Hallman v Kantor
Decided on January 30, 2009
Supreme Court, Nassau County
Paula Ann Hallman, Plaintiff,
Herbert C. Kantor, Steven W. Wolfe, Matthew C. Kesten and Kantor, Davidoff, Wolfe, Mandelker & Kass, P.C., Defendants.
Ira B. Warshawsky, J.
Motion pursuant to CPLR 3211[a],  by the defendants Herbert C. Kantor, Steven W. Wolfe, Matthew C. Kesten and Kantor, Davidoff, Wolfe Mandelker & Kass, P.C. for an order dismissing the plaintiff's complaint.
By summons and verified complaint dated July, 2008, the plaintiff Paula Ann Hallman commenced the within action against her former attorneys, defendant Kantor, Davidoff Wolfe, Mandelker & Kass, P.C. ["Kantor"], as well as the individual members thereof (Defs' Exh., "A")[collectively "the defendants"].
In pertinent part, the plaintiff contends that in November of 2003, her late father, Seymour Cohn, passed away leaving an estate valued at some $600 million According to the plaintiff, some six months prior to his death in February of 2003, her father allegedly gifted to her, the sum of $2,321,543.76, which amount was intended to assist the plaintiff in purchasing certain "horse farm" property located in Wellington, Florida (Hallman Aff., ¶¶ 40-41; Cmplt., ¶¶ 39-40).
Although the foregoing amount was allegedly a gift, the plaintiff's brother, Marc Cohn, allegedly approached the plaintiff the day before her father died and pressured her to execute six separate, interest-bearing promissory notes payable to her father and totaling $3,884,043.76 all with maturity dates ranging from January 2006 to November of 2006 (Hallman Aff., ¶¶ 39, 41, [*2]88-91; Cmplt., ¶ 39). The notes were intended to reflect an indebtedness arising from the amounts which Seymour had previously advanced to the plaintiff in February of 2003. Notwithstanding the plaintiff's position that the advances constituted a gift, she nevertheless signed the notes, allegedly succumbing to the pressure applied by her brother at a time when she was emotional vulnerable and distraught because of her father's illness (Hallman Aff., ¶¶ 89-90 Cmplt., ¶ 39).
In relevant part, Seymour's will provided, inter alia, that one third of his estate would pass in trust to the plaintiff and one third similarly to Marc with the remaining one third share to be divided among Marc's two children and the plaintiff's two children, also in trust (Hallman Aff., ¶¶ 25-26; Cmplt., ¶¶ 25-26). The plaintiff, Marc, and two non-family members were appointed co-executors under the will (Hallman Aff., ¶¶ 12-13; Cmplt., ¶12), and were initially represented by the same attorneys, until Marc separately retained the defendant Kantor law firm and later allegedly persuaded plaintiff to retain Kantor as well (Hallman Aff., ¶¶ 18-20; Cmplt., ¶¶ 18-19; 107).
Notably, the December 23, 2003, Kantor retainer agreement executed by the plaintiff states, in relevant part, that "[t]his letter, when signed by you, will confirm retainer of this firm to represent you as the Executor of the Estate of Seymour Cohn in connection with the administration of the Estate" (Def's Mot., Ex., "B").
According to the plaintiff, on several occasions she informed her brother, that the notes she had signed "were not valid", but he ignored her questions and changed the subject (Hallman Aff., ¶¶ 50, 79-80, 86; Cmplt., ¶¶ 48-49). She also "raised the issue of the notes" with the Kantor although how and when it is not expressly revealed but the firm similarly ignored these revelations, told her not to worry; and never followed up on or made additional inquires relating to her statements (Hallman Aff., ¶¶ 50, 52; Cmplt., ¶¶ 48-50, 84-88).
The plaintiff further contends that during the course of its representation, Kantor also advised her to sign a number of complicated legal documents in connection with the Estate which contradicted and undermined her claim that the money advanced by her father was a gift, i.e., she executed Federal Estate Tax Returns, Federal Gift Tax returns, Asset Inventories and certain damaging interrogatory responses submitted in a Florida lawsuit commenced by one of her father's former girlfriends (Hallman Aff., ¶¶ 84-87; Cmplt.,¶¶ 93-104).
In January of 2006, the plaintiff apparently advised the other three executors including her brother, Marc that she would not be paying the notes upon their maturity (Cmplt., ¶ 81). In response, the opposing executors commenced a proceeding in the Surrogates Court, New York County, in which they sought to recover the note amounts as an estate asset [the "Note Action"] (Pltff's Opp., Exh.,"K"; Pet., ¶¶ 12-17). Among other things, they relied on the aforementioned documents the plaintiff had executed at the defendants' behest as further confirmation that the amounts underlying the notes were not gifts (Pltff's Opp., Exh.,"L"; Cohn Aff., [Surrogate Proceeding], ¶¶ 14-37, 95).
The plaintiff's complaint advises that at about this time, i.e., January of 2006, the Kantor firm sent her an e-mail explaining that the firm could no longer represent her due to a conflict of interest arising out of the note dispute between her and the other executors (Cmplt., ¶ 83; Hallman Aff., ¶¶ 7-8). It is undisputed that, to date, the Surrogates Court has not rendered any definitive resolution with respect to the validity of the disputed notes. [*3]
Thereafter, in July of 2008 the plaintiff commenced this action against Kantor and its individual members, setting forth causes of action sounding in breach of fiduciary duty, negligence and breach of contract (Cmplt., ¶¶ 63-104; 105-114;115-120).
With respect to the breach of fiduciary claim, the plaintiff contends, among other things, that Kantor violated stated disciplinary rules by failing to disclose to the plaintiff, the existence of a purported conflict of interest arising out of Kantor's simultaneous representation of both her and her brother Marc; namely and among other things that Marc would profit if the notes were to be enforced by the Estate, while the plaintiff would simultaneously suffer in an individual sense as a result (Cmplt., ¶¶ 73-74; Hallman Aff., ¶¶ 61, 64 Spizz Aff.,¶¶ 12-24; 33-37)(see, DR 5-101; 5-105; Ethical Consideration, 5-2, 14-16).
Although the Surrogates Court proceeding and her liability on the notes is still unresolved, the plaintiff alleges that she has presently sustained actual damage by virtue of Kantor's representation, since she has expended to date, some $325,000.00 in counsel fees to defend against the Note Action (Hallman Aff., ¶¶ 104-106; Cmplt., ¶¶ 93-94). According to the plaintiff, the pecuniary damages and attorney's fees she is now incurring upon defending against the Note Action, "can be directly linked" to the negligent advice provided by the defendants and the alleged conflicts which existed prior to their withdrawal as her counsel (Spizz Aff.,¶ 56).
The Kantor defendants now move pre-answer to dismiss, arguing the complaint fails to state a cause of action and/or that the individual claims interposed are conclusively defeated by relevant documentary evidence, including the retainer agreement (CPLR 3211[a],). The motion to dismiss should be granted.
On a motion to dismiss pursuant to CPLR 3211[a], the Court must accept as true, the facts "alleged in the complaint and submissions in opposition to the motion, and accord plaintiffs the benefit of every possible favorable inference," determining only "whether the facts as alleged fit within any cognizable legal theory" (Sokoloff v. Harriman Estates Development Corp., 96 NY2d 409, 414  see, AG Capital Funding Partners, L.P. v. State Street Bank and Trust Co., 5 NY3d 582, 591 ; Polonetsky v. Better Homes Depot, 97 NY2d 46, 54 ; Leon v. Martinez, 84 NY2d 83, 87-88  see also, Lawrence v. Miller, __NY3d__ 2008 WL 5055393[ 2008]).
Moreover, "[t]o succeed on a motion to dismiss pursuant to CPLR 3211[a] , the documentary evidence that forms the basis of the defense must be such that it resolves all factual issues as a matter of law, and conclusively disposes of the plaintiff's claim"(Manfro v. McGivney, 11 AD3d 662 see, AG Capital Funding Partners, L.P. v. State Street Bank and Trust Co., supra, at 591; Goshen v. Mutual Life Ins. Co. of NY, 98 NY2d 314, 326 ; Leon v Martinez, supra, at 87-88; Jorjill Holding Ltd. v. Grieco Associates, Inc., 6 AD3d 500see, Arnav Industries, Inc. Retirement Trust v. Brown, Raysman, Millstein, Felder & Steiner, L.L.P., 96 NY2d 300, 303 ).
On the other hand " allegations consisting of bare legal conclusions as well as factual claims flatly contradicted by documentary evidence are not entitled to any such consideration'"(Morris v. Morris, 306 AD2d 449 see, Maas v. Cornell University, 94 NY2d 87, 91-92 , quoting from, Gertler v Goodgold, 107 AD2d 481, 485, affd, 66 NY2d 946  see also, Salvatore v. Kumar, 45 AD3d 560, 563; Garber v. Board of Trustees of State Univ. of NY, 38 AD3d 833, 834). [*4]
It is settled that " [i]n order to sustain a claim for legal malpractice, a plaintiff must establish both that the defendant attorney failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession which results in actual damages to a plaintiff, and that the plaintiff would have succeeded on the merits of the underlying action 'but for' the attorney's negligence'"(Leder v. Spiegel, 9 NY3d 836, 837 , quoting from, AmBase Corp. v. Davis Polk & Wardwell, 8 NY3d 428, 434 ; Rudolf v. Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438, 442 ; McCoy v. Feinman, 99 NY2d 295, 301-302 ; Barnett v. Schwartz, 47 AD3d 197). Indeed, "[t]o survive dismissal, the complaint must show that, but for counsel's alleged malpractice, the plaintiff would not have sustained some actual ascertainable damages" (Simmons v. Edelstein, 32 AD3d 464 see, Hearst v. Hearst, 50 AD3d 959; Sitar v. Sitar, 50 AD3d 667, 667).
"The failure to establish proximate cause mandates the dismissal of a legal malpractice action, regardless of the attorney's negligence" (Brooks v. Lewin, 21 AD3d 731, 734 see, Bauza v. Livington, 40 AD3d 791, 793; Berkowitz v. Fischbein, Badillo, Wagner & Harding, 34 AD3d 297), and damage claims grounded upon contingent or hypothetically projected injuries are generally insufficient to establish a prima facie case of attorney malpractice (Bauza v. Livington, supra; Brooks v. Lewin, 21 AD3d 731; 734-735; Phillips-Smith Specialty Retail Group II, L.P. v. Parker Chapin Flattau & Klimpl, LLP, 265 AD2d 208; John P. Tilden, Ltd. v. Profeta & Eisenstein, 236 AD2d 292).
Significantly, the same "but for" standard of casualty will be applicable to a fiduciary duty claim "irrespective of how the claim is denominated in the complaint" (Ulico Cas. Co. v. Wilson, Elser, Moskowitz, Edelman & Dicker, 56 AD3d 1, at 10-11)
Further, while "violation of a disciplinary rule does not in and of itself amount to actionable negligence on the part of an attorney * * * liability can follow where the client can show that he or she suffered actual damage as a result of the conflict" (Tabner v. Drake, 9 AD3d 606, 610 see also, Hearst v. Hearst, supra). Accordingly, it follows that "the absence of resulting damages is fatal" to a plaintiff's cause of action for legal malpractice (Kaminsky v. Herrick, Feinstein LLP, ___AD3d___, 2008 WL 5245901 [1st Dept. 2008]).
It is fundamental that "[t]o recover damages for legal malpractice, a plaintiff must prove, inter alia, the existence of an attorney-client relationship" (Velasquez v. Katz, 42 AD3d 566) and "[t]he unilateral belief of a plaintiff alone does not confer upon him or her the status of a client"(Moran v. Hurst, 32 AD3d 909, 911 see, Rechberger v. Scolaro, Shulman, Cohen, Fetter & Burstein, P.C., 45 AD3d 1453 see also, Velasquez v. Katz, supra).
Firstly, and with these principles in mind, the Court agrees that the terms of the applicable retainer agreement conclusively limit and define the scope of the defendants' representation by providing that the firm would "represent * * * [the plaintiff] as the Executor of the Estate of Seymour Cohn in connection with the administration of the Estate"[emphasis added].
Here, the plaintiff does not seriously dispute that the provisions of the agreement as written, expressly provide for a limited engagement in terms of the services which were to be rendered pursuant to the retainer, i.e., that the retainer provides that the defendants were to represent the plaintiff in her capacity as an executor only (cf., Spizz Aff.,¶ 27). Nor is there any dispute that the claims which she now advances are individual in nature arising from her personal status as an Estate beneficiary and/or alleged debtor thereof. [*5]
The complaint's bare assertion to the contrary, i.e., that the defendants nevertheless represented her as an individual with respect to the notes (Cmplt., ¶¶ 10, 107; Hallman Aff.,¶19), is insufficient alone to defeat the controlling import of the contractual language to which the plaintiff herself consented (cf., Bishop v. Maurer, 9 NY3d 910 [ 2007] see generally, Malarkey v. Piel, 7 AD3d 681). It bears noting that the plaintiff has not alleged that she actually requested that the defendants represent her in connection with the notes.
The Court is not persuaded by the list of claimed legal transactions in which the defendants allegedly provided individual representation to the plaintiff after the retainer was executed (Hallman Aff., ¶¶ 68-71). Assuming arguendo, that the defendants did agree to individually represent the plaintiff in those specific instances, there is still nothing which establishes that the defendants agreed to represent the plaintiff in connection with the execution of the notes which were signed before the defendants were even retained (see generally, Conti v. Polizzotto, 243 AD2d 672).
No less significant particularly in light of the retainer's express limitations is the fact that the plaintiff is arguing that the defendants, absent any specific request, were effectively duty-bound to inquire, advise and counsel her with respect to legal instruments executed well before they were ever retained (Hall Aff., ¶¶ 54-55). Moreover, in arguing that the defendants were obligated to undertake these affirmative duties, the plaintiff relies upon a series of obscure and circuitously framed statements which she apparently made primarily to her brother, and then later to the defendants at some undisclosed point during their representation, i.e., statements to the effect that she tried to "raise the subject" of the notes in some unexplained fashion and/or that she mentioned that the notes "were not valid" (Hallman Aff., ¶¶ 50, 52, 79). In particular, both the complaint and the plaintiff's opposing affidavit provide, at best, only oblique and circular descriptions of precisely how and when this information was supposedly conveyed to the defendants. Neither submission provides a comprehensible factual context within which the import if any of these alleged statements can be meaningfully weighed and assessed (Cmplt., ¶¶ 47-49; Hallman Aff., ¶¶ 48-49 see also, ¶¶ 78,-80). Indeed, neither document alleges with clarity that the plaintiff at any specific time, expressly or directly informed the defendants as opposed to her brother (Hallman Aff., ¶ 51) why she believed the notes were allegedly invalid; namely, that the sums advanced were gifts and that the notes were the product of duress and/or overreaching applied by her brother or others (e.g., Cmplt., ¶¶ 47-49; Hallman Aff., ¶¶ 48-49 see also, 78-80).
Even assuming that some sort of attorney-client relationship arose with respect to the notes, and further assuming that the defendants breached a duty owed to the plaintiff thereunder, nevertheless "[t]he failure to establish proximate cause mandates the dismissal of a legal malpractice action, regardless of the attorney's negligence" (Brooks v. Lewin, supra, 21 AD3d 731, 734 see, Bauza v. Livington, supra; Berkowitz v. Fischbein, Badillo, Wagner & Harding, supra ).
Here, the plaintiff's linchpin allegation relative to "but for" causality and causality in general (cf., Barnett v. Schwartz, supra), rests upon speculation and conjecture which lacks support in the record, i.e., that the purported conflicts and attorney misconduct she has identified proximately caused an actual and compensable injury (Hallman Aff., ¶¶ 52-56)(see generally, Orchard Motorcycle Distributors, Inc. v. Morrison Cohen Singer & Weinstein, LLP, 49 AD3d [*6]292, 293; John P. Tilden, Ltd. v. Profeta & Eisenstein, supra).
The plaintiff's damage theory is necessarily predicated on the conjectural presumption that the Note Action would never have been commenced and thus no counsel fees would have been incurred had the Kantor firm, among other things, not "severely worsened" her initial mistake by failing to make inquiries about the notes; remaining silent about the alleged conflicts of interest and/or counseling the plaintiffs to sign the disputed documents (Hallman Aff., ¶¶ 93, 104-106; Spizz Aff., ¶ 56). Indeed, there has been, to date, no determination issued by the Surrogate imposing liability as against the plaintiff in the underlying Note Action and thus no possible injury based on any holding that the notes are valid and enforceable.
Preliminarily, it is significant that with respect to the malpractice cause of action, the complaint refers to "but for" causality by alleging that but for the defendants' negligence, the plaintiff would never have executed certain Estate documents" (Cmplt., ¶ 109)[emphasis added]. Absent from the pleading is a factually express allegation to the effect that the defendants' purported negligence was the causative event actually responsible for the Estate's commencement of the underlying Note Action. Nor, in any event, would such an allegation rest upon anything other than speculation and conjecture.
It cannot be disputed that absent the plaintiff's execution of the notes, there would never have been a "Note Action" and thus no need to incur counsel fees in defending against that action. Further, and whatever import the disputed documents may have in the Note Action, they themselves did not create or give rise to any new or greater substantive liability than that which already existed once the plaintiff herself executed the notes. It follows that the alleged damage which the plaintiff claims she has currently sustained the commencement of the Note Action and her expenditure of counsel fees to defend against it are events principally attributable to the execution of the notes, not to the defendants' purported conduct in allowing her to sign allegedly damaging documents long after the notes had already been executed (cf., Bishop v. Maurer, supra).
To hold otherwise at this juncture, would require the Court to speculate that absent the defendants' involvement, an alternate and more favorable outcome with respect to the commencement of the Note Action may have ensued a purely hypothetical inquiry contingent upon the actions which the opposing executors might have taken had the factual circumstances been entirely different (see generally, Lappin v. Greenberg, 34 AD3d 277, 279; One Times Square Associates v. Calmenson, 292 AD2d 174; Alter & Alter v. Cannella, 284 AD2d 138, 139; Phillips-Smith Specialty Retail Group II, L.P. v. Parker Chapin Flattau & Klimpl, LLP, supra).
Additionally, it bears noting that the co-executors were duty-bound "to discover and marshal all probate assets, since "[t]he law imposes upon executors, administrators, or other representatives the duty of active vigilance in the collection of assets belonging to the estate" (In re Belcher's Estate, 129 Misc. 218, 220-221[Surrogates Court, New York County 1927] see, Mfrs. and Traders Trust Co., 20 Misc 3d 1143(A), 2008 WL 4193129 at 3 [Surrogates Court, Onondaga County 2008]). Further, the "failure of a fiduciary to properly search for and locate discoverable estate assets constitutes negligence" (see, SCPA 2103 see generally, King v. Talbot, 40 NY 76 ; Matter of Janes, 223 AD2d 20, 26; 5 Warren's Heaten on Surrogates Court Practice [7th ed], ¶¶ 62.02, 63.03[d]; 41 NY Jur.2d, Decedents' Estates, § 1899). [*7]
Since the executors were in possession of executed, and thus facially valid promissory notes now effectively constituting significant Estate assets, it is pure speculation to conclude that they would have been less vigilant in the discharge of their fiduciary duties and would not have commenced the Note Action had the plaintiff never executed the subject Estate documents, or if the defendants had not committed the additional misconduct the plaintiff has attributed to them.
The Court finds that the plaintiff has not otherwise established an alternative source of proximately caused, compensable damage flowing from the alleged attorney misconduct she has identified.
Lastly, the Court agrees that the third cause of action sounding in breach of contract is alternatively dismissible as duplicative of the attorney malpractice claim. Although nominally pleaded as one alleging breach of contract, this claim is ultimately predicated upon the same underlying factual allegations which support the malpractice and/or negligence cause of action (Spizz Aff.,¶¶ 64, 66-67). Accordingly, although the plaintiff's claims may be recast in varying factual permutations, her contract theory is repetitive of the second cause of action sounding in attorney malpractice(see, Kvetnaya v. Tylo, 49 AD3d 608, 609; Turk v. Angel, 293 AD2d 284; Nevelson v. Carro, Spanbock, Kaster & Cuiffo, 290 AD2d 399, 400 see also, Yuko Ito v. Suzuki, supra; Ulico Cas. Co. v. Wilson, Elser, Moskowitz, Edelman & Dicker, supra, 56 AD3d at 8-9; TVGA Engineering, Surveying, P.C. v. Gallick, supra; Berkowitz v. Fischbein, Badillo, Wagner & Harding, supra; Gotshal & Manges, LLP v. Fashion Boutique of Short Hills, Inc., supra).
The Court has considered the plaintiff's remaining contentions and concludes that they are lacking in merit.
Accordingly, it is,
ORDERED that the motion pursuant to CPLR 3211[a], by the defendants Herbert C. Kantor, Steven W. Wolfe, Matthew C. Kesten and Kantor, Davidoff, Wolfe Mandelker & Kass, P.C. for an order dismissing the plaintiff's complaint, is granted.
The foregoing constitutes the decision and order of the Court
Dated: January 30, 2009
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