Burke v. City of New York

ADDITIONAL CASES The City of New York, Third-Party Plaintiff, v. Perfetto Contracting Co. Inc., Third-Party Defendants Recitation as per CPLR §§2219(a) and/or 3212(b) of papers considered on review of this motion: NYSCEF Doc #s 52-65, 81-82 by Deft. Perfetto NYSCEF Doc #s 71-79 by Deft. City DECISION/ORDER Upon the foregoing cited papers and after oral argument on February 7, 2024 pursuant to CPLR §3212, Third-Party Defendant Perfetto Contracting Co. Inc.’s (“Perfetto”) cross-motion to dismiss Third-Party Plaintiff City of New York’s (“City”) complaint is GRANTED in part and DENIED in part. Perfetto moves for dismissal and other relief on several grounds, including: (1) failure to state a claim for which relief may be granted, pursuant to CPLR §3211(a)(7); (2) undue delay and substantial prejudice caused to Perfetto, pursuant to CPLR §1010; (3) sanctions against the City, pursuant to CPLR §3126 given its willful, unexcused, and contumacious failure and continued refusal to comply with the Court’s August 5, 2022 Order directing Plaintiff and the City to produce to Perfetto, under express threat of sanction, all prior discovery in this matter no later than September 30, 2022; and (4) for such other and further relief as this Court may deem just and proper. BACKGROUND This action arises from alleged injuries sustained by Plaintiff on May 23, 2009 from motor vehicle accident at the intersection of Atlantic Avenue and Schenck Avenue in Brooklyn¹. Plaintiff alleges she struck a raised manhole cover which hit her windshield causing it to break and the airbags to be deployed². Plaintiff alleges she suffered injuries to her head, right shoulder and neck³. PROCEDURAL HISTORY Plaintiff filed the summons and complaint July 15, 2010⁴. The City Defendant filed its answer September 16, 2010⁵. Defendant Perfetto was not a named party in either filing. The City Defendant filed a Third-Party Complaint May 26, 2022 asserting claims against Defendant Perfetto⁶ who filed their answer July 26, 2022 including their affirmative defenses⁷. Pursuant to CPLR §§3211(a)(7) and 1010, Defendant Perfetto brings this cross-motion to dismiss the City’s Third-Party Complaint. Pursuant to CPLR §3126, Perfetto seeks the imposition of sanctions against the City Defendant including dismissing or striking Defendant City’s Third-Party Complaint given the City’s allegedly willful, unexcused, and contumacious failure and continued refusal to comply with the Court’s August 5, 2022 Order that directed Plaintiff and Defendant City produce to Perfetto, under express threat of sanction, all prior discovery in this matter by no later than September 30, 2022⁸              . POSITION OF THE PARTIES Perfetto asserts that the Complaint against it should be dismissed because the City Defendant failed to state a claim and the undue delay in filing a third-party complaint results in substantial prejudice. Perfetto asks for sanctions against the City Defendant for the delay. The City Defendant asserts that it has initiated a cognizable claim against Third-Party Defendant Perfetto. City Defendant argues that the late filing was due to law office failure and as a result it should not be sanctioned. DISCUSSION Pursuant to CPLR §3211(a)(7), when considering a motion to dismiss for failure to state a cause of action “the pleadings must be liberally construed” and “[t]he sole criterion is whether from [the complaint's] four corners factual allegations are discerned which taken together manifest any cause of action cognizable at law”. Gershon v. Goldberg, 30 AD3d 372, 373 (2d Dept 2006), quoting Guggenheimer v. Ginzburg, 43 NY2d 268, 275 (1977); see also Leon v. Martinez, 84 NY2d 83, 87- 88 (1994). “The facts as alleged in the complaint are accepted as true, with the plaintiff accorded the benefit of every favorable inference”. Ginsburg Development Companies, LLC v. Carbone, 85 AD3d 1110, 1111 (2d Dept 2011); see also Sokol v. Leader, 74 AD3d 1180, 1180-1181 (2d Dept 2010). CPLR §1010 states in pertinent part: “The court may dismiss a third-party complaint without prejudice…or make such other order as may be just. In exercising its discretion, the court shall consider whether the controversy between the third-party plaintiff and the third-party defendant will unduly delay the determination of the main action or prejudice the substantial rights of any party.” “CPLR §1010 provides a safety valve for cases in which the third-party claim ‘will unduly delay the determination of the main action or prejudice the substantial rights of any party’” Soto v. CBS Corp., 157 AD3d 740, 741 (2d Dept 2018); see also Gomez v. City of New York, 78 AD3d 482, 483-484 [2010] (“motion to dismiss should have been granted because the substantial rights of [thirdparty defendant] were severely prejudiced by the almost eight-year delay between plaintiff’s accident and the filing of the third-party complaint, leaving [third-party defendant] unable to mount a defense”); Cipollina v. Kent, 52 AD2d 632 (2d Dept 1976) (“[I]n view of the tardiness of the commencement of the third-party action and the resultant delay, confusion and prejudice it will engender in the main action…the action should have been dismissed without prejudice pursuant to CPLR §1010″); Slack v. Stanton Surf Club LLC, 2021 NY Slip Op 30311[U] *4-5 (Kings Cnty Sup Ct 2021). “The determination to either dismiss or sever a third-party action under CPLR §1010 is discretionary, and entirely within the authority of the trial court”. Meczowski v. E.W Howell Co., Inc., 63 AD3d 803, 804 (2d Dept 2009). “Where the record indicates that a third-party plaintiff knowingly and deliberately delayed commencing a third-party action, the Court properly acts within its discretion to dismiss the third-party complaint”. Soto, 157 AD2d at 741 (four-year delay in bringing third-party action); Skolnick v. Max Connor, LLC, 89 AD3d 443, 444 (1st Dept 2011) (one-year delay in bringing third-party action after main action was commenced “despite being aware of potential contractual indemnification claim against third-party”). CPLR §3126 provides in relevant part that: “If any party…refuses to obey an order for disclosure or willfully fails to disclose information which the court finds ought to have been disclosed…the court may make such orders with regard to the failure or refusal as are just among them[, including]: (1) an order that the issues to which the information is relevant shall be deemed resolved for purposes of the action in accordance with the claims of the party obtaining the order;…or (3) an order striking out pleadings or parts thereof, or staying further proceedings until the order is obeyed, or dismissing the action or any part thereof, or rendering a judgment by default against the disobedient party”. Sanctions may include the striking of pleadings, the preclusion of evidence, or monetary penalties, where a party refuses to obey an order for disclosure or willfully fails to disclose information which the court sought to have been disclosed. Nationstar Mortgage LLC v. Jackson, 192 AD3d 813, 815 (2d Dept 2021). “The nature and degree of the penalty imposed pursuant to CPLR §3126 is a matter within the discretion of the court”. Id. “Although public policy strongly favors that actions be resolved on the merits when possible, a court may resort to the drastic remedies of striking a pleading or precluding evidence upon a clear showing that a party’s failure to comply with a disclosure order was the result of willful and contumacious conduct”. Id. See also Branningan v. Door, 144 AD3d 959, 960 (2d Dept 2016). A defendant’s “[w]illful and contumacious behavior can be inferred by a failure to comply with court orders, in the absence of adequate excuses”. Henderson-Jones v. City of New York, 87 AD3d 498, 504 (1st Dept 2011); Goldstein v. CIBC World Markets Corp., 30 AD3d 217 (1st Dept 2006). Here, Defendant Perfetto has provided sufficient evidence to demonstrate the existence of severe prejudice should the City Defendant be allowed to proceed with its third-party complaint. The summons and complaint were filed August 20, 2010⁹. The City Defendant filed its answer September 16, 2010¹⁰. The New York City Department of Design and Construction (“DDC”) entered into contract HW2CR08A with Defendant Perfetto listed as one of the contractors on March 27, 2008¹¹. On April 8, 2014¹² and again on July 15, 2014¹³, the City Defendant was ordered to search for and produce a witness to testify to the terms of the DDC contract related to the location of the accident. Defendant Perfetto was named several times in that contract, putting the City Defendant on notice that there was a third party who potentially could have shared liability. The third-party complaint here was not filed until 2022, 12 years after the filing of summons and complaint and 8 years after the initial review of the contract was ordered. During those years, the City Defendant had ample opportunity to investigate, something Defendant Perfetto is unable to do given the long delay in filing the third-party complaint. In the depositions, Defendant Perfetto provided the testimony of its Chief Financial Officer Tadeo Bolgiani who described the difficulty the company faces in its ability to defend the complaint since records are unavailable and many of the people involved with the contract have left the company¹⁴. The City Defendant knowingly delayed the third-party action; therefore the proper remedy is dismissal with prejudice in its entirety. The City Defendant relies on Annanquartey v. Passeser, 260 AD2d 517 (2d Dept 1999) to further their argument that “CPLR §1010 provides a safety valve for cases in which the third-party claim ‘will unduly delay the determination of the main action or prejudice the substantial rights of any party’”. Although there is no indication that allowing the filing will cause a delay in the outcome of the case, Defendant Perfetto is unjustly prejudiced by the years of delay in bringing the third-party action. The City argues that the late filing was due to unexpected law office failure and the Covid 19 pandemic citing HSBC Bank USA N.A. v. Kantor, 215 A.D.3d 643, 645 (2d Dept. 2023) (affirming trial court’s vacatur of Order granting defendant’s unopposed motion to dismiss where “plaintiff established a reasonable excuse for failing to oppose the defendant’s motion based on a calendaring error made by the plaintiff’s counsel”). The plaintiff in HSBC provided sufficient explanation for the delay. Here, although the City claims law office failure, at least four years prior to the delay, they had access to the contract which clearly named Perfetto as subcontractor since the summons and complaint was filed in 2010 and the Orders to examine the contracts occurred in 2014. The City’s contention that the third-party complaint should survive despite the delay in filing because it has a cognizable claim is similarly unpersuasive. The alleged strength of the claim does not outweigh the prejudice Perfetto faces in trying to defend a 2009 allegation. The City relies on EBC I, Inc. v. Goldman, Sachs & Co., 5 N.Y.3d 11, 19 (2005) to argue that whether a plaintiff can “ultimately establish its allegations is not part of the calculus in determining a motion to dismiss”. Here the potential success of the City Defendant’s claim is outweighed by the prejudicial effect of the delay in filing the third-party complaint. Pursuant to CPLR §3126, it is within the Court’s discretion whether to impose sanctions. Here, under the facts and circumstances, the Court will not impose sanctions. Although the delay in filing the third-party complaint is egregious, Defendant Perfetto failed to sustain its assertion that the City acted willfully and contumaciously. CONCLUSION Defendant Perfetto’s motion for summary judgment pursuant to CPLR §3211(a)(7) and their motion for sanctions pursuant to CPLR §3126 are denied. Perfetto’s motion to dismiss the third-party complaint pursuant to CPLR §1010 is grants. This constitutes the Decision and Order of the court. Dated: December 27, 2024