New York Court Applies Doctrine of Estoppel Against Inconsistent Positions and C.P.L.R. Section 105(u) to Dismiss Civil Lawsuit Against a City Contractor

Pisciotti Malsch recently secured summary judgment for its client, a construction company, based upon the doctrine of estoppel against inconsistent positions and C.P.L.R. § 105(u).

Plaintiff, a passenger in a car, brought suit against the City of New York and its contractor due to a one-car accident allegedly caused by the contractor’s negligent work in a construction zone.  Through investigation, it was discovered that Plaintiff had previously brought suit against the driver of the automobile and in a Verified Complaint, the plaintiff had alleged that “the aforesaid motor vehicle collision was caused solely by the negligence of the [driver] in the ownership, management, operation, maintenance, and/or control of the motor vehicle.”  This lawsuit was settled for the full policy limits ($25,000).

In filing an early motion for summary judgment, it was argued that (1) Plaintiff’s sworn verification from the first lawsuit against the driver conclusively refuted his liability allegations in the subsequent lawsuit and (2) the doctrine of estoppel against inconsistent positions precluded Plaintiff’s subsequent lawsuit against the City and the contractor.

First, under New York law, an allegation in a verified pleading is considered the equivalent of an affidavit and can be used in such a capacity.  See C.P.L.R. 105(u).  “A verification is a statement under oath that the pleading is true to the knowledge of the deponent, except as to matters alleged on information and belief and as to those matters, he believes to be true.  ‘Since the verification makes the pleading, or those parts of the pleading that are verified, sworn data, a verified pleading is the equivalent of an affidavit, CPLR 105, and may be used for the same purposes.’”  Wells Fargo Bank, N.A. v. Marchione, 69 A.D.3d 204, 210 (N.Y. App. Div. [2d Dep’t] 2009) (quoting Siegel, Practice Commentaries, McKinney’s Cons Laws of NY, Book 7B, C.P.L.R. C3020:2) (emphasis added); see also Oversby v. Linde Div. of Union Carbide Corp., 121 A.D.2d 373, 374 (N.Y. App. Div. [2d Dep’t] 1986) (citing CPLR 105(u) and noting that “a complaint which is verified based on personal knowledge may be used as an affidavit”).

It was argued that Plaintiff’s verified statement in the first lawsuit against the driver (that the “collision was caused solely by the negligence of the driver”) was the functional equivalent of an affidavit and can be used to support a dispositive motion.  We argued that this admission conclusively refuted Plaintiff’s liability allegations in the subsequent lawsuit.

Second, the “doctrine of estoppel against inconsistent positions precludes a party from ‘framing his pleadings in a manner inconsistent with a position taken in a prior proceeding.’”  Piedra v. Vanover, 174 A.D.2d 191, 197 (N.Y. App. Div. [2d Dep’t] 1992) (quoting The Doctrine of Preclusion Against Inconsistent Positions in Judicial Proceedings, 59 Harv. L. Rev. 1132); Kasmarksi v. Terranova, 115 A.D.2d 640, 641 (N.Y. App. Div. [2d Dep’t] 1985).  The policies underlying preclusion of inconsistent positions include general considerations of the orderly administration of justice and regard for the dignity of judicial proceedings.  Kasmarksi, 115 A.D.2d at 642.  The doctrine is invoked to estop parties from “playing fast and loose with the courts.”  Envtl. Concern v. Larchwood Constr. Corp., 101 A.D.2d 591, 593 (N.Y. App. Div. [2d Dep’t] 1984).

Typically, judicial estoppel may not be asserted unless it can be shown that the party against whom the estoppel is sought procured a judgment in its favor as a result of the inconsistent position.  Kalikow 78/79 Co. v. State, 174 A.D.2d 7, 11 (N.Y. App. Div. [1st Dep’t] 1992).  However, New York courts have recognized that the application of the doctrine of estoppel against inconsistent positions is based on consideration of the policies and principles underlying the doctrine.  Zemel v. Horowitz, 815 N.Y.S.2d 496 (N.Y. Sup. Ct. [N.Y. County] 2006).  In Zemel, despite the fact that the position taken by the plaintiffs did not result in “a final judgment,” the Court applied the doctrine of quasi-judicial estoppel.  Ibid.; see also Hartman v. Harris, 2008 N.Y. Misc. LEXIS 9317, at *4 (N.Y. Sup. Ct. [Nassau County] June 10, 2008) (“In any event, the doctrine of judicial estoppel is not limited to ‘judgments.’”).

The doctrine was meant to be a flexible one designed to serve the purposes of upholding the dignity of judicial proceedings.  Kasmarksi, 115 A.D.2d at 642; Envtl. Concern, 101 A.D.2d at 593.  Thus, New York Courts have applied this doctrine in order to protect the integrity of judicial proceedings when the prior lawsuit resulted in a settlement:  “[D]efendants’ recent statement in the Nassau litigation is so inconsistent with the position taken herein with regard to the legal fees charged in the Bronx action as to warrant estoppel of that claim, notwithstanding the fact that the Nassau action was resolved by settlement, rather than by judgment.”  Donovan Leisure Newton & Irvine v. Zion, 562 N.Y.S.2d 691 (N.Y. App. Div. [1st Dep’t] 1990) (emphasis added).  We then cited to various cases from New York and other jurisdictions where the doctrine has been applied when the prior cases had settled.

In this case, it was argued that Plaintiff “derived a benefit” from the first lawsuit (the $25,000 settlement) by maintaining one position and was now taking an inconsistent position in the subsequent lawsuit.  We further argued that Plaintiff’s attempt to play “fast and loose” with the judicial system was evidenced by the fact that, in the course of discovery, we had asked for all prior pleadings or lawsuits arising out of the accident, and Plaintiff responded that there were none.

After oral argument, the motion was granted and the trial court dismissed the action, holding:

Plaintiff brought an action against [the driver] in which his verified complaint states that [the driver] was the sole cause of the accident.  That action was settled for a $25,000 in favor of this plaintiff.  Plaintiff brought a subsequent action against the City of New York [and the contractor] based on their negligent acts.  In the course of discovery, [the contractor] asked if there were any other pleadings, claims, etc., arising out of this accident.  The plaintiff’s attorneys, without mentioning the prior accident, told defendant that it had everything.  It was only after bringing a third-party action against [the driver] that defendant learned of the prior lawsuit.  The Court finds that plaintiff’s statement in the prior lawsuit that the defendant there was the sole cause of the accident and the plaintiff’s recovery via settlement constitutes a judicial admission which prevents recovery in the instant action.

The arguments were briefed and argued by Danny Lallis. Click here for a PDF version of this article.

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Written by Danny C. Lallis

Danny is a Partner with Pisciotti Malsch, and his practice includes appeals, product liability, and commercial litigation.