Commercial Division Blog

Posted: October 13, 2016 / Categories Commercial, Intervention/Joinder

Court Orders Joinder of Prior Tenant as Necessary Party

On October 1, 2016, Justice Singh of the New York County Commercial Division issued a decision in Almah LLC v. AIG Employee Services, Inc., 2016 NY Slip Op. 31850(U), ordering the joinder of a prior tenant in a dispute over damage to a commercial building, explaining:

Under CPLR § 1OO1(a), necessary parties to an action or proceeding fall into two distinct categories: persons who ought to be parties if complete relief is to be accorded between the persons who are parties to the action, or who might be inequitably affected by a judgment in the action. CPLR § 1001 gives a court wide discretionary latitude and is to be liberally construed. Courts have interpreted the rule to require joinder where existing parties might be inequitably affected by a judgment in the action without the non-party's presence. Where a person who should be joined nevertheless cannot be joined, courts must decide whether the action can proceed without the necessary party.

The primary reason for compulsory joinder of parties is to avoid multiplicity of actions and to protect nonparties whose rights should not be jeopardized if they have a material interest in the subject matter. In making the determination as to whether an absentee need be joined as an indispensable party, courts must decide if a decision in the case, in the absence of the proposed parties, will have the element of finality for the protection of those before the court.

Defendants claim that they lack the full ability to defend themselves, without the presence of the Goldman Sachs entities who installed the busways and were responsible for their maintenance over many years, thereby making them potentially liable for some or all of the busways damage claimed by plaintiff.

Plaintiff asserts that the court will not have to apportion AIG's and the Goldman Sachs Entities' respective liability since plaintiff is only seeking damages concerning AIG's failure to take good care of the Busways during the time that it was tenant of the Building.

(Internal quotations and citations omitted) (emphasis added). The court went on to accept the defendants' argument and granted the motion for joinder.