Astrada v Archer

[*1] Astrada v Archer 2006 NY Slip Op 52432(U) [14 Misc 3d 1206(A)] Decided on December 21, 2006 Supreme Court, Kings County Schack, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 December 21, 2006
Supreme Court, Kings County

Faith Astrada, Plaintiff,

against

Hulbert Archer and Regina Felton, Esq., Defendants.



36373/04



Appearances:

Plaintiff

James Gerardi, Esq.

East Northport NY

Defendants

Felton & Associates

Brooklyn NY

Arthur M. Schack, J.

Plaintiff moves by motion, pursuant to CLPR Rule 3212, in this breach of contract action for summary judgment and dismissal of defendants' counterclaim (referred to as "cross-claim" in defendants' answer). Further, plaintiff seeks costs and sanctions for frivolous conduct by defendant Felton. For the reasons to follow, plaintiff's motion for summary judgment is granted and defendants' counterclaim is dismissed. Additionally, defendant-attorney Felton shall appear for a hearing, with a reasonable opportunity for her to be heard, pursuant to 22 NYCRR §130-1.1, to determine if she has engaged in frivolous conduct, and if so, the appropriate costs to be awarded plaintiff and/or sanctions to be deposited with the Lawyers' Fund for Client Protection.

Background[*2]

The instant action resulted from a real estate contract that never closed. Plaintiff Astrada and defendant Archer entered into a residential Contract of Sale for Ms. Astrada's purchase of 70 Clifton Place, Brooklyn, New York from Mr. Archer [part of exhibit D of motion] in April 2005. Defendant Felton is the attorney in this matter for defendant Archer. For reasons unexplained to the Court, the Contract is dated February 2005 [the date is blank] and the Rider is dated February 9, 2005. However, Ms. Astrada's down payment check of $30,000.00 [part of exhibit D of motion ], payable to "Regina Felton as Attorney," is dated April 7, 2005. The check cleared Ms. Astrada's bank on April 19, 2005. Ms. Felton, as seller's attorney, is named as escrowee and holder of the down payment in paragraph 6 of the Contract. Nonetheless, she failed to sign the Contact as escrowee, and her acceptance and deposit of the down payment demonstrate that she is the escrowee.

The Contract and its Rider contain inaccurate representations. The seller represents in paragraph 2 of the Rider that the building "is a legal one family house." However, paragraph 15 of the Contract and paragraph 8 of the Rider state that the building is vacant of tenants and "is registered as a Single Room Occupancy (SRO)." New York City Administrative Code § 27-198 (a) defines an SRO as either "a class A multiple dwelling used in whole or in part as a rooming house . . . or a Class B multiple dwelling." The court's review of the New York City Building Department's website at

www.nyc.gov reveals that two certificates of occupancy have been issued for 70 Clifton Place. The earlier one, issued on August 11, 1950, shows that the building is a Class B multiple dwelling for one family and six furnished rooms. A subsequent certificate of occupancy, issued on February 17, 1958, after alternations were made to the building, is for two families. The "Property Profile Overview" at the Buildings Department website states, "SRO restricted: NO." The New York City Finance Department's account history for the property, also at www.nyc.gov, classifies the building as "B1," a two-family brick building. Thus, the building is neither a "legal one family house" nor "registered as a Single Room Occupancy (SRO)."

While paragraph 21 of the Contract permitted plaintiff to wait until she had a mortgage commitment to order a title examination, she promptly ordered a Title Report from PFC Abstract Corporation. PFC's May 15, 2005 Title Report [exhibit E of motion], showed three Parking Violations Bureau (PVB) judgments, five Environmental Control Board (ECB) liens, and, in paragraph 13 of Schedule B, that a lis pendens had been filed against the property by Dimitri La Fortune and Ursula Urzedowska, on October 26, 2004, in Kings County Supreme Court, Index Number 35313/04. The Title Report required that the lis pendens "must be discontinued and judgment, if any, vacated and cancelled." Paragraph 13 of the Contract, entitled "Insurable Title" states "Seller shall give and Purchaser shall accept such title as an accredited title company shall be willing to approve and insure in accordance with the standard form of title policy approved by the New York [*3]State Insurance Department." Thus, the title company required a satisfactory disposition of the lis pendens as a condition precedent to insuring title and closing.

The Contract provided, in paragraph 15, that the closing would take place "within thirty days of satisfaction of paragraphs 10, 17, and 18 of Rider attached hereto." Paragraph 10, in relevant part, states:

This contract is subject to Purchaser obtaining, at its own expense,

a firm written commitment . . . for a conventional mortgage in the

amount of $714,000.00 (down payment $30,000) . . . Purchaser shall

exercise his best effort in good faith to obtain the said mortgage

commitment.

If after applying diligently and in good faith, Purchaser fails to obtain

the said mortgage commitment within forty-five (45) days from the

date hereof, then unless Purchaser waives this paragraph "10" in writing

within the said number of days, this contract shall be deemed cancelled

and Seller shall return Purchaser's down-payment. Upon the return of

the contract down-payment, neither party shall have any further rights

arising out of this contract [sic]. [Emphasis added]

Paragraph 17 states that "Seller shall obtain a Certificate of No Harassment from appropriate governmental agency," and paragraph 18 states "This contract is subject to the approval of construction permits to be obtained by and at the expense of Purchaser."

Plaintiff proceeded in reliance upon the assumption that the premises was an SRO. She desired to alter the building to a one family residence and eliminate the assumed vacant SRO's in the building. The Court is perplexed as to how counsel for both sides proceeded forward and did not discover the 1958 change in the status of the building to a two-family residence. Defendant Felton submitted her sur-affirmation in opposition (filed and served without permission of the Court), weeks after oral argument was heard on the instant motion, to which is attached a September 19, 2006-letter to Mr. Archer from an HPD official. This letter, citing the 1958 certificate of occupancy, states that since the building is not an SRO, a certificate of no harassment is not necessary. Needless motion practice could have been avoided if Ms. Felton, when drafting the Contract of Sale, had researched and determined the proper status of the premises' certificate of occupancy.

The New York City Council enacted Local Law 19 of 1983, codified as New York City Administrative Code § 27-198, requiring anyone altering an SRO to obtain a Certificate of No Harassment from the Commissioner of the Department of Housing Preservation and Development (HPD), certifying that no lawful SRO residents had been harassed to move out in the thirty-six-month period prior to the application date, as a condition precedent to the Commissioner of Buildings approving plans for building alterations and issuing a work permit. This public policy was enacted to protect low-income SRO residents from eviction by landlords desiring to convert SRO's to more [*4]profitable uses. Further, New York City Administrative Code § 27-198.2 (d) (1) (a) (ii) allows an owner of at least a fifty percent fee interest in a multiple dwelling being converted from SRO use to single family use to establish "to the satisfaction" of the Commissioner of HPD that "he or she intends to occupy such premises as his or her primary residence for a period of not less than three years after completion of such work."In her affidavit in support of the motion, plaintiff states in paragraph 10, that "I never waived my right to obtain a mortgage commitment as a condition of closing the sale." Plaintiff's former counsel notified Ms. Felton in a May 18, 2005-letter [exhibit G of motion] that Ms. Astrada wished to proceed with the Contract, while waiting for a mortgage commitment. She asked Ms. Felton to advise her if Mr. Archer wished to cancel the Contract and return the down payment. Ms. Felton didn't refund the deposit and plaintiff continued her efforts to obtain a mortgage commitment. As part of the loan process plaintiff retained an architect to plan a rehabilitation of the building [exhibit H].

On July 15, 2005, plaintiff received a conditional commitment from HSBC Bank [exhibit K of motion - Addendum C of commitment; exhibit B of affirmation in opposition - first and fourth pages of commitment], requiring the removal of the PVB and ECB liens, the dismissal of the lis pendens, and a copy of the building permit. The mortgage commitment, under "title matters," stated that "all matters affecting the sufficiency and status of title to the property are subject to the approval of HSBC Mortgage (USA) and the Settlement Agent at the time of closing." As discussed above, Schedule B of the Title Report [exhibit E of motion] enumerated exceptions to which the title company would not insure, including the lis pendens in paragraph 13, stating that "[t]his action must be discontinued and judgment, if any, vacated and cancelled."

In her affidavit in support of the motion, plaintiff alleges that the seller never complied with the removal of the PVB and ECB liens, dismissal or vacation of the lis pendens, and the obtainment of the certificate of no harassment. The commitment expired.

In her affirmation in opposition, defendant Felton claims:

23. The contingencies were the responsibility of plaintiff and not defendant

Regina Felton or Mr. Archer . . . 24. Plaintiff alleges in her statement that in absence of the certificate of noharassment and the presence of five liens and a notice of pendency preventedher closing [sic].

25. This a total and complete fabrication.

Actually, this is "a total and complete fabrication" by Ms. Felton. The Title Report required the resolution of the lis pendens prior to closing, whether by discontinuance or vacating of any judgments. Only the defendants had the power to resolve the lis pendens. The October 26, 2004 lis pendens has never been dismissed or vacated. The Court requisitioned and reviewed the Kings County Clerk's file for Supreme Court Index Number 35313/04. Ms. Felton, in paragraph 36 of her affirmation in opposition states, [*5]"[t]he Notice of Pendency was for a sum of less than $10,000 for which I obtained a stipulation that the said sum would be paid out of the proceeds of the closing." In support of this, Ms. Felton attached to her papers as exhibit D the first page of a document entitled "Stipulation," with Index Number 35314/04. This purported stipulation names Mark E. Tulip, Esq., as escrow agent, to receive the money in dispute and discontinue the lis pendens upon clearance of the funds in dispute. Ms. Felton failed to attach any other pages of the purported "stipulation."

Plaintiff's attorney, in his reply papers, explains that he contacted Mr. Tulip, who represents the lis pendens plaintiffs. Mr. Tulip, in exhibit D of plaintiff's reply affirmation in support of the motion, states in an affirmation, that he faxed a proposed stipulation of settlement to Ms. Felton on June 3, 2005 and "[t]he same was never executed nor was there even an agreement by Ms. Felton of its terms." The complete proposed stipulation is included in exhibit D of the reply affirmation in support of the motion. It shows unexecuted signature lines for the former attorney for Mr. Archer, Carl H. Smith, who resigned from the bar for disciplinary reasons, as well as Mr. Archer. There is no signature line for Ms. Felton's agreement. Further, the proposed stipulation does not state that the sums due will be paid out of the closing proceeds, as represented above by defendant Felton.

Plaintiff's former counsel, in a letter dated October 12, 2005 to Ms. Felton [exhibit I of motion], advised Ms. Felton of her client's failure to obtain a certificate of no harassment, and asked for a return of the down payment. Paragraph 12 of the Rider stated that all "notices, demands and requests . . . shall be in written [sic]" and sent by certified mail, return receipt requested, "addressed to the respective party at its address . . . A copy of each Notice shall be simultaneously given by regular mail to the parties' counsel [Emphasis added]." Complying with this notice clause, plaintiff's former counsel sent

notices to Ms. Felton on October 24 and 28, 2005, with copies to Mr. Archer, by certified mail, return receipt requested, that due to the seller's failure to obtain a certificate of no harassment the contract is cancelled. Demand was made for the return of the $30,000.00 down payment. In the October 28, 2005 notice, plaintiff's counsel claims that Ms. Felton advised her that she had obtained the certificate of no harassment, but that plaintiff's counsel's "investigation reveals that no application has been submitted for a Certificate of No Harassment." Ms. Felton responded to these notices, specifically allowed for in paragraph 12 of the Rider, by filing a complaint on November 4, 2005 against Ms. Astrada's former counsel [exhibit E of reply affirmation in support of motion] with the Grievance Committee for the Second and Eleventh Judicial Districts. Ms. Felton claimed that Ms. Astrada's former counsel violated § 1200.35 of the Code of Professional Responsibility, by communicating with Mr. Archer and his wife, alleging that these two notices, allowed by contract, "are unwarranted and unwanted and my clients have complained to me bitterly about . . . contact with them."

Plaintiff's former counsel then withdrew from the case and present counsel was [*6]engaged by plaintiff. Ms. Astrada's present counsel, by certified mail, return receipt, dated January 27, 2006 [exhibit J of motion], informed Ms. Felton that if she did not obtain a certificate of no harassment by February 8, 2006, the Contract would "be deemed null and void and purchaser demands the return of the contract deposit." Plaintiff's counsel, in paragraph 7 of his affirmation in support, states that "[d]efendant ignored my letter and the notice and to date wrongfully refuses to refund the contract deposit."

Paragraph Six of the verified complaint [exhibit A of motion] states that Defendant Archer "failed to obtain the required Certificate of No Harassment from the appropriate governmental authority and was thereby in default under the terms of the said Contract of Sale." In defendants' verified answer [exhibit B of motion and exhibit F of affirmation in opposition], defendant Felton denies under oath "each and every allegation set forth" in paragraph Six, despite never obtaining a certificate of no harassment.

Defendants' counterclaim misrepresents in paragraph 17 of the verified answer [exhibit B of motion] that "the premises was being sold as a vacant single room occupancy." It claims in paragraph 20 that plaintiff failed "to adhere to the terms of the contract," and demands damages from plaintiff because the house was off the market for months.

Summary Judgment Standard

The proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to eliminate any material issues of fact from the case. See Alvarez v Prospect Hospital, 68 NY2d 320, 324 (1986); Zuckerman v City of New York, 49 NY2d 557, 562 (1980); Sillman v Twentieth Century-Fox Film Corp., 3 NY2d 395, 404 (1957). Failure to make such a showing requires denial of the motion, regardless of the sufficiency of the opposing papers. Matter of Redemption Church of Christ v Williams, 84 AD2d 648, 649 (3d Dept 1981); Greenberg v Manlon Realty, 43 AD2d 968, 969 (2d Dept 1974); Winegrad v New York University Medical Center, 64 NY2d 851 (1985).

CPLR Rule 3212 (b) requires that for a court to grant summary judgment the court must determine if the movant's papers justify holding as a matter of law, "that the cause of action or defense has no merit." The evidence submitted in support of the movant must be viewed in the light most favorable to the nonmoving party. Marine Midland Bank, N.A. v Dino & Artie's Automatic Transmission Co., 168 AD2d 610 (2d Dept 1990). Summary judgment shall be granted only where there are no issues of material fact and the evidence requires the court to direct judgment in favor of the movant as a matter of law. Friends of Animals, Inc., v Associated Fur Mfrs., 46 NY2d 1065 (1979).

Discussion

Plaintiff's motion for partial summary judgment with proof in admissible form demonstrates a prima facie entitlement to judgment as a matter of law. Plaintiff has established: that she and Mr. Archer entered into a contract for the sale of 70 Clifton [*7]Place; the terms of the contract; plaintiff's inability to obtain a firm mortgage commitment; defendants' breach in failing to resolve both the certificate of no harassment and lis pendens issues; and, defendants' breach in failing to refund the down payment to plaintiff. It is clear that plaintiff made a good faith effort to obtain a mortgage commitment, and that the inaction of defendants led to plaintiff's failure to secure a "firm written commitment," as stated in paragraph 10 of the Rider.

Further, plaintiff relied upon defendant seller and her defendant attorney to secure a certificate of no harassment from HPD. Seller failed to obtain this or a document from HPD that a certificate of no harassment was not required, as the certificate of occupancy was changed in 1958 to a two-family residence. Seller's failure to dispose of the lis pendens filed against the property in Index Number 35313/04 was a condition precedent for HSBC Bank's firm commitment and the title company insuring title at closing. Paragraph 10 of the Rider, the mortgage contingency clause, embraces the mutual benefits to the prospective seller and the prospective purchaser. Either party could have cancelled the Contract upon purchaser's failure to obtain a firm mortgage commitment. In Oak Bee Corp. v N. E. Blankman & Co., Inc., 154 AD2d 3, 7 (2d Dept 1990), the Court instructed that, "where the relevant circumstances reveal that the condition has been inserted for the benefit of both parties to the agreement, either party may validly cancel the contract upon failure of the condition, and the condition may be waived only by the mutual assent of both parties." See Degree Security Systems, Inc. v F. A. B. Land Corp., 17 AD3d 402 (2d Dept 2005); Zilinski v Graziano, 25 AD3d 603 (2d Dept 2006).

With plaintiff as movant having made a showing of entitlement to summary judgment as a matter of law, the burden shifts to the opposing party to demonstrate the existence of triable issues of fact. See Alvarez v Prospect Hospital, supra; Winegrad v New York University Medical Center, supra. With plaintiff establishing a prima facie entitlement to summary judgment, defendants are then "required to lay bare . . . proof to show that there was a triable issue of fact." Silberstein, Awad & Miklos, P.C. v Carson, 10 AD3d 450 (2d Dept 2004). Defendants' opposition papers fail to address any of plaintiff's legal arguments and fail to lay bare proof in admissible form to establish material issues of fact that would require a trial.

Further, defendants' counterclaim is without merit. In essence, defendants allege that they have been damaged because they left the property off the market while they waited for plaintiff to obtain a mortgage commitment. This alleged cause of action flies in the face of the terms of the Contract, which defendant Felton prepared as defendant Archer's attorney. Paragraph 23 (a) of the Contract states, "[i]f Purchaser defaults hereunder, Seller's sole remedy shall be to receive and retain the Downpayment as liquidated damages, it being agreed that . . . the Downpayment constitutes a fair and reasonable amount of damages under the circumstances and is not a penalty." Further, paragraph 5 of the Rider specifies that if the Purchaser is in default the Seller "shall give [*8]Purchaser written notice thereof" and if the default is not cured within thirty days subsequent to the notice, "the agreement shall be null and void" and "Seller shall be entitled to retain the down payment as liquidated damages, at seller's sole option." It is clear that plaintiff has not breached the Contract and defendants' failure to clear the lis pendens frustrated plaintiff's performance. Defendants, after plaintiff's failure to get a firm mortgage commitment, for whatever reason, could have voided the contract and refunded plaintiff's down payment. See Oak Bee Corp. v N. E. Blankman & Co., Inc., supra; Degree Security Systems, Inc. v F. A. B. Land Corp., supra; Zilinski v Graziano, supra.

Further, defendant Felton has presented the Court with material misrepresentations. She recites, in her affirmation in opposition, that she had difficulties in securing a certificate of no harassment because of Mr. Archer's age and infirmities. She claims that the application for a certificate of no harassment was twice rejected, but fails to provide any documentary proof. The September 28, 2006-letter from HPD to Mr. Archer, attached to the sur-affirmation of Ms. Felton, states that after determining that a certificate of no harassment is not necessary because of the 1958 change in the certificate of occupancy, "[y]our application is deemed withdrawn." There is no mention of any previous rejections of certificate of no harassment applications.

Ms. Felton also claims, in her affirmation in opposition, to have secured a stipulation to resolve the lis pendens on the property out of the closing proceeds. This is clearly false. Removal of the lis pendens was a condition precedent for plaintiff to receive a firm mortgage commitment. In Kressel, Rothlein & Roth v Gallagher, 155 AD2d 587, 588 (1st Dept 1989), the Court held that, a "conditional subject to' mortgage such as the one at bar is not a firm commitment and does not satisfy a mortgage contingency clause. Such a clause requires that a final approval or commitment be obtained." See Finkelman v Wood, 203 AD2d 236 (2d Dept 1994); Severini v Wallace, 13 AD3d 434 (2d Dept 2004); D'Agnese v Wallace, 29 AD3d 851 (2d Dept 2006).

It is clear that defendant Felton must return to plaintiff the $30,000.00 down payment. Pursuant to CPLR § 5001, the Court has the discretion to award interest from the date that damages occurred. Therefore, Ms. Felton is to pay plaintiff the accrued interest on the $30,000.00 down payment from April 19, 2005, the day defendant Felton deposited plaintiff's $30,000.00 check, to October 28, 2005, the date of the last demand for refund of the down payment from plaintiff's former counsel. Ms. Felton shall pay interest on the $30,000.00 down payment to Ms. Astrada at the CPLR § 5004 statutory rate of 9 per cent from October 28, 2005 to the date of refund.

Frivolous conduct and 22 NYCRR § 130-1.1

22 NYCRR § 130-1.1 (a) gives the Court, in its own discretion, the authority to award costs "in the form of reimbursement for actual expenses reasonably incurred and reasonable attorney's fees" and/or the imposition of financial sanctions upon a party or attorney who engages in "frivolous conduct. " 22 NYCRR § 130-1.1(c) states: [*9] that conduct is frivolous if:

(1) it is completely without merit in law and cannot be supported by a

reasonable argument for an extension, modification or reversal of existing

law; (2) it is undertaken primarily to delay or prolong the resolution of the

litigation, or to harass or maliciously injure another; or (3) it asserts material factual statements that are false.

Several years before the drafting and implementation of the Part 130 Rules for costs and sanctions, the Court of Appeals in A.G. Ship Maintenance Corp. v Lezak, 69 NY2d 1, 6 (1986), observed that:

frivolous litigation is so serious a problem affecting the proper

administration of justice, the courts may proscribe such conduct and

impose sanctions in this exercise of their rule-making powers, in the

absence of legislation to the contrary (see, NY Const, art VI, §30;

Judiciary Law § 211 [1] [b]).

Part 130 Rules were subsequently created, and effective January 1, 1989, to give the courts an additional remedy to deal with frivolous conduct. These stand besides Appellate Division disciplinary case law against attorneys for abuse of process or malicious prosecution. The Court, in Gordon v Marrone, 202 AD2d 104, 110 (2d Dept 1994), lv denied 84 NY2d 813 (1995), instructed that:

Conduct is frivolous and can be sanctioned under the court rule

if "it is completely without merit . . . and cannot be supported by

a reasonable argument for an extension, modification or reversal

of existing law; or . . . it is undertaken primarily to delay or prolong

the resolution of the litigation, or to harass or maliciously injure

another" (22 NYCRR 130-1.1 [c] [1], [2]. [Emphasis added]).

In Levy v Carol Management Corporation, 260 AD2d 27, 33 (1st Dept 1999), the Court stated that in determining if sanctions are appropriate the Court must look at the broad pattern of conduct by the offending attorneys or parties. Further, "22 NYCRR 130-1.1 allows us to exercise our discretion to impose costs and sanctions on an errant

party . . ." The Levy Court held, at 34, that "[s]anctions are retributive, in that they punish past conduct. They also are goal oriented, in that they are useful in deterring future frivolous conduct not only by the particular parties, but also by the Bar at large." The Court in Kernisan, M.D. v Taylor, 171 AD2d 869 (2d Dept 1991), noted that the intent of the Part 130 Rules "is to prevent the waste of judicial resources and to deter vexatious litigation and dilatory or malicious litigation tactics (cf. Minister, Elders & Deacons of Refm. Prot. Dutch Church of City of New York v. 198 Broadway, 76 NY2d 411; see Steiner v. Bonhamer, 146 Misc 2d 10)." [*10]

The broad pattern of defendant Felton's conduct in this action is subject to costs and sanctions. It appears that Ms. Felton's arguments are "completely without merit in law or fact." Defendant Felton never ascertained in a timely manner that the premises were a two-family dwelling, not an SRO. If she had done so, plaintiff would not have relied upon the need for a certificate of no harassment. Ms. Felton did not dispose of the lis pendens on the premises. Meanwhile, Ms. Astrada was incurring bills for lawyers, the prospective lender, title company, and an architect. Instead of just returning the down payment to plaintiff, the intransigence of Ms. Felton compelled plaintiff to commence the instant action and motion practice. It appears that this litigation and the complaint filed by Ms. Felton against plaintiff's former counsel delayed or prolonged this litigation and attempted "to harass or maliciously injure another."

Further, the evidence shows that defendant Felton probably engaged in frivolous conduct by asserting "material factual statements that are false." These false representations are: claiming to have secured a stipulation to settle the lis pendens out of the proceeds of the closing; filing twice for a certificate of no harassment and presenting no documentary evidence in support of this claim; and, Ms. Felton's denial in her verified answer to the sixth paragraph of the verified complaint, which alleged that she failed to obtain a certificate of no harassment, when she had never secured a certificate of no harassment. Ms. Felton finally provided documentary proof in her sur-affirmation in opposition that a certificate of no harassment was not necessary because the premises has not been an SRO since 1958. In Sanders v Copley, 194 AD2d 85, 88 (1st Dept 1993), the Court held that, "[n]othing could more aptly be described as conduct completely without merit in . . . fact' than the giving of sworn testimony or providing an affidavit, knowing the same to be false, on a material issue." In Curcio v J.P. Hogan Coring & Sawing Corp., 303 Ad2d 357 (2d Dept 2003), the Court held that the conduct of plaintiff's counsel "was frivolous because it was without merit in law and involved the assertion of misleading factual statements to the Clerk of the Supreme Court (see 22 NYCRR 130-1.1[c] [3])." See Gordon v Marrone, supra; Tyree Bros. Environmental Services, Inc. v Ferguson Propeller, Inc., 247 Ad2d 376 (2d Dept 1998); Intercontinental Bank Limited v Micale & Rivera, LLP, 300 AD2d 207 (1st Dept 2002); Ofman v Campos, 12 AD3d 581 (2d Dept 2004); Greene v Doral Conference Center Associates, 18 AD3d 429 (2d Dept 2005); Miller v Dugan, 27 AD3d 429 (2d Dept 2006).

The Court, pursuant to 22 NYCRR § 130-1.1 (a) and as discussed above, has the

discretion to award costs for reimbursement of "for actual expenses reasonably incurred and reasonable attorney's fees, resulting from frivolous conduct as defined" in 22 NYCRR § 130-1.1 (c), and may impose sanctions upon an attorney who engages in frivolous conduct. It is unfair to Ms. Astrada that she has had to retain counsel to recover the down payment to which she was entitled to have returned to her in October 2005. A hearing will be conducted, at which time Ms. Felton will have a reasonable opportunity to be heard, to determine if her conduct in this action is frivolous, and, if so, [*11]the costs and/or sanctions to be imposed.

Conclusion

Accordingly, it is

ORDERED, that plaintiff's motion for partial summary judgment on the issue of liability, pursuant to CPLR Rule 3212, is granted; and it is further

ORDERED, that within 10 days after notice of entry of this order is served by plaintiff upon defendants, defendant Regina Felton shall refund to plaintiff Faith Astrada, by payment to her present counsel, James T. Gerardi, Esq., plaintiff's $30,000.00 down payment, together with accrued interest from April 19, 2005 to October 28, 2005, and statutory interest, at the CPLR § 5004 rate of 9 per cent, from October 28, 2005 to the date of refund; and it is further

ORDERED that defendants' counterclaim (denominated in their answer as a cross-claim) is dismissed; and it is further

ORDERED, that it appearing that defendant Regina Felton, Esq., engaged in "frivolous conduct," as defined in the Rules of the Chief Administrator 22 NYCRR

§ 130-1 (c) and that pursuant to the Rules of the Chief Administrator, 22 NYCRR § 130.1.1 (d), "[a]n award of costs or the imposition of sanctions may be made . . . upon the court's own initiative, after a reasonable opportunity to be heard," that a hearing affording Ms. Felton "a reasonable opportunity to be heard," will be conducted, before me in Part 27, on Friday, February 9, 2007, at 2:15 P. M., in Room 479, 360 Adams Street, Brooklyn, NY 11201; and it is further

ORDERED, that James T. Gerardi, Esq., counsel for plaintiff Faith Astrada, may participate in this hearing and present evidence, pursuant to the Rules of the Chief Administrator, 22 NYCRR § 130-1.1 (a), as to his client's "costs in the form of reimbursement for actual expenses reasonably incurred and reasonable attorney's fees resulting from frivolous conduct"; and it further

ORDERED, that Ronald Bratt, Esq., my Principal Law Clerk, is directed to serve this order by first-class mail, upon: Regina Felton, Esq., of Felton & Associates, 1371 Fulton Street, Brooklyn, NY 11216; and, James T. Gerardi, Esq., 58 Rofay Drive, East Northport, NY 11731.

This constitutes the Decision and Order of the Court.

ENTER

_________________________________

HON. ARTHUR M. SCHACK

J. S. C.

[*12]