Omansky v. Lapidus & Smith, L. L. P.

Order, Supreme Court, New York County (Harold Tompkins, J.), entered July 9, 1999, which granted defendants’ motion to dismiss the complaint and awarded sanctions in their favor in the amount of $2,500, unanimously modified, on the law and the facts, to deny the motion with respect to plaintiffs’ third cause of action and to reinstate that cause, and to vacate the award of sanctions, and otherwise affirmed, without costs.

The complaint should not have been dismissed on grounds of collateral estoppel and res judicata since the prior dismissal was not on the merits (see, Hodge v Hotel Empls. & Rest. Empls. Union, 269 AD2d 330). However, dismissal of the first and second causes of action, stemming from damages allegedly sustained by the partnership and condominium, was warranted pursuant to CPLR 3211 (a) (3) since the individual plaintiffs were without authority to sue on the behalf of the partnership and condominium. On the other hand, the third cause of action, in which the individual plaintiffs seek direct relief on their own behalf, is not subject to CPLR 3211 (a) (3) dismissal and was not otherwise subject to dismissal on defendants’ prejoinder motion to dismiss.

The award of sanctions, based on the motion court’s erroneous belief that collateral estoppel and res judicata barred this action, should be vacated. Concur — Rosenberger, J. P., Tom, Mazzarelli, Andrias and Saxe, JJ.