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William C. Altreuter
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Friday, August 30, 2013

Fridays are Law Days (sometimes) at Outside Counsel. Today we present CBA Properties, Inc vs. Global Airline Services, Inc. (pdf), a Third Department decision arising out of a commercial action in Supreme Court, Albany County. Some time shortly before trial Supreme Court directed the attorneys for the parties to appear for a conference with a corporate representative from each. When counsel appeared without their clients, the judge set a new date-- Christmas Eve. At the rescheduled conference plaintiff's counsel appeared with a corporate representative, and the defendant's attorney brought someone who'd been specifically hired to attend the court appearance-- not a corporate officer or employee. The judge deemed this unacceptable, struck the defendant's Answer, and directed that the matter proceed to inquest on damages rather than to trial. The Appellate Division reversed, and reinstated the Answer, stating that, "The applicable rule instead specifically authorizes the court only to deem the party's failure to comply 'a default under CPLR 3404', which results in a removal of the case from the trial calendar," pursuant to 22 NYCRR 202.26 [e].


I think that's the correct result, but it is a peculiar one, at least under these facts. Judges frequently engage in arm-twisting to settle cases approaching trial, and the pretrial conference with a representative with authority to settle the dispute is a favorite toy. This case, a commercial matter in which breach of contract and unjust enrichment was alleged, was apparently one in which the Supreme Court judge was particularly vexed-- judges hate working on Christmas Eve every bit as much as everyone else does. That said, the sort of arm-twisting that goes on at these sorts of pretrial conferences can and frequently does cross the line. I've skated pretty close to sanctions in these circumstances on more than one occasion, because I'm the one that talks to my client, not some judge. I don't want any judge compromising the veneer of neutrality when my client says that we we or will not do what the judge recommends, and in a lot of legal cultures the mere fact that a judge would engage in such conduct would be shocking. Then too, the defendant here is absolutely correct: the Business Corporation Law does indeed authorize it to appoint any representative it chooses to act on its behalf. It is kind of ballsy to be so high-hat to the judge who is about to preside over your trial, but we all have our appointed roles in life, and the judge's role is to preside over trials when the matter can't be resolved any other way.

All that said, the outcome here is an odd one to this extent: the plaintiff, who commenced its action in 2008, and came to court on Christmas Eve, has just spent eight months cooling its heels (when not briefing this appeal), and has just been told that the next time something like this happens the court's response will be to knock the case off the trial calendar. The remedy, in other words, is to delay the trial. That's kind of messed up. I do not expect that the situation will arise with much frequency, since one of the top three or four unwritten rules of trial practice is Don't Piss Off the Judge, but now we have a case that tells us what happens if we do, and what happens is nothing much.

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