Santonocito v Moskowitz, Passman & Edelman

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Santonocito v Moskowitz, Passman & Edelman 2012 NY Slip Op 30580(U) March 7, 2012 Supreme Court, New York County Docket Number: 114418-2010 Judge: Judith J. Gische Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. ANNED ON 31912012 [* 1] I I ndex Number: 114418/2010 SANTONOCITO, JOHN a. MOSKOWlTZ PASSMAN & EDELMAN SEQUENCE NUMBER : 001 I DISMISS ACTION i, I I [* 2] SUPREME COURT OF THE STATE OF N W YORK E C ~ ~ N WNEWYORKh a PART O OF : I X John Santonoclto, Plaintiff, I)ecklon/mder Index No. 114418-2010 Seq No.: 001 - against - Prewnt: Jm Judith J. GlsEhk i Moskowk Passman & Edelman and Sheldon Edelman, J.S.C. Defendants. X Recltatlon, as required by CPLR 2219 [a], of the papers considered in the mvlaw of this (these) motlon(s): ---- - Numbered Defs' nlm Papers (3211) w W G affirm, ehs ........ ......... 1 Pkfaopp w/AEDaffim, JS afid, exhs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2 Deb' replyhrther support wlKJQ affirm .......... ~ . Q g . 2 U I z......... 3 m. Steno rnlnutea 1/12/12 .............................................4 Stlps to adjourn motion . . . . . . . . . . . . . . . . . . . . . . . . . NmyoRK-.. . . . . . . . . 5 F..\.L.W -- G O W Na Upon fhe foregoing papers, the court's decision and ofderI 8s bihws: s Glocho J.; This is an actlon for legal malpractice. Plaintiff John Santonocito ("plalntIfF"at times "debtof')1 the former client o defendant Moskowttz, Passman & Edelman, a law 8 f firm. A. Shaldon Edelman dh/a "Sheldon Edelrnan"is a attorney at law and a partner In the law firm (wllecthrely "Moskowitrdefendants?* The Mmk- defendant8 now move for the prsanswer dismissal of thls adon on the bask of CPLR 3211 la] [l] (documentary evidence) and [a] [3] (lack of standing). Page 1 of 70 [* 3] Fact8 The followlng fa& are aseerted In the vertfiad mmplalnt and I plaintiff s ~ w m n affidavit in opposition to defendants motion. For purposes of thb motion only, these facts are accepted as true w h e n v. M u h ~Life Ina, Co, of NY., 08 NY2d 314,326 l [2002]; Mon v. Martlner, 84 NY2d 83 [lQM]; Momne v. M m 50 NY2d 481 [lQBO]). The sworn affidavit is allowed to remedy any ddects in the compialnt and prwerve a possibly Inartful pleading that may contain a patentialty meritorious clalm (Cron v , J-&mro Fabrics. Inc., 91 N.Y.2d 382 [19B8J): Plafnttffwas Involved In a motor vehicle accident on March 20,2002 when hls vehicle was struck by a vehicle leased to Dlana P. Burke ( Bud&) by Ford Motor Credit Corporation (*FMCC ). Burke had dropped off her c8r to be serviced by South Shore Repairs, Inc. (*South Shore ) when the mr, driven by Frederic M. Barnett ( Barnett ), a South Shore employee, sttuck the m plalntIffwas drlvlng. Plalnttff, who was working r when the accMent occurred, later filed a workem compensatlon clalm. That clalm was filed on hi8 behalf by non-party Martin C. Julius, Esq. ( Attorney Jullus~. Plaintiff also retained Attorney Jullus to commence a personal injury action on o v. Barnett et el, SUD,Ct lQ-jgg CQ, Index No. hi8 behatf in Kings County 25771109) ( personal injury action ). Although Shore, Burke and Barnett were named defendants In that adon, no claim was asserted against FMCC. The personal injury action w a commenced with the filing of the Summons and VerMed Complaint on or ~ about July 28,2004. Later Attorney Julius sewed and filed an Amended Summons and .Amended Complalnt on December 8,2004 to add other defendants, but FMCC was atill not added as a named defendant. Page 2 of 10 [* 4] On June 1,2004, prior to filing the personal injury action, plalnM and hls M e flied a voluntary petition for bankruptcy under Chapter 7 of the bankruptcy d e nocito, Case # 04-83841 CIML) ("bankruptcy petttlon"). The Santonocitos brought the petttion p ~ m, a legal services company (We the Peopl~) p but prepared and filed the petition on their behalf, charging them a $220 fee. Schedule B of the bankruptcy petition requires that the debtor "listall personal property of the debtor o whatever klnd." Item 20 requlraa that the debtor lid "Other f contingent and unliquidated daims of every nature, including t x refunds, counterdalms a ofthe debtor, and rights to rretoff claims. Give attimated valuwr." Item 17 of Schedule B requires the debtor to also list "Other liquidated debts owlng debtor, lndudfng tax refunds." The Santonocko's raspanse was that they had "Proceeds from Auto Accident [Husbandj $7,000," was, however, a monetary settlement for a different This car addent, unrelatad to the March 20,2002 collision that was the subject of the underlying personal injury action. The Santonodtos later filed an amended bankruptcy petttfon dated June 25, 2004. The responses in Schedule B (see above) rermalned unchanged. In the amended Statamant of Financial Affairs, however, the Santonocitos statad the following: 2. Income other than from employment or operation of business: Amount Soum $8,000 2004 Workman Comp/Debtor Husband 4. S u b and admlnistratlve proceedings, executions, garnishments [etc] Lbt all suits and admjnlstmthw proceedings to which the debtor is Or W a s 8 Party within one year lmmediatefy preceding tho flling of this bankruptcy cam: Page 3 of 10 [* 5] action is no listed in this seciion, but other ecibns in other countles am Menfffled'j [ L a Kings County persona, & y t The $7,000 settlment prmeeds from the unrelated automoblle accident in p o k y were declard as "exempt property"in Schedule C of the original and amended bankruptcy petitions. After commencing the personal injury action, plaintm b w m e unsatisfied with Attorney Jullus because the cam was not moving forward. In July 2004, plalntH met and coneutted with Attomay Edelman of the Moskowib firm. Ha was famlllar wlth the firm because it had sumasfulty rspraaented him in other ~ ~ 8 8 s . Plaintiff algned a consent to change attorney ("consenul). The consent I d a m July 30,2004, s and nofailzed by Attorney Edelman. The notarlzetion date is also July 30,2004. There iq however, a notation typed in stating: This conmnt form signed and returned to s Incoming attqrneys in dummy February 2005." Next to that statement I the name and signature of Attorney Julius with the date "2/3/05" alongside. Meanwhile, a bankruptcy trustbankruptcy action. By Order of Flnal De- ("trustee")had already been appolnted in the dated September 20,2004, the S m t o n o c k were discharged In bankruptcy. The trustee was discharged, hls band cancelled and the bankruptcy case was marked a8 " d d . ' The personal fnjury action was s t l d on Novamber 15,2006, after the order ete dlscharglng the Santonocitos was ksuad. The settlement was for $200,000. Burke's insurance company paid $100,000 and Barnen's insurance company ala0 paid $100,000. In connsctlon with the settlement, plaintiff signed a release which b notafimd by Attorney Edelman. A8 part of the releaas, the Moskowttz defendah Page 4 of 10 [* 6] prepared an agreement maohring the worked compensation carrier's lien. Although only the first page of t e agmemant is provided and it Es undated, the agreement sets h forth the following terns: It I agreed that the Claimant [santonocito] has ths pamisalon s of the Canjer [for workers' compensation insurance] to sattle his third party (3' party) action for damages for personal injuries in [the underlying personal injury actian] for [$200,000]lnclu8hrs of attorneys' fees and d-kbumeinenta ... and It is furthar Agreed that the Claimant, John Santonoclto, after dedudon for attorneys' fees and disbursements shall receive out of the settlmant the sum of [$132,572.03]from whlch sum the Claimant shall pay the sum of [$41,563-50](the reduced lien) to the Carrier. Ths Claimsant shall, therefore, receive a net recovary In the sum of [$91,008.53] (he mmaining pages of the agmment am not pmvided) Plaintiff claims that he suffered signillcant InJurieSand that the money recovered In the sefflemsnt is inadequate. He claims that the Moskwvitt defendants committed legal malpractice by failing to amend the complalnt to bring In FMCC a8 a named defendant. He contends that when he consuttd with the Moskowilz defendants, the statute o limitations for commencing a personal injury action agalnst FMCC had not yet f expired, but It expired w i the Moskowltz ddbndants were reprseenting him. hk Argumonta The Moekowltz defendants argue that plaintiff dpes not have standing to bring and maintain thls action because he failed to list the underlying personal Injury actlon as an asset in his bankruptcy pewon and b now precluded, by law, from asserting this legal malpradce chlm. The Moskowib defendants ague that any dalm for personal injuries stemrnlng from the March 2002 accident, as well aa the legal malpractice clalms Page 5 of 10 [* 7] flowing therefrom, were assets of the estate that had to be marshaled by the h t t e e . The Moskowib dsfendamb a130 contend that the consent t change attorney o was not a "retainer"and therefore, plaintHf did not retain the defendants until February 3,2005, when the consent form was returned to the defendant8 by Attorney Julius. Thus, the Moskowttz defendants contend Attorney Julius continued to act as plaintiW8 lawyer untll a least February 3,2005, If not February 14, 2005 when plalntlff signed a t Contingency Retainer Agreement in connaction with the March 20,2002 collision. In opposition to the motlon to dlsmlss, plaintiff rafsea qultable and legal arguments. He contends that he ff led the petttlon rtp and although he amended his petltlon to Include the $8,000 In workers' compensation he had m i v e d , he did not know he should have also included the personal Injury adon he latar commend. Plalnttff contends the told Attorney Edelman about the bankruptcy action and that Attorney Edelman said they would discuss thls later. Plalnttff clalrna thet after he changed attorneys, there was no acblvky In his case for another six (6) month. He claims to haw asked Attorney Edelman about tha delay and been punled by it. Plaintiff states further that when he algned the retainer in February 2005, he remhded Attorney Edelman about the bankruptcy case, but w88 assured that the MSB was over and it "would not be a factor in my personal injury lawsut' At oral argument and In hl8 opposition, plaintiff states that he has contacted the trustee and rqueated that tha bankruptcy actran be reopened b m u s e he made an error i not dlsclosing the personal InJuryactlon and is in tha process of suing the n Moskwvitz attorneys. The Moskowitr defendants reply that lack of standing cannot be mtsd end substtkrtion cannot cure that incapacity. Page 6 of 10 I [* 8] I Dlrcurslon Since the defendants have moved under CPLR 3211 [a] Iand [3], the documentary svldancer they rely on must defirrithrely dispose of plainws clalms w a r d i e t . Ltd v m , 405 [ld 20081;B r o n u i e Knob Inc. v. 29 AD3d De@. 221 AD2d 248 [idp t . laQ5l). On the other k & , hand, the Issue of whether a persan seeking relief Is the proper party to request adjudication I "an aspect of justlclabilttywhich, when challenged [by the defendant], s must be consfdered at the outset ofany iftlgathn"Sudehr o Plash q f . Industrv. Inc. C o u a of Suffolk, 77 N.Y.2d 761,769 [1997J). For the reasons that follow, defendant6 have proved that the order of the bankruptcy court conclus[vety disposes of plaintifPs daima in this case because it shows that he lacks standing to aasert It. When a debtor files for bankruptcy protection, this craatas an "estate' comprised of 'ail legal and equitable lntemts af the debtor as of the commencement d the am* (11 USC 5 541[aJ[lD.A pre-petllion injury qualifii as a legal interwit, withfn the meaning of the statute (In re CQrbi, 149 B.R. 325,329 [Bankr.E.D.N.Y.l903])and a debtor is required to disdose in its bankruptcy petition any wuses of action that wuld t>e brought by the debtor m i a v. u n c This is for the benefit of the creditors n Financial. Inc., 233 8.R. 46 [SDNY lOOQ]). (uSt Jean f v, l m . , supra). If the debtor fails to llst a claim, "an unscheduled d a h remains the property of the bankruptcy estate...m a v WL 1118584 [S.D.N.Y. 20111; elso , n Fi t h r p.,-B.R.--, . 201 1 240 A.D.2d 61 1 [2"dDapt 198Tj). ConfWueW, the debtor lacks standing to bring a lawsutt in connection with such d a h s after metglng from bankruptcy, and ifdhe does, the lawsuit must be dismtssd Page7of I O [* 9] rd v. Franklln Credit ManPclernanf-, supra, citing M a v. St Jean e FInanM. Inc, supra). Accepting plalnttfPs facts a8 true, a cause of action for legal malpractlce exists because FMCC, a potentlal defendant, was not brought into tha underlying personal injury action M o r a the applicable statute of limttations expired and plaintHT signed B consent to change attorney In July 2004. An action for lagal malpractice acciues~ when the malpractice is committed @m v. G i l m , 8 N.Y.3d 933 [20071). Thie legal malpractice claim, however, doea not btbng to the plaintiff and he does not have standlng to assert it becausa It accrued while plaintiff was seeking a discharge in bankruptcy court. Attematlvety, this action for lwai malpractice m n also be vfewed as a derivative action, arising from the personal injury action which was not disclosed in the bankruptcy petition m s lan v. u n a017 N.Y.3d 821 [2006]; pisehlavl v. C#l 88 A.D.3d lS91[4th Dept 20091). Ill, A debtor cannot not conceal assets and then, upon termination of the bankruptcy case, utilize the assots for its own banefd (Kunim v. St Jean F l n a w .I supra). Only the trustae, and not 8 debtor, has standing to pursue ~ 8 ~ o~action that f 8 8 belong to the bankruptcy estate (In ra Merrlll Lvnch,375 B.R. 719,725 [S.D.N.Y.2007]). Whether through inadvertence or otherwine, plalnWs failure to disclase the personal injury muse of actlon i hi6 bankruptcy petition deprives him of the legal capacity to sue n for rnalpractica in this action. Under the bankruptcy law, property 1 only "abandoned" s (and reverts back to the debtor) If It was properly 8cheduM (Donaldsan, Sec. Corn. v. M m n& , 207 AD2d 280 [I Dept 1Qslrl). Shce the personal Injury was not property disclosed In the bankruptcy action, the trustee did not approve of Page 8 of IO [* 10] the $200,000 settlement and the plalnUff claims for legal malpmctlce dudng the bankruptcy adon, plaintiff does not have standing to assert this dalm. Furthermore, the flnal order of the bankruptcy court is documentary evidence that the personal Injury wa8 not exempted from plaitniffdebtor'a estate. Therefore, defendants' motion to dismiss this daim for legal melpractice I granted {see Webstar E s W of WBbster v. s State of New Yo&, 2003 WL 728780 [N.Y.Ct.CI. 20031 n.0.r.). The court has cansMered plaintiffs contention, that he was self represented and made a mistake, as well as hb daim that dbrnlssal of this actlon rewards defendants for their malpractice. The first amtention ia unavailing and the latter argument underestimatehls own role in these events. Although in rap@and at om1 argument the parties first deatt with the bsue of whether the trustee can b.0 subathted a8 plaintiff in this action, or hae the power to reopen the bankruptcy case slnce he was already discharged a8 trustee by the bankruptcyjudge, them ieaues are not properly beform the court to decide and, In any event, appear to be within the provlnce of the bankruptcy court. This decision Is without prejudice to any remedies available in bankruptcy court. Coneluslon It is hereby ORDERED that the motion by defendante to disrniw thls actlon based upon CPLR 3211 [a] 1 and [3] is grantad for the reasons stated; and it is further ORDERED that the clerk shall enter judgment in favor of defendants Mwkwitz, Passman & Feldman and A. Sheldon Edelman slhla Sheldon Edelman, against plalntiff John Santonocttq disrnlssing tha complaint; and it is f u m r PageQof I O [* 11] I' b ORDERED that any relief raquested but not specifically addressed is hereby denied; and R 18 further ORDERED that this constitutes the decision and order of the couh Dated: NewYork, NewYork March 7,2012 So Ordered: FILED MAR 08 2012 NEW YORK COUNTY CLERK'S OFFICE Pageloof 10

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