LTown Ltd. Partnership v. Sire Plan, Inc.

• Decision Date: 20 May 1985
• Citation: 489 N.Y.S.2d 567,108 A.D.2d 435
• Parties: LTOWN LIMITED PARTNERSHIP, Respondent, v. SIRE PLAN INC., et al., Defendants; Perry E. Berger etc, Appellant.
• Court: New York Supreme Court — Appellate Division

Page 567

489 N.Y.S.2d 567

108 A.D.2d 435

LTOWN LIMITED PARTNERSHIP, Respondent, v. SIRE PLAN INC., et al., Defendants;

Perry E. Berger etc, Appellant.

Supreme Court, Appellate Division,

Second Department.

May 20, 1985.

Joel Paul Berger, Bayside, for appellant.

Suozzi, English & Klein, P.C., Mineola, (Brian Michael Seltzer, of counsel, Spitzer & Feldman, P.C., New York City New York City, on the brief), for respondent.

Before TITONE, J.P., and THOMPSON, O'CONNOR and EIBER, JJ.

TITONE, Justice Presiding.

The only issue of substance on these appeals is whether an appellate court has the power to impose monetary sanctions in addition to statutory costs where it is determined that the appeals are vexatious and frivolous. We conclude that New York appellate courts possess inherent authority to do so.

I

The underlying action seeks to foreclose a mortgage on commercial realty located on Hempstead Turnpike in Levittown. It is unique only with respect to the large number of original parties defendant and the persistent opposition from one intervening party, defendant-appellant Berger.

At the time that the action was commenced, in 1981, Berger neither owned nor had any interest in the realty. It was only after most of the parties defendant had defaulted and proof of service had been filed in the County Clerk's office that he began buying up fractional fee ownership shares.

Berger then sought to be substituted as a defendant on behalf of one fractional fee owner, who was then in default in answering plaintiff's amended complaint, and thereafter proceeded to oppose and delay the action at every possible stage, thereby elevating the costs of the proceedings to the point where, on these appeals, Berger himself now contests the amount of legal services utilized by plaintiff.

The record shows that plaintiff effected personal service on virtually all of the New York State resident defendants, as well as personal service, where at all possible, on vast numbers of persons outside the State. It also shows that plaintiff effected full and complete publication of the summons in both the New York Times and Newsday, followed by a later publication in those same newspapers upon plaintiff's submission of a judgment of foreclosure by default. Not one person, other than Berger, has sought to vacate a default, let alone to assert the existence of any meritorious defense. The mortgaged property has already been sold at auction pursuant to the judgment of foreclosure at a price which will generate a surplus.

These appeals, which have been consolidated, seek judicial review of parts of no fewer than seven determinations and orders made since the commencement of the action in 1981, namely the following:

(1) an order dated October 7, 1982, which dropped and substituted and added parties, corrected typographical errors in the names of some parties, deferred determination of plaintiff-respondent's motion for summary judgment, deferred determination of defendant-appellant's cross motion to be substituted as a party defendant and to serve an answer, and ordered oral argument at chambers with respect to defendant-appellant's predecessor's excuse for his default in timely answering plaintiff-respondent's amended complaint and with respect to the other deferred issues (2) an order dated December 23, 1982, which substituted defendant-appellant as a party defendant and substituted his counsel, denied defendant-appellant's application to vacate his predecessor-assignor's (defendant Glass's) default and for leave to serve a belated answer, denied defendant-appellant's cross motion to dismiss the summons and complaint, granted plaintiff-respondent's motion for judgment of foreclosure and sale, and directed settlement, on notice, of plaintiff-respondent's judgment of foreclosure and sale;

(3) an order dated January 24, 1983, made on the court's own motion, which amended its prior memorandum order dated December 23, 1982, to clarify the parties upon whom service of notice of settlement of plaintiff-respondent's proposed foreclosure judgment was to be made;

(4) an order dated March 7, 1984, which granted defendant-appellant's application for reargument of the prior motion for judgment to the extent of directing additional notice, by mail and by publication in the New York Times and Newsday, to all defendants in default more than a year, of plaintiff-respondent's submission for judicial signature of a judgment of foreclosure, but which denied defendant-appellant's application to enlarge the duties and authority of the guardian ad litem appointed by Special Term, the scope of whose duties had been established by an order entered on consent;

(5) an order dated May 29, 1984, which denied defendant-appellant's request for judicial rejection of plaintiff-respondent's proposed judgment of foreclosure and sale;

(6) an order dated June 5, 1984, which denied, as moot, defendant-appellant's further application for judicial denial of plaintiff-respondent's request for judgment (plaintiff-respondent's proposed judgment then already having been signed); and

(7) the judgment of foreclosure and sale dated May 3, 1984 and entered in the office of the clerk on May 4, 1984.

Appellant has filed two separate briefs in this court containing a total of 15 points and requested an hour of argument time. As to most of these arguments, appellant is not an "aggrieved party" (CPLR 5511) and lacks standing to act as a surrogate for others. For example, his principal objection is that the statutory published notice is somewhat inadequate. At the time of the publication, however, appellant was a nonparty and voluntarily sought leave to intervene. He did not then timely assert any objection to the notice and, therefore, waived any defect (see CPLR 2001, 21013211 Gager v. White, 53 N.Y.2d 475, 488, 442 N.Y.S.2d 463, 425 N.E.2d 851, cert. denied sub nom. Guertin Co. v. Cachat, 454 U.S. 1086, 102 S.Ct. 644, 70 L.Ed.2d 621; Aversano v. Town of Brookhaven, 77 A.D.2d 641, 430 N.Y.S.2d 133).

In any event, in no sense could the purported defect be deemed jurisdictional (Valz v. Sheepshead Bay Bungalow Corp., 249 N.Y. 122, 163 N.E. 124; Avery v. O'Dwyer, 280 App.Div. 766, 113 N.Y.S.2d 686, affd. 305 N.Y. 658, 112 N.E.2d 428; Hull v. Canandaigua Elec. Light Co., 55 App.Div. 419, 66 N.Y.S. 865). Appellant appeared and was heard. How then can he seriously complain about the form of the published summons?

All of the other arguments raised on these appeals similarly lack substance or legal basis. No one has controverted any of the material facts on which plaintiff-respondent's foreclosure action is based. No one has shown any procedural error which would warrant further delay in the delivery of the deed to the purchaser and distribution of the surplus to all of the nonobjecting defendants. Extended discussion of each of the 15 points is totally unwarranted.

II

It is evident that these appeals "could not," as Judge Cardozo put it, "with semblance of reason, be decided in any way but one" and ordinarily would be "predestined, so to speak, to affirmance without opinion" (Cardozo, The Nature of the Judicial Process, p. 164). Because the motives of appellant and his counsel appear, at the very least, to be suspect (see Judiciary Law § 488), we have decided to raise on our own motion the issue of whether they can be penalized for pursuing such frivolous litigation (see Vestal, Sua Sponte Consideration in Appellate Review, 27 Ford L.Rev. 477).

The problem cannot be viewed from a narrow perspective. The United States Court of Appeals for the Federal Circuit has correctly observed that "filing of and proceeding with clearly frivolous appeals constitutes an unnecessary and unjustifiable burden on already overcrowded courts, diminishes the opportunity for careful, unpressured consideration of nonfrivolous appeals, and delays access to the courts of persons with truly deserving causes" (Asberry v. United States Postal Service, 692 F.2d 1378, 1382). Moreover, as put by the United States Court of Appeals for the First Circuit, "Lawsuits are expensive and time consuming to courts and litigants alike. When an attorney fails to take an objective look at his case and appeals simply because the rules allow him to appeal, he commits a wrong against the courts and against the parties who must respond to his appeal" (Limerick v. Greenwald, 749 F.2d 97, 101; cf. Sassower v. Signorelli, 99 A.D.2d 358, 472 N.Y.S.2d 872; Matter of Cicio v. City of New York, 98 A.D.2d 38, 469 N.Y.S.2d 467).

At one time, economic considerations tended to prune frivolous appeals. Despite the occasional "fool in funds * * * able to pursue a useless or trivial appeal" (People v. Farinaro, 36 N.Y.2d 283, 286, 367 N.Y.S.2d 258, 326 N.E.2d 819), the cost of preparing the record caused counsel and clients to take a hard look and carefully assess their chances before perfecting an appeal (see Goodhart, Costs, 38 Yale L.J. 849, 869). With the advent of the appendix method and less expensive reproduction systems, however, monetary considerations have become secondary.

Although the pursuit of a frivolous appeal can subject counsel to disciplinary proceedings (see Code of Professional Responsibility, DR 7-102 Sassower v. Signorelli, supra, 99 A.D.2d at 360, 472 N.Y.S.2d 872; Matter of Lee, 86 A.D.2d 131, 449 N.Y.S.2d 7), this has not proven to be an effective deterrent. Most sister state courts and the Federal judiciary have imposed monetary sanctions on offenders--double statutory costs plus attorneys fees (see, e.g., Tedeschi v. Barney, 2 Cir., 757 F.2d 465; Hughes v. Hoffman, 750 F.2d 53; Limerick v. Greenwald, supra; Hagerty v. Succession of Clement, 749 F.2d 217; Scott v. Younger, 739 F.2d 1464, 1465; Evans v. Arthur, 139 Ariz. 362, 678 P.2d 943; People v. Beverly Bail Bonds, 134 Cal.App.3d 906, 185 Cal.Rptr. 36; Oberman, Coping With Rising Caseload II: Defining the Frivolous Civil Appeal, 47 Brooklyn L.Rev. 1057). These...