Litigation

It is not infrequent that an attorney's clients consult regarding some wrong they have suffered due to a commercial transaction that did not meet their expectations.  After listening to the client's story of the history of the transaction and reviewing the documents the client provides, an attorney will usually try to resolve the matter by a telephone discussion with the other party or a letter to that party requesting a resolution of the issue.  If a satisfactory resolution is achieved in this manner, the cost to the client is minimal, and frequently, the attorney will not even bill the client for the modest effort involved.
Sometimes, however, the telephone call or letter approach fails, leaving litigation as the only recourse open to the client.  Litigation is always time-consuming and expensive.  If the monetary amount of the loss the client has sustained is not significant, I would frequently suggest that clients represent themselves by bringing a lawsuit in a local small claims court, which usually has jurisdiction for claims that do not exceed $5,000 or so.  In those small claims courts, the claims are simply stated in the claimant's own words on pre-printed forms, and the filing fee is nominal.  Neither party is usually represented by counsel, and the judge listens to both sides and renders a quick decision, not too much, unlike the "Judge Judy" television show.

Small claims courts only work out for some clients in many situations for various reasons.  Some people feel uncomfortable going before a judge by themselves or feel that the issue is too complicated to explain.  In any discussion with a client regarding the practicality of employing the attorney to commence a lawsuit to press their claim, the attorney is usually quick to advise the client that even if the client prevails and gets the monetary judgment, the client is entitled, they may still suffer a loss because in most cases the court cannot award attorney's fees as part of the judgment.  Some contracts stipulate that the prevailing party can recover reasonable attorney's fees, but that is a double-edged sword because if the client does not win, he may also have to pay the other party's attorney's fees.

In my practice, I always tried to discourage clients from employing me to represent them to sue on modest claims, even though they sometimes said that the cost be damned, they wanted to sue on principal.  In the latter years of my practice, I used this personal example of how involved and expensive pursuing a modest claim in court can be.

Soon after building a new home in the early 1990s, my wife and I employed an interior decorator, Richard Seiden, to help us furnish the home.  Richard did an excellent job and took us to a design center in Manhattan, where we purchased much of our new furniture, including a large, curved sectional sofa for our living room, which was elliptical in shape.  Our home had oak floors, but Richard suggested using area rugs in some places.  The first area rug needed was an 8 x 8 square for our breakfast area.  Richard sent us to David Cohen's Lektro-Kleen, Inc., a commercial rug cleaner and fabricator who had been in business for many years in Albany.  Richard helped us choose the rug materials, and Mr. Cohen's company fabricated the rug promptly and for a reasonable price.  We were very satisfied.

After our living room furniture arrived, Richard offered to design an area rug that would visually tie the furniture together.  The rug was designed to follow the elliptical shape of the room and the contour of the curved sectional sofa.  The rug was to be fabricated in purple with a black border.  We showed the design to Mr. Cohen, and after he came to our home to view the job, he told us that he could make the rug Richard had designed and made notes and sketches.  We purchased the materials through Richard for $1,996.42 and employed Mr. Cohen's company to fabricate them for an agreed price of $1,400.00.

In May 1994, two workmen came to the house to make a template for the rug.  They did not have Mr. Cohen's notes or sketches.  They used a rope to outline the rug area, then moved the furniture and made a large paper template.  The workmen did not place the furniture on the template to check it.  A few weeks later, the workmen brought the finished rug, but after the furniture was placed on it, it became clear to us that the curve did not match the curve of the sofa, and the workmen brought the rug back to their shop.  After that, it became difficult to communicate with Mr. Cohen, and Richard became the intermediary.  A meeting was arranged at our home, and although the workmen brought the rug back for the meeting, Mr. Cohen didn't show up, although he had told Richard that we would personally come to inspect the problem.  Richard showed the workmen the problem, and after they agreed that they could not move the furniture to match the curve of the rug, they made a new template with the furniture in place.  The employees agreed with Richard that the template should have been made in this manner initially.

Everything went downhill from that point.  Mr. Cohen wouldn't return my telephone calls and told Richard he wanted us to buy more materials to piece on the rug, which was unsatisfactory.  In addition, he wanted to be paid before doing anything further.  By November 1994, he had stopped taking Richard's calls and didn't respond to my letters, so I decided that litigation was the only resolution.

Even though our claim was well within the monetary limits of small claims courts, I preferred to sue Mr. Cohen's company in the Supreme Court.  Had I elected to sue in the small claims section of Albany City Court, which had jurisdiction because the business was located in Albany, I knew that I could lose a morning waiting to be heard because of the crowded calendar, and the law permitted me to sue instead in Rensselaer County, where we lived, and which was convenient for me.  I thought that when he received the summons and complaint, Mr. Cohen would come to his senses and try to resolve the matter instead of incurring the cost of employing a lawyer to defend the case.  I didn't know that his daughter, Elise Hiller, had recently been admitted to the New York bar and was employed at Albany Law School.

Ms. Hiller answered the complaint, denying that the rug's construction was faulty and counterclaiming for the labor of fabricating the rug and for storage fees for storing the rug at the shop.  There were no negotiations, and the litigation proceeded.  I placed the case on the court calendar for trial, but because the amounts in contention were less than $10,000, the rules required that we submit to mediation.  We spent the better part of a day before the mediator, a young female attorney assigned by the court to hear our case.  My wife and I testified, as did Richard on our behalf.  Mr. Cohen and his workmen testified on the defendant's behalf.  At the conclusion, the mediator directed that Mr. Cohen remake the rug but did not give any monetary award to either party.  I asked the mediator how I could enforce her decision if the remade rug was unsatisfactory, and she replied that she knew no way of enforcing it.  Once again, I put the case on the Supreme Court calendar for trial.  This time, a conference was held before Judge George Ceresia, which was not productive.  Judge Ceresia assigned the case to be heard by M. Andrew Dwyer, a retired Rensselaer County Judge.

Photo taken during Court Observation

The trial in Rensselaer County Supreme Court was a more formal replay of the mediation.  I testified by asking myself questions and answering them, and I acted as the plaintiff's attorney in questioning the other witnesses.  Ms. Hiller elicited the testimony of her father and his workmen.  At the conclusion of the testimony, Judge Dwyer said that he could not reach a decision without seeing the rug and furniture and adjourned the case to a future date at our home.  Judge Dwyer, together with a court clerk and stenographer, came to our home.  Mr. Cohen and his workmen brought the rug back and put the furniture on it, adjusting it as best as possible to match the curves.  After inspecting the rug, Judge Dwyer announced that he required further testimony and set a date to reconvene in court.  At that time, Judge Dwyer asked a few innocuous questions and then announced that his decision was in our favor and against the defendant.  Based on a transcript of Judge Dwyer's decision, I entered a judgment against Mr. Cohen's company for $3,479.98, which included our original $1,996.42 for materials, interest, statutory costs, and out-of-pocket litigation expenses.  I then sent a restraining order to his bank to freeze that amount and an execution to the Albany County Sheriff to pick up the money.  I thought (hoped) that would be the end of the saga, but it was not to be.

Ms. Hiller promptly filed an appeal of the judgment to the five-judge Appellate Division of the Supreme Court and made a motion to stay the collection of the judgment pending the decision on the appeal.  The court granted the stay on the condition that her client deposit the total amount of the judgment with the court clerk.  Although court rules require that an appeal be perfected by filing a record on appeal, consisting of all court documents and a transcript of testimony, together with the appellant's brief (written legal argument showing why the trial court's decision was an error), be filed within 60 days, Ms. Hiller repeatedly requested extensions of time until she was given a final deadline by the appellate court.  She finally filed the required documents, including a brief citing numerous cases to support her contention of error and a date for oral argument was set.  By this time, I was disgusted with the time that the litigation had taken.  I submitted a brief reply of a cover sheet and one page that basically said that the cases cited by Ms. Hiller were irrelevant.  I notified the clerk of the Appellate Division that I would not attend the oral argument.

A few days later, the appellate court issued a one-sentence decision denying the appeal.  Since the decision was unanimous, there could be no further appeal, and I collected the judgment money from the court clerk.

Litigation, Part II

         In 2002, Tomhannock, LLC, a limited liability company I owned with a partner, entered into a contract to sell a 15+ acre parcel near the Tomhannock Reservoir in Pittstown, New York, to DiLallo.  This had been approved by the planning board for a single-family residence, as it had an adjacent 15+ acre parcel.  Tomhannock had initially wanted to carve out a 3.5-acre parcel from the front of both parcels and had them surveyed but did not get local planning board approval.  The purchase price was to be $105,000, but DiLallo only wanted to put down $50,000, so we fashioned a deal by way of an option agreement, which provided that if DiLallo failed to pay the balance of $55,000 within 10 years, he would convey the 3.5-acre parcel back to Tomhannock.  A similar arrangement was made with the purchaser of the adjacent parcel, who soon paid off the balance and we released the option on that parcel.

       DiLallo decided not to build and sold his parcel to LaPorte.  During early 2011, before the expiration of the 10-year period, Tomhannock, having not received the balance of $55,000, demanded that LaPorte execute a "reconveyance deed" of the 3.5 acres back to Tomhannock as provided in the option agreement.  Instead, while I was negotiating the matter with LaPorte's attorney, LaPorte sold the parcel to Roundabout Resources, LLC, a New Mexico limited liability company with its official address in the Canary Islands, Spain, in July.  The deed to Roundabout Resources showed its address as being in Fairbanks, Alaska.  I wrote to that address and received a letter stating that Roundabout Resources was not obligated to execute a reconveyance deed because its subdivision had not received planning board approval.  I then did some research and learned that the Alaska address was merely a paid mail drop, obviously intended to mislead Tomhannock as to its true owner and location.  I found that Roundabout Resources, LLC,  was owned by Kyle Litz, a resident of nearby Saratoga County who is a chemist with a Ph.D.

       As I was then living in Florida, I worked with my Troy attorney, Thomas Spain, and commenced an action in the New York Supreme Court to compel the execution and delivery of the reconveyance deed.  That was in 2012.  Mr. Litz retained a large law firm to defend the lawsuit.  There were no settlement discussions since Tomhannock's position was that Roustabout Resources had to honor the terms of the option agreement (binding upon all of the subsequent owners) or pay the $55,000.  Roustabout stood firm in its position that it was not required to do anything absent planning board approval, and without the approval, a deed to the reconveyance parcel could not be recorded.  

       During the litigation, the case came before a trial court judge on three different occasions, each ruling in favor of Tomhannock. Roustabout Resources appealed two of the rulings to the five-judge Appellate Division, which affirmed the trial court's decisions.  Finally, Roustabout Resources twice appealed to the seven-judge Court of Appeals, the court of last resort in New York, which on June 4, 2019, unanimously affirmed all of the lower court decisions and required the delivery of the reconveyance deed, together with statutory costs to Tomhannock.  33 N.Y.3d 1080 (2019)  I circumvented the local requirement that subdivided parcels could not be recorded without planning board approval by attaching the deed to the Court of Appeals decision that was filed in the County Clerk's Office, and a title company then insured title, permitting its sale.

       Litigation of this type, with three proceedings before a trial-level Supreme Court judge, two appeals to the Appellate Division, and two appeals to the Court of Appeals, is both unusual and costly.  Roustabout Resources' expenses must have significantly exceeded the $55,000 it could have paid to retain the 3.5-acre parcel because it not only used an expensive law firm, but it had to pay for printing the extensive records of all of the prior proceedings for each court appeal, the filing fees, and ultimately Tomhannock's statutory fees as the prevailing party.  Also, during the almost seven years of litigation, Roustabout Resources could not sell its parcel because the litigation rendered it effectively unsaleable.  During that period, the value of rural land in this area of Rensselaer County tanked as rising property taxes and development costs made selling it for anything other than a fraction of its original value unlikely.

       I then owned the 3.5+ acre parcel and offered to donate it to a conservation not-for-profit organization in Rensselaer County, but the donation was refused because it was too small.  Instead, I sold it to an adjoining landowner.  From my perspective, the litigation was a matter of principle that I could afford to fund, and I never doubted that Tomhannock would prevail.  I remain amazed that Mr. Litz's attorneys or Mr. Litz apparently did not understand the controlling legal issue.

       When the litigation was over, Mr. Litz telephoned me, and we discussed the case.  He was surprised that I was able to get the reconveyance deed recorded without municipal approval, and he told me that although he purchased the property with the intention of building his forever home, his plan now is to retire to his native Texas.