone. The reason for this frenzied production of paper seems to lie primarily with the nature of the two individuals involved. Defendant, Marie Flaherty, is an attorney representing herself. Claimant, John Bal, while not an attorney, is anything but a neophyte in these matters. He sues people on a regular basis in Small Claims Court. He has litigated extensively in the New York State courts, from the Civil Court to the Appellate Division to the Court of Appeals. He has had numerous actions in the federal courts. He has even brought a case to the United States Supreme Court. In all of [*2]these matters, claimant has appeared pro se.

In addition to their volume, the parties' papers are notable for their level of invective. Neither side hesitates to scorch the character of the other. Defendant, for instance, refers to claimant as a "parasite" who has sought to profit from the World Trade Center tragedy, and as a "serial suer" and "financial litigation terrorist." Claimant accuses defendant of defrauding the federal government, committing perjury and being an attorney who intentionally misleads the court.

Despite their excesses, the pleadings amply address the issues raised in the motion and cross-motion. They also set forth the relevant facts sufficient for the court to determine whether there is any merit to claimant's cause of action.

Procedural History

This case has its genesis in the aftermath of September 11, as do many of claimant's other Small Claims suits. As the sole proprietor of Mergent Services, claimant marketed air purifiers, air conditioners and vacuum cleaners to prospective customers concerned about contaminants released into the air when the Trade Center collapsed. Holding himself out to be a "FEMA Specialist," claimant tied his sale of the equipment to a reimbursement program administered by the Federal Emergency Management Agency.

On November 6, 2003, claimant, alleging that defendant breached a contract to purchase equipment from him, filed this claim against her for $2,973.51. The case first appeared on the Small Claims calendar on January 29, 2004. Defendant did not appear and a judgment was entered against her after inquest before an arbitrator. Alleging that she had never been served with the claim, defendant moved by Order to Show Cause to vacate the default judgment. The motion was heard on February 26, 2004, but claimant did not appear. Defendant's motion to vacate was granted and the case adjourned for trial March 31, 2004. Claimant then attempted to vacate the order granting defendant's motion, but the presiding judge refused to sign claimant's Order to Show Cause. Claimant was directed to appear for trial on March 31.

Prior to the trial date, defendant took the affirmative step of moving to dismiss the claim. In the motion, which was served on claimant on March 3, 2004, and made returnable March 15, 2004, defendant asserted that there was never a contract between the parties. She stated that she met claimant when they were both "extras" on a movie set. Believing that claimant was affiliated with FEMA, she was induced to order an air purifier and other equipment from him. She maintained, however, that she cancelled the order and received no merchandise of any kind from claimant.

Rather than opposing defendant's motion to dismiss his claim, claimant apparently decided to pursue defendant in a different forum. On March 8, 2004, he initiated a new case against defendant in the regular Civil Court. By a letter dated March 11, 2004, he informed the Small Claims Clerk's Office that he was discontinuing the Small Claims action.

On March 15, 2004, defendant's motion to dismiss was heard. Claimant did not appear, and the motion dismissing the claim was granted on default. Two days later, claimant brought on the Order to Show Cause that is now before the court.

Threshold Issues

There are two issues to be determined prior to reaching claimant's motion to vacate his default. The first issue concerns claimant's attempt to discontinue this proceeding. Claimant [*3]argues that by his letter of March 11, 2004, he discontinued the case prior to the decision granting defendant's motion to dismiss. It is his position that the dismissal on March 15, 2004, was a nullity because the Small Claims action had already been concluded.

Defendant counters that claimant's letter purporting to withdraw the Small Claims case was of no effect. She maintains that because her motion to dismiss was served before claimant provided notice of his intent to withdraw the claim, he could not voluntarily discontinue the action without obtaining her consent or a court order. It is her position that claimant's unilateral attempt to discontinue the action was meant to prevent the Small Claims Court from deciding her motion to dismiss and enable him to proceed against her in Civil Court for the same relief sought in the Small Claims action.

CPLR Rule 3217 provides that a party may discontinue its claim without court order or the consent of the other side where the notice of discontinuance is filed before a responsive pleading is served. Here, defendant served a responsive pleading her motion to dismiss on March 3, 2004, eight days before claimant delivered his notice to the Clerk's Office on March 11. There being no consent or court order, claimant's efforts to discontinue were unavailing and the case was still pending when defendant's motion to dismiss was granted on March 15.[FN1]

The other threshold issue involves whether the order granting defendant's motion to dismiss was a dismissal with prejudice. According to defendant, it was, and as such claimant is foreclosed from seeking to have the dismissal vacated and the case restored.

Defendant is incorrect. The order granting the motion awarded defendant costs and disbursements but says nothing about being a dismissal with prejudice. Nor could it have. A judgment of dismissal granted on default is without prejudice to the defaulting party's right to move to open the default. See Greenberg v. DeHart, 4 NY2d 511 (1958). As the dismissal here was on default and not on the merits, claimant is free to move to vacate the order of dismissal.

Claimant's Motion to Vacate the Dismissal

Having determined that this case was neither discontinued nor dismissed with prejudice, the court turns to claimant's motion to vacate the dismissal. In order to vacate the dismissal of a complaint or claim, a party "must satisfy the two-pronged burden of showing a meritorious claim ... and a reasonable excuse for the default." Sheikh v. New York City transit Authority, 258 AD2d 347 (1st Dept 1999).

Claimant has offered a reasonable excuse for his failure to appear to oppose the motion to dismiss. He states that when he hand-delivered his letter withdrawing the claim to the Clerk's Office on March 11, 2004, he was told that he did not have to come to court on March 15. The excuse for not appearing is credible in light of the fact that the practice of the Small Claims Part is to allow cases to be discontinued simply by letter to the court and the opposing party. There is a rarely a responsive pleading in a Small Claims case, so a discontinuance is granted automatically as a matter of right. Apparently, neither claimant, who routinely discontinues cases as part of his Small Claims practice, nor the Clerk's Office recognized that this was the exceptional case in which a responsive pleading had been filed and thus could not be [*4]discontinued without a court order or a stipulation of the parties.

Having shown that he did not deliberately default, claimant must still satisfy the other equally important prong of the test: establishing that he has a meritorious claim against defendant. Even where the default is excusable, "the rule is that the opening of a default should be withheld when it is not shown that there is a meritorious controversy, for the courts should not be burdened with unfounded claims to relief ... . Insistence on the observance of the rule makes for the orderly administration of justice, and it is not the enforcement of a mere technical rule of practice.' " Investment Corp. of Philadelphia, 12 AD2d 911 (1st Dept 1961), citing, Rothschild v. Haviland, 172 AD 562, 563 (1st Dept 1916).

Admittedly, due to the nature of the pleadings in Small Claims Court, this rule is not stringently followed. Unlike the summons and complaint utilized in Civil Court, the claim form used in Small Claims Court, which is prepared by the clerk, is usually a single sentence. The form order to show cause that is generally used to seek to vacate a default provides just a few lines for the movant to explain what the case is about. As a result, the judge deciding the motion has precious little information on which to assess the merits of the claim. The tendency then is to err on the side of caution and vacate the dismissal so as not to inadvertently deprive a claimant who might have a meritorious action his or her day in court.

In this case, however, there is no problem assessing the merits of the claim. While the claim form merely states "breach of contract and purchase of home products," the motion papers provide a full account of the facts and circumstances of the case. In his various pleadings, complete with footnotes and citations, claimant states in detail why he has sued defendant. He has even annexed the documents, each bearing a formal "Exhibit" stamp, which he says support his claim.

According to claimant, he "provided technical assistance and air purifying devices to victims of the World Trade Center disaster in accordance with a special joint Federal Emergency Management Agency (FEMA) and New York State Individual and Family Grant (IFG) program." (Claimant's Opposition to Defendant's Cross-Motion, dated April 24, 2004). He claims defendant ordered equipment from him and he provided her with a paid receipt from his company, Mergent Services, indicating that she had purchased $2,937.51 in equipment. Defendant, claimant states, promised to provide him with a check the next day, which she never did. Instead, it is alleged she used the receipt to obtain reimbursement benefits from the government program.

There are questions raised about claimant's business practices in general especially the suggestion that his commercial venture was somehow affiliated with FEMA. There is also the question as to why he would provide a receipt marked "paid," when no payment had been received. But leaving these questions aside, and even assuming that there was indeed a valid agreement for claimant to sell air purifying devices to defendant for $2,973.51, the issue is this: How was claimant damaged in this instance by defendant cancelling the purported agreement? In order to sustain a claim for breach of contract, there must be a showing that claimant suffered damages as a result of the breach.

No merchandise was ever provided to defendant. Moreover, claimant does not allege that he ever had the merchandise in his possession or had even ordered it from a distributor for sale to defendant. The only thing claimant alleges he provided to defendant was the receipt itself. [*5]

Claimant alleges that defendant defrauded FEMA by using the receipt that he gave her to obtain a grant for air purifying equipment that she never purchased. If such is the case, the government may have a claim against her. But claimant who lost nothing has no claim. Being unable to show damages, claimant cannot make the necessary showing of a meritorious claim. Accordingly, claimant's motion to vacate the dismissal of his claim on default must be denied.

Defendant's Cross-Motion

Nature of Dismissal

In her cross-motion, defendant seeks a number of things. The first is an order clarifying whether the dismissal granted on default on March 15, 2004, was with prejudice. This issue was dealt with earlier in this decision as a threshold matter. As the dismissal was without prejudice, this court entertained claimant's motion to vacate the dismissal. Now that the motion has been denied on the basis of there being no showing of a meritorious claim, the dismissal stands as a dismissal on the merits. A dismissal on the merits is a dismissal with prejudice. Yonkers Contracting Company, Inc. v. Port Authority Trans-Hudson Corporation, 93 NY2d 375, 380 (1999).

New York City Civil Court Act Section 1810

Defendant next seeks an order pursuant to New York City Civil Court Act Section 1810 curtailing claimant's access to the Small Claims Part. She vehemently argues that claimant has for many years used the court, and his status as a pro se litigant, to "harass and oppress" those unfortunate enough to become his prey. Defendant, who has attached to her papers a list of claimant's recent Small Claims actions, as well as the reported decisions on his cases brought in other courts, asserts that the majority of the claims are dismissed or otherwise decided in favor of the opposing party. She also points to what she describes as a pattern on claimant's part of discontinuing a case and then re-filing it, failing to appear in court and then having the matter restored to the calendar and suing the same defendant for the same relief in both Small Claims and regular Civil Court. All of this, she contends, is done by claimant with the intent of wearing his "victims" down until they default or succumb to his demands.

I have taken the opportunity to review the print-out and cards of claimant's recent Small Claims actions. My review supports the assertion that claimant's suits are meritless. All of his cases that have come before a judge were dismissed after trial or on motion by the defendant.[FN2] All of these cases involved the same scheme of marketing air purifying devices to people affected by the collapse of the World Trade Center.

My review of claimant's cases also confirms the charge that he uses the Small Claims Court as a tactical battleground to the detriment of the people he sues. He defaults on cases and moves to restore them, so as to require defendants to make multiple appearances. In other cases, he lets the dismissal stand and then commences a new case. In still others, he discontinues the Small Claims action and starts a case in another court.

The Small Claims Court is designed to afford ordinary people a forum for the fair and efficient resolution of their disputes. It is not designed for the pursuit of baseless claims by a [*6]party who gains an unfair advantage over the people he sues by the use of studied and well-practiced procedural machinations. Unfortunately, this is how the claimant has chosen to utilize the Small Claims Court. CCA §1810 provides a mechanism for preventing abuse of the system by those who use it "for purposes of oppression and harassment." I find that the claimant's conduct, intended as it is to oppress and harass, requires that I invoke the provisions of §1810 limiting his unfettered access to the Small Claims Part. See Kashdan-Wallerstein v. Malone, 115 Misc 2d 623 (Civ Ct, NY County 1982).

Accordingly, claimant will be required to make an application to the Special Term Judge prior to being permitted to bring an action in the Small Claims Part. The order will apply to claimant whether under the name John Bal, Mergent Services or any other name.

Sanctions

Defendant also seeks monetary sanctions against claimant as a result of his conduct in this case. While the conduct may seem to warrant sanctions, none will be imposed.

Monetary sanctions are not available in Small Claims proceedings. 22 NYCRR 130-1.1(a); Siegel, New York Practice § 414A (3d Ed 1999). In any event, the appropriate remedy is the imposition of an order pursuant to CCA §1810, which is designed to protect the integrity of the Small Claims process.

Moreover, defendant's own conduct in her defense of this proceeding has been far from exemplary. In all of her copious pleadings, she constantly reminds the court that "she is an attorney in good standing." Defendant needs to be reminded that as an attorney she is expected to comport herself as an officer of the court. While it is undoubtedly upsetting to be sued by claimant, this does not give defendant license to treat court personnel rudely or stand before the court and make petulant demands. Nor does it give her license to unleash a veritable torrent of paper. Her pleadings are both unduly repetitive and decidedly overwrought.

Conclusion

For the reasons stated above, claimant's motion to vacate his default and restore the case to the calendar is denied. Defendant's cross-motion is granted only to the extent that an order is entered pursuant to CCA §1810 requiring claimant to make application to the Special Term Judge before being permitted to bring a Small Claims proceeding. In all other respects, the cross-motion is denied.

This constitutes the decision and order of the court.

Dated: July 16, 2004Enter: __________________________

MATTHEW F. COOPER, J.C.C. Footnotes

Footnote 1: Even if claimant had moved for an order discontinuing the case, there is no reason that the order should have been granted, allowing, as it would, claimant to circumvent defendant's motion to dismiss. See DuBray v. Warner Bros. Records, Inc., 236 AD2d 312 (1st Dept 1997).

Footnote 2: On the evening this motion was argued, I tried one of claimant's other matters, John Bal, d/b/a Mergent Services v. Alexander Sinyavsky (S.C. 1553/04). I dismissed the claim.