Court Opinion

ID: 9958786
Source: CourtListenerOpinion
Date Created: 2024-04-09 20:12:05.953708+00
Date Added: 2024-06-11T08:15:53.030915
License: Public Domain

Matter of CCNY Constr., Inc. v
                West 161 St. Assoc., LLC
               2024 NY Slip Op 31030(U)
                     March 26, 2024
           Supreme Court, New York County
        Docket Number: Index No. 653813/2023
                  Judge: John J. Kelley
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.
                                                                                                                     INDEX NO. 653813/2023
  NYSCEF DOC. NO. 39                                                                                           RECEIVED NYSCEF: 03/27/2024

                                   SUPREME COURT OF THE STATE OF NEW YORK
                                             NEW YORK COUNTY
            PRESENT:             HON. JOHN J. KELLEY                                             PART                              56M
                                                                                      Justice
            ---------------------------------------------------------------------------------X   INDEX NO.          653813/2023
             In the Matter of
                                                                                                 MOTION DATE         11/08/2023
             CCNY CONSTRUCTION, INC.,
                                                                                                 MOTION SEQ. NO.         001
                                                         Petitioner,

                                                 -v-
                                                                                                   DECISION, ORDER, AND
             WEST 161 ST. ASSOCIATES, LLC, and ACIES GROUP,
             LLC,                                                                                       JUDGMENT

                                                         Respondents.
            ---------------------------------------------------------------------------------X

            The following e-filed documents, listed by NYSCEF document number (Motion 001) 1, 2, 3, 4, 5, 6, 7, 8,
            9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36,
            37, 38
            were read on this motion to/for                                                 DISCOVERY - PRE-ACTION                 .

                      In this proceeding pursuant to CPLR 3102(c), 7505, and 2318(b), the petitioner seeks

            pre-action disclosure from the respondents, in aid of an arbitration demanded against it by the

            respondent West 161 St. Associates, LLC (West 161), and to frame a complaint against Peter

            Witt, a reputed principal of the respondent Acies Group, LLC (Acies). The petitioner seeks this

            disclosure in the form of the issuance of so-ordered subpoenas directed the respondents, Witt,

            and others. The respondents oppose the petition. The petition is denied, and the proceeding is

            dismissed.

                      On July 18, 2022, West 161 demanded arbitration of an $800,000 claim against the

            petitioner, its construction contractor, alleging that it had discovered latent defects in the

            construction of certain components within various sections and elevations of the exterior facade

            of an apartment building that it owned at 607 West 161st Street in Manhattan. In particular,

            West 161 contended that the petitioner had done insufficient or improper work, inasmuch as it

            left open sealant joints at metal copings and skyward joints, open vertical joints on the 1st

             653813/2023 CCNY CONSTRUCTION, INC. vs. WEST 161 ST. ASSOCIATES LLC ET AL                               Page 1 of 4
             Motion No. 001

                                                                           1 of 4
[* 1]
                                                                                                    INDEX NO. 653813/2023
  NYSCEF DOC. NO. 39                                                                        RECEIVED NYSCEF: 03/27/2024

            through 3rd and 9th floors, an uplifting metal coping cover at a vertical flange, a metal coping

            cover that was fastened to the substrate at the skyward face, and open vertical and horizontal

            mortar joints at thin brick veneer panels and out-of-plumb masonry thin brick veneer panels on

            the 2nd through 8th floors.

                    According to the petitioner, it had retained Albarius, LLC (Albarius), as a subcontractor to

            perform the work about which West 161 had complained. It further contended that Alcies is

            either the new name of Albarius or the successor-in-interest to Albarius. As to the other

            persons and entities upon whom the petitioner seeks to serve a judicial subpoena, Witt is a

            principal of Albarius who signed the relevant subcontract with the petitioner, Dale Group is the

            insurance agent that was involved with the procurement of insurance for both Albarius and

            Acies, and Robert Ushkevich is a representative of National Claims Services, a third-party

            administrator for United Specialty Insurance Company, which purportedly provided coverage

            only to Albarius.

                    The petitioner asserted that, after West 161 demanded arbitration, the petitioner made a

            third-party arbitration claim for contribution against Albarius and Acies, as Albarius’s successor-

            in-interest.

                    The petitioner alleged that it needed extensive court-ordered disclosure to frame a

            complaint sounding in fraud against Witt for misrepresentations that he allegedly made to the

            petitioner concerning the nature and extent of insurance coverage that he was purportedly

            obligated to secure for it. It further asserted that it needed to ascertain the true relationship

            between Albarius and Acies, particularly whether Albarius is an ongoing, viable concern.

                    CPLR 3102(c) authorizes a court to permit a party to conduct pre-action disclosure to aid

            in framing a complaint and in identifying prospective defendants (see Sims v Metropolitan

            Transp. Auth., 123 AD3d 496, 496 [1st Dept 2014]; Walker v Sandberg & Sikorski Corp.

            Firestone, Inc., 102 AD3d 415, 415 [1st Dept 2013]; Matter of Champion v Metropolitan Tr.

            Auth., 70 AD3d 587, 588 [1st Dept 2010]). A petitioner seeking leave to conduct pre-action
             653813/2023 CCNY CONSTRUCTION, INC. vs. WEST 161 ST. ASSOCIATES LLC ET AL              Page 2 of 4
             Motion No. 001

                                                           2 of 4
[* 2]
                                                                                                     INDEX NO. 653813/2023
  NYSCEF DOC. NO. 39                                                                         RECEIVED NYSCEF: 03/27/2024

            disclosure must demonstrate that he or she has a potentially viable cause of action against

            some person or entity, and that the disclosure sought is material and necessary to the proof of

            an actionable wrong (see Matter of Woodbridge Structured Funding, LLC v Pissed Consumer,

            125 AD3d 508, 508 [1st Dept 2015]; Matter of Peters v Sotheby’s Inc. 34 AD3d 29, 34 [1st Dept

            2006]; Liberty Imports v Bourguet, 146 AD2d 535, 536 [1st Dept 1989]). The resort to pre-

            action disclosure, however, “is not permissible as a fishing expedition to ascertain whether a

            cause of action exists” in the first instance (id. at 536).

                    The petitioner has not established the need to obtain pre-action disclosure from Witt to

            frame a complaint against him sounding in fraudulent misrepresentation. The person to whom a

            representation has been made already has knowledge of facts sufficient to know the nature and

            substance of the fraudulent representation, who made it, when it was made, and whether he or

            she relied on the representation to his or her detriment.

                    As to the purported need to ascertain the current status of Albarius, or its relationship

            with Alcies, whether the petitioner is or should be covered by insurance policies obtained by

            Albarius or Alcies, or the purported need to obtain information from various insurers, risk

            managers, and brokers, the court notes, in the first instance, that a proceeding for pre-action

            disclosure is an inappropriate device to obtain this information. Rather, the appropriate vehicle

            would be the commencement of an action against an insurer for a judgment declaring that the

            petitioner is covered under one or more insurance policies that its subcontractor was obligated

            to obtain, or, if not barred by an arbitration clause, either an action declaring that its

            subcontractor failed to obtain the necessary coverage or one to recover for breach of contract

            for failure to procure such coverage. In the course of litigating those actions, the petitioner

            could avail itself of all disclosure devices authorized by the CPLR. Moreover, the respondents

            correctly pointed out that some of the contents of certain claims investigation files maintained by

            insurers are not discoverable.

             653813/2023 CCNY CONSTRUCTION, INC. vs. WEST 161 ST. ASSOCIATES LLC ET AL               Page 3 of 4
             Motion No. 001

                                                            3 of 4
[* 3]
                                                                                                      INDEX NO. 653813/2023
  NYSCEF DOC. NO. 39                                                                            RECEIVED NYSCEF: 03/27/2024

                    The court notes that, in any event, CPLR 7505 provides that the arbitrator, or an attorney

            of record for any party to an arbitration, has authority to issue subpoenas to parties and

            nonparties alike to compel testimony at the arbitration hearing or the production of documents

            for use at the arbitration hearing. The record does not reflect that the petitioner availed itself of

            any of the recognized preliminary avenues for discovery, “such as requesting a hearing at which

            witnesses could be called (see CPLR 7506[c]) [or] asking the arbitrator to issue subpoenas to

            procure documentary evidence (see CPLR 7505; see also Alexander, Practice Commentaries,

            McKinney's Cons Laws of NY, Book 7B, CPLR 7505, at 682-683 [1998])” (Matter of Progressive

            Northeastern Ins. Co. v New York State Ins. Fund, 56 AD3d 1111, 1114 [3d Dept 2008]).

            Further, the petitioner’s attorney has not demonstrated that he issued subpoenas pursuant to

            CPLR 7505, or that any court has ruled on a request for a protective order quashing or limiting

            those subpoenas. An application “to the court for an order directing disclosure in aid of

            arbitration upon a showing of extraordinary circumstances” is only a “last resort” (id.), and the

            court concludes that the petitioner has not made the required showing of extraordinary

            circumstances to warrant the pre-action disclosure that it seeks.

                    Accordingly, it is,

                    ORDERED that the petition is denied; and it is,

                    ADJUDGED that the proceeding is dismissed.

                    This constitutes the Decision, Order, and Judgment of the court.

                    3/26/2024                                                               $SIG$
                      DATE                                                          JOHN J. KELLEY, J.S.C.
             CHECK ONE:                   X   CASE DISPOSED                 NON-FINAL DISPOSITION

                                                                                                     □
                                              GRANTED          X   DENIED   GRANTED IN PART              OTHER

             APPLICATION:                     SETTLE ORDER                  SUBMIT ORDER

                                                                                                     □
             CHECK IF APPROPRIATE:            INCLUDES TRANSFER/REASSIGN    FIDUCIARY APPOINTMENT        REFERENCE

             653813/2023 CCNY CONSTRUCTION, INC. vs. WEST 161 ST. ASSOCIATES LLC ET AL                Page 4 of 4
             Motion No. 001

                                                                4 of 4
[* 4]