Carbon Capital Mgmt. Llc v. Am. Express Co.

• Decision Date: 25 October 2011
• Citation: 2011 N.Y. Slip Op. 07598,88 A.D.3d 933,932 N.Y.S.2d 488
• Parties: CARBON CAPITAL MANAGEMENT, LLC, respondent-appellant,v.AMERICAN EXPRESS COMPANY, et al., defendants,Irwin Selinger, appellant-respondent.
• Court: New York Supreme Court — Appellate Division

88 A.D.3d 933

932 N.Y.S.2d 488

2011 N.Y. Slip Op. 07598

CARBON CAPITAL MANAGEMENT, LLC, respondent-appellant,

v.AMERICAN EXPRESS COMPANY, et al., defendants,Irwin Selinger, appellant-respondent.

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

Oct. 25, 2011.

Ruskin Moscou Faltischek, P.C., Uniondale, N.Y. (Douglas A. Cooper and Vanessa K. Eng of counsel), for appellant-respondent.Bernard A. Nathan, P.C., West Islip, N.Y., for respondent-appellant.DANIEL D. ANGIOLILLO, J.P., THOMAS A. DICKERSON, CHERYL E. CHAMBERS, and PLUMMER E. LOTT, JJ.

In an action to recover damages for fraud and breach of fiduciary duty, (1) the defendant Irwin Selinger appeals, as limited by his brief, from so much of an order of the Supreme Court, Nassau County (Driscoll, J.), dated February 25, 2010, as directed a hearing to determine the validity of service of process upon him, and denied those branches of his motion which were pursuant to CPLR 3211(a)(7) to dismiss so much of the cause of action alleging fraud insofar as asserted against him as was premised upon the allegations that he misrepresented the integrity of nonparty Derivium Capital, LLC, and the cause of action alleging breach of fiduciary duty insofar as asserted against him, pursuant to CPLR 3211(a)(5) to dismiss, as time-barred, the cause of action alleging fraud and so much of the cause of action alleging breach of fiduciary duty insofar as asserted against him as was premised upon allegations that he falsely represented the tax-free nature of a loan from Derivium Capital, LLC, and that Derivium Capital, LLC, would hold certain notes as collateral for an agreed-upon period of time, pursuant to CPLR 3211(a)(1) to dismiss the complaint insofar as asserted against him, and, in effect, pursuant to CPLR 3211(a)(7) to dismiss the complaint insofar as asserted against him based upon the affirmative defense of champerty, and the plaintiff cross-appeals, as limited by its brief, from so much of the same order as directed a hearing on the issue of whether service of process was properly effected upon the defendant Irwin Selinger, and granted those branches of the motion of the defendant Irwin Selinger which were pursuant to CPLR 3211(a)(7) to dismiss so much of the cause of action alleging fraud insofar as asserted against him as was premised upon the allegations that he misrepresented the tax-free nature of a loan to it from Derivium Capital, LLC, and pursuant to CPLR 3211(a)(5) to dismiss, as time-barred, so much of the cause of action alleging breach of fiduciary duty insofar as asserted against him as was premised upon allegations that he failed to exercise diligence with respect to ascertaining the fitness of Derivium Capital, LLC, as a lender, (2) the defendant Irwin Selinger appeals, as limited by his brief, from so much of an order of the same court (Bucaria, J.), dated July 29, 2010, as, sua sponte, in effect, reconsidered his prior motion to dismiss the complaint insofar as asserted against him, and thereupon adhered to the determinations in the order dated February 25, 2010, denying those branches of his motion which were pursuant to CPLR 3211(a)(7) to dismiss so much of the cause of action alleging fraud insofar as asserted against him as was premised upon the allegations that he misrepresented the integrity of Derivium Capital, LLC, and the cause of action alleging breach of fiduciary duty insofar as asserted against him, pursuant to CPLR 3211(a)(5) to dismiss, as time-barred, the cause of action alleging fraud and so much of the cause of action alleging breach of fiduciary duty insofar as asserted against him as was premised upon allegations that he falsely represented the tax-free nature of the loan from Derivium Capital, LLC, and that Derivium Capital, LLC, would hold certain notes as collateral for an agreed-upon period of time, and, in effect, pursuant to CPLR 3211(a)(7) to dismiss the complaint insofar as asserted against him based upon the affirmative defense of champerty, and the plaintiff cross-appeals, as limited by its brief, from so much of the same order as, sua sponte, in effect, reconsidered the prior motion of the defendant Irwin Selinger to dismiss the complaint insofar as asserted against him, and thereupon adhered to the determinations in the order dated February 25, 2010, granting those branches of the motion of the defendant Irwin Selinger which were pursuant to CPLR 3211(a)(7) to dismiss so much of the cause of action alleging fraud insofar as asserted against him as was premised upon the allegations that he misrepresented the tax-free nature of a loan to it from Derivium Capital, LLC, and pursuant to CPLR 3211(a)(5) to dismiss, as time-barred, so much of the cause of action alleging breach of fiduciary duty insofar as asserted against him as was premised upon allegations that he failed to exercise diligence with respect to the fitness of Derivium Capital, LLC, as a lender, and (3) the defendant Irwin Selinger appeals, as limited by his brief, from so much of an order of the same court (Bucaria, J.), dated August 19, 2010, as, sua sponte, in effect, vacated the determination in the order dated February 25, 2010, directing a hearing on the issue of the validity of service of process upon him, and, upon vacatur, denied, without a hearing, that branch of his motion which was pursuant to CPLR 3211(a)(8) to dismiss the complaint insofar as asserted against him.

ORDERED that on the Court's own motion, the notices of appeal and cross appeal from so much of the order dated February 25, 2010, as directed a hearing on the issue of the validity of service of process are deemed to be applications for leave to appeal and cross-appeal, respectively, and leave to appeal and cross-appeal from that portion of the order is granted ( see CPLR 5701[c] ); and it is further,

ORDERED that on the Court's own motion, the notices of appeal and cross appeal from the order dated July 29, 2010, and the notice of appeal from the order dated August 19, 2010, are deemed to be applications for leave to appeal and cross-appeal, respectively, and leave to appeal and cross-appeal is granted ( see CPLR 5701[c] ); and it is further,

ORDERED that the order dated February 25, 2010, is affirmed, without costs or disbursements, and the matter is remitted to the Supreme Court, Nassau County, for a hearing on the issue of the validity of service of process upon the defendant Irwin Selinger; and it is further,

ORDERED that the order dated July 29, 2010, is reversed, on the law, without costs or disbursements; and it is further,

ORDERED that the order dated August 19, 2010, is reversed insofar as appealed from, on the law, without costs or disbursements.

The order of the Supreme Court dated February 25, 2010, in which Justice Driscoll, among other things, directed a hearing to determine the validity of service of process upon the defendant Irwin Selinger, an agent of the defendant Corporate Solutions Group, LLC (hereinafter CSG), who facilitated and/or brokered the financial transaction that is the subject of this action, constituted the law of the case, and was binding on all other justices of coordinate jurisdiction ( see Post v. Post, 141 A.D.2d 518, 519, 529 N.Y.S.2d 341). “The doctrine of the ‘law of the case’ is a rule of practice, an articulation of sound policy that, when an issue is once judicially determined, that should be the end of the matter as far as Judges and courts of co-ordinate jurisdiction are concerned” ( Martin v. City of Cohoes, 37 N.Y.2d 162, 165, 371 N.Y.S.2d 687, 332 N.E.2d 867; see Post v. Post, 141 A.D.2d at 519, 529 N.Y.S.2d 341; George W. Collins, Inc. v. Olsker–McLain Indus., 22 A.D.2d 485, 488–489, 257 N.Y.S.2d 201). “Such a rule is essential to an orderly and seemly administration of justice in a court composed of several judges” ( George W. Collins, Inc. v. Olsker–McLain Indus., 22 A.D.2d at 489, 257 N.Y.S.2d 201). “When there is an appeal from an order which is found to have been made in violation of the doctrine of law of the case, the Appellate Division may properly reverse it for that reason alone, without regard to the merits” ( Post v. Post, 141 A.D.2d at 519, 529 N.Y.S.2d 341; see George W. Collins, Inc. v. Olsker–McLain Indus., 22 A.D.2d at 488, 257 N.Y.S.2d 201). Accordingly, the orders dated July 29, 2010, and August 19, 2010, respectively, in which Justice Bucaria, sua sponte, in effect, reconsidered previously determined motions, must be reversed and reversed insofar as appealed from, respectively, as those orders are in violation of the doctrine of law of the case ( see Post v. Post, 141 A.D.2d at 519, 529 N.Y.S.2d 341; see also Merriwether v. Osborne, 66 A.D.3d 851, 886 N.Y.S.2d 606; Crapsi v. South Shore Golf Club Holding Co., Inc., 19 A.D.3d 1024, 1025, 797 N.Y.S.2d 234).

In the order dated February 25, 2010, the Supreme Court properly directed a hearing to resolve that branch of Selinger's motion which was to dismiss the complaint insofar as asserted against him for lack of personal jurisdiction ( see CPLR 3211[a][8]; Post v. Post, 141 A.D.2d at 520, 529 N.Y.S.2d 341). In support of that branch of his motion, Selinger submitted, inter alia, affidavits of security officers at his building asserting that the process server delivered the papers on July 5, 2009, which was a Sunday. The affidavit of the plaintiff's process server, submitted in opposition to that branch of Selinger's motion, alleged that service was effected on Saturday, July 4, 2009, by delivery of a copy of the summons and complaint to a person of suitable age and discretion at Selinger's apartment complex in Atlanta, Georgia, and the subsequent mailing of a second copy to Selinger at his apartment. Pursuant to General Business Law § 11, “[a]ll service or execution of legal process, of any kind whatever, on the first day of the week is prohibited.” Further, “[s]ervice or execution of any process upon said day except as herein...