Court Opinion

ID: 9954279
Source: CourtListenerOpinion
Date Created: 2024-03-25 21:10:06.074538+00
Date Added: 2024-06-11T08:12:00.174785
License: Public Domain

SJB RE Holdings, LLC v Gifford
               2024 NY Slip Op 30924(U)
                     March 21, 2024
            Supreme Court, Saratoga County
        Docket Number: Index No. EF20233420
              Judge: Richard A. Kupferman
Cases posted with a "30000" identifier, i.e., 2013 NY Slip
 Op 30001(U), are republished from various New York
 State and local government sources, including the New
  York State Unified Court System's eCourts Service.
 This opinion is uncorrected and not selected for official
                       publication.
        SUPREME COURT OF THE STATE OF NEW YORK
        COUNTY OF SARATOGA

        SJB RE HOLDINGS, LLC, SAMUEL J.
        BETTER and THE LAW OFFICE OF
        SAMUEL J. BETTER, PLLC,
                                  Plaintiffs,                      DECISION & ORDER

                       -against-                                   Index# EF20233420

        RYAN GIFFORD, GABRIELLE GIFFORD and
        TERENCE J. DEVINE,

                                             Defendants.

        Appearances:

        Samuel J. Better, Esq.
        The Law Office of Samuel J. Better, PLLC
        103 Broad Street
        Waterford, New York 12188
        Attorney for Plaintiffs

        Terence J. Devine, Esq.
        Devine & Bruno, LLP
        52 Corporate Circle, Suite 207
        Albany, New York 12203
        Attorneys for Defendants

        KUPFERMAN, J.,

               Plaintiffs filed a verified complaint against Defendants on December 5, 2023. The first

        four causes of action in the complaint are against Defendants Ryan Gifford and Gabrielle Gifford

        (the "Giffords") for breach of contract, negligence, gross negligence, and tortious interference.

        These claims allege that the Giffords (tenants) breached a lease agreement by engaging in conduct

        prohibited under the terms of the lease and that they further caused damage by flushing feminine

        hygiene products down the toilet.

                                                        1

[* 1]
               The remaining two claims in the complaint (the fifth and sixth causes of action) are asserted

        against the Giffords and their litigation counsel, Defendant, Terence J. Devine ("Devine"). These

        claims are based on statements that Devine made on the record during a court proceeding in the

        Waterford Town Court. The fifth cause of action is for defamation and seeks $1,000,000 in

        punitive damages, while the sixth cause of action seeks to recover monetary damages under

        Judiciary Law§ 487.

               Devine now seeks to dismiss the fifth and sixth causes of action alleged in the complaint

        pursuant to CPLR 3211(a)(7), for failure to state a cause of action, and requests an Order for

        sanctions and counsel fees based on frivolous conduct. The Plaintiffs have cross-moved to amend

        the complaint and consolidate the Waterford Town Court action with this action (see CPLR 602).

        The proposed amendment makes changes to the caption and the allegations made in the complaint.

        Among other things, the proposed amendment changes the fifth cause of action from "Defamation"

        to "Slander Per Se" and removes the demand for $1,000,000 in punitive damages. In response,

        Devine contends that the revisions do not correct the defects with the pleading and that the fifth

        and sixth causes of action are still frivolous.

                         Summary of the Allegations Made By Plaintiffs in this Action

                The Plaintiff LLC and the Giffords were parties to a lease agreement (the "Lease") for a

        lease term commencing on or about October 1, 2022. The Lease was on a month-to-month basis

        and ended in June of 2023. The Plaintiffs allege that during the landlord-tenant relationship, the

        Giffords breached their agreement by: removing and installing a light fixture on two occasions in

        the kitchen; damaging the sheetrock by tearing off a 3m hook(s) and a cable cover; damaging the

        sheetrock by installing and hanging several pictures, curtains, metal bars and/or other items;

        allowing guests to reside in the Premises without notifying the landlord; having a dog temporarily

                                                          2

[* 2]
        in the Premises; turning off the utilities to the Premises before vacating; and allegedly flushing

        feminine hygiene products down the toilet.

               As a result of the damage to the sheetrock, the Plaintiff LLC allegedly had to repair the

        sheetrock and paint the apartment. As a result of the feminine hygiene products being flushed

        down the drain, the Plaintiffs LLC and Samuel J. Better ("Better") allege that they had to: attempt

        to snake the drain line; then subsequently hire a plumber to snake the same; and clean the Premises

        from the sewage that overspilled. The Plaintiffs also allege that the plumbing problems caused

        significant disturbances to the tenant businesses and the residential tenant in the building. The

        Plaintiffs also allege that the Giffords' guest caused noise disturbances on one occasion; that the

        Giffords failed to notify the landlord of a dryer issue; and that the Giffords failed to pay their pro-

        rated rent for December 2022.

               After the Giffords left the Premises, Plaintiff Better (as counsel and sole member of the

        LLC) sent them a letter dated July 3, 2023. In the letter, Better informed the Giffords that they

        had caused damage to the Premises. Better estimated that it cost a total of $4,300.13 to repair

        and/or fix the damage. He credited the Giffords a total of $2,371.05 for the value of the security

        deposit, insurance proceeds, and a rental reimbursement. He further informed the Giffords that he

        was keeping their security deposit and insurance proceeds since the cost of repairs exceeded the

        value of the deposit and proceeds.

                The Giffords disputed that they caused the damage and that Better was entitled to retain

        their security deposit. Defendant Ryan Gifford filed a small claims court action in Waterford Town

        Court against Better for $2,371.05. At a court appearance, Devine appeared on behalf of Ryan

        Gifford. At the appearance, Devine allegedly stated twice on the record that Better had engaged

        in "self help."

                                                           3

[* 3]
               As the basis for the claims made against Devine at this Court, the Plaintiffs allege, upon

        information and belief, that the statements were made to insinuate that Better had committed a

        "self help" eviction, which is an unclassified misdemeanor under RPAPL § 768, or in the

        alternative, an actionable civil action under RPAPL § 853. The Plaintiffs allege that they never

        engaged in the any "self help" conduct against the Giffords. The Plaintiffs also allege that Devine's

        statements were tortious (slander per se) and made with reckless disregard of the truth, and with

        the intent of securing a judgment in the Town Court to injure Better in his profession, as well as to

        attempt to have him charged with a crime under RPAPL § 768. The Plaintiffs further allege that

        Devine's words and accusations were and are wholly false and constitute ethics violations of the

        New York State Rules of Professional Conduct, fraud upon the Town Court, and an improper

        attempt to threaten criminal conduct in a civil proceeding.

                                                      Analysis

               On a motion to dismiss under CPLR 321l(a), the Court must "accept the facts as alleged

        in the complaint as true, accord plaintiff the benefit of every possible favorable inference, and

        determine only whether the facts as alleged fit within any cognizable legal theory" (Connaughton

        v. Chipotle Mexican Grill, Inc., 29 NY3d 13 7, 141-142 [2017] [internal quotation marks, brackets,

        and citation omitted]). "Dismissal of the complaint is warranted if the plaintiff fails to assert facts

        in support of an element of the claim, or if the factual allegations and inferences to be drawn from

        them do not allow for an enforceable right of recovery" (id. at 142).

                "In opposition to such a motion, a plaintiff may submit affidavits to remedy defects in the

        complaint" (Cron v Hargro Fabrics, 91 NY2d 362, 366 [1998] [internal quotation marks and

        citations omitted]). "[S]uch additional submissions of the plaintiff, if any, will similarly be given

        their most favorable intendment" (id. [internal quotation marks and citation omitted]).

                                                           4

[* 4]
               The Court agrees that the fifth and sixth causes of action fail to state a claim. The original

        complaint, for example, is defective because it does not contain "the particular words complained

        of' to support the defamation/slander claim, as required by CPLR 3016 (a). While Plaintiffs have

        since provided this Court with a copy of the transcript to review, the Court does not consider any

        of the statements made during the Town Court appearance as actionable, even when viewed in the

        light most favorable to the Plaintiffs.

               As reflected in the transcript, the first time that Devine said the words complained of - i.e.,

        "self help" - he was advocating his client's position that Better had no basis to withhold the security

        deposit and that Better had simply helped himself to the insurance proceeds. The transcript reads,

        as follows:

                        "MR. DEVINE: He's withheld security deposit and has exercised
                        self help on certain --

                        MR. BETTER: Absolutely --

                        MR. DEVINE: -- insurance proceeds that he was holding that
                        essentially are to be paid to my client. The, the bogus claim is his
                        basis for withholding the security. He's violated the lease, he's
                        violated the law" (NYSCEF Document Number 36, Transcript, at
                        pp. 3-4 [emphasis added]).

                In the second instance, Devine was explaining that the lease required a walk through before

        the termination of the tenancy and that Ryan Gifford had talked with Better several times about a

        walk through. Devine further explained that Better failed to perform a walk through as promised

        and instead exercised "self help" by proceeding to unilaterally find and repair alleged defects at

        the Giffords' expense, and without allowing the Giffords to be present for the final inspection

        (Transcript, at pp. 5-6). The transcript reads, as follows:

                        "MR. DEVINE: The lease specifically required that one to two
                        weeks before the termination of this month-to-month tenancy, that

                                                           5

[* 5]
                      he would go in and do a walk through with them. He would point
                      out repairs and cleaning that would be necessary. Never did it at all.

                      He says that Mr. Gifford abandoned the property. He knew that Mr.
                      Gifford and his wife were moving up the Northway, bought a house.
                      It was agreed that they would have through the end of June and, in
                      fact, paid all the rent through the end of June. When they turned on
                      the electricity at the new house, National Grid turned off the
                      apartment. But it was summer, there's no danger of cold, no burst
                      pipes, nothing.

                      No effort was made to contact him to see if he was abandoning it.
                      Instead, [he] went in and exercised self help, said there were all these
                      things wrong, paid twenty-six hundred dollars to painters to
                      completely redo the place. It's not a matter of there was some
                      damage, there's wear and tear in any apartment. This was
                      completely recreating it [emphasis added].

                      In his letter saying we're not entitled, he points out two things in
                      particular. One, some damage to a wall from removing a cable cover
                      and damage to a wall from removing a 3M hook. He personally had
                      repaired those earlier. They were there, that wasn't from the
                      Giffords, that was from the prior tenant. He personally went in. This
                      wasn't a matter of he hired somebody. He went in, patched them,
                      didn't even paint over them. But he repaired them early in the
                      tenancy. So that whole paragraph, it comes down to there are several
                      holes from pictures basically and he repainted the entire place.

                      MR. DEVINE: . . . what you put forward is a violation of law,
                      violation of the lease. You've essentially accused him of damaging
                      your property by intentionally putting tampons down the drain. One,
                      his wife was pregnant. Two, they didn't even live there at the time.
                      Three, you've arbitrarily decided out of all the tenants in the
                      building, had to be him. I don't know if you collected from anybody
                      else, maybe you did, but you can't arbitrarily say he did it. There's
                      no proof, there is nothing" (Transcript, at pp. 5-8).

               Contrary to Better's imagination, no basis exists to conclude that Devine was accusing

        Better of engaging in a self-help eviction or violating Section 768 or 853 of the RPAPL. There

        was no mention of any eviction, nor any accusation about Better violating these provisions. To

        the contrary, Devine was simply explaining that Better helped himself to the insurance proceeds

                                                         6

[* 6]
        (i.e., retained them for himself) and that Better also made the repairs and charged for them without

        providing the Giffords with the proper notice and procedure required by the lease and the law. At

        best, Devine was accusing Better of violating General Obligations Law § 7-108, which was

        pertinent to the claim seeking the return of the security deposit.

               Further, it is well settled that "a statement, made in open court in the course of a judicial

        proceeding, is absolutely privileged if, by any view or under any circumstances, it may be

        considered pertinent to the litigation" (Martirano v Frost, 25 NY2d 505, 507 [1969]). As explained

        by the Court of Appeals, nothing "said in the court room may be the subject of an action for

        defamation unless ... the statement [is] so outrageously out of context as to permit one to conclude,

        from the mere fact that the statement was uttered, that it was motivated by no other desire than to

        defame" (id. at 508).

               As is readily apparent, the statements complained of were made in open court and

        challenged the basis for Better's retention of the security deposit and the charges for repairs. Such

        statements were absolutely pertinent to the litigation and, as such, are privileged (see id.; Gill v

        Dougherty, 188 AD3d 1008, 1010 [2d Dept 2020] ["The cause of action alleging defamation failed

        because the challenged statements were absolutely privileged as a matter of law and cannot be the

        basis for a defamation action"]).

                The allegations in the pleading and opposition papers similarly fail to allege sufficient facts

        to state a cause of action under Judiciary Law § 487. 1 Even when viewed in the light most

        favorable to the Plaintiffs, the statements made by Devine were not deceitful in any manner at all

        1As relevant here, Judiciary Law § 487 provides that an attorney who is "guilty of any deceit or
        collusion, or consents to any deceit or collusion, with intent to deceive the court or any party" is
        "guilty of a misdemeanor, and in addition to the punishment prescribed therefor by the penal law,
        he forfeits to the party injured treble damages, to be recovered in a civil action" (Judiciary Law §
        487).
                                                           7

[* 7]
        (see Gill, 188 AD3d at 1009). In fact, it is readily apparent that under no circumstances could a

        reasonable person conclude that Devine accused Better of any crime or engaged in any attorney

        misconduct.

               Accordingly, the Court finds that the complaint (even as amended) fails to state a cause of

        action for defamation, slander, and/or a violation of the Judiciary Law. The fifth and sixth causes

        of action are therefore DISMISSED.

               Motion for Sanctions and Counsel Fees

               The Court further grants Devine's request for sanctions and counsel fees. 22 NYCRR 130-

        1.1 provides, as follows:

                       "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 as defined in this Part
                       ... " (22 NYCRR 130-1.1 [a]).

               Conduct is frivolous under 22 NYCRR 130-1.1 if "it is completely without merit in law

        and cannot be supported by a reasonable argument for an extension, modification or reversal of

        existing law;" "it is undertaken primarily to delay or prolong the resolution of the litigation, or to

        harass or maliciously injure another;" or "it asserts material factual statements that are false" (22

        NYCRR 130-1. 1 [c]; see Miller v Falco, 170 AD3d 707, 710 [2d Dept 2019]). "In determining

        whether the conduct undertaken was frivolous, the court shall consider, among other issues the

        circumstances under which the conduct took place, including the time available for investigating

        the legal or factual basis of the conduct, and whether or not the conduct was continued when its

                                                          8

[* 8]
        lack of legal or factual basis was apparent, or should have been apparent, or was brought to the

        attention of counsel or the party" (22 NYCRR 130-1.1 [c]).

                 Here, the Court finds that the fifth and sixth causes of action are frivolous. The Plaintiffs

        have completely misrepresented what Devine said during the Town Court action. As explained

        above, no good faith basis existed for Better to allege that Devine had accused him of evicting the

        Giffords or committing a crime. These allegations made by Plaintiffs were completely fabricated

        by them to conjure up the claims against Devine. In addition, as explained above, the Plaintiffs

        lacked a good faith basis to allege that Devine deceived (or had the intent to deceive) the Town

        Court.

                 The Court further finds that the statements were made to harass the Defendants and

        improperly pressure them into abandoning/compromising the claim for the return of their security

        deposit and insurance proceeds. The law on privilege in the context oflitigation is also well settled

        and exists for a reason. Better's decision to commence this defamation and misconduct claim

        against Devine (his adversary in the Town Court action) was entirely improper and crossed the line

        between zealous advocacy and frivolous conduct.

                 Further, the Plaintiffs had plenty of time to investigate the legal and factual basis for the

        fifth and sixth causes of action. Rather than discontinue the claims, the Plaintiffs continued this

        conduct by realleging these frivolous claims in their proposed amended complaint, even after

        Devine requested sanctions/fees.

                 Based on these circumstances, the Court exercises its discretion and grants that branch of

        Devine's motion pursuant to 22 NYCRR 130-1.1 (a) to impose a sanction upon the Plaintiffs

        consisting of costs in the form of an attorney's fee. The Court finds this appropriate given the

        amount of time and resources Devine has had to expend to defend against these baseless claims.

                                                           9

[* 9]
         Among other things, Devine has had to file a motion, oppose a cross motion, conduct research,

         prepare moving and opposition papers (including a memorandum of law and a reply

         memorandum), and appear for oral argument. The Court, however, declines to award the entire

         amount requested by Devine.

                A lot of the legal work performed by Devine was somewhat repetitive (multiple

         submissions and repetitive arguments) and this same result could have been achieved with less

         time expended. In addition, the legal issues (defamation, attorney misconduct, privilege, and

         frivolous conduct) were relatively simple and involved the application of well-settled law. As

         Devine had an associate and other staff available to assist him, most of this work could have been

         performed by them at a lower rate. The Court further declines to award the full value of the

         attorney's fees or any other sanctions given that Better was very respectful to this Court and

         hopefully will modify his behavior moving forward to avoid finding himself in this same situation.

                Based on the circumstances, the Court finds that it is reasonable and appropriate to award

         costs to Devine for reasonable attorney's fees in the amount of $4,000.00, which is based on 5

         hours of legal services at a rate of $400 per hour and an additional IO hours of legal services at a

         rate of $200 per hour.

                Cross Motion to Amend

                The Plaintiffs have requested permission to amend the caption and the complaint. If such

         amendments concerned only the fifth and sixth causes of action, the Court would have denied the

         request as patently devoid of merit. The Plaintiffs, however, have also proposed changes to the

         other claims in the complaint. The Court therefore grants the Plaintiffs' request to amend the

         caption and the complaint, as no prejudice has been shown to deny this request (see CPLR 3025).

                                                         10

[* 10]
         The Giffords are directed to prepare and file an answer to the amended complaint within 30 days

         of this decision.

                 Cross Motion to Consolidate; Court's Sua Sponte Transfer to Town Court

                 Further, the Plaintiffs allege that they have incurred damages in the amount of $4,300.13.

         However, they have already offset/credited this amount by $2,371.05 by keeping the Giffords'

         security deposit, insurance proceeds, and rental reimbursement.         As such, the Plaintiffs are

         apparently seeking to recover a total amount of only $1,929.08 in damages ($4,300.13 -

         $2,371.05). This amount is well within the jurisdictional limits of the Waterford Town Court

         (UJCA § 202 ["the court shall have jurisdiction of actions and proceedings for the recovery of

         money or chattels where the amount sought to be recovered or the value of the property does not

         exceed $3000"]; see also UJCA § 208).

                 Considering the limited amount in dispute, as well as the pendency of the related action in

         the Waterford Town Court, the Court denies the Plaintiffs' motion to consolidate at this Court.

         Instead, the Court finds it more appropriate to exercise its discretion to transfer this action to the

         Waterford Town Court (see NY Constitution, article VI,§ 19; Hyman & Gilbert, P. C. v Greenstein,

         138 AD2d 678,680 [2d Dept 1988]; see also CPLR 325[d]; Uniform Civil Rules for Trial Courts

         § 202.13).

                 It is therefore,

                 ORDERED, that the Plaintiffs' cross motion seeking to amend the caption and the

         complaint is GRANTED and the amended complaint is deemed filed and served as of the date of

         this decision (NYSCEF Document No. 30). The Defendant Giffords are hereby directed to file in

         this action (by NYSCEF) an answer to the amended complaint on or before April 19, 2024; and it

         is further

                                                           11

[* 11]
                 ORDERED, that the motion made by the Defendant, Terence J. Devine seeking to dismiss

         the complaint (and amended complaint) against him is GRANTED and that the fifth and sixth

         causes of action in the amended complaint are hereby DISMISSED; and it is further

                 ORDERED, that the motion made by the Defendant, Terence J. Devine seeking sanctions

         and counsel fees is GRANTED and the Defendant, Terence J. Devine is awarded costs for his

         reasonable attorney's fees in the amount of $4,000.00 to be paid by the Plaintiffs within 45 days

         of the entry of this Order; and it is further

                 ORDERED, that the Plaintiffs' motion seeking to consolidate the Waterford Town Court

         action with this action is DENIED; and it is further

                 ORDERED, that the case is transferred, sua sponte, to the Waterford Town Court. The

         Plaintiffs are directed to notify the clerk of the Waterford Town Court of this transfer, provide the

         clerk with a copy of this Order and the pleadings filed in this action, and prepare/file any additional

         papers as may be necessary to effectuate and facilitate the transfer; and it is further

                 ORDERED, that the portion of this Order directing a transfer of this action is stayed for

         45 days to allow the remaining defendants the opportunity to prepare and file an answer to the

         amended complaint and to afford the parties and their counsel an additional opportunity to attempt

         to resolve their dispute prior to proceeding to the Town Court.

                 This shall constitute the Decision and Order of the Court. The Court is hereby uploading

         the original decision into the NYSCEF system for filing and entry by the County Clerk. The Court

         further directs the parties to serve notice of entry in accordance with the Local Protocols for

         Electronic Filing for Saratoga County.

         Dated: March 21, 2024
         at Ballston Spa, New York                       HON.RICHA
                                                         Justice Supreme C urt

                                                           12

[* 12]