Wagner Davis, P.C. v Finkelstein

[*1] Wagner Davis, P.C. v Finkelstein 2006 NY Slip Op 50204(U) [11 Misc 3d 1054(A)] Decided on January 3, 2006 Supreme Court, New York County Lehner, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on January 3, 2006
Supreme Court, New York County

Matter of Application of Wagner Davis, P.C., Petitioner, For an Order Pursuant to Article 75 of the CPLR Confirming an Arbitration Award

against

Howard Finkelstein, Respondent.



104264/05

Edward H. Lehner, J.

This is an application by petitioner Wagner Davis, P.C. ("Wagner") to reargue the order of the court rendered on the record at oral argument on June 10, 2005.

The controversy between the parties emanates from a dispute as to legal fees claimed by Wagner to be owing from respondent Finkelstein. To resolve the dispute the parties agreed to arbitration before the Joint Committee on Fee Disputes and Conciliation of the New York County Lawyer's Association. By decision dated September 14, 2004 the arbitrator made an award in favor of Wagner against Finkelstein in the amount of $89,663.64.

Finkelstein then commenced a plenary action against Wagner by service of a summons with notice [Index No. 603410(04)]. The Notice stated that the action was "for a declaratory judgment to determine whether the plaintiff is obligated to pay defendant legal fees for services and the amount due for such services." By notice dated October 28, 2004, Wagner demanded a copy of the complaint. When no complaint was timely served, Wagner, by notice of motion dated December 1, 2004, moved to dismiss the action. Finkelstein cross-moved to extend the time to serve the complaint, but when he failed to appear for oral argument on February 25, 2005 the motion to dismiss was granted on default and a judgment for costs in the amount of $340 was subsequently entered against him.

Finkelstein then moved to vacate his default and, by decision on the record on March 18, 2005, the application was denied due to his failure to demonstrate the existence of a possible meritorious defense.

Subsequently Finkelstein moved for renewal and by decision on the record on June 10, 2005, the application was granted, the court finding the existence of a possible meritorious defense. The effect of the plenary action was to allow Finkelstein a de novo review of the arbitration award. However, the grant of such relief was conditioned on Finkelstein paying Wagner $750 in costs, which sum was paid in open court. Wagner was given ten days to serve its answer. In light of the grant of the motion in the plenary action, the application by Wagner in this special proceeding to confirm the arbitration award was denied. [*2]

By notice of motion dated June 30, Wagner has now moved for reargument of the June 10 order, contending herein specifically for the first time that Part 137 of the Rules of the Chief Administrator of the Courts providing for arbitration of disputes for legal fees did not apply to this controversy. Wagner is legally correct in that Part 137 did not mandate arbitration of this dispute in that the program set forth therein only applies where the representation commenced after January 1, 2002 and the amount in dispute does not exceed $50,000 [137.1 (b)(2)]. Here the representation of Finkelstein by Wagner commenced prior to that date and the amount in controversy exceeds said sum. If the Part were applicable, a party aggrieved by the award is entitled to commence a plenary action on the merits within 30 days after the mailing of the award for a de novo review thereof (§ 137.8). There is no question that the plenary action commenced by Finkelstein was timely.

Crucial to this application for reargument is that at no time prior to the making of this motion and the service of its answer on June 17, 2005 did Wagner specifically assert that the arbitration, although not mandatory, did not proceed pursuant to Part 137. In fact, it argued to the contrary. In his affirmation dated December 1, 2004 (p. 8), attorney Andrew Bart maintained that Finkelstein did not timely commence his plenary action within the time set forth in § 137.8(a). In his affirmation dated January 3, 2005 (p. 6), Bart makes arguments in support of Wagner's motion by referring to §§ 137.8 (c) and 137.10 of Part 137, and in his affirmation dated March 17, 2005 (¶ 33) he requests that if the court were to grant Finkelstein's motion to vacate his default in appearing for oral argument on February 25, it should also expedite "the scheduling of a trial in this matter" (the plenary de novo review action). Also during the argument on June 10, 2005, Bart discusses whether Finkelstein complied with the procedure specified in Part 137. Thus, from the voluminous papers submitted and the various oral arguments had herein wherein Bart primarily argued the merits of the claim for legal fees, Wagner has acted in the instant litigation on the basis that the arbitration proceeded pursuant to the procedures set forth in Part 137. While on this motion Wagner argues that it had previously submitted an affidavit of Steven Wagner in which he obliquely states that he was "assured that (Finkelstein) would live by the (arbitrator's) decision," he does not state who gave him such assurance, nor when and where made. No reference to such contention was made at any of the oral arguments nor in any of the other papers submitted to the court prior to the making of this reargument motion.

It is noted that § 137.1 (b)(2) authorizes an arbitral body to hear disputes involving amounts in excess of $50,000 "if the parties have consented." Under Section 6 B (2) of the Standards and Guidelines of the Board of Governors established by Part 137, an attorney and client may consent that the award of the arbitrator is not subject to a trial de novo, but such consent must be in writing. No claim of such consent is asserted by Wagner.

Since a motion to reargue must be based on "matters of fact or law allegedly overlooked or misapprehended by the court in determining the prior motion, ... (and) shall not include any matters of fact not offered on the prior motion" [CPLR 2221 (d) 2], the court may not consider on this application the contention raised for the first time on this reargument motion that the arbitration did not proceed pursuant to Part 137. "Reargument is not available where the movant seeks only to argue a new theory of liability not previously advanced" [Desoigenes v. Cornasesk House Tenants Corp., ____ AD3d ____, NYLJ, Sept. 6, 2005, p. 24, c. 5 (1st Dept.). See also, Taylor v. Doral Inn, 293 AD2d 524 (2nd Dept. 2002)("Since the defendants advanced on their motion to reargue several new theories not advanced on their original motion, the Supreme Court should have denied them leave to reargue."). [*3]

Based on the foregoing, the motion by Wagner to reargue the order of June 10, 2005 is denied.

Dated: January 3, 2006________________

J.S.C.