RECITATION, AS REQUIRED BY CPLR 2219(a), OF THE PAPERS CONSIDERED IN THE REVIEW OF THIS MOTION ORDER TO SHOW CAUSE AND AFFIRMATION 1-2 AFFIRMATION/AFFIDAVIT IN OPPOSITION 3-4 CROSS-MOTION/AFFIRMATION/AFFIDAVIT 5-6 CROSS-MOTION OPPOSITION AFFIRMATION 7-8 CROSS-MOTION REPLY 9 DECISION AND ORDER CROSS-MOTION FOR COSTS AND SANCTIONS Petitioner moves This Honorable Court by Notice of Cross Motion for Costs and Sanctions against Respondent, Respondent’s Principal and Respondent Counsel pursuant to 22 NYCRR 130-1.1. and sua sponte for Contempt of Court. For the reasons set forth below, Judgment for Costs and Sanctions as set forth below are accordingly ORDERED. PROCEDURAL AND FACTUAL HISTORY The underlying Order to Show Cause that forms the basis of this instant cross motion has been previously denied and is not being relitigated herein. However, the facts and procedures for the underlying OSC forms the basis for the following determination of this instant cross motion. Petitioner sets forth the following, which Court credits as accurate: “10. This summary holdover proceeding was commenced in October 2019 to recover possession following expiration of the lease. 11. Respondent failed to answer and the court adjourned the matter for inquest. On November 8, 2019 judgment after inquest was awarded to petitioner… 12. Only after service of the marshal’s notice did Respondent appear claim to have been away for months and seek to vacate its default. As to the lack of merit of Respondent’s order to show cause to vacate its default, this court is respectfully referred to Petitioner’s opposition papers. 13. When it became apparent that the argument was losing, counsel sought adjournment to supplement the papers claiming rents were paid after termination of the lease. This Court granted a short adjournment to January 28, 2020.”1 Neither Respondent’s2 OSC Affirmation nor its principal’s Affidavit argued nor made any sworn statements as to any checks paid to and cashed by Petitioner to establish a month to month tenancy, thereby vitiating Petitioner’s expiration of lease basis for summary holdover proceeding. This alleged fact as to checks was merely verbally asserted, allegedly as an afterthought as portrayed by Petitioner at oral argument on January 7, 2020 (hereinafter “#1oral argument”). Respondent made application for adjournment to supplement its papers to establish that Petitioner accepted and cashed rental checks after termination of tenancy. Court granted Respondent’s application for adjournment to January 28, 2020 (hereinafter “#2 oral argument”) to file supplemental Affirmation/Affidavit and supporting documentation in support of its new month to month tenancy argument. Respondent counsel allegedly mailed a five page uncorroborated, unsworn letter, dated January 14, 2020 to Petitioner and to “Part 52 Judge” (parenthetically, no stamped original by the clerk of court nor was it contained in the court’s file): page1 — letterhead paper baring the following “Gerstman Schwartz, LLP”, with signatory as, Randy E. Kleinman, Esq., cc’d to petitioner’s Counsel; page 2 — baring “Exhibit C”; Pages 3, 4, 5 — alleged bank documents, stating: “Dear Part 52 Judge: As you may recall, we represent the Respondent, Brooklyn Cigar Lounge Corp., in the above-referenced matter. As a follow up to our appearance on January 7, 2019 and the discussion had, annexed hereto is a Supplemental Response to our Order to Show Cause seeking an Order to vacate the default judgment entered against the Respondent on or about December 2019. The annexed documents demonstrate that the Movant accepted and cashed at least two rent payments, in September and October 2019, subsequent to the expiration of the original Lease term in July 2019. (See Exhibit C — Bank Statements). The foregoing establish that the Landlord accepted these payments and has renewed the Lease for an additional five (5) year term. Thank you for Your Honors’ consideration.” This letter is not a legally admissible document in response to any motion whatsoever, even as a supplement. It is not in the form of an admissible sworn Affirmation nor an admissible sworn Affidavit in compliance with rules of evidence and Civil Practice Law and Rules. This letter is uncorroborated, unsworn inadmissible hearsay. Therefore, it cannot be given any credence in a court of law and it was summarily rejected by This Court. Thereafter, Petitioner applied and was granted TD Bank Judicial Subpoena Duces Tecum and Ad Testificandum so ordered on January 16, 2020. On January 23, 2020, instant cross motion for cost and sanctions was served upon Respondent’s counsel by overnight courier, to wit, Federal Express, duly filed with court clerk and made returnable to court’s adjourn date of January 28, 2020 (#2 oral argument). On said adjourn date, #2 oral argument, Subpoenaed TD Bank Witness appeared and testified under oath as to the procedures of TD Bank Bill Pay. At first blush, TD Bank witness was a customer service employee but not in processing. However, through her continued testimony during questioning it was established that TD Bank Bill Pay’s process would create a paper check to Respondent’s designated payee and simultaneously debit the check amount from Respondent’s account. Thereafter, TD Bank Bill Pay would mail the paper check to the payee at the address provided by Respondent. The debiting of Respondent’s account evidences the creation of the paper check, but it does not evidence the cashing of the check by the alleged payee, to wit, Petitioner. Respondent counsel failed to file any formal written opposition to instant cross motion nor a reply to Petitioner’s opposition to its Order to Show Cause. Respondent counsel of record failed to appear and rather sent per-diem counsel, who was quite unaware of the facts in relation to the allegedly cashed checks that were being claimed as returned and not cashed by Petitioner to Respondent, nor the gravitas of the proceedings to Respondent as juridical person, its natural person principal, David Gould, Respondent counsel’s law firm, Gerstman and Schwartz LLP and its assigned associate, Randy E. Kleinman, Esq. Per-diem counsel appeared with apparently same attached pages 3,4,5 from the unsworn letter (January 14, 2020 letter, supra at 2). No fact-witness, nor sworn Affirmation, nor sworn Affidavit by affiant with actual knowledge of the rent checks that are being claimed as cashed. Respondent’s per diem counsel did not nor could not address instant motion for cost and sanctions. Petitioner argued: as corroborated by sworn statement of facts by Affirmation and Affidavit, the checks were received, endorsed in error and returned to Respondent and checks were never cashed; Respondent’s bank statements containing debits are not dispositive of checks being cashed and are rather consistent with TD Bank Bill Pay witness testimony, that paper checks were created, not whether checks were actually cashed; Respondent and its principal, agents and employees are the only fact witnesses with actual knowledge of receipt of the returned checks in the mail; yet, Respondent had failed and appeared reluctant to present any such fact witness to provide sworn testimony under oath in writing because Respondent’s principal travels much as a sportscaster. This is an unreasonable, untenable, unavailing excuse given the myriad technological communication devices. It is of no moment that Respondent’s principal David Gould is sportscasting in any part of this vast globe, there are cell phones, computers scanners and fax machines to at the very least provide a sworn Affidavit even by international seal of Apostille in support of its allegations against Petitioner. Consequently, Court being quite concerned with Respondent counsel’s lackadaisical, dilatory conduct in its lack of zealous advocacy, admonished its per-diem counsel with a stern warning to Respondent counsel of record to appear with fact witness with actual knowledge of whether checks returned or not and to be subject to cross examination, and also to oppose instant motion for costs and sanctions notwithstanding no formal written opposition had been served, nevertheless court gave Respondent more time do so. Petitioner was also ordered to provide fact witnesses with actual knowledge of the allegedly returned uncashed checks and adjourned to January 30, 2020 (hereinafter “#3 hearing”). Late afternoon of January 29, 2020 Respondent counsel quite improperly and unethically left an ex-parte voicemail message to Court’s Chambers for adjournment of the next morning’s hearing. Court would not participate with Respondent’s improper unethical conduct and accordingly did not respond. Court was indeed quite taken aback that on hearing day January 30, 2020 (#3 Hearing) neither Respondent’s counsel of record law firm nor its assigned associate appeared, nor at the very least sent no affirmation of actual engagement, nor any affidavit by principal David Gould. But rather, again sent another unaware per diem counsel to appear for an obviously dilatory adjournment. Particularly of note, Court sternly admonished and warned Respondent’s per-diem counsel at #2 oral argument as it ordered #3 hearing and explicitly ordered the appearances of Respondent counsel of record and fact witness. Appearing per-diem counsel had no idea as to the absolutely avoidable tortured history and conduct that preceded #3 hearing and was caught quite off-guard as to the Court’s stern order that the hearing shall proceed, and no further adjournment shall be entertained. Per-diem counsel indeed strenuously, passionately, and zealously advocated for adjournment. However, Court made it clear that hearing would proceed. Court provided much latitude to per diem counsel to get in touch with counsel of record, to no avail. After many attempts and much argument for the adjournment, Court could no longer tolerate any further squandering of judicial and court resources with the judge waiting, reporter waiting, clerk waiting, court officer waiting, and a full gallery of other litigants waiting. As Court commenced #3 hearing, per-diem counsel withdrew her appearance and exited the courtroom. Hearing proceeded with testimony of Petitioner’s witnesses, to wit, Mag Realty Corp, Petitioner’s financing arm which shares Petitioner’s principal and finance manager. Witnesses provided testimony with corroborating admissible documentary evidence to establish: Respondent’s checks were received; checks were stamped on the back to be deposited by Petitioner’s employee; principal owner testified that its business practice is that after employee stamps back of its tenant’s rent checks, principal owner checks all stamped checks before they are deposited; when principal owner saw that Respondent’s checks were stamped, he flagged and removed these Respondent checks from other checks to not be deposited; these Respondent checks were sent with a corresponding letter addressed to its principal, David Gould, stating that check is being returned because the lease has expired; the letters sent were never returned as undeliverable; witness presented Petitioner’s finance arm’s segregated bank account for Respondent’s rent receivables showing that no deposits were made for the alleged checks; and ultimately that these Respondent checks were never cashed. After #3 hearing, crediting the witness’ testimony, TD Bank’s Subpoenaed witness’ previous testimony, admissible business records and drawing adverse inference against Respondent in its recalcitrant silence to unequivocally swear to under penalty of perjury by an affiant with actual knowledge that returned checks were received or not, Court found Respondent’s silence evidences that TD Bank Bill Pay paper checks that were returned by Petitioner were received by Respondent. Consequently, Respondent’s Order to Show Cause to vacate judgment was denied for no reasonable excuse for default and no meritorious defense, thereby lifting all stays on judgment of possession. Court, in an overabundance of leeway to Respondent with much appreciation for the finding of frivolity against a party, law firm, or member of The Bar is of weighty detrimental import, and notwithstanding its failure to formally oppose instant cross motion, nor personally appear for #2 oral argument, nor appear for #3 hearing, provided Respondent with another opportunity to defend itself. Court’s written Decision/Order after #3 hearing provided for a #4 oral argument February 14, 2020, 2:30PM in Courtroom 1302, and another opportunity to formally oppose instant cross motion in writing. Sometime before #4 oral argument Respondent improperly dropped off an Affirmation in Opposition to Cross Motion for Sanctions. Still yet, no Affidavit by fact witness willing to commit under penalty of perjury as to whether returned checks were received or not. Said Affirmation was placed in an open wire basket meant only for This Court’s daily New York Law Journal located in the public elevator bank. This wire basket in front of its Chambers is not private nor secure, completely open to any and all public traversing the elevator bank area. Affirmation appeared to be another attempt by Respondent to improperly communicate with This Court ex-parte since there was no appended Affidavit of Service upon Petitioner. At #4 oral argument Court was indeed quite flabbergasted that at 2:30 PM, there was no appearance by Respondent principal, David Gould, counsel of record, Gerstman Schwartz LLP, nor associate Randy E. Kleinman, Esq. Court waited for some time. Thereafter, Petitioner’s counsel made a courtesy call to Respondent’s office in the presence of Court. Further appalling, in sheer disrespect and defiance of Court’s mandate, Respondent’s Gerstman Schwartz LLP stated to Petitioner on the phone in the presence of This Court that they were unaware of oral argument being held in court as explicitly stated in Decision and Order dated January 30, 2020. This being a clear falsity3 by Gerstman Schwartz LLP and self-evident by its very own Affirmation in Opposition under penalty of perjury in paragraph 3, which quotes finding from very same Decision and Order, “the petitioner did not cash checks alleged by respondent to be cashed after tenancy ended.”4 At this point, This Court was indeed quite dismayed that Members of The Bar, Gerstman Schwartz LLP and its associate Randy Kleinman, Esq, would comport themselves in this unethically lackadaisical manner. Ergo, Court again as in #3 hearing could no longer tolerate any further squandering of judicial and court resources, judge waiting, reporter waiting, clerk waiting, court officer waiting. Court commenced oral argument on instant cross motion. Petitioner noted that it was served Respondent’s alleged Affirmation even though no affidavit of service was appended to copy improperly delivered to Court’s Chambers. Petitioner presented its oral argument and presented costs of its fees, to wit, $8,198.65 plus additional $500.00 for the present #4 oral argument, for the total of $8,698.65. Record closed. This Court reserved Decision. DISCUSSION COSTS AND SANCTIONS Notwithstanding courts are quite reluctantly constrained to exercise such authority, 22 NYCRR 130-1.1 confers to courts the authority to impose financial sanctions upon a party in civil litigation for its “frivolous conduct…to prevent the waste of judicial resources and to deter vexatious litigation and dilatory or malicious litigation tactics” (Kernisan v. Taylor, 171 AD2d 869, 870, 567 NYS 2d 794, 795-796, 1991 NY App Div LEXIS 3834, *3; cf. Minister, Elders & Deacons of Refm. Prot. Dutch Church of City of N.Y. v. 198 Broadway, 76 NY2d 411; see Steiner v. Bonhamer, 146 Misc 2d 10). 22 NYCRR 130 -1.1 (a) states: “The court, in its discretion, may award to any party or attorney in any civil action or proceeding before the court, except where prohibited by law, costs in the form of reimbursement for actual expenses reasonably incurred and reasonable attorney’s fees, resulting from frivolous conduct as defined in this Part. In addition to or in lieu of awarding costs, the court, in its discretion may impose financial sanctions upon any party or attorney in a civil action or proceeding who engages in frivolous conduct” Whereas, pursuant to 22 NYCRR 130-1.1 (c) 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.” It is the duty of attorney to ensure that legal papers filed and affirmed to in court have been vetted for veracity of facts proffered and comply with current state of laws argued. Therefore, whether attorney exercised the standards of a reasonable attorney forms the basis of the court’s inquiry in determination of frivolous conduct that authorizes the court’s imposition of costs and sanctions (One Wythe LLC v. Elevations Urban Landscape Design Inc, 2020 NY Misc LEXIS 708, 2020 NY Slip Op 50220 [U] citing DeRosa v. Chase Manhattan Mortg. Corp., 15 AD3d 249, 793 NYS 2d 1, 2005 NY App Div LEXIS 1982). Pursuant to 22 NYCRR 130-1.1 (d), “an award of costs or the imposition of sanctions may be made only after a reasonable opportunity to be heard” (Matter of Fernandez v. Nigro, 178 AD3d 703, 705, 2019 NY App Div LEXIS 8736, *4-5, 2019 NY Slip Op 08672, 2, 113 NYS 3d 753). Where, as here, This Court finds based upon the totality of the circumstances in the actions and inaction and all variations of adverse inferences taken thereto: Respondent principal David Gould did receive returned paper checks but allowed the cloud of fraud to remain upon Petitioner for cashing checks that it had not in fact cashed by failing to commit under penalty of perjury to that fact by merely remaining silent; in furtherance thereto Respondent counsel of record Gerstman Schwartz LLP and associate counsel Randy E. Kleinman, Esq. participated in this false narrative perpetrated by David Gould5 with unreasonable excuses of continuous travel as sportscaster, and in its failure to appear and confront Petitioner’s defense of said fraud allegations directly and rather hiding behind unaware per-diem counsels to unduly delay, prolong final resolution, to harass or maliciously injure Petitioner and engage in unsupported uncorroborated vexatious litigation, as well as ultimately asserting a false statement, to wit, unaware of This Court’s Decision and Order to appear for #4 oral argument all to the detriment of judicial economy and judicial efficiency, waste of valuable judicial resources in the statistically busiest Civil Court in the City of New York.6 Therefore, all such conduct is frivolous and abuse of the judicial process, which supports the imposition of costs and sanctions (see Maroulis v. 64th St.-Third Ave. Assocs., 77 NY2d 831; see also Matter of Minister, Elders & Deacons of Refm. Prot. Dutch Church v. 198 Broadway, 76 NY2d 411). This Court must consider the need to set precedent that all such conduct as herein described in frivolous motion practice shall likewise result in the imposition of punitive sanctions (see Bell v. State, 96 NY2d 811, 812, 751 NE2d 456, 457, 727 NYS.2d 377, 378, 2001 NY LEXIS 1002, *2-3). CONTEMPT Although 22 NYCRR 130-1.1 is punitive for frivolous conduct, it is not a substitute for the court’s power to punish for contempt of court’s orders (One Wythe LLC v. Elevations Urban Landscape Design Inc, 2020 NY Misc. LEXIS 708, 2020 NY Slip Op 50220 [U], citing Stow v. Stow, 262 AD2d 550, 550-551, 694 NYS 2d 68, 69-70, 1999 NY App Div LEXIS 6954, *2-4; see Casey v. Chemical Bank, 245 AD2d 258; see also Matter of Kernisan v. Taylor, 171 AD2d 869). Contempt punishment is a rather drastic punitive enforcement tool statutorily bestowed upon courts in both criminal and civil jurisdictions from the very creation of the judicial system from the King’s Bench.7 Consistent with court’s inherent powers to punish parties for failure to adhere and comply to court’s mandates, to wit, Court’s Decisions and Orders, and to preserve the court’s authority over the conduct of private parties as in civil matters, or society at large, to wit, The People, as in criminal matters. To do so, there must be some teeth, some stick to the court’s enforcement powers (Home Heating Oil Corp. v. Parris, 2019 NY Misc LEXIS 5738, 2019 NY Slip Op 51663 [U], 65 Misc 3d 1216 [A], 2019 WL 5406813). Contempt punishment is that enforcement tool statutorily provided to the courts with the teeth and the stick to assert its power to demand that its mandates be carried out by the contemnor. Contempt punishment, however, is not so readily granted without the utmost of fastidious due diligence and due deliberation by the courts, particularly in the context of civil matters. Contempt punishment is a crime in and of itself and therefore may be punished within the penal system just as any other crime, which carries with it the imposition of a sentence of incarceration to the contemnor. It is for that reason, that courts are reluctant to impose contempt punishment sentencing, whether by fine or more so drastic by a period of incarceration, particularly in civil matters. Nevertheless, such sentencing for contempt punishment carries the weight and gravitas that is sometimes required upon recalcitrant contemnors (Manswell v. Baptiste, 2019 NY Misc LEXIS 6200, 2019 NY Slip Op 29360, 113 NYS 3d 519, 2019 WL 6315273). Contemnors that intentionally flout civil court judicial mandates, as is obviously here, must be punished by the court in its power to regulate conduct within the judicial system. Otherwise, we would foster an anarchic society where courts would be devoid of authority to regulate behavior and conduct of persons. The judiciary branch of government is tasked with the enforcement of the legislative’s branch duly circumscribed codified laws of behavior and conduct of its people. Therefore, after a court provides some level of latitude to the contemnor, there comes a watershed moment when the civil court, no matter how reluctantly it may find itself, must indeed exercise its punishment enforcement powers of contempt with all its full encompassing ramifications and consequences thereto. It is only disobedience of that explicit written command shall be the subject to the very drastic punishment for contempt of court (see Application of Mullen, 31 NYS 2d 710, 177 Misc 734, 1941 NY Misc LEXIS 2442). Judiciary Law §753A-A.5 likewise bestows upon a court of record the power to punish, “by fine and imprisonment, either a neglect or violation of duty, or other misconduct, by which a right or remedy of a party to a civil action…may be defeated, impaired, impeded, or prejudiced,…in [the case of]…a person subpoenaed as a witness, for refusing or neglecting to obey the subpoena, or to attend, or to be sworn, or to answer as a witness.” The refusal or neglect to obey any clear unambiguous unequivocal lawful mandate or order of the court that contemnor had knowledge of or was apprised of, even if not procedurally served with, commits contempt of court (see El-Dehdan v. El-Dehdan, 26 NY3d 19 [2015]; see also Matter of First Am. Tit. Ins. Co. v. Cohen, 163 AD3d 814 [2d Dept 2018]). It is well established in the Second Department that the “mere act of disobedience is sufficient to sustain a finding of civil contempt where…the record reveals that such disobedience was calculated to or actually did defeat, impair, impede, or prejudice the plaintiff’s rights” (Kaywood v. Cigpak, Inc., 258 AD2d 623, 685 NYS 2d 770, 1999 NY Slip Op 01623 [2d Dept 1999], citing Yeshiva Tifferes Torah v. Kesher International Trading Corp, 246 AD2d 538, 667 NYS 2d 759 [2d Dept 1998]; see also Oppenheimer v. Oscar Shoes, 111 AD2d 28, 488 NYS 2d 693 [1st Dept 1985]; see also McNulty v. McNulty, 81 AD2d 581, 437 NYS 2d 438 [2d Dept 1981]). A hearing may be ordered by the court to determine whether the “rights or remedies of a party to civil action may be defeated, impaired, impeded or prejudiced by any disobedience to lawful mandate of court” (Great Neck Pennysaver v. Central Nassau Pubs., 65 AD2d 616, 409 NYS 2d 544 [2d Dept 1978]). Therefore, court should not decide on motion for contempt punishment without a hearing. However, This Court believes that under the specific facts in this instant matter carves out an exception for hearing for contempt. Where contemnor as here continued to flout and ignore not merely the court mandates but also the very basic rules of evidence and statutory Civil Practice Law and Rules, ultimately culminating with the utmost of disobedience of court order to appear to defend themselves, particularly as Members of The Bar, under falsely contrived pretenses. For the foregoing reasons, it is ORDERED: Judgment for Sanctions and Contempt of court are imposed jointly and severally on: Brooklyn Cigar Lounge Corp, Brooklyn Cigar Lounge Corp dba Diamante’s Brooklyn Cigar Lounge8, Gerstman Schwartz LLP, David Gould9 and Randy E. Kleinman in the amount of Five Thousand Dollars, $5,000.00 payable to Lawyer’s Fund for Client Protection. Judgment for Costs are imposed jointly and severally on: Brooklyn Cigar Lounge Corp, Brooklyn Cigar Lounge Corp dba Diamante’s Brooklyn Cigar Lounge10, Gerstman Schwartz LLP, David Gould11 in the amount of Eight Thousand, Six Hundred and Ninety Eight Dollars and Sixty Five Cents, $8,698.65 payable to Wenig Saltiel, LLP. This constitutes the opinion, decision, and order of This Honorable Court. SO ORDERED: Dated: February 25, 2020
