Delson Communications v. MTI/Image Group, Inc.

11 Misc. 3d 235
CourtCivil Court of the City of New York
DecidedDecember 28, 2005
StatusPublished

This text of 11 Misc. 3d 235 (Delson Communications v. MTI/Image Group, Inc.) is published on Counsel Stack Legal Research, covering Civil Court of the City of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Delson Communications v. MTI/Image Group, Inc., 11 Misc. 3d 235 (N.Y. Super. Ct. 2005).

Opinion

OPINION OF THE COURT

Delores J. Thomas, J.

[236]*236Defendant moves for an order dismissing this action on the ground that this court lacks subject matter jurisdiction in accordance with CCA 202.

Plaintiff and defendant entered into a contract in August 2001, whereby plaintiff would review and audit the telecommunication bills received by defendant and determine whether defendant had incurred overcharges or billing errors, and whether defendant was entitled to lower rates and/or credits. Defendant further agreed to negotiate with the telecommunication providers and prepare all necessary paperwork. In accordance with the contract, plaintiff was to receive 35% of all overcharges recovered and 35% of any future savings that defendant received from a rate reduction negotiated by plaintiff, for a period of one year from the date of the rate reduction.

Plaintiff commenced this action by service of a summons and complaint dated October 3, 2003, containing four causes of action.

In the first cause of action plaintiff contends that it obtained a refund check on August 1, 2002 from Verizon in the sum of $19,889.96; that its fee was $6,961.49; that it billed defendant by invoice dated August 14, 2002; and that defendant received the invoice and did not protest or object to it.

Similarly, in the other three causes of action, plaintiff alleges that on three separate occasions it obtained credits for defendant, billed defendant for its fee, and defendant retained the invoice without objection or protest.

Defendant claims that since all of plaintiffs claims arise from one contract, all the claims are for one cause of action for breach of contract, and since the aggregate sum which plaintiff seeks is in excess of $25,000, this court does not have subject matter jurisdiction over the case, pursuant to CCA 202, which limits this court’s jurisdiction to $25,000.

Plaintiff claims that since defendant willfully defaulted, defendant should not be permitted to raise the issue of subject matter jurisdiction at this time. In addition, plaintiff claims that since it is seeking recovery for separate acts and services it provided for plaintiff, it has properly alleged four separate causes of action and that accordingly, this court has subject matter jurisdiction pursuant to CCA 211, which provides a jurisdictional limit of $25,000 per cause of action.

Plaintiff is incorrect in its claim that defendant may not raise the claim of subject matter jurisdiction since it is in default.

[237]*237Lack of subject matter jurisdiction is a nonwaivable defense which can be raised at any time, even when a party is in default (Gelin v Lehman Coll., 254 AD2d 119 [1st Dept 1998], lv denied 92 NY2d 818 [1999]). Where a party who initially raises a claim that the court lacks subject matter jurisdiction, withdraws it, the court may still, sua sponte, dismiss the action if the court determines that it lacks subject matter jurisdiction (Matter of Watervliet Hous. Auth. v Bell, 262 AD2d 810 [3d Dept 1999]). If this court lacks subject matter jurisdiction, it does not have the power to enter a default judgment against defendant.

The issue before the court is whether the contract entered into between the parties is divisible or not.

“The true distinction between demands or rights of action which are single and entire, and those which are several and distinct is, that the former immediately arise out of one and the same act or contract, and the latter out of different acts or contracts. Perhaps as simple and safe a test as the subject admits of, by which to determine whether a case belongs to one class or the other, is by inquiring whether it rests upon one or several acts or agreements.” (Secor v Sturgis, 16 NY 548, 558 [1858].)

In a divisible contract the performance by one party of a particular division of the contract makes the other party liable for its performance of that division (22 NY Jur 2d, Contracts § 269).

Where sums are due periodically under one contract, such as monthly rent, a party is required when bringing a lawsuit to include therein all sums due to date, and if the party fails to so do, he will be barred from bringing a further suit for sums which were due at the time of the commencement of the first action, under the rule which prevents splitting of causes of action (Board of Mgrs. of Mews at N. Hills Condominium v Farajzadeh, 185 Misc 2d 353 [Nassau Dist Ct 2000], affd as modified 189 Misc 2d 38 [App Term, 2d Dept 2001]; A & J Enter. Solutions, Inc. v Business Applications Outsourcing Techs., Inc., 11 Misc 3d 173 [Nassau Dist Ct 2005]).

Thus, if the subject contract is divisible, then each claim for a commission for a refund or credit obtained would be considered a separate division of the contract, and this court would have subject matter jurisdiction.

Each cause of action listed in the complaint would then actually be considered a separate cause of action. The court would [238]*238then have subject matter jurisdiction pursuant to CCA 211, since plaintiff does not seek in excess of $25,000 on any one cause of action. On the other hand, if the contract is considered entire and not divisible, then in reality plaintiff merely has one cause of action for breach of contract, and since the aggregate sum sought by plaintiff exceeds $25,000, this court would be deprived of subject matter jurisdiction pursuant to CCA 202.

Whether a contract is entire or divisible is to be determined from the intention of the parties, and the intention is to be deduced from the contract itself, and the rules of construction governing the ascertainment of intention (First Sav. & Loan Assn. of Jersey City, N.J. v American Home Assur. Co., 35 AD2d 344 [1st Dept 1970], affd 29 NY2d 297 [1971]; Board ofMgrs. of Mews at N. Hills Condominium v Farajzadeh, supra; 22 NY Jur 2d, Contracts § 269, supra).

In Westbury Wholesale Produce Co. v Maine Maid Inn (186 Misc 2d 911 [Nassau Dist Ct 2000]), plaintiff sought to recover for 15 shipments of fresh produce which it shipped to defendant on different days, under separate invoice. In order to come within the jurisdictional limits of the Commercial Part of Small Claims Court, plaintiff commenced four separate actions. Defendant sought to have the four actions consolidated and then dismissed as exceeding the monetary jurisdiction of the court. The court held that each delivery was a separate transaction and that the court had jurisdiction.

In Rielly v Naftal (300 AD2d 811 [3d Dept 2002]), plaintiff sought to recover for unpaid commissions earned from real estate sales while plaintiff worked as a salesperson for defendant. On appeal, defendant claimed that the justice court had exceeded its monetary limit of $3,000. In holding that the justice court had jurisdiction, the Appellate Division stated as follows: “Here, plaintiff brought three separate and distinct claims to recover commissions with respect to three different transactions involving three separate parcels and three different clients. Each claim differs in amount and gives rise to separate defenses depending upon the extent and quality of plaintiffs work” (at 812 [citation omitted]).

In Medecon Off. Sys. v Patterson, Zimmerman & Hodes (166 AD2d 694 [2d Dept 1990]), the Court held that a contract to provide medical billing services was divisible.

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Related

First Savings and Loan Ass'n v. American Home Assurance Co.
277 N.E.2d 638 (New York Court of Appeals, 1971)
Secor v. . Sturgis
16 N.Y. 548 (New York Court of Appeals, 1858)
First Savings & Loan Ass'n v. American Home Assurance Co.
35 A.D.2d 344 (Appellate Division of the Supreme Court of New York, 1970)
Medecon Office Systems, Inc. v. Patterson
166 A.D.2d 694 (Appellate Division of the Supreme Court of New York, 1990)
Watervliet Housing Authority v. Bell
262 A.D.2d 810 (Appellate Division of the Supreme Court of New York, 1999)
Rielly v. Naftal
300 A.D.2d 811 (Appellate Division of the Supreme Court of New York, 2002)
Board of Managers of the Mews at North Hills Condominium v. Farajzadeh
185 Misc. 2d 353 (Nassau County District Court, 2000)
Westbury Wholesale Produce Co. v. Maine Maid Inn, L. L. C.
186 Misc. 2d 911 (Nassau County District Court, 2000)
Board of Managers of Mews v. Farajzadeh
189 Misc. 2d 38 (Appellate Terms of the Supreme Court of New York, 2001)

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Bluebook (online)
11 Misc. 3d 235, Counsel Stack Legal Research, https://law.counselstack.com/opinion/delson-communications-v-mtiimage-group-inc-nycivct-2005.