Preview
INDEX NO. 651885/2010
FILED: NEW YORK COUNTY CLERK 08/17/2011
NYSCEF DOC. NO. 65 RECEIVED NYSCEF: 08/17/2011
SUPREME COURT OF THE STATE OF NEW YORK
COUNTY OF NEW YORK Index No. 651885/2010
a aaa one ~X
JMB APPAREL DESIGNER GROUP, INC.
Plaintiff, AFFIRMATION IN
OPPOSITION TO ORDER
- against - TO SHOW CAUSE FOR
COST SANCTIONS OF
$7,658.50 [or $11,000.00]
ROBERT S. AROCHAS, D-NACH, LTD, and FOR 2 LETTERS TO PUT
FAB MILL, INC., RELEVANT, MATERIAL
INFORMATION INTO
Defendants. THE NYSCEFRECORD &
TO ADVISE THE COURT
a ee nae renee
JOSEPH H. ADAMS, being duly admitted to practice law in New York, affirms
1 Iam counsel for JMB Apparel Designer Group, Inc. ("JMB") in this action,
and I am familiar with the circumstances set forth below. I submit this affirmation in
response to the application, ostensibly brought as an “emergency” application to block
the submission of simple consolidation motion between this action, and another one
commenced by the defendants’ counsel, in the manner discussed below, In the second-
filed action defendant Robert Arochas ( Arochas”) asserts claims that are literally
identical to those asserted in his counterclaims in the captioned action, to wit: alleged
claims fora 20% profit interest in the JMB business. The only difference in the pleading
in the new action is that three individuals are alleged to be liable for the profit share
claim, in addition to JMB, as to whom the profit share claim in the new action is literally
identical to the one asserted in the counterclaims in the captioned action. As a matter of
1
fact, the counterclaim document purported to assert claims against at least two of th
individuals (Choy and Law) but neglected to bring them in as parties with a summons,
2 The short answer to the opposition to the consolidation motion, and this
over-the-top sanctions application, which generates fees in its making which are then
supposedly the proper basis for a sanctions award, is that the identical claims in the two
pleadings by Arochas justify the consolidation of the two actions, independently of the
content or subject matter of the main claims in the complaint, or the pendency of the
dismissal motion brought by Arochas’ counsel, who apparently can churn legal fees toa
fare-thee-well. Thad intended to file the consolidation motion originally as a cross-
motion to the pending motion to dismiss but was unable to do so, given the amount of
work needed to address and answer that motion. This consolidation has been discussed
from day one in that regard, with opposing counsel declining to consolidate, and that
denial has continued up to and including the last set of demands that consolidation be
set aside, until the motion to dismiss is determined. | rejected that request for cause.
3) Opposing counsel has gone to exceptional lengths to distract the Court
from this simple question posed by this simple motion: should identical pleadings
solely made by Arochas, which should have been pleaded in the original captioned
action to start with, be consolidated. The answer is yes. The objection to consolidation
arises solely and exclusively from the desire of opposing counsel to prevent the Court
for being able to see or to hear the fact, that, when pleading affirmative claims, in their
verified pleadings for Arochas, opposing counsel contradicts its position in support of
the motion to dismiss, i.e that Arochas is a free bird (aka employee-at will), against
whom no duty or obligation can exist after he left JMB, even though for his one claims,
Arochas alleges that he was so intimately involved in the origins and formation of the
JMB business that the company and its other participants owe him a fiduciary duty.
4 Defense counsel had every right or opportunity to answer and to oppose
the consolidation motion in the ordinary course, or as I suggested at the time, to consent
to it without prejudice to the outcome of the pending motion to dismiss, but that was
not enough. Defense counsel wanted to be sure that, under no circumstances could the
court learn of these pleadings until (they anticipated) that the dismissal motion would
be determined. I will detail that below, in summary manner, but when it became clear
to me that when defense counsel would do anything - literally - to prevent the Court
from having knowledge of this pleading (which should have been in this action from
the outset), then it became equally clear to me the Court should get the information.
5. The proposition put forward by defense counsel is that any attempt to
communicate with the Court, to advise of material and relevant information, which
Opposing counsel desires to keep from the Court, unless done with their consent, is a
sanctionable offense. I am confident that no rule permits such an anomaly to occur. If it
does, then I readily accept the Court's sanction, as I had a duty to inform the Court. I
request that any sanction be nominal for $1.0 and not an approved fee-churning event
for Mr. Skala’s law firm, [which has forced needless, costly litigation work by me in the
past. I have been discrete not to protest that conduct on behalf of his law firm but as
noted below, the costs incurred in the prior motion practice might be deemed an offset.]
6 The consolidation motion was properly made; the two pleadings made by
Arochas are identical; the latter-filed action (described below) should be consolidated,
just as to the pleadings made by Arochas, which should be in one action; the pendency
of the motion to dismiss, whatever its outcome, should not impede the consolidation.
It has been my intention to cross-move from the pending motion to dismiss, because the
full set of pleadings made by Arochas should have been before the Court on the motion,
but as a practical matter, I was unable to file such a motion given the amount of work
needed to be done to assemble timely the opposition by JMB to the dismissal motion.
7. At the time of these earlier filings, I had indicated to Mr. Skala that the
two actions should be consolidated; he declined to do so, and I later made this motion.
Once this motion was made, opposing counsel went to great lengths - I think willfully-
to delay it in the hopes that the dismissal motion would be decided before this motion
was filed. Originally , defendants’ counsel requested an adjournment because their
calendar was overloaded, and I agreed to adjourn this simple motion for one week.
They refused such an adjournment and insisted on going to Room 130 to get a three
week adjournment, which I originally opposed but later relented to give them. After
they got that adjournment, they demanded that the motion be withdrawn on grounds
that do not stand up. They insisted that the cases stated it was the “better practice” to
do so, but the cases cited bore no relation to such a general proposition’, and arose out
of different circumstances that bear no relation to the case where identical pleadings by
defendants’ counsel are pleaded by their own client in two filed actions for identical
claims (which incidentally impugn their main alleged defenses to the JMB complaint).
8 After getting their long adjournment, when defendants’ counsel refused
to permit the consolidation or the submission of the motion with an opposition (or the
acceptance of my own proposal to consent to consolidation, without prejudice to the
outcome of the dismissal motion). I was convinced that defendants’ counsel was not
acting in good faith, and their supposed principal objection to the consolidation was a
deliberate attempt to conceal contradictory pleadings made by them in this dispute.
9 That is when I wrote the August 3, 2011 letter, which I believe was entirely
appropriate. The verified pleadings of the parties, in the action, should be known to the
Court. In the nasty little whiplash exchange between myself and counsel, the statement
was made that the Court rules prohibited me from writing a letter to the Court. That is
not the case; it prohibits letters to the Court without prior discussion with opposing
counsel. We had the discussion; it is a repeat of the discussion had early this year. We
do not agree, and I wrote the letter to the Court. I believe that was appropriate. The
1 In Sokolow et.al v. Lacher, 299 A.D.2d 64, 747 N.Y S.2d 441 (1 Dept. 2002), in a major dispute
between law firms, a related action by one firm against its clients (for payments made to the adversary
firm) was deemed to be consolidated improperly, which as zip to do with Arochas’ identical pleadings. In
Schindler v. Niche Media Holdings LLC, 1 Misc. 3d 713, 772 N.Y.S.2d 781 (8.Ct. NY Co. 2003), a plaintiff
board chairman sued the CEO and the company Niche for various BCL based claims, and was denied the
right to consolidate third party claims against Niche’s accounting firm and others, where those claims
“ “profit-share” claims will go
were dependent on success in the underlying action. Here, Arochas identical
forward independently of the unlikely event the complaint is dismissed, and in fact that is the irony of
these claims: Arochas’ claims the accounting rights of an equity owner or partner, but without any duties.
5
demand thatI reject my own judgment as an advocate, and cower before a personal
threat of sanctions, to obey an incorrect statement of what the Court’s rules provide, i
not a proposition I could accept when I disagreed with counsel of all material points.
10. If this correspondence or motion violates any part rules, or commercial
division rules - and I do not believe it does - then I apologize to the Court, and I
suggest that a nominal sanction of $1.0 might be appropriate. However, counsel for Mr.
Arochas should not be permitted to turn an totally unnecessary order to show cause or
sanction motions motion into a fee-billing profit center for their law firm. I did not
notice the billing request when I was faxed part (or all) of that application, but it is a
little nuts to generate gratuitous and unneeded motion practice and then to demand
overstated billing of $11,000 for that unnecessary application be paid to the law firm.
11. There is an important issue involved on the merits, which is the fact that
defendants’ counsel affirmatively pleaded claims in the “new” action with its profit
sharing claims that are identical to the profit sharing claims in the first-filed and
captioned action. In this new action, Mr. Arochas affirmatively pleads that there was
established in the formation of JMB, by its “co-founders”, a fiduciary relationship as to
the new business they created, with Mr. Arochas the one person who performed the
essential sales and marketing work fo the new JMB business. On the motion to dismiss,
as the Court knows, Mr. Arochas - or his counsel, who brought his “ pants with two
legs” to the courthouse with the panache of vaudeville performer - claims that the idea
that any kind of obligation could exist, or survive departure by Arochas from JMB is so
inconsistent as a matter of law with his “at will” status that the complain can be
dismissed as a matter of law. Since this essential pleading is outside the case proper, it
is hidden from view or consideration by the Court, and I believe that is inappropriate.
12. Defendants’ does not want the Court to see the full pleadings in this case,
and I do. I have a professional obligation to prevent opposing counsel from hiding the
record of its own pleadings and if that is a sanctionable event, I am at fault thereon.
Since these pleadings are parked ina collateral action - for odd procedural reasons- it
took a motion to consolidate to do that and that motion should be granted by the Court.
13. The motion to consolidate should be granted on it merits, independently
of this collateral issue but that collateral issues relates to the integrity of the proceedings
before this Court. Defense counsel wants its full pleadings hidden, at any cost. That is
not , or should not be, an acceptable position or tactic in a litigation before this Court. I
have attached as Exhibit A, a copy of my short affirmation on the consolidation motion;
it raises the collateral point, as an information point; it argues on identify of pleadings.
14. The argument is made that I improperly forced the motion practice herein
(on the consolidation motion, not the sanctions motion, which is Mr. Skala’s election),
because I declined to sign a proffered stipulation to on the consolidation motion. The
short answer to that notion is that I first proposed an equally efficient agreement to
CONSENT to the consolidation, which could then be moot as to the main JMB
complaint in the unlikely event that the entire complaint was dismissed. I made that
offer less elegantly in my emai] (which was produced on the record) [I am correct my
email was not copied as an exhibit on the motion, and this clear omission makes the
application an intentionally misleading one]. As Exhibit B, that email states:
Gentlemen:
If you are perplexed by this issue, I suggest that you respond by submitting an
affirmation that states that you do not object to consolidation, in the event that the JMB
complaint is not dismissed. That would take one paragraph submission, and would
save you a lot of attorneys fees and existential angst and uncertainty.
Best wishes, in the warmth of our comraderie, and mutual professional respect.
15. Would that there had been a response to this email, other than the one
that insisted that an opposite formulation of the same suggestion by opposing counsel.
This was not so elegant, because it suggested a type of consent submission but it could
easily have been turned a stipulation, and the fundamental fact remains that the two
identical pleadings made by defendant's counsel required the consolidation in either
event whether the complaint is dismissed, or whether the complaint is sustained and
has to be answered. The motion practice could have been avoided on my proposal too.
16. At the time that these exchanges took place, I was involved in motion
practice that was urgent, and could not be set aside for game-playing ona minor point
of procedure, and the game-playing threat of sanctions. If I believe that information
is needed to be presented to the Court, and is affirmatively being withheld by opposing
counsel, in bad faith, then I cannot permit myself to respond to a sanction threat by not
coming forward with that evidence. For the Court and my client I have a higher
obligation. [Here hypothetically, Mr. Arochas could dismiss the complaint by dint of his
alleged exclusive “at will” employee status, and then return to sue as a fiduciary!!]”.
17, The threat was made that I violated a court rule that stated I could write
no letters to the Court. The rule cited in the papers of defense counsel, Rule 15, requires
counsel to consult before matters are brought to the Court by letter. We did that; we
disagreed about the consolidation motion; we exchanged emails, and had discussed the
issue much earlier in the case without agreeing, and then I filed the motion. My offer to
let the cases be consolidated, but being moot as to the complaint was rejected. Equally,
I was threatened with sanctions if I did not do as told, which is not acceptable. If we
disagree, we are entitled to go to the Court, but not required to cower out of fear. I hold
the opinion that the contradictory pleading needs to be known to the Court, and I acted.
18. The claim ~ which I see, reading the footnotes, escalates to $11,000.00 by
anticipating a court appearance at the high billing rates of my distinguished adversary -
argues that I intended to harass by forcing counsel to do motions for excessive billing.
[This is not so because opposition to the motion, might take an hour, at most.] This is a
claim of a pot calling the kettle black variety. Let’s look at how defense counsel acted
in the past. In doing so, I will refrain from making a fee application to that law firm.
19. As the pleading states (I am not producing the entire record on the prior
consolidation motion, but I request that Court to take judicial notice of it), this new
action was filed in January 2011, at a time when I had offered to accept service of
2 Cf. Chinatown Apartments Inc. v. New York Transit Authority, 100 A.D.2d 824, 747 N.Y.S.2d
763 (1° Dept. 1984)(Consolidation is appropriate where it will avoid unnecessary duplication of trials, save
unnecessary costs and expense and prevent the injustice ... from divergent decisions based on the same facts).
9
summons in the first-filed captioned action for the individual defendants, [subject to my
clients’ approval which was forthcoming]. I made the mistake -- and it was a mistake --
in delaying the response to this requests, although counsel never produced Rule 306
summons as I expected, and I had waited to join the individual defendants by consent
before answering counterclaims pleaded against JMB. Defendants’ moved for default.
20. Texplained the error to opposing counsel, but there was no way to
withdraw the default motion on the profit sharing claims, as their “client” would not
authorize it. After the default motion was filed, my opposing counsel THEN sought for
the first time to file a new action with a new summons on the individuals, instead of
joining them by consent as had been discussed, although that complaint had been filed
without my knowledge in January. I was required to answer the default motion which I
did by a well-prepared affirmation and memorandum (respectively Exhibits C and D),
when there was more important substantive work to be done on the dismissal motion to
respond to that motion. That work distracted me from the substantive motions, and it
interfered with my response to the main motion, which was clearly part of its motive.
My opposing papers, which were filed and served, would have shown that no default
was proper. Then, and only then after full briefing of the motion for a default, would
opposing counsel withdraw the motion. My billing for that work was much really more
substantial (at my lower rates) ,than the work sought to be reimbursed on this motion?
3 That application also interfered with the submission of evidence. I had wanted to submit the
JMB financials both in response to the default application and on the main motion, but counsel would not
accept a stipulation that Arochas could not retain a physical copy of the financials. Thus, I could not file
them, and the logistics of making a special sealing order application was too much for the point. I had to
10
21. That attempt to default exploited an honest mistake and confusion about
how we were going to join the individuals by consent; in a case where counsel were
supposedly cooperating to frame issues on a professional basis, it was not a motion that
was required, as a default could not properly have been granted, but opposing counsel
forced the legal work to be done, either to interfere with preparation of opposition to
the motion to dismiss, or to attempt to embarrass me in front of my client re the default.
22. When such advantage is sought, opposing counsel has no compunction
about forcing unnecessary motion practice, or burdening the opposition with it. On this
order to show cause application, the comparison of the work to answer and to defeat, if
appropriate - it could not be appropriate, as the two Arochas pleadings are identical - is
modest compared to the inflated cost and intended distraction of this sanctions motion.
23. The consolidation should be granted; the order to show cause denied, or if
a sanction is ordered, it should be a nominal sanction of $1.0, forgiven for good cause.
24. Asa last word on this opposition, the objection is made to a letter that was
sent to the Court after the argument. At the time of argument, I was unable to include
in my argument a number of points because, as the Court noted, there were other cases
pending, and there were points relating to the content of case law and other matters
that I had wanted to present to the Court. I believe it was appropriate to do so, as my
argument had been cut off, despite a request to respond to Mr. Skala’s argument, which
ran somewhat afield from arguments properly heard on a motion to dismiss, by giving
rely on a summary of the basic financial information which was stated in the affidavit of Marcella Law.
li
his characterization of fact disputes (e.g. an estoppel claim based on Arochas’ insistence
as the primary (99%) salesperson, on using the Atelier mark he knew was not registered
etc. ). [also submitted on the NYSCEF filing a copy of an affidavit the content of which
was presented in the oral argument. | had referenced this affidavit and its contents, on
the argument and the statements therein - by the knowledgeable buyers who are the
main clientele of JMB or of Arochas’ new company selling Atelier Luxe garments - are
clearly material and relevant. They acknowledge undisputed confusion as to the names
used by each party - Atelier by JMB, and Atelier Luxe by Arochas - by persons who
know, and the fact of confusion is central to an unfair competition case like that herein.
I think a lawyer that fails to include in the court record, a document of that nature with
material information on the issues, is negligent. If the Court elects to disregard that
affidavit, that is its prerogative but the submission itself should be part of the record.
25. The protested June 28, 2011 letter was intended to finish my argument
after Mr. Skala walked out of the well doing high-fives with his client after I was not
allowed to respond to his arguments. If one reviews that letter, the main, or a major
focus, of the June 28, 2011 letter, about which protest now is also made (perhaps again
to distract from the merits) was the specific content of cases that bore directly on the
issues, and which may not have been fully emphasized in the submitted memorandum.
26. Mr. Skala also makes reference to ComDiv rule 18, re sur-replies. I do not
think that either of these documents are properly dubbed sur-replies: the June 28, 2011
letter completed by my oral argument and highlighted parts of the cited cases, and the
12
later letter to advise the Court of the contradictory pleadings in the related case that
should have been before the Court as a pleading in the captioned case in any event.
27. Equally to the point, Rule 18 provides its own remedy; the court may
ignore the submissions, and opposing counsel is specifically instructed not to respond.
Opposing counsel has breached that rule by this application, which should be denied.
28. As Exhibit E, I attach my reply on thee consolidation motion. The two
pleadings I referenced from Arochas are part of the record, but I will copy them here as
Exhibits Fand G so that the main point; that Arochas’ pleaded identical claims, which
provides no ground for opposing the consolidation motion in good faith. As both of the
case cited by defense counsel about the “better practice” of not trying to consolidate
actions, cited ina prior footnote, both cases state that the party that opposes a motion to
consolidate has a “heavy burden” to establish such opposition when common issues of
fact and law exists. In a case where the pleadings are identical, that burden is not met.
CONCLUSION
29. The order to show cause should be denied; e two actions consolidated
Dated: August 17, 2011 —__}—
Jos¢ph H Adams
13
Preview
INDEX NO. 651885/2010 FILED: NEW YORK COUNTY CLERK 08/17/2011 NYSCEF DOC. NO. 65 RECEIVED NYSCEF: 08/17/2011 SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK Index No. 651885/2010 a aaa one ~X JMB APPAREL DESIGNER GROUP, INC. Plaintiff, AFFIRMATION IN OPPOSITION TO ORDER - against - TO SHOW CAUSE FOR COST SANCTIONS OF $7,658.50 [or $11,000.00] ROBERT S. AROCHAS, D-NACH, LTD, and FOR 2 LETTERS TO PUT FAB MILL, INC., RELEVANT, MATERIAL INFORMATION INTO Defendants. THE NYSCEFRECORD & TO ADVISE THE COURT a ee nae renee JOSEPH H. ADAMS, being duly admitted to practice law in New York, affirms 1 Iam counsel for JMB Apparel Designer Group, Inc. ("JMB") in this action, and I am familiar with the circumstances set forth below. I submit this affirmation in response to the application, ostensibly brought as an “emergency” application to block the submission of simple consolidation motion between this action, and another one commenced by the defendants’ counsel, in the manner discussed below, In the second- filed action defendant Robert Arochas ( Arochas”) asserts claims that are literally identical to those asserted in his counterclaims in the captioned action, to wit: alleged claims fora 20% profit interest in the JMB business. The only difference in the pleading in the new action is that three individuals are alleged to be liable for the profit share claim, in addition to JMB, as to whom the profit share claim in the new action is literally identical to the one asserted in the counterclaims in the captioned action. As a matter of 1 fact, the counterclaim document purported to assert claims against at least two of th individuals (Choy and Law) but neglected to bring them in as parties with a summons, 2 The short answer to the opposition to the consolidation motion, and this over-the-top sanctions application, which generates fees in its making which are then supposedly the proper basis for a sanctions award, is that the identical claims in the two pleadings by Arochas justify the consolidation of the two actions, independently of the content or subject matter of the main claims in the complaint, or the pendency of the dismissal motion brought by Arochas’ counsel, who apparently can churn legal fees toa fare-thee-well. Thad intended to file the consolidation motion originally as a cross- motion to the pending motion to dismiss but was unable to do so, given the amount of work needed to address and answer that motion. This consolidation has been discussed from day one in that regard, with opposing counsel declining to consolidate, and that denial has continued up to and including the last set of demands that consolidation be set aside, until the motion to dismiss is determined. | rejected that request for cause. 3) Opposing counsel has gone to exceptional lengths to distract the Court from this simple question posed by this simple motion: should identical pleadings solely made by Arochas, which should have been pleaded in the original captioned action to start with, be consolidated. The answer is yes. The objection to consolidation arises solely and exclusively from the desire of opposing counsel to prevent the Court for being able to see or to hear the fact, that, when pleading affirmative claims, in their verified pleadings for Arochas, opposing counsel contradicts its position in support of the motion to dismiss, i.e that Arochas is a free bird (aka employee-at will), against whom no duty or obligation can exist after he left JMB, even though for his one claims, Arochas alleges that he was so intimately involved in the origins and formation of the JMB business that the company and its other participants owe him a fiduciary duty. 4 Defense counsel had every right or opportunity to answer and to oppose the consolidation motion in the ordinary course, or as I suggested at the time, to consent to it without prejudice to the outcome of the pending motion to dismiss, but that was not enough. Defense counsel wanted to be sure that, under no circumstances could the court learn of these pleadings until (they anticipated) that the dismissal motion would be determined. I will detail that below, in summary manner, but when it became clear to me that when defense counsel would do anything - literally - to prevent the Court from having knowledge of this pleading (which should have been in this action from the outset), then it became equally clear to me the Court should get the information. 5. The proposition put forward by defense counsel is that any attempt to communicate with the Court, to advise of material and relevant information, which Opposing counsel desires to keep from the Court, unless done with their consent, is a sanctionable offense. I am confident that no rule permits such an anomaly to occur. If it does, then I readily accept the Court's sanction, as I had a duty to inform the Court. I request that any sanction be nominal for $1.0 and not an approved fee-churning event for Mr. Skala’s law firm, [which has forced needless, costly litigation work by me in the past. I have been discrete not to protest that conduct on behalf of his law firm but as noted below, the costs incurred in the prior motion practice might be deemed an offset.] 6 The consolidation motion was properly made; the two pleadings made by Arochas are identical; the latter-filed action (described below) should be consolidated, just as to the pleadings made by Arochas, which should be in one action; the pendency of the motion to dismiss, whatever its outcome, should not impede the consolidation. It has been my intention to cross-move from the pending motion to dismiss, because the full set of pleadings made by Arochas should have been before the Court on the motion, but as a practical matter, I was unable to file such a motion given the amount of work needed to be done to assemble timely the opposition by JMB to the dismissal motion. 7. At the time of these earlier filings, I had indicated to Mr. Skala that the two actions should be consolidated; he declined to do so, and I later made this motion. Once this motion was made, opposing counsel went to great lengths - I think willfully- to delay it in the hopes that the dismissal motion would be decided before this motion was filed. Originally , defendants’ counsel requested an adjournment because their calendar was overloaded, and I agreed to adjourn this simple motion for one week. They refused such an adjournment and insisted on going to Room 130 to get a three week adjournment, which I originally opposed but later relented to give them. After they got that adjournment, they demanded that the motion be withdrawn on grounds that do not stand up. They insisted that the cases stated it was the “better practice” to do so, but the cases cited bore no relation to such a general proposition’, and arose out of different circumstances that bear no relation to the case where identical pleadings by defendants’ counsel are pleaded by their own client in two filed actions for identical claims (which incidentally impugn their main alleged defenses to the JMB complaint). 8 After getting their long adjournment, when defendants’ counsel refused to permit the consolidation or the submission of the motion with an opposition (or the acceptance of my own proposal to consent to consolidation, without prejudice to the outcome of the dismissal motion). I was convinced that defendants’ counsel was not acting in good faith, and their supposed principal objection to the consolidation was a deliberate attempt to conceal contradictory pleadings made by them in this dispute. 9 That is when I wrote the August 3, 2011 letter, which I believe was entirely appropriate. The verified pleadings of the parties, in the action, should be known to the Court. In the nasty little whiplash exchange between myself and counsel, the statement was made that the Court rules prohibited me from writing a letter to the Court. That is not the case; it prohibits letters to the Court without prior discussion with opposing counsel. We had the discussion; it is a repeat of the discussion had early this year. We do not agree, and I wrote the letter to the Court. I believe that was appropriate. The 1 In Sokolow et.al v. Lacher, 299 A.D.2d 64, 747 N.Y S.2d 441 (1 Dept. 2002), in a major dispute between law firms, a related action by one firm against its clients (for payments made to the adversary firm) was deemed to be consolidated improperly, which as zip to do with Arochas’ identical pleadings. In Schindler v. Niche Media Holdings LLC, 1 Misc. 3d 713, 772 N.Y.S.2d 781 (8.Ct. NY Co. 2003), a plaintiff board chairman sued the CEO and the company Niche for various BCL based claims, and was denied the right to consolidate third party claims against Niche’s accounting firm and others, where those claims “ “profit-share” claims will go were dependent on success in the underlying action. Here, Arochas identical forward independently of the unlikely event the complaint is dismissed, and in fact that is the irony of these claims: Arochas’ claims the accounting rights of an equity owner or partner, but without any duties. 5 demand thatI reject my own judgment as an advocate, and cower before a personal threat of sanctions, to obey an incorrect statement of what the Court’s rules provide, i not a proposition I could accept when I disagreed with counsel of all material points. 10. If this correspondence or motion violates any part rules, or commercial division rules - and I do not believe it does - then I apologize to the Court, and I suggest that a nominal sanction of $1.0 might be appropriate. However, counsel for Mr. Arochas should not be permitted to turn an totally unnecessary order to show cause or sanction motions motion into a fee-billing profit center for their law firm. I did not notice the billing request when I was faxed part (or all) of that application, but it is a little nuts to generate gratuitous and unneeded motion practice and then to demand overstated billing of $11,000 for that unnecessary application be paid to the law firm. 11. There is an important issue involved on the merits, which is the fact that defendants’ counsel affirmatively pleaded claims in the “new” action with its profit sharing claims that are identical to the profit sharing claims in the first-filed and captioned action. In this new action, Mr. Arochas affirmatively pleads that there was established in the formation of JMB, by its “co-founders”, a fiduciary relationship as to the new business they created, with Mr. Arochas the one person who performed the essential sales and marketing work fo the new JMB business. On the motion to dismiss, as the Court knows, Mr. Arochas - or his counsel, who brought his “ pants with two legs” to the courthouse with the panache of vaudeville performer - claims that the idea that any kind of obligation could exist, or survive departure by Arochas from JMB is so inconsistent as a matter of law with his “at will” status that the complain can be dismissed as a matter of law. Since this essential pleading is outside the case proper, it is hidden from view or consideration by the Court, and I believe that is inappropriate. 12. Defendants’ does not want the Court to see the full pleadings in this case, and I do. I have a professional obligation to prevent opposing counsel from hiding the record of its own pleadings and if that is a sanctionable event, I am at fault thereon. Since these pleadings are parked ina collateral action - for odd procedural reasons- it took a motion to consolidate to do that and that motion should be granted by the Court. 13. The motion to consolidate should be granted on it merits, independently of this collateral issue but that collateral issues relates to the integrity of the proceedings before this Court. Defense counsel wants its full pleadings hidden, at any cost. That is not , or should not be, an acceptable position or tactic in a litigation before this Court. I have attached as Exhibit A, a copy of my short affirmation on the consolidation motion; it raises the collateral point, as an information point; it argues on identify of pleadings. 14. The argument is made that I improperly forced the motion practice herein (on the consolidation motion, not the sanctions motion, which is Mr. Skala’s election), because I declined to sign a proffered stipulation to on the consolidation motion. The short answer to that notion is that I first proposed an equally efficient agreement to CONSENT to the consolidation, which could then be moot as to the main JMB complaint in the unlikely event that the entire complaint was dismissed. I made that offer less elegantly in my emai] (which was produced on the record) [I am correct my email was not copied as an exhibit on the motion, and this clear omission makes the application an intentionally misleading one]. As Exhibit B, that email states: Gentlemen: If you are perplexed by this issue, I suggest that you respond by submitting an affirmation that states that you do not object to consolidation, in the event that the JMB complaint is not dismissed. That would take one paragraph submission, and would save you a lot of attorneys fees and existential angst and uncertainty. Best wishes, in the warmth of our comraderie, and mutual professional respect. 15. Would that there had been a response to this email, other than the one that insisted that an opposite formulation of the same suggestion by opposing counsel. This was not so elegant, because it suggested a type of consent submission but it could easily have been turned a stipulation, and the fundamental fact remains that the two identical pleadings made by defendant's counsel required the consolidation in either event whether the complaint is dismissed, or whether the complaint is sustained and has to be answered. The motion practice could have been avoided on my proposal too. 16. At the time that these exchanges took place, I was involved in motion practice that was urgent, and could not be set aside for game-playing ona minor point of procedure, and the game-playing threat of sanctions. If I believe that information is needed to be presented to the Court, and is affirmatively being withheld by opposing counsel, in bad faith, then I cannot permit myself to respond to a sanction threat by not coming forward with that evidence. For the Court and my client I have a higher obligation. [Here hypothetically, Mr. Arochas could dismiss the complaint by dint of his alleged exclusive “at will” employee status, and then return to sue as a fiduciary!!]”. 17, The threat was made that I violated a court rule that stated I could write no letters to the Court. The rule cited in the papers of defense counsel, Rule 15, requires counsel to consult before matters are brought to the Court by letter. We did that; we disagreed about the consolidation motion; we exchanged emails, and had discussed the issue much earlier in the case without agreeing, and then I filed the motion. My offer to let the cases be consolidated, but being moot as to the complaint was rejected. Equally, I was threatened with sanctions if I did not do as told, which is not acceptable. If we disagree, we are entitled to go to the Court, but not required to cower out of fear. I hold the opinion that the contradictory pleading needs to be known to the Court, and I acted. 18. The claim ~ which I see, reading the footnotes, escalates to $11,000.00 by anticipating a court appearance at the high billing rates of my distinguished adversary - argues that I intended to harass by forcing counsel to do motions for excessive billing. [This is not so because opposition to the motion, might take an hour, at most.] This is a claim of a pot calling the kettle black variety. Let’s look at how defense counsel acted in the past. In doing so, I will refrain from making a fee application to that law firm. 19. As the pleading states (I am not producing the entire record on the prior consolidation motion, but I request that Court to take judicial notice of it), this new action was filed in January 2011, at a time when I had offered to accept service of 2 Cf. Chinatown Apartments Inc. v. New York Transit Authority, 100 A.D.2d 824, 747 N.Y.S.2d 763 (1° Dept. 1984)(Consolidation is appropriate where it will avoid unnecessary duplication of trials, save unnecessary costs and expense and prevent the injustice ... from divergent decisions based on the same facts). 9 summons in the first-filed captioned action for the individual defendants, [subject to my clients’ approval which was forthcoming]. I made the mistake -- and it was a mistake -- in delaying the response to this requests, although counsel never produced Rule 306 summons as I expected, and I had waited to join the individual defendants by consent before answering counterclaims pleaded against JMB. Defendants’ moved for default. 20. Texplained the error to opposing counsel, but there was no way to withdraw the default motion on the profit sharing claims, as their “client” would not authorize it. After the default motion was filed, my opposing counsel THEN sought for the first time to file a new action with a new summons on the individuals, instead of joining them by consent as had been discussed, although that complaint had been filed without my knowledge in January. I was required to answer the default motion which I did by a well-prepared affirmation and memorandum (respectively Exhibits C and D), when there was more important substantive work to be done on the dismissal motion to respond to that motion. That work distracted me from the substantive motions, and it interfered with my response to the main motion, which was clearly part of its motive. My opposing papers, which were filed and served, would have shown that no default was proper. Then, and only then after full briefing of the motion for a default, would opposing counsel withdraw the motion. My billing for that work was much really more substantial (at my lower rates) ,than the work sought to be reimbursed on this motion? 3 That application also interfered with the submission of evidence. I had wanted to submit the JMB financials both in response to the default application and on the main motion, but counsel would not accept a stipulation that Arochas could not retain a physical copy of the financials. Thus, I could not file them, and the logistics of making a special sealing order application was too much for the point. I had to 10 21. That attempt to default exploited an honest mistake and confusion about how we were going to join the individuals by consent; in a case where counsel were supposedly cooperating to frame issues on a professional basis, it was not a motion that was required, as a default could not properly have been granted, but opposing counsel forced the legal work to be done, either to interfere with preparation of opposition to the motion to dismiss, or to attempt to embarrass me in front of my client re the default. 22. When such advantage is sought, opposing counsel has no compunction about forcing unnecessary motion practice, or burdening the opposition with it. On this order to show cause application, the comparison of the work to answer and to defeat, if appropriate - it could not be appropriate, as the two Arochas pleadings are identical - is modest compared to the inflated cost and intended distraction of this sanctions motion. 23. The consolidation should be granted; the order to show cause denied, or if a sanction is ordered, it should be a nominal sanction of $1.0, forgiven for good cause. 24. Asa last word on this opposition, the objection is made to a letter that was sent to the Court after the argument. At the time of argument, I was unable to include in my argument a number of points because, as the Court noted, there were other cases pending, and there were points relating to the content of case law and other matters that I had wanted to present to the Court. I believe it was appropriate to do so, as my argument had been cut off, despite a request to respond to Mr. Skala’s argument, which ran somewhat afield from arguments properly heard on a motion to dismiss, by giving rely on a summary of the basic financial information which was stated in the affidavit of Marcella Law. li his characterization of fact disputes (e.g. an estoppel claim based on Arochas’ insistence as the primary (99%) salesperson, on using the Atelier mark he knew was not registered etc. ). [also submitted on the NYSCEF filing a copy of an affidavit the content of which was presented in the oral argument. | had referenced this affidavit and its contents, on the argument and the statements therein - by the knowledgeable buyers who are the main clientele of JMB or of Arochas’ new company selling Atelier Luxe garments - are clearly material and relevant. They acknowledge undisputed confusion as to the names used by each party - Atelier by JMB, and Atelier Luxe by Arochas - by persons who know, and the fact of confusion is central to an unfair competition case like that herein. I think a lawyer that fails to include in the court record, a document of that nature with material information on the issues, is negligent. If the Court elects to disregard that affidavit, that is its prerogative but the submission itself should be part of the record. 25. The protested June 28, 2011 letter was intended to finish my argument after Mr. Skala walked out of the well doing high-fives with his client after I was not allowed to respond to his arguments. If one reviews that letter, the main, or a major focus, of the June 28, 2011 letter, about which protest now is also made (perhaps again to distract from the merits) was the specific content of cases that bore directly on the issues, and which may not have been fully emphasized in the submitted memorandum. 26. Mr. Skala also makes reference to ComDiv rule 18, re sur-replies. I do not think that either of these documents are properly dubbed sur-replies: the June 28, 2011 letter completed by my oral argument and highlighted parts of the cited cases, and the 12 later letter to advise the Court of the contradictory pleadings in the related case that should have been before the Court as a pleading in the captioned case in any event. 27. Equally to the point, Rule 18 provides its own remedy; the court may ignore the submissions, and opposing counsel is specifically instructed not to respond. Opposing counsel has breached that rule by this application, which should be denied. 28. As Exhibit E, I attach my reply on thee consolidation motion. The two pleadings I referenced from Arochas are part of the record, but I will copy them here as Exhibits Fand G so that the main point; that Arochas’ pleaded identical claims, which provides no ground for opposing the consolidation motion in good faith. As both of the case cited by defense counsel about the “better practice” of not trying to consolidate actions, cited ina prior footnote, both cases state that the party that opposes a motion to consolidate has a “heavy burden” to establish such opposition when common issues of fact and law exists. In a case where the pleadings are identical, that burden is not met. CONCLUSION 29. The order to show cause should be denied; e two actions consolidated Dated: August 17, 2011 —__}— Jos¢ph H Adams 13