In this morning’s NY Law Journal, I read an interesting case out of Suffolk County NY involving a piano. It seems that the plaintiffs,Paul and Karen Palmieri, purchased a rebuilt, refinished Weber 6′ grand piano for $9,000 in 1996 from The Piano Exchange in Glen Cove. The agreement’s terms called for a “rebuilt and refurnished-matching bench-guaranteed indefinitely parts and labor.” The lawsuit includes allegations of breach of contract, deceit and breach of the covenant of good faith and fair dealing. So far so good, a simple breach of contract case.The only problem is that the plaintiffs are suing for $1.259 Million in damages:Two Hundred Fifty Thousand Dollars ($250,000.00); alleging deceit claiming damages of Five Hundred Thousand Dollars ($500,000.00); alleging breach of the covenant of good faith and fair dealing and seeking damages of Three Hundred and Fifty Thousand Dollars($350,000.00) alleging tortious interference with a contract seeking damages of One Hundred and Fifty Thousand Dollars ($150,000.00) and lastly, alleging unjust enrichment seeking Nine Thousand Dollars ($9,000.00).
Judge Garguilo was not amused. He wants the plaintiffs’ attorney, Judith Berger, to appear before him on March 27, 2013, to explain the basis for this damages demand which is 138 times the amount paid for the piano 17 years ago. What I admire about the decision is that Judge Garguilo understood the effect getting hit with such a large claim can have against the other litigant:
Is it a reasonable application of the privilege to practice law to serve a complaint upon a person, in these circumstances, and stun the recipient-defendant with damage claims beyond the universe of those which logically follow the alleged breach? The Court thinks not. . . .Does the administration of Justice include a responsibility to shield litigants from conduct that may cause stress, anxiety and fear of pecuniary ruination far beyond the bounds of reasonable foreseeability? The Court thinks it does. The Courts are intimidating enough to ordinary people without needless exacerbation occasioned by grossly exaggerated claims of financial loss.
It will be interesting to see what happens on the 27th of March and I will keep you posted. The importance of this decision is the judge’s clear articulation of lawyer’s obligation to have a factual basis for the monetary damages they seek in their pleadings. Sure that can be hard to do in personal injury and medical malpractice actions where putting a value on pain and suffering can be a subjective endeavor and one cannot always determine when the complaint is field what the life-long consequence of the injuries suffered may be. But that is why in those types of cases, the law requires you to NOT put a monetary damage in the complaint. In commercial cases, however, the damages recoverable are usually specified by law and the damages are known and set when the complaint is filed.
This case can give some hope and be of some use to those hit with copyright infringement claims, where copyright holders routinely over-inflate the amount of damages that they can get for the alleged infringement. A quick tour of the internet will reveal that this problem – “copyright trolling” as it is known in the vernacular – is rampant. In fact, I have a whole website devoted to the issue (www.extortionletterinfo.com). Both Federal and State courts allow for sanctions to be levied upon firms and clients that make unsupported and baseless claims in their pleadings. Lawyers should similarly be admonished and sanctioned for making such baseless claims in their legal correspondence to alleged infringement targets. Kudos to Judge Garguilo for understanding the effect receiving such baseless claims can have on a person and further realizing that this is likely the intended consequence of sending such an exorbitant, extortionate damages amount.
Something else interested me in the case. I noticed that in the address block for the lawyer for the Palmieris, after the name Judith N. Berger, it read “The Coalition of Landlords, Homeowners & Merchants, Inc.” It appears the Coalition is some kind of legal self-help, libertarianish, not-for-profit group that charges people to fight building and housing violations. Judith appears to be their counsel. Their president is none other than Paul Palmieri, the plaintiff in this case involving an apparently very valuable rebuilt ancient piano. There are a few online complaints about The Coalition but what caught my eye is that the Coalition is no stranger to representing folks on claims that get hit for sanctions. In 2006, they were ordered to explain why they shouldn’t get hit with sanctions in Palmieri v. Thomas 29 Ad3d 658 (2d Dept 2006)(“The Coalition’s arguments appear to be completely without merit in law and unsupported by a reasonable argument for an extension, modification, or reversal of existing law, or undertaken primarily to delay or prolong the resolution of litigation or to harass or maliciously injure another.Accordingly, we direct counsel for the parties to submit affirmations or affidavits on the issue of the imposition of sanctions and/or costs against the Coalition and/or its counsel”); in 2007, it was the law firm on a claim that the plaintiffs were forced to pay $2,547 in sanctions for a frivolous claim brought against a process server employed by the Town of Brookhaven in Mascia v. Maresco 39 Ad3d 504 (2d Dep’t 2007)(The contentions advanced by the plaintiffs here were completely without merit in law or fact and cannot be supported by a reasonable argument for an extension, modification or reversal of existing law. Moreover, the plaintiffs’ conduct in commencing this action and in continuing to advance their claims, “appears to have been intended primarily to harass the defendant. Accordingly, the Supreme Court providently exercised its discretion in awarding the defendant’s employer its costs and reasonable attorney’s fees as a sanction); and in 2010 it was sanctioned for bringing a frivolous complaint against a law firm in the case of Matter of Seamans 2010 NY Slip Op. 31749(Nassau County Surrogate’s Court)(It appears clear to the court that many of the Coalition’s affirmative defenses, cross-claims, and counterclaims were either completely without merit in law and could not be supported by a reasonable argument for an extension
modification or reversal of existing law, or were undertaken primarily to delay or prolong the resolution of the litigation, or to harass or maliciously injure another, as evidenced by the failure to oppose the dismissal of several of them.
The malicious injury of another is particularly evident in the claims made against the petitioner’s attorneys.) That matter is still on appeal.
It is important that courts continue on the road commenced by Judge Garguilo in this case and address the making of frivolous damages claims in the same manner they address making frivolous substantive claims. Although based on the above track record, it seems that getting hit with sanctions may not be enough to teach some people this lesson.