*1 APPEAL from a judgment of the Supreme Court, Richmond County (Philip G. Minardo, J.), dated March 13, 2015. The judgment, insofar as appealed from, upon a decision dated December 5, 2013, made after a nonjury trial, is in favor of the plaintiff and against the defendant Eric Nelson in the principal sum of $115,000.*2
MARK DILLON, J.OPINION & ORDERWe address two related issues concerning subject matter jurisdiction that have not previously been addressed by our Court. The first is whether a court with subject matter jurisdiction, which pursuant to CPLR 325(d) has erroneously transferred an action to a lower court lacking subject matter jurisdiction to adjudicate the matter, may retransfer the action to itself after the lower court has already tried the matter and rendered a judgment. The second question is whether, upon a retransfer of the action to a court with subject matter jurisdiction pursuant to CPLR 325(b), the court may adopt the findings of fact and conclusions of law of the lower court and thereupon substitute the lower court’s judgment with its own judgment. We answer the first question in the affirmative and the second question in the negative.I. FactsThis appeal presents an unfortunate and tortured procedural history.In October 2009, the plaintiff, Maureen Caffrey, individually and as a shareholder of the defendant North Arrow Abstract & Settlement Services, Inc. (hereinafter North Arrow), commenced this shareholder derivative action in the Supreme Court, Richmond County, against North Arrow and the defendant Eric Nelson, to recover damages for, inter alia, corporate mismanagement. The complaint asserted equitable causes of action alleging misappropriation of funds, breach of fiduciary obligations, corporate waste, conversion, the failure to maintain a proper accounting, fraud, and unjust enrichment, and sought injunctive relief and a declaratory judgment. Nelson interposed an answer dated April 20, 2010, denying the material allegations of the complaint.The action was referred by the Administrative Judge of Richmond County “for assignment to a Judicial Hearing Officer/Court Attorney Referee to conduct a nonjury trial.” By order dated August 5, 2011, the Supreme Court, rather than assigning the matter to a judicial hearing officer or referee as directed, sua sponte, transferred the action pursuant to CPLR 325(d) to the Civil Court of the
