Brill & Meisel v Brown
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Brill & Meisel v Brown 2012 NY Slip Op 32107(U) July 10, 2012 Sup Ct, NY County Docket Number: 115685/08 Judge: Paul Wooten 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. SCANNED ON 81912012 [* 1] 4 SUPREME COURT OF THE STATE OF NEW YORK - NEW YORK COUNTY PRESENT: HON. PAUL WOOTEN 7 PART Justice BRILL & MEISEL, '08 INDEX NO. Plaintiff, 004 MOTION SEQ. NO. - against- . -,. . I , I 14 111 iu _,.#. JAMES M. BROWN and HELEN J. ALTMAN, /,: Defendants, ; ;1 , : 'I r I ,*(, !i ,L;* r i I d L 7t i y ;I I*., . The following papers, numbered Ito 4, were read on this motion by plaintiff for summatyf judgment, pursuant to CPLR 3212. ! Y I L Notice of Motion/ Order to Show Cause -Affidavits - Exhibits ."_ Answering Affidavits - Exhibits (Memo) Replying Affidavits (Reply Memo) Cross-Motion: flYes I ' ' I I 11 , b 7 PAPERS NUMBERED I,2 3 4 Motion sequence numbers 004 and 005 are consolidated for disposition. In this action the law firm Brill & Meisel (B&M) (plaintiff), seeks $96,281.33 in fees for legal services from James M.Brown arld Helen J. Altman (defendants), B&M's former clients.' B&M represented defendants for over two years in litigatisn against their cooperative corporation (Co-op) concerning leaks in defendants' master bedroom. The complaint asserts claims grounded in account stated, breach of contract and unjust enrichment theories. Defendants assert counterclaims grounded in legal malpractice, breach of contract, breach of fiduciary duty, negligence and unjust enrichment In Motion Sequence 005, plaintiff moves pursuant to CPLR 3212, for an order granting summary judgment in its favor or) the complaint and for dismissal of defendants' affirmative I defenses. Plaintiff also moves in Motion Sequence 004, with separate submissions, to dismiss defendants' counterclaims. Defendants cross-move, pursuant to CPLR 3212, for an order 1 This decision discusses three other court cases and, to simplify, unless indicated otherwise, "plaintiff' refers to B&M and "defendants" to Altman and Brown. Page 1 of 25 I I 1. [* 2] 3212, for an order granting summary judgment dismissing the complaint, on the ground that B&M was discharged for cause, dismissing the complaint s third cause of action, and, pursuant . to CPLR 4547, for an order striking all references to settlement negotiations in the underlying action. BACKGROUND It is undisputed that in 2005, defendants, who are spouses, experienced massive leakage in the master bedroom of their cooperative apartment that was not quickly abated by the Co-op. This prompted defendants to hire counsel, and after hiring, and terminating, their first counsel, they hired B&M. The partner from plaintiff who represented defendants was nonparty attorney Allen H. Brill (Brill). Defendants hired plaintiff pursuant to a retainer agreement, dated October 31, 2005, to represent them csecerning their dispute with the Ca-sp. Defendants testified that their obligation to pay plaintiff was not contingent on the results of the litigation. Defendants commenced an actiw in the Civil Cdurt bf the City of New York (Housing Court) against the Co-op concerning the leaks. They illso commenced 3 Separate action against the Co-op, for civil damages, in the New York Supreme Court (the Supl eme Court Action). The leakage condition was of such a magnitude that the New York City Department of Housing Preservation and Development issued three C violations, indkating dangerws conditions, and, in the Housing Court case, by consent order dated December 13, 2005, the At Co-op was ordered to remedy the condition within weeks (see Def. exhibit C, at I). or around this time, the Co-op was also involved in a separate litigation with defendants upstairs neighbor, Mr. Stephen Gallup, that concerned, among other things, a greenhouse in Mr. Ghllhp s apartment which is above the defendAntS master bedroom and leaks (the Gallup Action). In March 2006, a civil contempt hearing was held in the Housing Court (id.,exhibit. D), Page 2 of 25 - .. [* 3] wherein B&M sought a maintenance abatement against the Co-op, on defendants' behalf, based on the conditions in their apartment. However, plaintiff did not submit evidence to demonstrate what portion of the apartment was allegedly uninhabitable or provide apartment maintenance records (see id., exhibit. C, at 2-3, exhibit. D, at 210, 219). While these records were not submitted, Altman avers, and it is undisputed, that plaintiff instructed defendants to bring them to the proceeding, which they did. On May 21, 2006, the Housing Court denied the request for a maintenance abatement, without prejudice to defendants seeking it again (d., exhibit. C, at 4). In its order, the Court noted that there was no testimony regarding either the monthly maintenance or the configuration of the apartment (id. at 3). The Housing Court also found the Co-op in contempt of the December 13, 2005 order, because it did not abate the leaks by December 30, 2005, and awarded attorneys' fees to defendqnts, as the prevailing . party, and $250.00, stating that actual damages were not estAbliShed. Meanwhile, in the Gallup Action, the Supreme Court issued an order, dated April 27, 2006, which reflects that upstairs neighbor Mr. Gallup agreed to contract for removal of his greenhouse, to erect a new one on or before June 30, 2006, and to qllow the Co-op to inspect and repair the C o - ~ p building's facade. In the April 27, 2006 order, the Court alsq enjoined the Co-op from removing the old greenhouse. In or around July pr August of 2006, the parties here diqargree as to which, tMr, Gallup replaced the greenhouse. With its replacement, the leaks stopped (the Old Leaks). It is undisputed that Mr. Gallup's replacement of the greenhouse stopped the Old Leaks, and that defendants enjoyed freedom from the leaks for approximately seven months thereafter In July 2006, plaintiff brought Another motion in Housing Court, seekivg a contempt order against the Co-op for failing to abate the WateP'csnditiori. By Qtder dated December 12, 2006, the Housing Court denied the motion, stating that the Co-op was enjoined from removing the greenhouse by the April 27, 2006 Gallup Action Order, and that Mr. Gallup was a necessary P a g e 3 o f 25 [* 4] party who had not been joined. Altman states that the greenhouse had already been replaced when Brill brought this motion, but Brill avers otherwise, stating that the greenhouse was not . replaced until mid-August 2006 (Brill Aff. [12/7/10], 77 20, 23) Brill also argues that the motion concerned the other building facade issues In January 2007, at a status conference in the Supreme Court Action, plaintiff agreed to consolidate the Supreme Court Action with the Gallup Action for purposes of discovery, Also in early 2007, defendants moved to renew and reargue portions of the Housing Court s December 12, 2006 order. By order, dated March 9, 2007, the Housing Court denied the motion, except to the extent of directing a hearing for attorneys fees. At the attorneys fees hearing, although defendants sought and submitted evidence to demonstrate that they had incurred approximately $69,000 in attorneys fees and expenses, the Housjng Court awarded them only $21,500. The Court opined that requiring the Co-op to pay all of the attornkys fees was not appropriate, as defendants pressed on with motions against the Co-op in the Housing Court when the Co-op was restrained from removing the greenhouse by the April 27, 2006 Gallup Action order On March 17, 2007, after a storm, Altman states that new crack? developed in walls and the ceiling of the master bedroom (the New Condition). Within days after the March 17, 2007 I storm, B&M notified the C p o p about the New Conditipn. The reoarq is not definitive as to the connection between the Old Leaks and the New Condition, if any, but the partihs here contend that there were two reasons for these conditions: Mr. Gallup s greenhouse and problems with the Co-op s building facade. The Co-op s position in the underlying action was that there was no active or continuing leakaoe problem caused by a building facade defect (see Def. exhibit. 1 3 RR). It is undisputed that the Co-op inspected the apartment on May 17, 2007, but did not otherwise take action. In summer and fall 2007, the Co-op exchanged settlehent drafts with Page 4 of 25 _- . . - . [* 5] Brill (see id., exhibits. LL and 00). On August 1, 2007, Brill wrote a letter to the Co-op s lawyer, attaching a letter from Mr. Gallup s contractor stating that there was dampness under Gallup s .. - . .L . . 1 - _ . flooring from the exterior wall of the building. There is no dispute that the parties attended mediation sessions in fall of 2007, at which the Co-op agreed to cover some damages, and to credit defendants full maintenance from June 2005 through February 2007, for $44,628.37, but that there remained unresolved issues about the New Condition and reimbursement to defendants for their legal fees. Also undisputed is that the Co-op agreed to hire ay, independent engineer to inspect the building s facade and the apartment. In October of 2007, the engineer performed an inspection, and thereafter produced a report dated DeGember 5, 2007 (the Engineering Report) (jd,, exhibit, YY). Brill $&fled a 0 confidentiality agreemerit, dated December 20, 2007, precluding the Engiheering Report s use against the parties in the litigation (The Confidentiality Agreement). Defendants provide a fax from February 2008, with an attachment dated December 19, 2007, which they contehd is part of the Engineering Report, but which contains language that is not in the Deoember 5, 2007 Engineering Report (Def. exhibit. CCC). The Engineering Report indicated that the engineer did not observe an active leak, but the plaintiffs submission, which appears pa,t&ially redacted, provides for the repainting of masonry over a window and some btheplwqrk, In early 2008, Altman, represented by Brill, was deposed. At the deposition, Brill exchanged an outline prepared by Altman with the other parties. Altman avers that she did not want her outline exchanged with the other parties, and that it contained confidential and privileged information. In ApPIl 2008, defendants made a $10,000 paymeht to plairltiff fcir fees agdirlst tH& retainer. The parties do not dispute that defendants previgusly had alSo made intermitterlt payments to plaintiff. Iri total, plaintiff received approximately $76,000.00 in fees and expenses Page 5 of 25 I , I I 1 [* 6] for services relating to the underlying litigation. In correspondence in the second quarter of 2008, Altman wrote plaintiff that defendants were extremely frustrated that they were not getting the results that they desired from the Co-op and with plaintiff's responsiveness to their concerns, and that they desired that more be done to obtain the results they sought in the litigation ( i d , exhibits. HHH, LLL, MMM). By letter dated June 30, 2008, defendants terminated plaintiff as their counsel. Defendants stated that they were frustrated with the direction that the case had taken over the past year, no longer felt heard or validated, and it was their opinion that plaintiff's legal representation had become ineffective The letter informed plaintiff that defendants, "after much deliberation," had decided to retain another attorney to take over the case and to bring them the "closure that we have been asking for these past few years" ( i d , exhibit. 000). Defendants informed plaintiff of the identity of their new counsel, Wolf Haldenstein Adler Freeman & Herz LLP (WH), which is cocinsel for defendants in this action. Plaintiff asserts that WH charged defendants over $300,000.00 in the first year it represented them. In early July, defendants received B&M's bill for $83,102.74. On July 31, 2008, WH, on behalf of defendants, protested the bill, as well as all previous invoices. On August 13, 2008 and October 6, 2008, plaintiff sent defendants letters stating that $83,102.74was owed, and offered to submit the fee dispute to arbitration Brill avers that at that time, defendants separately owed plaintiff $1 5,436.47from the Housing Cocirt action, as indicated on a statement on a separate account sent to defendants on October 9, 2007 (Brill Aff. [12/6/10], r[ 32). Brill avers that defendants owe $96,281.33,which reflects the sum of these bills reduced by $2,257.84 for three accounting errors discovered after the commencement of this litigation. In October of 2008, in the Supreme Court Action, WH made a motion to compel relief for defendants concerning the New Condition, which was not opposed by the Co-op. However, as of April 21, 2009, defendants' position was that the work still had not been done by the CoPage G of 25 [* 7] op (Sandberg Aff , exhibit F). Defendants submit a copy of a settlement agreement, dated September 23, 2009, that they executed with the Co-op, and five other parties, including Mr. .. . _ i Gallup. Mr Gallup contributed over $125,000 to the total $660,000 settlement amount. The Co-op and three other parties, including the management company and their insurers, also contributed, with substantial contributions to the settlement from two of these parties. STANDARD Summary judgment is a drastic remedy that should be granted only if no triable issues of fact exist and the movant is entitled to judgment as a matter of law (see Alvarez v Prospect Hosp., 68 NY2d 320, 324 [1986]; Andre v Pomeroy, 35 NY2d 361, 364 [1974]). The party moving for summary judgment must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence in admiszible form demonstrating the absence of material issues of fact (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [19&]; I CPLR 3212 [b]). A failure to make such a showing requires denial of the mation, regardless of the sufficiency of the opposing papers (see Smalls v AJI lndus., Inc., 10 NY3d 733, 735 [2008]). Once a prima facie showing has been made, however, "the burden shifts to the nonmoving party to produce evidentiary proof in admissible form sufficient to establish the ertistence'of material issues of fact that require a trial for resolution" (Giuffrida v Citibank Cor,., 1b0 NY2d " 1 72, 81 [2003]; see also Zuckerman v City of New York, 49 NY2d 557, 562 [1980]; CPLR 321.2 [bl). When deciding a summary judgment motion, the Court's role is solely to determine if any triable issues exist, not to determine the merits of any such issues (See Sillman v Twentieth Centuty-Fox Film Corp., 3 NY2d 395, 4 [1957]). The Court views thg pyidenc most favorable to the nonmoving party, and gives the nonmoving patty t I ' rQasonable inferences that c80 be drawn from the evidence (see Negri v Stop & Shop, Inc., 65 NY2d 625, 626 [1985]). If there is any doubt as to the existence of a triable issue, summAry Page7of 25 11 1 1 , [* 8] judgment should be denied (see Rotuba Extruders, lnc. v Ceppos, 46 NY2d 223, 231 [1978]). DISCUSSION -.. . . . - . . . . ~.. . - Plaintiff s Motions for Summaw Judqment Plaintiff moves for summary judgment on its complaint and for dismissal of defendants five counterclaims and 26 affirmative defensives Defendants oppose the motion and move for summary judgment dismissing the complaint on the ground of discharge for cause and malpractice. Plaintiff objects to defendants cross-motion as untimely. Even without adequate excuse for tardiness, an untimely cross-motion for summary judgment may be considered where it involves issues relating to the timely-made summary judgment motion (Osario v BRF Co/?sfr.Corp., 23 AD3d 202, 203 [ l s t Dept 20051). This is so because, in the course of deciding the timely motion, a court mqy search the record and grant ,summary judgment to any party without the necessity of a cross motion (CPLR 3212[b]). In such circumstances, the I issues raised by the untimely cross motion are already properly before the court and, thus, the nedrly identical nature of the grounds may provide the requisite good cause (see CPLR 3212 [a]) to review the merits of the untimely cross motion (Snolis v Clare, 81 AD3d 923, 925-926 [2d Dept 201 11). Plaintiff in its summary judgment motion moves for the relief on all of the causes of &ion in its complaint, arguing that it bras mqde its prima fAcie showing arld that defendants cannot establish any reasongble defenses, The elements of a breach of contract claim include the performance of the contract by the injured party, and quantum meruit and unjust enrichment require a kkmonstration of services with value. Defendants discharge for cause assertions address the issue of performance of thd con\raCt by plaintiff, 4s well as the v a l w sf the pdfformance, and, therefwe, directly aodress issues r lated to the timely summary judgment motion. The timely motion is to recover fees for legal sdrvices; the cross motion concerns defendants contentions as to why they are not obligated to pay those same fees and is not Page8of 25 ,? I [* 9] precluded. Plaintiff objects to defendants assertion of discharge for cause as an unpleaded . affirmative defense or counterclaim. A defendant may resist a summary judgment motion based on an unpleaded defense and [a] party may raise even a completely unpleaded issue on summary judgment so long as the other party is not taken by surprise and does not suffer prejudice (Valent; v Camins, 95 AD3d 51 9, 522 [ 1st Dept 20121; Weinstock v Handler, 254 AD2d 165, 166 [1st Dept 19981 [ summary judgment may be awarded on an unpleaded cause of action if the proof supports such cause and if the opposing party has not been misled to its prejudice ]). Plaintiff offers a conclusory assertion of surprise, but the predicate facts that constitute defendants claim of discharge for cause are those that underlie defendants counterclaims. Also, in their pleading, defendants seek, in addition to damages, the $68,000 they claim to have paid to plaintiff, on the ground that plaintiff should not be compensated . . . because it utterly failed to competently pursue [their] rights and . . . severely prejudiced [their] rights and caused . . . hundreds of thousands of dollars in damages (PI. Mov. Mot, fgr SJ & to Dis. Aff. Def., exhibit. E, 7 136). Regarding prejudice, While plaintiff alludes to discovery not performed, it gives no specifics, and has had an opportunity to address the merits of the alleged new theory I 1 as well as the proof submitted in support thereof in response tab plaintiffs croqs motion (Boyle v I Marsh & McLennan Cos., lnc., 50 AD3d 1587, 1588 [4th Dept 20081). Therefore, defendants cross-motion for summary judgment will be permitted. As to their cross-motion, defendants maintain that plaintiff was discharged for cause bpcause it: (I) repeatedly refused and failed to follavy defendants irptructions and to fulfil is& to them; (2) divulged information that de ants a s s q t was confidential and privileged; (3) agreed in writing, against defendants wishes and without nbtice to thpm, to retroactively designate the Engineering R e p o i as confidential and urhsable in the litigation; (4) Page9of 25 I I . * ~ , [* 10] failed to offer the available proof to support defendants' maintenance rebate claim in Housing Court; (5) pursued a strategy in Housing Court that resulted in the loss of approximately $47,000.00 in attorneys' fees; (6) agreed to consolidate the Supreme Court Action with the Gallup Action for discovery without defendants' consent; and (7) failed to prosecute their action and accomplished nothing for years.' "It is well settled that a client may terminate his [or her] relationship with an attorney at any time, with or without cause. Where the discharge is for cause, the attorney has no right to compensation" (Friedi77a~ Paik C a k e , Iric., 34 AD3d 286, v 286-287 [I st Dept 20061 [citation and quotation marks oniitted] [failure to identify and discuss specific liens on a plaintiff's settlement not grounds for depriving counsel of an earned fee]). Among other reasons, "[alii attorney may be discharged for cause where he or she has engaged in misconduct, has failed to prosecute the client's case diligently, or has otherwise improperly handled the client's case or committed malpractice" (Coccin v Liotti, 70 AD3d 747, 757 [2d Dept 20101; see Doviak v Firikelsteiri 8, Paitriel-s,LLP, 90 AD3d 696, 699 [2d Dept 201 I ] [violation of disciplinary rule]; Yannitelli v D. Yamifelli & So/is CO/J.S~/: r p 247 AD2d 271 , 272 [ 1 st Dept 19981 [fee Co forfeiture based on admitted violations of the disciplinary rules over a period of years]; hrit see Fischbarg v Doricet, 63 AD3d 628, 628 [I st Dept 20091 [fee recovery not barred by violation of writing requirement concerning fee and expense payment]). Discharge for cause is not found based on "a client's dissatisfaction with reasonable strategic choices regarding litigation" ( D o v h k , 90 AD3d at 699 [citation and quotation marks omitted]; see Rosner v Paley, 65 NY2d 736, 738 [1985] [selection among reasonable courses of action not malpractice]), or "personality conflicts, misunderstandings or differences of opinion 'While defendants, it1 presenting facts, assert many tilore cornplatrits about plaintiff's conduct, the court iiiust necessarily be guided by what they have sufficiently briefed concerning their numerous conte t i 1ions Page 10 of 25 [* 11] having nothing to do with any impropriety by the lawyer (Klein v Eubank, 87 NY2d 459, 463 [1996]) Generally, a hearing is required to determine if an attorney _---.discharged - cause for .. . . was . . .-L (see Teichner v W & J Holsteins, 64 NY2d 977, 979 [ I 985]), unless the issue can be determined as a matter of law (see Park Cake, lnc., 34 AD3d at 286 [conflicting claims require hearing]; Hawkim v Lenox Hi// Hosp., 138 AD2d 572, 572 [2d Dept 19881). Defendants argue that [p]ursuant to the New York Rules of Professional Conduct [individually, Rule(s)], Mr. Brill was required to reasonably consult with the client about the and abide by a means by which the client s objectives are to be accomplished (Rule 1.4(a)(2)) client s decisions concerning the objectives of representation (Rule I .2(a)) (Def. Memo. of .. Law, at 26). The Rules to which defendants cite, however, were not effective until after plaintiff s representation of defendantg ended (see Sullivan v Cangelosl, 84 AD3d 1486, 1486 [3d Dept 201 I ] [analysis guided by former code which was in effect at the time of the conduct in q ~ e s t i o n ] ) . ~ Disciplinary Rule (DR) 7-101(a) (22 NYCRR 1200.32), which was then in existence, provided that a lawyer shall not intentionally [flail to seek the lawful pbjectives of the client through reasonably available mearls permitted by law and the Disdil; linary Rhles. As defendants have not addressed their argument to the correct governing rules, on this record, the3 have not demonstrated disdhdr ge fdr cause. Furtherrhote, t;HF quhs tion gf Lvhdfher or not l a lawyer intentionqlly failed to seek a cIie.nt s objectives is generally one of fatt, Defendants assert that they discharged plaintiff for failing, on multiple occasions over 3 In a footnote, defendants state that the Rules 1.4 (a) and 1.? (a$ arg similgr in substance to C ysideratton (EC and P R 7-101(A). However, Bule (Stmofi, SimQh sN rk vule$ of P,rofessionalConduqt foonvsid \he goals of [EC] 1ch;prpvided that, A Iqljvyer shauld decisions of the client qie mpde anly after the client has been lnfprmed gf telwaqt co initiate this deaisian-making proces$ if the client d at [ifn order tq avoid misunderstandings and hence to rnqihtain confidgnce, a; lawyer should fully and promptly inform the client of rrlaterial developments in the rnkters being handled for the c Iient. Page 11 of 25 I - 1 - [* 12] the course of the representation, to follow their instructions and keep promises. Altman provides instances of what she asserts were plaintiff s failure to follow client instructions and to . . . .. . . . . . . I . . . -. . . . . - , I .... ,A. . .. - . ... ,. A,.... . keep promises. These include that defendants instructed plaintiff to move for injunctive relief in the Supreme C ~ u rAction, compelling the Co-op to remedy the New Condition, or to settle the t case, after Mr. Brill promised them at the 2007 mediation that the leaks would be fixed and the case settled, with the Co-op paying 100% of defendants legal fees by the end of 2007. Brill I denies that he made such a statement about when the case would end. Altman also states that she requested a meeting with Brill in June 2008, voiced further objection to his inaction, and that he p r ~ m i s e dto~go into Court the next day to file an Order to Show Cause, compelling the Co-op to do facade work. Altman states that when she later called I to inquire about this, Brill, informed her that he hdd changed his mind, and would not be filing , the motion. What defendants do not demonstrate, on this record, was that this was not mere19 a difference in opinion as to strategy, as Brill avers thdt he sent a letter to the Court Concerning the facade issues. Defendants also maintain that plaintiff was discharged for cause because 4f its repeated, deliberate refusal to follow its clients instructions that the Co-op be required to pkrform facade repairs before the commencement of settlement negotiations for ddmsges. I P inqluded Defendants submit settlement agreements that plaintiff exqhTngqdBwith the Co- I provisions concerning inspection and remedy of water conditions within the agree part of, and not a condition to, settlement. The evidence defendants submit is not dispositive 4Altrnar) avkrs that Brill bregched several promises to defehdanfs, but dpe illl usedl and therefoi-6, these assertions, for summary ju on Fdr example, Altrr?gn asserts that when Brill did no apartment it was lust another broken promise that Mr. Brill made to us (pef However, the email rnesshge from Brill concerning thiS issue merely stated t there (Def. exhibit I30 [emphasis supplied]), and plaintiff asserts that a B&M associate @tended the inspection Page 12 of 25 I I [* 13] as to whether or not plaintiff s conduct was an intentional disregard of the client s objectives (see Def exhibit. II), but merely raises issues of fact. Furthermpre, lgter correspondence raises _ _ -*_. - ~ - . . .. . .- . L -- --- .___ factual issues as to whether defendants sought settlement when the New Condition still was not fixed, although this evidence may also merely reflect that defendants changed their mind about having work done prior to engaging in settlement discussiQns(see Def. exhibits. LLL, MMM) Altman s contention that she pushed plaintiff concerning moving the Supreme Court Action, which was for damages, throughout the course of the relationship with plaintiff, also raises a fact issue concerning defendants communications with plgintiff about their desire for injunctive relief before entering into settlement discussions. Defendants assert that Brill breached attorney-client privilege and revealed-client cwfidences by producing Altmdn s outline, or notes, at her deposition in early 2008. At the deposition, Altman, an attorney, WAS present and aware of the exchange of the notes as it I occurred. Regarding this event, and the other occasions where she claims that p,laintiff disclosed confidential information, testimony is required to, among Other things, determine whether plaintiff knowingly revealed what was to the client a confidence without the client s consent (see 22 NYCRR 1200.19). Defendants also maintain that plaintiff s execution of the Confidentiality Agreement regarding the engineeriqg report, ?itbout dqfendants approvgl, when the Co-op knew d the report s contents, but plaintiff and defendants did not, is cause for discharge. Hpwever, Altflan also avers that defendants did not know that Brill had executed the Confidentiality Agreement until after plaintiff s discharge. Therefore, this conduct was not the reason for discharge (see King v Fox, 200q WL 3098933,*5, 2005 US Dist LEXIS 28838, *I4 [SDNY I CarrYpBgnola v Mullholland, MiniQn &I Rae, 76 bJY2d 38, 4 11 990) for the pro I factors identified only after the relationship has been severed cannot have played a role in causing the breakdown ]). Page 13 of 25 [* 14] Defendants complain that they discharged B&M because it brought unnecessary, futile contempt motions against the Co-op in the Housing Court while, the Co-op was constrained _ - ___.-- . . . -.-<I ....I ~ from removing the greenhouse. In fact, Altman avers that the greenhouse had already been removed, but, as previously mentioned, the parties appear to dispute this. Defendants also claim that plaintiff failed to submit maintenance receipts during a Housing Court hearing. Because all of this conduct occurred years before the discharge, however, there is a factual issue as to whether or not defendants actually discharged plaintiff for this ond duct.^ Defendants assert that plaintiffs agreement, in January of 2007, to consolidate the Supreme Court Action with the Gallup Action, for purposes of discovery, without defendants' consent delayed resolution of their action, increased their attorneys' fees and constituted cause for dismissal. A selection of one amorcg several reasonable cburSe9 of action doestnot constitute malpractice, even if the attorney committed an error of judgment (Rosner v Paley, 65 NY2d 736 [1985]; see also e.g. Allsfate Ins. Go. v Nandi, 258 F Supp 2d 309, 312 [SD NY 20031 [material differences regarding strategic and tactical issues do not constitute cause]). Consolidating a case for discovery generally is noti in itself, misconduct or malpractice. However, Altman avers that defendants' objectives vyere ta get to trial quickly, And their I understanding with plaintiff was that involvement with the Gallup Action would be less likely to I effect that result, as there werg many pat'tikd thdt actiott. Althan also avers that despitg having advance notice, Brill failed to inform defendants that he intended t9 stipulate to consolidate, and then lied to her abput it afterwards, informing her that the consolidation was Court ordered. Conversely, Brill avers that Altman agreed to the consolidgtion. These factual iwues preclude the making of 3 determinatiqrr. I 'Plaintiff asserts that defendapts insisted upon a rebate of the full amovnt of their rnqietenance payments, but did not move out of the apartment, and that not providing the evidence in the Housing Court was a strategic move, designed to obtaln full maintgpdnce in the Supreme Court Action. ,%reading of the proceeding's transcript rdises issues of fact abdut the credibility sf this assertiorl. Fag ¬?14 Qf 25 I , ~ " I 1 . [* 15] Defendants claim that plaintiff was discharged for cause because it failed to prose5ute the Supreme Court Action, and because t h e litigation went on for years accomplishing nothing. .*-. .. - .. I Failure to timely prosecute or abandonment of a case may constitute discharge for cause (see Matter of ¬state of Stevens, 252 AD2d 654, 655-656 [3d Dept 19981 [discharge for cause for substantial delay in prosecuting action including failure to commence wrongful death actions]). The record does not reveal a failure to prosecute t h e action, In the Housing Court, plaintiff obtained an order requiring the Co-op to cure the violations, as well as a contempt order. As of April 2006, there was an order in place concerning the greenhouqe. In summer 2006, the Old Leaks were remedied, and there were no leaks until March 2007. The record also reveals that the case was prosecuted over 2007 and in 2008, as it is undisputed that an inspection took place in May of 20071, that Sevbral medigtian sessions were conducted in fall 2007, as well as an engineering inspection, and that discovery proceeded in the Supreme Court case, as Altrnan was deoosed in early 2008, Vyhjle defendants may have desired that plaintiff move for affirmative injunctive relief or trial in the Supreme Court Action, they do not so much as demonstrate that discovery was complete in the action, and there is no dispute t h a t the Co-op disagreed that there was a problem from a facade defect to be remedied I (Def. exhibit RR).' The parties here provide different documents that they claim were the pipduct of the Octobel' 2007 engineer's1inSpection, and on this reco68, defendants ckrtaiqly have nnt demonstrated, as a matter of lqw, that plaintiff could have aqhieved results defendants de5ired within the time-frame that they desired. It is well-known that an adversary's conduct in a case may greatly impact the length and difficulties encountered during litigation. In fact, even r plaintiff's discharge in June 2008, and otiqn later brought by WH, tho & until September 2009. As a general prOposition,'more than 'a Flient's r'nngre d/sSatisfaction 'Hindsight reveals that the COLPP nqt o p p o s e WM's later motion, but t h e record does not did reveal that, at t h e time, plaintiff could h a v e known that this would happen. Page 15 of 25 I . +Y [* 16] with an attorney s ability to achieve the desired ultimate result in a disputed litigation within a desired time period IS required to constitute discharge for cause, and this_. - -.-. - not record does _. - demonstrate a failure to prosecute In addition to the aforementioned issues, however, Altman s 47-page affidavit is replete with complaints about plaintiff s services, and the reasons that defendants contend that they discharged plaintiff, such as a lack of responsiveness, Brill s failure to adequately prepare, and that Brill kept things from and lied to Altman. The affidavit also contains characterization, which must be discounted on summary judgment. Plaintiff disputes defendants assertions, I characterizing them as transparent attempts to avoid payment. As is generally true concerning .. discharge for cause allegations, and in light of the material issues of fact discussed above, this case requires a hearing, which is directed below. In light of this, plaintiff s motion for summary judgment on its cornplaint, including its account stated claim, must be held in abeyance, pending the outcome of the hearing, and any ancillary motions relating there@, as must defendants motion for summary judgment dismissing the complaint fsr discharge for cause. Plaintiff moves to dismiss defendants counterclaims, and defendants oppose dismissal. Except for defendants counterclaim for unjust enrichment, the other four counterclaim$ are based on defendants assertions, discussed above, concerning discharge for cause, and seek I tha same type and amount of damages. I I Defendants assert a claim for legal malpractice. It is settled that an action for legal malpractice requires proof of three elements: the negligence of the attorney; that the negligence was the proximate cause of the loss susfained; and actual damages (Reibman v Seqie, 302 AD2d 290, 290 [l st Dept 20031). The Court 4f Appealg has statad that to reoover tort, a plaintiff must demonstrate that the attorney failed to exercise the drdinary skill A, I 7Altmanavers that Brill was unresppqsive to client inquiries, but at least one of the inquiries was made during a major holiday period Brill dispute? another. Page 16 of 25 * J . . [* 17] and knowledge commonly possessed by a member of the legal prgfession and that the attorney s breach of this duty prsximately caused [the] plaintiff to sustain .actual.and - _._ - ..~ _ _ _._ , . __ 2- _Y --- - ~ ~ ascertainable damages (Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438, 442 [2007] [citation and qugtation marks omitted]). It follows that for an attorney to prevail on summary judgment, [~ounsel] must present evidence in admissible form establishing that the [former client] is unable to prove at least one of the above-cited essential elements (Pedro v Walker, 46 AD3d 789, 790 [2d Dept 20071). Generally, expert testimony is required to establish that an attorney breached the applicable standard of care (see Estate of Nevelson v Carro, S p ~ ~ n b o cKaster & Cuiffo, 259 AD2d 282, 284 [ I s t Dept 1999]), with the finder of fact deciding k, - whether there was a deviation from such stapdard. Of coqrse, in determining whether rnqlpractice occurred, an attorney is not held ta the rule of inf& hopest mistake of judgment, where the proper course is open to reasonable doubt (PQmstein v Oppenheim & Co., 160 AD2d 428, 430 [1st Dept 19901). Abqent such reasonable courses of conduct found as a matter of law, a determination that a course Qf conduct constitutes malpractice requires findings of. fact (id.). n - I B&M argues that the malpractice claim should be dismissled bebduse the Co-op s failure I to timely remediate the water infiltration issue was the sole ptok dhflageS, and plaintiff could n i t ha one anything more t The ,failure to establish proximate cause mandates the dismissal of a legal malpractice action, regardless of the negligence of the attorney (Reibrnan, 302 AD2d at 291). At trial, a former client maintains the burden to prove that he or she would have prevailed in the underlying t have incurred any damages but for the a wan, 302 AD2d at 290). It follows, that o must demonstrate that the former client did not incur damqges, or tar tnbt produce evidence of \ damages, that were caused by the attorney s deviation from the apilicable starldal d af Care. Page 17 of 25 .~ . I [* 18] An issue of fact exists concerning whether Q&M'sconduct in making contempt motions PI. , . .. -. in Housing Court, that it indicates it.knew would .be denied. (see,.., .. Memo. of Law in Sup. of .. . . . ,. . -. ".*.,. , . . . -. . .. . .. -- ..- , , , , "8. L_l-.i ,a, I .-.. . -. . .. Counterclaim Dis., at 8), was the proximate cause of damages to defendants, which precludes summary judgment. Clearly, the Housing Court indicated that it was denying a substantial portion of the attorneys' fees requested based on the making of these motions and, as discussed below, there are factual issues regarding, among other things, whether defendants were able to later recover these fees as well as defendants' role concerning the motion. Defendants also aver that they suffered damages as they had to spend additional funds in attorneys' fees in order to obtain the maintenance rebate, raising a fact issue.' Plaintiff has not met its burden to demonstrate that its execution of the Confidential concerning the Engineering Report wa$ not negligence which caused the damqge? that bekn established on this defendants allege, especially As the contents of that report Have record. Defendants assert that Brill signed the Confidentiality Agreement as to the Engineering Report before Brill knew what was contained within the report, but opposing counsel did know. Amoeg other things, defendants assert that they incurred additional attorneys' fees ilnd costs to hive another engineer, when they s h d l d habe been able to rely bn the Engi Report. While plaintiff asserts that the rkport was not admissible in the underlying aetibrl; as it was part of 'settlerp'entdiscuSSionS, this is disDul&d,'qa ddfendanfs' c $1 I underlying dispute had already come to an agreement that repairs would be done hased on the report. Plaintiff qrgues that defendants did not incur actual, ascertainable damages due to Brill's I I R The partie$ recitation of the fact$concerning the occurrences at the Housing &QU reasons fot the failure to obtain maintenance, vary considerably. In any evept, if there wqs negligence, defendants may be entitled to a rebate on some fees paid ( K l u c ~ k a Leccl, 63 AD3d 796, 7 v Dept 20091,) ar incurred, but not recovered throlrgh settlement, in attempting to obtain even a Oafl maintenance rebate. Page 18 of 25 . % I I [* 19] exchange of outlines with other parties At their depositions, defendants asserted that their hand was revealed by this axchange, which possibly aided and saved their opponents money. .__._I _, _.._ .._ -8 - These are not actual ascertainable damages suffered b y defendants, and Altman s discomfort at her deposition also is not an injury for which she may recover. Defendants assertion that the outlines caused additional claims to b e asserted, and other delays, is speculative, vague and conclusory, and their mglpractice counterclaim is dismissed to the extent that it relies qn those allegations. Therefore, it is unnecessary to reach plaintiff s argument that the infor mdtion in the outline was not confidential Plaintiff argues that defendants recovered the entirety of the maintenance abatement and the attorneys fees owed to both B&M and WH, and did not suffer damages. In making this argument, plaintiff relies nn a document prepgred by WM entitled Damages Analy&, dated I I December 2008. Defendants argument that the Damages Analysis is inadmksible, pursuant to CPLR 4547, is unpersuasive (see e.g. American Re-Ins. Co. v United States Fid. & Guar. Co., 19 AD3d 103, 104 [ 1st Dept 20051 [ The so-called settlement privilege is inapplicable since the reinsurers seek the settlement-related materials for a purpose other than proving WSF & G s liability in the underlying coverage action [emphasis added] ), arld its mbti consideration of it is denied. on testimpny of defendants current attarney, Steven Sladkus, to demonstrate that defendants recovered all of their damages through settlement, but the page$ to which plaintiff refers were not found in Exhibit G to the Sandberg affidavit. 10 CPLR 4547 provides that: [e)vidence of (a) furnishing, or offering or promising to furnish, or (b) accepting, qr offering or promising to accept, any valuable consideration in corhpromising or attempting to corqpromise h clainj r validity or amount le asI Brhount of damage shall also be inadmi t e admissibility of the DamacJes AqAlyys. Therefgre, the strike references to Settlernerlt negofiatibns in the underlying action is 1imitgd:to that doqument, witD no broad prospeotive determination made here concerning the admissibility of any other evidence. Page 19 of 25 I . L --. * --y [* 20] Altman s averments, viewed in a light most favorable to defendants as non-rnovants, is that defendants did not recover all of their damages through the settlement, and particularly the - . Housing Court legal fees, which Altman claims that the Co-op refused to pay. Plaintiff contends that while defendants allege numerous errors committed by plaintiff in the Supreme Court Action, defendants have not and cannot establish that these errors resulted in actual and ascertainable damages precluding recovery At trial, defendants will bear the bqrden of proving damages proximately caused by plaintiff s alleged conduct, and to do so will necessarily have to demonstrate all of the actual, ascertainable damages that they claim they would not have incurred except for plaintiff s negligence, and that they were forced to settle for less than these damages. However, regardless of whether or not defendants have demonstrated in the herein motion that they suffered damages by the many alleged errors made in the Suprebe Court Action, summary judgment must be denied as to defendants malpractieelnegligence claims, as they have raised a fact issue conaerning the Housing Court case. Defendants counterclaims for breach of fiduciary duty and breach of contract are diqmissed as duplicative, since thsy arose from the same facts as the leg31 malpractice claim and did not seek distinct and different damages (Bernard v Proskauer Rose, U P , 87 AD3d 412, 416 [ l s t Dept 201 11; Skhulfe Roth & Zable v Kassover, 80 AD3d 500, 501 [Ist Dept 201 q]). l2 Plaintiff mgves for dismis$alzgfdefendants affirmative defenses. Defendirflts have agreed to the dismissal of their second through sixth, eight, ninth, twelfth through fifteenth, eighteenth, tweety-fourth and twenty-sixth affirmative defenses, which are dismissed. The first affirmative defense, of failure to state a cause of action, may be inserted in an answer as an affirmative defense, but is surplusage, because it may be assertqd at any time 3 , 2Whlle defendants appear to attempt to as sert a counterclaim for breach of cgntraGt here, based on other facts, they have not moved for leave t9 amend the complgint. In addition, plaintiff does specifically address the unjust enrichment counterclaim, which, therefore, will not be dismissed. Page20of 25 , I [* 21] whether or not pleaded and should not be subject to a motion to strike (Riland v Todman & CO., 56 AD2d 350, 352-353 11st Dept 19771) Consequently, the defmse remains. . . - --The seventh affirmative defense, that plaintiff s damages were caused in whole or part I 1 . ~ by its own conduct, and that its claims are barred or diminished in proportion to its own culpable conduct, is dismissed. CPLR 1411 mandates that [iln any action to recover damages for personal injury ... the amount of damages otherwise recoverable shall be diminished in the proportion which the culpable conduct attributable to the claimant ... bears to the culpable conduct which caused the damages. This affirmative defense is not applicable in this case, for recovery of legal fees, which is not grounded in tort. This ISnot to say that defendants are precluded from seeking to defend against fees they contend they were charged for negligent work, or a determination concerning that issue. I The tenth affirmative defense, is that plaintiff s alaims are barred by collateial estdppel. The party seeking the benefit of collateral estoppel must demonstrate that the identical issue was neces$arily decided in the prior adjudication and is decisive in the newly pr dsented circumstance and forum. To block the use of estoppel, a contestant can shgw the a b s q c e of a full and fair opporluqity to presellt relevant views in the prior contest (David v Biondo, 92 NY2d 318, 322 [1998]) Plaintiff argues that the defense should be dismissed because no Court has adjudicated B&M s legal fee claims agairist it, and that defendants contractual and independent obligation tg pay their legal fees is separate and distinct from what the court awarded them against the Co-op. Plaintiff also argues that defendants should not be able to keep money paid to them by the Co-op to reimburse plaintiff. Defendants argue that the defense is proper because plaintiff obtained a final, binding ruling from the Housing Court that $47,687.44 of its I I I fees were unreasonable. The issue adjudicated in the Mousing Court action was the Co-op s obligation to pay its tenant s attorneys fees and the amount, with defendants as the petitioners, not B&M. The Page21 of 25 f . l w - 1 [* 22] adjudication was against the Co-op, under the lease and Real Property Law 5 234. Defendants and plaintiff did nat have the opportunity to adjudicate the fee issue regarding what was owed ..- _against each other, and, as defendants attorney, plaintiff could not have litigated this issue against defendants (Wood v Wood, 21 AD2d 627, 627 [ I s t Dept 19641 [counsel fee award to wife in matrimonial action on attorneys application did not constitute adjudication on attorneys fee claim against wife where award wqs not rendered in proceeding to which attorneys were parties or against adversaries regarding the issue]; compare Wehle v Shanks, 35 NYS2d 801, 804-806 [Sup Ct, NY County 19421 [where attorney not formally a party to proceeding was regarded by court in first action as intervenor, with an interest in a fund, and participated in proceedings to determine the reasonable value of his services, he was later bound in the subsequent case by earlier deterrninatior~]). ~ Therefore, the tenth affirmative defense is dishissed. Plaintiff seeks to dismiss the eleventh affirmative defense, that [pllaintiff is barred because the obligation was fully paid, stating that it is a negating defense (PI. Menid. of Law for SJ & to DE.Aff. Def., at 17), and because defendants admit that they have not paid their legal bills in full. In opposition, defendants argue that they have overpaid given the services. Plaintiff s argument is predicated on its assumption that it will prevail on its complaint, but as no determination as to that issue is being made here, plaintiff s rnotiOn is denied as to thi$ , defense. l4 13Thecourt did not specifically state that the fees were unreasonable,but opined that the Co-op should not have to pay all of them because some were occasioned by motions made by defendants for the Co-pp s failure to comply with the court s prior grdpr when the Co-op was restrained frQmremoving the Gallup greenhouse by the Gallup Action order. However, the fact that the tjousing Couft ants attorneys fees request because of the rhQtionsieltridisputable,and plaintiff i+ ing the Mousing Court order as evidence in this actidn (see Wood v Wood, 21 AD I4lnaddition, defendants may also be entitled to reductions in damages for wh8 plaintiffs mistake in failing to timely respond to a discobery derhand that reSulted in moti Altrnan Aff , 7 59) and, if true, for billing def@ndqqt$ time spent; listeping tg them complain about this, for which is not the provision of legal services by the firm (see Def. exhibit. A [Retainer Agreement], at 1). Page22of 25 . - [* 23] The sixteenth affirmative defense, that plaintiff s claim is barred by the terms of the parties agreement, is not dismissed as plaintiff has not ._ its prima facie case . I-*this -motion met on . _~ A Y i n by referring the Court to the retainer agreement and conclusorily asserting that it does not provide defendants with grounds for asserting the defense. Plaintiff s argument that the defense should be dismissed because of defendants failure to elaborate on it in their pleading is unpersuasive. Plaintiff was not precluded from seeking elaboration during the litigation. Defendants opposition to the motion to dismiss the affirmative defenses numberkd 17, 19, 21-23 and 25 neither addresses the defenses individually, nor responds to the movant s arguments. However, plaintiffs motion for dismissal of these affirmative defenses is premised on the presumption that plaintiff prevailed on its motion on the complaipt, and is denied without prejudice with leave to renew. The twentieth affitmative defense, that plaintiff is bgrred from recovering because it breached the parties agreement, is dismissed as duplicative of the Seventeenth affirmative defense. Defendants Motion for Summary Judqment As discussed above, defendants motion for summary judgment dismissing thq complaint for discharge for cause is referred for d hearing. Defendants also move to dismis$ plaintiff s claim for the reasonable value of its services. While, generally, [a] claim for unjust I entichhent, or qudsi contract, may nbt be rh$rltain&i wh ete a corltrAct exists betdeeh the parties covering the same subject matter (GQldsteinv ClBC World Mkts. Corp., 6AD3d 295, 296 [Ist Dept 20041, [citing C/ark-Fitzpafr;ck, lnc. v Long Is. R.R. Co., 70 NY2d 382, 388 (1987)]), in the case of attorneys fees where an attorney is diskharded without cause, courts I may permit recovery on quantum meruitlu l erdlly Seth Rubenstein, P.C. v et Grocers, 239 A Moreover, plaintiff increased billing rates without providing the advance notice that the retainer states was to be prbvided prior to rate increases. No ddjudication regarding the$e issues is made here Page 23 of 25 I I [* 24] G a m a , 41 AD3d 54 [2d Dept 20071). Therefore, at this junctyre, summary judgment dismissing the cause of action is denied. Defendants motion concerning the Damages Analysis has _ . L _. . i -_-- --LyL 1 I, already been addressed CONCLUSION Accordingly, it is 1 , , 1; ORDERED that plaintiff s motion for summary judgment dismissing the affirmative defenses raised in the answer (motion sequence number 004) is granted to the extent that the second through tenth, twelfth through fifteenth, eighteenth, twentieth, twenty-fourth and twentysixth affirmative defenses are dismissed; and it is further, - . ORDERED that plaintiff s motion for summary judgment dismissing defendants i counterclaims (motion sequence number 005) is grdnted t9,the extent that the seGond (breaqh of contract) and third (breach of fiduciary duty) counterclairqs are dismissed and the first I counterclaim (legal malpractice) is dismissed to the extent that it relies on allegations concerning plaintiffs exchange of defendant Helen Altrnan s outline; and is otherwise denied; and rt is further, ORDERED that the issue of whether or not plaintiff was discharged by defendants for cause is referred to a Special Referee to hear and report with recommendations, exckpt that, in I 4ha.event of and upon the filing of astipulation of the parties; as pernlitted by CRLR 4317, the Special Referee, or another person designated by the parties to$ serve as referee, shall determine the aforesaid issue; and it is further, ORDERED that plaintiff s motion for summary judgment in its favor on the complaint (motion sequeocq number 005) and defend I disrni&ing the complaint in its entirety for di cause are held in abeyahce pending the report and recommendations of the Special Referee and a mqtion pursuant to OPLR 4403 or receipt of the determination of the SpeQial Referee or the designated referee; and it is further, Page 24 of 25 I - [* 25] ORDERED that plaintiff shall, within 30 days from the date of this order, serve a copy of this order with notice of entry, together with a completed informatiQnsheet,15 upon the Special _1 " L Referee Clerk in the Motion Support Office in Room I I 9 at 60 Centre Street, who is directed to place this matter on the calendar of the Special Referee's Part for the earliest convenient date; and it is further, ORDERED that defendants' cross-motion to dismiss t h e third cause of action of the complaint (quasi contract, quantum meruit and unjust enrichment) and to strike is denied. This constitutes t h e Decision and Order of the Court. < , . 111 Dated: Check one: NON-FINAL DlSPO$lTlON FINAL DISPOSITION Check if appropriate: [ DO NOT POST r \ I I 15 Copies are available in Room 119 at 60 Centre Street, qhC( on the COUO'S website. Page25of 25 , _ -
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