1181 Members for Change v. Nero
| Decision Date | 03 April 2011 |
| Docket Number | Index No. 102390/2011E |
| Citation | 2011 NY Slip Op 34283 (U) |
| Court | New York Supreme Court |
| Parties | 1181 MEMBERS FOR CHANGE, JOSEPH ALCENAT, MARC CLERGEAU, OTHELIA COLLINS, GLORIA RODRIGUEZ FLAHERTY, PEGGY HATZIDAKIS, MARIO JEAN, BERLOT JEAN BAPTISTE, SIMON JEAN BAPTISTE, REINA MARTINEZ, ERIC MCCARTHY, EDDY MEGIE, JULES SERAPHIN, JEAN SEREME, FILIUS SUFFY, and WARREN ZAUGG, Petitioners, v. THOMAS NERO, Respondent. |
Submission Date March 23, 2011
DECISION, ORDER & JUDGMENT
For Petitioners:
Levy Ratner, P.C.
By: Dana E. Lossia, Esq.
80 Eighth Avenue
New York, New York 10011
(212) 627-8100
For Respondent:
Barnes, Iaccarino & Shepherd, LLP
By: Lauren Kugielska, Esq.
258 Saw Mill River Road
Elmsford, New York 10523
(914) 592-5740
Papers considered in review of this petition:
Papers E-Filing Document Number Notice of Petition, Petition, Affs. of Dana E. Lossia, Warren Zaugg and Exhibits 1 Respondent's Response, Affs. of Thomas Nero, Maureen Henry and Exhibits 2 Petitioners' Reply Memorandum of Law Hard Copy1
In this special proceeding, petitioners seek, among other relief, a permanent injunction prohibiting respondent from using the name "1181 Members for Change." More specifically, petitioners commenced this special proceeding pursuant to Section 133 of the General BusinessLaw seeking to prohibit respondent Thomas Nero from improper use of petitioners' alleged trade name in the upcoming 2011 elections for the Executive Board of the Amalgamated Transit Union, Local 1181 ("the Union"). The first nominations meeting for the upcoming election cycle has been scheduled by the Union for May 3, 2011. For the reasons set forth below, the petition is granted to the extent it seeks a permanent injunction against respondent Nero's use of the name "1181 Members for Change," but denied to the extent it seeks money damages.
According to the petition, petitioner 1181 Members for Change ("MFC") is an unincorporated labor organization formed in 2004 by workers who were dissatisfied with their representation by the Amalgamated Transit Union, Local 1181 (Petition ¶ 5). Individual petitioners are current or retired bus drivers and members of the collective bargaining unit represented by the Union, as well as active members of MFC (id.). Respondent Nero is also a bus driver and member of the Union and, at various times, has been involved with MFC (Petition ¶ 6).
The mission of MFC has been "to encourage membership involvement in the Union, to democratize the Union and rid it of corrupt leaders associated with organized crime, and to obtain genuine member representation among the officers on the executive board of Local 1181, ATU" (id. ¶ 5). Decisions within MFC have (Zaugg Aff. ¶ 15).
In 2005, MFC ran a slate of candidates for leadership positions in the Union's internal elections (Petition ¶ 10). Nero was MFC's pick for Union president (id.). Three of the petitionersin this proceeding, Simon Jean-Baptiste, Eddy Megie and Warren Zaugg, also appeared on the ballot (Zaugg Aff., Ex. B). Neither MFC's slate, nor any of its members, were elected that year. Over the next few years, Nero had an on-again/off-again relationship with MFC until he publicly quit the group at a meeting in mid-2007 (Zaugg Aff. ¶ 7). According to Nero, MFC had split into two factions, both of which acted under the MFC name (Nero Aff. ¶ 4).
In March 2009, MFC again ran a slate of candidates in Union elections (id. at ¶ 8). Six of the petitioners herein were included in this slate, including Simon Jean-Baptiste, Warren Zaugg, Eddy Megie, Mario Jean, Gloria Rodriguez Flaherty and Jules Seraphin (see Zaugg Aff., Ex. C, Official Union Ballot). Nero was not part of the MFC slate, and he instead ran for Union president on his own slate, called "Tommy Nero C.P.R." (id. at ¶ 8; Ex. C). He claims he used his own name for his slate because the other MFC faction submitted its slate under the MFC name first (id. at 5). Neither slate won the presidency, but three MFC candidates were elected to seats on the Union executive board, including petitioner Simon Jean-Baptiste (Zaugg Aff. ¶ 11).
In mid-2009, Nero apparently sought to re-join MFC. According to petitioners, MFC held an open vote on the question and decided to allow Nero to return to MFC, subject to two conditions: (1) the group would decide whether to permit him to run as part of any future MFC slate; and (2) he would not seek a nomination from MFC to any of the top four Union officer positions (Zaugg Aff. ¶ 16). In October 2010, MFC decided to explore forming a not-for-profit corporation (id. at 18). MFC's organizer, Edward L. Kay ("Kay"), worked with MFC's counsel, Levy Ratner, P.C., to undertake this process (id.). On October 25, 2010, counsel faxed a certificate of incorporation and credit card authorization form to the Division of Corporations, New York State Department of State (Lossia Aff., Ex. 1). This form sought expedited handling withintwenty-four hours (id.). The filing fees and an additional fee for expedited service was paid for by Kay, who was listed as an initial director of the corporation (id.). Petitioner Gloria Flaherty was also listed as an initial director (id.). The next day, an official from the Division of Corporations responded, informing counsel that they were unable to file the document as requested because incorporation would first require approval from the Industrial Board of Appeals (Lossia Aff., Ex. 2). Then, on November 5, 2010, counsel was informed by the Division of Corporations that respondent Nero had registered a for-profit business corporation with the name "1181 Members For Change, Inc." (Lossia Aff. ¶ 5). The certificate of incorporation indicates it was filed on behalf of Nero on November 2, 2010, by David J. Gold, P.C. (Lossia Aff., Ex. 4).
On November 24, 2010, Levy Ratner, P.C. sent a letter on behalf of four individual petitioners in this action, Gloria Rodriguez Flaherty, Berlot Jean-Battiste, Jules Seraphin and Mario Jean, to the Union president, Michael Cordiello, and the Union's executive board (Lossia Aff., Ex. 5). The letter explains their belief that Nero is unlawfully infringing upon the name "1181 Members for Change" and asked the Union to "issue a directive to Mr. Nero, and any other members who may be working with him, to cease and desist from representing himself/themselves as part of 1181 Members for Change" (Lossia Aff. ¶ 10; Ex. 3). No response was received from the Union's executive board (id. at ¶ 11). However, on December 7, 2010, David Gold, Esq., claiming to be "legal counsel for 1181 MEMBERS FOR CHANGE, INC.," sent a letter to Kay demanding that he and his "company" cease and desist in using his client's name and likeness (Lossia Aff. ¶ 12; Ex. 6). Levy Ratner responded on behalf of Kay on December 14, 2010, claiming that it was their client's interest that had been infringed upon and demanded Nero cease and desist his use of their name (id. at 13; Ex. 7).
On January 6, 2011, Gold told Levy Ratner that he no longer represented Nero with respect to the corporation at issue. He further stated that he had forwarded the December 14 letter to Nero, and Levy Ratner should contact Nero directly (id. at 14). On January 10, 2011, a new letter was sent directly to Nero again explaining that petitioners view his actions as infringement and demanding that he cease and desist from using the name "1181 Members For Change" (id. at 15; Ex. 8). This letter also warned that they were in the process of preparing to file in the instant petition based on Nero's violation of General Business Law § 133 (id.). Petitioners claim they never received any response from Nero (id. at 16).
The petition asserts two causes of action: (1) violation of New York General Business Law § 133; and (2) violations of New York common law against unfair competition. The petition seeks relief in the form of a permanent injunction which: (a) enjoins and restrains respondent from using or causing others to use the name "1181 Members For Change" in any way; (b) orders respondent to dissolve the business incorporation "1181 Members for Change Inc.;" (c) orders respondent to delete and remove said name or any simulation thereof from any listings, pamphlets, petitions, leaflets, flyers, banners, signs, advertisements, and wherever else the same may appear where that name refers to respondents' entity; (d) declares that petitioners have the sole, exclusive and rightful use of the trade name "1181 Members for Change;" (e) holds respondent liable for a misdemeanor offense; and (f) grants monetary damages to petitioner to offset the losses they suffered through the diminution of the value of their trade name (Petition at 14).
Although respondent Nero has neither filed an answer to the petition nor filed a cross-motion to dismiss it pursuant to CPLR 3211, he has filed an affirmation in opposition which raises, among other issues, the capacity to sue of the petitioners.2
While no formal cross motion to dismiss based on lack of petitioners' lack of capacity to sue pursuant to CPLR 3211[3], because the issue of petitioners' standing has been squarely challenged in the affidavits filed in opposition to the petition, the court will, as a preliminary matter, address respondent Nero's contention that petitioners have no legal capacity to bring this special proceeding.
Unincorporated associations, "which are voluntary congregate entities, are accorded the capacity to bring suit through their presidents or treasurers by statute" (Community Board 7 v Schaffer, 84 NY2d 148, 155 [1994]). Section 12 of the General Association Law states, in...
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