Weintraub v Levine

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[*1] Weintraub v Levine 2006 NY Slip Op 51138(U) [12 Misc 3d 1171(A)] Decided on June 16, 2006 Supreme Court, Westchester County Smith, 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 This opinion is uncorrected and will not be published in the printed Official Reports.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 June 16, 2006
Supreme Court, Westchester County

Irene Weintraub and Julie Weintraub, Plaintiffs,

against

Michael Levine, Defendant.



14949/00



Law Firm of Michael Levine, P.C.

Atty. For Deft.

15 Barclay Road

Scarsdale, New York 10583

Becker & D'Agostino, P.C.

Attys. For Pltf.

880 Third Avenue

New York, New York 10022

Mary H. Smith, J.

Upon the foregoing papers, it is Ordered that this motion by defendant for an Order pursuant to CPLR 3124 compelling attorney Michael D'Agostino to attend a deposition for the purpose of creating an evidentiary record and imposing costs in the sum of $19,687.50 and sanctions in the sum of $10,000.00 pursuant to 22 N.Y.C.R.R. 130-1.1 of the Rules of the Chief Administrator of the Courts, and plaintiffs' cross-motion seeking to quash the subpoena are disposed of as follows:

Initially, the Court rejects defendant's request to treat his motion as unopposed based upon plaintiffs' failure to timely have [*2]served their opposition papers in accordance with the time frame set forth in CPLR 2214, subdivision (b). Defendant has been afforded an opportunity to serve his answering/replying affidavit and the Court discerns no prejudice, particularly where counsel had been afforded the opportunity to re-submit his papers in proper affidavit form rather than the Court merely denying the requested relief out of hand.

Addressing first the cross-motion by attorney D'Agostino for a protective Order quashing the subpoena duces tecum issued by defendant, said relief is granted. "A subpoena duces tecum may be issued by an attorney to compel the production of specific documents that are relevant and material to facts at issue in a pending judicial proceeding.' (Citation omitted)." Matter of Terry D., 81 NY2d 1042, 1044 (1993). It is "a process of the court, issued in conjunction with a trial or hearing" and its purpose is to foster a party's ability to prosecute or defend a case. See Brussels Leasing Ltd. Partnership v. Henne, 174 Misc 2d 535, 538 (Sup. Ct. 1997), app. dsmd. 256 AD2d 406 (2nd Dept. 1998). Here, there no longer is a "pending" action, the Appellate Division having affirmed this Court's (Barone, J.) granting of defendant's summary judgment motion. Defendant does not cite, and this Court's own research does not reveal, any authority which entitled defendant, in these circumstances, to have served the non-party subpoena here in issue. Accordingly, the subpoena duces tecum served upon non-party Michael D'Agostino, Esq., is hereby quashed. CPLR 2304.[FN1]

As to the merits of defendant's request for imposition of costs and sanctions pursuant to Part 130 of the Rules of the Chief Administrator, 22 N.Y.C.R.R 130-1.1(a) authorizes this Court to impose costs and/or sanctions against any party or counsel "who engages in frivolous conduct," and a determination imposing costs and/or sanctions will not be disturbed absent a clear abuse of discretion. See Providian Nat. Bank v. Forrester, 277 AD2d 582 (3rd Dept. 2000). Conduct is frivolous under this Rule if "(1) if is completely without merit in law and cannot be supported by a reasonable argument for an extension, modification or reversal of existing law; (2) it is undertaken primarily to delay or prolong the resolution of the litigation, or to harass or maliciously injure another; or (3) it asserts material factual statements that are false." See 22 N.Y.C.R.R. 130-1.1 ). While the Rule provides for a hearing, depending on the circumstances of the case, Courts are not necessarily required to conduct a formal evidentiary [*3]hearing prior to imposing sanctions, particularly where counsel provides no "meaningful response" to the assertions of misconduct. Jalor Color Graphics, Inc. Universal Advertising Systems, Inc., 193 Misc 2d 76, 77 (App. T. 2002), affd. 2 AD3d 165 (2003); see, also Bogen v. National Capital Group, Ltd., 288 AD2d 170 (2nd Dept. 2001), citing Household Bank Region I v. Stickles, 276 AD2d 940 (3rd Dept. 2000).

Defendant herein has reviewed in detail each of the pertinent allegations set forth in plaintiffs' complaint, which complaint had been verified by Mr. D'Agostino to be "true" based upon his "personal knowledge", and defendant submits are completely false.[FN2] For instance, contrary to the complaint allegation that defendant had represented Harry Traub commencing in 1980, defendant insists that he never had represented Harry Traub, which fact defendant argues was known to both Traub and Mr. D'Agostino. Notably, no contrary proof that defendant had represented Traub at any time has been submitted by plaintiffs.

Further, the allegation that Traub had an ownership interest in certain corporations represented by defendant, not only is completely false, according to defendant, but known by Traub and Mr. D'Agostino to be false.

The complaint also falsely alleges, according to defendant, that, "through a series of mergers and acquisitions," certain corporate entities in which Harry Traub had an interest were acquired by an entity known as Princeton Media Group, in 1996. Not only was there no "series of mergers and acquisitions," which according to defendant is evidenced by the relevant underlying documents relating thereto and to which Mr. Traub and Mr. D'Agostino had access, but these same documents demonstrate that Traub had no ownership interest in Princeton Media Group, as also incorrectly pleaded in the complaint. Plaintiffs offer nothing herein to defend their complaint characterization that there had been a "series of mergers and acquisitions."

Also falsely stated in the complaint, according to defendant, is the allegation that Traub had been offered a "buy out package" for his interest in Princeton Media Group; rather, Traub had entered into a Settlement/Escrow Agreement pursuant to Order which had resolved the then-pending litigation, all of which underlying documents were available to Traub and Mr. D'Agostino, and, [*4]defendant contends, the falsity of the allegation that Traub was offered a "buy out package" were known to both of them. Plaintiffs offer no explanation for why their complaint references a "buy out package" rather than accurately stating that the parties had entered into an Ordered Settlement Agreement.

To the extent that the complaint further asserts that defendant had a duty to Traub, as Traub's counsel, to file a UCC security interest on his behalf and that defendant had failed to inform Traub that no financing statements had been filed, which failure had relegated Traub to the status of an "unsecured creditor" at the time Princeton Media eventually filed a bankruptcy petition, defendant argues that each statement is demonstrably false and known to be false by Traub and Mr. D'Agostino since Traub was not and had never been his client, no security interest had been given to Traub personally which would have permitted a UCC filing on his behalf and Traub was not a creditor, secured or otherwise, of Princeton Media Group. Indeed, defendant notes that plaintiff never asserted a malpractice claim against him. Notably, plaintiffs fail to offer herein any evidence identifying the source of any claimed security interest given to Traub personally, nor do plaintiffs demonstrate through evidentiary submissions Traub's status as a secured creditor of Princeton Media Group.

The sole cause of action pleaded against defendant was for fraud, the complaint asserting that in 1996, while defendant was representing Traub, he was also representing Princeton Media Group, which constituted a conflict of interest, and which conflict was not discovered by Traub until October, 1998. Defendant argues, and this Court must agree, that the falsity of this allegation of a conflict of interest is demonstrably established by reference to paragraph 9(e) of the Court-Ordered Settlement Agreement, which Traub and Mr. D'Agostino were in possession of, which specifically provides that defendant has represented certain identified persons - not plaintiff Traub - at various times in the past and present, that the document was prepared by defendant as an accommodation to the parties, without compensation, and that the parties, including Traub,

hereby represent that none of them has received,

or relied upon, any advice from Michael Levine, Esq.,

... with respect to any aspect of this Agreement. Each

of the parties hereto further warrant and represent that

they have each been represented in the negotiation

and execution of this Agreement by independent

counsel of their own choice, and that they relied

solely and exclusively upon the advice of such

independent counsel.

Without addressing whether a claimed conflict of interest constitutes a viable fraud cause of action, the Court agrees that [*5]the foregoing completely undermines the gravamen of plaintiffs' fraud cause of action alleging that defendant had operated under a conflict of interest because he had represented Traub and Princeton Media Group.

Mr. D'Agostino's response to the foregoing is patently inadequate. Rather than speaking to any of the specifics addressed above which defendant contends establish Mr. D'Agostino's frivolous conduct, nor offering any evidentiary support for the challenged allegations, Mr. D'Agostino instead offers only the most cursory three-paragraph response (¶¶¶20,21,22 D'Agostino Affirmation). Essentially, he claims that "the complaint ... was conceived and advanced in good faith" and the fact that the claim did not succeed does not "in and of itself support a finding of frivolous or vexatious conduct in violation of 22 N.Y.C.R.R. 130-1.1." Further, Mr. D'Agostino states merely that defendant had drafted a document to settle a dispute between two persons and "as the only counsel in that transaction, he walked a fine line which may have cast him in liability if he made verbal legal representations to a party, regardless of any written disclaimer." Also, Mr. D'Agostino argues that Harry Traub's death prior to his having been deposed resulted in defendant's "good fortune" since Mr. Traub was not able to state on the record "what defendant said, did, advised or promised to him."

This is wholly insufficient. The inescapable fact is that many of the allegations asserted in the complaint were demonstrably false based upon documents which were in Mr. D'Agostino's possession, or unfounded because not supported by any documentary proof, and yet Mr. D'Agostino offers no explanation for his having made unfounded, false allegations. Moreover, while Mr. D'Agostino attempts herein to caste this unfortunate situation in which he finds himself upon the circumstance of Traub's death which he argues had prevented the necessary facts from coming forth, inexplicably, Mr. D'Agostino fails to address how it was that, if only Mr. Traub had the relevant facts which were lost upon his death, as he now claims, Mr. D'Agostino was able to personally verify the allegations to be true based upon his own knowledge.

In view of the foregoing, the Court finds that Mr. D'Agostino has engaged in frivolous conduct in that he asserted "material factual statements that are false," and that he accordingly is personally liable for a portion of reasonable attorney's costs incurred by defendant over the course of what had been five years of litigation. However, the Court also is mindful that this litigation appears to have been protracted over a five-year period in part due to defendant's unexplained failure to promptly have moved pursuant to CPLR 3211, subdivision (a), paragraphs 1 and 7 for dismissal of this complaint. In this regard, the Court notes that defendant's alleged difficulties with respect to obtaining discovery were irrelevant for purposes of the making the afore [*6]dismissal motion.

In view of all of the circumstances presenting, this Court imposes costs upon Mr. D'Agostino in the sum of $5,000.00, payable to defendant, and a further sanction upon counsel in the sum of $500.00 to be paid to the Lawyer's Fund for Client Protection, 119 Washington Avenue, Albany, New York 11210. Said sums shall be paid in full on or before September 1, 2006. Proofs of said payments shall be forwarded to this Court.



Dated: June 16, 2006

White Plains, New York

_________________________________

MARY H. SMITH

J.S.C. Footnotes

Footnote 1:While arguably defendant's request for a sanctions hearing under this Index Number had reinstituted this action, albeit for a very limited purpose, in light of this Court's determination, infra, a sanctions hearing is not warranted, rendering any argument predicated on this analysis and the need for the subject subpoena moot.

Footnote 2:By way of background, the Court notes that plaintiff Harry Weintraub had been the originally named plaintiff. Upon his death during the pendency of this action, Irene and Julie Weintraub were substituted as plaintiffs. Additionally, the Court notes that Mr. Weintraub's underlying dispute was with his brother Murray Traub, who apparently had shortened his name. Since defendant refers to Harry Weintraub throughout his papers as "Harry Traub," this Court will do likewise, notwithstanding that Mr. D'Agostino refers to him as Mr. Weintraub.



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