Lincoln First Bank of Rochester v. Siegel

• Decision Date: 16 December 1977
• Citation: 60 A.D.2d 270,400 N.Y.S.2d 627
• Parties: LINCOLN FIRST BANK OF ROCHESTER, Appellant, v. David SIEGEL, Respondent.
• Court: New York Supreme Court — Appellate Division

Page 627

400 N.Y.S.2d 627

60 A.D.2d 270

LINCOLN FIRST BANK OF ROCHESTER, Appellant, v. David SIEGEL, Respondent.

Supreme Court, Appellate Division, Fourth Department.

Dec. 16, 1977.

Nixon, Hargrave, Devans & Doyle, Rochester, for appellant (William S. Thomas, Jr., Rochester, of counsel).

Henry M. Hille, Bath, for respondent.

Before MOULE, J. P., and CARDAMONE, SIMONS and DILLON, JJ.

MOULE, Justice Presiding.

Plaintiff, Lincoln First Bank of Rochester (Lincoln), commenced this action in February, 1975 against defendants, David Siegel and Kenneth Quigley, to recover the sum of $46,000.00 plus interest allegedly due and owing on several notes and guarantees. Defendants had been associated in a construction enterprise known as the Central Development Company until November or December of 1974 and were involved under contract with the State of New York in a project located on Highway 81 in Binghamton. Lincoln served an order of attachment dated February 4, 1975 on the New York State Commission of Transportation, in an apparent effort to attach the highway construction contract involving defendant Siegel, a nonresident.

Siegel had signed three promissory notes totaling $46,000.00 on December 9, 1974 at Lincoln's Hammondsport branch bank. As he was leaving the bank, he was arrested on charges of second degree grand larceny as a result of criminal complaints signed by Quigley, who accused Siegel of issuing bad checks to the Central Development Company.

In an amended verified complaint, Lincoln asserted four causes of action, three of which are upon the notes executed by Siegel on December 9, 1974 and the other upon a guarantee executed by defendant Quigley. ¹

Siegel, in his second amended verified answer, ² denied the material allegations of Lincoln's complaint, asserted three affirmative defenses and interposed a single counterclaim. His counterclaim concerns two series of events: first, his arrest, arraignment and temporary incarceration on charges of second degree grand larceny and, second, Lincoln's attachment and attempted levy upon the State construction contract. Under this counterclaim Siegel alleged that the charge placed against him by Quigley was that he had issued bad checks to be deposited in a checking account maintained at Lincoln's bank in the name of David Siegel d/b/a Central Development Co., Quigley claiming that this was a partnership account; that upon his arraignment in Hammondsport, the vice-president of Lincoln's Hammondsport branch was summoned and asked to verify his assertion that he maintained a checking account with Lincoln in the name of David Siegel d/b/a Central Development Co., and not as a partnership or in any other form; that the vice-president, though aware that Siegel maintained such an account, refused to verify his assertion to the presiding town justice thereby intentionally depriving him of a defense and causing him to be incarcerated until he could post bail; that, thereafter, Lincoln connived and collusively cooperated with Quigley by commencing this lawsuit claiming that a partnership existed ³ and, when Quigley defaulted, by taking judgment and attempting to levy on separate and distinct proceeds of the State contract which were in a partnership name; and that the attachment was fraudulently obtained and is void.

Finally, Siegel alleged that "as a result of (his) false arrest * * * and the publicity attendant thereon, he was caused irreparable damage in obtaining financing and bonding for his various enterprises, he was caused severe humiliation and embarrassment, the illegal attachment caused him severe financial loss of contract proceeds, and he was otherwise damaged."

Lincoln served a verified reply, in which it set up the following seven affirmative defenses to Siegel's counterclaim: (1) that the counterclaim is barred by the Statute of Limitations; (2) that Lincoln did not institute criminal proceedings against Siegel; (3) that there was probable cause for the commencement of criminal proceedings against Siegel; (4) that Siegel was arrested pursuant to a duly issued warrant; (5) that the criminal proceedings were not terminated in favor of Siegel on the merits; (6) that Siegel lacks legal capacity to sue upon an alleged tort to a separate partnership and (7) that Siegel's counterclaim fails to state a cause of action.

Siegel moved to dismiss the reply to his counterclaim and Lincoln cross-moved for summary judgment dismissing Siegel's counterclaim but not on its causes of action against Siegel.

Siegel's attorney submitted an affidavit in support of his motion to dismiss Lincoln's reply to his counterclaim. However, neither Siegel nor his attorney submitted papers in opposition to Lincoln's cross-motion for summary judgment. Significantly, the affidavit that accompanied Siegel's motion set forth few substantial supporting facts and contained mostly conclusory allegations and arguments of law. One argument advanced by Siegel's attorney in this affidavit was that the first affirmative defense in Lincoln's reply, the Statute of Limitations, had no merit inasmuch as the limitations period for prima facie tort and fraud had not yet run. This was Siegel's first mention of prima facie tort in connection with his counterclaim, which had previously been framed in his second amended answer in terms of "false arrest" and "illegal attachment".

Special Term granted Siegel's motion to dismiss Lincoln's reply in part; ⁴ it denied Lincoln's cross-motion for summary judgment dismissing Siegel's counterclaim, because of the existence of questions of fact. The court found it unnecessary to reach the timeliness of the counterclaim because, on a trial, the proof might raise a question as to whether Siegel was the victim of a prima facie tort.

Although the court found that no specific item of damage was alleged, it determined that it would be improper to strike the counterclaim at this stage. Inasmuch as Siegel had not yet furnished a bill of particulars pursuant to Lincoln's demand, the court suggested that compliance with the demand would resolve this difficulty. It is from the denial of its cross-motion for summary judgment that Lincoln appeals.

A motion for summary judgment shall be granted if, upon all the papers and proof submitted, a cause of action or defense shall be established sufficiently to warrant the court as a matter of law in directing judgment in favor of any party (CPLR 3212(b)). To defeat summary judgment, the opponent must present evidentiary facts sufficient to raise a triable issue of fact, and averments merely stating conclusions, of fact or law, are insufficient (Mallad Constr. Corp. v. County Fed. Sav. & Loan Assn., 32 N.Y.2d 285, 344 N.Y.S.2d 925, 298 N.E.2d 96; Strenk v. Rausch Equipment Corp., 58 A.D.2d 986, 396 N.Y.S.2d 938).

Lincoln's first contention on this appeal is that the harm asserted in the "false arrest" portion of Siegel's counterclaim is that caused by malicious prosecution, and not false arrest or imprisonment. In effect, Lincoln asserts that the cause of action which this court should be examining with respect to Siegel's arrest and prosecution on this cross-motion for summary judgment should be malicious prosecution, and not false arrest or imprisonment. ⁵

The question as to whether false imprisonment or malicious prosecution is the proper form of action to redress an improper arrest was answered in Broughton v. State, 37 N.Y.2d 451, 457-458, 373 N.Y.S.2d 87, 94, 335 N.E.2d 310, 314, cert. den. 423 U.S. 929, 96 S.Ct. 277, 46 L.Ed.2d 257.

"The distinction between false imprisonment and malicious prosecution in the area of arrest depends on whether or not the arrest was made pursuant to a warrant. As noted in the Restatement, 2d, an unlawful detention gives rise to a cause of action for false imprisonment 'except where the confinement was by arrest under a valid process issued by a court having jurisdiction' (Restatement, 2d, Torts, § 35, comment a; Prosser, Torts (4th ed), § 11). When an unlawful arrest has been effected by a warrant an appropriate form of action is malicious prosecution."

(See Dillard v. City of Syracuse, 51 A.D.2d 432, 436, 381 N.Y.S.2d 913, 916, mot. lv. app. dsmd., 39 N.Y.2d 1011, 387 N.Y.S.2d 243, 355 N.E.2d 298.)

Since Lincoln, in its moving papers, produced the warrants pursuant to which Siegel was arrested, an action for malicious prosecution, and not false arrest or imprisonment, is the proper remedy.

Lincoln's second contention is that Siegel is barred by the Statute of Limitations on his failure to plead a cause of action in malicious prosecution within one year after entry of the order dismissing the criminal proceeding. In effect, Lincoln maintains that it is entitled to judgment as a matter of law on the basis of its affirmative defense of the Statute of Limitations.

An action for malicious prosecution (or false imprisonment) must be commenced within one year (CPLR 215(3)). This one-year period is computed from the time the cause of action accrues to the time the claim is interposed (CPLR 203(a)). A counterclaim is interposed when a pleading containing it is served (CPLR 203(c)). However, a claim asserted in an amended pleading is deemed to have been interposed at the time the claims in the original pleading were interposed, unless the original pleading does not give notice of the transactions, occurrences, or series of transactions or occurrences to be proved pursuant to the amended pleading (CPLR 203(e)).

Siegel's counterclaim was first pleaded in his second amended answer, dated September 16, 1976. He had been arrested and arraigned on December 9, 1974 and the criminal proceedings against him were terminated on March 8, 1975, after a preliminary hearing. This suit was commenced in February, 1975, with Siegel serving an original answer dated March 12, 1975 and a first amended answer dated July 22, 1975.

Lincoln argues that Siegel first set forth the circumstances surrounding his...