CASTROL INDUSTRIAL NORTH AMERICA INC v. CLASSIC TOOL DESIGN INC (1997)

In an action, inter alia, to recover damages for breach of contract, the defendant appeals from so much of an order of the Supreme Court, Orange County (Peter C. Patsalos, J.), dated October 4, 1996, as granted the plaintiff's cross motion to impose costs and sanctions upon the defendant pursuant to 22 NYCRR 130-1.1.

ORDERED that the order is modified by deleting the provision thereof directing the defendant to pay the sum of $2,500 to the “Clients' Security Fund”, and substituting therefor a provision directing the defendant to pay the sum of $2,500 to the Clerk of the Supreme Court, Orange County for transmittal to the Commissioner of Taxation and Finance;  as so modified, the order is affirmed insofar as appealed from, without costs or disbursements.

The Supreme Court providently exercised its discretion in imposing sanctions upon the defendant pursuant to 22 NYCRR 130-1.1 for seeking leave to amend its answer to interpose further counterclaims, as that conduct was frivolous under the circumstances of this case (see, 22 NYCRR 130-1.1[c] ).  However, we agree with the defendant that the court erred in directing the defendant to pay the sanction to the “Clients' Security Fund [sic, the Lawyers' Fund for Client Protection]” instead of the Clerk of the Supreme Court, Orange County for transmittal to the Commissioner of Taxation and Finance (see, 22 NYCRR 130-1.3).

The defendant's remaining contentions are without merit.

MEMORANDUM BY THE COURT.