10 Ellicott Square Court Corp. v. Violet Realty, Inc.

• Decision Date: 10 February 2011
• Citation: 916 N.Y.S.2d 705,81 A.D.3d 1366
• Parties: 10 ELLICOTT SQUARE COURT CORPORATION, doing business as Ellicott Development Co., LLC, 1097 Group, LLC, and 4628 Group, Inc., Plaintiffs-Appellants, v. VIOLET REALTY, INC., Violet Realty, Inc., doing business as Main Place Liberty Group, and Patrick Hotung, Defendants-Respondents.
• Court: New York Supreme Court — Appellate Division

916 N.Y.S.2d 705

81 A.D.3d 1366

10 ELLICOTT SQUARE COURT CORPORATION, doing business as Ellicott Development Co., LLC, 1097 Group, LLC, and 4628 Group, Inc., Plaintiffs-Appellants,

v.VIOLET REALTY, INC., Violet Realty, Inc., doing business as Main Place Liberty Group, and Patrick Hotung, Defendants-Respondents.

Supreme Court, Appellate Division, Fourth Department, New York.

Feb. 10, 2011.

Mosey Persico, LLP, Buffalo (Jennifer C. Persico of Counsel), for Plaintiffs-Appellants.

The Knoer Group, PLLC, Buffalo (Robert E. Knoer of Counsel), for Defendants-Respondents.

PRESENT: SMITH, J.P., CARNI, LINDLEY, AND SCONIERS, JJ.

MEMORANDUM:

In this action to recover damages for, inter alia, tortious interference with prospective economic advantage, plaintiffs appeal from an order and judgment granting that part of defendants' motion seeking to dismiss the complaint, as well as those parts of the motion seeking summary judgment dismissing the second and sixth causes of action.

Contrary to plaintiffs' contention, Supreme Court properly granted that part of the motion seeking to dismiss the complaint. When reviewing "a motion to dismiss pursuant to CPLR 3211, we must accept as true the facts as alleged in the complaint and submissions in opposition to the motion, accord plaintiffs the benefit of every possible favorable inference and determine only whether the facts as alleged fit within any cognizable legal theory" ( Sokoloff v. Harriman Estates Dev. Corp., 96 N.Y.2d 409, 414, 729 N.Y.S.2d 425, 754 N.E.2d 184; see Leon v. Martinez, 84 N.Y.2d 83, 87-88, 614 N.Y.S.2d 972, 638 N.E.2d 511). Applying that standard, we conclude that the court properly granted the motion with respect to the first cause of action, alleging tortious interference with prospective economic advantage. "Where, as here, the alleged interference was with prospective contractual relationships, rather than existing contracts, '[the] plaintiff[s] must show that the defendant[s] interfered with the plaintiff[s'] business relationships either with the sole purpose of harming the plaintiff[s] or by means that were unlawful or improper' " ( Out of Box Promotions, LLC v. Koschitzki, 55 A.D.3d 575, 577, 866 N.Y.S.2d 677; see Emergency Enclosures, Inc. v. National Fire Adj. Co., Inc., 68 A.D.3d 1658, 1660-1661, 893 N.Y.S.2d 414). Unlawful or improper means, sometimes referred to as wrongful means, may include physical violence, fraud, misrepresentation, civil suits, criminal prosecutions and economic pressure ( see Guard-Life Corp. v. Parker Hardware Mfg. Corp., 50 N.Y.2d 183, 191, 428 N.Y.S.2d 628, 406 N.E.2d 445).

Here, plaintiffs alleged that defendants tortiously interfered with their business relations by commencing four civil suits. Contrary to plaintiffs' contention, however, "civil suits and threats thereof constitute 'improper means' only if such tactics are frivolous" ( Pagliaccio v. Holborn Corp., 289 A.D.2d 85, 734 N.Y.S.2d 148; see generally Carvel Corp. v. Noonan, 3 N.Y.3d 182, 192, 785 N.Y.S.2d 359, 818 N.E.2d 1100), and that is not the case here. Plaintiffs stipulated to a settlement of the first civil suit and, although this Court affirmed the judgments in two of the civil suits that, inter alia, dismissed the petitions, we nevertheless concluded that the litigation was not frivolous ( see Matter of Violet Realty, Inc. v. City of Buffalo Planning Bd., 20 A.D.3d 901, 904, 798 N.Y.S.2d 283, lv. denied 5 N.Y.3d 713, 806 N.Y.S.2d 164, 840 N.E.2d 133). Further, plaintiffs failed to allege that the remaining civil suit was frivolous.

Plaintiffs also failed to allege that defendants acted solely to harm plaintiffs. To the contrary, the complaint, as well as the affidavits submitted by plaintiffs in opposition to defendants' motion ( see Martino v. Stolzman, 74 A.D.3d 1764, 1765-1766, 902 N.Y.S.2d 731, appeal dismissed 15 N.Y.3d 890, 912 N.Y.S.2d 566, 938 N.E.2d 1000), repeatedly allege that defendants were motivated by their desire to acquire the subject properties for their own business purposes ( see Besicorp, Ltd. v. Kahn, 290 A.D.2d 147, 150, 736 N.Y.S.2d 708, lv. denied 98 N.Y.2d 601, 744 N.Y.S.2d 761, 771 N.E.2d 834).

Contrary to the further contention of plaintiffs, the court properly granted that part of the motion seeking to dismiss as time-barred the second cause of action, alleging tortious interference with prospective economic advantage. It is well settled that a three-year statute of limitations applies to such a cause of action ( see Amaranth LLC v. J.P. Morgan Chase & Co., 71 A.D.3d 40, 48, 888 N.Y.S.2d 489, lv. dismissed in part and denied in part 14 N.Y.3d 736, 898 N.Y.S.2d 74, 925 N.E.2d 73). The court concluded, based on a document that they failed to include in the record on appeal, that plaintiffs agreed that the second cause of action concerned their attempts to acquire the property at 30 Court Street. Plaintiffs do not dispute that they purchased that property more than three years prior to the commencement of this action and thus that they created a contractual relationship at that time. "Because plaintiff[s] and [the seller of that property] had already entered into a contract, plaintiff[s] failed to plead any prospective business relationship" upon which the second cause of action may be based ( Nicosia v. Board of Mgrs. of Weber House Condominium, 77 A.D.3d 455, 457, 909 N.Y.S.2d 412).

Plaintiffs contend that the court erred in granting those parts of the motion seeking to dismiss as time-barred the third through fifth causes of action, for malicious prosecution, abuse of process and prima facie tort, respectively, because the statute of limitations did not begin to run with respect to those causes of action until the Court of Appeals denied their motion for leave to appeal from the judgment dismissing the last of the four civil suits commenced by defendants. We reject that contention. A cause of action for malicious prosecution is governed by a one-year statute of limitations, which begins to run upon termination of the underlying lawsuit ( see CPLR 215[3]; Syllman v. Nissan, 18 A.D.3d 221, 794 N.Y.S.2d 351; Dudick v. Gulyas, 277 A.D.2d 686, 688, 716 N.Y.S.2d 407). A one-year statute of limitations also governs a cause of action for abuse of process ( see Benyo v....