The Five Factors of CPLR § 1001(b)

CPLR § 1001 Necessary joinder of parties

Fagan v Nowitz, 2009 NY Slip Op 06660 (App. Div., 2nd, 2009)

By decision and order of this Court dated February 27, 2007, the matter
was remitted to the Supreme Court, Queens County, to hear and report on
whether or not it was appropriate to proceed in the absence of the
remainderpersons or beneficiaries, whether or not they can or should be
joined, and what is the appropriate remedy in the event that they
cannot be joined under CPLR 1001(b), and the appeal was held in
abeyance in the interim (see Nowitz v Nowitz, 37 AD3d 788).
The Supreme Court has now filed its report, and the parties have filed
supplemental appendices and briefs. Justices Mastro, Dillon, and Miller
have been substituted for former Justices Goldstein, Lifson, and Lunn (see 22 NYCRR 670.1[c]).

***

A court may excuse the failure to join a necessary party and allow
an action to proceed in the interest of justice upon consideration of
five factors enumerated in CPLR 1001(b): (1) whether the petitioner has
another remedy if the action is dismissed for nonjoinder, (2) the
prejudice that may accrue from nonjoinder to the defendant or to the
nonjoined party, (3) whether and by whom prejudice might have been
avoided or may in the future be avoided, (4) the feasibility of a
protective provision, and (5) whether an effective judgment may be
rendered in the absence of the nonjoined party.

Here, as the defendant concedes, the first factor weighs in
favor of excusing the plaintiff's failure to join the entities, since
she has no other effective remedy. However, the Supreme Court
improvidently exercised its discretion in determining that the
remaining four factors also weighed in favor of the proceeding
continuing in the entities' absence. As to the second factor, the
entities will suffer great prejudice if the matter proceeds in their
absence and the trust at issue is rescinded, as it was in the judgment
appealed from. As to the third factor, the plaintiff easily could have
avoided the prejudice to the entities by having timely joined the
entities as defendants. Moreover, although the entities could have
avoided any prejudice by voluntarily intervening in the action, such a
fact is outweighed by the plaintiff's failure to set forth any
reasonable excuse for her failure to timely join them (see Matter of Red Hook/Gowanus Chamber of Commerce v New York City Bd. of Stds. & Appeals, 49 AD3d 749, 752; Matter of Solid Waste Servs., Inc. v New York City Dept. of Envtl. Protection, 29 AD3d 318,
319). As to the fourth factor, the Supreme Court allowed the matter to
proceed to trial in the absence of the entities, resulting in the
rescission of the trust. Thus, this factor also weighs against
proceeding in the entities' absence, as under such circumstances, no
protective provision is feasible since recision of the trust directly
affects the entities' economic interests. Finally, the fifth factor
also weighs against proceeding in the entities' absence, as it is
questionable whether an effective judgment may be rendered without
their participation in the action.

Accordingly, considering each of the five factors enumerated in
CPLR 1001(b), and given our conclusion that the entities are
indispensable parties (see Nowitz v Nowitz, 37 AD3d 788), and in light of the fact that the applicable statute of limitations has expired (see CPLR 213[8]), the action must be dismissed (see Matter of Red Hook/Gowanus Chamber of Commerce v New York City Bd. of Stds. and Appeals, 49 AD3d 749, 752; Nixon v Barrow, 239 AD2d 326).

The bold is mine.

Necessary Joinder CPLR § 1001

CPLR § 1001 Necessary joinder of parties

Censi v Cove Landings, Inc., 2009 NY Slip Op 06496 (App. Div., 2nd, 2009)

Necessary parties are persons "who might be inequitably affected by a
judgment in the action" and must be made plaintiffs or defendants (see
CPLR 1001[a]).
CPLR 1001(b) requires the court to order such persons
summoned, where they are subject to the court's jurisdiction. If
jurisdiction over such necessary parties can be obtained only by their
consent or appearance, the court is to determine, in accordance with
CPLR 1001(b), whether justice requires that the action proceed in their
absence (see CPLR 1001 [b]). The nonjoinder of necessary parties
may be raised at any stage of the proceedings, by any party or by the
court on its own motion, including for the first time on appeal
(see City of New York v Long Is. Airports Limousine Serv. Corp., 48 NY2d 469, 475; Matter of Lezette v Board of Educ., Hudson City School Dist., 35 NY2d 272, 282; Matter of Jim Ludtka Sporting Goods, Inc. v City of Buffalo School Dist., 48 AD3d 1103, 1103-1104; Matter of Storrs v Holcomb, 245 AD2d 943, 944 n 1; Wrobel v La Ware, 229 AD2d 861; Matter of Dreyfuss v Board of Educ. of Union Free School Dist. No. 3, Town of Huntington, 42 AD2d 845; Alexander, Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR C1003:1; see also CPLR 1003).

Here, the record indicates the possible existence of necessary parties
who have not been joined
, namely, the owners of the remainder of the
roadbed of Fish Cove Road. Those parties' interests in real property
may be affected by that portion of the Supreme Court's order which,
upon searching the record, declared Fish Cove Road to be a public
highway, and effectively granted the public an easement to pass over
their lands (see Sorbello v Birchez Assocs., LLC, 61 AD3d 1225; Schaffer v Landolfo, 27 AD3d 812; Dunkin Donuts of N.Y., Inc. v Mid-Valley Oil Co., Inc., 14 AD3d 590, 592; Matter of Princess Bldg. Corp. v Zoning Bd. of Appeals of Town of Huntington, 307 AD2d 972; Hitchcock v Boyack, 256 AD2d 842, 844; Buckley v MacDonald, 231 AD2d 599, 600; Matter of Lehrer v Wallace,
24 AD2d 602, 603). Thus, the court should not have made this
determination upon searching the record without first determining
whether all necessary parties were joined.
Under the circumstances of
this case, "the questions of whether there are any . . . necessary
parties who should be joined in this action and, if so, the appropriate
procedural disposition for effecting joinder should not be determined
by this [C]ourt in the first instance" (De Ruscio v Jackson, 164
AD2d 684, 688). Accordingly, we remit the matter to the Supreme Court,
Suffolk County, to hold a hearing to determine whether there are any
necessary parties who should be joined in this action and, if so, to
compel their joinder, subject to any affirmative defenses, and if
joinder cannot be effectuated, to determine, pursuant to CPLR 1001(b),
whether the action should proceed in the absence of any necessary
parties.

It's almost always a good idea to invite everyone to the party.  Note that this can be brought up on appeal for the first time, so, if you aren't careful, you can lose, even when you win.

The bold is mine.

CPLR § 1001

CPLR § 1001 Necessary joinder of parties

Crummell v Avis Rent A Car Sys., Inc., 2009 NY Slip Op 04022 (App. Div., 2nd, 2009)

The Supreme Court erred in granting that branch of the defendant's
motion which was to dismiss the complaint for failure to state a cause
of action, pursuant to CPLR 3211(a)(7), due to the [*2]plaintiff's
failure to comply with Insurance Law § 3420(a)(2). That provision
governs the right of an injured party who is a stranger to an insurance
contract to maintain a direct action against the tortfeasor's insurer (see Lang v Hanover Ins. Co., 3 NY3d 350,
353-354). It does not apply where, as here, a signatory to a contract
seeks a declaration of his rights with respect to another contracting
party (see CPLR 3001; Lang v Hanover Ins. Co., 3 NY3d 350, 353).

While the Supreme Court correctly concluded that Thomas Pinkerton is a necessary party to this action (see CPLR 1001[a]; cf. Bello v Employees Motor Corp., 240
AD2d 527), under the circumstances presented, the plaintiff should have
been given an opportunity to rectify his failure to join him (see Stevens v Eaton, 267 AD2d 450, 450-451).

The Supreme Court should not have considered, and we do not
consider, the defendant's remaining contention, because the defendant
improperly raised it for the first time in its reply papers in the
Supreme Court (see Luft v Luft, 52 AD3d 479, 480; Medugno v City of Glen Cove, 279 AD2d 510, 511-512).

Mayer's Cider Mill, Inc. v Preferred Mut. Ins. Co., 2009 NY Slip Op 04466 (App. Div., 4th, 2009)

Finally, we reject the contention of Preferred Mutual that the
manufacturer and distributor of the machine in question are necessary
parties to this action, pursuant to CPLR 1001 (a)
. The issue whether
Preferred Mutual must defend and indemnify plaintiff has no bearing on
any claim by Lansdowne against the manufacturer or the distributor, and
they thus are not affected, "inequitably" or otherwise, by this action (id.).

The bold is mine.

CPLR § 3213; CPLR § 1001

CPLR § 3213 Motion for summary judgment in lieu of complaint

CPLR § 1001 Necessary joinder of parties

Ro & Ke, Inc. v Stevens, 2009 NY Slip Op 03501 (App. Div., 2nd, 2009)

"[A] document comes within CPLR 3213 if a prima facie case would be
made out by the instrument and a failure to make the payments called
for by its terms . . . . The instrument does not qualify if outside
proof is needed, other than simple proof of nonpayment or a similar de
minimis deviation from the face of the document"
(Weissman v Sinorm Deli, 88 NY2d 437, 444 [internal quotation marks [*2]omitted]; see Stallone v Rostek,
27 AD3d 449, 450). Here, the plaintiff made a prima facie showing of
entitlement to judgment as a matter of law by proving the existence of
the subject note and nonpayment according to its terms
(see Black Rock, Inc. v Z Best Car Wash, Inc., 27 AD3d 409, 409; James DeLuca, M.D., P.C. v North Shore Med. Imaging, 287 AD2d 488, 488; A. Bella Food Corp. v Luigi's Italian Deli,
243 AD2d 592, 592). In response to the plaintiff's prima facie showing,
the defendant raised a triable issue of fact regarding the validity of
the assignment under which the defendant allegedly assumed the
obligations of Hyunik Seo, a nonparty to this action, who was the
original borrower on the note. Therefore, the motion for summary
judgment in lieu of complaint should have been denied
(see Sillman v Twentieth Century-Fox Film Corp., 3 NY2d 395, 402-403; Comforce Telecom, Inc. v Spears Holding Co. Inc., 42 AD3d 557; cf. Millenium Falcon Corp. v WRD Sales, Inc., 46 AD3d 862, 863).

Under the circumstances presented, Hyunik Seo, the original
borrower on the note, should have been joined as a party to this action
(see CPLR 1001[a]; cf. Friedman v Friedman, 125 AD2d 539, 540-541; Matter of Brener, 12 AD2d 452).

The bold is mine.

Halliwell v Gordon, 2009 NY Slip Op 03481 (App. Div., 2nd, 2009)

Finally, the Supreme Court erred in granting that branch of the
defendant's motion which was to dismiss the complaint, with prejudice,
on the alternative ground that the plaintiff failed to join Bumble as a
necessary party. The defendant failed to demonstrate that Bumble needed
to be a party if complete relief was to be accorded between the parties
or that Bumble would be inequitably affected by a judgment in this
action if it were not joined (see CPLR 1001[a]; Spector v Toys "R" [*3]Us, Inc., 12 AD3d 358, 359).

Leeward Isles Resorts, Ltd. v Hickox, 2009 NY Slip Op 03457 (App. Div., 1st, 2009)

Assuming the non-joined parties are necessary parties within the
meaning of CPLR 1001(a), defendant has not shown as a matter of law
that he is entitled to dismissal of the complaint for failure to join
them. Defendant contends that these parties are beyond the jurisdiction
of the court and cannot be joined. However, even if these parties were
shown to be beyond the jurisdiction of the court, consideration of the
factors enumerated in CPLR 1001(b) would support allowing the action to
proceed, especially as "dismissal for failure to join a necessary party
should eventuate only as a last resort" (L-3 Communications Corp. v SafeNet, Inc., 45 AD3d 1, 11 [2007] [internal quotation marks and citation omitted]).

The bold is mine.

De Bie v Tredegar Trust Co., 2009 NY Slip Op 03445 (App. Div., 1st, 2009)

None of the factors set forth in CPLR 1001(b) warranted proceeding
without the joinder of Joan and Alexis Jr. as necessary parties
(see Nowitz v Nowitz, 37 AD3d 788
[2007]). First of all, plaintiff has an alternative forum for relief in
Virginia, where issues pertaining to the trust have been litigated for
over a decade. In its May 19, 2004 order, the Virginia court directed
the parties to "undertake to settle all remaining issues pertinent to
[Tredegar]'s prayer for aid and guidance not disposed of by this Order,
including, without limitation, undertaking to agree on a mutually acceptable division of the Trust into two parts"
(emphasis added), the very relief plaintiff seeks herein. By filing in
New York, plaintiff subverted the authority of the Virginia court,
which had agreed, in its 2004 order, to supervise settlement of the
parties' remaining disputes relating to the trust, including the
division of the trust into two parts.

Second, Joan and Alexis Jr. would be prejudiced if the New York
action were to proceed in their absence. Because plaintiff has sought
partition of his interest in the trust, his interests are not aligned
with those of his ex-wife and son. They do not stand to benefit from
the recovery of $10 million on account of alleged breaches of fiduciary
duty by the trustee; the complaint makes clear that plaintiff seeks
judgment restoring such losses "to the Plaintiff's partitioned trust,"
i.e., recovery of these sums would be for plaintiff's benefit only.

Third, plaintiff engaged in forum shopping by filing suit
against Tredegar in New York. Plaintiff concedes that he sought to
avoid litigating this case in Virginia, given that court's [*2]history of ruling "harshly" against his interest.

Fourth, it would not be feasible to fashion an appropriate
protective order. As the motion court recognized, the parties have a
"long and tortured history" in this matter, and the relief sought by
plaintiff, i.e., partition of his interest in the trust, would subvert
the terms of the settlement agreement.

Fifth, an effective judgment cannot be rendered in the absence
of Joan and Alexis Jr. The fact that plaintiff has not asserted any
claims against them is of no moment, given that the relief he seeks
would subvert the settlement agreement and, if he were to prevail,
diminish the value of their interests in the trust.

The bold is mine.

CPLR § 1001 Necessary Joinder

CPLR § 1001 Necessary joinder of parties

CPLR 2221 Motion affecting prior order
(a) Parties who should be joined

Menorah Home & Hosp. for Aged & Infirm v Jelks, 2009 NY Slip Op 02758 (App. Div., 2nd, 2009)

In an action to recover payment for professional nursing care
services, to set aside a conveyance of real property as fraudulent, and
to declare the subject deed null and void, nonparty Green Tree Credit,
LLC, f/k/a Conseco Finance Credit Corp., appeals from an order of the
Supreme Court, Kings County (Dabiri, J.), dated December 17, 2007,
which denied its motion, in effect, pursuant to CPLR 2221(a) and
1001(a) to vacate those portions of a prior order of the same court
dated December 5, 2006, granting that branch of the plaintiff's motion
which was for leave to amend the complaint to add a cause of action to
set aside a deed of real property to the defendant as fraudulent, and
amended a prior order and judgment (one paper) of the same court
(Ruchelsman, J.), dated September 12, 2005, to include a declaration
that the subject deed is null and void and a direction to the County
Clerk of Kings County to mark the records accordingly.

ORDERED that the order is reversed, on the law, with costs, the
nonparty-appellant's motion, in effect, pursuant to CPLR 2221(a) and
1001(a) is granted,
and those provisions of the December 5, 2006, order
which granted that branch of the plaintiff's motion which was for leave
to amend the complaint and which amended the order and judgment dated
September 12, 2005, to include a declaration that the subject deed is
null and void and a direction to the County Clerk of Kings County to
mark the records accordingly are vacated, and that branch of the
plaintiff's motion which was for leave to amend the complaint is
denied.
[*2]

"It is a fundamental legal
principle that an individual may not be deprived of property without
due process of law, which requires that one be accorded notice and an
opportunity to be heard" (Friedman v Friedman, 125 AD2d 539,
541). Contrary to the plaintiff's contention and the determination of
the Supreme Court, the plaintiff was required to join the
nonparty-appellant, Green Tree Credit, LLC, f/k/a Conseco Finance
Credit Corp. (hereinafter Green Tree), the mortgagee of the subject
premises, as a necessary party in its cause of action to set aside the
conveyance of the subject premises as fraudulent, and to declare the
subject deed null and void
(see CPLR 1001[a]; Ameriquest Mtge. Co. v Gaffney, 41 AD3d 750, 751; Losner v Cashline, L.P., 284 AD2d 433; Friedman v Friedman, 125 AD2d 539, 541; see e.g. Skiff-Murray v Murray, 17 AD3d 807).
Accordingly, the failure of the plaintiff to join Green Tree as a
defendant requires that the portions of the Supreme Court's resulting
order dated December 5, 2006, granting that branch of the plaintiff's
motion which was for leave to amend the complaint to add a cause of
action to set aside the conveyance of the subject premises as
fraudulent, and to declare the subject deed null and void, and amending
a prior order and judgment of the same court to include a declaration
that the subject deed is null and void and a direction to the County
Clerk of Kings County to mark the records accordingly be vacated, and
that that branch of the plaintiff's motion which was for leave to amend
the complaint be denied.

The bold is mine.