On October 15, 2024, Justice Bannon of the New York County Commercial Division issued a decision in Arlus Owner LLC v. 829 Mad. Ave. LLC, 2024 NY Slip Op. 33788(U), refusing to consolidate actions with disparate claims, explaining:
CPLR 602(a) permits the court, in its discretion, to consolidate actions that involve common questions of law and fact so as to reduce the cost of litigation, make more economical use of the trial court’s time, and speed the disposition of cases. The party seeking consolidation must specify the commonality in issues of fact or law between the actions sought to be consolidated. A party opposing the motion must show that consolidation will prejudice a substantial right. While mere delay is not a sufficient reason to deny the motion, consolidation may be denied where the actions are at markedly different procedural stages and consolidation would result in undue delay in the resolution of either matter. Here, the plaintiffs seeking consolidation do not meet their burden and the defendants opposing have met theirs.
The four subject actions arise out of a series of real estate transactions assigning interests in the property known as 829 Madison Avenue (the “Property”). Portions of the Property are leased to commercial tenants (i) Vanita Fine Arts & Antiques, Inc. (“Vanita”); (ii) Twain Time, Inc. (“Twain Time”); and (iii) Michail & Utarefson, Inc. (“M&U”) (collectively with Vanita and Twain Time, “Tenants”). Pursuant to an Agreement of Purchase and Sale, dated January 28, 2022 (the “PSA”), the plaintiffs purchased the Property for $17 million from defendant 829 Mad. Ave. LLC, of which defendant Stanley Myer is a member.
Discovery in the Declaratory Judgment Action, which was commenced in April 2024, has yet to begin. Pre-answer motions to dismiss the complaint filed by all the defendants therein are currently held in abeyance until a decision is rendered on the instant consolidation motion in this action. Discovery in the Twain Time Action, which was commenced in June 2023, has likewise yet to begin or is in its early stages. By contrast, discovery is almost complete in both the instant action, commenced in October 2022, and the Vanita Action, commenced in April 2022 – both of these actions have deadlines for the filing of the note of issue in the coming months.
The plaintiffs contend that there is a single purportedly common issue shared by all four of the subject actions: the disputed validity of certain 2021 lease amendments for the commercial leases held by the Tenants. However, their submissions do not demonstrate that those lease amendments are, in fact, presently at issue in all four of the cases to be consolidated. Moreover, there are distinct and separate lease amendments for each of the three Tenants. Further, there are additional, distinct factual issues that distinguish the four subject actions. The 2021 lease amendments on which the plaintiffs rely were only purportedly discovered by the Tenants and disclosed to the plaintiffs in late 2023, after three of the four subject actions had already been commenced. Moreover, aside from the plaintiffs themselves, those three actions-the Twain Time and Vanita Actions, as well as this action-do not have any parties in common.
The four actions the plaintiffs seek to consolidate involve widely disparate legal theories. The present action sounds in breach of contract and fraud, while the Declaratory Judgment Action involves a pair of declaratory judgment claims-only one of which potentially implicates the Tenants’ 2021 lease amendments-as well as causes of action sounding in tort, abuse of process, and civil conspiracy. These two actions should not be consolidated because when one action sounds in contract and the other in tort, it is inappropriate to grant consolidation. The remaining two actions, the Twain Time Action and Vanita Action, are landlord/tenant disputes seeking, respectively, an order of access to Twain Time’s leased space and an injunction to prevent the plaintiffs from terminating Vanita’s lease. As the defendants correctly observe, accounting for counterclaims, if the subject actions were consolidated there would be more than twenty causes of action sounding collectively in, inter alia, breach of (multiple, separate) contracts, fraud, tort, landlord/tenant law, and various claims for declaratory judgment, many of which would uniquely implicate only a small subset of the parties in the consolidated action. As such, consolidation would thus very likely risk jury confusion and unwieldy litigation. Indeed, consolidation would result in multiple parties-the plaintiffs herein, who are defendants in the Vanita Action, as well as Vanita, which is a defendant in the Declaratory Judgment Action being both plaintiff and defendant in a consolidated action.
Consolidation would also risk potential prejudice to the various parties, especially the Tenants, in that they be brought into a costly trial dominated by factual and legal issues related to the plaintiff’s fraud claims, which will have little bearing on the landlord/tenant disputes they are actually in court to litigate. Additionally, the Declaratory Judgment Action and Twain Time Action have either yet to commence, or have just begun, discovery, while discovery in this and the Vanita Action is nearly complete, raising the risk that consolidation would result in undue and prejudicial delay in this action and the Vanita Actions.
(Internal quotations and citations omitted).