City Court of Long Beach, January 2, 2018

Robert A. Smith, Long Beach, for plaintiffs.

Maria J. Aramanda, Garden City, for defendants.

This small claims matter arises out of a dispute involving a multimillion dollar beachfront property located at 110 Ocean Boulevard in Point Lookout, New York. The plaintiffs, Jamie Shaw and Christina Shaw, commenced the instant small claims action against the defendants, Point Lookout Toys, LLC, 110 Ocean, BMJC, LLC, and Louis G. [*2]Cornacchia, seeking to recover $5,000, alleging that they were entitled to the return of a security deposit they provided to the defendants in connection with a residential lease for the subject premises. The defendants filed an answer with counterclaims, wherein they alleged that the plaintiffs caused certain damage to the subject premises in the amount of $11,156.55, and in which they also sought attorney's fees pursuant to the subject lease agreement.

In recognition of the small claims court's monetary jurisdiction of $5,000 (see UCCA 1801), counsel for the defendants filed an amended answer with a counterclaim detailing an alleged breach of the lease agreement and damages allegedly caused by the plaintiffs. Such counterclaim capped the relief sought at $5,000, and eliminated the claim for attorney's fees. In the amended answer, the defendants referenced a complaint they had filed in the Supreme Court, Nassau County, seeking monetary damages, a declaratory judgment, and attorney's fees. A review of that complaint indicates that they seek damages in an unspecified amount expected to exceed $15,000.

At a conference before this court held on November 1, 2017, the parties addressed the potential impact that the defendants' Supreme Court action might have upon the instant action.^[FN*] Defense counsel stressed that due to this court's jurisdictional{**58 Misc 3d at 791} constraints, the defendants' claims could only be partially litigated in this court. Defense counsel contended that the Supreme Court action would provide the defendants with an opportunity to fully litigate their claims. Counsel for the plaintiffs argued that, irrespective of the Supreme Court action, the instant action should be litigated in this court.

The court requested the parties to submit legal memoranda addressing the issue of how the instant matter should proceed. In the defendants' papers, the defendants argue that the instant matter should be dismissed, or, in the alternative, stayed pending the outcome of the Supreme Court action. The plaintiffs challenge the legitimacy of both the equitable relief and the amount of damages sought by the defendants in the Supreme Court action, suggesting that the defendants' motivation for both is to "get away from the Long Beach Court." The plaintiffs, citing UCCA 1805, also contend that a transfer to [*3]the civil part of the Long Beach City Court is the appropriate procedural remedy in circumstances where a small claims counterclaim exceeds $5,000.

The court will first address the plaintiffs' arguments. As to the plaintiffs' claims regarding the legitimacy of the relief sought in the Supreme Court action, this court is without authority or jurisdiction to act with regard to the Supreme Court action. Nevertheless, the plaintiffs remain free to pursue whatever defense strategy and/or motion practice in the Supreme Court as they see fit.

Turning to the plaintiffs' reference to UCCA 1805, the court must initially acknowledge subdivision (c) of that section, which provides: "No counterclaim shall be permitted in a small claims action, unless the court would have had monetary jurisdiction over the counterclaim if it had been filed as a small claim. Any other claim sought to be maintained against the{**58 Misc 3d at 792} claimant may be filed in any court of competent jurisdiction." Thus, this subdivision simply precludes counterclaims in the small claims part which exceed the jurisdictional limit of $5,000. It also, however, permits a defendant in a small claims action to pursue a claim against the small claims plaintiff in any court of competent jurisdiction. The jurisdictional limit of this court's civil part is $15,000 (see UCCA 202), which precluded the filing of the Supreme Court action in that part.

The court must also acknowledge UCCA 1805 (b), which permits the transfer of "any small claim or claims to any other part of the court upon such terms as the rules may provide, and proceed to hear the same according to the usual practice and procedure applicable to other parts of the court." This provision, however, is inapplicable to the instant circumstances. As it stands, the plaintiffs have filed a small claims action in this court, and the defendants have filed an action in the Supreme Court seeking equitable relief and a money judgment in excess of $15,000. As stated above, this court has no authority over the Supreme Court action, and there is no reason for this court to consider a transfer of the small claims action to the civil part of this court at this time. Therefore, although it does not appear that the plaintiffs are seeking a transfer of the instant matter to the civil part, the court does note that the plaintiffs' interpretation of UCCA 1805 is incorrect.

Turning to the defendants' position, defendants seek either dismissal of the instant action or, alternatively, a stay of the instant action to make a motion in the Supreme Court, ostensibly pursuant to CPLR 325 (b), for removal of the instant action to the Supreme Court. The defendants' rationale for such relief is based upon their concerns regarding potential inconsistent rulings and judicial economy, should the instant small claims action proceed along with the Supreme Court action.

While the court appreciates the defendants' concerns, they must be weighed against the "salutary purposes of Small Claims Courts which is to provide a simple, informal and inexpensive procedure for the prompt determination of claims within its jurisdiction" (Kilinski v Melendez, 182 Misc 2d 55, 57 [Sup Ct, Nassau County 1999], citing [*4]UDCA 1802 [the UCCA 1802 counterpart applicable to District Court]). Indeed, these underpinnings of small claims court have been deemed a substantial right to which parties are entitled.

For example, in Moise v Brown (26 Misc 3d 1224[A], 2010 NY Slip Op 50243[U] [Sup Ct, Kings County 2010]), the {**58 Misc 3d at 793}plaintiff, Charles V. Moise, commenced an action in the Supreme Court, Kings County, alleging that a motor vehicle owned by defendant Clarence Brown and operated by Keon K. Brown came into contact with a motor vehicle owned by the plaintiff, causing injury. The plaintiff Moise moved, pursuant to CPLR 602, to transfer to the Supreme Court an action commenced by Keon K. Brown against the plaintiff Moise in the small claims court, and, after transfer, consolidate the small claims action with the Supreme Court action for a joint trial. The Supreme Court denied the motion, finding that transfer and consolidation would prejudice a substantial right of the defendant, Keon K. Brown, "that is, the right to have his claim resolved according to the standard and rules applicable in the Small Claims Part of Civil Court" (2010 NY Slip Op 50243[U], *3).

In making its determination, the Supreme Court examined New York City Civil Court Act § 1805 (b), which provides that a small claims action may be transferred to another part of the court (such provision is mirrored by UCCA 1805 [b]). It also relied upon Victoria Kitchens v Leiner (138 Misc 2d 556 [Civ Ct, Queens County 1988]), in which related actions were brought in small claims court and the regular part of civil court, and a motion to consolidate the actions was brought upon the ground that there existed common questions of law and fact. The Civil Court, Queens County ordered that a joint trial be held, conditioned upon the small claims defendant "stipulating and agreeing to have both actions tried in the regular parts of the court, under the more flexible procedural rules and 'substantial justice' standard applicable to small claims" (Victoria Kitchens at 560).

The Victoria Kitchens analysis is instructive. In that case, the court examined the legislative history of New York City Civil Court Act § 1805, most specifically the 1979 amendment thereto, which precluded a defendant in a small claims action from interposing a counterclaim in excess of small claims monetary jurisdiction. This amendment effectively prevented small claims defendants from obtaining transfers of small claims actions to the regular civil parts simply by filing counterclaims in excess of small claims jurisdiction. Thus, the legislature recognized the substantial right of parties to proceed in a small claims court, as an inexpensive and informal forum, with relaxed procedures and simplified rules, providing greater accessibility of the courts to all.{**58 Misc 3d at 794}

The court also considered New York City Civil Court Act § 1808 (the applicable counterpart of which is codified at UCCA 1808), which provides that a small claims judgment

"shall not be deemed an adjudication of any fact at issue or found therein in any other action or court; except that a subsequent judgment obtained in another action or court involving the same facts, issues and parties shall be reduced by the amount of a judgment awarded under this article."

This provision serves to eliminate any substantive [*5]prejudice to a small claims defendant who has pursued a separate related action against the small claims plaintiff.

The Victoria Kitchens result is, at its heart, a compromise, balancing the importance of a citizen's right to proceeding in small claims court—the "People's Court"—against the concerns of judicial economy and inconsistent verdicts. Of course, in that case, the court had the luxury of transferring the small claims matter to its civil part pursuant to New York City Civil Court Act § 1805 (b), while still imposing small claims procedural rules and standards upon the parties. In the instant matter, there is no related matter in this court's civil part, but rather a related matter in the Supreme Court, over which this court has no authority or jurisdiction.

Particularly on point is Nuckle v Huyck (2002 NY Slip Op 40041[U] [Sup Ct, Sullivan County 2002]), another Supreme Court action in which a plaintiff moved by order to show cause to remove a related small claims action (in which she was the defendant) to Supreme Court and consolidate the two actions. The court found that the defendant (i.e., the plaintiff in the small claims action), having chosen to avail himself of the informal method of adjudicating disputes that is afforded in small claims, "should not have to wade through a Supreme Court action to get the relief he seeks," and accordingly it denied the plaintiff's application (2002 NY Slip Op 40041[U], *1; see also Kilinski v Melendez at 57 [denying similar application primarily upon the ground that removal and consolidation would cause "substantial prejudicial delay to the plaintiff in the small claims action"]; Frankel v Best Physical Therapy, 2015 NY Slip Op 31990[U] [Rye City Ct, July 24, 2015] [denying dismissal of small claims action; instant small claims action had been filed first, indicating that it held priority pursuant to CPLR 3211 (a); no authority to remove small claims action to another City Court where related civil action had been commenced]).{**58 Misc 3d at 795}

Of course, as did the court in Nuckle, this court recognizes that allowing the instant action to proceed simultaneously with the Supreme Court action could potentially result in inconsistent verdicts (see generally Koshgarian & Schreiner v Vics, 112 AD2d 575 [3d Dept 1985]). However, this cannot work to the defendants' disadvantage. For example, if this court ultimately determines that the defendants are entitled to nothing on their counterclaim, or, for that matter, any amount up to its monetary jurisdictional limit of $5,000, the Supreme Court will consider the facts and circumstances anew, using the legal standards and procedures applicable in that court, and award the defendants the amount it sees fit. Any amount awarded by the Supreme Court will be offset by any amount awarded by this court. However, should the Supreme Court decide that the defendants are not entitled to any award, that determination will not have any effect on this court's award, if any, to the defendants. Furthermore, considering the expeditious nature in which small claims matters are resolved in this court, this court is confident that the prosecution of this small claims action will result in the expenditure of relatively little cost and time on the part of the defendants, and it will be completed long before the [*6]Supreme Court matter reaches resolution.

Should the defendants elect to make a motion in the Supreme Court either to stay the instant small claims action, or to remove this action to the Supreme Court, such motion will be for the Supreme Court to determine. However, at this time, this court perceives no basis upon which to grant the defendants a stay in order to make such a motion in the Supreme Court, and there certainly is no basis upon which to grant that branch of the defendants' motion that seeks dismissal of this action. Accordingly, all motions are denied, and the court will not entertain any further applications.