CHEN v. 215 CHRYSTIE VENTURE LLC 215 LLC LLC (2023)

The following e-filed documents, listed by NYSCEF document number (Motion 004) 61, 62, 63, 64, 65, 66, 67, 68, 69, 70, 71, 72, 73, 74, 75, 76, 77 were read on this motion to/for CONSOLIDATE/JOIN FOR TRIAL.

Upon the foregoing documents, it is decided that motion sequence number 004 is denied.

On this motion, defendants 215 Chrystie Venture LLC (“managing member”), 215 Chrystie Investors LLC (the “JV”), the Ian Schrager Company LLC (“ISC”) and the Witkoff Group LLC (“TWG,” and collectively with managing member, the JV and ISC, “EB-5 defendants” or “defendants”), move for an order, pursuant to CPLR 602(a), to consolidate the instant action with the actions entitled Manhattan Chrystie Street Development Fund LLC v. 215 Chrystie Investors LLC, et al., Supreme Court, New York County Index No. 651148/2021 (the “MCSDF contract action”) and Manhattan Chrystie Street Development Fund, LLC v. The Witkoff Group LLC, et al., Supreme Court, New York County Index No. 656516/2021 (the “MCSDF guaranty action”). EB-5 defendants also move pursuant to CPLR 3214(b) for an order staying all pretrial discovery in the various 215 Chrystie actions pending the court's determination of the pending dismissal motions.

CPLR § 602(a) authorizes the court to consolidate actions where they involve “a common question of law or fact” (see CPLR § 602(a); see also Teitelbaum v. PTR Co., 6 AD3d 254, 255 [1st Dep't 2004] [“Consolidation is mandated by judicial economy where lawsuits are intertwined with common questions of law and fact”]). Thus, a motion to consolidate should be granted where it will “avoid unnecessary duplication of trials, save unnecessary costs and expense and prevent the injustice which would result from divergent decisions based on the same facts” (Chinatown Apartments, Inc. v. New York City Transit Auth., 100 AD2d 824, 825 [1st Dep't 1984]). And while a motion for consolidation is left in the sound discretion of the court, it is the obligation of the party seeking such consolidation to specify common issues of law and fact which justify such consolidation, and in the absence of such showing the court should deny consolidation (RCN Const. Corp. v Fleet Bank, N.A., 34 AD3d 776, 777-78 [2nd Dep't 2006]).

Here, defendants do not specify any such common issues of law or fact which might exist between this action, on the one hand, and the MCSDF contract action or the MCSDF guaranty action on the other hand, and instead merely repeat in conclusory fashion that “[i]t cannot be credibly disputed that this action, [and the MCSDF Contract Action and the MCSDF Guaranty Action] are intertwined with common questions of law and fact.” Defendants reference a number of cases which hold that, once the moving party has sufficiently established the existence of common questions of law and fact, it is the other party's obligation to demonstrate the existence of prejudice to oppose consolidation. However, in the cases cited by defendants, the party seeking consolidation actually made the requisite showing, while here, defendants have made no more than perfunctory, non-specific assertions which fail to support their motion, and as such, the burden does not shift to plaintiffs (Bank of Am. v Airport Auto Group, 2008 WL 4212445 at *3 [Sup Ct Nassau Co., 2008] [demonstration of “prejudice to a substantial right is irrelevant, because (moving party) has failed to sufficiently show that the two actions present common questions of fact and law. Therefore, the commonality requirement of CPLR 602(a) is not satisfied”]).

Moreover, plaintiffs’ claims herein are direct and personal, sounding in pre-contractual, pre-investment fraudulent inducement and breaches of fiduciary duty stemming from defendants’ pre-contractual, pre-investment status as promoters of the project. The claims in the MCSDF contract action and the MCSDF guaranty action all stem from breaches of contract. On that basis, it is appropriate to deny consolidation of the plaintiffs’ pre-contractual tort claims, sounding in fraud and breach of fiduciary duty, with the MCSDF's naturally post-contractual breach of contract claims (Screen Gems-Columbia Music, Inc. v Hansen Publications, Inc., 42 AD2d 897 [1st Dep't 1973] [“There are not sufficient mutual issues of law and fact to warrant consolidation. Moreover, one action is in contract, while the other sounds chiefly in tort, and the single fact that they arise out of the same relationship does not warrant consolidation”]). Where, as here, one action sounds in pre-contractual fraud and breaches of duty and the other actions involve breach of contract, there has been no showing of overlapping proof for the claims asserted, and consolidation should properly be denied (Beerman v Morhaim, 17 AD3d 302, 303 [2nd Dep't 2005] [“[E]ven though both actions arise out of the same transaction, there was no showing that the proof with respect to each action overlaps. Thus, the identity of facts is insufficient to merit consolidation of the actions. Accordingly, the Supreme Court providently exercised its discretion in denying the motion”]).

And to the extent that there are fears of duplication of efforts or inconsistent results those issues can be dealt with in the future in ways that do not involve full consolidation of these action. For instance, the parties in all three actions can work together to streamline discovery on a joint schedule so that it is not duplicative. Further, that the separate actions are on the docket of the same judge should eliminate any concern regarding inconsistent results.

Finally, with respect to defendants’ motion for a stay of discovery, such motion is denied. New York County Commercial Division rule 11(g) places the imposition of a discovery stay, pursuant to CPLR 3214(b), within the sound discretion of the court (Matter of Grisi v Shainswit, 119 AD2d 418, 421 [1st Dep't 1986] [courts have the inherent power, and indeed responsibility, so essential to the proper administration of justice, to control their calendars and to supervise the course of litigation before them]). Nothing in the record on defendants’ motion before this court persuades it that the invocation of a discovery stay is warranted.

Accordingly, it is herby

ORDERED that the motion for consolidation by defendants is denied; and it is further

ORDERED that the motion for discovery stay is denied.

Robert R. Reed, J.