Petitioners move for a writ of mandamus, pursuant to CPLR Article 78 and Judiciary Law § 14, directing Respondent, the Hon. Gerald A. Lebovits to disqualify himself nunc pro tunc to June 4, 2007 with regard to all matters relative to two non-payment proceedings pending in the Housing Part of the Civil Court of the City of New York, County of New York, entitled Hudson Overlook LLC v William Kyle, Kathryn Gilbert, and Mary Kyle, L&T Index No. 68658/03 (the "2003 non-payment case") and 736 Riverside Dr., LLC v William Kyle, Mary Kyle and Kathryn Gilbert, L&T Index No. 77281/06 (the "2006 non-payment case"). Petitioners also seek a stay of the 2006 non-payment case allegedly pending before Judge Lebovits in Part O.

Respondent 736 Riverside Dr., LLC (736 Riverside Drive) cross-moves for sanctions against the petitioners and their attorney, pursuant to 22 NYCRR 130-1.1, for knowingly engaging in frivolous conduct.

By notice, pursuant to CPLR 7804(I), respondent Lebovits elected not to appear in this proceeding and referred the court to a decision and order he rendered on August 24, 2007 in the 2006 non-payment case.

Since the filing of the instant order to show cause, several developments have partially rendered the relief sought herein moot. First, in his August 24th order, Judge Lebovits made clear that he had recused himself as to the 2006 non-payment case and, again, sent it to Part X for trial before another judge on October 9, 2007.^[FN1] In addition, Judge Lebovits refused to vacate the stipulation of settlement he "so ordered" on June 20, 2007 in the non-payment cases. Said stipulation settled an outstanding attorney fee issue and, pursuant to which, petitioners were [*2]awarded $190,000 in attorney fees (the "Stipulation"). Finally, at argument of this application on September 10, 2007, this court declined to issue any stay the 2006 non-payment case.

Basically, petitioners seek to vacate the Stipulation on three grounds. First, petitioners argue that the Stipulation was entered into in violation of a stay issued by this court on May 31, 2007. Second, petitioners contend that Judge Lebovits was statutorily disqualified under Judiciary Law § 14 from presiding over the Civil Court non-payment cases by virtue of his being named a respondent in an Article 78 mandamus proceeding, and that this court should order that Judge Lebovits be retroactively disqualified from the Housing Court proceedings, thus vitiating the Stipulation. It should be noted that the Stipulation called for payment of attorneys fees to Petitioners' then attorney (in the non-payment cases), and that the sum it called for has been paid, i.e. petitioners have already received the benefit of their bargain. Third, petitioners make very serious and, as further discussed below, baseless accusations against Judge Lebovits, who is alleged to have "intimidated and harangued" petitioners' former counsel, Ronald Hart, Esq., into entering into the Stipulation.

A brief history of this landlord-tenant dispute and the prior Article 78 proceeding is necessary to resolve the remaining two issues in this proceeding, which are whether there is any basis for this court to vacate the Stipulation, and whether petitioners and/or their new counsel should be sanctioned for engaging in frivolous conduct.

On April 15, 2003, Hudson Overlook, LLC, the then owners of 736 Riverside Drive, commenced the 2003 non-payment case against the petitioners. On December 23, 2004, petitioners were awarded a judgment of $31,373.40 after trial. An appeal to the Appellate Term was dismissed on August 15, 2005 for failure to perfect.

On July 28, 2005, Hudson Overlook, LLC transferred its interest in the subject building to 736 Riverside Dr., LLC. In December of 2005, petitioners moved to amend the caption to add 736 Riverside Dr., LLC, as a party and also moved for attorney fees. Due to scheduling conflicts and numerous adjournments, the motion was never heard and marked off the calendar with the understanding that it would be later restored.

On June 16, 2006, 736 Riverside Dr., LLC commenced the 2006 non-payment case. Petitioners answered on July 21, 2006, and asserted three counterclaims. None of the counterclaims sought to hold 736 Riverside Dr., LLC liable for attorney fees as Hudson Overlook, LLC's successor-in-interest. Rather, the answer contained a reservation of petitioners' claimed right to move for an "accelerated/summary judgment" for attorney fees for their successful defense of the 2003 non-payment case.

After a plethora of motions in both non-payment cases, Judge Lebovits issued a decision and order dated January 26, 2007 in which he ruled that petitioners should seek leave to amend their answer in the 2006 non-payment case to add a counterclaim seeking attorneys fees for work done in the 2003 non-payment case. Petitioners thereupon made such a motion in the 2006 non-payment case.

By order dated March 30, 2006, the motion was denied by the Hon. Peter D. Wendt on the ground that the motion failed to include a copy of any lease entitling either side to legal fees and because the relief (attorney fees) should be sought in the 2003 non-payment proceeding or by plenary action. Judge Wendt referred the 2006 non-payment case back to Judge Lebovits for trial. [*3]

No appeal from Judge Wendt's order was taken. Instead, on May 25, 2007, petitioners filed an Article 78 proceeding in this court against Judge Wendt, Judge Lebovits and 736 Riverside Dr., LLC, seeking an order directing an immediate hearing in the 2006 non-payment case on the merits of petitioners' counterclaim for attorney fees. That proceeding was assigned to this part, and by order dated May 31, 2007, the 2006 non-payment case was temporarily stayed pending the hearing of the petition, scheduled for June 22, 2007.

On June 15, 2007, the parties appeared before Judge Lebovits in the 2006 non-payment case. Petitioners' then attorney, Ronald Hart, Esq., was not present in the courtroom, but appeared by telephone. At this conference, the parties asked for Judge Lebovits' assistance in settling the 2006 non-payment action, indicating that they were very close to a settlement. In response, Judge Lebovits indicated that he was in a "peculiar position" because he had been sued by petitioners in the Article 78 mandamus proceeding, but was being asked to resolve the non-payment case at the same time; that it "presents a rather serious ethical conundrum on [his] part" (6/15/07 Tr. at 47-48). He further stated on the record that, in his opinion, petitioners' decision to file an Article 78 proceeding against him and Judge Wendt, rather than moving for reconsideration of the orders or the filing of an appeal, was "frivolous and so sanctionable that it shocks the conscience," and that he was thinking about filing a disciplinary charge against Mr. Hart personally. Id. at 48-49. Despite these pronouncements, petitioners' counsel continued to press for his assistance in settling their dispute. In response, Judge Lebovits offered to put the matter over to June 20, 2007.

On June 20th, at the start of the conference, Judge Lebovits clarified on the record that he had no intention of filing a disciplinary complaint against Mr. Hart. The parties then presented Judge Lebovits with a written stipulation settling their dispute, which included a provision in paragraph 9 whereby the parties agreed to discontinue the Article 78 mandamus proceeding with prejudice. Judge Lebovits stated that he had difficulty "so ordering" a stipulation that includes a provision in which the parties were agreeing to discontinue a lawsuit in which he was a party. He suggested that the parties prepare a separate stipulation discontinuing the Article 78 proceeding, which he would not sign, and that he "so order" the existing stipulation, but specifically exclude paragraph 9. Both sides agreed to this procedure. In fact, on the first page of the Stipulation, it clearly states under Judge Lebovits' signature "(except that paragraph 9 is not so-ordered GL)." The matter was then adjourned until later that day for the parties to prepare a separate stipulation discontinuing the Article 78 mandamus proceeding. When the parties re-appeared before Judge Lebovits later that day, he so-ordered the Stipulation, as indicated above, and sent the 2006 non-payment case to Part X, the expediter, for trial on July 17, 2007, a date to which the parties agreed. The separate stipulation discontinuing the Article 78 proceeding was filed in this court the following day, June 21, 2007.

The Stipulation settled the petitioners' claims for legal fees "to date" for the sum of $190,000, and makes clear that this settlement applies to the legal fees incurred up to that date in the 2006 non-payment proceeding. In addition, the Stipulation provides for the withdrawal of petitioners' counsel, Mr. Hart, and that petitioner William Kyle ^[FN2] elects to proceed pro se in the [*4]matter or have until July 16, 2007 to obtain new counsel. The Stipulation was signed by both petitioners' counsel and by William Kyle. Indeed, Judge Lebovits specifically questioned petitioner William Kyle, who was present in court on June 20, 2007 as to whether he wanted to settle the attorney fee issue and William Kyle responded that he did. The $190,000 was subsequently paid.

Thereafter, in an effort to overturn the Stipulation, petitioner William Kyle filed an order to show cause, pro se, in the 2006 non-payment case to disqualify Judge Lebovits retroactively to May 24, 2007 on the ground that Judge Lebovits took part in an action in which he was a party, in violation of Judiciary Law § 14. Judge Lebovits declined to sign the order to show cause, writing thereon that it was the most outrageous document he has seen in his 5 ½ years of service on the bench.

Petitioners, represented by new counsel, Robin H. Kyle, Esq. — William Kyle's brother — then moved to vacate the Stipulation by motion returnable on August 13, 2007. They argued to Judge Lebovits that: (1) he had no authority to "so order" the Stipulation while the Supreme Court's stay was in effect; (2) he had a conflict of interest because he had been sued in the Article 78 mandamus proceeding; (3) he coerced petitioners' prior counsel, Ronald Hart, into signing the Stipulation by threatening him with disciplinary action; and (4) that Kathryn Gilbert and Mary Kyle did not know about the Stipulation and never received any part of the $190,000. Judge Lebovits denied the motion in an order dated August 13, 2007, stating that the motion was frivolous and possibly sanctionable.

On August 10, 2007, petitioners — through their new counsel — filed the instant order to show cause in this court seeking the above-referenced relief.

Thereafter, Judge Lebovits withdrew his August 13, 2007 decision and order and issued a second decision and order dated August 24, 2007, in which he withdrew his prior direction that a sanctions hearing be held on October 9, 2007. Instead, he directed the parties to appear on that day in Part X for trial.

Petitioners' motion is denied in its entirety, and for the following reasons, the court finds that the instant order to show cause and supporting papers are grossly frivolous and, thus, sanctionable.

Petitioners argue that the Stipulation was "so ordered" by Judge Lebovits in violation of this court's stay, and that no court conferences should have been held in the 2006 non-payment case after this court issued a stay on May 31, 2007. However, as the transcripts of the Civil Court proceedings held on June 15 and 20, 2007 make abundantly clear, Judge Lebovits presided over these settlement conferences only at the behest of petitioners' then counsel, who could have objected at any time on the grounds that the 2006 non-payment action was completely stayed and should be adjourned until after June 22, 2007. The June 15, 2007 transcript suggests that Judge Lebovits was not aware of the Supreme Court's stay:

THE COURT: Okay, I-I'm in a peculiar position with all of this, I think, because I'm-uh, I'm asked to, uh, assist in perhaps settling this case, or if not, in trying this case. And yet at the same [*5]time you have sued me. Uh, that-that, as far as I'm concerned, present a rather serious ethical conundrum on my part because it's rare to be sued and still have a case pending before me when in the context of suit I don't think you even ask for a stay of these proceedings. So I'm being sued and asked to resolve everything all at the same time. . . .

6/15/07 Tr. at 47-48 (emphasis added). In response, Mr. Hart did not correct the Judge and advise him of the Supreme Court stay. Rather Mr. Hart responded "I'm listening," (id. at 48), "Judge, I'm asking for your assistance" (id. at 55), and he proceeded to discuss issues regarding a proposed settlement. At least twice on June 15, 2007, rather than argue that the 2006 non-payment case was stayed, Mr. Hart announced that he was ready to go to trial. Id. at 53, 55. It is beyond the pale that a party, having obtained a stay of a judicial proceeding in a proceeding in which the Presiding Judge is named as a respondent, then lobbies the same presiding judge to assist in settling the case and then, later on, after having accepted the proceeds of the settlement, argues that the judge acted wrongfully in assisting the parties in facilitating a settlement.

It is important to note that on June 20, 2007, the parties presented Judge Lebovits with a written stipulation settling the attorney fee issue — the subject of the Article 78 mandamus proceeding — and that petitioners were prepared to discontinue the mandamus proceeding with prejudice. However, before Judge Lebovits "so ordered" the Stipulation, the parties presented him with a signed copy of a separate written stipulation discontinuing the Article 78 proceeding, and represented that it would be filed with the Supreme Court. Thus, Judge Lebovits took no official action in the non-payment cases until he was assured that the action in which a stay had been issued was voluntarily discontinued by the party who sought the stay in the first instance.

Under the circumstances presented, there was no violation of this court's stay order.

Petitioners also claim that Judge Lebovits was disqualified from presiding over the non-payment cases by virtue of Judiciary Law § 14, and that this section authorizes this court to nullify a stipulation settling an attorney fee issue, after the money has been paid.

Section 14 of the Judiciary Law provides, in pertinent part: "A judge shall not sit as such in, or take any part in the decision of, an action, claim, matter, motion or proceeding to which he is a party, or in which he has been attorney or counsel, or in which he is interested, or if he is related by consanguinity or affinity to any party to the controversy within the sixth degree." If disqualification under the statute were found, prohibition, not mandamus, would lie. However, a judge's decision not to disqualify himself, based on a claim that his impartiality might reasonably be questioned, is not subject to Article 78 review. Johnson v Hornblass, 93 AD2d 732, 733 (1st Dept 1983).

Judge Lebovits was not a party to the non-payment cases, and had no interest in the success or defense of those cases, such that legal disqualification under Judiciary Law § 14 was warranted. However, as he correctly recognized, having been sued by the tenants in an Article 78 mandamus proceeding, his impartiality towards those litigants might reasonably be questioned. Accordingly, he appropriately recused himself from the 2006 non-payment case. He only presided over settlement conferences at the behest of the tenant's (petitioners') attorney, who repeatedly advised Judge Lebovits that the cases were being settled. There is no basis in law or fact for this court to vacate the Stipulation on the basis of any violation of Judiciary Law § 14.

The court notes that the Stipulation was signed by the attorneys for both parties in the non-payment proceeding. Thus, it might well have been enforceable even if Judge Lebovits had [*6]not "so ordered" it.

The cases upon which petitioners rely are distinguishable. Harkness Apartment Owners Corp. v Abdus-Salaam (232 AD2d 309 [1st Dept 1996]), involved an Article 78 proceeding seeking a writ of prohibition, and not mandamus. Although the prohibitive writ was granted, the respondent justice had worked with the attorney general's office on the precise subject matter of the litigation prior to becoming a Supreme Court Justice, in violation of Judiciary Law § 14's prohibition of a judge presiding over any case "in which [s]he has been attorney or counsel." The case lacks any similarity to the case at bar.

Petitioners also rely on Matter of Beer Garden, Inc. v New York State Liquor Authority (79 NY2d 266 [1992]), which, similar to Harkness, involved the refusal of a State Liquor Authority (SLA) Commissioner to recuse herself despite her involvement in prosecuting the case as SLA counsel prior to becoming a commissioner.

Finally, petitioners make very serious and disturbing allegations that Judge Lebovits, acting in concert with Judge Wendt, coerced an unfair settlement of the attorney fee issue by threatening their former attorney, Ronald Hart, with disciplinary action for having filed, in Judge Lebovits' opinion, a frivolous mandamus proceeding. Notably, petitioners have not submitted an affidavit from their prior counsel in support of their application in this proceeding, and have failed to explain why they failed to do so. The only factual support for this claim is the statement in the Verified Petition that "Mr. Hart was so distraught at prospect [sic] of being the target of grievance disciplinary proceedings (initiated by a member of the Civil Court of the City of New York no less) he instructed his clients that he was going to drop the Mandamus matter forthwith." Pet at ¶ 27. Yet, Judge Lebovits made it very clear to Mr. Hart on June 20, 2007 that he had no intention of filing disciplinary charges against him. Contrary to Mr. Kyle's assertions, neither Judge Lebovits nor Mr. Hart "waived" the petitioners' right to counterclaim in the 2006 non-payment case for attorney fees. Indeed, there is nothing in the record suggesting that petitioners were forced to accept $190,000 in legal fees from their landlord for settlement of their outstanding legal fee claim in the 2003 non-payment case and any legal fees incurred "to date" in the 2006 non-payment case, or that Judge Lebovits had any involvement in negotiating the terms of the Stipulation, other than to announce on June 20th that he could not "so order" the paragraph, which provided for the discontinuance of the Article 78 proceeding.

This is not a situation where an attorney was allegedly acting without the knowledge and consent of his clients. Judge Lebovits specifically questioned petitioner William Kyle, who was present in court, about whether he wanted to settle. "[I]s this what you want to do?" the court asked. William Kyle answered: "Yes. Uh, this is what we're going to do. I want to do it." 6/20/07 Tr. at 57. After a few minutes, the court said to William Kyle, "Tell me what you want to do," and William Kyle said, "Don't start tearing up everything. This is fine." Id. at 60.^[FN3]

In addition to the fact that the petition lacks any basis in law or fact, the court finds that petitioners' present attorney, Robin H. Kyle, Esq., has engaged in the following additional [*7]frivolous conduct in connection with this proceeding that warrants the imposition of sanctions pursuant to 22 NYCRR 130-1.1.

First, Mr. Kyle's affirmation and supporting memoranda of law are replete with insulting and disingenuous readings of the record in the Civil Court cases. Mr. Kyle deliberately misquotes the June 15 and 20th transcripts of the proceedings in Civil Court by adding his own punctuation and emphasis, by selectively truncating quotes, and by mis-citing page references. At paragraph 11 of his supporting affirmation, Mr. Kyle quotes the record as follows:

THE COURT: . . . I think your lawsuit [the Article 78] is frivolous, because I think that your lawsuit is sanctionable. And I think that your lawsuit could lead you to go the disciplinary committee . . . And yet I am thinking about filing a disciplinary charge against you personally! So I don't think I have to [sic] wherewithal to handle this—this matter. And I don't know, because I have to speak to my attorney, uh, before I file disciplinary charges against you. . . I - I - I - I wonder, frankly, if you're capable of doing this, what else you're capable of!

So I essentially trust you not! I don't trust you even a little bit. Okay, have you heard me loud and clear?

MR. HART:Yes, Judge, I have.

(6/15/07 Tr. at 49).

However, in reality, this is a truncated excerpt from pages 48 and 49 of the transcript and the actual transcript contains no exclamation points and no emphasis.^[FN4] As stated in the affidavit [*8]of Lawrence McCourt, Esq., counsel for 736 Riverside Dr., LLC, Judge Lebovits never raised his voice and conducted himself in a calm and judicious manner at all times. In addition, in the middle of this quote, Judge Lebovits explained why he thought the Article 78 was frivolous:

It shocks my conscience to believe that you think that the way to gain leverage in your case is to sue me and Judge Peter Went [sic]. And it shocks my conscience to think that your solution instead of appealing or asking for reconsideration is to go to [60 Centre Street]. It is shocking to me, because I was told by you that the case would be settled last week. And then I was told by you that the case would be settled today.

Second, Mr. Kyle mis-interprets the Stipulation, which does not provide for the waiver of any statutory right pursuant to Real Property Law § 234 to recover attorney fees in the 2006 non-payment case. Further, Mr. Kyle makes unsupported claims that petitioners were "forced" into accepting the $190,000 on their attorney fee claim, and that it "will result in the loss of their home" (Pet Br at 31), when, in reality, the 2006 non-payment case has yet to be tried. Mr. Kyle also takes issue with the fact that the check for $190,000 was made payable to Mr. Hart (id. at 32), suggesting that there was some prior arrangement with Mr. Hart about who would ultimately receive that money, whether as reimbursement for bona fide attorneys' fees paid or otherwise. That is a dispute that petitioners must take up with their prior counsel, and does not, as Judge Lebovits correctly observed, justify setting aside the Stipulation.

Finally, Mr. Kyle's memoranda of law are replete with outrageous, overblown and insulting comments about both Judges Lebovits and Wendt that are completely unsupported by the record and lack any good faith basis whatsoever. For example, Mr. Kyle accuses Judge Lebovits of having "brought down the gavel in his own case," "selling tenants' statutory protections," and "using the prestige of his office for personal advantage in pending litigation." Pet Br at 1. He further accuses Judge Lebovits of having "orchestrated appearances" in the Civil Court cases "for the sole purpose of vitiating" the Article 78 mandamus (id.) and "fierce and discourteous lobbying" to neutralize the Article 78 mandamus proceeding" (id. at 23). In fact, record reflects that the 2006 non-payment case was adjourned, with the parties' consent, based on their repeated assurances to Judge Lebovits that the matter was close to being settled. 6/15/07 Tr. at 49-50, 52, 53-54. Finally, he accuses Judge Wendt of having acted in concert with Judge Lebovits solely because Judge Lebovits spoke to Judge Wendt by telephone on June 15, 2007 to [*9]advise him of the status of the 2006 non-payment case and possible settlement. See 6/15/07 Tr. at 24-25.

Mr. Kyle contends that Judge Lebovits demonstrated bias and prejudice against Mr. Hart by referring to him as "sir" at one point. See 6/15/07 Tr. at 49 ("Okay. What, now, sir, are your thoughts in response to my obviously pretty strong feelings toward you, toward your litigation and everything else?"). Mr. Kyle suggests that this is akin to a Judge engaging in prejudicial behavior by addressing a lawyer for one of the parties by an honorific title such as "judge," "senator" or "ambassador." See Commentary 3.2, Code of Judicial Conduct Canon 3(b)(4).

The numerous factual and legal misrepresentations detailed above, the baseless nature of the petition, the disrespect directed at two judges of the Housing Court and the petitioners' obvious intent to delay the resolution of the underlying 2006 non-payment proceeding, all constitute frivolous conduct under 22 NYCRR 130-1.1, justifying an award of sanctions. Rule 130-1.2 requires the court to state the reasons why the court found the amount imposed to be appropriate. Thus, this court finds the sum of $1,000 to be appropriate. The court hopes that this sanction "will sting sufficiently to communicate its demand for improved professional conduct without imposing excessive hardship" on Mr. Kyle. Candolfi v New York City Transit Authority, 156 Misc 2d 964, 970 [Civ Ct, Kings County 1992]). Accordingly, the court sets the amount of sanctions imposed on Robin H. Kyle, Esq. at $1,000.00.

For the foregoing reasons, it is hereby

ORDERED that the petition is denied and the proceeding dismissed; and it is further

ORDERED that respondent 736 Riverside Dr., LLC's cross motion for sanctions against the petitioners and their attorney pursuant to 22 NYCRR 130-1.1 for knowingly engaging in frivolous conduct is granted to the extent of ordering Robin H. Kyle, Esq. to pay a donation in the amount of $1,000 to The Lawyers' Fund for Client Protection; and it is further

ORDERED that, the clerk of the court shall enter judgment accordingly.

Dated: October 26, 2007

ENTER:

_____________/s/_______________________

J.S.C.