Bankers Trust Co. v. Braten

101 Misc. 2d 227, 420 N.Y.S.2d 584, 1979 N.Y. Misc. LEXIS 2674
CourtNew York Supreme Court
DecidedFebruary 27, 1979
StatusPublished
Cited by12 cases

This text of 101 Misc. 2d 227 (Bankers Trust Co. v. Braten) is published on Counsel Stack Legal Research, covering New York Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bankers Trust Co. v. Braten, 101 Misc. 2d 227, 420 N.Y.S.2d 584, 1979 N.Y. Misc. LEXIS 2674 (N.Y. Super. Ct. 1979).

Opinion

OPINION OF THE COURT

Edward J. Greenfield, J.

On this motion, defendant directly challenges the power of the Administrative Judge of this court to assign a single [228]*228Judge of the court to hear and supervise all aspects of this and several related actions from the pretrial stages on which cases have been designated as appropriate for "complex litigation” treatment. He also asks for the right to take the depositions of the Administrative Judge, the general clerk of the court, and other persons who assisted or advised the Administrative Judge in his determination. The motion thus raises policy and procedural questions of prime importance concerning the powers of this court to deal with its own calendars.

There are 15 actions in all which are involved, affecting 9 parties, with damages claimed approaching $500,000,000. Nine of the actions had previously been ordered to be heard jointly by a Special Referee who would supervise joint examinations before trial. However, this procedure as well was challenged by defendant, who had charged "misconduct” by the Referee. Up to this point, motions relating to various aspects of these actions have been decided by 12 different Justices of the Supreme Court, and several other motions are pending or imminent. The attorneys for Bankers Trust Company made application by letter to the Administrative Judge for the assignment of a single Judge to hear all interlocutory applications and to preside at trial, rather than have portions of the matter heard by many separate Judges. This application was joined in by Clarence Rainess & Co., a defendant in one action and a third-party defendant in six other actions, and was opposed by defendant Braten, and by the attorney for certain other parties. The application eventuated in the order by Mr. Justice Dudley "after review of the special circumstances” and "in accordance with procedures to expeditiously resolve all pending and future pre-trial applications”, pursuant to which all the cases were assigned to a single Justice "for all purposes”.

The objecting attorneys base their opposition on the absence of any statute or promulgated rule explicitly authorizing the assignment of a case to a single Judge prior to trial for all purposes, and upon the claimed denial of due process in having the question of assignment handled administratively, rather than by a formal litigated motion in Special Term, upon notice, with sworn affidavits, full rights to discovery, a fact hearing and oral argument upon the law. They also claim denial of due process in that their case was singled out for special treatment, and not handled in the same way as the [229]*229bulk of other cases. This court finds these objections to be without merit.

The history of these cases illustrate how a straightforward issue can burgeon into the luxuriant growth of complex litigation under the green thumb of lawyers intent on expanding and multiplying the proliferation of issues, rather than narrowing, simplifying and focusing issues for ready resolution. It is precisely such a situation which calls for a strong hand in control, to prevent the litigating urge from metastasizing and running rampant, while assuring that the real issues and rights of the parties are fully protected. Charles Dickens to the contrary, the law these days is not quite so much an ass as some lawyers would make it. Given the powers which courts can exercise today, powers here under challenge, cases like Dickens’ fictional Jarndyce v Jarndyce, which dragged on interminably and nourished generations of lawyers, are the exceptions and not the rule.

The genesis of the dispute between the parties was simple enough. Bankers Trust Company had been lending moneys to Braten Apparel Corporation pursuant to a written agreement which gave it a lien on the borrower’s accounts receivable and other collateral. The corporation’s obligations were personally guaranteed by Milton Braten, Erwin L. Klineman and Emery E. Klineman. On September 5, 1974, alleging inability to pay its debts as they matured, the corporation filed a petition under chapter 11 of the Bankruptcy Act in the United States District Court for the Southern District of New York. The bank claimed to be a secured creditor for $4,600,000. The debtor contended the bank’s lien was invalid, but the Bankruptcy Court ruled otherwise, and directed liquidation of the collateral, an accounting, and the ascertainment of any deficiency over what was realized on the security.

The filing of the chapter 11 petition was followed by a veritable barrage of lawsuits. First, Bankers Trust served Braten and the Klinemans in the Supreme Court, New York County on their individual guarantees. Instead of interposing an answer and counterclaim, each individual in turn brought a separate action against the bank (one in the Supreme Court, New York County, two in the Supreme Court, Westchester County), alleging the bank had breached its agreement to extend further advances to the corporation. Then the corporation also commenced a similar action in the Supreme Court, New York County, against the bank, claiming $25,000,000 in [230]*230damages. It brought a similar action against the bank in the Supreme Court, New York County, two months later. Braten then brought an action in Civil Court, New York for alleged excess and usurious interest, and for usurious interest and for conversion. The corporation also sued Clarence Rainess & Co., its accounting firm, claiming the accountants had falsely informed the bank that the corporation was insolvent, causing the bank to cut off further advances. The bank, in turn, has asserted a claim against the accountants as a third-party plaintiff, alleging it terminated advances to the corporation on the basis of their representations. Another action was brought against the bank by a group of affiliated companies claiming a failure to return Braten Apparel Corporation checks payable to them, and also claiming a failure by the bank to extend financial accommodations to them as had been done previously for Braten Apparel Corporation. Then Braten Apparel Corporation in May of 1977 brought three more suits against the bank in the Supreme Court, New York County, for $100,000,000; $35,000,000 and $10,000,000, respectively, alleging among other things that the corporation relying on the bank’s statements that it was insolvent, filed the chapter 11 petition to its deteriment.

The corporation also started a suit against the bank in South Carolina for $95,000,000 on the same transactions as those involved in the New York actions. The bank thereupon instituted a new suit in New York, asking that the defendants be enjoined from proceeding with this South Carolina action.

Of the 15 actions, the first 9 were consolidated for joint trial and motions were made to dismiss some of the later actions as duplicative. While this and the question of further consolidation had not yet been decided, a Special Referee was designated to supervise joint discovery proceedings and the examinations before trial. The bank, through its officers and employees, was examined over the course of a year at 50 separate sessions, and a transcript of over 10,000 pages was complied. When the Braten group indicated a desire to examine 70 more witnesses, the Special Referee ruled that all of the principal bank witnesses had been heard, and that it was time for the bank to go ahead and examine. At that point the defendants challenged the Referee’s ruling and sought to remove him.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Caffrey v. North Arrow Abstract & Settlement Servs., Inc.
2018 NY Slip Op 1043 (Appellate Division of the Supreme Court of New York, 2018)
Alvarez v. Snyder
264 A.D.2d 27 (Appellate Division of the Supreme Court of New York, 2000)
Lang v. Pataki
176 Misc. 2d 676 (New York Supreme Court, 1998)
Bankers Trust Co. v. Rhoades
108 B.R. 423 (S.D. New York, 1989)
In re Love Canal Actions
145 Misc. 2d 1076 (New York Supreme Court, 1989)
Holland v. State
134 Misc. 2d 826 (New York State Court of Claims, 1987)
AT&T Information Systems, Inc. v. Donohue
113 A.D.2d 395 (Appellate Division of the Supreme Court of New York, 1985)
Gabrelian v. Gabrelian
108 A.D.2d 445 (Appellate Division of the Supreme Court of New York, 1985)
Matter of Braten Apparel Corp.
26 B.R. 1009 (S.D. New York, 1983)
Matter of Braten Apparel Corp.
21 B.R. 239 (S.D. New York, 1982)
People v. Granatelli
108 Misc. 2d 1009 (New York Supreme Court, 1981)
Jones v. Palermo
105 Misc. 2d 405 (New York Supreme Court, 1980)

Cite This Page — Counsel Stack

Bluebook (online)
101 Misc. 2d 227, 420 N.Y.S.2d 584, 1979 N.Y. Misc. LEXIS 2674, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bankers-trust-co-v-braten-nysupct-1979.