Sindhwani v. Coe Business Service, Inc.

52 A.D.3d 674, 861 N.Y.S.2d 705
CourtAppellate Division of the Supreme Court of the State of New York
DecidedJune 17, 2008
StatusPublished
Cited by17 cases

This text of 52 A.D.3d 674 (Sindhwani v. Coe Business Service, Inc.) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sindhwani v. Coe Business Service, Inc., 52 A.D.3d 674, 861 N.Y.S.2d 705 (N.Y. Ct. App. 2008).

Opinion

In an action, inter alia, to recover damages for conversion of billing records, the plaintiff appeals, as limited by its brief, from so much of a judgment of the Supreme Court, Westchester County (Colobella, J.), entered July 14, 2006, as, upon a jury verdict and upon the granting of that branch of the defendants’ motion which was to set aside the verdict against the defendant Lynette B. Coe, is in favor of the defendant Lynette B. Coe and against the plaintiff dismissing the complaint insofar as asserted against that defendant, and the defendants cross-appeal from so much of the same judgment as, upon the jury verdict and the granting of that branch of the plaintiffs motion which was for additur from the principal sum of $115,700 to the principal sum of $344,000, is in favor of the plaintiff and against the defendant Coe Business Service, Inc., in the principal sum of $344,000 and dismissing the counterclaim of the defendant Coe Business Service, Inc.

Ordered that the cross appeal by the defendant Lynette B. Coe is dismissed, as she is not aggrieved by the judgment (see CPLR 5511); and it is further,

[675]*675Ordered that the judgment is modified, on the law, the facts, and in the exercise of discretion (1) by deleting the provision thereof dismissing the complaint insofar as asserted against the defendant Lynette B. Coe and substituting therefor a provision in favor of the plaintiff and against the defendant Lynette B. Coe in the principal sum of $28,466, (2) by adding a provision thereto conforming the complaint to the proof adduced at trial, and (3) by deleting the provision thereof in favor of the plaintiff and against the defendant Coe Business Service, Inc., awarding damages on the conversion cause of action in the principal sum of $344,000; as so modified, the judgment is affirmed insofar as appealed and cross-appealed from, with costs to the plaintiff, that branch of the plaintiffs motion which was for additur is denied, and the matter is remitted to the Supreme Court, Westchester County, for a new trial on the issue of damages on the conversion cause of action insofar as asserted against the defendant Coe Business Service, Inc., unless within 30 days service upon the defendant Coe Business Service, Inc., of a copy of this decision and order, the defendant Coe Business Service, Inc., serves and files in the office of the Clerk of the Supreme Court, Westchester County, a written stipulation consenting to increase the award of damages for conversion against it from the sum of $115,700 to the sum of $258,311; in the event that the defendant Coe Business Service, Inc., so stipulates, then the judgment, as so modified, increased, and amended, is affirmed insofar as appealed from by the plaintiff and cross-appealed from by the defendant Coe Business Service, Inc., without costs or disbursements.

In May 2001 the plaintiff hired Lynette B. Coe and her business, Coe Business Service, Inc. (hereinafter CBSI), to perform medical billing services. In December 2002 the plaintiff terminated the defendants’ services and requested the return of all outstanding bills and records, specifically the accounts receivable of the medical practice. Coe refused to return the records until the plaintiff paid the last three months of invoices for CBSI’s services. The plaintiff then commenced this action against CBSI and Coe personally, alleging causes of action to recover damages for breach of contract and conversion of the records. CBSI asserted a counterclaim for the unpaid invoices. The defendants did not return the documents until March 2004 after having been directed to do so by two court orders.

After trial, the jury rendered a verdict in favor of the plaintiff on both causes of action and on the counterclaim. The jury did not award the plaintiff any damages on the breach of contract cause of action, but awarded damages on the conversion cause [676]*676of action in the sum of $115,700 against CBSI and $28,466 against Coe personally. After postjudgment motions, the Supreme Court set aside the verdict against Coe personally and dismissed all claims asserted against her. The court further granted the plaintiffs motion for additur, increasing the damages awarded against CBSI to $344,000 and entering judgment against CBSI in the increased amount. The plaintiff appeals, and the defendants cross-appeal. We modify.

Contrary to the contention of CBSI, the damages awarded by the jury were attributable to the conversion cause of action. Damages for conversion are usually the value of the property at the time of conversion. However, lost profits are allowed “where either from the nature of the article or peculiar circumstances of the case they might reasonably be supposed to follow from the conversion” (Barrington v Offenbach, 163 NYS 423, 426 [1917]; see Fantis Foods v Standard Importing Co., 49 NY2d 317, 326 [1980]). The forensic accountant calculated that the plaintiff sustained a $191,000 loss due to the defendants’ poor collection methods. While that amount originally would have been amenable to a breach of contract claim, the plaintiff submitted evidence that those losses could have been recovered had the defendants promptly returned the records. Since the records were not returned until more than a year later, the jury could have reasonably concluded that this delay prevented the plaintiff from collecting on most of the bills. The jury also could have reasonably concluded that as medical billers, the defendants should have known that the plaintiff needed the records in order to be able to resolve the accounts receivable. Accordingly, lost profits would be expected to follow from conversion of the records and are a proper measure of damages (see Fantis Foods v Standard Importing Co., 49 NY2d 317, 326 [1980]).

Moreover, the court charged the jury, without exception, that damages for the conversion cause of action were to be: “a sum of money to compensate plaintiff for damages resulting from the conversion, if any, for loss of income and expenses in recovering the property and lost income including litigation expenses and attorneys’ fees.”

“Because defendants failed to object to the charge, ‘the law as stated in that charge became the law applicable to the determination of the rights of the parties . . . and thus established the legal standard by which the sufficiency of the evidence to support the verdict must be judged’ ” (Allen v Domus Dev. Corp., 273 AD2d 891, 892 [2000], quoting Harris v Armstrong, 64 NY2d 700, 702 [1984]; see Up-Front Indus. v US. Indus., 63 NY2d 1004 [1984]; Brodeur v Cooper, 182 AD2d 666 [1992]). [677]*677The damages claimed by the plaintiff, including lost profits, staff expenses in attempting to collect on the accounts after return of the documents, the forensic investigation fee, and attorney’s fees, were all proper measures of damages under this charge.

Further, the Supreme Court properly determined that the verdict was inadequate. While the plaintiff failed to prove the amount of its unbilled attorney’s fees, which were merely estimated, the plaintiff did prove a total of $286,777 in damages due to the conversion, including losses attributable to uncollected accounts, staff expenses, and the forensic investigation fee. Accordingly, the jury’s total verdict of $144,166 deviated materially from what would be reasonable compensation for the conversion (see CPLR 5501 [c]; Olsen v Burns, 267 AD2d 366, 367 [1999]; Rivera v City of New York, 170 AD2d 591 [1991]).

However, the court erred in entering an unconditional judgment for the plaintiff in the increased amount.

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Cite This Page — Counsel Stack

Bluebook (online)
52 A.D.3d 674, 861 N.Y.S.2d 705, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sindhwani-v-coe-business-service-inc-nyappdiv-2008.