Claimant, Michael Robles, commenced this Small Claims action on December 26, 2002, against the defendant, 4 Brothers Homes, alleging that the defendant, in order to develop its real property, trespassed onto claimant's real property and wrongfully removed claimant's trees. Defendant defaulted in appearing and answering. On January 23, 2003 an arbitrator, after Inquest, awarded the claimant a judgment in the amount of $3,000.00. The claimant sought to execute on that judgment. Claimant was informed by the sheriff that there was no entity known as "4 Brothers Homes" from whom the judgment could be satisfied. Thereafter the claimant did some research and learned that the owner of the property from which the trespassing occurred was Bartlett Building Corp. Claimant commenced a new Small Claims action against Bartlett Building Corp. (SCR 406/03). Bartlett appeared and answered that matter through counsel. A trial, at which claimant appeared without counsel and defendant was represented, was held on April 24, 2003. By written decision dated May 23, 2003 the Court found that the claimant had established a prima facie case of liability against the defendant. The court however found that the claimant was not entitled to actual damages since he failed to prove the value of the trees removed on the date of the trespass. He had provided estimates of the replacement costs for different types of flora without any expert testimony as to why the trees which were removed, Norwegian maples, could not be replaced with like trees. The court was constrained to only award nominal damages of $30.00 and treble damages for the wilfulness of the trespass of $90.00 for a total award of $120.00. Claimant has appealed that decision.

Thereafter, the defendant 4 Brothers Homes, moved to vacate its default in this action and [*2]asked the court to dismiss the action since the entire matter had been litigated against the proper defendant, Bartlett Building Corp. In reviewing the exhibits attached to the motion and conducting a search of the corporate filings with the New York State Department of State, Division of Corporations it was disclosed that there are eight corporations using the words "4 Brothers Homes" in their name. Seven of them included as a principal a member of the La Rocca family, the family that is the principal of Bartlett Building Corp. and one of whom is the individual who has appeared on behalf of the defendants in these suits. The Secretary of State lists three of these corporations as still "active." As a result of this information and statements made in defendant's motion papers, the court ordered that a hearing be held to determine whether or not a "4 Brothers Homes" entity was involved in the removal of the trees and may have incurred liability to the claimant even though not necessarily the owner of the property.

A hearing was held on October 16, 2003. Claimant appeared without counsel. Defendant was represented by an attorney.

A. Is the Defendant Entitled to Have The Default Judgment Vacated?

In the action the named defendant was "4 Brothers Homes." This entity defaulted in appearing and answering and a $3,000.00 judgment was entered against the defendant. Service was made by regular first class mail and certified mail return receipt requested as is prescribed in the statute (CCA 1803). Defendant asserts that it never got the notice although it was signed for by some one at 400 Woodrow Road, Staten Island, New York the address posted for '"4 Brothers Homes" the "builder-owner" on a sign at the property.

This case is a prime example of the situation pro se litigants in small claims and other civil actions often find themselves. An action is commenced against an entity who is reasonably believed to be the proper party. The reason for that belief is that the alleged offending entity is conducting business under that name. Thereafter, often after the defendant defaulted in appearing or answering, the complainant is awarded a judgment only to discover it was unenforceable because no such entity existed. If the statute of limitations has run, the injured party may now be remediless.

The legislature has taken steps to end this abuse. General Business Law§ 130 was enacted to require individuals and other entities to register with the county clerk or the secretary of state if doing business under an assumed name. Amendments were made to the Civil Court Act as well to remedy the situation. CCA 1813 was added in 1979 and it provides: "(a) Any person, partnership, firm or corporation which is sued in a small claims court for any cause of action arising out of its business activities, shall pay any judgment rendered against it in its true name or in any name in which it conducts business...." The statute defines "true name" and "conducting business." Included in the definition of "conducting business" is "maintaining signs at business premises." If a judgment is entered against the business in a name other than its true name and the judgment remains unpaid for thirty-five days after receipt by the judgment debtor of its notice of entry, "the aggrieved judgment creditor shall be entitled to commence an action in [*3]small claims court or in any other court of otherwise competent jurisdiction against the judgment debtor, notwithstanding the jurisdictional limit of the court, for the sum of the original judgment, costs, reasonable attorney's fees, and one hundred dollars."

There are some practical problems with this statute as written. For instance, the initial judgment will be against the business name. If as in this case, that is not a legal entity, the judgment will be uncollectible; there will be no assets against which enforcement of the judgment by the sheriff or marshal can be executed. What the statute must mean to make any sense is that the judgment creditor can then institute an action against the proper defendant when that information becomes available for the amount of the judgment plus costs, attorney's fees and an additional one hundred dollars. It would be illogical to re-sue the same incorrectly named defendant.

After the judgment was returned as "uncollectible," claimant learned the correct name of the defendant was "Bartlett Building Corp." As this was a matter of public record he could have discovered this before instituting the litigation. However, why would he believe another entity was responsible since the sign posted by the defendant listed "4 Brothers Homes" as both the builder and the owner? Armed with this knowledge, claimant commenced the second action which was tried and resulted in a judgment in his favor against the proper party.

Although there are strong arguments in support of the claimant's position that the default should not be granted, in the interest of justice, the court is granting the defendant's motion to vacate its default. This is Small Claims Court and it is preferred that all parties have their day in court and that cases be decided on the merits whenever possible and there is no prejudice to the claimant(CPLR 104, CPLR 2001; CPLR 3012; CPLR 5015; CCA 1814). Even though the "green" certified mail card was signed for at defendant's address, because it was addressed to a non-existing entity and more than one corporation existed at that address with "4 Brothers" in its name, it would be unfair to hold that notice was given to the proper defendant. In addition the "complaint" in a small claims action is very general and contains little information from which the exact nature of the claim can be determined. Since the defendant "4 Brothers Homes" has been in existence under various corporate entities for about forty years, it would be impossible for the defendant to reasonably conclude from the small claims summons and complaint who was the proper defendant and what was the nature of the occurrence.

Civil Court Act 1814 permits amendment of the name of the defendant when the true name becomes known to the claimant or the court. This statute makes it a prerequisite to a court entertaining an application to vacate a default that the defendant acknowledge the name of the proper entity. This is a condition precedent to granting relief when raised as part of a motion to vacate a default as was requested in this case (CCA 1814(d)). The defendant did provide this information albeit that it occurred after the claimant had affirmatively acted by commencing another suit against the proper defendant. The court also concludes that the proper defendant to the trespass action was in fact the defendant in SCR 486/03, Bartlett Building Corp. and that judgment rendered after a trial on the merits is fully enforceable. Defendant's excuse for not [*4]answering is that it did not receive the original notice, a fact that is belied by the evidence. A more plausible excuse is that a non-existent entity was listed and there was insufficient information in the complaint to determine what entity should respond. In any case, the defects of this initial action were corrected by the second action which was against the correct party and litigated on the merits. To allow the default judgment to be enforced against Bartlett Building Corp. would be a miscarriage of justice since the matter has been fully litigated thereby rendering the merits of this proceeding moot.

Claimant, at the court's suggestion, has searched the records of the New York City Building Department and turned up "work permit applications" issued to "Building Bartlett Corporation" at 400 Grantwood Avenue, Staten Island, New York, the same address of the Bartlett Building Corp. and for several of the "4 Brothers" corporate entities. It is clear that the designation of "Building Bartlett Corporation" is a typographical error and the correct entity is the Bartlett Building Corp. The Building Department has issued eight work permits to the defendant for construction of 16 dwelling units at the site adjacent to claimant's property. It should be pointed out that the sign posted with "4 Brothers Homes" as the "builder-owner" lists the address as 400 Woodrow Road and not 400 Grantwood Avenue. These streets actually intersect. It is impossible to determine if 400 Woodrow Road and 400 Grantwood Avenue are coincidentally the same address or are in fact different locations on those streets. Neither of these streets is near the location of the claimant's property and the land being developed by the defendant.

Although "4 Brothers Homes" is not the proper defendant in this trespass action, the exhibits and testimony have established that another cause of action exists against either the corporate entity, Bartlett Building Corp., or its principals.

B. Is The Claimant Entitled To Damages?

General Business Law§ 130 provides as follows: "1. No person shall hereafter (i) carry on or conduct or transact business in this state under any name or designation other than his or its real name, or (ii) carry on or conduct or transact business as a member of a partnership unless:...(b) Such person, if a corporation, limited partnership or limited liability company, shall file, together with the fees as set forth in subdivision five of this section, in the office of the secretary of state a certificate setting forth the name or designation under which business is carried on or conducted or transacted, its corporate, limited partnership or limited liability company name, the location including number and street, if any, of its principal place of business in the state, the name of each county in which it does business or intends to do business, and the location including number and street, if any of each place where it carries on or conducts or transacts business in this state." This section also requires individuals to file similar information with the county clerk of each county in which the individual conducts business.^[FN1] [*5]

Claimant has presented photographic evidence that the homes being sold at this location are being sold by "4 Brothers Homes" with out any indication that this is a trade name for a corporation or an individual. The activities of the defendant corporation, Bartlett Building Corp., as the owner of the property is in violation of this statute. Defendant's principal testified that to his knowledge there has been no registration as required by the statute either with the office of the Secretary of State or the Richmond County clerk. The statute does not create a private right of action for its violation. Failure to comply with the law is a misdemeanor (GBL§ 130(9)). In addition such an entity is prohibited from maintaining any action or proceeding in any court in this state until a proper registration is made (GBL §130(9)). The statute however, does not prohibit an entity from defending an action as is the fact in this case.

Although no cause of action is enumerated under this section of the General Business Law, the facts of the case do create a violation of General Business Law§ 349. This statute provides: "(a) Deceptive acts or practices in the conduct of any business, trade or commerce or in the furnishing of any service in this state are hereby declared unlawful." The conducting of a business under an assumed name that is not registered is a per se "deceptive practice." What can be more deceptive than not revealing the legal name of the business entity and not complying with a statute designed to provide that information? The clear intent of GBL§ 130 is to protect the public. It was meant to remedy the situation where claimants sued an entity under the business name presented to the public only to discover that the correct entity was someone or something other than the person sued. Claimants were obtaining unenforceable judgments or losing the ability to commence causes of action within the limitations period because of the defendant's failure to disclose its real name. The law is designed to prevent deception and confusion (Reed v Pelley, 112 Misc2d 383 [1982]).

General Business Law§ 349 (h) creates a private right of action against an individual or entity that engages in a deceptive practice. It allows the injured party to recover actual damages or fifty dollars, whichever is greater. The elements needed to establish a violation of this section are that there was a consumer oriented act or practice by the defendant; that it was misleading in a material way; and that the plaintiff suffered an injury as a result of the deceptive act (Stutman v Chemical Bank, 95 NY2d 24, [2000]). The facts of this case meet all three criteria. "4 Brothers Homes" is advertising under that name to the general public as the builder of the houses when in fact no such entity exists; this failure to disclose the real developer and comply with GBL§ 130 is per se misleading and is precisely the reason why the registration legislation was enacted; and the claimant suffered damages because he had to file a second small claims action in order to obtain any redress of the wrong he suffered.

Defendant is constructing 16 dwelling units on 8 registered building lots. Each of those houses is being sold in violation of GBL§ 130. Claimant is entitled to statutory damages of $400.00 (8 houses at $50.00 each). GBL§ 349(h) permits the court to award treble damages up to $1,000.00 as punitive damages if the court determines that there was a willful or knowing violation of the statute. The principals of Bartlett Building Corp. have been in business for about forty years, and have built hundreds if not thousands of homes under the name "4 Brothers [*6]Homes." They are not novices. Their failure to comply with GBL§ 130 is a willful and knowing violation of the statute entitling the claimant to the statutory maximum of $1,000.00. Defendant is seeking to obtain the benefit of any "good will" the name "4 Brothers Homes" has acquired over the years without complying with the statute which would give a dissatisfied customer an avenue to seek redress in the courts. Defendant cannot have it both ways. This is one of those occasions where the "piper" has to be paid.

C. Is Claimant Entitled To Any Other Relief?

General Business Law§ 133 provides: "No person, firm, or corporation shall, with intent to deceive or mislead the public, assume, adopt or use as, or as part of, a corporate, assumed or trade name, for advertising purposes or for the purposes of trade, or for any other purpose, any name, designation or style, or any symbol or simulation thereof, which may deceive or mislead the public as to the identity of such person, firm or corporation;..." A violation of this section is also a misdemeanor.

However, the statute provides another avenue of relief. "Whenever there shall be an actual or threatened violation of this section, an application may be made to a court or justice having jurisdiction to issue an injunction, upon notice to the defendant of not less than five days, to enjoin and restrain such actual or threatened violation: and if it shall appear to the satisfaction of the court or justice that the defendant is in fact assuming, adopting or using such name or is about to assume, adopt or use such name, and that the assumption, adoption or use of such name may deceive or mislead the public, an injunction may be issued by said court or justice, enjoining and restraining such actual or threatened violation without requiring proof that any person has in fact been deceived or mislead thereby." Case law has held that this statute which is based on former Penal Law 964 is a hybrid criminal and civil statute with each element having to be viewed separately so that the issues of intent which are necessary to establish the criminal violation, do not necessarily apply to the civil aspect of the statute and the legislature intended the civil relief to be rendered quickly since it is obtained by an "application" and not the commencement of an action or a proceeding( Julius Restaurant, Inc. V Lombardi, 282 NY 126 [1940]; Fainblatt v Leo Sportswear Co., 178 Misc 760 [1942]).

The fact that the defendant has not registered as required by the GBL§ 130 establishes the requisite intent to deceive or mislead the public to bring into play the terms of GBL§ 133. The evidence establishes that the actions of the defendant constitute an actual violation of the statute. As stated above, the sign the defendant has posted on the real property not only has the name of an unregistered entity as the "builder-owner" but lists as its address one different than the address provided to the Building Department for the building permits. The clear affect of this activity is to mislead and deceive the public as to the correct identity of the owner.

Although the statute permits the imposition of an injunction, the court must determine if the Civil Court has been granted the subject matter jurisdiction to enjoin the defendant's activities until proper registration under GBL§ 130 is completed. GBL§ 133 does not prohibit the Civil [*7]Court from asserting jurisdiction in these situations, it does not specify what courts will have the jurisdiction to issue such an injunction; therefore the court must look to the enabling statutes to decide this issue. As a court of limited jurisdiction the Civil Court only has the power to hear cases falling within the areas enumerated in the New York State Constitution Article 6 Section 15 and the Civil Court Act. The Constitution gives to the Civil Court jurisdiction "over such actions and proceedings, not within the exclusive jurisdiction of the supreme court, as may be provided by law. The court of city-wide civil jurisdiction shall further exercise such equity jurisdiction as may be provided by law...." CCA 203(o) gives the Civil Court the authority to issue "an injunction, restraining order or other orders for the enforcement of housing standards under any law described in subdivision (k)" of CCA 203. Subdivision (k) grants the Civil Court the power "to impose and collect civil penalties for a violation of state or local laws for the establishment of housing standards, including, but not limited to, the multiple dwelling law and the housing maintenance code, building code and health code of the administrative code of the city of New York." So long as a law has as its intention establishing standards for the betterment of housing in the City of New York, the civil court has jurisdiction.

One of the enumerated local laws is over which the court has jurisdiction in the building code. The Building Code in New York City is set forth in Title 27 of the Administrative Code while the Building Department is established in Title 26. Bartlett Building Corp. having received building permits from the Building Department is subject to the New York City Building Code. It has received permits to construct the houses from the Building Department pursuant to NYCAC 26-207 and NYCAC 27-156. Since Civil Court has jurisdiction over violations of the building code (CCA 203), it can enjoin activities of entities operating as result of permission given by the Building Department. What can be a more basic violation of the building code than to seek permits under the name of one entity and hold out to the public that the premises are being constructed by another entity? The Administrative Code permits the corporation counsel of the city of New York to institute in "any court of civil jurisdiction in the city" an action or proceeding seeking a restraining order, preliminary injunction or other provisional remedy for violations of any law, rule or regulations enforceable by the building department (NYCAC 26-120). Further, NYCAC 26-246 provides that "(c). Courts having jurisdiction. All courts of civil jurisdiction in the city shall have full legal and equitable jurisdiction over any and all suits and proceedings authorized by this subchapter or chapter one of title twenty-seven of the code to be brought for the recovery of any fine or the enforcement of any provision of this subchapter or chapter one of title twenty-seven of the code, and to make appropriate orders and render judgment therein according to law, so as to give force and effect to the provisions of this subchapter and chapter one of title twenty-seven of the code." Paragraph (d) of this statute permits the city to apply to "any court of record in the city" for an order enjoining and restraining work to be done on a structure until a hearing is held in regard to a violation. It should be pointed out that NYCAC 26-207 is contained in subchapter 3 of Title 26 the subchapter referred to in NYCAC 26-246. Likewise, NYCAC 27-156 is in chapter one of title twenty-seven referred to in NYCAC 26-246 thereby giving this court the authority to issue injunctions and restraining orders in the proper situation. [*8]

In this case there is a holder of a permit from the Building Department for construction of buildings subject to the building code. This is a statute which the Civil Court has jurisdiction to enforce. Bartlett Building Corp. as the permit holder is subject to the Court's jurisdiction. The Administrative Code requires that an applicant for a new building permit disclose the name and business address of the applicant (NYCAC 27-156). Bartlett Building Corp. is the applicant; however, it is advertising "4 Brothers Homes" with a different address than listed in the permit, as building and selling the dwellings. This creates a violation of GBL §133. There is no need for an aggrieved individual to notify the Building Department, have that agency seek to correct the situation, then require the corporation counsel bring an action to enforce the building code in Civil Court, so long as it can be established that a violation of a statute, in this case GBL§ 133, has been committed by an entity licensed pursuant to a code over which the Civil Court has jurisdiction. This is especially true when the information concerning the violation arose during litigation in which the interested party is currently before the court.

By reading GBL§ 133 in concert with CCA 203(k) and CCA 203(o) it is clear that the Civil Court has the authority to enjoin a builder from continuing to construct homes when there is a violation of the registration requirements of GBL§ 130. However, in the interest of fairness, it is apparent that the defendant did not anticipate such a result when making this application to vacate the default judgment in the small claims action. In addition, GBL§ 133 requires five days notice to the alleged offender before issuing an injunction.

Therefore, it is ordered that Bartlett Building Corp. appear before this court in the Small Claims part on Wednesday, December 10, 2003 at 6:00 PM and show cause why an order should not be issued enjoining Bartlett Building Corp. from continuing to build and sell houses on Block 6943 Lots 6,8, 106-110, and 112, owing to its failure to comply with GBL 130. Defendant can prevent the issuance of the injunction by presenting proof of compliance with GBL§ 130.

Conclusion:

1. Defendant's default is vacated.

2. Bartlett Building Corp. is substituted as the defendant in this action.

3. Claimant is entitled to a judgment of $1,000.00 against Bartlett Building Corp. for violation of GBL 349. The trespass action has been decided by SCR 486/03 and remains in full force and effect.

4. Defendant shall appear in Small Claims Court on December 10, 2003 at 6:00 and show cause why it should not be enjoined from continuing to build and sell homes until proof of compliance with GBL 130 is established.

The foregoing constitutes the decision and order of this court.

Dated: December 3, 2003