Court cannot search the record on claims not the subject of the motion, or can it?
August 02, 2018
The Appellate Division, in a short but direct ruling, reminds the bench and bar that courts cannot simply “search the record” and grant summary judgment on claims or defenses that are not the subject of the motion. It did so this time in the context of an LLC judicial dissolution action pending in the Commercial Division of Nassau Supreme in Philogene v. Duckett. This follows another recent decision by the same court two weeks earlier in Singletary v. Alhalai Rest., Inc., a personal injury action.
The procedural setting in Philogene is somewhat unusual. Plaintiff and defendant are 50/50 members of Verity Associates, LLC (“Verity”), which publishes cookbooks and recipes, such as America’s Most Wanted Recipes and Tried and True Recipe Secrets, through the internet. Plaintiff commenced the action in his “individual” capacity, as well as “suing in the right” of Verity. In his complaint, he asserted various claims, including breaches of fiduciary duty and contract, where he sought injunctive relief, damages and an accounting. In turn, defendant counterclaimed for judicial dissolution and moved for summary judgment on that claim. The motion court denied defendant’s motion for dissolution since it found that the stated purpose of the entity was being met and that it was financially feasible to continue Verity. The court then “searched the record” concluding that “no further adjustment in their interests is necessary” and dismissed the complaint.
So what is the reach of a court’s authority to “search the record” and grant reverse summary judgment?
We’re all familiar with CPLR 3212(b) which empowers a court to “search the record” and award judgment to the non-movant. In fact, if a court searches the record and concludes the non-movant should win, then the court has both the “power” and “responsibility” to render judgment accordingly, see Merritt Vineyards, Inc. v. Windy Heights Vineyard, Inc. This authority, however, is not boundless. The leading case from the Court of Appeals on the scope of this power is Dunham v. Hilco Constr. Co., where Chief Judge Kaye observed that, “[a]part from considerations of simple fairness, allowing a summary judgment motion by any party to bring up for review every claim and defense asserted by every other party would be tantamount to shifting the well-accepted burden of proof on summary judgment motions.” Some courts have expressed frustration with this limitation (e.g., “Although the Court would like nothing better than to put this case out of its misery, given Dunham . . . the Court will decline defendant’s invitation to search the record.”) But by now, the law is clear that CPLR 3212(b) permits “searching the record” in the context of summary judgment is only appropriate on issues or claims raised by the motion, and nothing more.
Notwithstanding the narrow authority courts have to “search the record” in the context of a dispositive motion, this should not be confused with a court’s authority to decide non-dispositive motions (such as discovery related) on grounds other than those advanced by the parties in the motion papers, see, e.g., Tirado v. Miller (granting discovery related motion on grounds not argued by the parties). For a good discussion of this distinction, the First Department’s ruling in Rosenblatt v. St. George Health and Racquetball Assocs., LLC is instructive.