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Mar 11 2013

State Court Judge Wants Lawyer to Explain High Damages Claim in Contract Case – Could Be Start of Trend Against Copyright Trolls

In this morning’s NY Law Journal, I read an interesting case out of Suffolk County NY involving a piano. It seems that the plaintiffs,Paul and Karen Palmieri, purchased a rebuilt, refinished Weber 6′ grand piano for $9,000 in 1996 from The Piano Exchange in Glen Cove. The agreement’s terms called for a “rebuilt and refurnished-matching bench-guaranteed indefinitely parts and labor.” The lawsuit includes allegations of breach of contract, deceit and breach of the covenant of good faith and fair dealing. So far so good, a simple breach of contract case.The only problem is that the plaintiffs are suing for $1.259 Million in damages:Two Hundred Fifty Thousand Dollars ($250,000.00); alleging deceit claiming damages of Five Hundred Thousand Dollars ($500,000.00); alleging breach of the covenant of good faith and fair dealing and seeking damages of Three Hundred and Fifty Thousand Dollars($350,000.00) alleging tortious interference with a contract seeking damages of One Hundred and Fifty Thousand Dollars ($150,000.00) and lastly, alleging unjust enrichment seeking Nine Thousand Dollars ($9,000.00).

Judge Garguilo was not amused. He wants the plaintiffs’ attorney, Judith Berger, to appear before him on March 27, 2013, to explain the basis for this damages demand which is 138 times the amount paid for the piano 17 years ago. What I admire about the decision is that Judge Garguilo understood the effect getting hit with such a large claim can have against the other litigant:

Is it a reasonable application of the privilege to practice law to serve a complaint upon a person, in these circumstances, and stun the recipient-defendant with damage claims beyond the universe of those which logically follow the alleged breach? The Court thinks not. . . .Does the administration of Justice include a responsibility to shield litigants from conduct that may cause stress, anxiety and fear of pecuniary ruination far beyond the bounds of reasonable foreseeability? The Court thinks it does. The Courts are intimidating enough to ordinary people without needless exacerbation occasioned by grossly exaggerated claims of financial loss.

It will be interesting to see what happens on the 27th of March and I will keep you posted. The importance of this decision is the judge’s clear articulation of lawyer’s obligation to have a factual basis for the monetary damages they seek in their pleadings. Sure that can be hard to do in personal injury and medical malpractice actions where putting a value on pain and suffering can be a subjective endeavor and one cannot always determine when the complaint is field what the life-long consequence of the injuries suffered may be. But that is why in those types of cases, the law requires you to NOT put a monetary damage in the complaint. In commercial cases, however, the damages recoverable are usually specified by law and the damages are known and set when the complaint is filed.

This case can give some hope and be of some use to those hit with copyright infringement claims, where copyright holders routinely over-inflate the amount of damages that they can get for the alleged infringement. A quick tour of the internet will reveal that this problem – “copyright trolling” as it is known in the vernacular – is rampant. In fact, I have a whole website devoted to the issue (www.extortionletterinfo.com). Both Federal and State courts allow for sanctions to be levied upon firms and clients that make unsupported and baseless claims in their pleadings. Lawyers should similarly be admonished and sanctioned for making such baseless claims in their legal correspondence to alleged infringement targets. Kudos to Judge Garguilo for understanding the effect receiving such baseless claims can have on a person and further realizing that this is likely the intended consequence of sending such an exorbitant, extortionate damages amount.

Something else interested me in the case. I noticed that in the address block for the lawyer for the Palmieris, after the name Judith N. Berger, it read “The Coalition of Landlords, Homeowners & Merchants, Inc.” It appears the Coalition is some kind of legal self-help, libertarianish, not-for-profit group that charges people to fight building and housing violations. Judith appears to be their counsel. Their president is none other than Paul Palmieri, the plaintiff in this case involving an apparently very valuable rebuilt ancient piano. There are a few online complaints about The Coalition but what caught my eye is that the Coalition is no stranger to representing folks on claims that get hit for sanctions. In 2006, they were ordered to explain why they shouldn’t get hit with sanctions in Palmieri v. Thomas 29 Ad3d 658 (2d Dept 2006)(“The Coalition’s arguments appear to be completely without merit in law and unsupported by a reasonable argument for an extension, modification, or reversal of existing law, or undertaken primarily to delay or prolong the resolution of litigation or to harass or maliciously injure another.Accordingly, we direct counsel for the parties to submit affirmations or affidavits on the issue of the imposition of sanctions and/or costs against the Coalition and/or its counsel”); in 2007, it was the law firm on a claim that the plaintiffs were forced to pay $2,547 in sanctions for a frivolous claim brought against a process server employed by the Town of Brookhaven in Mascia v. Maresco 39 Ad3d 504 (2d Dep’t 2007)(The contentions advanced by the plaintiffs here were completely without merit in law or fact and cannot be supported by a reasonable argument for an extension, modification or reversal of existing law. Moreover, the plaintiffs’ conduct in commencing this action and in continuing to advance their claims, “appears to have been intended primarily to harass the defendant. Accordingly, the Supreme Court providently exercised its discretion in awarding the defendant’s employer its costs and reasonable attorney’s fees as a sanction); and in 2010 it was sanctioned for bringing a frivolous complaint against a law firm in the case of Matter of Seamans 2010 NY Slip Op. 31749(Nassau County Surrogate’s Court)(It appears clear to the court that many of the Coalition’s affirmative defenses, cross-claims, and counterclaims were either completely without merit in law and could not be supported by a reasonable argument for an extension
modification or reversal of existing law, or were undertaken primarily to delay or prolong the resolution of the litigation, or to harass or maliciously injure another, as evidenced by the failure to oppose the dismissal of several of them.
The malicious injury of another is particularly evident in the claims made against the petitioner’s attorneys.) That matter is still on appeal.

It is important that courts continue on the road commenced by Judge Garguilo in this case and address the making of frivolous damages claims in the same manner they address making frivolous substantive claims. Although based on the above track record, it seems that getting hit with sanctions may not be enough to teach some people this lesson.

9 comments

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  1. Merlin

    What about grossly overcharging in the criminal arena, as may be the case with Aaron Swartz.

  2. Merlin

    I don’t find your censoring my posts (e.g., the one about licensing lunch sandwiches to end run the First Sale doctrine) nearly as amusing as my posts.

    Nevertheless, on the matter of so-called copyright trolling did you happen to catch Lisa Willmer of Getty acknowledging during the 11-16-2012 public hearings at Columbia U involving the possibility of a new system to handle small dollar claim copyright actions that Getty is often in the position of chasing down (alleged) infringers with unregistered images and, therefore, stuck with actual damages which people don’t seem to threatened by. Not something you haven’t already inferred but I thought it was interesting to hear it out loud that their images are often not registered in time for stat damages/fees to be in play.

    She also said earlier in the discussion that Getty is sensitive to the public perception they they aren’t aggressive with enforcement so their settlement letters aren’t taken seriously. So they would prefer any future small claims system to involve a public record of the resolution.

    1. Oscar Michelen

      Merlin- I didn’t censor your last post,in fact I enjoyed it. For some reason, it didn’t get “approved” last time I clicked on it so it was just in queue waiting for approval. Trust me that Getty will be lobbying for whatever changes in the Copyright Law best suits its current profitable infringement program.

  3. Jan

    Thank you for the well written and informative article.
    Any update on the outcome of Judith Berger’s appearance before Judge Garguilo?

    It is of particular interest to me as she has filed another outrageous and frivolous suit against a group of individuals and township to which I am connected.

    1. Oscar Michelen

      There is no decision on file about the March 27 court date. The next date is May 29. I have reached out to defense counsel for more information and will update the blog if he responds or I learn what happened.

  4. kassmanlawoffice

    Really Good News !

  5. Carol

    We in the public have a major problem with the legal system. Most middle class can’t afford the huge hourly wages of attys. ($350 to %50 at least a hour) I was pro se not by my choice but because the judge allowed my atty to walk, after being paid in full. This judge was in Central Islip, LI, NY that never showed in court. I mean years and was still on the bench. Can’t think of his name but you attys know, you had a social club in his court room charging your clients. I was there for hours listing to the attys conversations…Who was sleeping with who, vacations, where your children were going to up scale colleges. I was there myself and had to listen to this abuse. Clients were paying $350 to $550 or more for atty and judges abuse.
    This judge retired and cases were turned over to Judge Garguilo, Hector LaSalle and they stated since this judge did nothing they needed to clear his calender at the clients expenses. My son worked for years for free to learn and take over a business a auto repair business, because they wanted to clear their calender my son lost his business. Atty and judges are in each others pocket and bed and Pro Se clients are abused by the Suffolk County court system..
    My atty had no reason to quit my sons case they had been paid every dime, that atty didn’t like the new atty put on the case and didn’t want to work with him so he got his friends in court to release him for his paid case.. No atty should be allowed to walk off a case, NONE.
    Judges once they leave the bench become attys again and the public gets hurt.
    Hector LaSalle I made a complaint against his abuse to PRO SE… guess what all his punishment became of losing the election and abusing PRO se, he’s now on the APPELLANT DIVISION hurting use more… He verbally abused me, but you can’t prove because you can’t hear the written word… I was spoken to like I was Daisy Duke trash… But our court do nothing to protect the PRO SE.. We have no rights to our legal system.. Louis England, esq stated we PRO SE are making HOME DEPOs of His courts.. I guess he forgot the WE THE PEOPLE.

    Just explain an atty messes up a case and it’s the clients fault, go to the ethics department and they protect there own.. Try to find a Legal Malpractice atty and it’s $100,000 retainer.. One of my attys didn’t sign on with the court 16 mos.. Judge Spinner had no idea I had a atty.. I was still PRO SE as per the court, so I lost my home was never served but refused Traverse hearing to prove this…
    The legal system is a total disrespect of human rights… Most attys don’t even have there masters degree.. 3 years education above BA/BS and they get a JD degree.. Every college graduate should go to law school just to protect themselves from JD’s in their future…

    The judges are voted in my the public and once in they abuse that very public that voted them in…

    Local District Courts are in bed with the Town’s all over Suffolk County to steal from citizens.. All Town code violations are CRIMINAL but the towns are not following NYS Codes.. You are to be notified of a violation before a summons but you are not being notified just summoned..

    The public needs help against the dishonest of our legal system, courts,judges and gov’t town abuses…

  6. hyperlinkedweb

    Whatever happened in this case?

    1. Oscar Michelen

      Still being fought. Left message with the defendants lawyer for an update

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