Issue Joined before motion for joint trial
Ehrlich v. Froehlich, 18 Misc.3d 1134(A) (2008)
859 N.Y.S.2d 894, 2008 N.Y. Slip Op. 50306(U)
18 Misc.3d 1134(A)
Unreported Disposition
NOTE: THIS OPINION WILL NOT BE PUBLISHED
IN A PRINTED VOLUME. THE DISPOSITION
WILL APPEAR IN A REPORTER TABLE.
Supreme Court, Nassau County, New York.
Mel EHRLICH and Daniel Ehrlich, Plaintiff,
v.
Randolph FROEHLICH, William Froehlich, Michael
Loturco, Paul V. Craco and Mark D. Mermel, and
the Christopher Companies, Ltd., Defendants.
No. 2628–04.
| 2005 order which granted Plaintiffs' motion for leave
Jan. 28, 2008.
Attorneys and Law Firms
Robert L. Folks & Associates, LLP, Melville, for
Plaintiffs.
Philips Nizer, Esq., Garden City, for Plaintiffs in the
Suffolk Co. Action.
Craco & Ellsworth, Esqs. Huntington, for Paul V. Craco.
L'Abbate, Balkan, Colavita & Contini, LLP, Garden City,
for Mark D. Mermel.
Certilman, Balin, Adler & Hyman, LLP, Hauppauge, for
Randolph Froehlich.
Berkman, Henoch, Peterson & Peddy, P.C., Garden City,
for Christopher Companies, Ltd.
Michael Loturco, Huntington, pro se.
Opinion
LEONARD B. AUSTIN, J.
*1 Defendant, Randolph Froehlich (“Froehlich”),
moves to consolidate an action commenced in Supreme
Court, Suffolk County captioned Sandpit Operations
Partners Inc., and Daniel Erhlich, individually and
derivatively as a shareholder of Sandpit Operations
Partners, Inc., and as a partner in the General Partnership
between Michael Loturco and himself, Plaintiffs against
Sandpit Operations Partners Inc., as a nominal defendant,
Michael Loturco and Randolph Froehlich, Defendants,
© 2017 Thomson Reuters. No claim to original U.S. Government Works.
Suffolk County, Index No. 27959/07 (“Suffolk County
Action”) with this action (“Nassau County Action”),
extending Froehlich's time to appear, answer and move
in the Suffolk County Action pending the further order
of this Court and staying all proceedings in both actions
pending further order of this Court.
BACKGROUND
A.Nassau County Action 1
1 Copies of the pleadings in the Nassau County
Action are not attached to the motion papers. The
factual background relating to the Nassau County
Action is derived from this Court's October 25,
to serve a supplemental summons and amended
complaint adding The Christopher Companies, Ltd.
as Defendant herein.
Reduced to its basics, the Nassau County Action is
an action brought by Plaintiff, Mel Ehrlich (“Mel”), to
recover on a $145,000 loan.
Defendants, William Froehlich and Randolph Froehlich
(collectively “Froehlich”), own real property in Yaphank,
New York. At the time of the transactions alleged in
the Nassau County Action, the Froelich property was an
inactive sand mine. The property allegedly had substantial
value as a commercial sand mine and/or for residential real
estate development.
Mel, who is in the real estate development business,
introduced the Froehlichs to Defendant, The Christopher
Companies, Ltd. (“CCL”). As a result of this
introduction, CCL supposedly entered into a contract to
purchase and develop the property.
Mel alleges that disputes arose between CCL and the
Froehlichs. As a result, CCL never purchased the
property. CCL then supposedly brought an action to
recover the deposit it had paid on contract.
At that point, Plaintiff, Daniel Ehrlich (“Daniel”), was
approached by Defendant, Michael Loturco (“Loturco”).
Loturco proposed that Daniel and he enter into an
agreement to lease or purchase the property from the
Froehlichs subject to the resolution of the litigation then
pending between CCL and the Froehlichs.
1
Ehrlich v. Froehlich, 18 Misc.3d 1134(A) (2008)
859 N.Y.S.2d 894, 2008 N.Y. Slip Op. 50306(U)
During the course of the negotiations between Daniel and
Loturco, Daniel introduced Mel to Loturco. Mel advised
Loturco that he would like to acquire an interest in the
property.
At Loturco's request, Mel wired $10,000 to Kennedy
Funding, Inc. to obtain a loan commitment on the
property.
Loturco then advised Mel and Daniel that, in exchange
for a loan of $145,000, which would be used to settle
the litigation between the Froehlichs and CCL, Mel and
Daniel would receive a 25% interest in the corporation
Loturco was forming for the purpose of entering into a
long-term lease on the property with the Froehlichs.
The proposed corporation would operate a sand mine on
one-half of the property and would develop the other half
for residential use. Once the sand assets on the property
had been exhausted, that portion would be developed for
residential use as well.
*2 Mel agreed to make the loan to Loturco provided that
the loan was collateralized. Loturco allegedly agreed to
give Mel a security interest in certain heavy equipment.
Loturco was supposed to have his attorney, Defendant,
Paul V. Craco, Esq. (“Craco”), prepare the necessary
documents to reflect Mel's security interest in the heavy
equipment and have them executed by Loturco. Craco
was also supposed to prepare, for Loturco's signature,
the UCC Financing Statements evidencing Mel's security
interest in the heavy equipment. Craco was then to file
those statements
Mel claims that he was advised that all the necessary
documents had been prepared, executed and filed. He
then wired $145,000 into the attorney trust account of
Defendant, Mark D. Mermel, Esq. (“Mermel”) with the
understanding that Mermel was not to disburse any of the
money until Mermel and Mel had confirmed that all the
necessary documents relating to Mel's security interest had
been signed and filed.
Loturco never signed the security agreement or the UCC
Financing Statements. Mel alleges that Loturco never
formed a corporation to enter into the long-term lease on
the property with the Froehlichs. Despite this, Mermel
disbursed the money to settle the litigation between CCL
and the Froehlichs.
© 2017 Thomson Reuters. No claim to original U.S. Government Works.
Mel alleges that, during the course of discovery, he
learned that the Froehlichs had entered into a contract
to sell the property to Sandpit Operations Partners, LLC
(“Sandpit”); not CCL. Sandpit assigned its interest in the
contract to Zion Investments, Inc. (“Zion”). Mel alleges
that Loturco controls both Sandpit and Zion.
It is Mel's claim that the entire scenario was an elaborate
scheme to defraud him.
Mel has never been repaid. Neither Daniel nor he have
received an interest in the property or any business entity
formed for the purpose of leasing or purchasing the
property. In the Nassau Action, Mel and Daniel have sued
everyone involved in the alleged scheme to recover this
money.
The Nassau County Action has proceeded to the point
where discovery is significantly, if not fully, completed.
The action should be certified for trial shortly.
B. Suffolk County Action
The Suffolk County Action was commenced in September
2007. The action seeks specific performance of two
agreements.
The first agreement is an August 16, 2001 letter signed
by Daniel and Loturco. The purpose of the letter was
to memorialize their agreement relating to the purchase
and development of the Froehlichs' Yaphank property.
The letter references a corporation formed or to be
formed. Loturco was to have a 75% interest in the
corporation, while Daniel was to have a 25% interest
in the corporation. The letter reflects that Daniel was
to obtain a $145,000 loan for the business. The letter
further reflects the loan was to be collateralized and that
Daniel and Loturco would be personally liable to repay
the loan. The letter contains other information regarding
Loturco and Daniel's respective interests and positions in
the corporation to be formed. The final sentence of their
letter reflects that Loturco and Daniel were to complete a
formal agreement within 30 days of the date of the letter.
*3 Since Loturco and Daniel did not enter into
the formal agreement and Loturco never formed the
corporation envisioned by the letter, the complaint in
the Suffolk County Action characterizes this letter as
creating a joint venture or partnership between Loturco
2
Ehrlich v. Froehlich, 18 Misc.3d 1134(A) (2008)
859 N.Y.S.2d 894, 2008 N.Y. Slip Op. 50306(U)
and Daniel. Daniel seeks to cancel Loturco's interest in the
joint venture or partnership as a result of Loturco's failure
to comply with the agreement.
Alternatively, Daniel alleges that he formed Sandpit as the
corporation referenced by the August 16, 2001 letter.
The second agreement is a letter dated August 22, 2001
sent by Loturco's attorney to the Froehlichs' attorney
indicating that the pending litigation regarding the
Yaphank property was being settled and discontinued.
The letter further indicates that upon discontinuance
of the litigation, the Froehlichs had agreed to sell the
property to Loturco or a corporation he was forming
for that purpose. The letter contains a purchase price
and various other terms regarding the proposed sale. The
letter indicates possession was to be delivered on of before
September 7, 2001. The letter further states:
“It is understood by both
Mr. Loturco and your clients
[the Froehlichs] that the above
represents a recitation of the
intention to enter into a contract in
the future, and the above terms and
conditions are subject to alteration
at the parties wishes.”
The letter indicates that if the stated terms were acceptable
to the Froehlichs, then it should be signed by Randolph
Froehlich. Randolph Froehlich signed the letter.
Froehlich and Loturco never entered into the contract
contemplated in the August 22, 2001 letter. Apparently,
the Froehlichs have never sold the property to Loturco or
anyone else.
Daniel alleges that the August 21, 2001 letter constitutes
a contract to sell the property. The complaint alleges
that Sandpit, as Loturco's undisclosed principal, has the
right to enforce the contract. The complaint seeks specific
performance of the contract on behalf of Sandpit.
Alternatively, the complaint alleges that Daniel, as a
general partner, seeks to compel specific performance on
behalf of the Daniel–Loturco joint venture/partnership.
Issue has not yet been joined in the Suffolk County Action.
The order to show cause granted by this Court stayed all
© 2017 Thomson Reuters. No claim to original U.S. Government Works.
proceedings in the Suffolk County Action pending further
order of this Court.
DISCUSSION
CPLR 602(b) permits the Supreme Court to remove
to itself an action pending in another court and direct
consolidation or joint trial. Consolidation or joint trial
will be directed only if the cases involve common questions
of law or fact. CPLR 602(a).
Consolidation is inappropriate where the cases involve
different factual or legal issues. Pau v. Bellavia, 145
A.D.2d 609 (2nd Dept.1988).
Froehlich fails to establish that the Nassau County and
Suffolk County Actions involve common questions of law
and fact. Mel is not a party to the Suffolk County Action.
None of the causes of action he asserts in the Nassau
County Action are involved in any of the causes of action
plead in the Suffolk County Action. In fact, Mel opposes
consolidation of these actions
*4 Mel is seeking to recover on a $145,000 loan. The
questions of law and fact raised in the Nassau County
Action involve to whom did Mel loan the money, was
it properly disbursed and who is obligated to make
repayment.
The Suffolk County Action involves causes of action for
specific performance. Mel is not a party to the contracts
that give rise to those causes of action. Neither are Craco,
Mermel or CCL, who are Defendants in the Nassau
County Action. The questions of law and fact in the
Suffolk County Action involve the question of whether
the writings upon which Daniel relies are enforceable
contracts and, if so, what rights does Daniel or Sandpit
have, if any, pursuant to those contracts.
One of the primary reasons for directing consolidation or
joint trial is to avoid irreconcilably inconsistent results.
Dolce v. Jones, 145 A.D.2d 594 (2nd Dept.1988). Since
Mel is not a party to the Suffolk County Action and the
causes of action he pleads in the Nassau County Action
are not involved in or affected by the causes of action
alleged in the Suffolk County Action, the possibility of
irreconcilably inconsistent results is not a real concern.
3
Ehrlich v. Froehlich, 18 Misc.3d 1134(A) (2008)
859 N.Y.S.2d 894, 2008 N.Y. Slip Op. 50306(U)

In addition, where discovery in one action is significantly Finally, consolidation in Nassau County would be
improper. CPLR 507 requires that venue of an action
completed and is still at the pleadings stage in the
affecting title to or use, possession or enjoyment of real
other action, a party establishes significant prejudice
property be in the county in which the property is located.
to a substantial right requiring that consolidation be
The Suffolk County Action seeks specific performance of
denied. Smith v. Smith, 261 A.D.2d 928 (4th Dept.1999).
a contract to sell real property located in Suffolk County.
Discovery in the Nassau County Action is substantially,
If the Court were to grant consolidation, and it is not,
if not fully, completed. The attorneys have completed 15
the mandatory venue provisions of CPLR 507 would
days of depositions. Most, if not all, of the document
require that consolidation be in Suffolk County. GAM
discovery has been completed. The Nassau County Action
Property Corp. v. Sorrento Lactalis, Inc., 41 AD3d 645
is or will shortly be ready for trial.
(2nd Dept.2007). Such a result would be unfair to the
parties in the Nassau County Action. For this reason as
The Suffolk County Action was commenced in September
well, the motion must be denied.
2007. Issue has not yet been joined. A preliminary
conference has not been held. Discovery has not been
*5 Accordingly, it is,
begun. Based upon a reading of the complaint and the
documents upon which Daniel relies as the basis for his
ORDERED, that Froehlich's motion to consolidate is
causes of action, this Court believes that Froehlich is
denied; and it is further,
likely to move to dismiss the Suffolk County Action.
A motion to dismiss the Suffolk County Action would
ORDERED, that Froehlich's time to answer or move in
extend Froehlich's time to serve a responsive pleading
regard to the complaint in the Suffolk County Action is
pending the hearing and determination of that motion.
hereby extended for a period of twenty (20) days from the
CPLR 3211(f). Even if the motion to dismiss is denied, in
service of this order with notice of entry; and it is further,
whole or in part, issue will not be joined and discovery in
the Suffolk County Action will not commence for months.
This constitutes the decision and order of this Court.
Given the nature of the issues involved and the discovery
that will have to be conducted, the Suffolk County Action
will almost certainly not be ready for trial for a substantial All Citations
period of time. Under such circumstances, consolidation
is inappropriate. Dias v. Berman, 188 A.D.2d 331 (1st 18 Misc.3d 1134(A), 859 N.Y.S.2d 894 (Table), 2008 WL
Dept.1992). 465276, 2008 N.Y. Slip Op. 50306(U)

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© 2017 Thomson Reuters. No claim to original U.S. Government Works. 4