| Saint James' Episcopal Church v F.O.C.U.S. Found. |
| 2008 NY Slip Op 00157 [47 AD3d 1058] |
| January 10, 2008 |
| Appellate Division, Third Department |
| Saint James' Episcopal Church et al.,Respondents, v F.O.C.U.S. Foundation et al., Defendants, and Citihope International,Inc., Appellant. |
—[*1] Tobin & Dempf, L.L.C., Albany (Michael L. Costello of counsel), for respondents.
Kane, J. Appeal from an order of the Supreme Court (Dowd, J.), entered December 29, 2006in Otsego County, which denied the motion of defendant Citihope International, Inc. forsummary judgment on its counterclaims.
Mark Cole was the rector of plaintiff Saint James' Episcopal Church (hereinafter the Church)and a director of plaintiff St. James' Episcopal Missionary Society (hereinafter the Society), aseparate not-for-profit corporation. In July 2000, Cole, on behalf of the Society, allegedly enteredinto a written pledge agreement with defendant Citihope International, Inc. Pursuant to thesedocuments, Citihope would acquire and deliver $6 million worth of medicines to variouscountries, and the Society would contribute $150,000 toward costs. On August 10, 2000, Coleresigned as rector of the Church.[FN*]It is unclear whether Cole lost his position as a [*2]director of theSociety on August 10 or August 14, 2000. On August 11, 2000, at Cole's request, the Society'streasurer issued a $150,000 check to Citihope. The check was dishonored for insufficient funds.
Plaintiffs subsequently commenced this interpleader action to determine the proper owner ofthe $150,000. Citihope counterclaimed against the Society for payment on the bad check andbreach of contract. Soon after issue was joined in 2001, Citihope moved for summary judgmenton its counterclaims. Supreme Court denied the motion, finding that it was premature. In 2006,after most disclosure had been completed, Citihope renewed its motion for summary judgment.Supreme Court again denied the motion, finding that issues of fact still exist. Citihope appeals.
Supreme Court properly denied Citihope's motion for summary judgment. Citihope met itsinitial burden on its breach of contract counterclaim by producing the sponsorship applicationand pledge agreement signed by Cole and dated July 10, 2000, the affidavit of Citihope'spresident attesting that he and Cole signed those documents on that date, and the lack of paymentpursuant to those documents. In opposition, plaintiffs submitted the affidavit of a State Policeinvestigator. The investigator averred that during questioning, Cole admitted that the pledgeagreement was signed on August 10, 2000 and backdated to July 10, 2000 at the request ofCitihope's president. While hearsay evidence that is inadmissible at trial may be sufficient todefeat a motion for summary judgment, there must be some additional competent evidence tosupport the motion or an excuse for the failure to present proof in admissible form (see Tibbits v Verizon N.Y., Inc., 40AD3d 1300, 1302 [2007]; Allstate Ins. Co. v Keil, 268 AD2d 545, 545-546 [2000];see also Murray v North Country Ins. Co., 277 AD2d 847, 850 [2000]; Randio vThomas, 270 AD2d 767 [2000]). Plaintiffs offered a reasonable excuse for their failure topresent nonhearsay proof through their submission of the deposition transcript where Coleasserted his Fifth Amendment right to remain silent in response to all substantive questions(see Egleston v Kalamarides, 58 NY2d 682, 684 [1982]; Siegel v Wank, 183AD2d 158, 161 [1992]). Due to the criminal proceedings in federal and state court, the absenceof an affidavit from Cole was understandable (compare Gizzi v Hall, 300 AD2d 879, 881[2002]; Landisi v Beacon Community Dev. Agency, 180 AD2d 1000, 1002-1003[1992]). Additionally, some competent evidence circumstantially supported a possiblebackdating of the contract; Cole's hearsay statement alleged that he was asked to backdate thecontract on August 10, 2000 and the check was written just one day later, on August 11. Whilethe contract did not require payment until August 15, 2000, thus making this payment timely, itstiming is extremely coincidental considering Cole's resignation on August 10 and his subsequentemployment with Citihope immediately after resigning from the Church. Summary judgment isinappropriate, considering this conflicting evidence concerning when the documents were signedand the possibility that Citihope's president engaged in improper conduct surrounding theexecution of these documents.
Finally, Supreme Court was not required to sever Citihope's counterclaims. While CPLR1006 (e) permits severance of independent claims from the interpleader action, the statuteprovides the court discretion. As an alternative to severance, the court is permitted to require that[*3]the independent claims be tried along with the main action(see CPLR 1006 [e]). Due to the interrelated nature of Citihope's counterclaims and theinterpleader action, the court did not abuse its discretion in denying the request for severance.
Cardona, P.J., Peters, Spain and Rose, JJ., concur. Ordered that the order is affirmed, withcosts.
Footnote *: In April 2004, Cole pleadedguilty in federal court to one count of fraud and false statements (see 26 USC §7206 [1]). In June 2006, he pleaded guilty in state court to grand larceny in the second degree(see Penal Law § 155.40 [1]). These convictions related to Cole's improperdealings with the Church's and the Society's finances.