Goldberg v. Sitomer, Sitomer & Porges

• Decision Date: 29 November 1983
• Citation: Goldberg v. Sitomer, Sitomer & Porges, 469 N.Y.S.2d 81, 97 A.D.2d 114 (N.Y. App. Div. 1983)
• Court: New York Supreme Court — Appellate Division
• Parties: Stuart C. GOLDBERG, Plaintiff-Respondent, v. SITOMER, SITOMER & PORGES, et al., Defendants-Appellants, and Robert Porges, Defendant.

Page 81

469 N.Y.S.2d 81

97 A.D.2d 114

Stuart C. GOLDBERG, Plaintiff-Respondent, v.SITOMER, SITOMER & PORGES, et al., Defendants-Appellants and Robert Porges, Defendant.

Supreme Court, Appellate Division First Department.

Nov. 29, 1983.

Harold Davis and Paul B. Garland, New York City, of counsel(Davis & Davis, New York City), for defendant-appellantJacob Aschkenasy.

Alan Kanzer, New York City, of counsel(George Berlstein, New York City, with him on brief; Walter, Conston & Schurtman, P.C., New York City), for defendants-appellants Empire Fire, Gross and Kaplan.

Robert E. Meshel, New York City, of counsel(Timothy P. Butler, New York City, with him on brief; D'Amato & Lynch, New York City), for defendants-appellantsSitomer Sitomer & Porges, Alvin Lester Sitomer and Stephen Joel Sitomer.

Harry E. Youtt, New York City, for plaintiff-respondent.

Before KUPFERMAN, J.P., and CARRO, SILVERMAN and BLOOM, JJ.

SILVERMAN, Justice.

These are appeals from orders of the Supreme Court, Special Term, denying defendants' motions to dismiss the complaint on the grounds of statute of limitations and failure to state a cause of action.

Plaintiff, a lawyer, alleges that he was employed as an associate by the law firm of the defendants Sitomer, Sitomer and Porges; that in the course of his work he was called upon to participate in the preparation of a registration statement for filing with the Securities and Exchange Commission on behalf of the corporate defendant Empire, a client of the firm; that the nature of the retainer agreement between Empire and the firm was misrepresented to him, and that it was therefore inaccurately stated in the registration statement; that when he found out about the inaccuracy and defendants refused to correct it, he resigned his position with the firm, and on January 22, 1973he went to the Securities and Exchange Commission himself and made a full disclosure.In this action he claims damages by reason of the defendants having caused him to be involved in a false registration statement with the result that (a) some persons thought he had knowingly participated in the making of such a false statement, and (b) that other firms would not employ him, either for that reason, or because they thought he was a "whistle blower."

The claims in the complaint in reality are claims for defamation or "false words causing special damages" governed by the one year statute of limitations of CPLR § 215(3).The controlling case is Morrison v. National Broadcasting Co., Inc., 19 N.Y.2d 453, 280 N.Y.S.2d 641, 227 N.E.2d 572.The Court of Appeals said (at 458-459, 280 N.Y.S.2d 641, 227 N.E.2d 572):

The broad reach of the common-law cause of action for defamation is indicated in the Restatement of Torts."A communication is defamatory", its authors have written ( § 559), "if it tends so to harm the reputation of another as to lower him in the estimation of the community or to deter third persons from associating or dealing with him."Thus, unlike most torts, defamation is defined in terms of the injury, damage to reputation, and not in terms of the manner in which the injury is accomplished.This is borne out by Comment a to section 559, where it is noted that "The word 'communication' is used to denote the fact that one person has brought an idea to the perception of another."In the case before us, the plaintiff complains, in effect, that the defendants' conduct "brought an idea" that he was dishonest "to the perception" of the general public.

Here the entire injury complained of by plaintiff flows from the effect on his reputation--what people thought about him--either (a) falsely as having knowingly participated in having made a false registration statement with respect to a public issue of securities, or (b) truly as a "whistle blower," one who would not remain silent when he discovered wrongful and unethical conduct by his associates, at least with respect to matters in which he was involved.Each cause of action in the complaint defines the damage to plaintiff in terms of paragraph "29" of the complaint, which in turn recites damages all arising from injury to his reputation, i.e., in essence that the actions complained of tended "so to harm the reputation of ... [plaintiff] as to lower him in the estimation of the community or to deter third persons from associating or dealing with him."(Id.)

It does not matter that plaintiff chose to call his claims "tort of injurious involvement,""fraud,""breach of warranty," and "fraudulent inducement."As the Court of Appeals said in Morrison v. National Broadcasting Co., Inc., supra, 19 A.D.2d at 459, 280 N.Y.S.2d 641, 227 N.E.2d 572 In applying a Statute of Limitations, this court declared some years ago, "We look for the reality, and the essence of the action and not its mere name."(Brick v. Cohn-Hall-Marx Co., 276 N.Y. 259, 264[11 N.E.2d 902] )Concluding as we do that this cause of action sounds in defamation, it would be highly unreal and unreasonable to apply some Statute of Limitations other than the one which the Legislature has prescribed for the traditional defamatory torts of libel and slander.....A contrary result might very well enable plaintiffs in libel and slander cases to circumvent the otherwise short limitations period by the simple expedient of "redescribing [the] defamation action to fit this new 'noncategory' " of intentional wrong.

Two of the items of damages, alleged in paragraph "29" of the complaint, are alleged to flow from conduct of defendants after January 22, 1973.These are the items in subdivisions"(c)" and "(d)" of paragraph "29" of the complaint, that plaintiff"became the brunt of a malicious campaign of vilification and ridicule directed by" certain of the defendants, and that plaintiff"became the subject of numerous assertions" initiated by those defendants to the effect that he had been a knowing and culpable wrongdoer in the securities law violations.These allegations, however, fail to state a cause of action because they do not comply with the requirements of CPLR § 3016(a) that in libel and slander cases"the particular words complained of shall be set forth in the complaint," nor with the requirement of CPLR § 3013 that:

Statements in a pleading shall be sufficiently particular to give the court and parties notice of the transactions, occurrences, or series of transactions or occurrences, intended to be proved and the material elements of each cause of action or defense.

With these two exceptions the remainder of the claims all relate to conduct of the defendants complete and known to plaintiff(and disclosed by him to the Securities and Exchange Commission) by January 22, 1973 so that the cause of action accrued not later than that date.The present action was begun on April 15, 1979, more than six years after the claim accrued.

The statute of limitations, as we have said, is one year.However, under CPLR § 205(a), if a previous action had been timely commenced by plaintiff and terminated in any other manner than by voluntary discontinuance, judgment on the merits, etc., the plaintiff may commence a new action on the same cause of action within six months after the termination.Here plaintiff claims and Special Term gives plaintiff the benefit of that section on the ground that the plaintiff had timely asserted the present claims in a previous action in the federal court, which was terminated less than six months before the...