Flaks, Zaslow & Co., Inc. v. Bank Computer Network Corp.

• Court: New York Supreme Court — Appellate Division
• Writing for the Court: Before MURPHY; EVANS
• Citation: Flaks, Zaslow & Co., Inc. v. Bank Computer Network Corp., 413 N.Y.S.2d 1, 66 A.D.2d 363 (N.Y. App. Div. 1979)
• Decision Date: 01 February 1979
• Parties: FLAKS, ZASLOW & CO., INC., Plaintiff-Respondent, v. BANK COMPUTER NETWORK CORPORATION, Defendant-Appellant.

Page 1

413 N.Y.S.2d 1

66 A.D.2d 363

FLAKS, ZASLOW & CO., INC., Plaintiff-Respondent, v. BANK COMPUTER NETWORK CORPORATION, Defendant-Appellant.

Supreme Court, Appellate Division, First Department.

Feb. 1, 1979.

Clark A. Marcus, Forest Hills, of counsel, for defendant-appellant.

Michael C. Devine, New York City, of counsel (Carren C. Kleinman, New York City, with him on the brief; Schwenke & Devine, New York City, attys.), for plaintiff-respondent.

Before MURPHY, J. P., and LUPIANO, EVANS, MARKEWICH and SULLIVAN, JJ.

EVANS, Justice:

Plaintiff commenced a breach of contract action against defendant, a corporation organized in Delaware with offices in Chicago, by personal service in Chicago. Defendant answered with a general denial, three affirmative defenses including a claim of lack of jurisdiction over defendant and a counterclaim for a service fee claiming plaintiff's unjust enrichment, and a second counterclaim for attorneys' fees for defending against plaintiff's baseless claim. Plaintiff's original reply demanded dismissal of the two counterclaims.

Defendant subsequently moved to dismiss for lack of jurisdiction, and special term referred the question of defendant's "presence" in this jurisdiction to a referee to hear, report and recommend. The referee, after hearing, recommended the complaint be dismissed because defendant had not done business in New York for the purpose of sustaining jurisdiction here. The referee's report was confirmed and subsequently on order of the Supreme Court, the plaintiff's complaint was dismissed for lack of jurisdiction over defendant. Afterward, defendant sought summary judgment on the second counterclaim and thereafter plaintiff cross-moved seeking permission to amend its reply to the counterclaim. In denying defendant's motion the trial court found that "Defendant is unable to demonstrate that plaintiff's conduct in bringing the action in New York was in bad faith or with ill motive."

Attorneys' fees are not usually compensable in the absence of specific statutory authority, or contractual obligation or incident to recovery for certain torts involving malice. (Klein v. Sharp,41 A.D.2d 926, 343 N.Y.S.2d 1014; Crane, "Adequacy of Costs Allowable in Litigation," 16th Annual Report of the Judicial Conference, 246, 251 nn. 68-70 (1971)). As Helman, J. held, defendant made no showing in support of its motion that plaintiff had been motivated by bad faith or ill will in instituting this action. Yet, summary judgment searches the record and, even on appeal, summary judgment can be granted in favor of the non-appealing party. DeRosa v. Slattery Contr. Co., 14 A.D.2d 278, 280-1, 220 N.Y.S.2d 871, 873-74, Aff'd 12 N.Y.2d 735, 234 N.Y.S.2d 217, 186 N.E.2d 415; Video Techniques, Inc. v. Teleprompter Corp., 60 A.D.2d 516, 399 N.Y.S.2d 884. Since there is no evidentiary support for defendant's second counterclaim, plaintiff was entitled, even in the absence of a cross-motion for such relief (C.P.L.R. 3212(b)), to summary judgment in its favor on that counterclaim.

We also note that, when initially interposed, the second counterclaim was insufficient. An essential element of a cause of action for malicious prosecution requires that the "prior action" have been terminated favorably to the party interposing the malicious prosecution claim. That requirement precludes assertion of a cause of action for malicious prosecution, by way of counterclaim, in the very action alleged to be malicious since the foundation of the right to sue for malicious prosecution does not yet exist. See, generally, Belsky v. Lowenthal, 62 A.D.2d 319, 405 N.Y.S.2d 62; Peresluha v. City of New York, 60 A.D.2d 226, 400 N.Y.S.2d 818; Embassy Sewing Stores, Inc. v. Leumi Fin. Corp., 39 A.D.2d 940, 333 N.Y.S.2d 106; 5 Carmody-Wait 2d, New York Practice, § 29:851, pp. 353-4; 36 N.Y.Jur., Malicious Prosecution § 7. By the time defendant moved for summary judgment, however, the complaint had been dismissed for lack of In personam jurisdiction, although the plaintiff's claim has now re-emerged in the amended reply. We express no opinion as to whether or...