Lemanski v. SFM Realty Corp.
| Decision Date | 26 October 2021 |
| Docket Number | Index 150261/2021 |
| Parties | PATRICIA LEMANSKI, Plaintiff, v. SFM REALTY CORP. and LONICA SMITH, Defendants. |
| Court | New York Supreme Court |
DECISION + ORDER ON MOTION
BARBARA JAFFE J.S.C.
The following e-filed documents, listed by NYSCEF document number (Motion 001) 6-37 were read on this motion for dismissal.
Defendants SFM Realty Corp. (SFM) and Smith (collectively, movants) move pursuant to CPLR 3211(a)(5) and (a)(7) for an order dismissing plaintiffs complaint, claiming that plaintiff is collaterally estopped from proceeding and that she fails to state a cause of action. Plaintiff opposes, and cross-moves for expedited discovery pursuant to CPLR 3211(d). Defendants oppose plaintiffs cross-motion.
Plaintiff alleges the following:
SFM is a real estate company, one of several entities within the Sapir Organization, which is privately owned by a Jewish family. From 2011 to January 2020, SFM employed plaintiff as a paralegal working under its general counsel. In 2019, a bitter and widely reported intra-family dispute resulted in the general counsel's departure from SFM. SFM's chief executive officer (CEO) then directed plaintiff to find a "smoking gun" to use against the former general counsel and his family, and he instructed SFM's information technology department to increase plaintiffs access to SFM files accordingly.
In August 2019, defendant Smith was hired as SFM's new general counsel. Shortly thereafter, Smith removed plaintiff from existing projects and re-assigned her to lower-level administrative tasks, re-scheduled meetings without notice for days when plaintiff worked from home, and publicly criticized her. Plaintiff eventually complained to Sapir Organization executives that she was being discriminated against based on, inter alia, her age, gender, and religion. The Sapir executives reassured plaintiff that she was a valued employee and instructed her to meet with Smith. Smith ignored plaintiffs request to meet with her and, on information and belief, her complaints were never forwarded to SFM's human resources administrator.
On January 9, 2020, a judge in the Southern District of New York (SDNY) granted SFM's motion for a temporary restraining order (TRO) enjoining plaintiff from accessing, disclosing, copying, reproducing or otherwise conveying SFM's trade secret information, and signed an order to show cause requiring plaintiff to demonstrate why she should not be preliminarily enjoined from possessing, without authorization, SFM files containing trade secrets, even though she had obtained them at Smith's specific instruction. Then, on January 10, 2020, plaintiff was served with the TRO and fired without warning, although she had received only positive performance reviews.
On January 14, 2020, an article was published in a real estate trade publication about the circumstances of plaintiff s termination and the SDNY lawsuit. (NYSCEF 3). Plaintiff states, on information and belief, that defendants encouraged this publication, or that they at least knew that their lawsuit would be publicized given the public and media interest in the Sapir family dispute.
On January 30, 2020, SFM voluntarily withdrew its motion for a preliminary injunction and voluntarily discontinued its complaint in the SDNY before the motion for a preliminary injunction was decided and an answer was required.
Based on the foregoing, plaintiff advances as her first cause of action a violation of the New York City Human Rights Law (NYCHRL), claiming that defendants discriminated against her on the basis of her being (i) a woman; (ii) over the age of 50; and (iii) a non-Jew, contending that her gender, age, and religion factored into Smith's discriminatory treatment of her and eventual termination from SFM. In support, plaintiff contends that she was treated worse than similarly-situated male Jewish employees who engaged in the conduct of which SFM accuses her, such as routinely copying work emails to their personal email without repercussion, that all Jewish SFM employees terminated within the last few years of her employment there were offered a severance package whereas she was not, and that she was replaced by someone approximately 20 years younger.
Plaintiff advances as her second cause of action retaliation in violation of the NYCHRL, contending that the temporal nexus between her complaints to Sapir Organization executives about Smith's discriminatory treatment and her termination, as well as SFM's failure to consult with its human resources provider prior to her termination, "suggest" an improper motive.
Plaintiffs third and fourth causes of action for, respectively, abuse of process and malicious prosecution, derive from the SDNY action, which she claims was filed with the intention of taking control of her property, tarnishing her reputation and that of SFM's business rivals, and creating a pretext for firing her. According to her, SFM's voluntary withdrawal of the SDNY action less than a month after its commencement demonstrates that it had filed the suit for improper reasons.
Plaintiff advances as her fifth cause of action defamation per se and a violation of Judiciary Law § 487, contending that defendants made false statements about her which were reported in the media by third parties. She claims that as the SDNY action was brought in bad faith, the litigation privilege ought not apply, and that Smith engaged in misconduct as a party attorney in violation of the Judiciary law.
In response to SFM's voluntary discontinuance of the SDNY action, plaintiff filed an application, by order to show cause, to vacate SFM's notice of voluntary discontinuance, deny its motion for a preliminary injunction on the merits, dismiss the complaint with prejudice, and award her attorney fees and costs. She also sought leave to file a motion for sanctions. Plaintiffs motion was denied after a hearing, but the court retained jurisdiction to consider other issues such as sanctions. Plaintiff then moved for sanctions pursuant to Rule 11 of the Federal Rules of Civil Procedure (FRCP) and the court's inherent power.
By decision dated January 4, 2021, the SDNY court denied plaintiffs motion for sanctions based on its findings that plaintiff had not complied with the safe harbor provision of FRCP rule 11(c)(2) and even had she, sanctions were not warranted as "[t]he [c]ourt is not aware of any intentional effort by [SFM's] counsel to make false representations to the [c]ourt." The court also declined to impose sanctions under its inherent power, concluding that, while it was a close issue, SFM had a colorable, good faith basis and proper motives for bringing the lawsuit.
While the court denied plaintiffs motion for sanctions, it admonished SFM for bringing the lawsuit in haste and ex parte before conducting a more thorough investigation, and opined that "[i]t is unfortunate that [SFM] does not share this view, and that [SFM] has done little to remediate the damage to [plaintiffs] reputation that its litigation has wrought."
On March 11, 2020, plaintiff filed a complaint against SFM in the SDNY asserting causes of action for a wrongful and excessive seizure in violation of 18 USC § 1836(b)(2)(G), a violation of her fourth amendment rights, and abuse of process (NYSCEF 11), which she voluntarily discontinued on June 8, 2020 (NYSCEF 13).
Defendants contend that, as a threshold matter, plaintiff is collaterally estopped from advancing her third and fourth causes of action, as essential issues underlying those claims were litigated in the SDNY, where the court held that SFM had filed the action in good faith and with proper motives. Even if she is not estopped, defendants argue, plaintiff fails to state a cause of action for malicious prosecution, as a voluntarily discontinued action, in which all significant judicial determinations were not in plaintiffs favor, does not constitute a termination in plaintiffs favor, and she does not plead special damages. Plaintiffs cause of action for abuse of process also fails, defendants argue, absent an allegation that process was used improperly after it issued. (NYSCEF 13).
In response, plaintiff maintains that, as defendants voluntarily discontinued their claims in the SDNY action before a decision was reached on the merits, and as that action did not address issues identical to those presented here, she is not estopped from raising any issue here that was decided in the SDNY. Additionally, she claims, she is not estopped by the TRO or the claims discontinued in the second SDNY action from asserting them here.
Plaintiff also argues that she states a cause of action for abuse of process and for malicious prosecution, per the dicta of the SDNY court who characterized the first SDNY action as an "ill-[conceived] overreach," and as SFM's voluntary discontinuance should be construed in her favor for the purpose of maintaining a claim for malicious prosecution. (NYSCEF 29).
Defendants concede in reply that plaintiff is not estopped by the TRO and her discontinued federal claims but assert that the SDNY decision denying her motion for sanctions constitutes an adjudication on the merits that precludes plaintiff from re-litigating issues decided against her in that decision noting that although the claims need not be identical, the issues must be identical, and that as the court determined that SFM had brought the SDNY action in "good faith" with "proper motives" and did not mislead the court, it constitutes a bar to...
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