For the fifth installment of this blog’s ongoing “Check the Rules” series, we feature the individual practice or part rules of the Justices of the Kings County Commercial Division, particularly those recently instituted by Hon. Sylvia G. Ash.

As hyperlinked within any number of past posts on this blog, the Commercial Division’s official webpage – which encompasses all eight of its statewide locations, including the busy metro counties of New York, Queens, and Kings – provides users with county- and judge-specific practice information, including individual rules and procedures for many of its Justices. Check the Rules

Notably, however, the link to the Kings County Commercial Division, which contains separate links to bibliographical and contact information for its two Justices, Hon. Sylvia G. Ash and Hon. Lawrence Knipel, does not link to the individual rules for either Justice. Their rules can be found elsewhere on the NYCOURTS.GOV site, specifically here (Justice Knipel) and here (Justice Ash).

A couple of Justice Ash’s new rules are worth noting, particularly with respect to motion practice and pre-trial conferencing:

Motions. Justice Ash’s motion calendar, which is designated for Wednesday mornings, consists of two separate calendars – a “general motion calendar” and, to the delight of many practitioners, an “oral argument motion calendar,” which consists only of motions that have been fully briefed and submitted to the court in hard-copy format in advance of the calendar call. As a general rule, “Justice Ash will only hear arguments on motions that are on the oral argument motion calendar.” The bifurcated nature of Justice Ash’s motion calendar – particularly the oral argument motion calendar – presumably will facilitate rulings from the bench, which litigants interested in prosecuting and defending their commercial cases expeditiously no doubt will welcome.

Pre-trial Conferences. Justice Ash’s pre-trial conference calendar, which is designated for Thursday mornings, also is two-fold in nature. At the first pre-trial conference, the court will set a “firm trial date” – generally “three to five months out” – as well as a date for the second pre-trial conference. At the second pre-trial conference, parties must submit witness lists, exhibit books, motions in limine, and pre-trial memoranda, and their failure to do so “will result in an adjournment of the second pre-trial conference as well as the trial.”

Speaking of updates and resources, the webpage for New York’s electronic filing system (NYSCEF), also frequently hyperlinked on this blog, recently was updated to include the following resources:

  • Forms for general use in the Supreme Court, Appellate Division, Court of Claims, and Surrogate’s Court, and for specific use in particular counties;
  • A PDF Checker allowing practitioners to validate acceptable documents for proper e-filing on the NYSCEF system;
  • A statewide list of Authorized Courts and counties for e-filing;
  • Links to Rules and Legislation concerning e-filing, including the Electronic Filing Rules for the Appellate Division, the Uniform Rules for the Trial Courts, and related Amendments and Administrative Orders; and
  • Links to News & Events concerning new features and functions on the NYSCEF system, including production build notes for practitioners, clerks, and administrators alike.

 

That was the issue presented to the Appellate Division, First Department in Electron Trading, LLC v. Morgan Stanley & Co. LLC, which was an appeal from the grant of defendant’s motion to dismiss a contractual claim seeking damages above the amount allowable under the contract’s limitation of liability clause.   Justice Saliann Scarpulla granted defendant’s motion to dismiss that portion of the breach of contract claim, notwithstanding plaintiff’s allegations in the complaint that the defendant engaged in wrongdoing and, as such,  could not avail itself of the limitation of liability clause.  Her decision and order was affirmed by the First Department.

The case involved a developer of an alternative trading system (“ATS”), designed to be operated through a “dark pool”, that is, a “private exchange where investors can make trades anonymously.”  Plaintiff and defendant entered into an exclusive licensing agreement (“ELA”) and a consulting services agreement (“CSA”).  Although neither agreement refers to “dark pools,” plaintiff later claimed defendant breached the ELA based upon defendant’s insistence that it would perform only if plaintiff modified the agreement to allow defendant’s high-frequency traders to use it with other customers.  Although defendant conceded breach for purposes of the motion to dismiss, the ELA provided a limitation of liability clause, limiting total liability to amounts paid under the agreement.

Generally, “limitation of liability” clauses are routinely enforced, letting the parties to such a clause, “lie on the bed they made”, says the Court of Appeals in Metropolitan Life Ins. Co. v. Noble Lowndes Invtl.  There are circumstances, however, when a court will ignore the limitation clause when, for example, there is misconduct that “smacks of intentional wrongdoing”, or involves “gross negligence” displaying a reckless indifference. Id. 

Because the complaint here did not detail factual allegations as to the misconduct and “[a]t most . . . support[ed] a claim of intentional breach”, the Appellate Division unanimously affirmed.   The court reasoned that the allegations did not meet the heightened standard of pleading for fraud claims under CPLR 3016(b).  An interesting side note is that the case decided defendant’s motion to dismiss the complaint, but in effect decided the viability of a “limitation of liability” clause — something that is ordinarily pleaded as an affirmative defense.  The First Department noted, however, that the courts can consider whether documentary evidence (here the clause contained in the contract at issue) establishes an asserted defense.

When faced with a “limitation of liability” clause, consider whether the breaching party’s conduct amounts to “wrongful conduct” sufficient to vitiate the clause.  However, a heightened pleading standard applies.  The courts appear to abide by parties’ agreed upon limitation clause, unless the conduct rises to a significant level of misconduct.  Courts are unlikely to set aside such limitations lightly.  Remember, a mere “intentional breach” is not enough.

 

 

 

Chief Judge Janet DiFiore announced on Tuesday (February 6) in her State of Our Judiciary Address, that the Appellate Divisions in all four Departments will be rolling out electronic filing rules for certain cases.  Of particular interest to commercial litigators is the First and Fourth Departments, in which the rule announcement specifically identifies commercial cases.  As for the Second Department, the rule applies to all appeals originating and electronically filed in Surrogate’s and Supreme Court, Westchester County.   This is a welcome addition and should lead to at least some tangible benefits including, reduced costs and increased efficiency to both the courts and litigants.

Also worthy of note is Chief Judge DiFiore’s recognition that our Commercial Division “has built a reputation for excellence and earned the respect of court and business leaders around the globe.”  Address at 16.  As a result, she has called upon the Advisory Committee on Civil Practice to study the CD rule changes and amendments to explore whether they should be adopted more broadly in other courts.

 

So you entered into a Preliminary Conference and a Compliance Conference Order with your adversary whereby the parties have to exchange discovery by dates certain. The purpose of these orders is to save parties a significant amount of time and money and to move along litigation. However, when a party repeatedly fails to comply with the orders, one may seek an order of preclusion and to strike the other party’s pleading, right?  CPLR 3126(3) provides the aggrieved litigator with just the tool:  motion to strike the other side’s pleading.  Are they successful?  Sometimes!

Recently, in PAL Environmental Services, Inc., v. LJC Dismantling Corp., the Justice Marguerite Grays denied Plaintiff’s motion to strike Defendant’s answer based on Defendant’s repeated failure to provide complete and sufficient discovery responses. There, Plaintiff and Defendant entered into a Preliminary Conference Order, Compliance Conference Order, and a stipulation directing the production of certain material documentation pertaining to the breach of contract action. Although the Defendant was delinquent in producing the requested discovery responses pursuant to the discovery orders, it finally produced documents in accordance with the dates set forth by the stipulation. Nevertheless, Plaintiff deemed these responses “incomplete.” As such, Plaintiff moved pursuant to CPLR 3126(3) to strike the Defendant’s answer for failure to comply with the terms of the stipulation. Although the Supreme Court denied the motion, Plaintiff successfully moved for leave to renew, granting Plaintiff’s motion to strike the delinquent party’s answer. Not surprisingly, the Queens County Supreme Court held that Defendant’s repeated failure to comply with the terms of stipulation constituted “willful and contumacious” conduct.

However, upon Defendant’s appeal of the decision, the Second Department reversed, finding that public policy favors the “resolution of actions on the merits whenever possible” and that striking a pleading is not warranted absent a showing that the failure to comply with discovery is “willful and contumacious.”  Thus, the court resuscitated Defendant’s answer, breathing life back to the case, since there was very little evidence demonstrating that the failures to respond to discovery were “willful, deliberate, or contumacious.”  The court relied on another recent Second Department case, Henry v Datson, which held that the decision whether to strike a pleading for failure to comply with “court-ordered disclosures lies within the sound discretion of the trial court.”

“Well”, you say, “has the Appellate Division ever upheld the striking of a pleading under CPLR 3126(3)?”  You bet.  Indeed, in Studer v. Newpointe Estates Condominium, the Second Department upheld the strike where the court found repeated delays in complying with the demands and the court’s schedule, coupled with the inadequacy of the responses and the lack of an adequate excuse for the delays, gave sufficient evidence of willful and contumacious conduct that Supreme Court was well within its discretion to strike the answer.

 

Takeaway: Not all “repeated discovery failures” lead to the striking of a pleading — something considered a drastic remedy.  The failures must be shown to be “willful and contumacious,” meaning, more than mere negligence.  Repeated negligence does not seem to meet the criterion to strike a pleading under CPLR 3126(3).

Have you ever had a brilliant business idea, only to discover years later that someone else has beaten you to market? If you are a professional athlete, you might break your hand punching a fire extinguisher or picture frame in frustration. If you are a web developer, you might indignantly exclaim, “They literally stole my idea!” And if you are a New York County Commercial Division Justice (or a semantic pedant), you would reply that the idea has not actually been stolen unless the alleged thief erased it from the plaintiff’s brain.

Such is the state of conversion of intangible property in New York County, as recently expressed by Justice Kornreich in MLB Advanced Media, L.P., et al. v. Big League Analysis, LLC.  Big League Analysis, LLC (“BLA”) alleged that it contracted with MLB Advanced Media, L.P. (“MLB”) to develop youth-oriented baseball content and services that would be used on Major League Baseball’s websites. BLA further alleged that at a meeting, it turned over to MLB a binder containing confidential business information related to this content, which MLB and its related entities subsequently used to develop a competing product. The binder was returned to BLA and the relationship between BLA and MLB ceased shortly thereafter, resulting in MLB suing BLA.

In its amended answer, BLA asserted counterclaims for misappropriation of trade secrets and wrongful competition. BLA also asserted a counterclaim for conversion based on MLB’s allegedly unlawful retention and use of the information contained in the binder. MLB moved to dismiss only the counterclaim for conversion.  The Court framed the issue in the following terms:  “[W]hether intangible property (here, confidential business information) allegedly improperly used by defendant may give rise to a cause of action for conversion if, at the same time, plaintiff had complete and unfettered use of its property.”

The Court’s answer was a resounding “No”, based largely on the Court’s reading of Thyroff v. Nationwide Mut. Ins. Co., an earlier Court of Appeals’ decision recognizing a cause of action for conversion of electronic records stored on a computer held by Nationwide. Crucial to the Court’s analysis were subsequent New York County decisions dismissing conversion claims under Thyroff, where the plaintiff was not deprived of its ownership rights in the converted property. The Court also relied on State v. Seventh Regiment Fund, Inc., a 2002 decision in which the Court of Appeals reaffirmed that “denial of access to the rightful owner” has always been a necessary element of conversion. In contrast to these cases, MLB returned the binder to BLA, and BLA was free to do as it wished with its information. BLA’s counterclaim for conversion was therefore dismissed.

Not all New York courts read Thyroff so narrowly. In New York Racing Assn. v. Nassau Regional Off-Track Betting Corp., for example, another Commercial Division allowed an action for conversion of a live audio-visual simulcast, even though the plaintiff was not “excluded” from access to the electronic data transmission. In so holding, Justice Bucaria noted that, “[i]n Thyroff, the Court of Appeals suggests that plaintiff may maintain an action for conversion where its electronically stored data is misappropriated, regardless of whether plaintiff has been excluded from access to its intangible property.” (Emphasis added.)

In sum, when asserting conversion of intangible property rights, New York County practitioners should carefully consider whether the claimant was ever deprived of its property. If not, resort to “trade secret” protections may be required. However, as the Court noted, just as “trade secret” misappropriation does not always qualify as conversion, not all intangible property qualifies as a “trade secret.”

So your client wants you to file a declaratory judgment action, but you are unsure of whether the applicable statute of limitations has expired.  But what is the applicable statute of limitations in a declaratory judgment action?  Since there is no limitations period specifically addressed to the declaratory judgment action, it generally falls under the “catch-all” provision of CPLR 213[1] and gets six years as “an action for which no limitation is specifically prescribed by law.”  That being the case, you assume your declaratory judgment cause of action is timely so long as it is filed within six years of its accrual.  Think again.

Declaratory judgment actions are unique, in that the Court will actually examine the substantive nature of the claims and the relief sought to determine which limitations period applies.  If the Court determines that the underlying dispute could have been resolved through another proceeding for which a specific limitations period is statutorily provided, the Court will apply that limitations period – even if it is much shorter than six years.

The Appellate Division, Second Department recently addressed this point in Save the View Now v Brooklyn Bridge Park Corp., 156 AD3d 928 (2d Dept 2017).

Save the View Now involved a challenge to the development of a hotel, restaurant, and residential units upland of Pier 1 in Brooklyn Bridge Park (the “Park”).  The overall plan and structure for the Park were set forth in a general project plan (“GPP”) first adopted by Defendants Brooklyn Bridge Park Development Corporation (“BBPDC”) and the Empire State Development Corporation (“ESD”) in July 2005.  The general project plan, as modified (“MGPP”), stated that “[t]he residential and hotel uses would be located in two buildings, one of approximately 55 feet and one of approximately 100 feet in height.”

Construction began in July 2013 and, on September 10, 2014, the northern hotel building had already reached its maximum height.  By this time, members of the community began objecting that the height of the northern hotel building violated the MGPP and was obstructing the view of the roadbed of the Brooklyn Bridge from the Brooklyn Promenade.

In April 2015, Plaintiffs, a group comprised of local members of the community, commenced an action against BBPDC and others seeking, among other things, a declaration that the buildings were being constructed in excess of their height limitation in violation of the MGPP.  The Kings County Supreme Court (Knipel, J.) granted Defendants’ motion to dismiss on the ground that the action was untimely.

The Second Department affirmed.  The Court noted that while an action for a declaratory judgment is generally governed by a six-year statute of limitations (see CPLR 213[1]), the applicable statute of limitations in a declaratory judgment action is determined by the substantive nature of the claim.  Thus, “where a declaratory judgment action involves claims that could have been made in another proceeding for which a specific limitation period is provided, the action is subject to the shorter limitations period.”

Because Plaintiffs’ declaratory judgment action could have been brought as an Article 78 proceeding (and indeed should have, since it involved a challenge to governmental conduct), the four-month statute of limitations governing Article 78 proceedings – rather than the six-year statute of limitations under CPLR 213[1] – applied.

So what’s the takeaway?  The nature of the relief sought in a declaratory judgment action dictates the applicable limitations period.  Thus, prior to relying on the catch-all provision in CPLR 213[1], a careful lawyer should analyze the substance of a complaint to determine if a shorter limitations period may apply.  However, a lawyer may not use a declaratory judgment action as a vehicle to circumvent the statute of limitations that applies to the substance of a complaint.

 

My colleague Adam Rafsky’s astute post last week on Manhattan Commercial Division Justice Shirley Werner Kornreich’s recent reminder regarding the importance of proper service and claim viability when seeking a default judgment under CPLR 3215 reminded me of another default decision last fall from the same judge also addressing issues of service.

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In Wimbeldon Fin. Master Fund, Ltd. v Weston Capital Mgt. LLC, Justice Kornreich denied the plaintiff’s motion because it had served the defendant “in a jurisdiction where he did not work or reside.”  However, because of the defendant’s “apparent evasion of service,” as well as the undisputed fact that he “ha[d] clearly been aware of this action for some time,” the court sua sponte and “in the interest of justice” granted the plaintiff leave to serve the defendant “by alternative service,” including electronically by the court’s NYSCEF system.

Under CPLR 308 (5), a court may direct service by alternative means in certain circumstances, provided that the statutorily-prescribed methods are otherwise “impracticable” and the alternative method complies with constitutional due process – i.e., is reasonably calculated to apprise a defendant that an action is pending against him.

What caught my eye in Justice Kornreich’s Wimbeldon decision was a line in a footnote, noting that “courts have increasingly recognized the wisdom of permitting electronic service that is reasonably calculated to apprise defendant that he is being sued, even on social media networks.”

Justice Kornreich cited a non-commercial, Manhattan Supreme Court decision from 2015, Baidoo v Blood-Dzraku, in which the court discussed at length service of process in “the advent and ascendency of social media” and, after considering an affidavit verifying regular social media exchanges between the plaintiff and the on-the-lam defendant, directed alternative service “by Facebook, albeit novel and nontraditional, [a]s the form of service that most comports with the constitutional standards of due process.”

The court in Baidoo even went so far as to direct the specific procedure for effectuating such service:

Specifically, because litigants are prohibited from serving other litigants, plaintiff’s attorney shall log into plaintiff’s Facebook account and message the defendant by first identifying himself, and then either including a web address of the summons or attaching an image of the summons.  This transmittal shall be repeated by plaintiff’s attorney to the defendant once a week for three consecutive weeks or until acknowledged by the defendant.”

A quick Google Scholar search for New York cases involving “service of process” by “social media” since Baidoo revealed just two federal court decisions from 2016 and 2017 out of the Eastern and Northern Districts of New York.  In Ferrarese v Shaw, the Eastern District allowed service of a summons and petition by Facebook as a “backstop” to simultaneous service by certified mail on the defendant’s last known address.  And in Baez v City of Schenectady, the Northern District, after repeated nonparty witness no-shows, required that court-ordered deposition subpoenas be prepared, issued, and “transmitted to the witnesses via any known social media (i.e. Facebook), email, or text address.”

Nevertheless, according to the Baidoo court, “it would appear that the next frontier in the developing law of the service of process over the Internet is the use of social media sites as forums through which a summons can be delivered.”  In citing Baidoo in her recent Wimbeldon decision, Justice Kornreich appears to have “recognized the wisdom” of allowing for such service.   Look for the development of the law in this area in Commercial Division jurisprudence in the near future.

**Nota Bene**January 24, 2018:  Don’t miss this year’s Commercial and Federal Litigation Section Annual Meeting Program and Luncheon at which Manhattan Commercial Division Justice Charles E. Ramos will be honored with the Stanley H. Fuld Award for Outstanding Contributions to Commercial Law and Litigation.

Default judgments are merely rubber-stamped when defendant fails to appear and/or answer, right?  Wrong, as the New York County Commercial Division’s recent decision in Gutterman v. Stark (Hon. Shirley Werner Kornreich, J.) reminds us. In Gutterman, a case arising from plaintiff’s failed investment in a would-be ambulatory care surgical facility, the plaintiff purportedly served by personal service the individual (“Stark”) and corporate defendant (“FinPrime”) in question with a summons with notice and subsequently served its complaint on both by overnight express mail. FinPrime never appeared and Stark, after appearing, failed to file an answer. Naturally, plaintiff moved for a default judgment under CPLR § 3215 against Stark and FinPrime. Notwithstanding FinPrime’s and Stark’s failures to appear and answer, respectively, the Commercial Division denied the plaintiff’s motion. So, what gives?

The plaintiff failed to satisfy the two fundamental requirements: effectuating proper service and pleading viable claims.  First, the court held that FinPrime was not properly served. Plaintiff’s affidavit of service for FinPrime indicated only that the recipient of service was “a person of suitable age and discretion” who was employed at the location of FinPrime’s principal place of business. The court explained that suitable age and discretion service under CLPR § 308(2) is proper as against a corporation only if the person served is authorized to receive service on the corporation’s behalf. Plaintiff’s AOS did not indicate whether the person served was employed by FinPrim, let alone authorized to accept service on its behalf.  Second, the court held that the plaintiff failed to meet its very minimal pleading burden with respect to each of its claims against Stark. While noting that the standard of proof “is not stringent, amounting only to some firsthand confirmation of the facts,” the Commercial Division explained that notwithstanding, “a default judgment does not ‘give rise to a mandatory ministerial duty to enter a default judgment” but rather it is the plaintiff’s burden to demonstrate that it “at least [has] a viable cause of action.”(quoting the Second Department’s decision in Resnick v. Lebovitz).  With respect to the plaintiff’s claims against Stark, the Court explained that:

  • Its claim for malpractice could not be maintained as a matter of law because financial advisors such as Stark are not “professionals” in the context of professional malpractice;
  • the negligent misrepresentation claim failed to allege specific facts indicating the requisite special relationship between plaintiff and Stark;
  • the negligence claim failed to identify from where Stark’s alleged duty of care originated or how his alleged breaches caused plaintiff’s alleged damages; and
  • that its claims for breach of the implied covenant of good faith and fair dealing were not viable because Stark was not a party to the underlying agreement.

The court did, however, show  plaintiff some leniency by sua sponte granting it leave to amend its Complaint. The lesson to be learned here is that a defendant’s default does not automatically entitle the plaintiff, as a matter of right, to a default judgment. As always, the plaintiff must properly effectuate service and must establish through its complaint that it has viable claims.

Diamonds are nothing more than chunks of coal that stuck to their jobs,” said Malcom Forbes.  An industry that generates over $13 billion annually, diamonds are considered one of the world’s major natural resources.  Critical to the integrity of the market are reports or certificates that grade the quality of the stones based upon the “four C’s”:  color, cut, clarity and carat.  These reports are issued by one of several grading entities.  One of them, the Gemological Institutes of America, Inc. (“GIA”), is considered to be one of the most well-respected and renowned.

Diamond purchasers and resellers, such as L.Y.E. Diamonds Ltd. (“LYE”) and E.G.S.D. Diamonds Ltd. (“EGSD”), contract with GIA in order for the formers’ diamonds to be analyzed and graded.  On May 15, 2015, GIA published an Alert, advising the diamond industry that it reasonably suspected that nearly 500 diamonds submitted to GIA’s laboratory in Israel might have been subjected to a “temporary treatment” that masks the inherent color of the stone, leading to an improper higher grading level.  In the Alert, which was published on its websites and mass email, LYE and EGSD, were identified.

As a result of the published Alerts, LYE and EGSD claim they were defamed and suffered significant losses.  They sued, filing a complaint for $180 million in compensatory and punitive damages, alleging defamation and trade libel.  At issue on the defendants’ motion to dismiss was whether GIA was entitled to qualified immunity, negating any presumption of implied malice.  Qualified immunity may exist when a statement is made by a person in the discharge of a duty — either private or public — in which another person relies as both have a common interest.

In ruling on the motion to dismiss in L.Y.E. Diamonds Ltd. v. Gemological Inst. of Am., Inc., at the outset, Justice Barry Ostrager rejected plaintiffs’ procedural argument that “qualified immunity” is an affirmative defense that could not be raised in a pre-answer motion.  Rather, the court relied on a series of First Department cases holding that a question of privilege could be determined at the pleading stage.  Turning to the merits of the application of the privilege, the court recognized that the Alerts served a “public function by warning interested parties of potentially treated diamonds, pursuant to GIA’s agreement with plaintiffs.”  Applying the privilege, the burden then shifted to plaintiffs to demonstrate that malice existed which would negate the privilege.   The court granted dismissal of the complaint, finding that the plaintiffs did not allege more than conclusory allegations of malice, with little or no detail that would support an inference that the statements were made out of spite or ill will.

Where allegations of actual malice are required to support a defamation claim, the courts appear to consistently uphold a heightened pleading standard, see, e.g., Themed Rests., Inc. v. Zagat Survey, LLC.  Remember, CPLR 3016(a) requires specificity when it comes to pleading defamation claims.  Thus, it behooves the drafter to allege facts surrounding the time, place, manner of publication, and the context of the statements made.

 

 

This week, we examine the answer to a simple question: may an out-of-state lawyer serve as counsel in a New York state court proceeding absent making a motion for admission pro hac vice? To answer this slightly ambiguously worded question, we need more information.  Specifically, the answer depends on the meaning of “out-of-state” in a particular situation.  The determinative factor is not whether the attorney resides in New York, but whether she maintains a law office in the state. Under Judiciary Law § 470 — the constitutionality of which was recently upheld (see Schoenefeld v. New York, 748 F.3d 464 [2d Cir 2014] [certifying question of statute’s constitutionality to New York Court of Appeals], Schoenefeld v. State, 25 NY3d 22 [2015] [answering certified question]) — an attorney who resides “in an adjoining state” may practice in New York only if she is admitted to practice and maintains a physical law office in New York.

A recent decision from the Appellate Division, First Department makes clear that the in-state office requirement is not to be taken lightly, especially by would-be plaintiff’s counsel. In Arrowhead Capital Fin., Ltd. v. Cheyne Speciality Fin. Fund L.P., the First Department affirmed a decision of the New York County Commercial Division (Hon. Shirley Werner Kornreich, J.), dismissing the complaint solely on the basis that at the time the action was commenced, plaintiff’s counsel failed to maintain an in-state office.

Further, the First Department found that the plaintiff’s ex post facto retention of New York based co-counsel was moot, holding that the “commencement of the action in violation of Judiciary Law § 470 was a nullity.” Additionally, the First Department affirmed the Commercial Division’s decision permitting the defendants’ dispositive motion based on Judiciary Law § 470, even though it was their second such motion, because at time the defendants made their first motion, they had no reason to suspect that plaintiff’s counsel had violated the statute.

For those curious readers, the standard for what qualifies as maintaining a physical office in New York for purposes of the statute has been examined on multiple occasions. Not surprisingly, maintaining a small, barely accessible room in the basement of a restaurant/bar in New York is insufficient (see Lichtenstein v. Emerson, 251 AD2d 64 [1st Dept 1998]), while establishing proof of an “of counsel” relationship with a New York attorney who has a New York office is sufficient (see Tatko v McCarthy, 267 AD2d 583 [3d Dept 1999]).