[*1]
D & A Structural Contrs., Inc. v Unger
2008 NY Slip Op 51699(U) [20 Misc 3d 1131(A)]
Decided on August 7, 2008
Supreme Court, Nassau County
Austin, J.
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and will not be published in the printed Official Reports.


Decided on August 7, 2008
Supreme Court, Nassau County


D & A Structural Contractors, Inc. and Alexander Wall Corporation, Plaintiffs,

against

Jeanne Unger, John J. Ciotti, as Receiver, and Arthur Unger, Defendants.




1112/2008



COUNSEL FOR PLAINTIFFS

Weinberg, Gross & Pergament, LLP

400 Garden City Plaza

Garden City, New York 11530

COUNSEL FOR DEFENDANTS

(for Jeanne Unger)

Certilman Balin Adler & Hyman, LLP

90 Merrick Avenue, 9th Floor

East Meadow, New York 11554

(for John J. Ciotti, as Receiver)

Ciotti & Damm, LLP

1551 Kellum Place

Mineola, New York 11501

(for Arthur Unger)

Roe Taroff Taitz & Portman, LLP 31 Oak Street, Suite 20

P.O. Box 352

Patchogue, New York 11772

Leonard B. Austin, J.

The following papers were read on Defendant Arthur Unger's motion for leave to amend his answer and for a stay of the action:

Notice of Cross-Motion dated May 14, 2008[FN1];

Affidavit of Arthur Unger, sworn to on May 14, 2008;

Defendant Arthur Unger's Memorandum of Law;

Plaintiff's Memorandum of Law;

Affidavit of John J. Ciotti, Esq., sworn to on April 28, 2008;

Supplemental Affidavit of John J. Ciotti, Esq., sworn to on May 2, 2008;

Reply Affirmation of Linda D. Calder, Esq., dated May 28, 2008.

Defendant Arthur Unger moves for leave to amend his answer pursuant to CPLR 3025. He is also seeking to stay the action pending the outcome of a related matrimonial proceeding in this Court captioned Unger v. Unger, Index No. 201418-04.

BACKGROUND

Defendants, Jeanne Unger ("Jeanne") and Arthur Unger ("Arthur"), were married in 1975. In 2003, the two separated. In May 2004, Arthur initiated a divorce proceeding against Jeanne in this Court. The matter is captioned Unger v. Unger, Index No. 201418-04 ("Divorce Proceeding").

In 2005, Jeanne had exclusive occupancy of the marital residence. She resided there until May 11, 2007, when the premises burned to the ground. The residence was a martial asset subject to equitable distribution in the Divorce Proceeding.

After the fire, Jeanne filed a homeowner's insurance claim with Nationwide Property & Casualty Insurance Company ("Nationwide"). Nationwide paid Jeanne over $1.3 million in partial settlement of the fire claim.

On May 29, 2007, Jeanne subsequently hired Plaintiffs, D & A Structural Contractors, Inc. ("D & A") and Alexander Wall Corporation ("Wall"), to salvage certain items from the residence, remove debris and rebuild the house using the proceeds of the insurance claim. Because the house was a marital asset subject to equitable distribution, the proceeds from the insurance claim were also considered marital assets. Jeanne did not seek the approval of the Matrimonial Court or Arthur to use the insurance funds for such purposes.

On October 1, 2007, Arthur discovered that Jeanne had filed the insurance claim with Nationwide and had been paid over $1.3 million. Arthur brought this to the [*2]attention of the Matrimonial Court. By Order to Show Cause, dated October 4, 2007, Jeanne was stayed, enjoined, and forbidden from spending any marital assets, including the proceeds of the insurance claim. On October 18, 2007, a Restraining Order was issued which stayed, enjoined, and restrained Jeanne, her agents, employees, nominees, contractors, or anyone acting on her behalf from disposing of any assets, whether held in her name or in any name of a nominee or agent.

On November 1, 2007, the Matrimonial Court issued an Order appointing John Ciotti, Esq. ("Ciotti"), as Receiver of Jeanne's real and personal property. As a result, the insurance proceeds from the fire were transferred into Ciotti's escrow account. By Order, dated December 17, 2007, Ciotti was restrained from disbursing any funds to D & A and Wall for the reconstruction of the residence.

D & A and Wall commenced this action on January 17, 2008 to recover for the work done pursuant to the contracts they entered into with Jeanne. Arthur served his verified answer on February 28, 2008. He now seeks to amend his answer to allege a counterclaim against Plaintiffs. He seeks to plead a counterclaim against D & A and Wall for money damages relating to their removal and destruction of his personal property from the residence. Prior to the contracts between Plaintiffs and Jeanne, the Matrimonial Court had ordered that some of the property ultimately destroyed by Plaintiffs be returned to Arthur. Arthur also moves to stay this action pending the outcome of the Divorce Proceeding to avoid inconsistent rulings.

DISCUSSION


A.Amendment of the Answer

CPLR 3025(b) permits parties to amend or supplement their pleadings by leave of the court or by stipulation of the parties. Leave to amend pleadings shall be "freely given" as long as it will not result in prejudice or surprise to the opposing party. See, Edenwald Contracting Co. v. City of New York, 60 NY2d 957, 959 (2nd Dept. 1983); Acuri v. Ramos, 7 AD3d 741, 741 (2nd Dept. 2004); McKenzie v. Ostreich, 300 AD2d 371, 371 (2nd Dept. 2002); and Bolanowski v. Trustees of Columbia University in City of New York, 21 AD3d 340, 341 (2nd Dept. 2005). "It is considered an improvident exercise of discretion to deny leave to amend in the absence of an inordinate delay and a showing of prejudice." Courageous Syndicate, Inc. v. People-to-People Sports Committee, Inc., 141 AD2d 599, 599 (2nd Dept. 1988), quoting Scarangello v. State of NY, 111 AD2d 798, 799 (2nd Dept. 1985). However, if the information or claims sought to be included or amended appear to be devoid of any merit or are insufficient as a matter of law, leave to amend should be denied. Kraycar v. Monahan, 49 AD3d 507, 508 (2nd Dept. 2008); and Morton v. Brookhaven Memorial Hosp., 32 AD3d 381, 381 (2nd Dept. 2006).

Here, Arthur seeks to amend his answer to include two counterclaims against the Plaintiffs. He filed this motion before substantial discovery has occurred. The new claims sought to be included in the amended answer arise from facts unknown to him at the time he filed his original answer. However, the proposed amended answer fails to set forth any specific legal theory for recovery on the two new counterclaims. It is unclear from the proposed amended answer how these Plaintiffs, ostensibly acting under the direction of Jeanne, bear any theoretical or actual liability for conversion. See, Hoffman v. Unterberg, 9 AD3d 386, 388 (2nd Dept. 2004). This is especially true since [*3]Arthur did not, nor apparently could not, plead any demand made of Plaintiffs without regard to his salvaged personalty. See, United Credit Corp. v. J.L.E. Industries, 251 AD2d 69 (1st Dept. 1998).

Since no legal basis for recovery has been asserted by Arthur in his amended answer, the counterclaims he seeks to include are insufficient and cannot be permitted. Therefore, his motion to amend his answer should be denied.

B.Staying the Proceedings

The court in which an action is pending may grant a stay of the proceedings wherever proper. CPLR 2201. A motion for a stay of an action pending determination of another action is discretionary in the trial court. Pollack v. Long Island Lighting Co., 246 A.D. 765, 765 (2nd Dept. 1936). A denial of a stay will be set aside only for an abuse of discretion. Rye Psychiatric Hosp. Center, Inc. v. Doniger, 110 AD2d 695, 696 (2nd Dept. 1985). The issues and parties do not necessarily need to be identical in all respects in order for a stay to be granted. De La Vergne Mach. Co. v. New York & Brooklyn Brewing Co., 125 A.D. 649, 650 (2nd Dept. 1908). Rather, the court should look at the substance of the action. Id.

Whatever happens with regard to the monies potentially owed to D & A and Wall are issues that would ultimately affect the matrimonial action: not the other way around. Indeed, under Lien Law §70, the Nationwide Insurance proceeds are arguably trust funds; not a marital asset. Thus, such issue is best determined before this Court. The house, as restored by Plaintiffs, is the marital asset to be addressed in the Divorce Proceeding. Likewise, claims of waste or dissipation of Arthur's personalty are best addressed in the context of the matrimonial action.

Thus, Plaintiffs should not be prejudiced or delayed by the pendency of the Divorce Proceeding. D & A and Wall are not parties to the Divorce Proceeding. Whatever their rights are should be determined here with appropriate apportionment between Jeanne and Arthur in the Divorce Proceeding.

Accordingly, it is,

ORDERED, that Defendant Arthur Unger's motion for leave to amend his answer is denied; and it is further,

ORDERED, that Arthur Unger's motion to stay this action be denied; and it further,

ORDERED, that counsel for the respective parties is directed to appear for a conference before this Court on September 12, 2008 at 9:30 a.m.

This constitutes the decision and Order of this Court.

Dated:Mineola, NY

August 7, 2008

Hon. Leonard B. Austin, J.S.C.

Footnotes


Footnote 1:Plaintiffs' motion seeking a default judgment, against which Defendant Arthur Unger cross-moved, was withdrawn on May 22, 2008.