Grimm & Davis v. Goldberg

• Decision Date: 16 November 1979
• Citation: Grimm & Davis v. Goldberg, 422 N.Y.S.2d 319, 101 Misc.2d 829 (N.Y. City Ct. 1979)
• Court: New York City Court
• Parties: GRIMM & DAVIS, a Division of Douglas Stewart, Inc., Plaintiff, v. Anne GOLDBERG, Defendant. Ann GOLDBERG, Plaintiff, v. GRIMM & DAVIS, a Division of Douglas Stewart, Inc., Defendant.

Page 319

422 N.Y.S.2d 319

101 Misc.2d 829

GRIMM & DAVIS, a Division of Douglas Stewart, Inc., Plaintiff, v. Anne GOLDBERG, Defendant.

Ann GOLDBERG, Plaintiff, v. GRIMM & DAVIS, a Division of Douglas Stewart, Inc., Defendant.

Civil Court of the City of New York, King's County.

Nov. 16, 1979.

Rabin & Silverman, New York City, for plaintiff.

Anne Goldberg, pro se.

S. HERMAN KLARSFELD, Judge.

The plaintiff, stockbrokerage firm commenced an action against its former customer in the regular part of this court for money damages in excess of the monetary jurisdiction of the small claims part arising out of an alleged debit balance in the defendant's brokerage account. Thereafter, the defendant customer commenced a proceeding in the small claims part of this court against the plaintiff for money damages resulting from an alleged unauthorized sale of stock and for retaining the proceeds of sale.

The plaintiff moves herein under Section 602(a) of the CPLR to consolidate both actions to the regular part of this court, on the grounds that common questions of law and fact are involved.

In determining whether the plaintiff is entitled to this relief, an examination of the purpose and effect of Sections 1805(a) and (b) of the New York City Civil Court Act is necessary.

Section 1805(a) authorizes the court to transfer any small claims action to the regular part of this court upon such terms as the rules may provide . . .

Former Section 1805(b) provided, inter alia, that if a defendant interposed a counterclaim in excess of the monetary jurisdiction of the small claims part, the court shall transfer the entire case forthwith to the regular part of the court upon payment of the appropriate filing fees by the defendant. This caused abuses by the practice of some defendants in filing frivolous counterclaims in excess of the permitted jurisdictional amount in small claims thereby mandating the court to transfer the entire case to the regular part of the court. Section 1805(b) often frustrated the purposes for which small claims were established to save time, expenses and legal fees. To remedy these abuses, the Legislature recently amended 1805(b) of the NYCCCA in Chapter 77 of the 1979 Session Laws by providing that,

"no counterclaim shall be permitted in a small claims action, unless the court would have had monetary jurisdiction over the counterclaim if it had been filed as a small claim. Any other claim sought to be maintained against the claimant may be filed in any court of competent jurisdiction."

The issue presented on this motion is apparently one of first impression to determine if the recent amendment to Section 1805(b) is a procedural obstacle against granting a consolidation of a small claims proceeding with a case pending in the regular part of this court under CPLR 602(a) where common questions of law and fact are involved.

Clearly, it was the intent of the Governor and the Legislature in amending 1805(b) of the NYCCCA to prohibit the transfer of a small claims proceeding by the defendant lodging a frivolous counterclaim in excess of the monetary jurisdiction of the small claims part. The movant herein cannot be accused of attempting to frustrate the purposes for which small claims was established. The plaintiff did not interpose a counterclaim in a pending small claims proceeding. Its action was commenced in the regular part of this court approximately 6 months prior to the commencement of the small claims proceeding by the defendant.

The present tendency is to permit...