Quinn Emanuel Urquhart & Sullivan, LLP v Avra Surgical Robotics, Inc.
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Quinn Emanuel Urquhart & Sullivan, LLP v Avra Surgical Robotics, Inc. 2016 NY Slip Op 32497(U) December 20, 2016 Supreme Court, New York County Docket Number: 158148/14 Judge: Paul Wooten Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various state and local government websites. These include the New York State Unified Court System's E-Courts Service, and the Bronx County Clerk's office. This opinion is uncorrected and not selected for official publication. [*FILED: NEW YORK COUNTY CLERK 12/22/2016 10:23 AM 1] NYSCEF DOC. NO. 47 INDEX NO. 158148/2014 RECEIVED NYSCEF: 12/22/2016 SUPREME COURT OF THE STATE OF NEW YORK - NEW YORK COU'TY-:., Ii PRESENT:~~H~O~N~·~PA~U_L~WO~O~T~EN...._~ .......... PART-f---- Justice 1: QUINN EMANUEL URQUHART & SULLIVAN, LLP I i 15,48/14 INDEX NO. Plaintiff, ~ '[ 0031'' MOTION SEQ. NO. -v- AVRA SURGICAL ROBOTICS, INC., I ! Defendant. i The following papers, numbered 1 to 5, were read on this motion by plaintiff for leave to rearf e and ,· renew pursuant to CPLR 2221. PAPERS NUMBE.D Notice of Motion/ Order to Show Cause - Affidavits - Exhibits ... 1.2.3 Ii Answering Affidavits- Exhibits (Memo)__________ 4 Ii Replying Affidavits (Reply Memo)._ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ Cross-Motion: D Yes • No :'' This action was commenced by the plaintiff against defendant, its former client, for ~he nonpayment of legal fees. In tts Complaint filed on August 19, 2014, plaintiff states claims~or breach of contract and unjust enrichment/quantum meruit. Issue was joined when defendtt efiled its answer on September 18, 2014, which included a counterclaim for breach of fiduci 'ry duty for disclosing confidential information in this action. On November 6, 2014, plaintiff ved for a default judgment against defendant for failing to answer, and on November 19, 2014 , I defendant cross-moved for a default judgment on Its counterclaim. On February 4, 2015, *.is Court denied both motions and so-ordered a stipulation between the parties, in which it wa~ i agreed that "plaintiff shall amend its complaint by removing paragraphs 5-13 which contai~ I. 11 I confidential information that Defendant imparted to Plaintiff in confidence. Plaintiff may rep~ce '· I· I the confidential information alleged with claims that do not allege confidential information" ~~ee Decision and Order dated February 4, 2015). The parties also set a schedule for plalntlfft1 amend its Complaint and for defendant to respond. Thereafter, plaintiff filed its Amended Page 1of5 I' I~ I. I. I• I! 1' I 1 of 5 t~ I [* 2] Complaint on February 17, 2015, and defendant answered on March 23, 2015, again setti~g i forth a counterclaim that plaintiff disclosed confidential information. On May 12, 2015 plaififf 11 moved for summary judgment on its claim for legal fees, and on May 22, 2015 defendant toss! moved for summary judgment on its counterclaim. In support of its summary judgment m~ion, i plaintiff submitted an affidavit from attorney Peter Keilty (Keilty), in which he addressed I i defendant's counterclaim as "baseless and without merit." In a separate affidavit in opposlion to the cross-motion, Keilty stated, inter alia, that "plaintiff has disclosed no confidential [: l information." In a Decision and Order dated November 12, 2015 and entered on Novembt 13, ! 2015 (2015 Order), this Court denied plaintiff's motion for summary judgment and granted! I defendant's cross-motion for summary judgment on its counterclaim for breach of fiducia~! duty l because plaintiff failed to answer said counterclaim contained within defendant's answer t~ the ! i Amended Complaint. Before the Court is a motion by the plaintiff for an Order 1) pursuant to CPLR 2221 ~>' and (e) seeking leave to reargue and renew the 2015 Order to the extent thatthis Court a default judgment to defendant on its counterclaim; and (2) pursuant to CPLR 3012(d) g~nted fo~· i leave to file an out-of-time reply to the defendant's counterclaim. The defendant is in oppf ition to the herein application. i I I: In support of its motion plaintiff states that it has a meritorious defense to the I~ r ! counterclaim as it did not disclose any confidential information, that the counterclaim was I r I resolved by the so-ordered stipulation, and that defendant has suffered no prejudice from .ny delay as plaintiff has repeatedly made its position on the counterclaim clear. Moreover, pl+intiff I contends that any failure to submit a reply was inadvertent, inasmuch as Keilty, who appefed on behalf of plaintiff for its summary judgment motions believed the confidential informatio~ I' I' I! issue to be fully resolved by the stipulation. In opposition, defendant maintains that this motion should be denied because plai'fff Page 2 of 5 I ~ i I I ! I: ! 2 of 5 [* 3] I I i I i: fails to meet the standard for reargument or renewal. Defendant contends that plaintiff is judicially estopped from claiming It did not publicly disclose confidential information, that , stipulation entered into between the parties did not settle defendant's breach of fiduciary c~im Ip against plaintiff as damage has already been done to defendant's business, and that plainff i ! fails to establish a reasonable excuse or a meritorious defense to the counterclaim. DISCUSSION A motion for leave to reargue "shall be based upon matters of fact or law allegedly I overlooked or misapprehended by the court in determining the prior motion, but shall not Ii include any matters of fact not offered on the prior motion" (CPLR 2221 [d](2]; see Kent v ~4 E. I 11th St., 80 AD3d 106, 116 [1st Dept 2010) ["A motion for reargument is addressed to the court's discretion and is designed to afford a party an opportunity to establish that the I~]; s:e~::~::0:::11 : :~:~:::o:::~ ::: on the prior I. cou~ overlooked or misapprehended the relevant facts, or misapplied any controlling principle 6 Ii o~ m~ion ~ would change the prior determination or shall demonstrate that there has been a change i~ the i ,, law that would change the prior determination ... [and a) reasonable justification for the f~lure !: to present such facts on the prior motion" (CPLR 2221[e][2] and (3)). "Renewal is grantedJJ sparingly, and only in cases where there exists a valid excuse for failing to submit the add~onal i I'· facts on the original application" (Matter of Weinberg, 132 AD2d 190, 210 [1st Dept 19871,i: ii appeal dismissed sub nom Matter of Beiny, ·71 NY2d 994 [1988) [internal citation omitted])~i CPA Mut. Ins. Co. of Am. Risk Retention Group v Weiss & Co., 80 AD3d 431, 432 (1st Dept 20~:1]). !' It is well settled that there is a strong public policy in New York which favors resolu~on of actions on their merits rather than on default (see Picinic v Seatrain Lines, Inc., 117 AD2d li>04, 508 (1st Dept 1986); Berurdo v Guillet, 86 AD3d 459 (1st Dept 2011 ]; Chi v Kelly Group, ~le., Iii P~e3~5 I ,, I 3 of 5 i! r ,~ [* 4] ' " I 63 AD3d 632 (1st Dept 2009]; Yu v Vantage Mgmt Services, LLC, 85 AD3d 564 (1st Dept i 2011]; Bobet v Rockefellar Center, North, Inc., 78 AD3d 475 [1st Dept 2010]). As such, tttre is a liberal policy towards "opening default judgments in furtherance of justice so that partieslihiay i have their day in court" (Picinic, 117 AD2d at 508). Additionally, in accordance with CPLRI I 3012(d), "the court may extend the time to appear or plead, or compel the acceptance of a ' pleading untimely served, upon such terms as may be just and upon a showing of reason~le i· excuse for delay or default." The determination of what constitutes a reasonable excuse lir:s within the sound discretion of the Supreme Court (BAC Home Loans Servicing, LP v Rea1on, I 132 AD3d 790 [2d Dept 2015]). The Court finds that plaintiff does not meet the standard for leave to renew or rear~e . I 1: the 2015 Order. However, in taking into account the entire record and in the interest of ju,ice, as well as the strong public policy favoring the resolution of cases on their merits, the Cou' I finds that the plaintiff shall be granted an opportunity to submit a reply to the defendant's counterclaim (see Bobet, 78 AD3d at 475). Accordingly, the default judgment previously i,: i j. granted to defendant on its counterclaim in the 2015 Order must b~ vacated. The Co.urt fi~ds that plaintiff has demonstrated a reasonable excuse for failing to submit a formal and time~ I reply to the counterclaim, to wit, counsel's error, as plaintiff mistakenly believed that the stipulation of February 4, 2015 fully resolved the counterclaim (see Oberon Sec. i' LLC v Pafr.ar. 135 AD3d 446 (1st Dept 2016]). Plaintiff's failure to respond to the counterclaim with a re~y I was entirely inadvertent, and does not evidence any willful or contumacious conduct on plaintiff's behalf. Also significant here is that defendant fails to demonstrate any prejudice Ii ~rom I· the late filing of the reply inasmuch as plaintiff has previously stated its position on the i r· counterclaim, to wit that it is "baseless" and "without merit" in the affidavit in support of its summary judgment motion submitted by Keilty. Thus, defendant was clearly on notice of plaintiff's defense, which is consistent with the reply it seeks to file now in which it denies Page4of 5 4 of 5 ! [* 5] publicly disclosing information imparted to it by defendant in confidence. Additionally, the i I plaintiff's claim for unpaid legal fees is going forward and discovery has been stayed. Thel Court sees no reason why the parties cannot simultaneously engage in discovery on i defendant's counterclaim and the issue of whether plaintiff publicly disclosed of confidentictl information, and if so, whether defendant incurred damages. CONCLUSION I ,, For these reasons it is hereby, ORDERED that plaintiff's motion is granted to the extent that plaintiff shall serve a ~ply, 'i in the form as annexed to its papers in exhibit 2, upon the defendant within 7 days of the ~te of this Order; and it is further, ORDERED that this Court's Decision and Order dated November 12, 2015 and en.red I on November 13, 2015 is hereby amended to the extent that the portion of the motion gra'1ting defendant a default judgment on its counterclaim against the plaintiff is vacated, but otheriltise ! remains the same; and it is further, ORDERED that counsel for the plaintiff is directed to serve a copy of this Order wi~ Notice of Entry upon the defendant, the County Clerk, and the Clerk of Part 7 who is direc11ed to schedule a Status Conference forthwith. This constitutes the Decision and Or Check one: 0 FINAL DISPOSITION Check if appropriate: 0 • NON-FINAL DISPOSITION DO NOT POST Page 5 of 5 5 of 5 0 REFERENCE
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