theCPLRblog

The Five Factors of CPLR § 1001(b)

CPLR § 1001 Necessary joinder of parties

Fagan v Nowitz, 2009 NY Slip Op 06660 (App. Div., 2nd, 2009)

By decision and order of this Court dated February 27, 2007, the matter was remitted to the Supreme Court, Queens County, to hear and report on whether or not it was appropriate to proceed in the absence of the remainderpersons or beneficiaries, whether or not they can or should be joined, and what is the appropriate remedy in the event that they cannot be joined under CPLR 1001(b), and the appeal was held in abeyance in the interim (see Nowitz v Nowitz, 37 AD3d 788). The Supreme Court has now filed its report, and the parties have filed supplemental appendices and briefs. Justices Mastro, Dillon, and Miller have been substituted for former Justices Goldstein, Lifson, and Lunn (see 22 NYCRR 670.1[c]).

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A court may excuse the failure to join a necessary party and allow an action to proceed in the interest of justice upon consideration of five factors enumerated in CPLR 1001(b): (1) whether the petitioner has another remedy if the action is dismissed for nonjoinder, (2) the prejudice that may accrue from nonjoinder to the defendant or to the nonjoined party, (3) whether and by whom prejudice might have been avoided or may in the future be avoided, (4) the feasibility of a protective provision, and (5) whether an effective judgment may be rendered in the absence of the nonjoined party.

Here, as the defendant concedes, the first factor weighs in favor of excusing the plaintiff's failure to join the entities, since she has no other effective remedy. However, the Supreme Court improvidently exercised its discretion in determining that the remaining four factors also weighed in favor of the proceeding continuing in the entities' absence. As to the second factor, the entities will suffer great prejudice if the matter proceeds in their absence and the trust at issue is rescinded, as it was in the judgment appealed from. As to the third factor, the plaintiff easily could have avoided the prejudice to the entities by having timely joined the entities as defendants. Moreover, although the entities could have avoided any prejudice by voluntarily intervening in the action, such a fact is outweighed by the plaintiff's failure to set forth any reasonable excuse for her failure to timely join them (see Matter of Red Hook/Gowanus Chamber of Commerce v New York City Bd. of Stds. & Appeals, 49 AD3d 749, 752; Matter of Solid Waste Servs., Inc. v New York City Dept. of Envtl. Protection, 29 AD3d 318, 319). As to the fourth factor, the Supreme Court allowed the matter to proceed to trial in the absence of the entities, resulting in the rescission of the trust. Thus, this factor also weighs against proceeding in the entities' absence, as under such circumstances, no protective provision is feasible since recision of the trust directly affects the entities' economic interests. Finally, the fifth factor also weighs against proceeding in the entities' absence, as it is questionable whether an effective judgment may be rendered without their participation in the action.

Accordingly, considering each of the five factors enumerated in CPLR 1001(b), and given our conclusion that the entities are indispensable parties (see Nowitz v Nowitz, 37 AD3d 788), and in light of the fact that the applicable statute of limitations has expired (see CPLR 213[8]), the action must be dismissed (see Matter of Red Hook/Gowanus Chamber of Commerce v New York City Bd. of Stds. and Appeals, 49 AD3d 749, 752; Nixon v Barrow, 239 AD2d 326).

The bold is mine.

Necessary Joinder CPLR § 1001

CPLR § 1001 Necessary joinder of parties

Censi v Cove Landings, Inc., 2009 NY Slip Op 06496 (App. Div., 2nd, 2009)

Necessary parties are persons "who might be inequitably affected by a judgment in the action" and must be made plaintiffs or defendants (see CPLR 1001[a]). CPLR 1001(b) requires the court to order such persons summoned, where they are subject to the court's jurisdiction. If jurisdiction over such necessary parties can be obtained only by their consent or appearance, the court is to determine, in accordance with CPLR 1001(b), whether justice requires that the action proceed in their absence (see CPLR 1001 [b]). The nonjoinder of necessary parties may be raised at any stage of the proceedings, by any party or by the court on its own motion, including for the first time on appeal (see City of New York v Long Is. Airports Limousine Serv. Corp., 48 NY2d 469, 475; Matter of Lezette v Board of Educ., Hudson City School Dist., 35 NY2d 272, 282; Matter of Jim Ludtka Sporting Goods, Inc. v City of Buffalo School Dist., 48 AD3d 1103, 1103-1104; Matter of Storrs v Holcomb, 245 AD2d 943, 944 n 1; Wrobel v La Ware, 229 AD2d 861; Matter of Dreyfuss v Board of Educ. of Union Free School Dist. No. 3, Town of Huntington, 42 AD2d 845; Alexander, Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR C1003:1; see also CPLR 1003).

Here, the record indicates the possible existence of necessary parties who have not been joined, namely, the owners of the remainder of the roadbed of Fish Cove Road. Those parties' interests in real property may be affected by that portion of the Supreme Court's order which, upon searching the record, declared Fish Cove Road to be a public highway, and effectively granted the public an easement to pass over their lands (see Sorbello v Birchez Assocs., LLC, 61 AD3d 1225; Schaffer v Landolfo, 27 AD3d 812; Dunkin Donuts of N.Y., Inc. v Mid-Valley Oil Co., Inc., 14 AD3d 590, 592; Matter of Princess Bldg. Corp. v Zoning Bd. of Appeals of Town of Huntington, 307 AD2d 972; Hitchcock v Boyack, 256 AD2d 842, 844; Buckley v MacDonald, 231 AD2d 599, 600; Matter of Lehrer v Wallace, 24 AD2d 602, 603). Thus, the court should not have made this determination upon searching the record without first determining whether all necessary parties were joined. Under the circumstances of this case, "the questions of whether there are any . . . necessary parties who should be joined in this action and, if so, the appropriate procedural disposition for effecting joinder should not be determined by this [C]ourt in the first instance" (De Ruscio v Jackson, 164 AD2d 684, 688). Accordingly, we remit the matter to the Supreme Court, Suffolk County, to hold a hearing to determine whether there are any necessary parties who should be joined in this action and, if so, to compel their joinder, subject to any affirmative defenses, and if joinder cannot be effectuated, to determine, pursuant to CPLR 1001(b), whether the action should proceed in the absence of any necessary parties.

It's almost always a good idea to invite everyone to the party.  Note that this can be brought up on appeal for the first time, so, if you aren't careful, you can lose, even when you win.

The bold is mine.

CPLR § 1001

CPLR § 1001 Necessary joinder of parties

Crummell v Avis Rent A Car Sys., Inc., 2009 NY Slip Op 04022 (App. Div., 2nd, 2009)

The Supreme Court erred in granting that branch of the defendant's motion which was to dismiss the complaint for failure to state a cause of action, pursuant to CPLR 3211(a)(7), due to the [*2]plaintiff's failure to comply with Insurance Law § 3420(a)(2). That provision governs the right of an injured party who is a stranger to an insurance contract to maintain a direct action against the tortfeasor's insurer (see Lang v Hanover Ins. Co., 3 NY3d 350, 353-354). It does not apply where, as here, a signatory to a contract seeks a declaration of his rights with respect to another contracting party (see CPLR 3001; Lang v Hanover Ins. Co., 3 NY3d 350, 353).

While the Supreme Court correctly concluded that Thomas Pinkerton is a necessary party to this action (see CPLR 1001[a]; cf. Bello v Employees Motor Corp., 240 AD2d 527), under the circumstances presented, the plaintiff should have been given an opportunity to rectify his failure to join him (see Stevens v Eaton, 267 AD2d 450, 450-451).

The Supreme Court should not have considered, and we do not consider, the defendant's remaining contention, because the defendant improperly raised it for the first time in its reply papers in the Supreme Court (see Luft v Luft, 52 AD3d 479, 480; Medugno v City of Glen Cove, 279 AD2d 510, 511-512).

Mayer's Cider Mill, Inc. v Preferred Mut. Ins. Co., 2009 NY Slip Op 04466 (App. Div., 4th, 2009)

Finally, we reject the contention of Preferred Mutual that the manufacturer and distributor of the machine in question are necessary parties to this action, pursuant to CPLR 1001 (a). The issue whether Preferred Mutual must defend and indemnify plaintiff has no bearing on any claim by Lansdowne against the manufacturer or the distributor, and they thus are not affected, "inequitably" or otherwise, by this action (id.).

The bold is mine.

CPLR § 3213; CPLR § 1001

CPLR § 3213 Motion for summary judgment in lieu of complaint

CPLR § 1001 Necessary joinder of parties

Ro & Ke, Inc. v Stevens, 2009 NY Slip Op 03501 (App. Div., 2nd, 2009)

"[A] document comes within CPLR 3213 if a prima facie case would be made out by the instrument and a failure to make the payments called for by its terms . . . . The instrument does not qualify if outside proof is needed, other than simple proof of nonpayment or a similar de minimis deviation from the face of the document" (Weissman v Sinorm Deli, 88 NY2d 437, 444 [internal quotation marks [*2]omitted]; see Stallone v Rostek, 27 AD3d 449, 450). Here, the plaintiff made a prima facie showing of entitlement to judgment as a matter of law by proving the existence of the subject note and nonpayment according to its terms (see Black Rock, Inc. v Z Best Car Wash, Inc., 27 AD3d 409, 409; James DeLuca, M.D., P.C. v North Shore Med. Imaging, 287 AD2d 488, 488; A. Bella Food Corp. v Luigi's Italian Deli, 243 AD2d 592, 592). In response to the plaintiff's prima facie showing, the defendant raised a triable issue of fact regarding the validity of the assignment under which the defendant allegedly assumed the obligations of Hyunik Seo, a nonparty to this action, who was the original borrower on the note. Therefore, the motion for summary judgment in lieu of complaint should have been denied (see Sillman v Twentieth Century-Fox Film Corp., 3 NY2d 395, 402-403; Comforce Telecom, Inc. v Spears Holding Co. Inc., 42 AD3d 557; cf. Millenium Falcon Corp. v WRD Sales, Inc., 46 AD3d 862, 863).

Under the circumstances presented, Hyunik Seo, the original borrower on the note, should have been joined as a party to this action (see CPLR 1001[a]; cf. Friedman v Friedman, 125 AD2d 539, 540-541; Matter of Brener, 12 AD2d 452).

The bold is mine.

Halliwell v Gordon, 2009 NY Slip Op 03481 (App. Div., 2nd, 2009)

Finally, the Supreme Court erred in granting that branch of the defendant's motion which was to dismiss the complaint, with prejudice, on the alternative ground that the plaintiff failed to join Bumble as a necessary party. The defendant failed to demonstrate that Bumble needed to be a party if complete relief was to be accorded between the parties or that Bumble would be inequitably affected by a judgment in this action if it were not joined (see CPLR 1001[a]; Spector v Toys "R" [*3]Us, Inc., 12 AD3d 358, 359).

Leeward Isles Resorts, Ltd. v Hickox, 2009 NY Slip Op 03457 (App. Div., 1st, 2009)

Assuming the non-joined parties are necessary parties within the meaning of CPLR 1001(a), defendant has not shown as a matter of law that he is entitled to dismissal of the complaint for failure to join them. Defendant contends that these parties are beyond the jurisdiction of the court and cannot be joined. However, even if these parties were shown to be beyond the jurisdiction of the court, consideration of the factors enumerated in CPLR 1001(b) would support allowing the action to proceed, especially as "dismissal for failure to join a necessary party should eventuate only as a last resort" (L-3 Communications Corp. v SafeNet, Inc., 45 AD3d 1, 11 [2007] [internal quotation marks and citation omitted]).

The bold is mine.

De Bie v Tredegar Trust Co., 2009 NY Slip Op 03445 (App. Div., 1st, 2009)

None of the factors set forth in CPLR 1001(b) warranted proceeding without the joinder of Joan and Alexis Jr. as necessary parties (see Nowitz v Nowitz, 37 AD3d 788 [2007]). First of all, plaintiff has an alternative forum for relief in Virginia, where issues pertaining to the trust have been litigated for over a decade. In its May 19, 2004 order, the Virginia court directed the parties to "undertake to settle all remaining issues pertinent to [Tredegar]'s prayer for aid and guidance not disposed of by this Order, including, without limitation, undertaking to agree on a mutually acceptable division of the Trust into two parts" (emphasis added), the very relief plaintiff seeks herein. By filing in New York, plaintiff subverted the authority of the Virginia court, which had agreed, in its 2004 order, to supervise settlement of the parties' remaining disputes relating to the trust, including the division of the trust into two parts.

Second, Joan and Alexis Jr. would be prejudiced if the New York action were to proceed in their absence. Because plaintiff has sought partition of his interest in the trust, his interests are not aligned with those of his ex-wife and son. They do not stand to benefit from the recovery of $10 million on account of alleged breaches of fiduciary duty by the trustee; the complaint makes clear that plaintiff seeks judgment restoring such losses "to the Plaintiff's partitioned trust," i.e., recovery of these sums would be for plaintiff's benefit only.

Third, plaintiff engaged in forum shopping by filing suit against Tredegar in New York. Plaintiff concedes that he sought to avoid litigating this case in Virginia, given that court's [*2]history of ruling "harshly" against his interest.

Fourth, it would not be feasible to fashion an appropriate protective order. As the motion court recognized, the parties have a "long and tortured history" in this matter, and the relief sought by plaintiff, i.e., partition of his interest in the trust, would subvert the terms of the settlement agreement.

Fifth, an effective judgment cannot be rendered in the absence of Joan and Alexis Jr. The fact that plaintiff has not asserted any claims against them is of no moment, given that the relief he seeks would subvert the settlement agreement and, if he were to prevail, diminish the value of their interests in the trust.

The bold is mine.

CPLR § 1001 Necessary Joinder

CPLR § 1001 Necessary joinder of parties

CPLR 2221 Motion affecting prior order
(a) Parties who should be joined

Menorah Home & Hosp. for Aged & Infirm v Jelks, 2009 NY Slip Op 02758 (App. Div., 2nd, 2009)

In an action to recover payment for professional nursing care services, to set aside a conveyance of real property as fraudulent, and to declare the subject deed null and void, nonparty Green Tree Credit, LLC, f/k/a Conseco Finance Credit Corp., appeals from an order of the Supreme Court, Kings County (Dabiri, J.), dated December 17, 2007, which denied its motion, in effect, pursuant to CPLR 2221(a) and 1001(a) to vacate those portions of a prior order of the same court dated December 5, 2006, granting that branch of the plaintiff's motion which was for leave to amend the complaint to add a cause of action to set aside a deed of real property to the defendant as fraudulent, and amended a prior order and judgment (one paper) of the same court (Ruchelsman, J.), dated September 12, 2005, to include a declaration that the subject deed is null and void and a direction to the County Clerk of Kings County to mark the records accordingly.

ORDERED that the order is reversed, on the law, with costs, the nonparty-appellant's motion, in effect, pursuant to CPLR 2221(a) and 1001(a) is granted, and those provisions of the December 5, 2006, order which granted that branch of the plaintiff's motion which was for leave to amend the complaint and which amended the order and judgment dated September 12, 2005, to include a declaration that the subject deed is null and void and a direction to the County Clerk of Kings County to mark the records accordingly are vacated, and that branch of the plaintiff's motion which was for leave to amend the complaint is denied. [*2]

"It is a fundamental legal principle that an individual may not be deprived of property without due process of law, which requires that one be accorded notice and an opportunity to be heard" (Friedman v Friedman, 125 AD2d 539, 541). Contrary to the plaintiff's contention and the determination of the Supreme Court, the plaintiff was required to join the nonparty-appellant, Green Tree Credit, LLC, f/k/a Conseco Finance Credit Corp. (hereinafter Green Tree), the mortgagee of the subject premises, as a necessary party in its cause of action to set aside the conveyance of the subject premises as fraudulent, and to declare the subject deed null and void (see CPLR 1001[a]; Ameriquest Mtge. Co. v Gaffney, 41 AD3d 750, 751; Losner v Cashline, L.P., 284 AD2d 433; Friedman v Friedman, 125 AD2d 539, 541; see e.g. Skiff-Murray v Murray, 17 AD3d 807). Accordingly, the failure of the plaintiff to join Green Tree as a defendant requires that the portions of the Supreme Court's resulting order dated December 5, 2006, granting that branch of the plaintiff's motion which was for leave to amend the complaint to add a cause of action to set aside the conveyance of the subject premises as fraudulent, and to declare the subject deed null and void, and amending a prior order and judgment of the same court to include a declaration that the subject deed is null and void and a direction to the County Clerk of Kings County to mark the records accordingly be vacated, and that that branch of the plaintiff's motion which was for leave to amend the complaint be denied.

The bold is mine.