CASES INVOLVED “DIFFERENT QUESTIONS OF LAW AND FACT”
Some five years after “E” was sued by plaintiff “3B” for breach of contract, the latter filed a second suit against E, alleging a “fraudulent conveyance” – that the entity’s president allegedly transferred millions of dollars from the company to himself to “defraud” the plaintiff and other creditors.After the New York County Supreme Court denied the defendant’s request to stay discovery in that second case and granted the plaintiff’s motion to “consolidate” the two actions, an appeal followed.
On its review of the record, the Appellate Division, First Department, didn’t think consolidation was appropriate in this instance particularly given the different legal theories that had been asserted in each case and because they involved “different questions of law and fact.”
Additionally, given that a win in the contract breach lawsuit would “moot” the fraudulent conveyance dispute, and because joining the two matters together would delay the trial of the first action, the AD1 thought that consolidation should have been denied and the discovery in the later dispute should have been stayed, and reversed the underlying determination accordingly.
The AD1 sure took action there ….
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DECISION
3B v E