C. STEPHEN HACKELING
John Fazzini, Esq., The Law Office of John Fazzini, P.C., Huntington Station, attorney for the Plaintiff. Tom Teresky, Esq., Huntington, attorney for the Defendant.
C. STEPHEN HACKELING, J.
Mona Conway, an attorney and the above captioned plaintiff, commenced this small claims action seeking to recover $5,000.00 for independent contractor legal services rendered to the defendant law firm Dejesu Maio and Associates. The defendant counterclaimed for $5,000.00 asserting a legal malpractice cause of action. The trial commenced on May 1, 2014 and the defendant's trial counsel moved for a directed verdict at the close of the plaintiff's case asserting a subject matter jurisdictional defense in that plaintiff's claims exceeded the $5,000.00 small claims limit. The Court reserved decision and adjourned the trial.
The undisputed facts are that both parties are admitted attorneys and both sides have retained counsel for the purpose of trial. No pre-trial discovery was undertaken as is usual in a small claims case. The plaintiff's testimony established that her breach of contract cause of action consists of a $5,341.00 component representing $100 per hour compensation for of-counsel services rendered in a Federal Court and a claim of entitlement to recover undetermined contingency fees in two New York State Court personal injury actions.
The jurisdictional issue presented for disposition is whether a plaintiff can waive any recovery over $5,000.00 so as to fall within the $5,000.00 small claims jurisdictional limit?
The Law
Section 1802 of the Uniform District Court Act (hereafter “UDCA”) establishes a jurisdictional limit for a small claims action when it provides “the term small claims ... shall mean and include any cause of action for money only not in excess of $5,000.00 exclusive of interest and costs ...” Emphasis added.
Section 202 of the UDCA establishes the District Court's general jurisdiction when it provides: “:The Court shall have jurisdiction of actions and proceedings ... where the amount sought to be recovered ... does not exceed $15,000.00. Emphasis added.
It is axiomatic that small claims subject matter jurisdiction cannot be conferredona Court that lacks it, and that objection may be made at any stage of the proceeding to dismiss the action. See Pivarnick v. Pivarnick, 42 Misc.3d 1229(A), 2014 WL 733942 (Civ.Ct., Richmond Co.2014) citing to Siegel, New York Practice, 5th Ed. Sec. 8). It is the plaintiff's contention that she can confer small claims jurisdiction upon herself by simply waiving the $341.00 overage due upon her hourly rate claim along with her right to recover upon her contingency claims.
It is noted that it is a common occurrence in this Court to obtain District Court subject matter jurisdiction by waiving damages to bring the claim with the Court's $15,000.00 monetary jurisdiction. See generally, Teachers Federal Credit Union v. Leal, dec. N.Y.L.J. com. 1202654297616 (Nas.Co.Dist.Ct., April 28, 2014). While the waiver mechanism is allowable under Sec. 202; it is inappropriate and not authorized under Sec. 1802. Sec. 202 establishes jurisdiction with the words “where the amount sought to be recovered.” Sec. 1802 establishes jurisdiction with the words “shall mean and include any cause of action.”
It is clear that the legislature envisioned and authorized plaintiffs to obtain District Court jurisdiction by simply reducing “the amount sought to be recovered.” As this language is omitted from Sec. 1802 the Court must infer that this waiver doctrine does not apply to small claims cases. See, N.Y. Statutes §§ 236,240. In its stead the words “cause of action” is substituted into Sec. 1802. As a matter of statutory construction, when the legislature uses different terms in various parts of the statute, it is assumed that a distinction is intended. Doyle v. Gordon, 158 N.Y.S.2d 248 (Sup.Ct., N.Y. Co.1954). The Court also notes that “causes of action” may not be “split” to obtain small claims jurisdiction. See A & J Enterprise Solutions, Inc. v. B.A.O. Tech, 11 Misc.3d 173, 812 N.Y.S.2d 226 (Nas.Dist.Ct.2005). As such it is logical to conclude that a “cause of action” must be valued “as a whole” in determining whether it is appropriate for small claims jurisdiction.
In the present case, the plaintiff presents a single breach of contract cause of action. Said cause of action is valued somewhere between $5,341.00 and infinity. Absent the ability to apply a waiver mechanism, the cause of action clearly exceeds $5,000.00 and must be dismissed without prejudice. For the same reasons the defendant's undelineated malpractice counterclaim must be dismissed without prejudice.