Shawe v. Elting

• Decision Date: 22 May 2018
• Docket Number: 6627,Index 153375/16
• Citation: 77 N.Y.S.3d 400,161 A.D.3d 585
• Parties: Philip SHAWE, Plaintiff–Appellant, v. Elizabeth ELTING, et al., Defendants–Respondents.
• Court: New York Supreme Court — Appellate Division

161 A.D.3d 585

77 N.Y.S.3d 400

Philip SHAWE, Plaintiff–Appellant,

v.Elizabeth ELTING, et al., Defendants–Respondents.

6627

Index 153375/16

Supreme Court, Appellate Division, First Department, New York.

Decided May 22, 2018

Alan M. Dershowitz, Cambridge, MA, of the bar of the Commonwealth of Massachusetts, admitted pro hac vice, for appellant.

Kramer Levin Naftalis & Frankel LLP, New York (Jeffrey S. Trachtman of counsel), for respondents.

Sweeny, J.P., Webber, Gesmer, Moulton, JJ.

Judgment, Supreme Court, New York County (Shirley Werner Kornreich, J.), entered July 25, 2017, dismissing the action with prejudice, and bringing up for review an order, same court and Justice, entered June 30, 2017, insofar as it granted defendants' motion pursuant to CPLR 3211(a) to dismiss the amended complaint, unanimously affirmed, with costs.

Plaintiff Philip Shawe (Shawe) has failed to plead any malicious prosecution claim. Neither in his complaint nor in the reworked theory presented in his appellate brief does he identify any proceeding favorably terminated for purposes of a malicious prosecution claim (see Facebook, Inc. v. DLA Piper LLP (US), 134 A.D.3d 610, 613, 23 N.Y.S.3d 173 [1st Dept. 2015], lv denied 28 N.Y.3d 903, 2016 WL 4820902 [2016] ). In his complaint, Shawe alleges that defendant Elizabeth Elting (Elting) and the attorney defendants herein commenced the underlying action (the 2014 action) (seeking removal of Shawe as a director in the principals' corporation) in Supreme Court, New York County, and obtained a TRO and sought a preliminary injunction based on trumped-up claims of a payroll crisis which they knew was not really an emergency. The complaint is clear in alleging that the TRO, which was ultimately vacated, and the preliminary injunction application, which was ultimately denied, were the "proceeding" which was terminated in favor of Shawe, giving rise to his cause of action for malicious prosecution. This theory suffers from two insurmountable defects. In the first place, a ruling on an interim or preliminary application, being non-final, does not constitute a "proceeding" for purposes of maintaining a malicious prosecution claim (see Hudson Val. Mar., Inc. v. Town of Cortlandt, 79 A.D.3d 700, 703, 912 N.Y.S.2d 623 [2d Dept. 2010] ). Moreover, if the "favorable termination" was the denial of Elting's preliminary injunction motion, which occurred in August 2014, then Shawe's malicious prosecution claim, brought in 2016, is time-barred under the applicable one-year limitations period (see CPLR 215[3] ; Syllman v. Nissan, 18 A.D.3d 221, 222, 794 N.Y.S.2d 351 [1st Dept. 2005] ).

Shawe's new theory is that the "proceeding" is the breach of fiduciary duty claim which Elting first brought in the 2014 action. That claim, with the rest of the 2014 action, was stayed in September 2015, with the understanding that it would be resolved in related litigation in Delaware (the Delaware action), where it was asserted by Elting. Elting ultimately dropped her fiduciary duty claim in the Delaware action. Shawe thus contends that Elting's fiduciary duty claim was the "proceeding" which terminated in his favor when she withdrew it in Delaware.

This theory is meritless. In the first place, Shawe provides no authority for the idea that a single substantive claim, traveling from one state court to another in multiple proceedings amidst a host of other claims, can constitute a "proceeding" for purposes of a malicious prosecution claim. To the contrary, "the falsity of one allegation of a complaint does not support" a claim for malicious prosecution "where there existed probable cause for the underlying action as a whole" ( Wilhelmina Models, Inc. v. Fleisher, 19 A.D.3d 267, 270, 797 N.Y.S.2d 83 [1st Dept. 2005] ). If anything, viewed as a whole, Elting won the Delaware action, since she was awarded relief while all of Shawe's claims were denied. Moreover, even parsing out the single fiduciary duty claim, the chancellor in the Delaware action went out of his way to state that he was making no finding on the merits of that claim, other than to note that he had found Elting's claim to be colorable at an earlier stage of the litigation.

The granting of the TRO in the 2014 action likewise militates against any finding of lack of probable cause (see Hornstein v. Wolf, 67 N.Y.2d 721, 723, 499 N.Y.S.2d 938, 490 N.E.2d 857 [1986] ; Facebook, 134 A.D.3d at 614, 23 N.Y.S.3d 173 ). Moreover, when the preliminary injunction motion was finally denied, it was only because Supreme Court found that Elting had failed to...