Richmond SSG Inc. v Kramer Levin Naftalis & Frankel, LLP

[*1] Richmond SSG Inc. v Kramer Levin Naftalis & Frankel, LLP 2010 NY Slip Op 50083(U) [26 Misc 3d 1213(A)] Decided on January 25, 2010 Supreme Court, Richmond County Gerges, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. As corrected in part through February 10, 2010; it will not be published in the printed Official Reports.

Decided on January 25, 2010
Supreme Court, Richmond County

Richmond SSG Incorporated, Petitioner(s),

against

Kramer Levin Naftalis & Frankel, LLP, et al., Respondent(s).



101603/09



Glenn Backer, Esq.

292 Madison Avenue (22nd Flr.)

New York, NY 10017

Michael A. Cardozo

Corporation Counsel

The City of New York

100 Church Street

New York, NY 10007

Attn: Matthew Cuttler, Esq., Assistant Corporation Counsel

Market Ops LLP

c/o Samuel Grunkorn

2400 Richmond Terrace

Staten Island, NY 10302

Samuel Grunkorn

c/o Market Ops LLP

P.O. Box 778

Armonk, NY 10504

Abraham G. Gerges, J.

Upon the foregoing papers, defendant Kramer Levin Naftalis & Frankel, LLP (Kramer Levin) moves for an order consolidating the instant action with the related condemnation proceeding captioned In the Matter of the City of New York (Richmond [*2]Terrace between John Street and Nicholas Avenue) (Richmond Co. Index No. (CY) 4039/07) (the Condemnation Proceeding). The City of New York (the City) moves for an order, pursuant to CPLR 3216(3), dismissing this action as against it.

Facts and Procedural Background

On December 21, 2007, the City acquired title to part of the property located at 2400 Richmond Terrace on Staten Island (Block 1115, Lot 30) (the Property) for the installation of sewer lines. At the time of the taking, the property was owned by defendant Market Ops LLC (Market Ops). Kramer Levin represents Market Ops in the Condemnation Proceeding. In October 2008, the City advised Kramer Levin that the Property was subject to a $1 condemnation clause, so that the City was obligated to pay only $1 because it was condemned. Following negotiations, the City changed its position and on February 4, 2009, authorized an advance payment of $158,400, the amount of its highest appraisal. Market Ops elected to accept the advance payment, without prejudice to its right to seek additional compensation pursuant to Eminent Domain Proceeding Law (EDPL) § 304.

By letter to the City dated May 15, 2009, plaintiff Richmond SSG Incorporated (Richmond) alleged that it had priority over any advance payment owed to Market Ops in connection with its mortgage agreement. By letter to the City dated May 21, 2009, Kramer Levin asserted that it had an attorney's lien against the advance payment and instructed the City not to pay the funds to Richmond or to any other party before its lien was satisfied. By subsequent letter dated June 8, 2009, Kramer Levin advised the City that its lien totaled $64,734.09 through May 31, 2009.

Thereafter, by summons and complaint dated July 2, 2009, Richmond commenced the instant action seeking a declaration that it is entitled to be paid the entire advance payment and that Kramer Levin does not have an attorneys' lien on the funds; it alleges that the outstanding balance on the mortgage was $1,546,643 as of May 15, 2009. In its answer, Kramer Levin asserts that it has an attorneys' lien on the advance payment.

The Parties' Contentions

Kramer Levin

In support of its motion, Kramer Levin argues that the present action arises out of the condemnation of the property and should be consolidated with the Condemnation Proceeding. More specifically, it asserts that the advance payment that is held by the City is the subject of the dispute at issue herein. It thus concludes that consolidation is appropriate pursuant to EDPL § 505(C).

The City

In support of its motion, the City argues that the claim interposed by Richmond and the counterclaim interposed by Kramer Levin should be dismissed as inconsistent with EDPL § 505(C). In this regard, the City contends that since both Richmond and Kramer Levin are asking for relief in connection with the advance payment, the instant action should be dismissed and Kramer Levin should make a motion seeking relief in the [*3]Condemnation Proceeding.

Kramer Levin's Reply

In reply, Kramer Levin alleges that it agrees with the objective of the City's motion, i.e., to bring the issue of the rights and interests in the advance payment and the priority of Kramer Levin's attorney's lien before the court in the Condemnation Proceeding. Kramer Levin contends, however, that it would be more expeditious to consolidate this action with the Condemnation Proceeding so as to avoid the need to make a new motion, particularly since its motion to consolidate was made ten days before the City made its motion to dismiss.

Plaintiff's Contentions

Plaintiff joins in Kramer Levin's motion to consolidate. Plaintiff further avers, however, that Kramer Levin is not entitled to any portion of the advance payment pursuant the terms of its agreement with Market Ops and that it will address Kramer Levin's claim at the appropriate juncture.

Plaintiff opposes the City's motion to dismiss, arguing that there is no basis for dismissal on the ground of failure to prosecute and that the CPLR does not contain a section denominated 3216(3). It further argues that the City's motion should be denied as moot on the ground that upon granting Kramer Levin's motion to consolidate this action with the Condemnation Proceeding, the relief that it seeks will be determined in the Condemnation Proceeding pursuant to EDPL § 505. Moreover, the City's assertion that plaintiff should seek relief by way of a motion in the Condemnation Proceeding is not a ground for dismissal. Finally, plaintiff argues that the City's motion should be denied on the ground that it has no standing to move for dismissal because it is not aggrieved by this action.

Consolidation"When actions involving a common question of law or fact are pending before a court, the court, upon motion, may order . . . the actions consolidated" (CPLR § 602[a]). "A motion for consolidation is addressed to the sound discretion of the court and absent substantial prejudice to the opposing party, is proper where there are common questions of law and fact" (see e.g. RCN Constr. v Fleet Bank, 34 AD3d 776, 777 [2006]). Consolidation is appropriate where the actions are brought by the same plaintiff, arise out of the exact same incident and involve the same causes of action (see e.g. Williams v Rockefeller Ctr. Props., 282 AD2d 285, 286 [2001]); to avoid unnecessary duplication of trials and the possibility of divergent decisions (see e.g. Velasquez v C.F.T., 240 AD2d 178, 179 [1997]); or to save unnecessary costs and expense (see e.g. Viafax v Citicorp Leasing, 54 AD3d 846, 850 [2008]).

Discussion

Herein, it is beyond dispute that the instant action and the Consolidation Proceeding involve the same parties and the same issue, i.e., entitlement to the advance payment due and owing to Market Ops. From this it follows that both involve common [*4]questions of law and fact. The court therefore grants Kramer Levin's motion to consolidate. In so holding, however, the court notes that since neither Kramer Levin nor plaintiff moved for an order directing the City to release the advance payment, if either intends to seek such relief, a motion requesting that relief must be made.

Dismissal

Implicit in this holding is the denial of the City's motion to dismiss. In reaching this conclusion, the court first notes that CPLR 3216, which pertains to want of prosecution, is facially inapplicable. In so holding, the court notes that CPLR 3216(b)(3)[FN1] provides that the court may dismiss an action where the court or the party seeking dismissal has served a written demand by registered or certified mail requiring the party against whom such relief is sought to resume prosecution of the action and to serve and file a note of issue within ninety days after receipt of such demand. The City, however, is not seeking dismissal on this ground.

Moreover, the City fails to establish any grounds upon which such relief should be granted. In this regard, it is clear that a dispute exists with regard to who is entitled to receive the advance payment, which dispute must be resolved by this court. Under these circumstances, dismissal would be inappropriate (see generally Jegamont Realty v State , 142 AD2d 767 [1988] [the state was not entitled to dismissal of an action against it for compensation for the appropriation of property, since the proof submitted by claimant indicated that questions of fact existed as to ownership interest claimant possessed in the subject property]). In fact, if Kramer Levin and Richmond did not voluntarily appear before the court, it would be appropriate to implead them pursuant to EDPL § 505(B)[FN2] in order to resolve the issue of the conflicting claims of entitlement to the advance payment in accordance with EDPL § 505(C)[FN3] (see generally Owasco R. R. v State, 181 AD2d 665, [*5]665-666 [1992] [the court should have reopened the trial on the claim to recover damages for the appropriation of property and should have interpleaded the contract vendee, who had an equitable interest in appropriated property, and thus also had an interest in appropriation award, since the EDPL provides that court should interplead anyone imputed to have a lien or encumbrance on appropriated property]).

Conclusion

For the above stated reasons, Kramer Levin's motion to consolidate the instant action with the Condemnation Proceedings is granted and the action and proceeding shall be consolidated under Index No. (CY) 4039/07. The pleadings in this action shall stand as the pleadings in that proceeding.

The City's motion to dismiss the action is denied.

The foregoing constitute the order and decision of this court.

ENTER

J. S. C.

Bottom of Form 1 Footnotes

Footnote 1: In disposing of the motion, the court will assume that the City intended to cite to this provision.

Footnote 2: EDPL § 505(B) provides, in pertinent part, that:

"Where a condemnor disputes a condemnee's title or a right to all or a portion of an award or a prospective award by reason of conflicting claims of title, or if there is uncertainty as to how such payment should be apportioned, the court, upon motion of any party, shall interplead anyone claiming or imputed to have such a conflicting claim or interest."

Footnote 3: EDPL § 505(C) provides that:

"The court shall determine the compensation due the condemnees as well as the respective interests and rights of all parties to the award and the apportionment thereof. The court shall have jurisdiction to determine all questions relating to title and priority of interests incident to the acquisition."