Matter of Hudson Ins. Co. (Arias)

[*1] Matter of Hudson Ins. Co. (Arias) 2006 NY Slip Op 52128(U) [13 Misc 3d 1235(A)] Decided on November 13, 2006 Supreme Court, Kings County Johnson, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. As corrected in part through November 15, 2006; it will not be published in the printed Official Reports.

Decided on November 13, 2006
Supreme Court, Kings County

In the Matter of the Application of Hudson Insurance Company by their t/p/a Country-Wide Management Services, Petitioner, For an Order Staying the Arbitration Demanded by (Esteban Arias) & Dario Fernandez, Respondent(s) -and- Anthony Conroyannis, Shimon Weisberger & Country-Wide Insurance Company Proposed Additional Co-Respondents.

10189/06

Diana A. Johnson, J.

Upon the foregoing papers Petitioner Hudson Insurance Company seeks reargument and renewal of its Petition to Stay Arbitration; and upon reargument and renewal setting aside the Court's Order dated July 13, 2006 denying the petition. Respondents have defaulted on this motion.

Although denominated as a motion to renew and reargue, the motion is more properly solely a motion to reargue as there are no new or additional facts presented. Rather the thrust of Petitioner's Counsel's argument is that the Court overlooked or misapprehended the facts or mistakenly arrived at its earlier decision. Accordingly the Court grants leave to reargue.

The relevant fact are as follows. The petition was filed on March 31, 2006. On June 1, 2006 the proceeding was marked off calendar. Subsequently this Court "So Ordered" a stipulation restoring and adjourning the proceeding to the calendar for June 22, 2006. On June 22, 2006 the proceeding was further adjourned to July 13, 2006. On that day respondents did not appear. A short form order was issued as follows: "Petition to stay arbitration is denied without prejudice as there was no proof of service of papers submitted to the Court.".

Petitioner's attorney alleges in her affirmation under penalties of perjury that this Order [*2]should be set aside based on the following.

On the July 13, 2006 appearance date the Court stated to her that the motion[FN1] would be granted as the respondent did not appear and no opposition papers were filed. She alleges the Court instructed her to prepare a short form order to be submitted to the law secretary for review.

Counsel recites that when she gave the proposed order to the law clerk, he stated that he had misplaced the petition to stay arbitration that had been served on the court. Counsel then gave the law clerk a copy of the petition. The law clerk stated that the order would be ready for pick up the next day. However, as the copy of the petition allegedly did not contain the affidavit proving the petition was served upon the respondents, after counsel left the law clerk wrote up a new order denying the petition without prejudice.

Counsel argues that the Court overlooked and misapprehended the facts in finding that petitioner failed to serve respondents and in ruling that petitioner did not include proof of service in its petition, when the proof of service was included and the law clerk's mistake caused Hudson Insurance Company to have its petition denied. Attached to the present motion (Exhibit B and Exhibit C) is a copy of the petition and the proof of mailing- the certified mailing receipts.

Incredibly, Counsel did not appear on October 12, 2006, the return date of this motion. An attorney "of counsel" answered on the calendar call at which point the case was marked "default". This attorney later called the Part to find out what had happened to the motion. That attorney was informed the motion had been marked submitted on default. Pursuant to the Kings County Supreme Court Uniform Civil Term Rules all motions require oral argument, and had any of the respondents appeared, the "of counsel" attorney could not have argued the motion as the alleged factual basis for bringing the motion was solely within the personal knowledge of Counsel. This notwithstanding, given the serious allegations made in the affirmation, Counsel should have been appeared if for no other reason than to answer any questions the Court had concerning the circumstances and events recited in the affirmation.

Turning to the factual allegations made by Counsel in her affirmation in support of this motion to reargue. This Court did not speak to Counsel. Had the Court done so it would not have told Counsel that the "motion" would be granted without first examining the papers for the relief requested and for proof of service. And had the Court examined the papers and determined that the "motion" should be granted it would not have directed that the proposed order go to the law clerk, but directly to the bench for signature as it had already reviewed the papers. However, in this case the Court could not have examined the papers as they were not in the courtroom on July 13, 2006. The Part Clerk's master calendar for July 13, 2006 indicates that there were "no papers" on this case which was No.18 on the court calendar. The reason being that after the proceeding had been marked off on June 1, 2006, the file went to the County Clerk's office. Although the stipulation restored the proceeding to the calendar, the file remained in the County Clerk's office. Therefore Counsel's claim that the law clerk told her he "misplaced the petition", strains credulity as the petition was not in the courtroom to be misplaced. Typically when a case which has been marked off is restored to the calendar, the attorney(s) provide a complete copy of the papers which the Court accepts and uses in lieu of the originals which remain in the County Clerk's office. Therefore in a restored proceeding in which the papers are not in the courtroom, it [*3]is incumbent upon the attorney(s) to provide the Court with a complete set of papers.

In order to determine this motion, this Court requisitioned the entire file from the County Clerk's office. It reveals that the copy of the papers submitted to the law clerk on July 13, 2006 (stamped "FILED KINGS COUNTY CLERK 2006 JUL 24 AM 9:35", as was the July 13, 2006 Order) contains an affidavit of service alleging service had been made by certified mail, return receipt requested, which indicates "SEE RIDER". The rider contains the name and mailing address of who was served. Beside each is written "CMRRR # ". Nothing more is indicated or attached. Neither the mailing receipt numbers are provided nor are copies of the certified mailing receipts attached.

Further the Court's examination of the contents of the file from the County Clerk's office reveal that the original papers filed with the court also do not contain the certified mailing receipts (original or copies ). Thus even if the original papers had been in the courtroom on July 13, 2006, the petition still would have been dismissed for lack of proof of service. It appears that it is only now for the first time, attached as Exhibit C to the present motion, that copies of the certified mailing receipts are presented.

Accordingly as neither the copy of the papers submitted to the Court on July 13, 2006, nor the original set of papers contained in the County Clerk's office contain the certified mailing receipts, the Order dated July 13, 2006 dismissing the proceeding without prejudice as there was no proof of service of the papers submitted to the Court is adhered to. The Court did not overlook or misapprehend any fact or mistakenly render its decision. Therefore upon reargument the motion is denied.

Turning now to the allegations made in Counsel's affirmation submitted in support of this motion. An attorney submitting an affirmation to the Court has an ethical obligation to be truthful. An attorney's reputation for veracity is the measure by which he/she is regarded and which holds one in good stead with courts and fellow attorneys. The presumption of good faith dealing which this Court assumes all attorneys conduct themselves, should not be cavalierly dissipated for the simple expediency of attempting to prevail on a motion at all costs. Counsel is reminded of the Disciplinary Rules contained within the Code of Professional Responsibility. Specifically DR 1-102 [22 NYCRR § 1200.3] providing in pertinent part that a lawyer shall not engage in conduct involving dishonesty, fraud, deceit, or misrepresentation; or engage in conduct which is prejudicial to the administration of justice; and DR 7-102 (A)( 5) [ 22NYCRR § 1200.33] which provides a lawyer shall not knowingly make a false statement of law or fact. (see Matter of Aaron, 232 AD2d 119 (1997), where the Appellate Division, Second Department found submitting a false affidavit, affirmation to the Bankruptcy Court violated DR 1-102(A) (4) and (5) and DR 7-102(A) (5); and Matter of Kramer, 235 AD2d 87 (1997), lv denied 91 NY2d 805, lv dismissed 93 NY 883, cert denied 528 US 869, where the Appellate Division, First Department found that making false statements in an affidavit to the District Court violated DR 1-102(A) (4) and (5) and DR7-102 (A) (5) ). As was stated in the case of Matter of Schildhaus, 23 AD2d 152 (1st Dept 1965), affd 16 NY2d 748, appeal dismissed, cert denied by Schildhaus v Association of the Bar of the City of New York, 382 US 370 (1966). An attorney is to be held strictly accountable for his statements or conduct which reasonably could have the effect of deceiving or misleading the court in the action to be taken in a matter pending before it. The court is entitled to rely upon the accuracy of any statement of a relevant fact unequivocally made by an attorney in the course of judicial [*4]proceedings.

Part 130-1.1 of the Rules of the Chief Administrator [22 NYCRR 130-1.1] provides for the imposition of financial sanctions for frivolous conduct in civil litigation. Under Part 130-1.1(c)(3) frivolous conduct includes the assertion of material factual statements that are false. An award of costs and the imposition of sanctions for same may be made upon the Court's own imitative after a reasonable opportunity to be heard. [22NYCRR §130.1.1 (d)]. Accordingly the Court sets the matter down for a hearing on costs and sanctions on December 12, 2006 at 9:30 A.M. in Part 17.

The foregoing constitutes the decision and order of the Court.

E N T E R

J. S. C. Footnotes

Footnote 1:Although petitioner's counsel calls it a motion in her affirmation, it is a special proceeding.